Leases

3 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

Leases

The Company has operating and finance leases for data centers, corporate offices, and certain equipment. Its leases have remaining lease terms of one to 10 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within one to three years.

Operating Leases

The components of operating lease expense were as follows:

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Operating lease cost	$	106	$	130
Short-term lease cost	8		11
Variable lease cost	22		18
Sublease income	(4)		(9)
Total operating costs	$	132	$	150

Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and as such, are excluded from the supplemental cash flow information stated below.

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows	$	106	$	130
ROU assets obtained in exchange for operating lease liabilities(1)	$	55	$	52

(1) Net of $338 million and $242 million in lease modifications and terminations for the three months ended June 30, 2022 and June 30, 2021, respectively. See Note 17 – “Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents operating lease balances:

		As of
(in millions)	Balance Sheet Line Item	June 30, 2022		March 31, 2022
ROU operating lease assets	Operating right-of-use assets, net	$	1,025	$	1,133
Operating lease liabilities	Current operating lease liabilities	$	346	$	388
Operating lease liabilities	Non-current operating lease liabilities	742		815
Total operating lease liabilities		$	1,088	$	1,203

The weighted-average operating lease term was 4.2 years and 4.4 years as of June 30, 2022 and March 31, 2022, respectively. The weighted-average operating lease discount rate was 3.4% and 3.3% as of June 30, 2022 and March 31, 2022, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of June 30, 2022:

	Fiscal Year
(in millions)	Remainder of 2023		2024		2025		2026		2027		Thereafter		Total
Operating lease payments	$	286	$	304	$	232	$	141	$	68	$	150	$	1,181
Less: imputed interest													(93)
Total operating lease liabilities													$	1,088

Finance Leases

The components of finance lease expense were as follows:

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Amortization of right-of-use assets	$	61	$	87
Interest on lease liabilities	5		9
Total finance lease cost	$	66	$	96

The following table provides supplemental cash flow information related to the Company’s finance leases:

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Interest paid for finance lease liabilities – Operating cash flows	$	5	$	9
Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows	96		170
Total cash paid in the measurement of finance lease obligations	$	101	$	179
Capital expenditures through finance lease obligations(1)	$	26	$	71

(1) See Note 17 – ”Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents finance lease balances:

		As of
(in millions)	Balance Sheet Line Item	June 30, 2022		March 31, 2022
ROU finance lease assets	Property and Equipment, net	$	534	$	602
Finance lease	Short-term debt and current maturities of long-term debt	$	267	$	289
Finance lease	Long-term debt, net of current maturities	321		354
Total finance lease liabilities(1)		$	588	$	643

(1) See Note 10 – “Debt” for further information on finance lease liabilities.

The weighted-average finance lease term was 2.8 years as of June 30, 2022 and March 31, 2022, respectively. The weighted-average finance lease discount rate was 2.9% as of June 30, 2022 and March 31, 2022, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of June 30, 2022:

	Fiscal Year
(in millions)	Remainder of 2023		2024		2025		2026		2027		Thereafter		Total
Finance lease payments	$	217	$	196	$	116	$	58	$	26	$	1	$	614
Less: imputed interest													(26)
Total finance lease liabilities													$	588

Leases

Leases

The Company has operating and finance leases for data centers, corporate offices, and certain equipment. Its leases have remaining lease terms of one to 10 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within one to three years.

Operating Leases

The components of operating lease expense were as follows:

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Operating lease cost	$	106	$	130
Short-term lease cost	8		11
Variable lease cost	22		18
Sublease income	(4)		(9)
Total operating costs	$	132	$	150

Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and as such, are excluded from the supplemental cash flow information stated below.

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows	$	106	$	130
ROU assets obtained in exchange for operating lease liabilities(1)	$	55	$	52

(1) Net of $338 million and $242 million in lease modifications and terminations for the three months ended June 30, 2022 and June 30, 2021, respectively. See Note 17 – “Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents operating lease balances:

		As of
(in millions)	Balance Sheet Line Item	June 30, 2022		March 31, 2022
ROU operating lease assets	Operating right-of-use assets, net	$	1,025	$	1,133
Operating lease liabilities	Current operating lease liabilities	$	346	$	388
Operating lease liabilities	Non-current operating lease liabilities	742		815
Total operating lease liabilities		$	1,088	$	1,203

The weighted-average operating lease term was 4.2 years and 4.4 years as of June 30, 2022 and March 31, 2022, respectively. The weighted-average operating lease discount rate was 3.4% and 3.3% as of June 30, 2022 and March 31, 2022, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of June 30, 2022:

	Fiscal Year
(in millions)	Remainder of 2023		2024		2025		2026		2027		Thereafter		Total
Operating lease payments	$	286	$	304	$	232	$	141	$	68	$	150	$	1,181
Less: imputed interest													(93)
Total operating lease liabilities													$	1,088

Finance Leases

The components of finance lease expense were as follows:

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Amortization of right-of-use assets	$	61	$	87
Interest on lease liabilities	5		9
Total finance lease cost	$	66	$	96

The following table provides supplemental cash flow information related to the Company’s finance leases:

(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021
Interest paid for finance lease liabilities – Operating cash flows	$	5	$	9
Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows	96		170
Total cash paid in the measurement of finance lease obligations	$	101	$	179
Capital expenditures through finance lease obligations(1)	$	26	$	71

(1) See Note 17 – ”Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents finance lease balances:

		As of
(in millions)	Balance Sheet Line Item	June 30, 2022		March 31, 2022
ROU finance lease assets	Property and Equipment, net	$	534	$	602
Finance lease	Short-term debt and current maturities of long-term debt	$	267	$	289
Finance lease	Long-term debt, net of current maturities	321		354
Total finance lease liabilities(1)		$	588	$	643

(1) See Note 10 – “Debt” for further information on finance lease liabilities.

The weighted-average finance lease term was 2.8 years as of June 30, 2022 and March 31, 2022, respectively. The weighted-average finance lease discount rate was 2.9% as of June 30, 2022 and March 31, 2022, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of June 30, 2022:

	Fiscal Year
(in millions)	Remainder of 2023		2024		2025		2026		2027		Thereafter		Total
Finance lease payments	$	217	$	196	$	116	$	58	$	26	$	1	$	614
Less: imputed interest													(26)
Total finance lease liabilities													$	588