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Leases
3 Months Ended
Jul. 30, 2021
Leases [Abstract]  
Leases

8. 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 July 30, 2021, 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 July 30, 2021, have remaining lease terms of up to 4 years. As of July 30, 2021, 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 located in Wichita, Kansas, 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 the third quarter of fiscal 2022. The initial term of the lease is twenty years with options to renew the lease during the lease term. A ROU asset and related lease liability will be measured and recognized in our financial statements in the period the lease commences.

 

In April 2021, we entered into a lease for our new corporate headquarters located in San Jose, California, which is comprised of approximately three hundred thousand square feet of office space and requires future minimum undiscounted payments of approximately $180 million over the initial 11-year lease term. The lease agreement also provides us two successive renewal options, each for five years. The lease commenced during the first quarter of fiscal 2022.

 

 

 

 

 

 

 

 

 

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

 

 

 

Three Months Ended

 

 

 

July 30,

2021

 

 

July 31,

2020

 

Operating lease cost

 

$

15

 

 

$

14

 

Variable lease cost

 

 

4

 

 

 

3

 

Total lease cost

 

$

19

 

 

$

17

 

 

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):

 

 

 

Three Months Ended

 

 

 

July 30,

2021

 

 

July 31,

2020

 

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

 

$

13

 

 

$

14

 

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

 

$

159

 

 

$

10

 

 

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

 

 

 

July 30,

2021

 

 

April 30,

2021

 

Other non-current assets

 

$

259

 

 

$

114

 

Total operating lease ROU assets

 

$

259

 

 

$

114

 

 

 

 

 

 

 

 

 

 

Accrued expenses

 

$

53

 

 

$

49

 

Other long-term liabilities

 

 

211

 

 

 

71

 

Total operating lease liabilities

 

$

264

 

 

$

120

 

 

 

 

 

 

 

 

 

 

Weighted Average Remaining Lease Term

 

8.0 years

 

 

3.4 years

 

 

 

 

 

 

 

 

 

 

Weighted Average Discount Rate

 

 

2.8

%

 

 

2.9

%

 

Future minimum operating lease payments as of July 30, 2021, which exclude the undiscounted payments for the build-to-suit lease located in Wichita, Kansas, expected to commence in the third quarter of fiscal year 2022, are as follows (in millions):

 

Fiscal Year

 

Operating Leases

 

2022 (remainder)

 

$

46

 

2023

 

 

46

 

2024

 

 

36

 

2025

 

 

27

 

2026

 

 

24

 

Thereafter

 

 

116

 

Total lease payments

 

 

295

 

Less: Interest

 

 

(31

)

Total

 

$

264