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Leases
 12 Months Ended
Nov. 30, 2020
Leases [Abstract]  
Leases LEASESOur lease portfolio primarily consists of (i) certain real estate, including those related to a number of administrative, distribution and manufacturing locations; (ii) certain machinery and equipment, including forklifts; and (iii) automobiles, delivery trucks and other vehicles, including an airplane. When our real estate lease arrangements
include lease and non-lease components (for example, common area maintenance), we account for each component separately, based on their relative standalone prices. For all other asset categories, we combine lease components and non-lease components into a single lease commitment. We determine if an agreement is a lease or contains a lease at inception. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are based on the estimated present value of lease payments over the lease term and are recognized at the lease commencement date.

As most of our leases do not provide an implicit borrowing rate, we use our estimated incremental borrowing rate in determining the present value of lease payments. The estimated incremental borrowing rate is derived from information available at the lease commencement date.

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. A limited number of our lease agreements include rental payments that are adjusted periodically based on a market rate or index. Our lease agreements generally do not contain residual value guarantees or material restrictive covenants, with the exception of the non-cancellable synthetic lease discussed below.
The following presents the components of our lease expense for the year ended November 30, 2020 (in millions):

Operating lease cost$41.2 
Finance lease cost:
Amortization of ROU assets9.0 
Interest on lease liabilities4.5 
Net lease cost$54.7 
(1) Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial.

Rental expense under operating leases (primarily buildings and equipment) was $48.1 million in 2019 and $58.5 million in 2018.
Supplemental balance sheet information related to leases as of November 30, 2020 were as follows (in millions):

LeasesClassification
Assets:
Operating lease ROU assetsOther long-term assets$136.8 
Finance lease ROU assetsProperty, plant and equipment, net120.7 
Total leased assets$257.5 
Liabilities:
Current
Operating Other accrued liabilities $37.3 
FinanceCurrent portion of long-term debt7.3 
Non-current
Operating Other long-term liabilities103.5 
FinanceLong-term debt125.5 
Total lease liabilities$273.6 

Information regarding our lease terms and discount rates as of November 30, 2020 were as follows:
Weighted-average remaining lease term (years)Weighted-average discount rate
Operating leases5.61.9 %
Finance leases13.93.3 %

The future maturity of our lease liabilities as of November 30, 2020 were as follows (in millions):

Operating leasesFinance leasesTotal
2021$39.4 $11.4 $50.8 
202229.2 11.4 40.6 
202322.3 11.4 33.7 
202415.3 11.5 26.8 
202512.6 11.7 24.3 
Thereafter28.8 114.0 142.8 
Total lease payments147.6 171.4 319.0 
Less: Imputed interest6.8 38.6 45.4 
Total lease liabilities$140.8 $132.8 $273.6 

Supplemental cash flow and other information related to leases for the year ended November 30, 2020 were as follows (in millions):
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows used for operating leases$41.5 
Operating cash flows used for finance leases4.5 
Financing cash flows used for finance leases6.9 
ROU assets obtained in exchange for lease liabilities
Operating leases$36.6 
During October 2020, we entered into a non-cancellable synthetic lease for a distribution facility with an estimated construction cost of $315 million. The lease will commence upon completion of construction of the facility, for which we are the construction agent, which is expected to be in the later part of fiscal 2022. The term of the lease is five years after commencement. The lease contains options to negotiate a renewal of the lease or to purchase or sell the facility at the end of the lease term. Upon lease commencement, the ROU asset and lease liability will be determined and recorded. The lease arrangement also contains a residual value guarantee of approximately 75% of the total construction cost. The lease also contains covenants that are consistent with our revolving credit agreements as disclosed in Note 6.
Leases LEASESOur lease portfolio primarily consists of (i) certain real estate, including those related to a number of administrative, distribution and manufacturing locations; (ii) certain machinery and equipment, including forklifts; and (iii) automobiles, delivery trucks and other vehicles, including an airplane. When our real estate lease arrangements
include lease and non-lease components (for example, common area maintenance), we account for each component separately, based on their relative standalone prices. For all other asset categories, we combine lease components and non-lease components into a single lease commitment. We determine if an agreement is a lease or contains a lease at inception. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are based on the estimated present value of lease payments over the lease term and are recognized at the lease commencement date.

As most of our leases do not provide an implicit borrowing rate, we use our estimated incremental borrowing rate in determining the present value of lease payments. The estimated incremental borrowing rate is derived from information available at the lease commencement date.

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. A limited number of our lease agreements include rental payments that are adjusted periodically based on a market rate or index. Our lease agreements generally do not contain residual value guarantees or material restrictive covenants, with the exception of the non-cancellable synthetic lease discussed below.
The following presents the components of our lease expense for the year ended November 30, 2020 (in millions):

Operating lease cost$41.2 
Finance lease cost:
Amortization of ROU assets9.0 
Interest on lease liabilities4.5 
Net lease cost$54.7 
(1) Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial.

Rental expense under operating leases (primarily buildings and equipment) was $48.1 million in 2019 and $58.5 million in 2018.
Supplemental balance sheet information related to leases as of November 30, 2020 were as follows (in millions):

LeasesClassification
Assets:
Operating lease ROU assetsOther long-term assets$136.8 
Finance lease ROU assetsProperty, plant and equipment, net120.7 
Total leased assets$257.5 
Liabilities:
Current
Operating Other accrued liabilities $37.3 
FinanceCurrent portion of long-term debt7.3 
Non-current
Operating Other long-term liabilities103.5 
FinanceLong-term debt125.5 
Total lease liabilities$273.6 

Information regarding our lease terms and discount rates as of November 30, 2020 were as follows:
Weighted-average remaining lease term (years)Weighted-average discount rate
Operating leases5.61.9 %
Finance leases13.93.3 %

The future maturity of our lease liabilities as of November 30, 2020 were as follows (in millions):

Operating leasesFinance leasesTotal
2021$39.4 $11.4 $50.8 
202229.2 11.4 40.6 
202322.3 11.4 33.7 
202415.3 11.5 26.8 
202512.6 11.7 24.3 
Thereafter28.8 114.0 142.8 
Total lease payments147.6 171.4 319.0 
Less: Imputed interest6.8 38.6 45.4 
Total lease liabilities$140.8 $132.8 $273.6 

Supplemental cash flow and other information related to leases for the year ended November 30, 2020 were as follows (in millions):
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows used for operating leases$41.5 
Operating cash flows used for finance leases4.5 
Financing cash flows used for finance leases6.9 
ROU assets obtained in exchange for lease liabilities
Operating leases$36.6 
During October 2020, we entered into a non-cancellable synthetic lease for a distribution facility with an estimated construction cost of $315 million. The lease will commence upon completion of construction of the facility, for which we are the construction agent, which is expected to be in the later part of fiscal 2022. The term of the lease is five years after commencement. The lease contains options to negotiate a renewal of the lease or to purchase or sell the facility at the end of the lease term. Upon lease commencement, the ROU asset and lease liability will be determined and recorded. The lease arrangement also contains a residual value guarantee of approximately 75% of the total construction cost. The lease also contains covenants that are consistent with our revolving credit agreements as disclosed in Note 6.