LEASES

6 Months Ended

Dec. 31, 2024

Leases [Abstract]

LEASES

NOTE 13 — 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 20 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 December 31,					Six Months Ended December 31,
		2024		2023		2024		2023
Operating lease cost	$	1,293	$	817	$	2,453	$	1,591
Finance lease cost:
Amortization of right-of-use assets	$	830	$	408	$	1,524	$	788
Interest on lease liabilities		337		168		611		317
Total finance lease cost	$	1,167	$	576	$	2,135	$	1,105

Supplemental cash flow information related to leases was as follows:

(In millions)	Three Months Ended December 31,					Six Months Ended December 31,
		2024		2023		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	962	$	803	$	2,169	$	1,597
Operating cash flows from finance leases		319		168		594		317
Financing cash flows from finance leases		480		288		1,282		573
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		3,098		847		4,991		2,651
Finance leases		6,435		1,796		10,767		3,500

Supplemental balance sheet information related to leases was as follows:

(In millions, except lease term and discount rate)
	December 31, 2024			June 30, 2024
Operating Leases
Operating lease right-of-use assets	$	22,816		$	18,961
Other current liabilities	$	4,608		$	3,580
Operating lease liabilities		17,254			15,497
Total operating lease liabilities	$	21,862		$	19,077
Finance Leases
Property and equipment, at cost	$	42,539		$	32,248
Accumulated depreciation		(7,650	)		(6,386	)
Property and equipment, net	$	34,889		$	25,862
Other current liabilities	$	2,673		$	2,349
Other long-term liabilities		33,404			24,796
Total finance lease liabilities	$	36,077		$	27,145
Weighted Average Remaining Lease Term
Operating leases		7 years			7 years
Finance leases		12 years			12 years
Weighted Average Discount Rate
Operating leases		3.4%			3.3%
Finance leases		4.0%			3.9%

The following table outlines maturities of our lease liabilities as of December 31, 2024:

(In millions)
Year Ending June 30,	Operating Leases			Finance Leases
2025 (excluding the six months ended December 31, 2024)	$	2,726		$	1,979
2026		4,920			4,149
2027		4,063			4,180
2028		3,025			4,175
2029		2,203			3,528
Thereafter		7,433			28,350
Total lease payments		24,370			46,361
Less imputed interest		(2,508	)		(10,284	)
Total	$	21,862		$	36,077

As of December 31, 2024, we had additional operating and finance leases, primarily for datacenters, that had not yet commenced of $6.0 billion and $99.4 billion, respectively. These operating and finance leases will commence between fiscal year 2025 and fiscal year 2030 with lease terms of 1 year to 25 years.