Leases

12 Months Ended

Apr. 30, 2020

Leases

Leases

8. Leases

The Company leases office and warehouse facilities, distribution equipment and its fleet of vehicles. The Company’s leases have lease terms ranging from one to eleven years. The Company’s facility leases generally contain renewal options for periods ranging from one to five years. The exercise of lease renewal options is typically at the Company’s sole discretion. The Company does not recognize ROU assets or lease liabilities for renewal options unless it is determined that the Company is reasonably certain of exercising renewal options at lease inception. Certain of the Company’s equipment leases include options to purchase the leased property and certain of the Company’s equipment leases contain residual value guarantees. Any residual value payment deemed probable is included in the Company’s lease liability. The Company’s lease agreements do not contain any material restrictive covenants.

The Company determines if an arrangement is a lease at inception and evaluates whether the lease meets the classification criteria of a finance or operating lease. Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and long-term operating lease liabilities in the Consolidated Balance Sheet. Finance leases are included in property and equipment, current portion of long-term debt and long-term debt in the Consolidated Balance Sheet.  

Lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. For leases that do not provide an implicit rate, the Company uses its incremental borrowing rate in determining the present value of future payments. The Company determines its incremental borrowing rate based on the applicable lease terms and the current economic environment. Lease ROU assets also include any lease payments made in advance and excludes lease incentives and initial direct costs incurred. Some of the Company’s lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvements funding or other lease concessions. Lease expense is recognized on a straight-line basis based on the fixed component over the lease term. Variable lease costs consist primarily of taxes, insurance and common area or other maintenance costs for leased facilities and vehicles and equipment, which are paid based on actual costs incurred.

The components of lease expense were as follows:

	Year
	Ended
	April 30, 2020
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	24,352
Interest on lease liabilities		13,316
Operating lease cost		42,846
Variable lease cost		12,555
Total lease cost	$	93,069

Operating lease cost, including variable lease cost, is included in selling, general and administrative expenses; amortization of finance ROU assets is included in depreciation and amortization; and interest on finance lease liabilities is included in interest expense in the Consolidated Statements of Operations and Comprehensive Income (Loss). Rent expense under operating leases was $53.5 million and $63.9 million during the years ended April 30, 2019 and 2018, respectively, and is included in selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Supplemental cash flow information related to leases was as follows:

	Year
	Ended
	April 30, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	42,150
Operating cash flows from finance leases		13,316
Financing cash flows from finance leases		25,275
Right-of-use assets obtained in exchange for lease obligations
Operating leases		38,143
Finance leases		50,484

Other information related to leases was as follows:

	April 30,
	2020			2019
	(in thousands)
Finance leases included in property and equipment
Property and equipment	$	171,380		$	134,931
Accumulated depreciation		(41,737)			(27,686)
Property and equipment, net	$	129,643		$	107,245
Weighted-average remaining lease term (years)
Operating leases		4.9
Finance leases		3.6
Weighted-average discount rate
Operating leases		5.5	%
Finance leases		5.0	%

Future minimum lease payments under non-cancellable leases as of April 30, 2020 were as follows:

	Finance		Operating
Year Ending April 30,	(in thousands)
2021	$	46,116	$	38,960
2022		39,328		30,387
2023		30,525		23,655
2024		21,234		18,775
2025		10,544		12,154
Thereafter		3,647		16,848
Total lease payments		151,394		140,779
Less imputed interest		22,627		18,134
Total	$	128,767	$	122,645