LEASES FOOTNOTE DISCLOSURE LEASES FOOTNOTE DISCLOSURE (Notes)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases of Lessee Disclosure

NOTE 9. LEASES

Our lease portfolio consists primarily of real estate and equipment leases. Our real estate leases primarily consist of land, office, distribution, warehousing and manufacturing facilities. These leases typically range in term from 2 to 50 years and may contain renewal options for periods up to 10 years at our discretion. Our equipment lease portfolio consists primarily of vehicles (including service vehicles), fork trucks and IT equipment. These leases typically range in term from two to three years and may contain renewal options. Our leases generally do not contain variable lease payments other than (1) certain foreign real estate leases which have payments indexed to inflation and (2) certain real estate executory costs (such as taxes, insurance and maintenance), which are paid based on actual expenses incurred by the lessor during the year. Our leases generally do not include residual value guarantees other than our service vehicle fleet, which has a residual guarantee based on a percentage of the original cost declining over the lease term.

The components of our lease cost were as follows:

	Years ended December 31,
In millions	2022		2021		2020
Operating lease cost	$	160	$	172	$	172
Finance lease cost
Amortization of right-of-use asset	19		16		18
Interest expense	4		4		4
Short-term lease cost	23		18		19
Variable lease cost	12		11		12
Total lease cost	$	218	$	221	$	225

Supplemental balance sheet information related to leases:

	December 31,
In millions	2022		2021		Balance Sheet Location
Assets
Operating lease assets	$	492	$	444	Other assets
Finance lease assets(1)	117		95		Property, plant and equipment, net
Total lease assets	$	609	$	539
Liabilities
Current
Operating lease liabilities	$	132	$	128	Other accrued expenses
Finance lease liabilities	32		14		Current maturities of long-term debt
Long-term
Operating lease liabilities	368		326		Other liabilities
Finance lease liabilities	81		75		Long-term debt
Total lease liabilities	$	613	$	543
(1) Finance lease assets were recorded net of accumulated amortization of $78 million and $66 million at December 31, 2022 and 2021.

Supplemental cash flow and other information related to leases:

	Years ended December 31,
In millions	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	151	$	159	$	149
Operating cash flows from finance leases	4		4		4
Financing cash flows from finance leases	16		14		14
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	148	$	160	$	97
Finance leases	29		13		19

Additional information related to leases:

	December 31,
	2022		2021
Weighted-average remaining lease term (in years)
Operating leases	5.4		5.1
Finance leases	7.9		9.8
Weighted-average discount rate
Operating leases	3.7	%	2.8	%
Finance leases	4.7	%	3.9	%

Following is a summary of the future minimum lease payments due to finance and operating leases with terms of more than one year at December 31, 2022, together with the net present value of the minimum payments:

In millions	Finance Leases		Operating Leases
2023	$	37	$	145
2024	16		118
2025	13		93
2026	10		62
2027	9		45
After 2027	53		94
Total minimum lease payments	138		557
Interest	(25)		(57)
Present value of net minimum lease payments	$	113	$	500