LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

LEASES

We have operating and finance leases primarily for corporate offices, manufacturing facilities, warehouses, vehicles, and equipment. Our leases have remaining lease terms up to 20 years, some of which may include one or more renewal options with terms to extend the lease for up to an additional 15 years, and some of which may include options to terminate the leases prior to their expiration.

The components of lease cost included in income from continuing operations were as follows, in millions:

	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	56	$	48	$	47
Short-term lease cost	10		8		7
Variable lease cost	5		4		3
Finance lease cost:
Amortization of right-of-use assets	3		3		3
Interest on lease liabilities	1		1		1

Supplemental cash flow information related to leases was as follows, in millions:

	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	47	$	47	$	47
Operating cash flows for finance leases	1		1		1
Financing cash flows for finance leases	2		2		2
ROU assets obtained in exchange for new lease obligations:
Operating leases (A)	126		67		27
Finance leases	—		—		—

______________________________

(A)Includes $2 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of ESS and Steamist in 2021. Includes $9 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of Kraus and Work Tools in the fourth quarter of 2020.

F. LEASES (Concluded)

Certain other information related to leases was as follows:

	At December 31,
	2022		2021		2020
Weighted-average remaining lease term:
Operating leases	10 years		9 years		10 years
Finance leases	9 years		9 years		10 years
Weighted-average discount rate:
Operating leases	4.8	%	4.0	%	4.4	%
Finance leases	3.3	%	3.3	%	3.3	%

Supplemental balance sheet information related to leases was as follows, in millions:

	At December 31,
	2022				2021
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Property and equipment, net	$	—	$	21	$	—	$	24
Notes payable	—		3		—		3
Accrued liabilities	39		—		38		—
Long-term debt	—		20		—		23

Gross ROU assets under finance leases recorded within property and equipment, net was $41 million and $42 million at December 31, 2022 and 2021, respectively, and accumulated amortization associated with these leases was $20 million and $18 million, at December 31, 2022 and 2021, respectively.

At December 31, 2022, future maturities of lease liabilities were as follows, in millions:

	Operating Leases		Finance Leases
Year ending December 31,
2023	$	50	$	3
2024	47		3
2025	42		3
2026	38		3
2027	30		3
Thereafter	174		11
Total lease payments	381		26
Less: imputed interest	(87)		(3)
Total	$	294	$	23

LEASES

LEASES

We have operating and finance leases primarily for corporate offices, manufacturing facilities, warehouses, vehicles, and equipment. Our leases have remaining lease terms up to 20 years, some of which may include one or more renewal options with terms to extend the lease for up to an additional 15 years, and some of which may include options to terminate the leases prior to their expiration.

The components of lease cost included in income from continuing operations were as follows, in millions:

	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	56	$	48	$	47
Short-term lease cost	10		8		7
Variable lease cost	5		4		3
Finance lease cost:
Amortization of right-of-use assets	3		3		3
Interest on lease liabilities	1		1		1

Supplemental cash flow information related to leases was as follows, in millions:

	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	47	$	47	$	47
Operating cash flows for finance leases	1		1		1
Financing cash flows for finance leases	2		2		2
ROU assets obtained in exchange for new lease obligations:
Operating leases (A)	126		67		27
Finance leases	—		—		—

______________________________

(A)Includes $2 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of ESS and Steamist in 2021. Includes $9 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of Kraus and Work Tools in the fourth quarter of 2020.

F. LEASES (Concluded)

Certain other information related to leases was as follows:

	At December 31,
	2022		2021		2020
Weighted-average remaining lease term:
Operating leases	10 years		9 years		10 years
Finance leases	9 years		9 years		10 years
Weighted-average discount rate:
Operating leases	4.8	%	4.0	%	4.4	%
Finance leases	3.3	%	3.3	%	3.3	%

Supplemental balance sheet information related to leases was as follows, in millions:

	At December 31,
	2022				2021
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Property and equipment, net	$	—	$	21	$	—	$	24
Notes payable	—		3		—		3
Accrued liabilities	39		—		38		—
Long-term debt	—		20		—		23

Gross ROU assets under finance leases recorded within property and equipment, net was $41 million and $42 million at December 31, 2022 and 2021, respectively, and accumulated amortization associated with these leases was $20 million and $18 million, at December 31, 2022 and 2021, respectively.

At December 31, 2022, future maturities of lease liabilities were as follows, in millions:

	Operating Leases		Finance Leases
Year ending December 31,
2023	$	50	$	3
2024	47		3
2025	42		3
2026	38		3
2027	30		3
Thereafter	174		11
Total lease payments	381		26
Less: imputed interest	(87)		(3)
Total	$	294	$	23