Leases

12 Months Ended

Aug. 31, 2020

Leases [Abstract]

Leases

Leases

Effective September 1, 2019, the Company adopted Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) using the modified retrospective approach and also elected to apply the package of practical expedients, which among other things, allows entities to maintain the historical lease classification for existing leases. The Company has lease agreements that contain both lease and non-lease components. For lease agreements entered into or reassessed after the adoption of ASU 2016-02, the Company has elected the practical expedient to combine lease and non-lease components for building and real estate leases.

Upon adoption of ASU 2016-02, the Company recorded $414.6 million and $437.5 million of right-of-use assets and lease liabilities, respectively, related to its existing operating lease portfolio. The accounting for the Company's finance leases remained substantially unchanged and balances were not significant on the adoption date. The adoption of this standard did not have a material impact on the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows.

The following table sets forth the amount of lease assets and lease liabilities included on the Company's Consolidated Balance Sheets, as of the period indicated (in thousands):

	Financial Statement Line Item	August 31, 2020
Assets
Operating lease assets (1)	Operating lease right-of-use assets	$	362,847
Finance lease assets (2)	Property, plant and equipment, net	160,015
Total lease assets		$	522,862
Liabilities
Current
Operating lease liabilities	Current operating lease liabilities	$	110,723
Finance lease liabilities	Accrued expenses	7,465
Non-current
Operating lease liabilities	Non-current operating lease liabilities	302,035
Finance lease liabilities	Other liabilities	160,747
Total lease liabilities		$	580,970

⁽¹⁾  Net of accumulated amortization of $96.2 million.

⁽²⁾  Net of accumulated amortization of $12.8 million.

The following table is a summary of expenses related to leases included on the Company's Consolidated Statements of Operations, for the periods indicated (in thousands):

	Fiscal Year Ended August 31,
	2020
Operating lease cost	$	114,290
Finance lease cost
Amortization of leased assets	5,470
Interest on lease liabilities	4,950
Other	15,038
Net lease cost(1)	$	139,748

⁽¹⁾  Lease costs are primarily recognized in cost of revenue.

The following table is a summary of the weighted-average remaining lease terms and weighted-average discount rates of the Company's leases, as of the period indicated:

	August 31, 2020
	Weighted-average remaining lease term	Weighted-average discount rate
Operating leases	5.4 years	3.18	%
Finance leases	5.7 years	4.28	%

The following table sets forth other supplemental information related to the Company's lease portfolio (in thousands):

	Fiscal Year Ended August 31,
	2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases(1)	$	112,267
Operating cash flows for finance leases(1)	4,950
Financing activities for finance leases(2)	6,242
Non-cash right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	91,350
Finance leases	111,591

⁽¹⁾  Included in accounts payable, accrued expenses and other liabilities in Operating Activities of the Company's Consolidated Statements of Cash Flows.

⁽²⁾  Included in payments toward debt agreements in Financing Activities of the Company's Consolidated Statements of Cash Flows.

The future minimum lease payments under operating and finance leases as of August 31, 2020 were as follows (in thousands):

Fiscal Year Ending August 31,	Operating Leases(1)			Finance Leases			Total
2021	$	121,196		$	12,383		$	133,579
2022	89,143			12,864			102,007
2023	67,952			12,363			80,315
2024	56,153			12,505			68,658
2025	36,924			43,185			80,109
Thereafter	85,799			101,111			186,910
Total minimum lease payments	$	457,167		$	194,411		$	651,578
Less: Interest	(44,409		)	(26,199		)	(70,608		)
Present value of lease liabilities	$	412,758		$	168,212		$	580,970

⁽¹⁾  Excludes $137.8 million of payments related to leases signed but not yet commenced. Additionally, certain leases signed but not yet commenced contain residual value guarantees and purchase options not deemed probable.

As disclosed in the Company’s Form 10-K for the fiscal year ended August 31, 2019, the future minimum lease payments of non-cancelable operating leases prior to the adoption of ASU 2016-02 were as follows (in thousands):

Fiscal Year Ending August 31,	Amount
2020	$	118,312
2021	102,915
2022	84,729
2023	63,206
2024	51,091
Thereafter	182,932
Total minimum lease payments	$	603,185

Total operating lease expense prior to the adoption of ASU 2016-02 was approximately $125.4 million and $130.2 million for fiscal years 2019 and 2018, respectively.

Leases

Leases

Effective September 1, 2019, the Company adopted Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) using the modified retrospective approach and also elected to apply the package of practical expedients, which among other things, allows entities to maintain the historical lease classification for existing leases. The Company has lease agreements that contain both lease and non-lease components. For lease agreements entered into or reassessed after the adoption of ASU 2016-02, the Company has elected the practical expedient to combine lease and non-lease components for building and real estate leases.

Upon adoption of ASU 2016-02, the Company recorded $414.6 million and $437.5 million of right-of-use assets and lease liabilities, respectively, related to its existing operating lease portfolio. The accounting for the Company's finance leases remained substantially unchanged and balances were not significant on the adoption date. The adoption of this standard did not have a material impact on the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows.

The following table sets forth the amount of lease assets and lease liabilities included on the Company's Consolidated Balance Sheets, as of the period indicated (in thousands):

	Financial Statement Line Item	August 31, 2020
Assets
Operating lease assets (1)	Operating lease right-of-use assets	$	362,847
Finance lease assets (2)	Property, plant and equipment, net	160,015
Total lease assets		$	522,862
Liabilities
Current
Operating lease liabilities	Current operating lease liabilities	$	110,723
Finance lease liabilities	Accrued expenses	7,465
Non-current
Operating lease liabilities	Non-current operating lease liabilities	302,035
Finance lease liabilities	Other liabilities	160,747
Total lease liabilities		$	580,970

⁽¹⁾  Net of accumulated amortization of $96.2 million.

⁽²⁾  Net of accumulated amortization of $12.8 million.

The following table is a summary of expenses related to leases included on the Company's Consolidated Statements of Operations, for the periods indicated (in thousands):

	Fiscal Year Ended August 31,
	2020
Operating lease cost	$	114,290
Finance lease cost
Amortization of leased assets	5,470
Interest on lease liabilities	4,950
Other	15,038
Net lease cost(1)	$	139,748

⁽¹⁾  Lease costs are primarily recognized in cost of revenue.

The following table is a summary of the weighted-average remaining lease terms and weighted-average discount rates of the Company's leases, as of the period indicated:

	August 31, 2020
	Weighted-average remaining lease term	Weighted-average discount rate
Operating leases	5.4 years	3.18	%
Finance leases	5.7 years	4.28	%

The following table sets forth other supplemental information related to the Company's lease portfolio (in thousands):

	Fiscal Year Ended August 31,
	2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases(1)	$	112,267
Operating cash flows for finance leases(1)	4,950
Financing activities for finance leases(2)	6,242
Non-cash right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	91,350
Finance leases	111,591

⁽¹⁾  Included in accounts payable, accrued expenses and other liabilities in Operating Activities of the Company's Consolidated Statements of Cash Flows.

⁽²⁾  Included in payments toward debt agreements in Financing Activities of the Company's Consolidated Statements of Cash Flows.

The future minimum lease payments under operating and finance leases as of August 31, 2020 were as follows (in thousands):

Fiscal Year Ending August 31,	Operating Leases(1)			Finance Leases			Total
2021	$	121,196		$	12,383		$	133,579
2022	89,143			12,864			102,007
2023	67,952			12,363			80,315
2024	56,153			12,505			68,658
2025	36,924			43,185			80,109
Thereafter	85,799			101,111			186,910
Total minimum lease payments	$	457,167		$	194,411		$	651,578
Less: Interest	(44,409		)	(26,199		)	(70,608		)
Present value of lease liabilities	$	412,758		$	168,212		$	580,970

⁽¹⁾  Excludes $137.8 million of payments related to leases signed but not yet commenced. Additionally, certain leases signed but not yet commenced contain residual value guarantees and purchase options not deemed probable.

As disclosed in the Company’s Form 10-K for the fiscal year ended August 31, 2019, the future minimum lease payments of non-cancelable operating leases prior to the adoption of ASU 2016-02 were as follows (in thousands):

Fiscal Year Ending August 31,	Amount
2020	$	118,312
2021	102,915
2022	84,729
2023	63,206
2024	51,091
Thereafter	182,932
Total minimum lease payments	$	603,185

Total operating lease expense prior to the adoption of ASU 2016-02 was approximately $125.4 million and $130.2 million for fiscal years 2019 and 2018, respectively.