Leases

12 Months Ended

Dec. 31, 2023

We lease certain facilities and equipment related primarily to R&D, administrative and commercial activities. Leases with terms of 12 months or less are expensed as incurred and are not recorded in the Consolidated Balance Sheets.

Most leases include one or more options to renew, with renewal terms that may extend the lease term up to seven years. The exercise of lease renewal options is at our sole discretion. In addition, some of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements neither contain residual value guarantees nor impose significant restrictions or covenants. We sublease certain real estate to third parties. Our sublease portfolio consists of operating leases from former R&D and administrative space.

The following table summarizes information related to our leases, all of which are classified as operating, included in our Consolidated Balance Sheets (in millions):


	December 31,
Consolidated Balance Sheets locations	2023		2022
Assets:
Other noncurrent assets	$	651	$	579
Liabilities:
Accrued liabilities	$	119	$	156
Other noncurrent liabilities	691		539
Total lease liabilities	$	810	$	695

The components of net lease costs were as follows (in millions):


	Years ended December 31,
Lease costs	2023		2022		2021
Operating(1)	$	208	$	218	$	237






Sublease income	(28)		(32)		(38)
Total net lease costs	$	180	$	186	$	199

____________

(1) Includes short-term leases and variable lease costs, which were not material for the years ended December 31, 2023, 2022 and 2021.

Maturities of lease liabilities as of December 31, 2023, were as follows (in millions):


Maturity dates	Amounts
2024	$	138
2025	121
2026	109
2027	95
2028	74
Thereafter	440
Total lease payments(1)	977
Less imputed interest	(167)
Present value of lease liabilities	$	810

____________

(1) Includes future rental commitments for abandoned leases of $67 million. We expect to receive total future rental income of $70 million related to noncancellable subleases for abandoned facilities.

The weighted-average remaining lease terms and weighted-average discount rates were as follows:


	December 31,
	2023		2022
Weighted-average remaining lease term (in years)	9.7		8.2
Weighted-average discount rate	3.6	%	2.7	%

Cash and noncash information related to our leases was as follows (in millions):


	Years ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	182	$	171	$	190


ROU assets obtained in exchange for lease obligations:
Operating leases	$	245	$	191	$	340

As of December 31, 2023, there were no future lease payments for leases that have not yet commenced.