Leases

6 Months Ended

Jun. 30, 2024

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, 2024 and 2023, the Company determined that $1 million and $2 million, respectively, and $5 million and $13 million, respectively, of the ROU assets 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)	2024		2023		2024			2023
Lease Cost:
Operating lease cost (a)	$	81	$	81	$	163		$	161
Short-term lease cost	2		2		3			3
Variable lease cost	28		26		54			63
Sublease income	(5)		(2)		(8)			(6)
Net lease cost	$	106	$	107	$	212		$	221
Other information:
Operating cash outflows from operating leases					$	183		$	189
Right of use assets obtained in exchange for new operating lease liabilities					$	85		$	121
Weighted average remaining lease term – real estate					7.8 years			8.3 years

Weighted average discount rate – real estate leases					3.58		%	3.21		%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases at June 30, 2024 are as follows:


(In millions)	Real Estate Leases
2024 (excludes payments through June 30, 2024)	$	182
2025	355
2026	327
2027	289
2028	214
2029	170
Subsequent years	616
Total future lease payments	2,153
Less: Imputed interest	(263)
Total	$	1,890
Current lease liabilities	$	304
Long-term lease liabilities	1,586
Total lease liabilities	$	1,890

Note: The above table excludes obligations for leases with original terms of 12 months or less which have not been recognized as a ROU asset or liability in the consolidated balance sheets.

At June 30, 2024, the Company had additional operating real estate leases that had not yet commenced of $25 million. These operating leases will commence over the next 12 months.