Leases

3 Months Ended

Jul. 31, 2019

NOTE 10: LEASES

As discussed in note 1, we adopted ASU 2016-02 on May 1, 2019. The majority of our lease portfolio consists of retail office space in the U.S., Canada, and Australia. The contract terms for these retail offices generally are from May 1 to April 30. We record operating lease right of use (ROU) assets and operating lease liabilities based on the discounted future minimum lease payments over the term of the lease. We generally do not include renewal options in the term of the lease. As the rates implicit in our leases are not readily determinable, we used our incremental borrowing rate based on the lease term and geographic location in calculating the discounted future minimum lease payments.

We recognize lease expenses for our operating leases on a straight-line basis. For lease payments that are subject to adjustments based on indexes or rates, the most current index or rate adjustments were included in the measurement of our ROU assets and lease liabilities at adoption. Variable lease costs, including non-lease components (such as common area maintenance, utilities, insurance and taxes) and certain index-based changes in lease payments, are expensed as incurred.

For the three months ended July 31, 2019, our lease costs consist of the following:



	(in 000s)
Operating lease costs	$	60,171
Variable lease costs	14,761
Subrental income	(349		)
Total lease costs	$	74,583

Other information related to operating leases for the three months ended July 31, 2019 is as follows:



	(dollars in 000s)
Cash paid for operating lease costs	$	58,881
Operating lease right of use assets obtained in exchange for operating lease liabilities ⁽¹⁾	$	157,216
Weighted-average remaining operating lease term (years)	3
Weighted-average operating lease discount rate	3.5		%

⁽¹⁾This balance excludes the initial impacts of the adoption of ASU 2016-02.

Aggregate operating lease maturities as of July 31, 2019 are as follows:



	(in 000s)
Remainder of 2020	$	158,893
2021	164,760
2022	104,983
2023	50,061
2024	20,145
2025 and thereafter	8,701
Total future undiscounted operating lease payments	507,543
Less imputed interest	(28,370		)
Total operating lease liabilities	$	479,173

As disclosed in our Annual Report on Form 10-K for the fiscal year ended April 30, 2019, our future undiscounted operating lease commitments under the previous accounting standard was $573.3 million.