Leases and Other Commitments

12 Months Ended

Jun. 30, 2023

Leases

The Company leases certain domestic and international facilities and data center space under long-term, non-cancelable operating leases that expire at various dates through 2034. These leases include no material variable or contingent lease payments. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include prepaid lease payments minus any lease incentives. Extension or termination options present in the Company’s lease agreements are included in determining the right-of-use asset and lease liability when it is reasonably certain the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term. The following table summarizes supplemental balance sheet information related to operating leases as of June 30, 2023:

The following table summarizes supplemental balance sheet information related to operating leases as of June 30, 2023:


	Lease Amounts
Minimum lease payments by year:	(in millions)
2024	$	49
2025	47
2026	47
2027	42
2028	35
Thereafter	114
Total future minimum lease payments	334
Less: Imputed Interest	50
Present value of lease liabilities	284
Less: Current portion (included in Accrued expenses)	40
Long-term operating lease liabilities (included in Other liabilities )	$	244

Operating lease right-of-use assets (included in Other non-current assets)	$	260

Weighted average remaining lease term in years	7.6
Weighted average discount rate	4.2		%

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases for the year ended June 30, 2023:



	June 30, 2023
	(in millions)
Cost of operating leases	$	57
Cash paid for operating leases	51
Operating lease assets obtained in exchange for operating lease liabilities	17

Cost of operating leases was as follows:


	2023		2022		2021
	(in millions)
Cost of operating leases	$	57	$	58	$	50

Purchase Agreements and Other Commitments

In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. As of June 30, 2023, the Company had the following minimum long-term commitments:


	Long-term commitments
	(in millions)
Fiscal year:
2024	$	275
2025	253
2026	61
2027	47
2028	20
Thereafter	130
Total	$	786