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Leases (Tables)

12 Months Ended

Dec. 31, 2023

Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to our leases is as follows (dollars in millions):


		December 31,
Category	Classification	2023		2022
Assets
Operating	Operating lease assets	$	1,030	$	1,033
Financing	Other assets, net	210		91
Total leased assets		$	1,240	$	1,124

Liabilities
Current:
Operating	Operating lease liabilities	$	242	$	230
Financing	Other current liabilities	36		33
Non-current:
Operating	Non-current operating lease liabilities	1,089		1,080
Financing	Other liabilities	72		58
Total lease liabilities		$	1,439	$	1,401

Schedule of Components of Lease Costs

Components of lease cost are as follows (dollars in millions):


		Year Ended December 31,
Component	Classification	2023		2022
Operating lease cost	Operating, administrative and other	$	220	$	196
Financing lease cost:
Amortization of right-to-use assets	(1)	36		31
Interest on lease liabilities	Interest expense	1		1
Variable lease cost	(2)	115		79
Sublease income	Revenue	(5)		(4)
Total lease cost		$	367	$	303

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(1)Amortization costs of $25.2 million and $26.4 million from vehicle finance leases utilized in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively. Amortization costs of $10.8 million and $4.2 million from all other finance leases are included in the “Depreciation and amortization” line item in the accompanying consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively.

(2)Variable lease costs of $24.0 million and $23.6 million from leases in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively. Variable lease costs of $64.1 million and $55.6 million from all other leases are included in the “Operating, administrative and other” line item in the accompanying consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively.

Schedule of Weighted Average Remaining Lease Term and Discount Rate for Operating Leases

Weighted average remaining lease term and discount rate for our operating and finance leases are as follows:


	December 31,
	2023	2022
Weighted-average remaining lease term:
Operating leases (1)	41 years	42 years
Financing leases (2)	71 years	75 years
Weighted-average discount rate:
Operating leases (1)	4.8%	4.5%
Financing leases (2)	5.2%	5.1%

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(1)Operating leases as of December 31, 2023 and 2022 include three 90+ year leases on real estate under development. If excluded, the weighted-average remaining lease term would be 7 years (for both years) and weighted-average discount rate would be 3.5% as of December 31, 2023 and 3.0% as of December 31, 2022.

(2)Finance leases as of December 31, 2023 and 2022 included a 99 year lease on real estate held for investment. If excluded, the weighted-average remaining lease term and weighted-average discount rate would be 3 years and 2.5%, respectively, as of December 31, 2023 and 3 years and 1.7%, respectively, as of December 31, 2022. This excludes certain land leases up to 999 years held by our U.K. development business.

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities by fiscal year as of December 31, 2023 are as follows (dollars in millions):


	Operating Leases		Financing Leases
2024	$	239	$	38
2025	226		27
2026	210		19
2027	161		11
2028	127		4
Thereafter	1,241		218
Total remaining lease payments at December 31, 2023	2,204		317
Less: Interest	873		209
Present value of lease liabilities at December 31, 2023	$	1,331	$	108

Supplemental Cash Flow Information and Non-Cash Activity Related to Operating Leases

Supplemental cash flow information and non-cash activity related to our operating and financing leases are as follows (dollars in millions):


	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	237	$	237
Operating cash outflows from financing leases	3		2
Financing cash outflows from financing leases	38		38
Right-of-use assets obtained in exchange for new operating lease liabilities	154		164
Right-of-use assets obtained in exchange for new financing lease liabilities	54		31
Other non-cash increases in operating lease right-of-use assets (1)	6		32
Other non-cash increases in financing lease right-of-use assets (1)	100		6

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(1)The non-cash activity in the right-of-use assets resulted from lease modifications/remeasurements and terminations.