Leases

12 Months Ended

Dec. 31, 2023

NOTE 11: LEASES

We enter into lease agreements for the use of real estate space, vehicles, information technology equipment, and certain other equipment under both operating and finance leases. The majority of our lease agreements are accounted for as operating leases.

Operating lease expense was $463 million, $475 million, and $525 million for 2023, 2022, and 2021, respectively. Finance leases are not considered significant to our Consolidated Balance Sheet, Consolidated Statement of Operations, or Consolidated Statement of Cash Flows.

Leases under which we are the lessor are generally short-term leases that support our commercial aerospace customers during maintenance events. Our commercial aerospace customers have varying forms of aftermarket maintenance coverage that often provide a level of support for leased engines as part of the revenue arrangement. As such, leases where we are the lessor are not considered significant to our Consolidated Balance Sheet, Consolidated Statement of Operations, or Consolidated Statement of Cash Flows.

In 2023 and 2021, we entered into sale and leaseback transactions for the sale of new engines, and used leasepool engines and related maintenance, respectively. We subsequently leased back the engines sold for a limited timeframe, which are accounted for as operating leases. The proceeds received in 2023 as a result of sales of new engines are classified primarily in Other operating activities, net within our Consolidated Statement of Cash Flows. The proceeds received in 2021 as a result of sales of engines held in our leasepool are classified in Receipts from customer financing assets within Investing Activities in our Consolidated Statement of Cash Flows. The net gains as a result of these transactions were not material.

Supplemental cash flow information related to operating leases were as follows:


(dollars in millions)	2023		2022		2021
Operating cash flows used in the measurement of operating lease liabilities	$	421	$	399	$	490
Operating lease right-of-use assets obtained in exchange for operating lease obligations	373		359		535

Future lease payments related to our operating lease liabilities as of December 31, 2023 are as follows:


(dollars in millions)
2024	$	371
2025	314
2026	268
2027	223
2028	181
Thereafter	640
Total undiscounted lease payments	1,997
Less imputed interest	(237)
Total discounted lease payments	$	1,760

Our lease liabilities recognized in our Consolidated Balance Sheet were as follows as of December 31:


(dollars in millions)	2023		2022
Operating lease liabilities, current (included in Other accrued liabilities)	$	348	$	356
Operating lease liabilities, noncurrent	1,412		1,586
Total operating lease liabilities	$	1,760	$	1,942

The weighted-average remaining lease term related to our operating leases was 9 years as of December 31, 2023 and 2022. The weighted-average discount rate related to our operating leases was 3.5% and 3.3% as of December 31, 2023 and 2022, respectively.