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Leases | 9 Months Ended
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Feb. 29, 2020
Leases [Abstract] |
Leases | NOTE 13—LEASES We have leases for manufacturing facilities, warehouses, office facilities, equipment, and vehicles, which are primarily classified and accounted for as operating leases. We have a small portfolio of finance leases, which are not material to our Consolidated Financial Statements. Some leases include one or more options to renew, generally at our sole discretion, with renewal terms that can extend the lease term from one to five years or more. In addition, certain leases contain termination options, where the rights to terminate are held by either us, the lessor, or both parties. These options to extend or terminate a lease are included in the lease terms when it is reasonably certain that we will exercise that option. We have made an accounting policy election not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less, with no purchase option that we are reasonably certain to exercise. ROU assets and lease liabilities are recognized based on the present value of the fixed and in-substance fixed lease payments over the lease term at the commencement date. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by lease incentives. We use our incremental borrowing rate as the discount rate to determine the present value of the lease payments for leases, as our leases do not have readily determinable implicit discount rates. Our incremental borrowing rate is the rate of interest that we would have to borrow on a collateralized basis over a similar term and amount in a similar economic environment. We determine the incremental borrowing rates for our leases by adjusting the local risk-free interest rate with a credit risk premium corresponding to our credit rating. Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the ROU assets and interest expense for the outstanding lease liabilities using the discount rate discussed above. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain vendors have the right to declare that we are in default of our agreements if any such vendor, including the lessors under its vehicle leases, determines that a change in our financial condition poses a substantially increased credit risk. Our lease agreements do not contain any significant residual value guarantees or material restrictive covenants. Income from subleases was not significant for any period presented. During the three months ended February 29, 2020, we incurred lease costs of $20.3 million, which is primarily comprised of operating lease cost of $18.2 million and other costs of $2.1 million which include costs for our finance leases, short-term leases, and variable lease payments. During the nine months ended February 29, 2020, we incurred lease costs of $62.5 million, which is primarily comprised of operating lease costs of $54.1 million and other costs of $8.4 million, which include costs for our finance leases, short-term leases and variable lease payments. For the three and nine months ended February 29, 2020, we paid approximately $17.1 million and $51.1 million, respectively, for operating lease obligations. These payments are included in operating cash flows. In addition, during the nine months ended February 29, 2020, we recognized ROU assets for $54.8 million in exchange for new operating lease obligations. At February 29, 2020, the weighted-average remaining lease term under our operating leases was 9.4 years, while the weighted-average discount rate for our operating leases was approximately 3.7%. The following represents our future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities, as of February 29, 2020:
(In thousands) |  |  |  |
Year ending May 31, |  | Operating Leases |
2020 (excluding the nine months ended February 29) |  | $ | 16,157 |
2021 |  |  | 58,231 |
2022 |  |  | 47,303 |
2023 |  |  | 36,535 |
2024 |  |  | 30,324 |
Thereafter |  |  | 175,896 |
Total lease payments |  | $ | 364,446 |
Less imputed interest |  |  | 65,666 |
Total present value of lease liabilities |  | $ | 298,780 |
As of February 29, 2020, our current lease liability balance was $51.1 million and recorded within Other Accrued Liabilities on our Consolidated Balance Sheet. Following is a summary of our future minimum lease commitments, as determined under ASC 840, for all non-cancelable lease agreements, for each of the next five years and in the aggregate, as of May 31, 2019:
(In thousands) |  |  |  |
Year ending May 31, |  | Operating Leases |
2020 |  | $ | 59,163 |
2021 |  |  | 49,731 |
2022 |  |  | 40,339 |
2023 |  |  | 32,798 |
2024 |  |  | 27,716 |
Thereafter |  |  | 119,607 |
Total lease payments |  | $ | 329,354 |
Related party leases and subleases were not significant during any period presented, and therefore are not disclosed. Further, we do not have leases that have not yet commenced, which would create significant rights and obligations for us, including any involvement with the construction or design of the underlying asset.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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