Notes to Financial Statements
NOTE 13 — LEASES
We have operating and finance leases for datacenters, corporate offices, research and development facilities, retail stores, and certain equipment. Our leases have remaining lease terms of 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:
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(In millions) |
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Three Months Ended September 30, |
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2020 |
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2019 |
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Operating lease cost |
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$ |
498 |
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$ |
465 |
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Finance lease cost: |
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Amortization of right-of-use assets |
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$ |
206 |
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$ |
125 |
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Interest on lease liabilities |
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92 |
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|
78 |
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Total finance lease cost |
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$ |
298 |
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$ |
203 |
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Supplemental cash flow information related to leases was as follows:
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(In millions) |
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Three Months Ended September 30, |
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2020 |
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2019 |
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Cash paid for amounts included in the measurement of lease liabilities: |
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Operating cash flows from operating leases |
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$ |
491 |
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$ |
453 |
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Operating cash flows from finance leases |
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|
92 |
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|
78 |
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Financing cash flows from finance leases |
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|
136 |
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|
79 |
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Right-of-use assets obtained in exchange for lease obligations: |
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Operating leases |
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|
678 |
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|
983 |
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Finance leases |
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|
635 |
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1,489 |
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Supplemental balance sheet information related to leases was as follows:
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(In millions, except lease term and discount rate) |
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September 30, 2020 |
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June 30, |
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Operating Leases |
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Operating lease right-of-use assets |
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$ |
9,047 |
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$ |
8,753 |
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Other current liabilities |
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$ |
1,744 |
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$ |
1,616 |
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Operating lease liabilities |
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|
7,753 |
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|
7,671 |
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Total operating lease liabilities |
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$ |
9,497 |
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$ |
9,287 |
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Finance Leases |
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Property and equipment, at cost |
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$ |
11,174 |
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$ |
10,371 |
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Accumulated depreciation |
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(1,591 |
) |
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(1,385 |
) |
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Property and equipment, net |
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$ |
9,583 |
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$ |
8,986 |
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Other current liabilities |
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$ |
596 |
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$ |
540 |
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Other long-term liabilities |
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|
9,571 |
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8,956 |
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Total finance lease liabilities |
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$ |
10,167 |
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$ |
9,496 |
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Weighted Average Remaining Lease Term |
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Operating leases |
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7 years |
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8 years |
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Finance leases |
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12 years |
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13 years |
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Weighted Average Discount Rate |
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Operating leases |
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2.6% |
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2.7% |
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Finance leases |
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3.8% |
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3.9% |
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Maturities of lease liabilities were as follows:
|
(In millions) |
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Year Ending June 30, |
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Operating Leases |
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Finance Leases |
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2021 (excluding the three months ended September 30, 2020) |
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$ |
1,522 |
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$ |
709 |
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2022 |
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|
1,738 |
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|
958 |
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2023 |
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|
1,566 |
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|
968 |
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2024 |
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|
1,362 |
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|
982 |
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2025 |
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|
1,090 |
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|
|
1,304 |
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Thereafter |
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|
3,513 |
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|
7,805 |
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Total lease payments |
|
|
10,791 |
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|
|
12,726 |
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Less imputed interest |
|
|
(1,294 |
) |
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|
(2,559 |
) |
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Total |
|
$ |
9,497 |
|
|
$ |
10,167 |
|
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As of September 30, 2020, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $4.3 billion and $4.6 billion, respectively. These operating and finance leases will commence between fiscal year 2021 and fiscal year 2024 with lease terms of 1 year to 16 years.
