LEASES

9 Months Ended

Jan. 31, 2020

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 nine months ended January 31, 2020, our lease costs consist of the following:



				(in 000s)
	Three months ended January 31, 2020			Nine months ended January 31, 2020
Operating lease costs	$	59,804		$	180,734
Variable lease costs	17,822			50,272
Subrental income	(330		)	(1,015		)
Total lease costs	$	77,296		$	229,991

Other information related to operating leases for the nine months ended January 31, 2020 is as follows:



	($ in 000s)
Cash paid for operating lease costs	$	160,769
Operating lease right of use assets obtained in exchange for operating lease liabilities ⁽¹⁾	251,284
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 January 31, 2020 are as follows:



	(in 000s)
Remainder of 2020	$	61,713
2021	190,233
2022	130,637
2023	73,433
2024	34,988
2025 and thereafter	19,573
Total future undiscounted operating lease payments	510,577
Less imputed interest	(33,388		)
Total operating lease liabilities	$	477,189

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.