Leases

12 Months Ended

Jun. 30, 2023

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,
	2023			2022
	(in millions)
ROU assets	$	947		$	477
Lease liabilities
Current lease liabilities	$	72		$	107
Non-current lease liabilities	925			405
Total lease liabilities	$	997		$	512
Other supplemental information
Weighted average remaining lease term	17 years			9 years
Weighted average discount rate	5		%	3		%

In December 2022, the Company renewed the operating lease for its corporate headquarters at 1211 Avenue of the Americas in New York through fiscal 2042. In connection with this extension, the Company recorded additional operating lease assets and liabilities of approximately $540 million as of June 30, 2023.

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


	For the years ended June 30,
	2023		2022		2021
	(in millions)
Lease costs
Total lease costs(a)	$	145	$	128	$	126
Supplemental cash flows information
Operating cash flows from operating leases	$	119	$	116	$	134
ROU assets obtained in exchange for operating lease liabilities	$	568	$	137	$	49


(a)			Total lease costs of $145 million, $128 million and $126 million for fiscal 2023, 2022 and 2021 are net of sublease income of approximately $15 million, $15 million and $30 million, respectively. Approximately $15 million of the sublease income for fiscal 2021 relates to office facilities that were subleased through November 2020 to News Corporation, a related party (see Note 13—Related Party Transactions).

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


	As of June 30, 2023
	(in millions)
Fiscal Year
2024	$	123
2025	113
2026	63
2027	61
2028	93
Thereafter	1,101
Total lease payments	1,554
Less: imputed interest	(557)
Present value of operating lease liabilities	$	997

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 remaining lease term.

The Company recorded total lease income of approximately $60 million, $60 million, and $50 million for fiscal 2023, 2022 and 2021 respectively, 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.