Annual report pursuant to Section 13 and 15(d)

Leases

v3.21.4
Leases
12 Months Ended
Oct. 31, 2021
Leases [Abstract]  
Leases Leases
The Company adopted ASC 842, Leases on November 4, 2019 using the modified transition method without retrospective application to comparative periods. The Company elected the package of three practical expedients allowed for under the transition guidance. Accordingly, the Company did not reassess: (1) whether any expired or existing contracts are/or contain leases; (2) the lease classification for any expired or existing leases; or (3) initial direct costs for any existing leases. The Company has also elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less.
Upon adoption, the Company recorded approximately $47.2 million of ROU assets and $52.0 million of lease liabilities related to operating leases in the Consolidated Balance Sheets. The Company also recognized a $22.2 million cumulative-effect adjustment to retained earnings related to the deferred gain on the sale and leaseback of real estate.
The Company’s material leases are classified as operating and consist of branch locations, as well as corporate office space. Our leases have remaining terms of 1 - 9 years. The lease term is the minimum of the non-cancelable period of the lease or the lease term inclusive of reasonably certain renewal option periods.
The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate and instead account for each as a single lease component, for all underlying asset classes. Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance, tax payments and other miscellaneous costs. The variable portion of lease payments is not included in the ROU assets or lease liabilities. Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred and are included in lease expenses. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses.
Operating leases are included in Right-of-use assets - operating leases and Operating lease liabilities, current and long-term, in the Consolidated Balance Sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term and is included in Selling, administrative and other operating costs in the Consolidated Statement of Operations. The Company’s finance lease arrangements are immaterial.
Year Ended
Components of Lease Expense (in thousands) October 31, 2021 November 1, 2020
Operating lease expense $ 8,785  $ 10,990 
Sublease income (1,799) (1,577)
Variable lease expense 1,550  760 
Total (1) (2)
$ 8,536  $ 10,173 
(1) The Company's short-term lease expense is immaterial.
(2) Lease expense included in restructuring is approximately $2.1 million and $0.3 million in fiscal 2021 and 2020, respectively.

Year Ended
Supplemental Cash Flows Information (in thousands) October 31, 2021 November 1, 2020
Cash paid for amounts included in the measurement of operating lease liabilities $ 10,829  $ 8,784 
Operating ROU assets obtained in exchange for operating lease liabilities $ 3,122  $ 1,784 

Year Ended
Weighted Average Remaining Lease Term and Discount Rate October 31, 2021 November 1, 2020
Weighted average remaining lease term (years) 7.4 7.9
Weighted average discount rate 6.3  % 6.3  %
Maturities of Lease Liabilities (in thousands) As of October 31, 2021
Fiscal Year Amount
2022 $ 9,022 
2023 7,622 
2024 6,028 
2025 5,418 
2026 4,283 
Thereafter 18,704 
Total future lease payments $ 51,077 
Less: Imputed interest 10,626 
Total lease liabilities $ 40,451