LEASES Leases

6 Months Ended

Jan. 31, 2020

LEASES

The Company has operating and finance leases for office space, office equipment, warehouse space and automobiles. The leases have remaining terms of up to 11 years, some of which include options to purchase, extend or terminate the leases, and management has assessed such terms when determining the lease term for accounting purposes. The Company's current lease arrangements expire through 2030.

The Company's leases do not include any residual value guarantees, and therefore none were considered in the calculation of the operating ROU and operating lease liability balances. The Company has leases that contain variable payments, most commonly in the form of common area maintenance charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the operating ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments.

For leases with terms greater than 12 months, the Company records the related operating ROU assets and operating lease liabilities at the present value of lease payments over the lease terms. For leases with an initial term of 12 months or less (with purchase options or extension options that are not reasonably certain to be exercised), the Company does not record them on the balance sheet, but instead recognizes lease expense on a straight-line basis over the terms of the leases.

Lease expense

The components of the Company's lease expense are presented below:



	Three Months Ended January 31, 2020		Six Months Ended January 31, 2020
	(In thousands)
Operating lease cost	$	4,816	$	9,632
Short-term lease expense	226		452
Variable lease cost	6		46
Amortization of finance lease assets	18		36
Interest on finance lease liabilities	4		8
	$	5,070	$	10,174

Lease commitments

The Company's future minimum lease payments required under operating and finance leases that have commenced as of January 31, 2020 were as follows:



	Operating Leases		Finance Leases
	(In thousands)
2020	$	10,527	$	65
2021	15,941		76
2022	12,493		76
2023	7,597		38
2024	5,298		—
Thereafter	23,261		—
Total lease payments	75,117		255
Less: imputed interest	12,413		38
Present value of lease payments	62,704		217
Less: current maturities of lease obligations	14,717		71
Long-term lease obligations	$	47,987	$	146

As of January 31, 2020, the Company had additional operating leases primarily for office space, which have not yet commenced, with lease liabilities totaling $8.9 million.

In order to calculate the operating ROU asset and operating lease liability for a lease, ASC 842 requires that a lessee apply a discount rate equal to the rate implicit in the lease whenever that rate is readily determinable. The Company's lease agreements do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors. Therefore, we use an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value.

Additional lease information

Additional information related to the Company's leases as of January 31, 2020 was as follows:



Weighted average remaining lease term:
Operating leases	6.3	years
Finance leases	2.8	years

Weighted average discount rate:
Operating leases		4.4%
Finance leases		3.8%

Supplemental cash flow information

Supplemental cash flow information related to the Company's leases during the six months ended January 31, 2020 was as follows (in thousands):



Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	8,769
Operating cash flows from finance leases	$	5
Financing cash flows from finance leases	$	74

Leases