Leases

9 Months Ended

Apr. 30, 2021


8. 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 10 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 of up to 4 years, some of which include one or more options to extend the subleases for up to 5 years per option.

The components of lease expense were as follows:


	Three Months Ended				Nine Months Ended
(In millions)	April 30, 2021		April 30, 2020		April 30, 2021		April 30, 2020
Operating lease cost (1)	$	21	$	16	$	54	$	53

Variable lease cost	2		3		8		9
Sublease income	(4)		(5)		(12)		(19)
Total net lease cost	$	19	$	14	$	50	$	43

(1) Includes short-term leases, which were not significant for each of the three and nine months ended April 30, 2021 and 2020.

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


	Nine Months Ended
(In millions)	April 30, 2021		April 30, 2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	52	$	50
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	$	32	$	328

(1) For the nine months ended April 30, 2020, this includes $319 million for operating leases existing on August 1, 2019 and $9 million for operating leases that commenced in the first nine months of fiscal 2020.

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


	April 30, 2021		July 31, 2020
Weighted-average remaining lease term for operating leases	6.6 years		5.5 years
Weighted-average discount rate for operating leases	2.3	%	3.1	%

Future minimum lease payments under non-cancellable operating leases as of April 30, 2021 were as follows:


(In millions)	Operating Leases (1)
Fiscal year ending July 31,
2021 (excluding the nine months ended April 30, 2021)	$	17
2022	88
2023	78
2024	74
2025	59
Thereafter	157
Total future minimum lease payments	473
Less imputed interest	(34)
Present value of lease liabilities	$	439

(1) Non-cancellable sublease proceeds for the remainder of the fiscal year ending July 31, 2021 and the fiscal years ending July 31, 2022, 2023, 2024, and 2025, of $3 million, $9 million, $3 million, $2 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:


(In millions)	April 30, 2021		July 31, 2020

Operating lease right-of-use assets	$	370	$	226

Other current liabilities	$	74	$	46
Operating lease liabilities	365		221
Total operating lease liabilities	$	439	$	267

As of April 30, 2021, we have additional operating leases of $42 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 in fiscal year 2022 with lease terms of 3 to 11 years.