v3.22.4
Leases
 9 Months Ended
Dec. 31, 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:

Three Months EndedNine Months Ended
(in millions)December 31, 2022December 31, 2021December 31, 2022December 31, 2021
Operating lease cost$97 $117 $311 $371 
Short-term lease cost 9 9 28 32 
Variable lease cost 17 17 56 50 
Sublease income(5)(1)(15)(27)
Total operating costs$118 $142 $380 $426 
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.

Nine Months Ended
(in millions)December 31, 2022December 31, 2021
Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows
$311 $371 
ROU assets obtained in exchange for operating lease liabilities(1)
$193 $130 
        

(1) Net of $911 million and $792 million in lease modifications and terminations during the nine months of fiscal 2023 and 2022, 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 ItemDecember 31, 2022March 31, 2022
ROU operating lease assetsOperating right-of-use assets, net$954 $1,133 
Operating lease liabilitiesCurrent operating lease liabilities$320 $388 
Operating lease liabilities Non-current operating lease liabilities691 815 
Total operating lease liabilities $1,011 $1,203 

The weighted-average operating lease term was 4.1 years and 4.4 years as of December 31, 2022 and March 31, 2022, respectively. The weighted-average operating lease discount rate was 3.7% and 3.3% as of December 31, 2022 and March 31, 2022, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of December 31, 2022:

Fiscal Year
(in millions)
Remainder of 2023
2024202520262027
Thereafter
Total
Operating lease payments
$99 $325 $258 $169 $85 $159 $1,095 
Less: imputed interest
(84)
Total operating lease liabilities
$1,011 
Finance Leases

The components of finance lease expense were as follows:

Three Months EndedNine Months Ended
(in millions)December 31, 2022December 31, 2021December 31, 2022December 31, 2021
Amortization of right-of-use assets$50 $85 $166 $271 
Interest on lease liabilities4 6 13 22 
Total finance lease expense$54 $91 $179 $293 

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

Nine Months Ended
(in millions)December 31, 2022December 31, 2021
Interest paid for finance lease liabilities – Operating cash flows
$13 $22 
Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows
244 403 
Total cash paid in the measurement of finance lease obligations$257 $425 
Capital expenditures through finance lease obligations(1)
$73 $180 
         

(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 ItemDecember 31, 2022March 31, 2022
ROU finance lease assetsProperty and Equipment, net $462 $602 
Finance lease Short-term debt and current maturities of long-term debt $230 $289 
Finance leaseLong-term debt, net of current maturities 289 354 
Total finance lease liabilities(1)
$519 $643 
        

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

The weighted-average finance lease term was 2.8 years and 2.8 years as of December 31, 2022 and March 31, 2022, respectively. The weighted-average finance lease discount rate was 3.1% and 2.9% as of December 31, 2022 and March 31, 2022, respectively.
The following maturity analysis presents expected undiscounted cash payments for finance leases as of December 31, 2022:

Fiscal Year
(in millions)
Remainder of 2023
2024202520262027
Thereafter
Total
Finance lease payments
$71 $216 $138 $76 $38 $6 $545 
Less: imputed interest
(26)
Total finance lease liabilities
$519 
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:

Three Months EndedNine Months Ended
(in millions)December 31, 2022December 31, 2021December 31, 2022December 31, 2021
Operating lease cost$97 $117 $311 $371 
Short-term lease cost 9 9 28 32 
Variable lease cost 17 17 56 50 
Sublease income(5)(1)(15)(27)
Total operating costs$118 $142 $380 $426 
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.

Nine Months Ended
(in millions)December 31, 2022December 31, 2021
Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows
$311 $371 
ROU assets obtained in exchange for operating lease liabilities(1)
$193 $130 
        

(1) Net of $911 million and $792 million in lease modifications and terminations during the nine months of fiscal 2023 and 2022, 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 ItemDecember 31, 2022March 31, 2022
ROU operating lease assetsOperating right-of-use assets, net$954 $1,133 
Operating lease liabilitiesCurrent operating lease liabilities$320 $388 
Operating lease liabilities Non-current operating lease liabilities691 815 
Total operating lease liabilities $1,011 $1,203 

The weighted-average operating lease term was 4.1 years and 4.4 years as of December 31, 2022 and March 31, 2022, respectively. The weighted-average operating lease discount rate was 3.7% and 3.3% as of December 31, 2022 and March 31, 2022, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of December 31, 2022:

Fiscal Year
(in millions)
Remainder of 2023
2024202520262027
Thereafter
Total
Operating lease payments
$99 $325 $258 $169 $85 $159 $1,095 
Less: imputed interest
(84)
Total operating lease liabilities
$1,011 
Finance Leases

The components of finance lease expense were as follows:

Three Months EndedNine Months Ended
(in millions)December 31, 2022December 31, 2021December 31, 2022December 31, 2021
Amortization of right-of-use assets$50 $85 $166 $271 
Interest on lease liabilities4 6 13 22 
Total finance lease expense$54 $91 $179 $293 

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

Nine Months Ended
(in millions)December 31, 2022December 31, 2021
Interest paid for finance lease liabilities – Operating cash flows
$13 $22 
Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows
244 403 
Total cash paid in the measurement of finance lease obligations$257 $425 
Capital expenditures through finance lease obligations(1)
$73 $180 
         

(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 ItemDecember 31, 2022March 31, 2022
ROU finance lease assetsProperty and Equipment, net $462 $602 
Finance lease Short-term debt and current maturities of long-term debt $230 $289 
Finance leaseLong-term debt, net of current maturities 289 354 
Total finance lease liabilities(1)
$519 $643 
        

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

The weighted-average finance lease term was 2.8 years and 2.8 years as of December 31, 2022 and March 31, 2022, respectively. The weighted-average finance lease discount rate was 3.1% and 2.9% as of December 31, 2022 and March 31, 2022, respectively.
The following maturity analysis presents expected undiscounted cash payments for finance leases as of December 31, 2022:

Fiscal Year
(in millions)
Remainder of 2023
2024202520262027
Thereafter
Total
Finance lease payments
$71 $216 $138 $76 $38 $6 $545 
Less: imputed interest
(26)
Total finance lease liabilities
$519