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Leases
6 Months Ended
Oct. 30, 2020
Leases [Abstract]  
Leases

9. Leases

 

We lease real estate, equipment and automobiles in the U.S. and internationally. Our real estate leases, which are responsible for the majority of our aggregate ROU asset and liability balances, include leases for office space, data centers and other facilities, and as of October 30, 2020, have remaining lease terms of up to 15 years. Some of these leases contain options that allow us to extend or terminate the lease agreement. Our equipment leases are primarily for servers and networking equipment and as of October 30, 2020, have remaining lease terms of up to 4 years. As of October 30, 2020, our automobile leases have remaining lease terms of up to 5 years. All our leases are classified as operating leases except for certain immaterial equipment finance leases.

 

In June 2020, we entered into a build-to-suit lease agreement for an office building with future undiscounted payments of approximately $67 million. Because the Company does not control the underlying asset during the construction period, the Company is not considered the owner of the asset under construction for accounting purposes. The lease will commence upon completion of the construction of the office building which is expected to be in fiscal 2021. The initial term of the lease is twenty years with options to renew the lease during the lease term. An ROU asset and related lease liability will be measured and recognized in our financial statements in the period the lease commences.

 

The components of lease cost related to our operating leases were as follows (in millions):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

October 30,

2020

 

 

October 25,

2019

 

 

October 30,

2020

 

 

October 25,

2019

 

Operating lease cost

 

$

14

 

 

$

15

 

 

$

28

 

 

$

29

 

Variable lease cost

 

 

2

 

 

 

4

 

 

 

5

 

 

 

8

 

Total lease cost

 

$

16

 

 

$

19

 

 

$

33

 

 

$

37

 

 

Variable lease cost is primarily attributable to amounts paid to lessors for common area maintenance and utility charges under our real estate leases.

 

The supplemental cash flow information related to our operating leases is as follows (in millions):

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

 

October 30,

2020

 

 

October 25,

2019

 

Cash paid for amounts included in the measurement of operating lease liabilities

 

 

 

 

 

$

28

 

 

$

29

 

Right-of-use assets obtained in exchange for new operating lease obligations

 

 

 

 

 

$

16

 

 

$

21

 

 

The supplemental balance sheet information related to our operating leases is as follows (in millions, except lease term and discount rate):

 

 

 

 

 

 

 

October 30,

2020

 

 

April 24,

2020

 

Other non-current assets

 

 

 

 

 

$

129

 

 

$

137

 

Total operating lease ROU assets

 

 

 

 

 

$

129

 

 

$

137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses

 

 

 

 

 

$

52

 

 

$

51

 

Other long-term liabilities

 

 

 

 

 

 

84

 

 

 

93

 

Total operating lease liabilities

 

 

 

 

 

$

136

 

 

$

144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Remaining Lease Term

 

 

 

 

 

3.5 years

 

 

3.9 years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Discount Rate

 

 

 

 

 

 

2.7

%

 

 

2.7

%

 

Future minimum operating lease payments as of October 30, 2020, which exclude the undiscounted payments for the build-to-suit lease expected to commence in fiscal 2021, are as follows (in millions):

 

 

 

 

 

 

 

Operating Leases

 

Fiscal 2021 (remainder)

 

 

 

 

 

$

30

 

Fiscal 2022

 

 

 

 

 

 

47

 

Fiscal 2023

 

 

 

 

 

 

28

 

Fiscal 2024

 

 

 

 

 

 

17

 

Fiscal 2025

 

 

 

 

 

 

9

 

Fiscal 2026

 

 

 

 

 

 

8

 

Thereafter

 

 

 

 

 

 

3

 

Total lease payments

 

 

 

 

 

$

142

 

Less: Interest

 

 

 

 

 

 

(6

)

Total

 

 

 

 

 

$

136