Leases (Notes)

6 Months Ended

Jul. 31, 2019

NOTE 11 — LEASES

At contract inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. The Company has operating leases for certain logistics centers, office facilities, vehicles and equipment. The Company’s finance leases are not material. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. Certain of the Company’s operating leases contain options to extend the lease, which are included in the lease term when it is reasonably certain that the option will be exercised. Certain of the Company's operating leases contain options to terminate the lease; periods after the date of the termination option are included in the lease term when it is reasonably certain that the Company will not exercise the option to terminate the lease. The Company has elected to not separately recognize the lease and non-lease components of a contract for all operating leases.

Operating leases are included in “other assets, net”, “accrued expenses and other liabilities” (for the current portion of lease liabilities) and “other long-term liabilities” on the Consolidated Balance Sheet. These assets and liabilities are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term using the Company's incremental borrowing rate. Lease expense for operating leases is recognized on a straight-line basis over the lease term and is recognized in “selling, general and administrative expenses” on the Consolidated Statement of Income. Variable lease costs are recognized as incurred.

The following table presents the contractual maturities of the Company's operating lease liabilities as of July 31, 2019:



Fiscal year:
(in thousands)
2020 (remaining 6 months)	$	33,408
2021	63,070
2022	41,811
2023	30,247
2024	22,390
Thereafter	35,788
Total payments	$	226,714
Less amount of lease payments representing interest	(25,834		)
Total present value of lease payments	$	200,880

Rental expense for all operating leases totaled $21.8 million and $43.4 million during the three and six months ended July 31, 2019. These costs primarily relate to fixed costs for long-term operating leases, but also include immaterial amounts for variable lease costs and short-term operating leases.

The following amounts were recorded in the Company's Consolidated Balance Sheet as of July 31, 2019:



Operating leases	Balance sheet location	July 31, 2019
(in thousands)
Operating lease right-of-use assets	Other assets, net	$	201,782
Current operating lease liabilities	Accrued expenses and other liabilities	64,361
Non-current operating lease liabilities	Other long-term liabilities	136,519

Supplemental cash flow information related to the Company's operating leases is as follows:



Cash flow information	Six months ended July 31, 2019
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:	$	35,067
Non-cash right-of-use assets obtained in exchange for lease liabilities:	18,036

The weighted-average remaining lease term and discount rate were as follows as of July 31, 2019:



Operating lease term and discount rate	Operating Leases
Weighted-average remaining lease term	4.7 years
Weighted-average discount rate	4.8	%