Leases

9 Months Ended

Apr. 29, 2023

Leases [Abstract]

Leases

Leases

(a)Lessee Arrangements

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

	Balance Sheet Line Item	April 29, 2023		July 30, 2022
Operating lease right-of-use assets	Other assets	$	1,017	$	1,003
Operating lease liabilities	Other current liabilities	$	321	$	322
Operating lease liabilities	Other long-term liabilities	742		724
Total operating lease liabilities		$	1,063	$	1,046

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

	Three Months Ended				Nine Months Ended
	April 29, 2023		April 30, 2022		April 29, 2023		April 30, 2022
Operating lease expense	$	106	$	99	$	300	$	292
Short-term lease expense	16		17		50		49
Variable lease expense	61		37		182		127
Total lease expense	$	183	$	153	$	532	$	468

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

	Nine Months Ended
	April 29, 2023		April 30, 2022
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	290	$	306
Right-of-use assets obtained in exchange for operating leases liabilities	$	278	$	237

The weighted-average lease term was 4.7 years as of each of April 29, 2023 and July 30, 2022. The weighted-average discount rate was 2.9% and 2.2% as of April 29, 2023 and July 30, 2022, respectively.

The maturities of our operating leases (undiscounted) as of April 29, 2023 are as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	97
2024	327
2025	245
2026	155
2027	92
Thereafter	243
Total lease payments	1,159
Less interest	(96)
Total	$	1,063

(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 was $13 million and $36 million for the third quarter and first nine months of fiscal 2023, respectively, and $13 million and $42 million for the corresponding periods of fiscal 2022, 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 April 29, 2023 are summarized as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	157
2024	326
2025	198
2026	140
2027	107
Thereafter	64
Total	992
Less: Present value of lease payments	920
Unearned income	$	72

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):

	April 29, 2023		July 30, 2022
Operating lease assets	$	135	$	185
Accumulated depreciation	(82)		(111)
Operating lease assets, net	$	53	$	74

Our operating lease income was $18 million and $56 million for the third quarter and first nine months of fiscal 2023, respectively, and $26 million and $87 million for the corresponding periods of fiscal 2022, respectively, and was included in product revenue in the Consolidated Statement of Operations.

Minimum future rentals on noncancelable operating leases as of April 29, 2023 are summarized as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	8
2024	19
2025	7
2026	2
Total	$	36

Leases

Leases

(a)Lessee Arrangements

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

	Balance Sheet Line Item	April 29, 2023		July 30, 2022
Operating lease right-of-use assets	Other assets	$	1,017	$	1,003
Operating lease liabilities	Other current liabilities	$	321	$	322
Operating lease liabilities	Other long-term liabilities	742		724
Total operating lease liabilities		$	1,063	$	1,046

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

	Three Months Ended				Nine Months Ended
	April 29, 2023		April 30, 2022		April 29, 2023		April 30, 2022
Operating lease expense	$	106	$	99	$	300	$	292
Short-term lease expense	16		17		50		49
Variable lease expense	61		37		182		127
Total lease expense	$	183	$	153	$	532	$	468

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

	Nine Months Ended
	April 29, 2023		April 30, 2022
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	290	$	306
Right-of-use assets obtained in exchange for operating leases liabilities	$	278	$	237

The weighted-average lease term was 4.7 years as of each of April 29, 2023 and July 30, 2022. The weighted-average discount rate was 2.9% and 2.2% as of April 29, 2023 and July 30, 2022, respectively.

The maturities of our operating leases (undiscounted) as of April 29, 2023 are as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	97
2024	327
2025	245
2026	155
2027	92
Thereafter	243
Total lease payments	1,159
Less interest	(96)
Total	$	1,063

(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 was $13 million and $36 million for the third quarter and first nine months of fiscal 2023, respectively, and $13 million and $42 million for the corresponding periods of fiscal 2022, 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 April 29, 2023 are summarized as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	157
2024	326
2025	198
2026	140
2027	107
Thereafter	64
Total	992
Less: Present value of lease payments	920
Unearned income	$	72

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):

	April 29, 2023		July 30, 2022
Operating lease assets	$	135	$	185
Accumulated depreciation	(82)		(111)
Operating lease assets, net	$	53	$	74

Our operating lease income was $18 million and $56 million for the third quarter and first nine months of fiscal 2023, respectively, and $26 million and $87 million for the corresponding periods of fiscal 2022, respectively, and was included in product revenue in the Consolidated Statement of Operations.

Minimum future rentals on noncancelable operating leases as of April 29, 2023 are summarized as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	8
2024	19
2025	7
2026	2
Total	$	36

Leases

Leases

(a)Lessee Arrangements

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

	Balance Sheet Line Item	April 29, 2023		July 30, 2022
Operating lease right-of-use assets	Other assets	$	1,017	$	1,003
Operating lease liabilities	Other current liabilities	$	321	$	322
Operating lease liabilities	Other long-term liabilities	742		724
Total operating lease liabilities		$	1,063	$	1,046

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

	Three Months Ended				Nine Months Ended
	April 29, 2023		April 30, 2022		April 29, 2023		April 30, 2022
Operating lease expense	$	106	$	99	$	300	$	292
Short-term lease expense	16		17		50		49
Variable lease expense	61		37		182		127
Total lease expense	$	183	$	153	$	532	$	468

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

	Nine Months Ended
	April 29, 2023		April 30, 2022
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	290	$	306
Right-of-use assets obtained in exchange for operating leases liabilities	$	278	$	237

The weighted-average lease term was 4.7 years as of each of April 29, 2023 and July 30, 2022. The weighted-average discount rate was 2.9% and 2.2% as of April 29, 2023 and July 30, 2022, respectively.

The maturities of our operating leases (undiscounted) as of April 29, 2023 are as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	97
2024	327
2025	245
2026	155
2027	92
Thereafter	243
Total lease payments	1,159
Less interest	(96)
Total	$	1,063

(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 was $13 million and $36 million for the third quarter and first nine months of fiscal 2023, respectively, and $13 million and $42 million for the corresponding periods of fiscal 2022, 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 April 29, 2023 are summarized as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	157
2024	326
2025	198
2026	140
2027	107
Thereafter	64
Total	992
Less: Present value of lease payments	920
Unearned income	$	72

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):

	April 29, 2023		July 30, 2022
Operating lease assets	$	135	$	185
Accumulated depreciation	(82)		(111)
Operating lease assets, net	$	53	$	74

Our operating lease income was $18 million and $56 million for the third quarter and first nine months of fiscal 2023, respectively, and $26 million and $87 million for the corresponding periods of fiscal 2022, respectively, and was included in product revenue in the Consolidated Statement of Operations.

Minimum future rentals on noncancelable operating leases as of April 29, 2023 are summarized as follows (in millions):

Fiscal Year	Amount
2023 (remaining three months)	$	8
2024	19
2025	7
2026	2
Total	$	36