XML 36 R21.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Leases | 12 Months Ended
--- | ---
Dec. 31, 2023
Leases [Abstract] |
Leases | Leases Lessee The Company leases property and equipment under finance and operating leases. The Company's operating leases primarily consist of automobiles in certain countries and real estate, including office, storage and parking spaces. The duration of these leases range from 1 to 4 years. The Company's finance leases primarily consist of equipment financed for the purpose of delivering services to our customers. For leases with terms greater than 12 months, the Company recorded the related asset and obligation at the present value of lease payments over the term. Many of our leases include variable rental escalation clauses which are recognized when incurred. Some of our leases also include renewal options and/or termination options that are factored into the determination of lease payments and lease terms when it is reasonably certain that the Company will exercise these options. Lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. For real estate leases beginning in 2019 and later, we account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease components (e.g., common-area maintenance costs). For automobile leases we account for lease and non-lease components together. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. However, real estate leases do not typically provide a readily determinable implicit rate. Therefore, the Company must estimate the incremental borrowing rate to discount the lease payments based on information available at lease commencement. The incremental borrowing rate used in the calculation of the lease liability is based on the secured rate associated with financed lease obligations for each location of leased property. The table below presents the lease-related assets and liabilities recorded on the balance sheet at December 31:
In millions, except weighted average calculations | Classification on the Balance Sheet |  | 2023 |  | 2022 |
Assets |  |  |  |  |  |
Operating lease assets | Right of use assets - operating lease, net |  | $ | 9 |  |  | $ | 13 |  |
Finance lease assets | Property and equipment, net |  | 156 |  |  | 149 |  |
Total lease assets |  |  | $ | 165 |  |  | $ | 162 |  |
Liabilities |  |  |  |  |  |
Current |  |  |  |  |  |
Operating | Current portion of operating lease liability |  | $ | 6 |  |  | $ | 8 |  |
Finance | Current portion of finance lease liability |  | 66 |  |  | 67 |  |
Non current |  |  |  |  |  |
Operating | Operating lease liability |  | 6 |  |  | 10 |  |
Finance | Finance lease liability |  | 63 |  |  | 54 |  |
Total lease liabilities |  |  | $ | 141 |  |  | $ | 139 |  |
Weighted-average remaining lease term |  |  |  |  |  |
Operating leases |  |  | 2.16 years |  | 2.37 years |
Finance leases |  |  | 2.06 years |  | 2.03 years |
Weighted-average discount rate |  |  |  |  |  |
Operating leases(1) |  |  | 5.00 | % |  | 5.00 | % |
Finance leases |  |  | 6.28 | % |  | 4.97 | % |
(1) Upon adoption of the new lease standard, discount rates used for existing leases were established based on the Company's incremental borrowing rate at January 1, 2019. For new leases entered after January 1, 2019, the discount rate was determined based on the Company's incremental borrowing rate at lease commencement. Lessee Costs The table below presents certain information related to the lease costs for finance and operating leases recognized in the Company's consolidated statements of income for the years ended December 31:
In millions |  | 2023 |  | 2022 |  | 2021
Finance lease cost |  |  |  |  |  |
Depreciation of leased assets |  | $ | 68 |  |  | $ | 69 |  |  | $ | 78 |
Interest of lease liabilities |  | 7 |  |  | 5 |  |  | 6 |
Operating lease cost |  | 7 |  |  | 12 |  |  | 17 |
Sub-lease income from real estate properties owned and leased |  | (5) |  |  | (5) |  |  | (5) |
Total lease cost |  | $ | 77 |  |  | $ | 81 |  |  | $ | 96 |
Other Information The table below presents supplemental cash flow information related to cash paid for amounts included in the measurement of lease liabilities for the year ended December 31:
In millions | 2023 |  | 2022 |
Operating cash flows for operating leases | $ | 9 |  |  | $ | 15 |  |
Operating cash flows for finance leases | $ | 7 |  |  | $ | 5 |  |
Financing cash flows for finance leases | $ | 82 |  |  | $ | 86 |  |
Undiscounted Cash Flows The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet at December 31, 2023:
In millions |  | Operating Leases |  | Finance Leases |
2024 |  | $ | 8 |  |  | $ | 72 |  |
2025 |  | 4 |  |  | 50 |  |
2026 |  | 2 |  |  | 16 |  |
2027 |  | — |  |  | — |  |
2028 |  | — |  |  | — |  |
Thereafter |  | — |  |  | — |  |
Total minimum lease payments |  | 14 |  |  | 138 |  |
Less: amount of lease payments representing interest |  | (2) |  |  | (9) |  |
Present value of future minimum lease payments |  | 12 |  |  | 129 |  |
Less: current obligations under leases |  | (6) |  |  | (66) |  |
Long-term lease obligations |  | $ | 6 |  |  | $ | 63 |  |
The table below provides the undiscounted cash flows for the Company's finance lease liabilities and operating lease obligations as of December 31, 2022:
In millions |  | Operating Leases |  | Finance Leases |
2023 |  | $ | 11 |  |  | $ | 72 |  |
2024 |  | 8 |  |  | 39 |  |
2025 |  | 3 |  |  | 17 |  |
2026 |  | 1 |  |  | — |  |
2027 |  | — |  |  | — |  |
Thereafter |  | — |  |  | — |  |
Total minimum lease payments |  | 23 |  |  | 128 |  |
Less: amount of lease payments representing interest |  | (5) |  |  | (7) |  |
Present value of future minimum lease payments |  | 18 |  |  | 121 |  |
Less: current obligations under leases |  | (8) |  |  | (67) |  |
Long-term lease obligations |  | $ | 10 |  |  | $ | 54 |  |
Lessor The Company receives rental revenue for leasing hardware offerings to its customers. For our hardware rental offering, the Company owns or leases the hardware and may or may not provide managed services. Leases sometimes include options to renew but typically do not include lessee purchase options. The revenue for these operating leases is generally recognized straight-line over the term of the contract and is included within the recurring revenue caption on the consolidated statements of income. Equipment used for this revenue is reported within Property and equipment, net on the consolidated balance sheet. The following table includes rental revenue for the years ended December 31:
In millions |  | 2023 |  | 2022 |  | 2021
Rental revenue* |  | $ | 216 |  |  | $ | 191 |  |  | $ | 162 |
*Rental revenue includes hardware maintenance. The following table includes estimated rental revenue expected to be recognized in the future based on executed contracts at December 31, 2023:
In millions | Rental Revenue
2024 | $ | 180 |
2025 | 110 |
2026-27 | 66 |
Total | $ | 356 |
Leases | Leases Lessee The Company leases property and equipment under finance and operating leases. The Company's operating leases primarily consist of automobiles in certain countries and real estate, including office, storage and parking spaces. The duration of these leases range from 1 to 4 years. The Company's finance leases primarily consist of equipment financed for the purpose of delivering services to our customers. For leases with terms greater than 12 months, the Company recorded the related asset and obligation at the present value of lease payments over the term. Many of our leases include variable rental escalation clauses which are recognized when incurred. Some of our leases also include renewal options and/or termination options that are factored into the determination of lease payments and lease terms when it is reasonably certain that the Company will exercise these options. Lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. For real estate leases beginning in 2019 and later, we account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease components (e.g., common-area maintenance costs). For automobile leases we account for lease and non-lease components together. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. However, real estate leases do not typically provide a readily determinable implicit rate. Therefore, the Company must estimate the incremental borrowing rate to discount the lease payments based on information available at lease commencement. The incremental borrowing rate used in the calculation of the lease liability is based on the secured rate associated with financed lease obligations for each location of leased property. The table below presents the lease-related assets and liabilities recorded on the balance sheet at December 31:
In millions, except weighted average calculations | Classification on the Balance Sheet |  | 2023 |  | 2022 |
Assets |  |  |  |  |  |
Operating lease assets | Right of use assets - operating lease, net |  | $ | 9 |  |  | $ | 13 |  |
Finance lease assets | Property and equipment, net |  | 156 |  |  | 149 |  |
Total lease assets |  |  | $ | 165 |  |  | $ | 162 |  |
Liabilities |  |  |  |  |  |
Current |  |  |  |  |  |
Operating | Current portion of operating lease liability |  | $ | 6 |  |  | $ | 8 |  |
Finance | Current portion of finance lease liability |  | 66 |  |  | 67 |  |
Non current |  |  |  |  |  |
Operating | Operating lease liability |  | 6 |  |  | 10 |  |
Finance | Finance lease liability |  | 63 |  |  | 54 |  |
Total lease liabilities |  |  | $ | 141 |  |  | $ | 139 |  |
Weighted-average remaining lease term |  |  |  |  |  |
Operating leases |  |  | 2.16 years |  | 2.37 years |
Finance leases |  |  | 2.06 years |  | 2.03 years |
Weighted-average discount rate |  |  |  |  |  |
Operating leases(1) |  |  | 5.00 | % |  | 5.00 | % |
Finance leases |  |  | 6.28 | % |  | 4.97 | % |
(1) Upon adoption of the new lease standard, discount rates used for existing leases were established based on the Company's incremental borrowing rate at January 1, 2019. For new leases entered after January 1, 2019, the discount rate was determined based on the Company's incremental borrowing rate at lease commencement. Lessee Costs The table below presents certain information related to the lease costs for finance and operating leases recognized in the Company's consolidated statements of income for the years ended December 31:
In millions |  | 2023 |  | 2022 |  | 2021
Finance lease cost |  |  |  |  |  |
Depreciation of leased assets |  | $ | 68 |  |  | $ | 69 |  |  | $ | 78 |
Interest of lease liabilities |  | 7 |  |  | 5 |  |  | 6 |
Operating lease cost |  | 7 |  |  | 12 |  |  | 17 |
Sub-lease income from real estate properties owned and leased |  | (5) |  |  | (5) |  |  | (5) |
Total lease cost |  | $ | 77 |  |  | $ | 81 |  |  | $ | 96 |
Other Information The table below presents supplemental cash flow information related to cash paid for amounts included in the measurement of lease liabilities for the year ended December 31:
In millions | 2023 |  | 2022 |
Operating cash flows for operating leases | $ | 9 |  |  | $ | 15 |  |
Operating cash flows for finance leases | $ | 7 |  |  | $ | 5 |  |
Financing cash flows for finance leases | $ | 82 |  |  | $ | 86 |  |
Undiscounted Cash Flows The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet at December 31, 2023:
In millions |  | Operating Leases |  | Finance Leases |
2024 |  | $ | 8 |  |  | $ | 72 |  |
2025 |  | 4 |  |  | 50 |  |
2026 |  | 2 |  |  | 16 |  |
2027 |  | — |  |  | — |  |
2028 |  | — |  |  | — |  |
Thereafter |  | — |  |  | — |  |
Total minimum lease payments |  | 14 |  |  | 138 |  |
Less: amount of lease payments representing interest |  | (2) |  |  | (9) |  |
Present value of future minimum lease payments |  | 12 |  |  | 129 |  |
Less: current obligations under leases |  | (6) |  |  | (66) |  |
Long-term lease obligations |  | $ | 6 |  |  | $ | 63 |  |
The table below provides the undiscounted cash flows for the Company's finance lease liabilities and operating lease obligations as of December 31, 2022:
In millions |  | Operating Leases |  | Finance Leases |
2023 |  | $ | 11 |  |  | $ | 72 |  |
2024 |  | 8 |  |  | 39 |  |
2025 |  | 3 |  |  | 17 |  |
2026 |  | 1 |  |  | — |  |
2027 |  | — |  |  | — |  |
Thereafter |  | — |  |  | — |  |
Total minimum lease payments |  | 23 |  |  | 128 |  |
Less: amount of lease payments representing interest |  | (5) |  |  | (7) |  |
Present value of future minimum lease payments |  | 18 |  |  | 121 |  |
Less: current obligations under leases |  | (8) |  |  | (67) |  |
Long-term lease obligations |  | $ | 10 |  |  | $ | 54 |  |
Lessor The Company receives rental revenue for leasing hardware offerings to its customers. For our hardware rental offering, the Company owns or leases the hardware and may or may not provide managed services. Leases sometimes include options to renew but typically do not include lessee purchase options. The revenue for these operating leases is generally recognized straight-line over the term of the contract and is included within the recurring revenue caption on the consolidated statements of income. Equipment used for this revenue is reported within Property and equipment, net on the consolidated balance sheet. The following table includes rental revenue for the years ended December 31:
In millions |  | 2023 |  | 2022 |  | 2021
Rental revenue* |  | $ | 216 |  |  | $ | 191 |  |  | $ | 162 |
*Rental revenue includes hardware maintenance. The following table includes estimated rental revenue expected to be recognized in the future based on executed contracts at December 31, 2023:
In millions | Rental Revenue
2024 | $ | 180 |
2025 | 110 |
2026-27 | 66 |
Total | $ | 356 |
Leases | Leases Lessee The Company leases property and equipment under finance and operating leases. The Company's operating leases primarily consist of automobiles in certain countries and real estate, including office, storage and parking spaces. The duration of these leases range from 1 to 4 years. The Company's finance leases primarily consist of equipment financed for the purpose of delivering services to our customers. For leases with terms greater than 12 months, the Company recorded the related asset and obligation at the present value of lease payments over the term. Many of our leases include variable rental escalation clauses which are recognized when incurred. Some of our leases also include renewal options and/or termination options that are factored into the determination of lease payments and lease terms when it is reasonably certain that the Company will exercise these options. Lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. For real estate leases beginning in 2019 and later, we account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease components (e.g., common-area maintenance costs). For automobile leases we account for lease and non-lease components together. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. However, real estate leases do not typically provide a readily determinable implicit rate. Therefore, the Company must estimate the incremental borrowing rate to discount the lease payments based on information available at lease commencement. The incremental borrowing rate used in the calculation of the lease liability is based on the secured rate associated with financed lease obligations for each location of leased property. The table below presents the lease-related assets and liabilities recorded on the balance sheet at December 31:
In millions, except weighted average calculations | Classification on the Balance Sheet |  | 2023 |  | 2022 |
Assets |  |  |  |  |  |
Operating lease assets | Right of use assets - operating lease, net |  | $ | 9 |  |  | $ | 13 |  |
Finance lease assets | Property and equipment, net |  | 156 |  |  | 149 |  |
Total lease assets |  |  | $ | 165 |  |  | $ | 162 |  |
Liabilities |  |  |  |  |  |
Current |  |  |  |  |  |
Operating | Current portion of operating lease liability |  | $ | 6 |  |  | $ | 8 |  |
Finance | Current portion of finance lease liability |  | 66 |  |  | 67 |  |
Non current |  |  |  |  |  |
Operating | Operating lease liability |  | 6 |  |  | 10 |  |
Finance | Finance lease liability |  | 63 |  |  | 54 |  |
Total lease liabilities |  |  | $ | 141 |  |  | $ | 139 |  |
Weighted-average remaining lease term |  |  |  |  |  |
Operating leases |  |  | 2.16 years |  | 2.37 years |
Finance leases |  |  | 2.06 years |  | 2.03 years |
Weighted-average discount rate |  |  |  |  |  |
Operating leases(1) |  |  | 5.00 | % |  | 5.00 | % |
Finance leases |  |  | 6.28 | % |  | 4.97 | % |
(1) Upon adoption of the new lease standard, discount rates used for existing leases were established based on the Company's incremental borrowing rate at January 1, 2019. For new leases entered after January 1, 2019, the discount rate was determined based on the Company's incremental borrowing rate at lease commencement. Lessee Costs The table below presents certain information related to the lease costs for finance and operating leases recognized in the Company's consolidated statements of income for the years ended December 31:
In millions |  | 2023 |  | 2022 |  | 2021
Finance lease cost |  |  |  |  |  |
Depreciation of leased assets |  | $ | 68 |  |  | $ | 69 |  |  | $ | 78 |
Interest of lease liabilities |  | 7 |  |  | 5 |  |  | 6 |
Operating lease cost |  | 7 |  |  | 12 |  |  | 17 |
Sub-lease income from real estate properties owned and leased |  | (5) |  |  | (5) |  |  | (5) |
Total lease cost |  | $ | 77 |  |  | $ | 81 |  |  | $ | 96 |
Other Information The table below presents supplemental cash flow information related to cash paid for amounts included in the measurement of lease liabilities for the year ended December 31:
In millions | 2023 |  | 2022 |
Operating cash flows for operating leases | $ | 9 |  |  | $ | 15 |  |
Operating cash flows for finance leases | $ | 7 |  |  | $ | 5 |  |
Financing cash flows for finance leases | $ | 82 |  |  | $ | 86 |  |
Undiscounted Cash Flows The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet at December 31, 2023:
In millions |  | Operating Leases |  | Finance Leases |
2024 |  | $ | 8 |  |  | $ | 72 |  |
2025 |  | 4 |  |  | 50 |  |
2026 |  | 2 |  |  | 16 |  |
2027 |  | — |  |  | — |  |
2028 |  | — |  |  | — |  |
Thereafter |  | — |  |  | — |  |
Total minimum lease payments |  | 14 |  |  | 138 |  |
Less: amount of lease payments representing interest |  | (2) |  |  | (9) |  |
Present value of future minimum lease payments |  | 12 |  |  | 129 |  |
Less: current obligations under leases |  | (6) |  |  | (66) |  |
Long-term lease obligations |  | $ | 6 |  |  | $ | 63 |  |
The table below provides the undiscounted cash flows for the Company's finance lease liabilities and operating lease obligations as of December 31, 2022:
In millions |  | Operating Leases |  | Finance Leases |
2023 |  | $ | 11 |  |  | $ | 72 |  |
2024 |  | 8 |  |  | 39 |  |
2025 |  | 3 |  |  | 17 |  |
2026 |  | 1 |  |  | — |  |
2027 |  | — |  |  | — |  |
Thereafter |  | — |  |  | — |  |
Total minimum lease payments |  | 23 |  |  | 128 |  |
Less: amount of lease payments representing interest |  | (5) |  |  | (7) |  |
Present value of future minimum lease payments |  | 18 |  |  | 121 |  |
Less: current obligations under leases |  | (8) |  |  | (67) |  |
Long-term lease obligations |  | $ | 10 |  |  | $ | 54 |  |
Lessor The Company receives rental revenue for leasing hardware offerings to its customers. For our hardware rental offering, the Company owns or leases the hardware and may or may not provide managed services. Leases sometimes include options to renew but typically do not include lessee purchase options. The revenue for these operating leases is generally recognized straight-line over the term of the contract and is included within the recurring revenue caption on the consolidated statements of income. Equipment used for this revenue is reported within Property and equipment, net on the consolidated balance sheet. The following table includes rental revenue for the years ended December 31:
In millions |  | 2023 |  | 2022 |  | 2021
Rental revenue* |  | $ | 216 |  |  | $ | 191 |  |  | $ | 162 |
*Rental revenue includes hardware maintenance. The following table includes estimated rental revenue expected to be recognized in the future based on executed contracts at December 31, 2023:
In millions | Rental Revenue
2024 | $ | 180 |
2025 | 110 |
2026-27 | 66 |
Total | $ | 356 |

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-30/tableOfContent + Details
Name: | us-gaap_OperatingLeasesOfLessorDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration