Leases

12 Months Ended

Dec. 31, 2023

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.

Components of leases are as follows (in millions):


	December 31,
	2023		2022
Current portion of lease liabilities:
Operating	$	70	$	67
Financing		24		20
Total	$	94	$	87

	December 31,
	2023		2022
Long-term portion of lease liability:
Operating	$	343	$	334
Financing		215		215
Total	$	558	$	549

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


	Year Ended
	December 31, 2023			December 31, 2022
Lease cost
Finance lease cost
Amortization of right-of-use assets	$	23		$	24
Interest on lease liabilities		10			9
Operating lease cost		85			73
Short-term lease cost		77			90
Sub-lease income		(8	)		(8	)
Total	$	187		$	188

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


	Years Ended
	December 31, 2023			December 31, 2022
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - finance leases	$	10		$	9
Operating cash flows - operating leases		85			73
Financing cash flows - finance leases		23			24
Right-of-use assets obtained in exchange for new:
Operating lease liabilities	$	68		$	57
Finance lease liabilities		27			19

Weighted average remaining lease term at December 31, 2023:
Operating leases	10 years			10 years
Finance leases	16 years			17 years
Weighted average discount rate at December 31, 2023:
Operating leases		5.17	%		4.74	%
Finance leases		4.15	%		3.95	%

Future minimum lease commitments for leases with initial or remaining terms of one year or more at December 31, 2023, are payable as follows (in millions):


	Operating			Finance
2024	$	97		$	34
2025		82			31
2026		69			27
2027		56			21
2028		47			17
Thereafter		237			185
Total lease payments		588			315
Less: Interest		(175	)		(76	)
Present value of lease liabilities	$	413		$	239