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LEASES | 12 Months Ended
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Oct. 31, 2023
Leases [Abstract] |
Lessee, Operating Leases | LEASES As a lessee, we have various non-cancelable operating lease agreements for office space, warehouses, distribution centers, research and development facilities, manufacturing and production locations as well as vehicles, personal computers and other equipment. Our real estate leases have remaining lease terms of one to thirty years, which represent the non-cancelable periods of the leases and include extension options that we determined are reasonably certain to be exercised. We exclude options that are not reasonably certain to be exercised from our lease terms, ranging from six months to twenty years. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. We often receive incentives from our landlords, such as rent abatement periods, which effectively reduce the total lease payments owed for these leases. Vehicle, personal computer and other equipment operating leases have terms between three and five years. The components of lease cost for operating leases were as follows:
|  | Year Ended October 31,
|  | 2023 |  | 2022 |  | 2021
|  | (in millions)
Operating lease cost |  | $ | 68 |  |  | $ | 59 |  |  | $ | 59 |
Short-term lease cost |  | 2 |  |  | 2 |  |  | 2 |
Variable lease cost (a) |  | 16 |  |  | 15 |  |  | 14 |
Sublease income |  | (16) |  |  | (14) |  |  | (13) |
Total lease cost |  | $ | 70 |  |  | 62 |  |  | 62 |
(a) Variable lease cost includes cancelable leases, non-fixed maintenance costs and non-recoverable transaction taxes. In the fourth quarter of fiscal year 2023, we initiated a new restructuring plan ("FY23 Plan") designed to reduce costs and expenses in response to the current macroeconomic conditions. The consolidation of excess facilities under the FY23 Plan resulted in $7 million of accelerated depreciation of our ROU assets. During fiscal year 2023, we recorded ROU asset impairments of $8 million primarily related to the exit of our Resolution Bioscience business. There were no impairments for fiscal years 2022 and 2021. Supplemental cash flow information related to leases was as follows:
|  | Year Ended October 31,
|  | 2023 |  | 2022 |  | 2021
|  | (in millions)
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flow from operating leases |  | $ | 56 |  |  | $ | 53 |  |  | $ | 57 |
Non-cash right of use assets obtained in exchange for operating lease obligations |  | $ | 70 |  |  | $ | 38 |  |  | $ | 53 |
Supplemental balance sheet information related to leases was as follows:
|  |  |  | October 31,
|  | Financial Statement Line Item |  | 2023 |  | 2022
|  |  |  | (in millions, except lease term and discount rate)
Assets: |  |  |  |  |  |
Operating lease: |  |  |  |  |  |
Right of use asset |  | Other assets |  | $ | 154 |  |  | $ | 150 |
Liabilities: |  |  |  |  |  |
Current |  |  |  |  |  |
Operating lease liabilities |  | Other accrued liabilities |  | $ | 46 |  |  | $ | 51 |
Long-term |  |  |  |  |  |
Operating lease liabilities |  | Other long-term liabilities |  | $ | 118 |  |  | $ | 101 |
Weighted average remaining lease term (in years) |  |  |  |  |  |
Operating leases |  |  |  | 8.3 years |  | 7.4 years
Weighted average discount rate |  |  |  |  |  |
Operating leases |  |  |  | 3.3 | % |  | 2.4 | %
Future minimum rents payable as of October 31, 2023 under non-cancelable leases with initial terms exceeding one year reconcile to lease liabilities included in the consolidated balance sheet as follows:
|  | Operating Leases |
|  | (in millions) |
2024 |  | $ | 51 |  |
2025 |  | 32 |  |
2026 |  | 22 |  |
2027 |  | 14 |  |
2028 |  | 11 |  |
Thereafter |  | 59 |  |
Total undiscounted future minimum lease payments |  | $ | 189 |  |
Less: amount of lease payments representing interest |  | (25) |  |
Present value of future minimum lease payments |  | $ | 164 |  |
Less: current liabilities |  | (46) |  |
Long-term lease liabilities |  | $ | 118 |  |
As of October 31, 2023, we had no additional significant operating or finance leases that had not yet commenced. As a lessor, we have contracts for equipment leased to customers primarily in connection with our diagnostics business which include both operating-type lease and sales-type finance lease arrangements. We account for the non-lease component under the revenue recognition ASC 606 guidance and the lease component under the leasing ASC 842 guidance. Equipment lease revenue for operating lease agreements is recognized as visualization kits and reagents are shipped over the life of the lease. The cost of customer leased equipment is recorded within property, plant and equipment, and is netted in the consolidated balance sheet with depreciation over the equipment’s estimated useful life. For an arrangement that has been classified as a sales-type lease, revenue is recognized when the transfer of control of the underlying leased asset has occurred and the net investment lease recorded which is calculated at the present value of the remaining lease payments due from the lessee. Revenue allocated to the lease income for both sales-type finance lease and operating lease rental arrangements represents less than one percent of total net revenue in the years ended October 31, 2023, 2022 and 2021, respectively. As of October 31, 2023, the original cost and net book value of operating leased assets were $30 million and $7 million, respectively. As of October 31, 2023, lease receivables related to sales-type leases were $42 million. As of October 31, 2022, the original cost and net book value of operating leased assets were $29 million and $4 million, respectively. As of October 31, 2022, lease receivables related to sales-type leases were $38 million.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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