LEASES

9 Months Ended

Apr. 30, 2020

We have operating leases for offices, research and development facilities and datacenters. Our leases have remaining lease terms of one year to approximately nine years, some of which include options to renew or terminate. We do not include renewal options in the lease terms for calculating our lease liability, as we are not reasonably certain that we will exercise these renewal options at the time of the lease commencement. Our lease agreements do not contain any residual value guarantees or restrictive covenants.

Total operating lease cost was $10.0 million and $28.9 million for the three and nine months ended April 30, 2020, respectively, excluding short-term lease costs, variable lease costs and sublease income, each of which were not material. Variable lease costs primarily include common area maintenance charges. Total lease expense recognized prior to our adoption of ASC 842 was $9.4 million and $25.0 million for the three and nine months ended April 30, 2019, respectively.

During the second quarter of fiscal 2020, we ceased using certain office spaces in Bangalore, India. As the carrying value of the related right-of-use assets exceeded fair value, we recorded a $3.0 million impairment in our condensed consolidated statements of operations for the nine months ended April 30, 2020. Of the $3.0 million impairment, approximately $1.8 million relates to the impairment of the operating lease right-of-use assets and approximately $1.2 million relates to the impairment of leasehold improvements. Additional charges related to asset impairments may be recorded in the future.

Supplemental balance sheet information related to leases is as follows:


	As of April 30, 2020
	(in thousands)
Operating leases:
Operating lease right-of-use assets, gross	$	154,689

Accumulated amortization	(22,170)
Operating lease right-of-use assets, net	$	132,519

Operating lease liabilities—current	$	34,371
Operating lease liabilities—non-current	123,470
Total operating lease liabilities	$	157,841

Weighted average remaining lease term (in years):	4.0
Weighted average discount rate:	5.3		%

Supplemental cash flow and other information related to leases is as follows:


	Nine Months Ended April 30, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	30,593

Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	41,888

The undiscounted cash flows for our operating lease liabilities as of April 30, 2020 were as follows:


Fiscal Year Ending July 31:	Amount
	(in thousands)
2020 (remaining three months)	$	9,713
2021	44,225
2022	43,801
2023	41,987
2024	29,952
Thereafter	7,931
Total lease payments	177,609
Less: imputed interest	(19,768)
Total lease obligation	157,841
Less: current lease obligations	(34,371)
Long-term lease obligations	$	123,470

As of April 30, 2020, we have additional operating lease commitments of approximately $3.5 million on an undiscounted basis for certain office leases that have not yet commenced. These operating leases will commence during the remainder of fiscal 2020, fiscal 2021 and fiscal 2022, with lease terms of two to five years.

As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2019, the following table summarizes the future minimum payments due under our operating leases as of July 31, 2019, reported under ASC 840:


Fiscal Year Ending July 31:	Amount
	(in thousands)
2020	$	39,540
2021	41,909
2022	41,332
2023	40,695
2024	30,240
Thereafter	3,511
Total	$	197,227