Leases

9 Months Ended

Jan. 31, 2021

We lease certain warehouses, manufacturing facilities, office space, equipment, and vehicles, primarily through operating lease agreements. We have elected to not recognize leases with a term of 12 months or less on the balance sheet. Instead, we recognize the related lease expense on a straight-line basis over the lease term.

Although the majority of our right-of-use asset and lease liability balances consist of leases with renewal options, these optional periods do not typically impact the lease term as we are not reasonably certain to exercise them. Certain leases also include termination provisions or options to purchase the leased property. Since we are not reasonably certain to exercise these types of options, minimum lease payments do not include any amounts related to these termination or purchase options. Our lease agreements generally do not contain residual value guarantees or restrictive covenants that are material.

We determine if an agreement is or contains a lease at inception by evaluating whether an identified asset exists that we control over the term of the arrangement. A lease commences when the lessor makes the identified asset available for our use. We generally account for lease and non-lease components as a single lease component. Minimum lease payments do not include variable lease payments other than those that depend on an index or rate.

For the majority of our leases, the interest rate implicit in the lease cannot be readily determined, so we utilize our incremental borrowing rate to present value lease payments using information available at the lease commencement date. We consider our credit rating and the current economic environment in determining this collateralized rate.

The following table sets forth the right-of-use assets and lease liabilities recognized in the Condensed Consolidated Balance Sheets.


	January 31, 2021		April 30, 2020
Operating lease right-of-use assets	$	147.9	$	148.4
Operating lease liabilities:
Current operating lease liabilities	$	39.2	$	36.5
Noncurrent operating lease liabilities	120.2		120.0
Total operating lease liabilities	$	159.4	$	156.5

Finance lease right-of-use assets:
Machinery and equipment	$	9.9	$	11.6
Accumulated depreciation	(5.3)		(5.9)
Total property, plant, and equipment	$	4.6	$	5.7
Finance lease liabilities:
Other current liabilities	$	2.0	$	2.2
Other noncurrent liabilities	2.7		3.5
Total finance lease liabilities	$	4.7	$	5.7

The following table summarizes the components of lease expense.


	Three Months Ended January 31,				Nine Months Ended January 31,
	2021		2020		2021		2020
Operating lease cost	$	11.6	$	13.2	$	34.0	$	38.5
Finance lease cost:
Amortization of right-of-use assets	0.6		0.7		1.8		2.3
Interest on lease liabilities	—		0.1		0.1		0.2
Variable lease cost	6.6		5.0		17.7		17.6
Short-term lease cost	9.5		8.5		28.8		25.9
Sublease income	(0.9)		(1.1)		(3.4)		(3.4)
Net lease cost	$	27.4	$	26.4	$	79.0	$	81.1

The following table sets forth cash flow and noncash information related to leases.


	Nine Months Ended January 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	32.3	$	38.8
Operating cash flows from finance leases	0.1		0.2
Financing cash flows from finance leases	2.0		2.1
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	31.2		56.6
Finance leases	0.8		2.4

The following table summarizes the maturity of our lease liabilities by fiscal year.


	January 31, 2021
	Operating Leases		Finance Leases
2021 (remainder of the year)	$	10.5	$	0.6
2022	42.5		1.8
2023	40.0		1.1
2024	28.6		0.9
2025	20.9		0.4
2026 and beyond	26.3		0.1
Total undiscounted minimum lease payments	$	168.8	$	4.9
Less: Imputed interest	9.4		0.2
Lease liabilities	$	159.4	$	4.7

The following table sets forth the weighted average remaining lease term and discount rate.


	January 31, 2021		April 30, 2020
Weighted average remaining lease term (in years):
Operating leases	4.6		4.7
Finance leases	3.1		3.4

Weighted average discount rate:
Operating leases	2.6	%	3.1	%
Finance leases	2.7	%	2.9	%