Leases

6 Months Ended

Jan. 29, 2022

Leases [Abstract]

Leases

Leases

(a)Lessee Arrangements

The following table presents our operating lease balances (in millions):

	Balance Sheet Line Item	January 29, 2022		July 31, 2021
Operating lease right-of-use assets	Other assets	$	1,078	$	1,095
Operating lease liabilities	Other current liabilities	$	376	$	337
Operating lease liabilities	Other long-term liabilities	763		831
Total operating lease liabilities		$	1,139	$	1,168

The components of our lease expenses were as follows (in millions):

	Three Months Ended				Six Months Ended
	January 29, 2022		January 23, 2021		January 29, 2022		January 23, 2021
Operating lease expense	$	98	$	103	$	193	$	201
Short-term lease expense	15		17		32		35
Variable lease expense	41		43		90		89
Total lease expense	$	154	$	163	$	315	$	325

Supplemental information related to our operating leases is as follows (in millions):

	Six Months Ended
	January 29, 2022		January 23, 2021
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	202	$	201
Right-of-use assets obtained in exchange for operating leases liabilities	$	178	$	218

The weighted-average lease term was 4.7 years and 5.2 years as of January 29, 2022 and July 31, 2021, respectively. The weighted-average discount rate was 1.7% as of each of January 29, 2022 and July 31, 2021.

The maturities of our operating leases (undiscounted) as of January 29, 2022 are as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	196
2023	323
2024	234
2025	154
2026	85
Thereafter	217
Total lease payments	1,209
Less interest	(70)
Total	$	1,139

(b)Lessor Arrangements

Our leases primarily represent sales-type leases with terms of four years on average. We provide leasing of our equipment and complementary third-party products primarily through our channel partners and distributors, for which the income arising from these leases is recognized through interest income. Interest income for the second quarter and first six months of fiscal 2022 was $14 million and $29 million, respectively, and $19 million and $40 million for the corresponding periods of fiscal 2021, respectively, and was included in interest income in the Consolidated Statement of Operations. The net investment of our lease receivables is measured at the commencement date as the gross lease receivable, residual value less unearned income and allowance for credit loss. For additional information, see Note 9.

Future minimum lease payments on our lease receivables as of January 29, 2022 are summarized as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	327
2023	502
2024	321
2025	144
2026	61
Thereafter	9
Total	1,364
Less: Present value of lease payments	1,300
Unearned income	$	64

Actual cash collections may differ from the contractual maturities due to early customer buyouts, refinancings, or defaults.

We provide financing of certain equipment through operating leases, and the amounts are included in property and equipment in the Consolidated Balance Sheets. Amounts relating to equipment on operating lease assets held by us and the associated accumulated depreciation are summarized as follows (in millions):

	January 29, 2022		July 31, 2021
Operating lease assets	$	245	$	273
Accumulated depreciation	(148)		(165)
Operating lease assets, net	$	97	$	108

Our operating lease income for the second quarter and first six months of fiscal 2022 was $29 million and $61 million, respectively, and $40 million and $83 million for the corresponding periods of fiscal 2021, respectively, and was included in product revenue in the Consolidated Statement of Operations.

Minimum future rentals on noncancelable operating leases as of January 29, 2022 are summarized as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	24
2023	30
2024	13
2025	2
Total	$	69

Leases

Leases

(a)Lessee Arrangements

The following table presents our operating lease balances (in millions):

	Balance Sheet Line Item	January 29, 2022		July 31, 2021
Operating lease right-of-use assets	Other assets	$	1,078	$	1,095
Operating lease liabilities	Other current liabilities	$	376	$	337
Operating lease liabilities	Other long-term liabilities	763		831
Total operating lease liabilities		$	1,139	$	1,168

The components of our lease expenses were as follows (in millions):

	Three Months Ended				Six Months Ended
	January 29, 2022		January 23, 2021		January 29, 2022		January 23, 2021
Operating lease expense	$	98	$	103	$	193	$	201
Short-term lease expense	15		17		32		35
Variable lease expense	41		43		90		89
Total lease expense	$	154	$	163	$	315	$	325

Supplemental information related to our operating leases is as follows (in millions):

	Six Months Ended
	January 29, 2022		January 23, 2021
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	202	$	201
Right-of-use assets obtained in exchange for operating leases liabilities	$	178	$	218

The weighted-average lease term was 4.7 years and 5.2 years as of January 29, 2022 and July 31, 2021, respectively. The weighted-average discount rate was 1.7% as of each of January 29, 2022 and July 31, 2021.

The maturities of our operating leases (undiscounted) as of January 29, 2022 are as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	196
2023	323
2024	234
2025	154
2026	85
Thereafter	217
Total lease payments	1,209
Less interest	(70)
Total	$	1,139

(b)Lessor Arrangements

Our leases primarily represent sales-type leases with terms of four years on average. We provide leasing of our equipment and complementary third-party products primarily through our channel partners and distributors, for which the income arising from these leases is recognized through interest income. Interest income for the second quarter and first six months of fiscal 2022 was $14 million and $29 million, respectively, and $19 million and $40 million for the corresponding periods of fiscal 2021, respectively, and was included in interest income in the Consolidated Statement of Operations. The net investment of our lease receivables is measured at the commencement date as the gross lease receivable, residual value less unearned income and allowance for credit loss. For additional information, see Note 9.

Future minimum lease payments on our lease receivables as of January 29, 2022 are summarized as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	327
2023	502
2024	321
2025	144
2026	61
Thereafter	9
Total	1,364
Less: Present value of lease payments	1,300
Unearned income	$	64

Actual cash collections may differ from the contractual maturities due to early customer buyouts, refinancings, or defaults.

We provide financing of certain equipment through operating leases, and the amounts are included in property and equipment in the Consolidated Balance Sheets. Amounts relating to equipment on operating lease assets held by us and the associated accumulated depreciation are summarized as follows (in millions):

	January 29, 2022		July 31, 2021
Operating lease assets	$	245	$	273
Accumulated depreciation	(148)		(165)
Operating lease assets, net	$	97	$	108

Our operating lease income for the second quarter and first six months of fiscal 2022 was $29 million and $61 million, respectively, and $40 million and $83 million for the corresponding periods of fiscal 2021, respectively, and was included in product revenue in the Consolidated Statement of Operations.

Minimum future rentals on noncancelable operating leases as of January 29, 2022 are summarized as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	24
2023	30
2024	13
2025	2
Total	$	69

Leases

Leases

(a)Lessee Arrangements

The following table presents our operating lease balances (in millions):

	Balance Sheet Line Item	January 29, 2022		July 31, 2021
Operating lease right-of-use assets	Other assets	$	1,078	$	1,095
Operating lease liabilities	Other current liabilities	$	376	$	337
Operating lease liabilities	Other long-term liabilities	763		831
Total operating lease liabilities		$	1,139	$	1,168

The components of our lease expenses were as follows (in millions):

	Three Months Ended				Six Months Ended
	January 29, 2022		January 23, 2021		January 29, 2022		January 23, 2021
Operating lease expense	$	98	$	103	$	193	$	201
Short-term lease expense	15		17		32		35
Variable lease expense	41		43		90		89
Total lease expense	$	154	$	163	$	315	$	325

Supplemental information related to our operating leases is as follows (in millions):

	Six Months Ended
	January 29, 2022		January 23, 2021
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	202	$	201
Right-of-use assets obtained in exchange for operating leases liabilities	$	178	$	218

The weighted-average lease term was 4.7 years and 5.2 years as of January 29, 2022 and July 31, 2021, respectively. The weighted-average discount rate was 1.7% as of each of January 29, 2022 and July 31, 2021.

The maturities of our operating leases (undiscounted) as of January 29, 2022 are as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	196
2023	323
2024	234
2025	154
2026	85
Thereafter	217
Total lease payments	1,209
Less interest	(70)
Total	$	1,139

(b)Lessor Arrangements

Our leases primarily represent sales-type leases with terms of four years on average. We provide leasing of our equipment and complementary third-party products primarily through our channel partners and distributors, for which the income arising from these leases is recognized through interest income. Interest income for the second quarter and first six months of fiscal 2022 was $14 million and $29 million, respectively, and $19 million and $40 million for the corresponding periods of fiscal 2021, respectively, and was included in interest income in the Consolidated Statement of Operations. The net investment of our lease receivables is measured at the commencement date as the gross lease receivable, residual value less unearned income and allowance for credit loss. For additional information, see Note 9.

Future minimum lease payments on our lease receivables as of January 29, 2022 are summarized as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	327
2023	502
2024	321
2025	144
2026	61
Thereafter	9
Total	1,364
Less: Present value of lease payments	1,300
Unearned income	$	64

Actual cash collections may differ from the contractual maturities due to early customer buyouts, refinancings, or defaults.

We provide financing of certain equipment through operating leases, and the amounts are included in property and equipment in the Consolidated Balance Sheets. Amounts relating to equipment on operating lease assets held by us and the associated accumulated depreciation are summarized as follows (in millions):

	January 29, 2022		July 31, 2021
Operating lease assets	$	245	$	273
Accumulated depreciation	(148)		(165)
Operating lease assets, net	$	97	$	108

Our operating lease income for the second quarter and first six months of fiscal 2022 was $29 million and $61 million, respectively, and $40 million and $83 million for the corresponding periods of fiscal 2021, respectively, and was included in product revenue in the Consolidated Statement of Operations.

Minimum future rentals on noncancelable operating leases as of January 29, 2022 are summarized as follows (in millions):

Fiscal Year	Amount
2022 (remaining six months)	$	24
2023	30
2024	13
2025	2
Total	$	69