Leases

12 Months Ended

Sep. 24, 2022

Leases [Abstract]

Leases

Leases

The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. These leases typically have original terms not exceeding 10 years and generally contain multiyear renewal options, some of which are reasonably certain of exercise.

Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the underlying leased assets. Lease costs associated with fixed payments on the Company’s operating leases were $1.9 billion, $1.7 billion and $1.5 billion for 2022, 2021 and 2020, respectively. Lease costs associated with variable payments on the Company’s leases were $14.9 billion, $12.9 billion and $9.3 billion for 2022, 2021 and 2020, respectively.

The Company made $1.8 billion, $1.4 billion and $1.5 billion of fixed cash payments related to operating leases in 2022, 2021 and 2020, respectively. Noncash activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $2.8 billion for 2022, $3.3 billion for 2021 and $10.5 billion for 2020, including the impact of adopting the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-02, Leases (Topic 842) in the first quarter of 2020.

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 24, 2022 and September 25, 2021 (in millions):

Lease-Related Assets and Liabilities	Financial Statement Line Items	2022		2021
Right-of-use assets:
Operating leases	Other non-current assets	$	10,417	$	10,087
Finance leases	Property, plant and equipment, net	952		861
Total right-of-use assets		$	11,369	$	10,948
Lease liabilities:
Operating leases	Other current liabilities	$	1,534	$	1,449
	Other non-current liabilities	9,936		9,506
Finance leases	Other current liabilities	129		79
	Other non-current liabilities	812		769
Total lease liabilities		$	12,411	$	11,803

Lease liability maturities as of September 24, 2022, are as follows (in millions):

	Operating Leases		Finance Leases		Total
2023	$	1,758	$	155	$	1,913
2024	1,742		130		1,872
2025	1,677		81		1,758
2026	1,382		48		1,430
2027	1,143		34		1,177
Thereafter	5,080		906		5,986
Total undiscounted liabilities	12,782		1,354		14,136
Less: Imputed interest	(1,312)		(413)		(1,725)
Total lease liabilities	$	11,470	$	941	$	12,411

The weighted-average remaining lease term related to the Company’s lease liabilities as of September 24, 2022 and September 25, 2021 was 10.1 years and 10.8 years, respectively. The discount rate related to the Company’s lease liabilities as of September 24, 2022 and September 25, 2021 was 2.3% and 2.0%, respectively.

As of September 24, 2022, the Company had $1.2 billion of future payments under additional leases, primarily for corporate facilities and retail space, that had not yet commenced. These leases will commence between 2023 and 2026, with lease terms ranging from less than 1 year to 21 years.

Leases

Leases

The Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. These leases typically have original terms not exceeding 10 years and generally contain multiyear renewal options, some of which are reasonably certain of exercise.

Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the underlying leased assets. Lease costs associated with fixed payments on the Company’s operating leases were $1.9 billion, $1.7 billion and $1.5 billion for 2022, 2021 and 2020, respectively. Lease costs associated with variable payments on the Company’s leases were $14.9 billion, $12.9 billion and $9.3 billion for 2022, 2021 and 2020, respectively.

The Company made $1.8 billion, $1.4 billion and $1.5 billion of fixed cash payments related to operating leases in 2022, 2021 and 2020, respectively. Noncash activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $2.8 billion for 2022, $3.3 billion for 2021 and $10.5 billion for 2020, including the impact of adopting the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-02, Leases (Topic 842) in the first quarter of 2020.

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 24, 2022 and September 25, 2021 (in millions):

Lease-Related Assets and Liabilities	Financial Statement Line Items	2022		2021
Right-of-use assets:
Operating leases	Other non-current assets	$	10,417	$	10,087
Finance leases	Property, plant and equipment, net	952		861
Total right-of-use assets		$	11,369	$	10,948
Lease liabilities:
Operating leases	Other current liabilities	$	1,534	$	1,449
	Other non-current liabilities	9,936		9,506
Finance leases	Other current liabilities	129		79
	Other non-current liabilities	812		769
Total lease liabilities		$	12,411	$	11,803

Lease liability maturities as of September 24, 2022, are as follows (in millions):

	Operating Leases		Finance Leases		Total
2023	$	1,758	$	155	$	1,913
2024	1,742		130		1,872
2025	1,677		81		1,758
2026	1,382		48		1,430
2027	1,143		34		1,177
Thereafter	5,080		906		5,986
Total undiscounted liabilities	12,782		1,354		14,136
Less: Imputed interest	(1,312)		(413)		(1,725)
Total lease liabilities	$	11,470	$	941	$	12,411

The weighted-average remaining lease term related to the Company’s lease liabilities as of September 24, 2022 and September 25, 2021 was 10.1 years and 10.8 years, respectively. The discount rate related to the Company’s lease liabilities as of September 24, 2022 and September 25, 2021 was 2.3% and 2.0%, respectively.

As of September 24, 2022, the Company had $1.2 billion of future payments under additional leases, primarily for corporate facilities and retail space, that had not yet commenced. These leases will commence between 2023 and 2026, with lease terms ranging from less than 1 year to 21 years.