Leases and Other Commitments (Notes)

3 Months Ended

Oct. 04, 2019

Leases [Abstract]

Leases and Other Commitments

Leases and Other Commitments

Leases

The Company leases certain domestic and international facilities and data center space under long-term, non-cancelable operating leases that expire at various dates through 2034. These leases include no variable or contingent lease payments. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include prepaid lease payments minus any lease incentives. Extension or termination options present in the Company’s lease agreements are included in determining the right-of-use asset and lease liability when it is reasonably certain the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. The following table summarizes supplemental balance sheet information related to operating leases as of October 4, 2019:

	Lease Amounts
Minimum lease payments by fiscal year:	(in millions)
Remaining nine months of 2020	$	37
2021	40
2022	28
2023	24
2024	27
Thereafter	163
Total future minimum lease payments	319
Less: Imputed Interest	(62		)
Present value of lease liabilities	257
Less: Current portion (included in Accrued expenses)	40
Long-term operating lease liabilities (included in Other liabilities)	$	217
Operating lease right-of-use assets (included in Other non-current assets)	$	243
Weighted average remaining lease term in years	9.5
Weighted average discount rate	4.1		%

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases for the three months ended October 4, 2019:

	Three Months Ended
	October 4, 2019
	(in millions)
Cost of operating leases	$	12
Cash paid for operating leases	16
Operating lease assets obtained in exchange for operating lease liabilities	49

Purchase Agreements and Other Commitments

In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. As of October 4, 2019, the Company had the following minimum long-term commitments:

	Long-term commitments
	(in millions)
Fiscal year:
Remaining nine months of 2020	$	70
2021	183
2022	250
2023	267
2024	40
Thereafter	210
Total	$	1,020