Accounting for Leases as a Lessee
Components of lease cost included in the Consolidated Statement of Earnings were as follows:
| | | | | | | | | | | | | | | | | |
| For the fiscal years ended October 31, |
| 2025 | | 2024 | | 2023 |
| In millions |
| Operating lease cost | $ | 350 | | | $ | 259 | | | $ | 200 | |
| Finance lease cost | 3 | | | 3 | | | 4 | |
| Sublease rental income | (40) | | | (26) | | | (23) | |
| Total lease cost | $ | 313 | | | $ | 236 | | | $ | 181 | |
The ROU assets and lease liabilities for operating and finance leases included in the Consolidated Balance Sheets were as follows:
| | | | | | | | | | | | | | | | | |
| | | As of October 31, |
| Balance Sheet Classification | | 2025 | | 2024 |
| | | In millions |
| Operating Leases | | | | | |
| ROU Assets | Long-term financing receivables and other assets | | $ | 1,535 | | | $ | 1,408 | |
| Lease Liabilities: | | | | | |
| Operating lease liabilities – current | Other accrued liabilities | | 316 | | | 261 | |
| Operating lease liabilities – non-current | Other non-current liabilities | | 1,396 | | | 1,309 | |
| Total operating lease liabilities | | | $ | 1,712 | | | $ | 1,570 | |
| | | | | |
| Finance Leases | | | | | |
| Finance lease ROU Assets: | Property, plant and equipment, net | | | | |
| Gross finance lease ROU assets | | | $ | 26 | | | $ | 26 | |
| Less: Accumulated depreciation | | | (18) | | | (16) | |
| Net finance lease ROU assets | | | $ | 8 | | | $ | 10 | |
| Lease Liabilities: | | | | | |
| Finance lease liabilities – current | Notes payable and short-term borrowings | | $ | 6 | | | $ | 6 | |
| Finance lease liabilities – non-current | Long-term debt | | 25 | | | 32 | |
| Total finance lease liabilities | | | $ | 31 | | | $ | 38 | |
| | | | | |
| Total ROU assets | | | $ | 1,543 | | | $ | 1,418 | |
| Total lease liabilities | | | $ | 1,743 | | | $ | 1,608 | |
| | | | | |
The weighted-average remaining lease term and the weighted-average discount rate for the operating and finance leases were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| As of October 31, |
| 2025 | | 2024 |
| Operating Leases | | Finance Leases | | Operating Leases | | Finance Leases |
| Weighted-average remaining lease term (in years) | 6.6 | | 4.5 | | 6.7 | | 5.5 |
| Weighted-average discount rate | 4.5 | % | | 3.5 | % | | 4.4 | % | | 3.5 | % |
Supplemental cash flow information related to leases was as follows: | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the fiscal years ended October 31, |
| Cash Flow Statement Activity | | 2025 | | 2024 | | 2023 |
| | | In millions |
| Cash outflows from operating leases | Net cash used in operating activities | | $ | 352 | | | $ | 274 | | | $ | 219 | |
| | | | | | | |
| ROU assets obtained in exchange for new operating lease liabilities | Non-cash activities | | $ | 109 | | | $ | 627 | | | $ | 251 | |
The following tables shows the future payments on the Company's operating and finance leases:
| | | | | | | | | | | |
| As of October 31, 2025 |
| Operating Leases | | Finance Leases |
| Fiscal year | In millions |
| 2026 | $ | 383 | | | $ | 7 | |
| 2027 | 355 | | | 7 | |
| 2028 | 312 | | | 8 | |
| 2029 | 252 | | | 8 | |
| 2030 | 196 | | | 4 | |
| Thereafter | 492 | | | — | |
| Total future lease payments | $ | 1,990 | | | $ | 34 | |
| Less: imputed interest | (278) | | | (3) | |
| Total lease liabilities | $ | 1,712 | | | $ | 31 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.