Leases

12 Months Ended

Jan. 31, 2020

We lease offices under noncancelable operating lease agreements that expire at various dates through March 2032. As of January 31, 2020, we had no finance leases. Some operating leases contain escalation provisions for adjustments in the consumer price index.

The following table is a summary of our lease costs:


(in thousands)	Year Ended January 31, 2020
Operating lease cost	$	26,490
Short-term lease cost	837
Total lease cost	$	27,327

Future lease payments under noncancelable operating leases as of January 31, 2020, were as follows:


Fiscal Period:	Amount (in thousands)
2021	$	24,327
2022	32,299
2023	32,531
2024	32,777
2025	26,307
Thereafter	67,053
Total undiscounted cash flows	$	215,294
Less: imputed interest	(32,134)
Present value of lease liabilities	$	183,160

The weighted average remaining lease term and discount rate for operating leases as of January 31, 2020 were 7.7 years and 4.4%.

We have commitments of $26.2 million, including $17.6 million entered into after January 31, 2020, for operating leases that have not yet commenced. These leases have terms of 4 to 6 years.

The future minimum annual lease payments as of January 31, 2019, prior to the adoption of Topic 842, related to the outstanding lease agreements were as follows:


Fiscal Period:	Amount (in thousands)
2020	$	22,198
2021	22,617
2022	22,556
2023	23,173
2024	23,373
Thereafter	34,634
Total minimum lease payments	$	148,551

Israel Build-to-Suit Lease

In July 2018, we entered into a long-term lease of a new-construction office space in Giv'at Shmuel, Israel. The lease has a term of 10 years with an option to cancel after five years and six months and an option to extend for five years. Since the office space was delivered to us as a cold shell and we are performing construction activities, for accounting purposes only, we were deemed to be the owner of the entire project, including the office space shell. In August 2018, upon commencement of the construction, we began to capitalize the related costs, including the fair value of the office space shell, as a build-to-suit property within “Property and equipment, net” and recognize a corresponding build-to-suit lease obligation, including interest. Fair value of the office space shell was estimated at $2.5 million using comparable market prices per square foot for similar space for public real estate transactions in the surrounding area. As of January 31, 2019, $4.2 million was capitalized for the building and construction costs. Construction was completed on the office in December 2018 and, as such, a portion of the monthly lease payment is allocated to land rent and recorded as an operating lease expense and the non-interest portion of the amortized lease payments to the landlord related to the rent of the building is applied to reduce the build-to-suit lease obligation. Upon adoption of Topic 842 on February 1, 2019, we derecognized the build-to-suit asset and recognized an operating right-of-use asset for the related lease within the consolidated balance sheet as of January 31, 2020. Refer to Note 1 for additional information.