Warranty, Guarantees, Commitments and Contingencies

3 Months Ended

Jan. 29, 2023

Commitments and Contingencies Disclosure [Abstract]

Warranty, Guarantees, Commitments and Contingencies

Warranty, Guarantees, Commitments and Contingencies    

Warranty

Changes in the warranty reserves are presented below:

 

	Three Months Ended
	January 29, 2023		January 30, 2022
	(In millions)
Beginning balance	$	286	$	242
Warranties issued	62		65
Change in reserves related to preexisting warranty	4		3
Consumption of reserves	(50)		(56)
Ending balance	$	302	$	254

 Our products are generally sold with a warranty for a 12-month period following installation. The provision for the estimated cost of warranty is recorded when revenue is recognized. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product, configuration and geographic region. Quarterly warranty consumption is generally associated with sales that occurred during the preceding four quarters, and quarterly warranty provisions are generally related to the current quarter’s sales.

Guarantees

In the ordinary course of business, we provide standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either us or our subsidiaries. As of January 29, 2023, the maximum potential amount of future payments that we could be required to make under these guarantee agreements was approximately $614 million. We have not recorded any liability in connection with these guarantee agreements beyond that required to appropriately account for the underlying transaction being guaranteed. We do not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee agreements.

We also have agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. As of January 29, 2023, we have provided parent guarantees to banks for approximately $300 million to cover these arrangements.

Legal Matters

From time to time, we receive notification from third parties, including customers and suppliers, seeking indemnification, litigation support, payment of money or other actions by us in connection with claims made against them. In addition, from time to time, we receive notification from third parties claiming that we may be or are infringing or misusing their intellectual property or other rights. We also are subject to various other legal proceedings, regulatory investigations or inquires, and claims, both asserted and unasserted, that arise in the ordinary course of business. 

In August 2022, we received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting information relating to certain China customer shipments. We are cooperating fully with the government. These inquiries are subject to uncertainties, and we cannot predict the outcome of this inquiry, or any other governmental inquires or proceedings that may occur.

Although the outcome of the above-described matters, claims and proceedings cannot be predicted with certainty, we do not believe at this time that any will have a material effect on our consolidated financial condition or results of operations.