Leases

6 Months Ended

May 31, 2020

Leases [Abstract]

Leases

Leases

We enter into lease and sublease agreements, primarily for office space, across our geographic locations. Finance lease ROU assets and finance lease liabilities are not material. Information related to operating leases in our Consolidated Statement of Financial Condition at May 31, 2020 was as follows (in thousands, except lease term and discount rate):

Premises and equipment - ROU assets	$	500,830
Weighted average:
Remaining lease term (in years)	11.1
Discount rate	2.9		%

The following table presents the maturities of our operating lease liabilities and a reconciliation to the Lease liabilities included in our Consolidated Statement of Financial Condition at May 31, 2020 (in thousands):

Fiscal Year	Lease Liabilities
Remainder of 2020	$	28,312
2021	70,201
2022	68,025
2023	60,882
2024	59,596
2025 and thereafter	388,589
Total undiscounted cash flows	675,605
Less: Difference between undiscounted and discounted cash flows	(104,613		)
Operating leases amount in our Consolidated Statement of Financial Condition	570,992
Finance leases amount in our Consolidated Statement of Financial Condition	290
Total amount in our Consolidated Statement of Financial Condition	$	571,282

In addition to the table above, at May 31, 2020, we have a lease agreement that we have entered into that was signed but has not yet commenced. We expect this operating lease to commence by the end of 2020 with a lease term of seven years. Lease payments for this lease agreement will be $0.8 million for the period from lease commencement to the end of the lease term.

The following table presents our lease costs (in thousands):

	Three Months Ended   May 31, 2020			Six Months Ended   May 31, 2020
Operating lease costs (1)	$	17,762		$	35,389
Variable lease costs (2)	2,499			5,966
Less: Sublease income	(1,500		)	(3,000		)
Total lease cost, net	$	18,761		$	38,355

(1) Includes short-term leases, which are not material.

(2) Includes property taxes, insurance costs, common area maintenance, utilities, and other costs that are not fixed. The amount also includes rent increases resulting from inflation indices and periodic market rent reviews.

Consolidated Statement of Cash Flows supplemental information was as follows (in thousands):

	Six Months Ended   May 31, 2020
Cash outflows - lease liabilities	$	37,536
Non-cash - ROU assets recorded for new and modified leases	19,463

Minimum Future Lease Commitments (under Previous GAAP). As lessee, we lease certain premises and equipment under non-cancelable agreements expiring at various dates through 2039 which are operating leases. At November 30, 2019, future minimum aggregate annual lease payments under such leases (net of subleases) for fiscal years ended November 30, 2020 through 2024 and the aggregate amount thereafter, were as follows (in thousands):

Fiscal Year	Operating Leases
2020	$	57,952
2021	60,395
2022	62,916
2023	57,574
2024	56,878
Thereafter	389,245
Total	$	684,960

The total minimum payments to be received in the future under non-cancelable subleases at November 30, 2019 was $16.2 million.

Rental expense, net of subleases, amounted to $61.2 million, $52.3 million, and $56.1 million for the years ended November 30, 2019, 2018 and 2017, respectively.

Leases

Leases

We enter into lease and sublease agreements, primarily for office space, across our geographic locations. Finance lease ROU assets and finance lease liabilities are not material. Information related to operating leases in our Consolidated Statement of Financial Condition at May 31, 2020 was as follows (in thousands, except lease term and discount rate):

Premises and equipment - ROU assets	$	500,830
Weighted average:
Remaining lease term (in years)	11.1
Discount rate	2.9		%

The following table presents the maturities of our operating lease liabilities and a reconciliation to the Lease liabilities included in our Consolidated Statement of Financial Condition at May 31, 2020 (in thousands):

Fiscal Year	Lease Liabilities
Remainder of 2020	$	28,312
2021	70,201
2022	68,025
2023	60,882
2024	59,596
2025 and thereafter	388,589
Total undiscounted cash flows	675,605
Less: Difference between undiscounted and discounted cash flows	(104,613		)
Operating leases amount in our Consolidated Statement of Financial Condition	570,992
Finance leases amount in our Consolidated Statement of Financial Condition	290
Total amount in our Consolidated Statement of Financial Condition	$	571,282

In addition to the table above, at May 31, 2020, we have a lease agreement that we have entered into that was signed but has not yet commenced. We expect this operating lease to commence by the end of 2020 with a lease term of seven years. Lease payments for this lease agreement will be $0.8 million for the period from lease commencement to the end of the lease term.

The following table presents our lease costs (in thousands):

	Three Months Ended   May 31, 2020			Six Months Ended   May 31, 2020
Operating lease costs (1)	$	17,762		$	35,389
Variable lease costs (2)	2,499			5,966
Less: Sublease income	(1,500		)	(3,000		)
Total lease cost, net	$	18,761		$	38,355

(1) Includes short-term leases, which are not material.

(2) Includes property taxes, insurance costs, common area maintenance, utilities, and other costs that are not fixed. The amount also includes rent increases resulting from inflation indices and periodic market rent reviews.

Consolidated Statement of Cash Flows supplemental information was as follows (in thousands):

	Six Months Ended   May 31, 2020
Cash outflows - lease liabilities	$	37,536
Non-cash - ROU assets recorded for new and modified leases	19,463

Minimum Future Lease Commitments (under Previous GAAP). As lessee, we lease certain premises and equipment under non-cancelable agreements expiring at various dates through 2039 which are operating leases. At November 30, 2019, future minimum aggregate annual lease payments under such leases (net of subleases) for fiscal years ended November 30, 2020 through 2024 and the aggregate amount thereafter, were as follows (in thousands):

Fiscal Year	Operating Leases
2020	$	57,952
2021	60,395
2022	62,916
2023	57,574
2024	56,878
Thereafter	389,245
Total	$	684,960

The total minimum payments to be received in the future under non-cancelable subleases at November 30, 2019 was $16.2 million.

Rental expense, net of subleases, amounted to $61.2 million, $52.3 million, and $56.1 million for the years ended November 30, 2019, 2018 and 2017, respectively.