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LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

LEASES

The Company leases certain equipment and facilities under both operating and finance leases expiring on various dates through 2050. The nature of these leases generally fall into the following five categories: real estate, material handling equipment, fleet vehicles, office equipment and energy equipment.

For leases with initial terms greater than 12 months, we consider these our right-of-use assets and record the related asset and obligation at the present value of lease payments over the term. For leases with initial terms equal to or less than 12 months, we do not consider them as right-of-use assets and instead consider them short-term lease costs that are recognized on a straight-line basis over the lease term.

Many of our leases include escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when reasonably certain. These options to extend or terminate a lease are at our discretion. We have elected to take the practical expedient and not separate lease and non-lease components of contracts. We estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Our lease agreements do not contain any material residual value guarantees.                            

Balance Sheet Classification

The table below presents the lease-related assets and liabilities recorded on the balance sheet (in millions):

						December 31,
Leases			Classification on Balance Sheet			2022						2021
Assets
Operating lease assets			Operating lease right-of-use assets			$	204					$	158
Finance lease assets			Other non-current assets			127						95
Total lease assets						$	331					$	253
Liabilities
Current
Operating			Current operating lease liabilities			$	52					$	49
Finance			Other current liabilities			28						25
Non-Current
Operating			Non-current operating lease liabilities			152						109
Finance			Long-term debt, net of current portion			103						74
Total lease liabilities						$	335					$	257

Lease Costs

The table below presents lease-related costs (in millions):

			Twelve Months Ended December 31,
			2022						2021						2020
Operating lease cost			$	67					$	69					$	71
Finance lease cost
Amortization			$	30					$	23					$	16
Interest			$	4					$	4					$	3
Short-term lease cost			$	12					$	7					$	11
Variable lease cost			$	6					$	5					$	5

Cash paid for operating leases approximated operating lease expense for the years ended December 31, 2022, 2021 and 2020. Cash paid for finance leases included $30 million for financing activities and $4 million for operating activities for the year ended December 31, 2022. Cash paid for finance leases included $23 million for financing activities and $4 million for operating activities for the year ended December 31, 2021. Cash paid for finance leases included $16 million for financing activities and $3 million for operating activities for the year ended December 31, 2020.

We added $119 million and $81 million of operating lease liabilities as a result of obtaining operating lease right-of-use assets in the years ended December 31, 2022 and 2021, respectively. We added $70 million and $51 million of finance lease liabilities as a result of obtaining finance lease right-of-use assets in the years ended December 31, 2022 and 2021, respectively.

Other Information

The tables below present supplemental information related to leases:

			December 31,
Weighted-average remaining lease term (years)			2022						2021						2020
Operating leases			4.8						4.2						3.8
Finance leases			9.6						6.9						6.8

			December 31,
Weighted-average discount rate			2022						2021						2020
Operating leases			3.32		%				3.27		%				3.29		%
Finance leases			3.46		%				3.67		%				4.04		%

Maturities of Lease Liabilities

The table below reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet as of December 31, 2022 (in millions):     

Period			Operating Leases			Finance Leases
2023			$	62		$	31
2024			50			24
2025			40			16
2026			31			11
2027			20			6
2028 and beyond			24			69
Total minimum lease payments			227			157
Less: implied interest			23			26
Present value of future minimum lease payments			204			131
Less: current lease obligations			52			28
Long-term lease obligations			$	152		$	103

LEASES

LEASES

The Company leases certain equipment and facilities under both operating and finance leases expiring on various dates through 2050. The nature of these leases generally fall into the following five categories: real estate, material handling equipment, fleet vehicles, office equipment and energy equipment.

For leases with initial terms greater than 12 months, we consider these our right-of-use assets and record the related asset and obligation at the present value of lease payments over the term. For leases with initial terms equal to or less than 12 months, we do not consider them as right-of-use assets and instead consider them short-term lease costs that are recognized on a straight-line basis over the lease term.

Many of our leases include escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when reasonably certain. These options to extend or terminate a lease are at our discretion. We have elected to take the practical expedient and not separate lease and non-lease components of contracts. We estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Our lease agreements do not contain any material residual value guarantees.                            

Balance Sheet Classification

The table below presents the lease-related assets and liabilities recorded on the balance sheet (in millions):

						December 31,
Leases			Classification on Balance Sheet			2022						2021
Assets
Operating lease assets			Operating lease right-of-use assets			$	204					$	158
Finance lease assets			Other non-current assets			127						95
Total lease assets						$	331					$	253
Liabilities
Current
Operating			Current operating lease liabilities			$	52					$	49
Finance			Other current liabilities			28						25
Non-Current
Operating			Non-current operating lease liabilities			152						109
Finance			Long-term debt, net of current portion			103						74
Total lease liabilities						$	335					$	257

Lease Costs

The table below presents lease-related costs (in millions):

			Twelve Months Ended December 31,
			2022						2021						2020
Operating lease cost			$	67					$	69					$	71
Finance lease cost
Amortization			$	30					$	23					$	16
Interest			$	4					$	4					$	3
Short-term lease cost			$	12					$	7					$	11
Variable lease cost			$	6					$	5					$	5

Cash paid for operating leases approximated operating lease expense for the years ended December 31, 2022, 2021 and 2020. Cash paid for finance leases included $30 million for financing activities and $4 million for operating activities for the year ended December 31, 2022. Cash paid for finance leases included $23 million for financing activities and $4 million for operating activities for the year ended December 31, 2021. Cash paid for finance leases included $16 million for financing activities and $3 million for operating activities for the year ended December 31, 2020.

We added $119 million and $81 million of operating lease liabilities as a result of obtaining operating lease right-of-use assets in the years ended December 31, 2022 and 2021, respectively. We added $70 million and $51 million of finance lease liabilities as a result of obtaining finance lease right-of-use assets in the years ended December 31, 2022 and 2021, respectively.

Other Information

The tables below present supplemental information related to leases:

			December 31,
Weighted-average remaining lease term (years)			2022						2021						2020
Operating leases			4.8						4.2						3.8
Finance leases			9.6						6.9						6.8

			December 31,
Weighted-average discount rate			2022						2021						2020
Operating leases			3.32		%				3.27		%				3.29		%
Finance leases			3.46		%				3.67		%				4.04		%

Maturities of Lease Liabilities

The table below reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet as of December 31, 2022 (in millions):     

Period			Operating Leases			Finance Leases
2023			$	62		$	31
2024			50			24
2025			40			16
2026			31			11
2027			20			6
2028 and beyond			24			69
Total minimum lease payments			227			157
Less: implied interest			23			26
Present value of future minimum lease payments			204			131
Less: current lease obligations			52			28
Long-term lease obligations			$	152		$	103

X

- References

No definition available.

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X

- Definition

The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI https://asc.fasb.org/subtopic&trid=77888251

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X

- Definition

The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI https://asc.fasb.org/subtopic&trid=77888251

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