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LEASES LEASES

3 Months Ended

Jan. 31, 2020

The Company leases certain buildings, warehouses, land, transportation equipment, operating equipment, and office equipment with remaining lease terms from less than one year up to 20 years. The Company reviews all options to extend, terminate, or purchase a right of use asset at the time of lease inception and accounts for options deemed reasonably certain.

The Company combines lease and non-lease components for all leases except real estate, for which these components are presented separately. Leases with an initial term of twelve months or less are not capitalized and are recognized on a straight-line basis over the lease term. The implicit rate is not readily determinable for substantially all of the Company's leases, therefore the initial present value of lease payments is calculated utilizing an estimated incremental borrowing rate determined at the portfolio level based on market and Company specific information.

Certain of the Company’s leases include variable costs. As the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, changes in these variable expenses are not capitalized and are expensed as incurred throughout the lease term.

As of January 31, 2020, the Company has not entered into any significant leases which have not yet commenced.

The following table presents the balance sheet classification of the Company’s lease assets and liabilities as of January 31, 2020:



(in millions)	Balance Sheet Classification	January 31, 2020
Lease Assets
Operating lease assets	Operating lease assets	$	327.2
Finance lease assets	Other long-term assets	5.2
Total lease assets		$	332.4

Lease Liabilities
Current operating lease liabilities	Current portion of operating lease liabilities	$	60.3
Current finance lease liabilities	Other current liabilities	1.8
Total current lease liabilities		62.1

Non-current operating lease liabilities	Operating lease liabilities	271.4
Non-current finance lease liabilities	Other long-term liabilities	3.4
Total non-current lease liabilities		274.8
Total lease liabilities		$	336.9

The following table presents the lease expense components for the three months ended January 31, 2020:



(in millions)	Three Months Ended January 31, 2020
Operating lease cost	$	17.2
Finance lease cost	0.2
Variable lease cost^*	6.2
Total lease cost	$	23.6

^* Amount includes short-term lease costs. The Company continues to account for short-lease leases, which are immaterial for individual reporting

Future maturity for the Company's lease liabilities, during the next five years, and in the aggregate for the years thereafter, are as follows:



(in millions)	Operating Leases			Finance Leases			Total expected payments
2020	$	66.9		$	1.4		$	68.3
2021	60.2			1.4			61.6
2022	51.7			1.1			52.8
2023	43.0			0.8			43.8
2024	33.9			0.5			34.4
Thereafter	133.7			0.3			134.0
Total lease payments	$	389.4		$	5.5		$	394.9
Less: Interest	(57.7		)	(0.3		)	(58.0		)
Lease liabilities	$	331.7		$	5.2		$	336.9

The following table presents the weighted-average lease term and discount rate as of January 31, 2020:



Weighted-average remaining lease term (years):
Operating leases	10.4
Finance leases	4.2
Weighted-average discount rate:
Operating leases	3.39	%
Finance leases	3.45	%

The following table presents other required lease related information for the three months ended January 31, 2020:



(in millions)	January 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	17.1
Financing cash flows used for finance leases	0.4
Leased assets obtained in exchange for new operating lease liabilities	28.7
Leased assets obtained in exchange for new finance lease liabilities	—

In compliance with ASC 842, the Company must provide the prior year disclosures required under the previous lease guidance for comparative periods presented herein.

The table below contains information related to the Company’s rent expense as disclosed within the 10-K for the period ended October 31, 2019:



	Year Ended October 31,
(in millions)	2019		2018		2017
Rent Expense	$	86.2	$	47.1	$	41.0

The following table provides the Company’s minimum rent commitments under operating leases in the next five years and the remaining years thereafter as disclosed within the 10-K for the period ended October 31, 2019:



(in millions)	Operating Leases		Capital Leases
Year(s):
2020	$	64.8	$	1.8
2021	57.0		1.6
2022	48.7		1.3
2023	40.1		1.0
2024	31.6		0.6
Thereafter	117.5		0.3
Total	$	359.7	$	6.6

Minimum rent commitments under capital leases in 2020 and thereafter are attributable to addition of capital leases through the Caraustar Acquisition.

LEASES

NOTE 12 — LEASES