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Supplemental Financial Information | 6 Months Ended
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Oct. 29, 2021
Supplemental Financial Information [Abstract] |
Supplemental Financial Information | 5. Supplemental Financial Information Cash, cash equivalents and restricted cash (in millions): The following table presents cash and cash equivalents as reported in our condensed consolidated balance sheets, as well as the sum of cash, cash equivalents and restricted cash as reported on our condensed consolidated statements of cash flows:
|  | October 29, 2021 |  |  | April 30, 2021 |
Cash and cash equivalents |  | $ | 4,509 |  |  | $ | 4,529 |
Restricted cash |  |  | 7 |  |  |  | 6 |
Cash, cash equivalents and restricted cash |  | $ | 4,516 |  |  | $ | 4,535 |
Inventories (in millions):
|  | October 29, 2021 |  |  | April 30, 2021 |
Purchased components |  | $ | 48 |  |  | $ | 22 |
Finished goods |  |  | 107 |  |  |  | 92 |
Inventories |  | $ | 155 |  |  | $ | 114 |
Property and equipment, net (in millions):
|  | October 29, 2021 |  |  | April 30, 2021 |
Land |  | $ | 46 |  |  | $ | 46 |
Buildings and improvements |  |  | 350 |  |  |  | 356 |
Leasehold improvements |  |  | 77 |  |  |  | 83 |
Computer, production, engineering and other equipment |  |  | 903 |  |  |  | 869 |
Computer software |  |  | 305 |  |  |  | 305 |
Furniture and fixtures |  |  | 76 |  |  |  | 93 |
Construction-in-progress |  |  | 65 |  |  |  | 46 |
|  |  | 1,822 |  |  |  | 1,798 |
Accumulated depreciation and amortization |  |  | (1,273 | ) |  |  | (1,273 | )
Property and equipment, net |  | $ | 549 |  |  | $ | 525 |
Other non-current assets (in millions):
|  | October 29, 2021 |  |  | April 30, 2021 |
Deferred tax assets |  | $ | 249 |  |  | $ | 219 |
Operating lease ROU assets |  |  | 263 |  |  |  | 114 |
Other assets |  |  | 355 |  |  |  | 361 |
Other non-current assets |  | $ | 867 |  |  | $ | 694 |
Other non-current assets as of October 29, 2021 and April 30, 2021 include $75 million and $71 million, respectively, for our 49% non-controlling equity interest in Lenovo NetApp Technology Limited, a China-based entity that we formed with Lenovo (Beijing) Information Technology Ltd. in fiscal 2019. Accrued expenses (in millions):
|  | October 29, 2021 |  |  | April 30, 2021 |
Accrued compensation and benefits |  | $ | 400 |  |  | $ | 505 |
Product warranty liabilities |  |  | 19 |  |  |  | 21 |
Operating lease liabilities |  |  | 49 |  |  |  | 49 |
Other current liabilities |  |  | 328 |  |  |  | 395 |
Accrued expenses |  | $ | 796 |  |  | $ | 970 |
Product warranty liabilities: Equipment and software systems sales include a standard product warranty. Estimated future hardware and software warranty costs are recorded as a cost of product revenues at the time of product shipment, based on historical and projected warranty claim rates, historical and projected cost-per-claim and knowledge of specific product failures that are outside our typical experience. The following tables summarize the activity related to product warranty liabilities and their balances as reported in our condensed consolidated balance sheets (in millions):
|  | Three Months Ended |  |  | Six Months Ended |
|  | October 29, 2021 |  |  | October 30, 2020 |  |  | October 29, 2021 |  |  | October 30, 2020 |
Balance at beginning of period |  | $ | 31 |  |  | $ | 37 |  |  | $ | 32 |  |  | $ | 41 |
Expense accrued during the period |  |  | 2 |  |  |  | 4 |  |  |  | 6 |  |  |  | 5 |
Warranty costs incurred |  |  | (5 | ) |  |  | (6 | ) |  |  | (10 | ) |  |  | (11 | )
Balance at end of period |  | $ | 28 |  |  | $ | 35 |  |  | $ | 28 |  |  | $ | 35 |
|  | October 29, 2021 |  |  | April 30, 2021 |
Accrued expenses |  | $ | 19 |  |  | $ | 21 |
Other long-term liabilities |  |  | 9 |  |  |  | 11 |
Total warranty liabilities |  | $ | 28 |  |  | $ | 32 |
Warranty expense recognized during the period includes amounts accrued for systems at the time of shipment, adjustments for changes in estimated costs for warranties on systems shipped in the period and changes in estimated costs for warranties on systems shipped in prior periods. Other long-term liabilities (in millions):
|  | October 29, 2021 |  |  | April 30, 2021 |
Liability for uncertain tax positions |  | $ | 111 |  |  | $ | 127 |
Income taxes payable |  |  | 303 |  |  |  | 351 |
Product warranty liabilities |  |  | 9 |  |  |  | 11 |
Operating lease liabilities |  |  | 224 |  |  |  | 71 |
Other liabilities |  |  | 88 |  |  |  | 90 |
Other long-term liabilities |  | $ | 735 |  |  | $ | 650 |
Deferred revenue and financed unearned services revenue The following table summarizes the components of our deferred revenue and financed unearned services balance as reported in our condensed consolidated balance sheets (in millions):
|  | October 29, 2021 |  |  | April 30, 2021 |
Deferred product revenue |  | $ | 47 |  |  | $ | 59 |
Deferred services revenue |  |  | 3,758 |  |  |  | 3,873 |
Financed unearned services revenue |  |  | 61 |  |  |  | 71 |
Total |  | $ | 3,866 |  |  | $ | 4,003 |
Reported as: |  |  |  |  |  |
Short-term |  | $ | 1,967 |  |  | $ | 2,062 |
Long-term |  |  | 1,899 |  |  |  | 1,941 |
Total |  | $ | 3,866 |  |  | $ | 4,003 |
Deferred product revenue represents unrecognized revenue related to undelivered product commitments and other product deliveries that have not met all revenue recognition criteria. Deferred services revenue represents customer payments made in advance for services, which include software and hardware support contracts, Public Cloud, and other services. Financed unearned services revenue represents undelivered services for which cash has been received under certain third-party financing arrangements. See Note 15 – Commitments and Contingencies for additional information related to these arrangements. The following tables summarize the activity related to deferred revenue and financed unearned services revenue (in millions):
|  | Six Months Ended |
|  | October 29, 2021 |  |  | October 30, 2020 |
Balance at beginning of period |  | $ | 4,003 |  |  | $ | 3,698 |
Additions |  |  | 1,363 |  |  |  | 1,364 |
Revenue recognized during the period |  |  | (1,500 | ) |  |  | (1,411 | )
Balance at end of period |  | $ | 3,866 |  |  | $ | 3,651 |
During the six months ended October 29, 2021 and October 30, 2020, we recognized $1,183 million and $1,207 million, respectively, that was included in the deferred revenue and financed unearned services revenue balance at the beginning of the respective periods. As of October 29, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied approximated our deferred revenue and unearned services revenue balance. Because customer orders are typically placed on an as-needed basis, and cancellable without penalty prior to shipment, orders in backlog may not be a meaningful indicator of future revenue and have not been included in this amount. We expect to recognize as revenue approximately 51% of our deferred revenue and financed unearned services revenue balance in the next 12 months, approximately 24% in the next 13 to 24 months, and the remainder thereafter. Deferred commissions The following tables summarize the activity related to deferred commissions and their balances as reported in our condensed consolidated balance sheets (in millions):
|  | Six Months Ended |
|  | October 29, 2021 |  |  | October 30, 2020 |
Balance at beginning of period |  | $ | 197 |  |  | $ | 156 |
Additions |  |  | 76 |  |  |  | 57 |
Expense recognized during the period |  |  | (71 | ) |  |  | (45 | )
Balance at end of period |  | $ | 202 |  |  | $ | 168 |
|  | October 29, 2021 |  |  | April 30, 2021 |
Other current assets |  | $ | 86 |  |  | $ | 86 |
Other non-current assets |  |  | 116 |  |  |  | 111 |
Total deferred commissions |  | $ | 202 |  |  | $ | 197 |
Other expense, net (in millions):
|  | Three Months Ended |  |  | Six Months Ended |
|  | October 29, 2021 |  |  | October 30, 2020 |  |  | October 29, 2021 |  |  | October 30, 2020 |
Interest income |  | $ | 1 |  |  | $ | 2 |  |  | $ | 3 |  |  | $ | 5 |
Interest expense |  |  | (18 | ) |  |  | (18 | ) |  |  | (36 | ) |  |  | (36 | )
Other income (expense), net |  |  | 3 |  |  |  | 9 |  |  |  | 7 |  |  |  | (8 | )
Total other expense, net |  | $ | (14 | ) |  | $ | (7 | ) |  | $ | (26 | ) |  | $ | (39 | )
Statements of cash flows additional information (in millions): Supplemental cash flow information related to our operating leases is included in Note 8 ─ Leases. Non-cash investing activities and other supplemental cash flow information are presented below:
|  | Six Months Ended |
|  | October 29, 2021 |  |  | October 30, 2020 |
Non-cash Investing Activities: |  |  |  |  |  |
Capital expenditures incurred but not paid |  | $ | 21 |  |  | $ | 9 |
Supplemental Cash Flow Information: |  |  |  |  |  |
Income taxes paid, net of refunds |  | $ | 232 |  |  | $ | 238 |
Interest paid |  | $ | 34 |  |  | $ | 23 |

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- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -URI http://asc.fasb.org/topic&trid=2122208 + Details
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