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LEASES
 12 Months Ended
Dec. 31, 2023
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 39 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 12 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.
The components of lease cost for the years ended December 31, 2023, 2022 and 2021 were:
(in millions)202320222021
Operating lease cost$127 $124 $112 
Finance lease cost
Amortization of right-of-use assets6 6 6 
Interest on lease liabilities5 5 5 
Variable lease cost63 62 52 
Lease cost$201 $197 $175 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021:
(in millions)202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$154 $141 $123 
Operating cash flows from finance leases5 5 5 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations90 73 71 
Right-of-use finance lease assets obtained in exchange for lease obligations15 3 4 
Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 include:
(in millions)20232022
Operating leases
Operating lease right-of-use assets$524 $541 
Accrued expenses and other current liabilities$128 $120 
Operating lease liabilities438 447 
Total operating lease liabilities$566 $567 
Finance leases
Property, plant and equipment, at cost$91 $82 
Accumulated depreciation(39)(34)
Property, plant and equipment, net$52 $48 
Current maturities of long-term debt and finance lease obligations$3 $2 
Long-term debt and finance lease obligations66 62 
Total finance lease liabilities$69 $64 
Lease term and discount rates as of December 31, 2023 and 2022 were:
December 31, 2023December 31, 2022
Weighted-average remaining lease term (years)
Operating leases77
Finance leases1011
Weighted-average discount rate
Operating leases3.0 %2.7 %
Finance leases9.1 %9.5 %
Maturities of operating and finance lease liabilities as of December 31, 2023 were:
(in millions)Finance LeasesOperating Leases
2024$11 $143 
202511 115 
202611 94 
202710 76 
202810 55 
Thereafter63 139 
Total minimum lease payments116 622 
Less: imputed interest(47)(56)
Present value of lease liabilities$69 $566 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often 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, 2023, 2022 and 2021 were:
(in millions)202320222021
Sales-type lease revenue$10 $15 $27 
Operating lease revenue518 513 135 
Variable lease revenue53 54 79 
Total lease revenue$581 $582 $241 
The components of our net investment in sales-type leases as of December 31, 2023 and 2022 were:
(in millions)20232022
Minimum lease payments$71 $87 
Unguaranteed residual values— 1 
Net investment in leases $71 $88 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets as of December 31, 2023 and 2022:
(in millions)20232022
Accounts receivable, net$31 $35 
Other non-current assets40 53 
Total$71 $88 
Our net investment in sales-type leases was $71 million as of December 31, 2023, of which $14 million originated in 2019 and prior, $17 million in 2020, $17 million in 2021, $13 million in 2022 and $10 million in 2023.
Maturities of sales-type and operating leases as of December 31, 2023 were:
(in millions)
Sales-type Leases1
Operating Leases
2024$34 $80 
202518 75 
20269 55 
20274 39 
20283 11 
Thereafter3 — 
Total minimum lease payments$71 $260 
1 Unamortized imputed interest on minimum lease payments was less than $1 million as of December 31, 2023.
In the third quarter of 2023, we recognized $267 million of long-lived asset impairments related to our HD business, which included impairments of $14 million of operating lease right-of-use assets and $58 million of equipment leased to customers. See Note 4 for additional information.
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 39 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 12 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.
The components of lease cost for the years ended December 31, 2023, 2022 and 2021 were:
(in millions)202320222021
Operating lease cost$127 $124 $112 
Finance lease cost
Amortization of right-of-use assets6 6 6 
Interest on lease liabilities5 5 5 
Variable lease cost63 62 52 
Lease cost$201 $197 $175 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021:
(in millions)202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$154 $141 $123 
Operating cash flows from finance leases5 5 5 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations90 73 71 
Right-of-use finance lease assets obtained in exchange for lease obligations15 3 4 
Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 include:
(in millions)20232022
Operating leases
Operating lease right-of-use assets$524 $541 
Accrued expenses and other current liabilities$128 $120 
Operating lease liabilities438 447 
Total operating lease liabilities$566 $567 
Finance leases
Property, plant and equipment, at cost$91 $82 
Accumulated depreciation(39)(34)
Property, plant and equipment, net$52 $48 
Current maturities of long-term debt and finance lease obligations$3 $2 
Long-term debt and finance lease obligations66 62 
Total finance lease liabilities$69 $64 
Lease term and discount rates as of December 31, 2023 and 2022 were:
December 31, 2023December 31, 2022
Weighted-average remaining lease term (years)
Operating leases77
Finance leases1011
Weighted-average discount rate
Operating leases3.0 %2.7 %
Finance leases9.1 %9.5 %
Maturities of operating and finance lease liabilities as of December 31, 2023 were:
(in millions)Finance LeasesOperating Leases
2024$11 $143 
202511 115 
202611 94 
202710 76 
202810 55 
Thereafter63 139 
Total minimum lease payments116 622 
Less: imputed interest(47)(56)
Present value of lease liabilities$69 $566 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often 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, 2023, 2022 and 2021 were:
(in millions)202320222021
Sales-type lease revenue$10 $15 $27 
Operating lease revenue518 513 135 
Variable lease revenue53 54 79 
Total lease revenue$581 $582 $241 
The components of our net investment in sales-type leases as of December 31, 2023 and 2022 were:
(in millions)20232022
Minimum lease payments$71 $87 
Unguaranteed residual values— 1 
Net investment in leases $71 $88 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets as of December 31, 2023 and 2022:
(in millions)20232022
Accounts receivable, net$31 $35 
Other non-current assets40 53 
Total$71 $88 
Our net investment in sales-type leases was $71 million as of December 31, 2023, of which $14 million originated in 2019 and prior, $17 million in 2020, $17 million in 2021, $13 million in 2022 and $10 million in 2023.
Maturities of sales-type and operating leases as of December 31, 2023 were:
(in millions)
Sales-type Leases1
Operating Leases
2024$34 $80 
202518 75 
20269 55 
20274 39 
20283 11 
Thereafter3 — 
Total minimum lease payments$71 $260 
1 Unamortized imputed interest on minimum lease payments was less than $1 million as of December 31, 2023.
In the third quarter of 2023, we recognized $267 million of long-lived asset impairments related to our HD business, which included impairments of $14 million of operating lease right-of-use assets and $58 million of equipment leased to customers. See Note 4 for additional information.
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 39 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 12 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.
The components of lease cost for the years ended December 31, 2023, 2022 and 2021 were:
(in millions)202320222021
Operating lease cost$127 $124 $112 
Finance lease cost
Amortization of right-of-use assets6 6 6 
Interest on lease liabilities5 5 5 
Variable lease cost63 62 52 
Lease cost$201 $197 $175 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021:
(in millions)202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$154 $141 $123 
Operating cash flows from finance leases5 5 5 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations90 73 71 
Right-of-use finance lease assets obtained in exchange for lease obligations15 3 4 
Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 include:
(in millions)20232022
Operating leases
Operating lease right-of-use assets$524 $541 
Accrued expenses and other current liabilities$128 $120 
Operating lease liabilities438 447 
Total operating lease liabilities$566 $567 
Finance leases
Property, plant and equipment, at cost$91 $82 
Accumulated depreciation(39)(34)
Property, plant and equipment, net$52 $48 
Current maturities of long-term debt and finance lease obligations$3 $2 
Long-term debt and finance lease obligations66 62 
Total finance lease liabilities$69 $64 
Lease term and discount rates as of December 31, 2023 and 2022 were:
December 31, 2023December 31, 2022
Weighted-average remaining lease term (years)
Operating leases77
Finance leases1011
Weighted-average discount rate
Operating leases3.0 %2.7 %
Finance leases9.1 %9.5 %
Maturities of operating and finance lease liabilities as of December 31, 2023 were:
(in millions)Finance LeasesOperating Leases
2024$11 $143 
202511 115 
202611 94 
202710 76 
202810 55 
Thereafter63 139 
Total minimum lease payments116 622 
Less: imputed interest(47)(56)
Present value of lease liabilities$69 $566 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often 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, 2023, 2022 and 2021 were:
(in millions)202320222021
Sales-type lease revenue$10 $15 $27 
Operating lease revenue518 513 135 
Variable lease revenue53 54 79 
Total lease revenue$581 $582 $241 
The components of our net investment in sales-type leases as of December 31, 2023 and 2022 were:
(in millions)20232022
Minimum lease payments$71 $87 
Unguaranteed residual values— 1 
Net investment in leases $71 $88 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets as of December 31, 2023 and 2022:
(in millions)20232022
Accounts receivable, net$31 $35 
Other non-current assets40 53 
Total$71 $88 
Our net investment in sales-type leases was $71 million as of December 31, 2023, of which $14 million originated in 2019 and prior, $17 million in 2020, $17 million in 2021, $13 million in 2022 and $10 million in 2023.
Maturities of sales-type and operating leases as of December 31, 2023 were:
(in millions)
Sales-type Leases1
Operating Leases
2024$34 $80 
202518 75 
20269 55 
20274 39 
20283 11 
Thereafter3 — 
Total minimum lease payments$71 $260 
1 Unamortized imputed interest on minimum lease payments was less than $1 million as of December 31, 2023.
In the third quarter of 2023, we recognized $267 million of long-lived asset impairments related to our HD business, which included impairments of $14 million of operating lease right-of-use assets and $58 million of equipment leased to customers. See Note 4 for additional information.
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 39 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 12 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.
The components of lease cost for the years ended December 31, 2023, 2022 and 2021 were:
(in millions)202320222021
Operating lease cost$127 $124 $112 
Finance lease cost
Amortization of right-of-use assets6 6 6 
Interest on lease liabilities5 5 5 
Variable lease cost63 62 52 
Lease cost$201 $197 $175 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021:
(in millions)202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$154 $141 $123 
Operating cash flows from finance leases5 5 5 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations90 73 71 
Right-of-use finance lease assets obtained in exchange for lease obligations15 3 4 
Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 include:
(in millions)20232022
Operating leases
Operating lease right-of-use assets$524 $541 
Accrued expenses and other current liabilities$128 $120 
Operating lease liabilities438 447 
Total operating lease liabilities$566 $567 
Finance leases
Property, plant and equipment, at cost$91 $82 
Accumulated depreciation(39)(34)
Property, plant and equipment, net$52 $48 
Current maturities of long-term debt and finance lease obligations$3 $2 
Long-term debt and finance lease obligations66 62 
Total finance lease liabilities$69 $64 
Lease term and discount rates as of December 31, 2023 and 2022 were:
December 31, 2023December 31, 2022
Weighted-average remaining lease term (years)
Operating leases77
Finance leases1011
Weighted-average discount rate
Operating leases3.0 %2.7 %
Finance leases9.1 %9.5 %
Maturities of operating and finance lease liabilities as of December 31, 2023 were:
(in millions)Finance LeasesOperating Leases
2024$11 $143 
202511 115 
202611 94 
202710 76 
202810 55 
Thereafter63 139 
Total minimum lease payments116 622 
Less: imputed interest(47)(56)
Present value of lease liabilities$69 $566 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often 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, 2023, 2022 and 2021 were:
(in millions)202320222021
Sales-type lease revenue$10 $15 $27 
Operating lease revenue518 513 135 
Variable lease revenue53 54 79 
Total lease revenue$581 $582 $241 
The components of our net investment in sales-type leases as of December 31, 2023 and 2022 were:
(in millions)20232022
Minimum lease payments$71 $87 
Unguaranteed residual values— 1 
Net investment in leases $71 $88 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets as of December 31, 2023 and 2022:
(in millions)20232022
Accounts receivable, net$31 $35 
Other non-current assets40 53 
Total$71 $88 
Our net investment in sales-type leases was $71 million as of December 31, 2023, of which $14 million originated in 2019 and prior, $17 million in 2020, $17 million in 2021, $13 million in 2022 and $10 million in 2023.
Maturities of sales-type and operating leases as of December 31, 2023 were:
(in millions)
Sales-type Leases1
Operating Leases
2024$34 $80 
202518 75 
20269 55 
20274 39 
20283 11 
Thereafter3 — 
Total minimum lease payments$71 $260 
1 Unamortized imputed interest on minimum lease payments was less than $1 million as of December 31, 2023.
In the third quarter of 2023, we recognized $267 million of long-lived asset impairments related to our HD business, which included impairments of $14 million of operating lease right-of-use assets and $58 million of equipment leased to customers. See Note 4 for additional information.