Leases

6 Months Ended

Jul. 31, 2019

We have entered into operating lease agreements for our office space, data centers, and other property and equipment. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Right-of-use assets also include adjustments related to prepaid or deferred lease payments and lease incentives. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of lease payments. As of July 31, 2019, total operating lease right-of-use assets and operating lease liabilities were approximately $295 million and $309 million, respectively.

Options to extend or terminate a lease are included in the lease term when it is reasonably certain that we will exercise such options. The remaining lease term of our leases generally ranges from less than one year to ten years.

The components of operating lease expense were as follows (in thousands):



	Three Months Ended July 31, 2019		Six Months Ended July 31, 2019
Operating lease cost	$	18,961	$	37,475
Short-term lease cost	4,205		7,845
Variable lease cost	5,138		8,564
Total operating lease cost	$	28,304	$	53,884

Information related to our operating lease right-of-use assets and operating lease liabilities was as follows (in thousands, except periods and percentages):



	Three Months Ended July 31, 2019		Six Months Ended July 31, 2019
Cash paid for operating lease liabilities	$	19,324	$	35,508
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities ⁽¹⁾	31,071		327,021


			As of July 31, 2019
Weighted average remaining lease term (in years)			6
Weighted average discount rate			3.53		%


⁽¹⁾	Includes $279 million for operating leases existing on February 1, 2019, and $48 million for operating leases that commenced in the first half of fiscal 2020.

As of July 31, 2019, maturities of operating lease liabilities were as follows (in thousands):



Fiscal period:
Remainder of 2020	$	34,512
2021	77,259
2022	66,814
2023	53,607
2024	44,483
Thereafter	76,409
Total lease payments	353,084
Less imputed interest	(43,667		)
Total	$	309,417

As of July 31, 2019, we have additional operating leases, primarily for office space, that have not yet commenced with total undiscounted lease payments of $33 million. These operating leases will commence between fiscal 2020 and fiscal 2021, with lease terms ranging from three to six years.

Related Party Lease Transactions

We lease certain office space from an affiliate of our Chairman, Mr. Duffield, adjacent to our corporate headquarters in Pleasanton, California, under various lease agreements. As of July 31, 2019, the operating lease right-of-use assets and operating lease liabilities related to these agreements were $53 million and $64 million, respectively. The weighted average remaining lease term of these agreements is five years. The total rent expense under these agreements was $3 million and $2 million for the three months ended July 31, 2019, and 2018, respectively, and $6 million and $5 million for the six months ended July 31, 2019, and 2018, respectively.