Leases

12 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Note 10. LEASES

Lessee Arrangements

The following amounts were recorded in the Company’s Balance Sheet relating to its operating leases and other supplemental information:

	As of June 30, 2020
	(in millions)
ROU assets	$	539
Lease liabilities
Current lease liabilities	$	122
Non-current lease liabilities		452
Total lease liabilities	$	574
Other supplemental information
Weighted average remaining lease term	8 years
Weighted average discount rate		3	%

The following table presents information about the Company’s lease costs and supplemental cash flows information for leases:

	For the year ended June 30, 2020
	(in millions)
Lease costs
Total lease costs(a)	$	126
Supplemental cash flows information
Operating cash flows from operating leases	$	166
ROU assets obtained in exchange for operating lease liabilities(b)	$	87

^(a) Total lease costs of $126 million for the year ended June 30, 2020 are net of sublease income of approximately $50 million, of which approximately $40 million relates to office facilities that have been subleased to News Corporation.

^{(b) Primarily related to leases obtained through the Company’s acquisitions (See Note 3—Acquisitions, Disposals and Other Transactions under the heading “Acquisitions and Disposals”) and the commencement of a lease.}

The following table presents the lease payments relating to the Company’s operating leases:

	As of June 30, 2020
	(in millions)
Fiscal Year
2021(a)	$	135
2022		95
2023		95
2024		91
2025		83
Thereafter		169
Total lease payments		668
Less: imputed interest		(94	)
Present value of operating lease liabilities	$	574

^(a) Included in the fiscal 2021 lease payments presented above are approximately $15 million for office facilities that have been subleased through November 2020 to News Corporation.

In accordance with GAAP in effect prior to the adoption of Topic 842, total operating lease expense, including corporate allocations, was approximately $100 million and $105 million for fiscal 2019 and 2018, respectively.

Lessor Arrangements

The Company’s lessor arrangements primarily relate to its owned production and office facilities at the FOX Studio Lot, which is located in Los Angeles, California. The Company is responsible for the management of the FOX Studio Lot, which includes managing and providing facilities, studio operations, and production services. The Company leases production and office space on the FOX Studio Lot to 21CF for an initial term of seven years, subject to two five-year renewal options exercisable by 21CF. As a result, the FOX Studio Lot will predominantly be utilized by Disney productions until 2026. The Company will receive approximately $50 million annually in lease payments over the lease term.

The Company recorded total lease income of approximately $55 million for the year ended June 30, 2020, which is included in Revenues in the Statements of Operations. The Company recognizes lease payments for operating leases as revenue on a straight-line basis over the lease term and variable lease payments as revenue in the period incurred.