LEASES

12 Months Ended

Dec. 31, 2022

The Company leases certain properties, buildings and equipment (including branches, warehouses, DCs and office space) under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists mainly of operating leases that expire at various dates through 2037.

Information related to operating leases is as follows (in millions of dollars):


	As of December 31,
	2022		2021
Right-of-use assets
Operating lease right-of-use	$	367	$	393



Operating lease liabilities
Operating lease liability	68		66
Long-term operating lease liability	318		334
Total operating lease liabilities	$	386	$	400


	As of December 31,
	2022			2021
Weighted average remaining lease term	7 years			7 years
Weighted average incremental borrowing rate	1.46		%	0.81		%
Cash paid for operating leases	$	76		$	68
Right-of-use assets obtained in exchange for operating lease obligations	$	96		$	244

Rent expense was $93 million, $74 million and $76 million for 2022, 2021 and 2020, respectively. These amounts are net of sublease income of $2 million for 2022, 2021 and 2020.

Remaining maturity of existing lease liabilities as of December 31, 2022 are as follows (in millions of dollars):


Year	Operating Leases
2023	$	77
2024	68
2025	62
2026	50
2027	40
Thereafter	108
Total lease payments	405
Less interest	(19)
Present value of lease liabilities	$	386

As of December 31, 2022 and 2021, the Company's finance leases and service contracts with lease arrangements were not material. Finance leases are reported in Property, buildings and equipment – net, and as a short and long-term finance lease liability in Accrued Expenses and Other non-current liabilities.

As of December 31, 2022 and 2021, Grainger's future lease obligations that have not yet commenced were $65 million and $18 million, respectively.