Leases and Commitments

12 Months Ended

Dec. 31, 2023

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 95 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
	2023		2022		2021		Income Statement Classification
Operating lease expense	$	147	$	145	$	157	Cost of products sold, Marketing, research and general expenses



Finance lease expense:
Amortization of lease assets	16		15		13		Cost of products sold
Interest on lease liabilities	2		1		2		Interest expense
Total finance lease expense	18		16		15

Variable lease expense(a)	253		242		219		Cost of products sold, Marketing, research and general expenses
Total lease expense	$	418	$	403	$	391

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

Lease Assets and Liabilities


	December 31
	2023		2022		Balance Sheet Classification
Assets
Operating lease	$	450	$	475	Other Assets
Finance lease	79		71		Property, Plant and Equipment, Net
Total lease assets	$	529	$	546
Liabilities
Current:
Operating lease	$	130	$	127	Accrued expenses and other current liabilities
Finance lease	14		11		Debt payable within one year
Noncurrent:
Operating lease	346		377		Other Liabilities
Finance lease	57		49		Long-Term Debt
Total lease liabilities	$	547	$	564

As of December 31, 2023 and 2022, accumulated amortization of finance lease assets was $37 and $32, respectively.

Maturity of Lease Liabilities


	December 31, 2023
	Operating Leases		Finance Leases		Total
2024	$	145	$	16	$	161
2025	128		14		142
2026	110		11		121
2027	64		9		73
2028	27		7		34

Thereafter	45		25		70
Total lease payments	519		82		601
Less imputed interest	43		10		53
Present value of lease liabilities	$	476	$	72	$	548

As of December 31, 2023, our operating leases have a weighted-average remaining lease term of 4 years and a weighted-average discount rate of 4 percent and our finance leases have a weighted-average remaining lease term of 7 years and a weighted-average discount rate of 4 percent.

Supplemental Information Related to Leases


	December 31
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases	$	147	$	148	$	155
Finance leases	17		11		13
Lease assets obtained in exchange for new lease obligations:
Operating leases	66		57		34
Finance leases	24		6		56
Other non-cash modifications to lease assets:
Operating leases	39		72		61

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 $1,528 in 2024, $1,029 in 2025, $227 in 2026, $227 in 2027, $13 in 2028, and $18 beyond the year 2028.

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.