Leases

3 Months Ended

Oct. 31, 2019

6. Leases

We lease office facilities under non-cancellable operating lease arrangements. Our facility leases generally provide for periodic rent increases and may contain escalation clauses and renewal options. Our leases have remaining lease terms of less than 1 year to 11 years, some of which include one or more options to extend the leases for up to 10 years per option, generally at rates to be determined in accordance with the agreements. Options to extend the lease are included in the lease liability if they are reasonably certain of being exercised. We do not have significant finance leases.

We sublease certain office facilities to third parties. These subleases have remaining lease terms from 1 to 5 years, and some include options to extend the leases for up to 4 years.

The components of lease expense were as follows:



	Three Months Ended
(In millions)	October 31, 2019
Operating lease cost ⁽¹⁾	$	18
Variable lease cost	3
Sublease income	(7		)
Total net lease cost	$	14


⁽¹⁾	Includes short-term leases, which are not significant for the three months ended October 31, 2019.

Supplemental cash flow information related to operating leases was as follows:



	Three Months Ended
	October 31, 2019
(In millions)
Cash paid for amounts included in the measurement of operating lease liabilities	$	16

Right-of-use assets obtained in exchange for new operating lease liabilities ⁽¹⁾	$	322


⁽¹⁾	Includes $319 million for operating leases existing on August 1, 2019 and $3 million for operating leases that commenced in the first quarter of 2020.

Other information related to operating leases was as follows at the date indicated:



	October 31, 2019
Weighted-average remaining lease term for operating leases	5.8
Weighted-average discount rate for operating leases	2.9	%

Future minimum lease payments under non-cancellable operating leases as of October 31, 2019 were as follows:



(In millions)	Operating Leases ⁽¹⁾
Fiscal year ending July 31,
2020 (excluding the three months ended October 31, 2019)	$	46
2021	73
2022	67
2023	60
2024	58
Thereafter	79
Total future minimum lease payments	383
Less imputed interest	(31		)
Present value of lease liabilities	$	352


(1)	Non-cancellable sublease proceeds for the remainder of the fiscal year ending July 31, 2020 and the fiscal years ending July 31, 2021, 2022, 2023, 2024, and thereafter of $18 million, $22 million, $10 million, $1 million, $1 million, and $1 million, respectively, are not included in the table above.

Supplemental balance sheet information related to operating leases was as follows at the date indicated:



(In millions)	October 31, 2019

Operating lease right-of-use assets	$	307

Other current liabilities	$	55
Operating lease liabilities	297
Total operating lease liabilities	$	352

As of October 31, 2019, we have additional operating leases of $19 million, primarily for office facilities, that have not yet commenced and therefore are not reflected on the condensed consolidated balance sheet nor in the tables above. These operating leases will commence between fiscal year 2020 and fiscal year 2022 with lease terms of 5 to 10 years.