Warranty period for products

  
(c)Product WarrantiesThe following table summarizes the activity related to the product warranty liability (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | July 30, 2022 |  | July 31, 2021 |  | July 25, 2020 |
| Balance at beginning of fiscal year | $ | 336  |  |  | $ | 331  |  |  | $ | 342  |  |
| Provisions for warranties issued | 415  |  |  | 496  |  |  | 561  |  |
| Adjustments for pre-existing warranties | 3  |  |  | —  |  |  | (8) |  |
| Settlements  | (421) |  |  | (491) |  |  | (564) |  |
| Balance at end of fiscal year | $ | 333  |  |  | $ | 336  |  |  | $ | 331  |  |

We accrue for warranty costs as part of our cost of sales based on associated material product costs, labor costs for technical support staff, and associated overhead. Our products are generally covered by a warranty for periods ranging from 90 days to five years, and for some products we provide a limited lifetime warranty.(d)Financing and Other GuaranteesIn the ordinary course of business, we provide financing guarantees for various third-party financing arrangements extended to channel partners customers. Payments under these financing guarantee arrangements were not material for the periods presented.Channel Partner Financing Guarantees   We facilitate arrangements for third-party financing extended to channel partners, consisting of revolving short-term financing, with payment terms generally ranging from 60 to 90 days. These financing arrangements facilitate the working capital requirements of the channel partners, and, in some cases, we guarantee a portion of these arrangements. The volume of channel partner financing was $27.9 billion, $26.7 billion, and $26.9 billion in fiscal 2022, 2021, and 2020, respectively. The balance of the channel partner financing subject to guarantees was $1.4 billion and $1.3 billion as of July 30, 2022 and July 31, 2021, respectively.Financing Guarantee Summary   The aggregate amounts of channel partner financing guarantees outstanding at July 30, 2022 and July 31, 2021, representing the total maximum potential future payments under financing arrangements with third parties along with the related deferred revenue, are summarized in the following table (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | July 30, 2022 |  | July 31, 2021 |
| Maximum potential future payments | $ | 188  |  |  | $ | 155  |  |
| Deferred revenue | (9) |  |  | (16) |  |
| Total | $ | 179  |  |  | $ | 139  |  |

(e)IndemnificationsIn the normal course of business, we have indemnification obligations to other parties, including customers, lessors, and parties to other transactions with us, with respect to certain matters. We have agreed to indemnify against losses arising from a breach of representations or covenants or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time or circumstances within which an indemnification claim can be made and the amount of the claim.It is not possible to determine the maximum potential amount for claims made under the indemnification obligations due to uncertainties in the litigation process, coordination with and contributions by other parties and the defendants in these types of cases, and the unique facts and circumstances involved in each particular case and agreement. Historically, indemnity payments made by us have not had a material effect on our Consolidated Financial Statements.In addition, we have entered into indemnification agreements with our officers and directors, and our Amended and Restated Bylaws contain similar indemnification obligations to our agents. (f)Legal ProceedingsBrazil Brazilian authorities have investigated our Brazilian subsidiary and certain of its former employees, as well as a Brazilian importer of our products, and its affiliates and employees, relating to alleged evasion of import taxes and alleged improper transactions involving the subsidiary and the importer. Brazilian tax authorities have assessed claims against our Brazilian subsidiary based on a theory of joint liability with the Brazilian importer for import taxes, interest, and penalties. In addition to claims asserted by the Brazilian federal tax authorities in prior fiscal years, tax authorities from the Brazilian state of Sao Paulo have asserted similar claims on the same legal basis in prior fiscal years. The asserted claims by Brazilian federal tax authorities are for calendar years 2003 through 2007, and the asserted claims by the tax authorities from the state of Sao Paulo are for calendar years 2005 through 2007. The total asserted claims by Brazilian state 90
