LEASES

9 Months Ended

Mar. 31, 2021

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 1 year to 15 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 March 31,				Nine Months Ended March 31,
		2021		2020		2021		2020
Operating lease cost	$	553	$	522	$	1,554	$	1,465
Finance lease cost:
Amortization of right-of-use assets	$	211	$	135	$	666	$	423
Interest on lease liabilities		100		87		286		249
Total finance lease cost	$	311	$	222	$	952	$	672

Supplemental cash flow information related to leases was as follows:

(In millions)	Three Months Ended March 31,					Nine Months Ended March 31,
		2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	533	$	505	$	1,506	$	1,437
Operating cash flows from finance leases		100		87		286		249
Financing cash flows from finance leases		168		110		457		293
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		1,106		680		3,362		2,611
Finance leases		836		259		2,664		2,611

Supplemental balance sheet information related to leases was as follows:

(In millions, except lease term and discount rate)
	March 31, 2021			June 30, 2020
Operating Leases
Operating lease right-of-use assets	$	10,673		$	8,753
Other current liabilities	$	1,876		$	1,616
Operating lease liabilities		9,272			7,671
Total operating lease liabilities	$	11,148		$	9,287
Finance Leases
Property and equipment, at cost	$	13,412		$	10,371
Accumulated depreciation		(2,051	)		(1,385	)
Property and equipment, net	$	11,361		$	8,986
Other current liabilities	$	753		$	540
Other long-term liabilities		11,301			8,956
Total finance lease liabilities	$	12,054		$	9,496
Weighted Average Remaining Lease Term
Operating leases		6 years			8 years
Finance leases		12 years			13 years
Weighted Average Discount Rate
Operating leases		2.2%			2.7%
Finance leases		3.4%			3.9%

The following table outlines maturities of our lease liabilities as of March 31, 2021:

(In millions)
Year Ending June 30,	Operating Leases			Finance Leases
2021 (excluding the nine months ended March 31, 2021)	$	603		$	278
2022		1,981			1,128
2023		1,803			1,140
2024		1,607			1,156
2025		1,320			1,481
Thereafter		4,716			9,510
Total lease payments		12,030			14,693
Less imputed interest		(882	)		(2,639	)
Total	$	11,148		$	12,054

As of March 31, 2021, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $5.3 billion and $6.8 billion, respectively. These operating and finance leases will commence between fiscal year 2021 and fiscal year 2026 with lease terms of 1 year to 15 years.