Semiconductors: Remaining performance obligations

As of September 3, 2026, the transaction price allocated to our remaining performance obligations was approximately $ 134 billion, of which $ 13 billion has been recognized as contract liabilities. Contract liabilities primarily consisted of customer deposits associated with strategic customer agreements. Nearly all of the deposits are scheduled to be repaid between 2029 and 2031. Approximately one-fourth of the remaining performance obligations as of September 3, 2026 are expected to be recognized as revenue over the next twelve months . The remaining performance obligations are expected to be fully recognized within the next five years. As of August 28, 2025, our remaining performance obligations were not material.

Our remaining performance obligations are based on expected purchases to satisfy committed volumes and minimum pricing and are not expected to be indicative of future revenue under these contracts. We have excluded agreements from our remaining performance obligations that do not have either fixed pricing or price bands as the related consideration is variable at contract inception. As a practical expedient, we have excluded contracts that have an original term of one year or less from remaining performance obligations.

Certain strategic customer agreements also include terms requiring our customers to maintain letters of credit with third-party financial institutions. Our right to access letters of credit is contingent upon the occurrence of specified events of default or breach by our customers. Letters of credit are not recognized as revenue unless an event of default or breach has occurred. The aggregate amount of letters of credit issued, or contractually committed to be issued, by third-party financial institutions was $ 7 billion as of September 3, 2026, which represented the maximum potential proceeds available to us in the event of customer default or breach. In the event of customer default or breach, our contractual recovery rights may include proceeds from letters of credit, rights to decrement customer deposits and other contractual remedies.

As of September 3, 2026 and August 28, 2025, other current liabilities included $ 4.32 billion and $ 1.19 billion, respectively, for estimates of consideration payable to customers, including pricing adjustments and returns.

Note 17. Other Operating (Income) Expense, Net