Leases

3 Months Ended

Mar. 31, 2023

The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. The Company’s leases have no restrictions on the payment of dividends, the acquisition of debt or additional lease obligations, or entering into additional lease obligations. The leases also do not contain significant purchase options.

Operating leases are recognized on the consolidated balance sheets as ROU assets and operating lease liabilities based on the present value of the remaining future minimum payments over the lease term at commencement date of the lease.

The Company determined that $8 million and $1 million of its ROU assets were impaired and recorded a charge to the consolidated statements of income for the three months ended March 31, 2023 and 2022, respectively, with an offsetting reduction to ROU assets.

The following table provides additional information about the Company’s property leases:


	Three Months Ended March 31,
(In millions)		2023		2022
Lease Cost:
Operating lease cost (a)		$	80	$	90
Short-term lease cost		1		1
Variable lease cost		37		34
Sublease income		(4)		(5)
Net lease cost		$	114	$	120
Other information:
Operating cash outflows from operating leases		$	94	$	99
Right of use assets obtained in exchange for new operating lease liabilities		$	76	$	51
Weighted-average remaining lease term – real estate		8.4 years		8.7 years

Weighted-average discount rate – real estate leases		3.12%		2.75%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases as of March 31, 2023 are as follows:


(In millions)	Real Estate Leases
Remainder of 2023	$	274
2024	338
2025	308
2026	287
2027	250
2028	180
Subsequent years	667
Total future lease payments	2,304
Less: Imputed interest	(275)
Total	$	2,029
Current lease liabilities	$	306
Long-term lease liabilities	1,723
Total lease liabilities	$	2,029

Note: The above table excludes obligations for leases with original terms of twelve months or less which have not been recognized as a ROU asset or liability in the consolidated balance sheets.

As of March 31, 2023, the Company had additional operating real estate leases that had not yet commenced of $59 million. These operating leases will commence over the next twelve months.