Leases

6 Months Ended

Nov. 30, 2019

Leases

Leases

Note 10 – Leases

We lease facilities, offices, vehicles, and equipment.  We determine at inception whether an arrangement that provides us control over the use of an asset is a lease. ROU assets and lease liabilities are recognized on the Condensed Consolidated Balance Sheet at lease commencement date based on the present value of the future minimum lease payments over the lease term.  Our lease agreements do not provide a readily determinable implicit rate nor is it available to us from our lessors.  We estimate our incremental borrowing rate based on information available at lease commencement in order to discount lease payments to present value.

Our lease costs are allocated over the remaining lease term on a straight-line basis unless another systematic or rational basis is more representative of the pattern in which the underlying asset is expected to be used. ROU assets are evaluated for impairment in a manner consistent with the treatment of other long-lived assets.

Certain leases include options to renew or extend the terms of the lease, which are included in the determination of the ROU assets and lease liabilities when it is reasonably certain that the option will be exercised. Our leases may also include variable lease payments such as escalation clauses based on consumer price index rates, maintenance costs and utilities. Variable lease payments that depend on an index or a rate are included in the determination of ROU assets and lease liabilities using the index or rate at the lease commencement date, whereas variable lease payments that do not depend on an index or rate are recorded as lease expense in the period incurred.  Our lease agreements do not contain any significant residual value guarantees or restrictive covenants.

The summary of our operating lease cost is as follows:

	Three Months		Six Months
	Ended		Ended
	November 30,		November 30,
	2019		2019
Operating lease cost	$	4.5	$	8.7
Short-term lease cost		1.3		2.6
Variable lease cost		1.8		2.8
	$	7.6	$	14.1

With the exception of a land lease for one of our airframe maintenance facilities that expires in 2108, our operating leases expire at various dates through 2039.  Maturities of our operating lease payments as of November 30, 2019 are as follows:

2020 (excluding the six months ended November 30, 2019)	$	8.6
2021		16.6
2022		14.8
2023		13.0
2024		11.1
Thereafter		51.6
Total undiscounted payments		115.7
Less: Imputed interest		(18.0)
Present value of minimum lease payments		97.7
Less: Operating lease liabilities – current		(13.7)
Operating lease liabilities – non-current	$	84.0

The current portion of operating lease liabilities are presented within Accrued expenses on our Condensed Consolidated Balance Sheet.

Prior to the adoption of ASC 842, our future minimum operating lease payments at May 31, 2019 were as follows:

2020	$	21.6
2021		19.3
2022		16.5
2023		13.2
2024		11.0
Thereafter		39.9
	$	121.5

As of November 30, 2019, the weighted average remaining lease term and discount rate for our operating leases were approximately 8.9 years and 3.4%, respectively.  

Supplemental cash flow information related to leases for the three- and six-month period ended November 30, 2019 was as follows:

	Three Months		Six Months
	Ended		Ended
	November 30,		November 30,
	2019		2019
Cash paid for amounts included in the measurement of lease liabilities	$	3.9	$	7.6
Operating lease liabilities arising from obtaining ROU assets		13.1		13.1