Leases

12 Months Ended

Dec. 31, 2022

8. Leases

The Company leases certain facilities and equipment to support its operations around the world. These leases generally require the Company to pay maintenance, insurance, taxes and other operating costs in addition to rent. Renewal options are common in longer term leases; however, it is rare that the Company intends to exercise a lease option at inception due to the cyclical nature of the

Company’s business. Residual value guarantees are not typically part of the Company’s leases. Occasionally, the Company sub-leases excess facility space, generally at terms similar to the source lease. The Company reviews new agreements to determine if they include a lease and, when they do, uses its incremental borrowing rate to determine the present value of the future lease payments as most do not include implicit interest rates. The Company recorded right-of-use asset impairment charges of $42 million for the year ended December 31, 2020.

Components of leases are as follows (in millions):


	December 31,
	2022		2021
Current portion of lease liabilities:
Operating	$	67	$	76
Financing		20		23
Total	$	87	$	99

	December 31,
	2022		2021
Long-term portion of lease liability:
Operating	$	334	$	357
Financing		215		219
Total	$	549	$	576

Components of lease expense were as follows (in millions):


	Year Ended
	December 31, 2022			December 31, 2021
Lease cost
Finance lease cost
Amortization of right-of-use assets	$	24		$	26
Interest on lease liabilities		9			10
Operating lease cost		73			83
Short-term lease cost		90			74
Sub-lease income		(8	)		(9	)
Total	$	188		$	184

Supplemental information related to the Company’s leases is as follows (in millions):


	Years Ended
	December 31, 2022			December 31, 2021
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - finance leases	$	9		$	10
Operating cash flows - operating leases		73			83
Financing cash flows - finance leases		24			26
Right-of-use assets obtained in exchange for new:
Operating lease liabilities	$	57		$	37
Finance lease liabilities		19			9

Weighted average remaining lease term at December 31, 2022:
Operating leases	10 years			11 years
Finance leases	17 years			18 years
Weighted average discount rate at December 31, 2022:
Operating leases		4.74	%		4.74	%
Finance leases		3.95	%		3.86	%

Future minimum lease commitments for leases with initial or remaining terms of one year or more at December 31, 2022, are payable as follows (in millions):


	Operating			Finance
2023	$	85		$	30
2024		72			27
2025		60			24
2026		49			20
2027		39			17
Thereafter		197			200
Total lease payments		502			318
Less: Interest		(101	)		(83	)
Present value of lease liabilities	$	401		$	235