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Leases (Notes)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases LEASES
The Company has leases for corporate offices, manufacturing facilities, research and development facilities and certain transportation and office equipment, the majority of which are operating leases. The Company’s leases have remaining lease terms of up to 50 years, some of which include options to extend the leases for up to 15 years.
The components of lease expense were as follows:
December 31,
(DOLLARS IN MILLIONS)202320222021
Operating leases
Operating lease cost$137 $134 $133 
Variable lease cost56 53 35 
Total operating lease cost$193 $187 $168 
Finance leases
Finance lease cost$10 $8 $7 
Supplemental cash flow information related to leases was as follows:
December 31,
(DOLLARS IN MILLIONS)202320222021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$122 $135 $129 
Operating cash flows for finance leases1 — — 
Financing cash flows for finance leases8 7 6 
Right-of-use assets obtained in exchange for lease obligations
Operating leases49 174 88 
Finance leases22 7 15 
Supplemental balance sheet information related to leases was as follows:
December 31,
(DOLLARS IN MILLIONS)20232022
Operating Leases
Operating lease right-of-use assets$689 $743 
Current operating lease obligations(2)
85 86 
Operating lease liabilities642 672 
Total operating lease liabilities$727 $758 
Finance Leases
Finance lease right-of-use assets(1)
$26 $22 
Current finance lease obligations(2)
7 5 
Finance lease liabilities(3)
18 12 
Total finance lease liabilities$25 $17 
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(1)Presented in Other assets on the Consolidated Balance Sheets.
(2)Presented in Other current liabilities on the Consolidated Balance Sheets.
(3)Presented in Other liabilities on the Consolidated Balance Sheets.
Weighted average remaining lease term and discount rate were as follows:
December 31,
20232022
Weighted average remaining lease term in years
Operating leases9.910.6
Finance leases3.54.0
Weighted average discount rate
Operating leases4.24 %3.83 %
Finance leases4.33 %2.59 %
Maturities of lease liabilities as of December 31, 2023 were as follows:
(DOLLARS IN MILLIONS)Operating LeasesFinance LeasesTotal
2024$113 $9 $122 
2025110 8 118 
2026101 7 108 
202787 4 91 
202877 — 77 
Thereafter410 — 410 
Total undiscounted liabilities898 28 926 
Less: Imputed interest(171)(3)(174)
Total lease liabilities$727 $25 $752 
Right-of-use assets and lease liabilities acquired from N&B were remeasured at the present value of the future minimum lease payments over the remaining lease term utilizing an updated incremental borrowing rate of the Company as if the acquired leases were new leases as of the Closing Date. Right-of-use assets were further adjusted for any off-market terms of the lease. The remaining lease term is based on the remaining term at the Closing Date plus any renewal or extension options that the Company is reasonably certain will be exercised. Additionally, the Company has elected short-term lease treatment for those acquired lease contracts which, at the Closing Date, have a remaining lease term of 12 months or less. For the leases acquired through the Transactions, the Company will retain the previous lease classification. This resulted in an increase in both operating lease right-of-use assets and operating lease liabilities of approximately $525 million and $523 million, respectively, as of the Closing Date.
As a result of the Company’s acquisition of Health Wright, there was an increase of approximately $22 million in finance lease right-of-use assets and $21 million in finance lease liabilities as of the Acquisition Date. In the fourth quarter of 2022, the Company exercised its option to purchase the asset and, as such, de-recognized the finance lease right-of-use assets and finance lease liabilities.