LEASES

9 Months Ended

Jul. 31, 2023

The Company leases certain buildings, warehouses, land, transportation equipment, operating equipment, and office equipment with remaining lease terms from less than 1 year up to 19 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, and 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 July 31, 2023, the Company has not entered into any significant leases which have not yet commenced.

The following table presents the lease expense components for the three and nine months ended July 31, 2023 and 2022:


	Three Months Ended July 31,				Nine Months Ended July 31,
(in millions)	2023		2022		2023		2022
Operating lease cost	$	17.0	$	14.7	$	48.0	$	48.4
Finance lease cost - amortization	1.2		0.2		3.0		1.2
Finance lease cost - interest	0.5		0.1		1.5		0.1
Other lease cost*	6.1		6.1		19.3		17.1
Total lease cost	$	24.8	$	21.1	$	71.8	$	66.8
*includes variable and short-term lease costs

The following table presents the future maturity for the Company’s lease liabilities, during the next five years, and in the aggregate for the years thereafter as of July 31, 2023:


(in millions)	Operating Leases		Finance Leases		Total expected payments
2023	$	16.3	$	1.6	$	17.9
2024	59.0		6.0		65.0
2025	52.1		5.6		57.7
2026	43.0		5.5		48.5
2027	33.8		5.4		39.2
Thereafter	115.0		20.8		135.8
Total lease payments	$	319.2	$	44.9	$	364.1
Less: interest	(47.2)		(12.7)		(59.9)
Lease liabilities	$	272.0	$	32.2	$	304.2

The following table presents the weighted-average lease term and discount rate as of July 31, 2023 and 2022:


	July 31, 2023		July 31, 2022
Weighted-average remaining lease term (years):
Operating leases	9.2		10.0
Finance leases	7.9		2.7
Weighted-average discount rate:
Operating leases	4.22	%	3.63	%
Finance leases	6.32	%	3.41	%

The following table presents other required lease related information for the three and nine months ended July 31, 2023 and 2022:


	Three Months Ended July 31,				Nine Months Ended July 31,
(in millions)	2023		2022		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating liabilities	$	17.0	$	15.3	$	48.1	$	49.4
Financing cash flows used for finance leases	1.2		0.3		2.9		0.9
Leased assets obtained in exchange for new lease liabilities:
Leased assets obtained in exchange for new operating lease liabilities	5.7		3.9		52.9		15.9
Leased assets obtained in exchange for new finance lease liabilities	2.4		0.1		36.1		0.4