Leases

12 Months Ended

Sep. 30, 2023

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 $2.0 billion, $1.9 billion and $1.7 billion for 2023, 2022 and 2021, respectively. Lease costs associated with variable payments on the Company’s leases were $13.9 billion, $14.9 billion and $12.9 billion for 2023, 2022 and 2021, respectively.

The Company made $1.9 billion, $1.8 billion and $1.4 billion of fixed cash payments related to operating leases in 2023, 2022 and 2021, respectively. Noncash activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $2.1 billion, $2.8 billion and $3.3 billion for 2023, 2022 and 2021, respectively.

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 30, 2023 and September 24, 2022 (in millions):

Lease-Related Assets and Liabilities	Financial Statement Line Items	2023		2022
Right-of-use assets:
Operating leases	Other non-current assets	$	10,661	$	10,417
Finance leases	Property, plant and equipment, net	1,015		952
Total right-of-use assets		$	11,676	$	11,369
Lease liabilities:
Operating leases	Other current liabilities	$	1,410	$	1,534
	Other non-current liabilities	10,408		9,936
Finance leases	Other current liabilities	165		129
	Other non-current liabilities	859		812
Total lease liabilities		$	12,842	$	12,411

Lease liability maturities as of September 30, 2023, are as follows (in millions):

	Operating Leases		Finance Leases		Total
2024	$	1,719	$	196	$	1,915
2025	1,875		151		2,026
2026	1,732		120		1,852
2027	1,351		52		1,403
2028	1,181		34		1,215
Thereafter	5,983		872		6,855
Total undiscounted liabilities	13,841		1,425		15,266
Less: Imputed interest	(2,023)		(401)		(2,424)
Total lease liabilities	$	11,818	$	1,024	$	12,842

The weighted-average remaining lease term related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 10.6 years and 10.1 years, respectively. The discount rate related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 3.0% and 2.3%, respectively. The discount rates related to the Company’s lease liabilities are generally based on estimates of the Company’s incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined.

As of September 30, 2023, the Company had $544 million of future payments under additional leases, primarily for corporate facilities and retail space, that had not yet commenced. These leases will commence between 2024 and 2026, with lease terms ranging from 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 $2.0 billion, $1.9 billion and $1.7 billion for 2023, 2022 and 2021, respectively. Lease costs associated with variable payments on the Company’s leases were $13.9 billion, $14.9 billion and $12.9 billion for 2023, 2022 and 2021, respectively.

The Company made $1.9 billion, $1.8 billion and $1.4 billion of fixed cash payments related to operating leases in 2023, 2022 and 2021, respectively. Noncash activities involving right-of-use (“ROU”) assets obtained in exchange for lease liabilities were $2.1 billion, $2.8 billion and $3.3 billion for 2023, 2022 and 2021, respectively.

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September 30, 2023 and September 24, 2022 (in millions):

Lease-Related Assets and Liabilities	Financial Statement Line Items	2023		2022
Right-of-use assets:
Operating leases	Other non-current assets	$	10,661	$	10,417
Finance leases	Property, plant and equipment, net	1,015		952
Total right-of-use assets		$	11,676	$	11,369
Lease liabilities:
Operating leases	Other current liabilities	$	1,410	$	1,534
	Other non-current liabilities	10,408		9,936
Finance leases	Other current liabilities	165		129
	Other non-current liabilities	859		812
Total lease liabilities		$	12,842	$	12,411

Lease liability maturities as of September 30, 2023, are as follows (in millions):

	Operating Leases		Finance Leases		Total
2024	$	1,719	$	196	$	1,915
2025	1,875		151		2,026
2026	1,732		120		1,852
2027	1,351		52		1,403
2028	1,181		34		1,215
Thereafter	5,983		872		6,855
Total undiscounted liabilities	13,841		1,425		15,266
Less: Imputed interest	(2,023)		(401)		(2,424)
Total lease liabilities	$	11,818	$	1,024	$	12,842

The weighted-average remaining lease term related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 10.6 years and 10.1 years, respectively. The discount rate related to the Company’s lease liabilities as of September 30, 2023 and September 24, 2022 was 3.0% and 2.3%, respectively. The discount rates related to the Company’s lease liabilities are generally based on estimates of the Company’s incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined.

As of September 30, 2023, the Company had $544 million of future payments under additional leases, primarily for corporate facilities and retail space, that had not yet commenced. These leases will commence between 2024 and 2026, with lease terms ranging from 1 year to 21 years.