Leases

6 Months Ended

Oct. 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 and six months ended October 31, 2019, our lease costs consist of the following:



				(in 000s)
	Three months ended October 31, 2019			Six months ended October 31, 2019
Operating lease costs	$	60,759		$	120,930
Variable lease costs	17,689			32,450
Subrental income	(336		)	(685		)
Total lease costs	$	78,112		$	152,695

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



	($ in 000s)
Cash paid for operating lease costs	$	99,146
Operating lease right of use assets obtained in exchange for operating lease liabilities ⁽¹⁾	$	204,962
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 October 31, 2019 are as follows:



	(in 000s)
Remainder of 2020	$	121,490
2021	176,640
2022	116,537
2023	60,550
2024	27,756
2025 and thereafter	14,996
Total future undiscounted operating lease payments	517,969
Less imputed interest	(28,381		)
Total operating lease liabilities	$	489,588

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.