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LEASES
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 41 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019.
The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Operating lease cost$114 $115 $121 
Finance lease cost
Amortization of right-of-use assets7 5 5 
Interest on lease liabilities5 5 5 
Variable lease cost52 54 89 
Lease cost$178 $179 $220 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019:
(in millions)202120202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$124 $127 $119 
Operating cash flows from finance leases5 4 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations71 67 207 
Right-of-use finance lease assets obtained in exchange for lease obligations4 8 — 
There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include:
(in millions)20212020
Operating leases
Operating lease right-of-use assets$630 $603 
Accrued expenses and other current liabilities$128 $111 
Operating lease liabilities522 501 
Total operating lease liabilities$650 $612 
Finance leases
Property, plant and equipment, at cost$86 $76 
Accumulated depreciation(31)(28)
Property, plant and equipment, net$55 $48 
Current maturities of long-term debt and finance lease obligations$2 $1 
Long-term debt and finance lease obligations68 64 
Total finance lease liabilities$70 $65 
Lease term and discount rates as of December 31, 2021 and 2020 were:
December 31, 2021December 31, 2020
Weighted-average remaining lease term (years)
Operating leases89
Finance leases1213
Weighted-average discount rate
Operating leases1.8 %2.2 %
Finance leases9.3 %10.3 %
Maturities of operating and finance lease liabilities as of December 31, 2021 were:
(in millions)Finance LeasesOperating Leases
2022$10 $141 
20239 118 
20249 95 
20259 76 
20269 60 
Thereafter72 216 
Total minimum lease payments118 706 
Less: imputed interest(48)(56)
Present value of lease liabilities$70 $650 
Lessor Activity
We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Sales-type lease revenue$27 $38 $35 
Operating lease revenue136 84 61 
Variable lease revenue79 80 85 
Total lease revenue$242 $202 $181 
The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were:
(in millions)20212020
Minimum lease payments$111 $122 
Unguaranteed residual values4 12 
Net investment in leases $115 $134 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2021December 31, 2020
Accounts receivable, net$40 $39 
Other non-current assets75 95 
Total$115 $134 
Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021.
Maturities of sales-type and operating leases as of December 31, 2021 were:
(in millions)Sales-type LeasesOperating Leases
2022$43 $87 
202332 79 
202422 75 
202512 60 
20265 11 
Thereafter1 2 
Total minimum lease payments115 $314 
Less: imputed interest(4)
Present value of minimum lease payments$111 
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 41 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019.
The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Operating lease cost$114 $115 $121 
Finance lease cost
Amortization of right-of-use assets7 5 5 
Interest on lease liabilities5 5 5 
Variable lease cost52 54 89 
Lease cost$178 $179 $220 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019:
(in millions)202120202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$124 $127 $119 
Operating cash flows from finance leases5 4 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations71 67 207 
Right-of-use finance lease assets obtained in exchange for lease obligations4 8 — 
There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include:
(in millions)20212020
Operating leases
Operating lease right-of-use assets$630 $603 
Accrued expenses and other current liabilities$128 $111 
Operating lease liabilities522 501 
Total operating lease liabilities$650 $612 
Finance leases
Property, plant and equipment, at cost$86 $76 
Accumulated depreciation(31)(28)
Property, plant and equipment, net$55 $48 
Current maturities of long-term debt and finance lease obligations$2 $1 
Long-term debt and finance lease obligations68 64 
Total finance lease liabilities$70 $65 
Lease term and discount rates as of December 31, 2021 and 2020 were:
December 31, 2021December 31, 2020
Weighted-average remaining lease term (years)
Operating leases89
Finance leases1213
Weighted-average discount rate
Operating leases1.8 %2.2 %
Finance leases9.3 %10.3 %
Maturities of operating and finance lease liabilities as of December 31, 2021 were:
(in millions)Finance LeasesOperating Leases
2022$10 $141 
20239 118 
20249 95 
20259 76 
20269 60 
Thereafter72 216 
Total minimum lease payments118 706 
Less: imputed interest(48)(56)
Present value of lease liabilities$70 $650 
Lessor Activity
We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Sales-type lease revenue$27 $38 $35 
Operating lease revenue136 84 61 
Variable lease revenue79 80 85 
Total lease revenue$242 $202 $181 
The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were:
(in millions)20212020
Minimum lease payments$111 $122 
Unguaranteed residual values4 12 
Net investment in leases $115 $134 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2021December 31, 2020
Accounts receivable, net$40 $39 
Other non-current assets75 95 
Total$115 $134 
Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021.
Maturities of sales-type and operating leases as of December 31, 2021 were:
(in millions)Sales-type LeasesOperating Leases
2022$43 $87 
202332 79 
202422 75 
202512 60 
20265 11 
Thereafter1 2 
Total minimum lease payments115 $314 
Less: imputed interest(4)
Present value of minimum lease payments$111 
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 41 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019.
The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Operating lease cost$114 $115 $121 
Finance lease cost
Amortization of right-of-use assets7 5 5 
Interest on lease liabilities5 5 5 
Variable lease cost52 54 89 
Lease cost$178 $179 $220 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019:
(in millions)202120202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$124 $127 $119 
Operating cash flows from finance leases5 4 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations71 67 207 
Right-of-use finance lease assets obtained in exchange for lease obligations4 8 — 
There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include:
(in millions)20212020
Operating leases
Operating lease right-of-use assets$630 $603 
Accrued expenses and other current liabilities$128 $111 
Operating lease liabilities522 501 
Total operating lease liabilities$650 $612 
Finance leases
Property, plant and equipment, at cost$86 $76 
Accumulated depreciation(31)(28)
Property, plant and equipment, net$55 $48 
Current maturities of long-term debt and finance lease obligations$2 $1 
Long-term debt and finance lease obligations68 64 
Total finance lease liabilities$70 $65 
Lease term and discount rates as of December 31, 2021 and 2020 were:
December 31, 2021December 31, 2020
Weighted-average remaining lease term (years)
Operating leases89
Finance leases1213
Weighted-average discount rate
Operating leases1.8 %2.2 %
Finance leases9.3 %10.3 %
Maturities of operating and finance lease liabilities as of December 31, 2021 were:
(in millions)Finance LeasesOperating Leases
2022$10 $141 
20239 118 
20249 95 
20259 76 
20269 60 
Thereafter72 216 
Total minimum lease payments118 706 
Less: imputed interest(48)(56)
Present value of lease liabilities$70 $650 
Lessor Activity
We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Sales-type lease revenue$27 $38 $35 
Operating lease revenue136 84 61 
Variable lease revenue79 80 85 
Total lease revenue$242 $202 $181 
The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were:
(in millions)20212020
Minimum lease payments$111 $122 
Unguaranteed residual values4 12 
Net investment in leases $115 $134 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2021December 31, 2020
Accounts receivable, net$40 $39 
Other non-current assets75 95 
Total$115 $134 
Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021.
Maturities of sales-type and operating leases as of December 31, 2021 were:
(in millions)Sales-type LeasesOperating Leases
2022$43 $87 
202332 79 
202422 75 
202512 60 
20265 11 
Thereafter1 2 
Total minimum lease payments115 $314 
Less: imputed interest(4)
Present value of minimum lease payments$111 
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 41 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019.
The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Operating lease cost$114 $115 $121 
Finance lease cost
Amortization of right-of-use assets7 5 5 
Interest on lease liabilities5 5 5 
Variable lease cost52 54 89 
Lease cost$178 $179 $220 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019:
(in millions)202120202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$124 $127 $119 
Operating cash flows from finance leases5 4 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations71 67 207 
Right-of-use finance lease assets obtained in exchange for lease obligations4 8 — 
There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include:
(in millions)20212020
Operating leases
Operating lease right-of-use assets$630 $603 
Accrued expenses and other current liabilities$128 $111 
Operating lease liabilities522 501 
Total operating lease liabilities$650 $612 
Finance leases
Property, plant and equipment, at cost$86 $76 
Accumulated depreciation(31)(28)
Property, plant and equipment, net$55 $48 
Current maturities of long-term debt and finance lease obligations$2 $1 
Long-term debt and finance lease obligations68 64 
Total finance lease liabilities$70 $65 
Lease term and discount rates as of December 31, 2021 and 2020 were:
December 31, 2021December 31, 2020
Weighted-average remaining lease term (years)
Operating leases89
Finance leases1213
Weighted-average discount rate
Operating leases1.8 %2.2 %
Finance leases9.3 %10.3 %
Maturities of operating and finance lease liabilities as of December 31, 2021 were:
(in millions)Finance LeasesOperating Leases
2022$10 $141 
20239 118 
20249 95 
20259 76 
20269 60 
Thereafter72 216 
Total minimum lease payments118 706 
Less: imputed interest(48)(56)
Present value of lease liabilities$70 $650 
Lessor Activity
We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2021, 2020 and 2019 were:
(in millions)202120202019
Sales-type lease revenue$27 $38 $35 
Operating lease revenue136 84 61 
Variable lease revenue79 80 85 
Total lease revenue$242 $202 $181 
The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were:
(in millions)20212020
Minimum lease payments$111 $122 
Unguaranteed residual values4 12 
Net investment in leases $115 $134 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2021December 31, 2020
Accounts receivable, net$40 $39 
Other non-current assets75 95 
Total$115 $134 
Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021.
Maturities of sales-type and operating leases as of December 31, 2021 were:
(in millions)Sales-type LeasesOperating Leases
2022$43 $87 
202332 79 
202422 75 
202512 60 
20265 11 
Thereafter1 2 
Total minimum lease payments115 $314 
Less: imputed interest(4)
Present value of minimum lease payments$111