NOTE 16 — 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:

(In millions)


Year Ended June 30,	2018			2017		2016

Operating lease cost	$	1,585	$	1,412	$	936


Finance lease cost:
Amortization of right-of-use assets	$	243	$	104	$	28
Interest on lease liabilities		175		68		28


Total finance lease cost	$	418	$	172	$	56

Supplemental cash flow information related to leases was as follows:

(In millions)


Year Ended June 30,	2018			2017		2016

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,522	$	1,157	$	936
Operating cash flows from finance leases		175		68		28
Financing cash flows from finance leases		144		46		6

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		1,571		1,270		1,062
Finance leases		1,933		1,773		413

Supplemental balance sheet information related to leases was as follows:

(In millions, except lease term and discount rate)


June 30,	2018			2017

Operating Leases

Operating lease right-of-use assets	$	6,686		$	6,555


Other current liabilities	$	1,399		$	1,423
Operating lease liabilities		5,568			5,372


Total operating lease liabilities	$	6,967		$	6,795


Finance Leases

Property and equipment, gross	$	4,543		$	2,658
Accumulated depreciation		(404	)		(161	)


Property and equipment, net	$	4,139		$	2,497


Other current liabilities	$	176		$	113
Other long-term liabilities		4,125			2,425


Total finance lease liabilities	$	4,301		$	2,538

Weighted Average Remaining Lease Term

Operating leases		7 years			7 years
Finance leases		13 years			13 years

Weighted Average Discount Rate

Operating leases		2.7%			2.5%
Finance leases		5.2%			4.7%

Maturities of lease liabilities were as follows:

(In millions)


Year Ending June 30,	Operating Leases			Finance Leases

2019	$	1,492		$	386
2020		1,347			393
2021		1,086			401
2022		902			408
2023		721			410
Thereafter		2,157			4,036


Total lease payments		7,705			6,034
Less imputed interest		(738	)		(1,733	)


Total	$	6,967		$	4,301

As of June 30, 2018, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $594 million and $2.4 billion, respectively. These operating and finance leases will commence between fiscal year 2019 and fiscal year 2020 with lease terms of 1 year to 20 years.