Leases and Commitments

12 Months Ended

Dec. 31, 2022

Leases and Commitments

We have entered into leases for certain facilities, vehicles, material handling and other equipment. Our leases have remaining contractual terms up to 96 years, some of which include options to extend the leases for up to 99 years, and some of which include options to terminate the leases within 1 year. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Our lease costs are primarily related to facility leases for inventory warehousing and administration offices.

Lease Expense


	Year Ended December 31
	2022		2021		2020		Income Statement Classification
Operating lease expense	$	145	$	157	$	168	Cost of products sold, Marketing, research and general expenses



Finance lease expense:
Amortization of lease assets	15		13		9		Cost of products sold
Interest on lease liabilities	1		2		1		Interest expense
Total finance lease expense	16		15		10

Variable lease expense(a)	242		219		202		Cost of products sold, Marketing, research and general expenses
Total lease expense	$	403	$	391	$	380

(a) Includes short-term leases, which are immaterial.

Lease Assets and Liabilities


	December 31
	2022		2021		Balance Sheet Classification
Assets
Operating lease	$	475	$	488	Other Assets
Finance lease	71		86		Property, Plant and Equipment, Net
Total lease assets	$	546	$	574
Liabilities
Current:
Operating lease	$	127	$	130	Accrued expenses and other current liabilities
Finance lease	11		11		Debt payable within one year
Noncurrent:
Operating lease	377		393		Other Liabilities
Finance lease	49		60		Long-Term Debt
Total lease liabilities	$	564	$	594

As of December 31, 2022 and 2021, accumulated amortization of finance lease assets was $32 and $27, respectively.

Maturity of Lease Liabilities


	December 31, 2022
	Operating Leases		Finance Leases		Total
2023	$	138	$	13	$	151
2024	119		10		129
2025	100		8		108
2026	83		6		89
2027	53		5		58

Thereafter	46		27		73
Total lease payments	539		69		608
Less imputed interest	35		9		44
Present value of lease liabilities	$	504	$	60	$	564

As of December 31, 2022, our operating leases have a weighted-average remaining lease term of 5 years and a weighted-average discount rate of 3 percent and our finance leases have a weighted-average remaining lease term of 8 years and a weighted-average discount rate of 3 percent.

Supplemental Information Related to Leases


	December 31
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases	$	148	$	155	$	164
Finance leases	11		13		14
Lease assets obtained in exchange for new lease obligations:
Operating leases	57		34		198
Finance leases	6		56		20
Other non-cash modifications to lease assets:
Operating leases	72		61		98

We have entered into long-term contracts for the purchase of superabsorbent materials, pulp and certain utilities. Commitments under these contracts based on current prices are $1,794 in 2023, $958 in 2024, $798 in 2025, $279 in 2026, $252 in 2027, and $39 beyond the year 2027.

Although we are primarily liable for payments on the above-mentioned leases and purchase commitments, our exposure to losses, if any, under these arrangements is not material.