LEASES

3 Months Ended

Sep. 30, 2023

NOTE 12 — LEASES

We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. Our leases have remaining lease terms of less than 1 year to 18 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.

The components of lease expense were as follows:


(In millions)


Three Months Ended September 30,		2023		2022

Operating lease cost	$	775	$	662


Finance lease cost:
Amortization of right-of-use assets	$	380	$	189
Interest on lease liabilities		149		113


Total finance lease cost	$	529	$	302

Supplemental cash flow information related to leases was as follows:


(In millions)


Three Months Ended September 30,		2023		2022

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	795	$	654
Operating cash flows from finance leases		149		113
Financing cash flows from finance leases		285		256

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		1,804		1,189
Finance leases		1,704		611

Supplemental balance sheet information related to leases was as follows:


(In millions, except lease term and discount rate)


	September 30, 2023			June 30, 2023

Operating Leases

Operating lease right-of-use assets	$	15,435		$	14,346


Other current liabilities	$	2,538		$	2,409
Operating lease liabilities		13,487			12,728


Total operating lease liabilities	$	16,025		$	15,137


Finance Leases

Property and equipment, at cost	$	21,892		$	20,538
Accumulated depreciation		(4,949	)		(4,647	)


Property and equipment, net	$	16,943		$	15,891


Other current liabilities	$	1,577		$	1,197
Other long-term liabilities		16,577			15,870


Total finance lease liabilities	$	18,154		$	17,067


Weighted Average Remaining Lease Term

Operating leases		8 years			8 years
Finance leases		11 years			11 years

Weighted Average Discount Rate

Operating leases		3.1%			2.9%
Finance leases		3.6%			3.4%

The following table outlines maturities of our lease liabilities as of September 30, 2023:


(In millions)


Year Ending June 30,	Operating Leases			Finance Leases

2024 (excluding the three months ended September 30, 2023)	$	2,287		$	1,378
2025		2,834			2,196
2026		2,365			1,883
2027		1,961			1,890
2028		1,767			1,900
Thereafter		6,803			12,934


Total lease payments		18,017			22,181
Less imputed interest		(1,992	)		(4,027	)


Total	$	16,025		$	18,154

As of September 30, 2023, we had additional operating and finance leases, primarily for datacenters, that had not yet commenced of $7.5 billion and $75.1 billion, respectively. These operating and finance leases will commence between fiscal year 2024 and fiscal year 2030 with lease terms of 1 year to 18 years.