Operating lease right-of-use assets
Notes to Financial Statements ▼ ▶
NOTE 14 — 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 17 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) |
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Year Ended June 30, |
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2024 |
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2023 |
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2022 |
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Operating lease cost |
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$ |
3,555 |
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$ |
2,875 |
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$ |
2,461 |
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Finance lease cost: |
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Amortization of right-of-use assets |
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$ |
1,800 |
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$ |
1,352 |
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$ |
980 |
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Interest on lease liabilities |
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734 |
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501 |
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429 |
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Total finance lease cost |
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$ |
2,534 |
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$ |
1,853 |
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$ |
1,409 |
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Supplemental cash flow information related to leases was as follows:
(In millions) |
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Year Ended June 30, |
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2024 |
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2023 |
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2022 |
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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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$ |
3,550 |
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$ |
2,706 |
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$ |
2,368 |
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Operating cash flows from finance leases |
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734 |
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501 |
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429 |
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Financing cash flows from finance leases |
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1,286 |
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1,056 |
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896 |
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Right-of-use assets obtained in exchange for lease obligations: |
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Operating leases |
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6,703 |
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3,514 |
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5,268 |
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Finance leases |
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11,633 |
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3,128 |
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4,234 |
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Supplemental balance sheet information related to leases was as follows:
(In millions, except lease term and discount rate) |
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June 30, |
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2024 |
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2023 |
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Operating Leases |
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Operating lease right-of-use assets |
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$ |
18,961 |
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$ |
14,346 |
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Other current liabilities |
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$ |
3,580 |
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$ |
2,409 |
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Operating lease liabilities |
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15,497 |
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12,728 |
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Total operating lease liabilities |
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$ |
19,077 |
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$ |
15,137 |
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Finance Leases |
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Property and equipment, at cost |
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$ |
32,248 |
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$ |
20,538 |
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Accumulated depreciation |
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(6,386 |
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(4,647 |
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Property and equipment, net |
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$ |
25,862 |
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$ |
15,891 |
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Other current liabilities |
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$ |
2,349 |
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$ |
1,197 |
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Other long-term liabilities |
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24,796 |
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15,870 |
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Total finance lease liabilities |
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$ |
27,145 |
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$ |
17,067 |
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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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11 years |
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Weighted Average Discount Rate |
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Operating leases |
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3.3% |
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2.9% |
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Finance leases |
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3.9% |
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3.4% |
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The following table outlines maturities of our lease liabilities as of June 30, 2024:
(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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2025 |
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$ |
4,124 |
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$ |
3,311 |
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2026 |
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3,549 |
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3,021 |
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2027 |
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2,981 |
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3,037 |
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2028 |
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2,405 |
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3,026 |
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2029 |
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1,924 |
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2,638 |
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Thereafter |
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6,587 |
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19,116 |
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Total lease payments |
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21,570 |
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34,149 |
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Less imputed interest |
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(2,493 |
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(7,004 |
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Total |
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$ |
19,077 |
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$ |
27,145 |
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As of June 30, 2024, we had additional operating and finance leases, primarily for datacenters, that had not yet commenced of $8.6 billion and $108.4 billion, respectively. These operating and finance leases will commence between fiscal year 2025 and fiscal year 2030 with lease terms of 1 year to 20 years.