Balance Sheet Components

Certain balance sheet components are as follows:



	January 28, 2018		January 29, 2017
	(In millions)
Inventories:
Raw materials	$	227	$	252
Work in-process	192		176
Finished goods	377		366
Total inventories	$	796	$	794



	January 28, 2018			January 29, 2017			Estimated Useful Life
	(In millions)						(In years)
Property and Equipment:
Land	$	218		$	218		(A)
Building	348			13			25-30 (B)
Test equipment	462			427			3-5
Computer equipment	285			188			3-5
Leasehold improvements	198			176			(C)
Software and licenses	88			63			3-5
Office furniture and equipment	79			49			5
Capital leases	28			28			(C)
Construction in process	31			29			(D)
Total property and equipment, gross	1,737			1,191
Accumulated depreciation and amortization	(740		)	(670		)
Total property and equipment, net	$	997		$	521


(A)	Land is a non-depreciable asset.


(B)	In January 2018, we terminated the off-balance sheet, build-to-suit operating lease financing arrangement related to our new Santa Clara campus building and exercised our option to purchase the property for $335 million, which has been recorded as Property and Equipment, net in our Consolidated Balance Sheet.


(C)	Leasehold improvements and capital leases are amortized based on the lesser of either the asset’s estimated useful life or the remaining expected lease term.


(D)	Construction in process represents assets that are not available for their intended use as of the balance sheet date.

Depreciation expense for fiscal years 2018, 2017, and 2016 was $144 million, $118 million, and $124 million, respectively.

Accumulated amortization of leasehold improvements and capital leases was $178 million and $164 million as of January 28, 2018 and January 29, 2017, respectively. Amortization of leasehold improvements and capital leases is included in depreciation and amortization expense.



	January 28, 2018		January 29, 2017
	(In millions)
Accrued and Other Current Liabilities:
Customer related liabilities (1)	$	181	$	197
Accrued payroll and related expenses	172		137
Deferred revenue (2)	53		85
Taxes payable	33		4
Coupon interest on debt obligations	20		21
Accrued royalties	17		7
Professional service fees	15		13
Warranty accrual (3)	15		8
Accrued restructuring and other charges	7		13
Leases payable	5		4
Contributions payable	4		4
Other	20		14
Total accrued and other current liabilities	$	542	$	507


(1)	Customer related liabilities include accrued customer programs, such as rebates and marketing development funds.


(2)	Deferred revenue primarily includes customer advances and deferrals related to license and service arrangements.


(3)	Refer to Note 10 of these Notes to the Consolidated Financial Statements for a discussion regarding warranties.



	January 28, 2018		January 29, 2017
	(In millions)
Other Long-Term Liabilities:
Income tax payable (1)	$	559	$	96
Deferred income tax liability	18		141
Deferred revenue	15		4
Employee benefits liability	12		10
Contributions payable	9		9
Deferred rent	9		6
Licenses payable	8		1
Other	2		10
Total other long-term liabilities	$	632	$	277


(1)	Represents the long-term portion of the one-time transition tax payable of $369 million, as well as unrecognized tax benefits of $175 million and related interest and penalties of $15 million. Refer to Note 13 of these Notes to the Consolidated Financial Statements for additional information.