Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

Leasing Arrangements

We lease certain offices, manufacturing buildings, transportation equipment, machinery, computers and other equipment. Our most significant lease liabilities relate to real estate leases. These leases include renewal, termination or purchase options, and we have assessed these to determine whether it is reasonably certain for us to exercise any of the previously mentioned options. All periods relating to options that are reasonably certain to be exercised have been included in the lease term of the respective leases.

We did not identify any events or conditions during the 12 month period ended December 31, 2023 to indicate that a reassessment or re-measurement of our existing leases was required. There also were no impairment indicators identified during the 12 month period ended December 31, 2023 that required an impairment test for the Company’s ROU assets.

Our current operating lease liabilities of $84 million and $65 million are included in "accrued and other current liabilities" as of December 31, 2023 and 2022, respectively. Our non-current operating lease liabilities of $272 million and $228 million are included in "Other non-current accrued liabilities" as of December 31, 2023 and 2022, respectively. Our net operating lease ROU asset balances of $348 million and $285 million are included in "other non-current assets" as of December 31, 2023 and 2022 , respectively.

Our current finance lease liabilities of $22 million and $4 million are included in accrued and other current liabilities as of December 31, 2023 and 2022, respectively. Our non-current finance lease liabilities of $64 million and $21 million are included in "other non-current accrued liabilities" as of December 31, 2023 and 2022, respectively. Our net finance lease ROU asset balances of $85 million and $25 million are included in "other non-current assets" as of December 31, 2023 and 2022 , respectively.

	Year Ended December 31,
(in millions)	2023		2022		2021
Lease cost
Finance lease cost:
Depreciation of ROU assets	$	16	$	3	$	1
Interest on lease liabilities	2		1		—
Operating lease cost	96		83		84
Short-term lease cost	4		2		2
Variable lease cost	23		21		23
Total lease cost	$	141	$	110	$	110

The supplemental cash flow information related to leases are as follows:

	Year Ended December 31,
(in millions)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	2	$	—	$	—
Operating cash flows from operating leases	$	92	$	82	$	83
Financing cash flows from finance leases	$	14	$	3	$	1
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	34	$	24	$	5
Operating leases	$	74	$	94	$	109

Information relating to the lease term and discount rate are as follows:

	Year Ended December 31,
	2023	2022
Weighted-average remaining lease term (years)
Operating leases	6 Years	7 Years
Finance leases	5 Years	7 Years
Weighted-average discount rate
Operating leases	3.2%	2.3%
Finance leases	4.2%	2.7%

As of December 31, 2023, the maturities of finance lease liabilities were as follows:

(in millions)
2024	$	22
2025	23
2026	19
2027	14
2028	8
Thereafter	8
Total lease payments	94
Less: Imputed interest	(8)
Total	$	86

As of December 31, 2023, the maturities of operating lease liabilities were as follows:

(in millions)
2024	$	89
2025	78
2026	63
2027	49
2028	37
Thereafter	68
Total lease payments	384
Less: Imputed interest	(30)
Total	$	354

Lessor arrangements

Our gross assets available for rent were $457 million and $263 million as of December 31, 2023 and 2022, respectively. The accumulated amortization related to our gross assets was $203 million and $161 million as of December 31, 2023 and 2022, respectively. Depreciation expense for these assets was $58 million, $27 million and $24 million for the 12 month period ended December 31, 2023, 2022 and 2021, respectively.

The components of our lease revenue are as follows:

	Year Ended December 31,
(in millions)	2023	2022	2021
Lease revenue: operating leases	$395	$228	$197
Lease revenue: sales-type leases	6	—	—
Total lease revenue	$401	$228	$197

As of December 31, 2023, future minimum lease payments under operating leases are as follows:

(in millions)
2024	$	122
2025	74
2026	59
2027	50
2028	34
Thereafter	172
Future minimum lease payments	$	511

At December 31, 2023, the Company had current and long-term lease receivables of $5 million and $57 million, respectively, recorded in Prepaid and other current assets and Other non-current assets, respectively, in the Consolidated Balance Sheets related to sales-type leases.

As of December 31, 2023, maturities of sales type lease receivables are as follows:

(in millions)
2024	$	5
2025	5
2026	5
2027	5
2028	4
Thereafter	38
Future minimum lease payments	$	62

Leases

Leases

Leasing Arrangements

We lease certain offices, manufacturing buildings, transportation equipment, machinery, computers and other equipment. Our most significant lease liabilities relate to real estate leases. These leases include renewal, termination or purchase options, and we have assessed these to determine whether it is reasonably certain for us to exercise any of the previously mentioned options. All periods relating to options that are reasonably certain to be exercised have been included in the lease term of the respective leases.

We did not identify any events or conditions during the 12 month period ended December 31, 2023 to indicate that a reassessment or re-measurement of our existing leases was required. There also were no impairment indicators identified during the 12 month period ended December 31, 2023 that required an impairment test for the Company’s ROU assets.

Our current operating lease liabilities of $84 million and $65 million are included in "accrued and other current liabilities" as of December 31, 2023 and 2022, respectively. Our non-current operating lease liabilities of $272 million and $228 million are included in "Other non-current accrued liabilities" as of December 31, 2023 and 2022, respectively. Our net operating lease ROU asset balances of $348 million and $285 million are included in "other non-current assets" as of December 31, 2023 and 2022 , respectively.

Our current finance lease liabilities of $22 million and $4 million are included in accrued and other current liabilities as of December 31, 2023 and 2022, respectively. Our non-current finance lease liabilities of $64 million and $21 million are included in "other non-current accrued liabilities" as of December 31, 2023 and 2022, respectively. Our net finance lease ROU asset balances of $85 million and $25 million are included in "other non-current assets" as of December 31, 2023 and 2022 , respectively.

	Year Ended December 31,
(in millions)	2023		2022		2021
Lease cost
Finance lease cost:
Depreciation of ROU assets	$	16	$	3	$	1
Interest on lease liabilities	2		1		—
Operating lease cost	96		83		84
Short-term lease cost	4		2		2
Variable lease cost	23		21		23
Total lease cost	$	141	$	110	$	110

The supplemental cash flow information related to leases are as follows:

	Year Ended December 31,
(in millions)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	2	$	—	$	—
Operating cash flows from operating leases	$	92	$	82	$	83
Financing cash flows from finance leases	$	14	$	3	$	1
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	34	$	24	$	5
Operating leases	$	74	$	94	$	109

Information relating to the lease term and discount rate are as follows:

	Year Ended December 31,
	2023	2022
Weighted-average remaining lease term (years)
Operating leases	6 Years	7 Years
Finance leases	5 Years	7 Years
Weighted-average discount rate
Operating leases	3.2%	2.3%
Finance leases	4.2%	2.7%

As of December 31, 2023, the maturities of finance lease liabilities were as follows:

(in millions)
2024	$	22
2025	23
2026	19
2027	14
2028	8
Thereafter	8
Total lease payments	94
Less: Imputed interest	(8)
Total	$	86

As of December 31, 2023, the maturities of operating lease liabilities were as follows:

(in millions)
2024	$	89
2025	78
2026	63
2027	49
2028	37
Thereafter	68
Total lease payments	384
Less: Imputed interest	(30)
Total	$	354

Lessor arrangements

Our gross assets available for rent were $457 million and $263 million as of December 31, 2023 and 2022, respectively. The accumulated amortization related to our gross assets was $203 million and $161 million as of December 31, 2023 and 2022, respectively. Depreciation expense for these assets was $58 million, $27 million and $24 million for the 12 month period ended December 31, 2023, 2022 and 2021, respectively.

The components of our lease revenue are as follows:

	Year Ended December 31,
(in millions)	2023	2022	2021
Lease revenue: operating leases	$395	$228	$197
Lease revenue: sales-type leases	6	—	—
Total lease revenue	$401	$228	$197

As of December 31, 2023, future minimum lease payments under operating leases are as follows:

(in millions)
2024	$	122
2025	74
2026	59
2027	50
2028	34
Thereafter	172
Future minimum lease payments	$	511

At December 31, 2023, the Company had current and long-term lease receivables of $5 million and $57 million, respectively, recorded in Prepaid and other current assets and Other non-current assets, respectively, in the Consolidated Balance Sheets related to sales-type leases.

As of December 31, 2023, maturities of sales type lease receivables are as follows:

(in millions)
2024	$	5
2025	5
2026	5
2027	5
2028	4
Thereafter	38
Future minimum lease payments	$	62