Item 8

  

The following table presents the fair value of our derivatives instruments on a gross basis:

> **(In millions)**
>
> Level 1 / Level 1 / Level 2 / Level 3 / Level 3 / Total / Total
>
> June 30, 2025
> Derivative assets ....................... $ / 1 / $ / 474 / $ / 283 / $ / 758
> Derivative liabilities .................. 0 / ( 1,832 / ) / ( 5 / ) / ( 1,837 / )
> June 30, 2024
> Derivative assets ....................... 0 / 327 / 4 / 331
> Derivative liabilities .................. ( 1 / ) / ( 799 / ) / 0 / ( 800 / )

  

Gains (losses) on derivative instruments recognized in other income (expense), net were as follows:

> **(In millions)**
>
> (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions)
>
> Year Ended June 30, ..................... 2025 / 2025 / 2024 / 2024 / 2023 / 2023
> Designated as Fair Value Hedging Instruments
> Interest rate contracts
> Derivatives ............................. $ / 5 / $ / ( 23 / ) / $ / ( 65 / )
> Hedged items ............................ ( 45 / ) / ( 25 / ) / 38
> Designated as Cash Flow Hedging Instruments
> Foreign exchange contracts
> Amount reclassified from accumulated other comprehensive loss ... 103 / ( 48 / ) / 61
> Not Designated as Hedging Instruments
> Foreign exchange contracts .............. ( 938 / ) / 367 / ( 73 / )
> Equity contracts ........................ ( 266 / ) / ( 177 / ) / ( 420 / )
> Other contracts ......................... 21 / ( 15 / ) / ( 41 / )

  

Gains (losses), net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows:

> **(In millions)**
>
> Year Ended June 30, ..................... 2025 / 2025 / 2024 / 2024 / 2023 / 2023
> Designated as Cash Flow Hedging Instruments
> Foreign exchange contracts
> Included in effectiveness assessment .... $ / 77 / $ / ( 14 / ) / $ / 34

  

  

NOTE 6 — PROPERTY AND EQUIPMENT

  

The components of property and equipment were as follows:

> **(In millions)**
>
> (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions) / (In millions)
>
> June 30, ................................ 2025 / 2025 / 2024 / 2024
> Land .................................... $ / 9,338 / $ / 8,163
> Buildings and improvements .............. 137,921 / 93,943
> Leasehold improvements .................. 12,117 / 9,594
> Computer equipment and software ......... 132,836 / 93,780
> Furniture and equipment ................. 6,407 / 6,532
> Total, at cost .......................... 298,619 / 212,012
> Accumulated depreciation ................ ( 93,653 / ) / ( 76,421 / )
> Total, net .............................. $ / 204,966 / $ / 135,591

During fiscal years 2025, 2024, and 2023, depreciation expense was $ 22.0  billion, $ 15.2  billion, and $ 11.0  billion,  respectively.

As of June 30, 2025, 2024, and 2023, purchases of property and equipment remaining in accounts payable were $ 6.9  billion, $ 4.3  billion, and $ 3.8  billion, respectively. As of June 30, 2025, we have committed $ 32.1  billion for the construction of new buildings, building improvements, and leasehold improvements, primarily related to datacenters.

  

69

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PART II