Leases

6 Months Ended

Jan. 27, 2024

Leases [Abstract]

Leases

Leases

(a)Lessee Arrangements

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

	Balance Sheet Line Item	January 27, 2024		July 29, 2023
Operating lease right-of-use assets	Other assets	$	978	$	971
Operating lease liabilities	Other current liabilities	$	330	$	313
Operating lease liabilities	Other long-term liabilities	703		707
Total operating lease liabilities		$	1,033	$	1,020

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

	Three Months Ended				Six Months Ended
	January 27, 2024		January 28, 2023		January 27, 2024		January 28, 2023
Operating lease expense	$	103	$	98	$	203	$	194
Short-term lease expense	25		17		36		34
Variable lease expense	50		63		106		121
Total lease expense	$	178	$	178	$	345	$	349

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

	Six Months Ended
	January 27, 2024		January 28, 2023
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	178	$	192
Right-of-use assets obtained in exchange for operating leases liabilities	$	182	$	149

The weighted-average lease term was 4.6 years as of each of January 27, 2024 and July 29, 2023. The weighted-average discount rate was 3.7% and 3.1% as of January 27, 2024 and July 29, 2023, respectively.

The maturities of our operating leases (undiscounted) as of January 27, 2024 are as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	183
2025	303
2026	206
2027	129
2028	94
Thereafter	231
Total lease payments	1,146
Less interest	(113)
Total	$	1,033

(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 $16 million and $30 million for the second quarter and the first six months of fiscal 2024, respectively, and $12 million and $24 million for the corresponding periods of fiscal 2023, 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 27, 2024 are summarized as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	401
2025	369
2026	125
2027	91
2028	68
Thereafter	45
Total	1,099
Less: Present value of lease payments	(989)
Unearned income	$	110

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 27, 2024		July 29, 2023
Operating lease assets	$	125	$	135
Accumulated depreciation	(72)		(78)
Operating lease assets, net	$	53	$	57

Our operating lease income was $15 million and $31 million for the second quarter and first six months of fiscal 2024, respectively, and $18 million and $39 million for the corresponding periods of fiscal 2023, respectively, and was included in product revenue in the Consolidated Statements of Operations.

Minimum future rentals on noncancelable operating leases as of January 27, 2024 are summarized as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	12
2025	16
2026	9
2027	1
Total	$	38

Leases

Leases

(a)Lessee Arrangements

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

	Balance Sheet Line Item	January 27, 2024		July 29, 2023
Operating lease right-of-use assets	Other assets	$	978	$	971
Operating lease liabilities	Other current liabilities	$	330	$	313
Operating lease liabilities	Other long-term liabilities	703		707
Total operating lease liabilities		$	1,033	$	1,020

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

	Three Months Ended				Six Months Ended
	January 27, 2024		January 28, 2023		January 27, 2024		January 28, 2023
Operating lease expense	$	103	$	98	$	203	$	194
Short-term lease expense	25		17		36		34
Variable lease expense	50		63		106		121
Total lease expense	$	178	$	178	$	345	$	349

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

	Six Months Ended
	January 27, 2024		January 28, 2023
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	178	$	192
Right-of-use assets obtained in exchange for operating leases liabilities	$	182	$	149

The weighted-average lease term was 4.6 years as of each of January 27, 2024 and July 29, 2023. The weighted-average discount rate was 3.7% and 3.1% as of January 27, 2024 and July 29, 2023, respectively.

The maturities of our operating leases (undiscounted) as of January 27, 2024 are as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	183
2025	303
2026	206
2027	129
2028	94
Thereafter	231
Total lease payments	1,146
Less interest	(113)
Total	$	1,033

(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 $16 million and $30 million for the second quarter and the first six months of fiscal 2024, respectively, and $12 million and $24 million for the corresponding periods of fiscal 2023, 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 27, 2024 are summarized as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	401
2025	369
2026	125
2027	91
2028	68
Thereafter	45
Total	1,099
Less: Present value of lease payments	(989)
Unearned income	$	110

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 27, 2024		July 29, 2023
Operating lease assets	$	125	$	135
Accumulated depreciation	(72)		(78)
Operating lease assets, net	$	53	$	57

Our operating lease income was $15 million and $31 million for the second quarter and first six months of fiscal 2024, respectively, and $18 million and $39 million for the corresponding periods of fiscal 2023, respectively, and was included in product revenue in the Consolidated Statements of Operations.

Minimum future rentals on noncancelable operating leases as of January 27, 2024 are summarized as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	12
2025	16
2026	9
2027	1
Total	$	38

Leases

Leases

(a)Lessee Arrangements

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

	Balance Sheet Line Item	January 27, 2024		July 29, 2023
Operating lease right-of-use assets	Other assets	$	978	$	971
Operating lease liabilities	Other current liabilities	$	330	$	313
Operating lease liabilities	Other long-term liabilities	703		707
Total operating lease liabilities		$	1,033	$	1,020

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

	Three Months Ended				Six Months Ended
	January 27, 2024		January 28, 2023		January 27, 2024		January 28, 2023
Operating lease expense	$	103	$	98	$	203	$	194
Short-term lease expense	25		17		36		34
Variable lease expense	50		63		106		121
Total lease expense	$	178	$	178	$	345	$	349

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

	Six Months Ended
	January 27, 2024		January 28, 2023
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows	$	178	$	192
Right-of-use assets obtained in exchange for operating leases liabilities	$	182	$	149

The weighted-average lease term was 4.6 years as of each of January 27, 2024 and July 29, 2023. The weighted-average discount rate was 3.7% and 3.1% as of January 27, 2024 and July 29, 2023, respectively.

The maturities of our operating leases (undiscounted) as of January 27, 2024 are as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	183
2025	303
2026	206
2027	129
2028	94
Thereafter	231
Total lease payments	1,146
Less interest	(113)
Total	$	1,033

(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 $16 million and $30 million for the second quarter and the first six months of fiscal 2024, respectively, and $12 million and $24 million for the corresponding periods of fiscal 2023, 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 27, 2024 are summarized as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	401
2025	369
2026	125
2027	91
2028	68
Thereafter	45
Total	1,099
Less: Present value of lease payments	(989)
Unearned income	$	110

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 27, 2024		July 29, 2023
Operating lease assets	$	125	$	135
Accumulated depreciation	(72)		(78)
Operating lease assets, net	$	53	$	57

Our operating lease income was $15 million and $31 million for the second quarter and first six months of fiscal 2024, respectively, and $18 million and $39 million for the corresponding periods of fiscal 2023, respectively, and was included in product revenue in the Consolidated Statements of Operations.

Minimum future rentals on noncancelable operating leases as of January 27, 2024 are summarized as follows (in millions):

Fiscal Year	Amount
2024 (remaining six months)	$	12
2025	16
2026	9
2027	1
Total	$	38