LEASES Level 1 (Notes)

12 Months Ended

Jul. 31, 2020

LEASES

We have operating leases primarily for real estate properties, including corporate headquarters, customer service and sales offices, manufacturing and packaging facilities, warehouses, and research and development facilities, as well as for rail tracks, railcars and office equipment. Certain of our leases for a shared warehouse and office facility, rail track and railcars have options to extend which we are reasonably certain we will exercise and, accordingly, have been considered in the lease term used to recognize our ROU assets and lease liabilities. To determine the present value of the lease liability, we use an incremental borrowing rate, which is defined as the rate of interest that the Company would have to pay to borrow (on a collateralized basis over a similar term) an amount equal to the lease payments in similar economic environments. Further information about our accounting policy for leases is included in Note 1 of the Notes to the Consolidated Financial Statements.

We have no material finance leases, and variable costs for operating leases are immaterial. Operating lease costs are included in Cost of Sales or SG&A expenses based on the nature of the lease. The following table summarizes total lease costs for our operating leases (in thousands):



	For the Twelve Months Ended July 31, 2020
Operating Lease Cost
Operating lease cost	$	2,219
Short-term operating lease cost	788

Supplemental cash flow information related to leases was as follows (in thousands):



	For the Twelve Months Ended July 31, 2020
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,878

Operating lease ROU assets and operating lease liabilities are separately presented on the Consolidated Balance Sheet, excluding leases with an initial term of twelve months or less. Other supplemental balance sheet information related to leases was as follows:



	For the Twelve Months Ended July 31, 2020
Weighted-average remaining lease term - operating leases	9.4 years
Weighted-average discount rate - operating leases	3.87%

The following table summarizes scheduled minimum future lease payments due within twelve months for operating leases with terms longer than one year for which cash flows are fixed and determinable as of July 31, 2020 (in thousands):



2021	$	2,552
2022	2,076
2023	1,106
2024	965
2025	885
Thereafter	6,131
Total	13,715
Less: imputed interest	(2,410		)
Net lease obligation	$	11,305

Rent expense for the fiscal year ended July 31, 2019 was $2,873,000. The following table summarizes scheduled minimum future lease payments due within twelve months for operating leases with terms longer than one year for which cash flows are fixed and determinable as of July 31, 2019 (in thousands):



2020	$	2,255
2021	1,640
2022	1,513
2023	1,038
2024	899
Thereafter	7,422