Leases and Other Commitments

9 Months Ended

Mar. 31, 2023

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 material 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 those options. 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 March 31, 2023:


	Lease Amounts
	($ in millions)
Minimum lease payments by year:
Remaining three months of 2023	$	13
2024	48
2025	46
2026	46
2027	42
Thereafter	149
Total future minimum lease payments	344
Less: Imputed interest	52
Present value of lease liabilities	292
Less: Current portion (included in Accrued expenses)	41
Long-term operating lease liabilities (included in Other liabilities )	$	251

Operating lease right-of-use assets (included in Other non-current assets)	$	268

Weighted average remaining lease term in years	7.8
Weighted average discount rate	4.2		%

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases:


	Three Months Ended				Nine Months Ended
	March 31, 2023		April 1, 2022		March 31, 2023		April 1, 2022
	(in millions)
Cost of operating leases	$	15	$	15	$	43	$	42
Cash paid for operating leases	12		13		38		37
Operating lease assets obtained in exchange for operating lease liabilities	10		9		14		132

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 March 31, 2023, the Company had the following minimum long-term commitments:


	Long-Term Commitments
	(in millions)
Year:
Remaining three months of 2023	$	62
2024	206
2025	182
2026	54
2027	46
Thereafter	159
Total	$	709