Leases

6 Months Ended

Jun. 30, 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.

For the three and six months ended June 30, 2023, the Company determined that $5 million and $13 million of its ROU assets, respectively, were impaired and recorded a charge to the consolidated statements of income with an offsetting reduction to ROU assets.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Lease Cost:
Operating lease cost (a)	$	81	$	88	$	161	$	178
Short-term lease cost	2		1		3		2
Variable lease cost	26		30		63		64
Sublease income	(2)		(4)		(6)		(9)
Net lease cost	$	107	$	115	$	221	$	235
Other information:
Operating cash outflows from operating leases					$	189	$	194
Right of use assets obtained in exchange for new operating lease liabilities					$	121	$	114
Weighted-average remaining lease term – real estate					8.3 years		8.6 years

Weighted-average discount rate – real estate leases					3.21%		2.75%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases as of June 30, 2023 are as follows:


(In millions)	Real Estate Leases
Remainder of 2023	$	186
2024	347
2025	317
2026	295
2027	259
2028	186
Subsequent years	690
Total future lease payments	2,280
Less: Imputed interest	(272)
Total	$	2,008
Current lease liabilities	$	309
Long-term lease liabilities	1,699
Total lease liabilities	$	2,008

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 June 30, 2023, the Company had additional operating real estate leases that had not yet commenced of $55 million. These operating leases will commence over the next 12 months.