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Leases

12 Months Ended

Jul. 31, 2021

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from one to four years. net2phone-UCaaS also has operating leases for office equipment. Certain of these leases include renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise the options to extend or terminate the leases.

The adoption of ASC 842 resulted in the recognition of operating lease liabilities of $12.4 million and operating ROU assets of the same amount as of August 1, 2019 based on the present value of the remaining minimum rental payments associated with the Company’s leases.

net2phone-UCaaS is the lessee in equipment leases that were classified as capital leases under Topic 840 and are finance leases under ASC 842. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

The Company leases office and parking space from Rafael Holdings, Inc. (“Rafael”) in a building and parking garage located at 520 Broad St, Newark, New Jersey. The Company also leases office space in Israel from Rafael. Howard S. Jonas, the Chairman of the Company’s Board of Directors, is also the Chairman of the Board of Directors of Rafael. The Newark lease expires in April 2025 and the Israel lease expires in July 2025. In both fiscal 2021 and fiscal 2020, the Company incurred lease costs of $1.9 million in connection with the Rafael leases, which is included in operating lease cost in the table below.

Supplemental disclosures related to the Company’s operating leases were as follows:

Year ended July 31 (in thousands)	2021		2020
Operating lease cost	$	2,824	$	2,832
Short-term lease cost		620		246
TOTAL LEASE COST	$	3,444	$	3,078

Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases	$	2,779	$	2,745

July 31	2021			2020
Weighted-average remaining lease term-operating leases		3.4 years			4.2 years
Weighted-average discount rate-operating leases		2.9	%		3.12	%

On September 1, 2020, the Company entered into a new lease with an aggregate operating lease liability of $0.6 million. The Company’s aggregate operating lease liability was as follows:

July 31 (in thousands) 2021 2020

Operating lease liabilities included in “Other current liabilities” $ 2,456 $ 2,350

Operating lease liabilities included in noncurrent liabilities 5,473 7,353

TOTAL $ 7,929 $ 9,703

IDT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Future minimum maturities of operating lease liabilities were as follows:

(in thousands)
Year ending July 31:
2022	$	2,656
2023		2,432
2024		1,844
2025		1,423
2026		—
Thereafter		—
Total lease payments		8,355
Less imputed interest		(426	)
Total operating lease liabilities	$	7,929