Commitments and Contingent Liabilities

3 Months Ended

Feb. 29, 2020

Commitments and Contingencies Disclosure [Abstract]

The Company is a party to various claims, legal actions and complaints arising in the ordinary course of business. In the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s consolidated financial statements. The Company is also a party to various lawsuits involving purchases and sales of real property. These lawsuits include claims regarding representations and warranties made in connection with the transfer of properties and disputes regarding the obligation to purchase or sell properties.

The Company does not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on its business or financial position. However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into.

Leases

The Company has entered into agreements to lease certain office facilities and equipment under operating leases. The Company recognizes leases expense for these leases on a straight-line basis over the lease term. Right-of-use (“ROU”) assets and right-of-use lease liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less. Many of the Company's leases include options to renew. The exercise of lease renewal options is at the Company's option and therefore renewal option payments have not been included in the ROU assets or lease liabilities. The following table includes additional information about the Company's leases:



(Dollars in thousands)	February 29, 2020
Right-of-use assets	$	143,690
Lease liabilities	$	150,779
Weighted-average remaining lease term (in years)	3.4
Weighted-average discount rate	3.1		%

The Company has entered into agreements to lease certain office facilities and equipment under operating leases. Future minimum payments under the noncancellable leases in effect at February 29, 2020 were as follows:



(Dollars in thousands)	Lease Payments
2020	$	30,818
2021	38,278
2022	29,061
2023	21,754
2024	15,311
2025 and thereafter	28,550
Total future minimum lease payments (1)	$	163,772
Less: Interest (2)	12,993
Present value of lease liabilities (2)	$	150,779


(1)	Total future minimum lease payments exclude variable lease costs of $13.4 million and short-term lease costs of $2.8 million. This also does not include minimum lease payments for executed and legally enforceable leases that have not yet commenced. As of February 29, 2020, the minimum lease payments for these leases that have not yet commenced were immaterial.

(2)

The Company's leases do not include a readily determinable implicit rate. As such, the Company has estimated the discount rate for these leases to determine the present value of lease payments at the lease commencement date or as of December 1, 2019, which was the effective date of ASU 2016-02. As of February 29, 2020, the weighted average remaining lease term and weighted average discount rate used in calculating the lease liabilities were 3.4 years and 3.1%, respectively. The Company recognized the lease liabilities on its condensed consolidated balance sheets within other liabilities.

Rental expense for the three months ended February 29, 2020, was $20.7 million. Payments on lease liabilities during the three months ended February 29, 2020 totaled $17.4 million. Rental expense includes costs for all leases. On occasion, the Company may sublease rented space which is no longer used for the Company's operations. For the three months ended February 29, 2020, the Company had an immaterial amount of sublease income.