LEASES

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

LEASES

F. 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 19 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 net income were as follows, in millions:

	Year Ended December 31,
	2023		2022		2021
Operating lease cost	$	61	$	56	$	48
Short-term lease cost	10		10		8
Variable lease cost	7		5		4
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,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	50	$	47	$	47
Operating cash flows for finance leases	1		1		1
Financing cash flows for finance leases	3		2		2
ROU assets obtained in exchange for new lease obligations:
Operating leases (A)	41		126		67
Finance leases	—		—		—

______________________________

(A)Includes $6 million and $2 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of Sauna360 in 2023 and ESS and Steamist in 2021, respectively.

Certain other information related to leases was as follows:

	At December 31
	2023		2022		2021
Weighted-average remaining lease term:
Operating leases	10 years		10 years		9 years
Finance leases	8 years		9 years		9 years
Weighted-average discount rate:
Operating leases	5.2	%	4.8	%	4.0	%
Finance leases	3.3	%	3.3	%	3.3	%

F. LEASES (Concluded)

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

	At December 31
	2023				2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Property and equipment, net	$	—	$	19	$	—	$	21
Notes payable	—		3		—		3
Accrued liabilities	44		—		39		—
Long-term debt	—		17		—		20

Gross ROU assets under finance leases recorded within property and equipment, net was $41 million at both December 31, 2023 and 2022, and accumulated amortization associated with these leases was $23 million and $20 million, at December 31, 2023 and 2022, respectively.

At December 31, 2023, future maturities of lease liabilities were as follows, in millions:

	Operating Leases		Finance Leases
Year ending December 31,
2024	$	57	$	3
2025	53		3
2026	48		2
2027	36		2
2028	29		2
Thereafter	167		9
Total lease payments	390		23
Less: imputed interest	(88)		(3)
Total	$	302	$	20

LEASES

F. 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 19 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 net income were as follows, in millions:

	Year Ended December 31,
	2023		2022		2021
Operating lease cost	$	61	$	56	$	48
Short-term lease cost	10		10		8
Variable lease cost	7		5		4
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,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	50	$	47	$	47
Operating cash flows for finance leases	1		1		1
Financing cash flows for finance leases	3		2		2
ROU assets obtained in exchange for new lease obligations:
Operating leases (A)	41		126		67
Finance leases	—		—		—

______________________________

(A)Includes $6 million and $2 million of ROU assets obtained in exchange for new lease obligations related to the acquisitions of Sauna360 in 2023 and ESS and Steamist in 2021, respectively.

Certain other information related to leases was as follows:

	At December 31
	2023		2022		2021
Weighted-average remaining lease term:
Operating leases	10 years		10 years		9 years
Finance leases	8 years		9 years		9 years
Weighted-average discount rate:
Operating leases	5.2	%	4.8	%	4.0	%
Finance leases	3.3	%	3.3	%	3.3	%

F. LEASES (Concluded)

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

	At December 31
	2023				2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Property and equipment, net	$	—	$	19	$	—	$	21
Notes payable	—		3		—		3
Accrued liabilities	44		—		39		—
Long-term debt	—		17		—		20

Gross ROU assets under finance leases recorded within property and equipment, net was $41 million at both December 31, 2023 and 2022, and accumulated amortization associated with these leases was $23 million and $20 million, at December 31, 2023 and 2022, respectively.

At December 31, 2023, future maturities of lease liabilities were as follows, in millions:

	Operating Leases		Finance Leases
Year ending December 31,
2024	$	57	$	3
2025	53		3
2026	48		2
2027	36		2
2028	29		2
Thereafter	167		9
Total lease payments	390		23
Less: imputed interest	(88)		(3)
Total	$	302	$	20