Leases

12 Months Ended

Jul. 31, 2024


10. 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 up to 18 years, which include options to extend that are reasonably certain of being exercised. Some of our leases include one or more options to extend the leases for up to 10 years per option, which we are not reasonably certain to exercise. The options to extend are 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 sublease certain office facilities to third parties. These subleases have remaining lease terms of up to 6 years, one of which includes an option to extend the sublease for up to 5 years.

The components of lease expense were as follows:


	Twelve Months Ended July 31,
(In millions)	2024		2023		2022
Operating lease cost (1)	$	108	$	124	$	105

Variable lease cost	23		20		15
Sublease income	(11)		(12)		(17)
Total net lease cost	$	120	$	132	$	103

(1) Includes short-term leases, which were not material for the twelve months ended July 31, 2024, 2023 or 2022.

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


	Twelve Months Ended July 31,
(In millions)	2024		2023		2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	89	$	107	$	104
Right-of-use assets obtained in exchange for operating lease liabilities	$	35	$	28	$	238

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


	July 31,
	2024		2023		2022
Weighted-average remaining lease term for operating leases	7.7 years		7.9 years		8.1 years
Weighted-average discount rate for operating leases	3.3	%	3	%	2.9	%

Future minimum lease payments under non-cancellable operating leases as of July 31, 2024 were as follows:


(In millions)	Operating Leases (1)
Fiscal year ending July 31,
2025	$	87
2026	88
2027	78
2028	65
2029	68
Thereafter	221
Total future minimum lease payments	607
Less imputed interest	(78)
Present value of lease liabilities	$	529

(1) Non-cancellable sublease proceeds for the fiscal years ending July 31, 2025, 2026, 2027, 2028, 2029, and thereafter of $7 million, $2 million, $2 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 dates indicated:


	July 31,
(In millions)	2024		2023

Operating lease right-of-use assets	$	411	$	469

Other current liabilities	$	71	$	89
Operating lease liabilities	458		480
Total operating lease liabilities	$	529	$	569

As of July 31, 2024, we have additional operating leases of $124 million for office facilities that have not yet commenced and therefore are not reflected on the consolidated balance sheets nor in the tables above. These operating leases are expected to commence in fiscal year 2025 with lease terms ranging from nine to 10 years.