Annual report pursuant to Section 13 and 15(d)

LEASES FOOTNOTE DISCLOSURE LEASES FOOTNOTE DISCLOSURE (Notes)

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LEASES FOOTNOTE DISCLOSURE LEASES FOOTNOTE DISCLOSURE (Notes)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases of Lessee Disclosure
NOTE 9. LEASES
Our lease portfolio consists primarily of real estate and equipment leases. Our real estate leases primarily consist of land, office, distribution, warehousing and manufacturing facilities. These leases typically range in term from 2 to 50 years and may contain renewal options for periods up to 10 years at our discretion. Our equipment lease portfolio consists primarily of vehicles (including service vehicles), fork trucks and IT equipment. These leases typically range in term from two to three years and may contain renewal options. Our leases generally do not contain variable lease payments other than (1) certain foreign real estate leases which have payments indexed to inflation and (2) certain real estate executory costs (such as taxes, insurance and maintenance), which are paid based on actual expenses incurred by the lessor during the year. Our leases generally do not include residual value guarantees other than our service vehicle fleet, which has a residual guarantee based on a percentage of the original cost declining over the lease term.
The components of our lease cost were as follows:
Years ended December 31,
In millions 2023 2022 2021
Operating lease cost $ 165  $ 160  $ 172 
Finance lease cost
Amortization of right-of-use asset 20  19  16 
Interest expense 4  4  4 
Short-term lease cost 24  23  18 
Variable lease cost 14  12  11 
Total lease cost $ 227  $ 218  $ 221 
Supplemental balance sheet information related to leases:
December 31,
In millions 2023 2022 Balance Sheet Location
Assets
Operating lease assets $ 501  $ 492  Other assets
Finance lease assets (1)
115  117  Property, plant and equipment, net
Total lease assets $ 616  $ 609 
Liabilities
Current
Operating lease liabilities $ 138  $ 132  Other accrued expenses
Finance lease liabilities 17  32  Current maturities of long-term debt
Long-term
Operating lease liabilities 374  368  Other liabilities
Finance lease liabilities 94  81  Long-term debt
Total lease liabilities $ 623  $ 613 
(1) Finance lease assets were recorded net of accumulated amortization of $77 million and $78 million at December 31, 2023 and 2022.
Supplemental cash flow and other information related to leases:
Years ended December 31,
In millions 2023 2022 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ 148  $ 151  $ 159 
Operating cash flows from finance leases 4  4  4 
Financing cash flows from finance leases 35  16  14 
Right-of-use assets obtained in exchange for lease obligations
Operating leases $ 153  $ 148  $ 160 
Finance leases 12  29  13 
Additional information related to leases:
December 31,
2023 2022
Weighted-average remaining lease term (in years)
Operating leases 5.2 5.4
Finance leases 8.6 7.9
Weighted-average discount rate
Operating leases 4.2  % 3.7  %
Finance leases 5.0  % 4.7  %
Following is a summary of the future minimum lease payments related to finance and operating leases with terms of more than one year at December 31, 2023, together with the net present value of the minimum payments:
In millions Finance Leases Operating Leases
2024 $ 23  $ 155 
2025 19  126 
2026 15  92 
2027 13  68 
2028 12  45 
After 2028 56  90 
Total minimum lease payments 138  576 
Interest (27) (64)
Present value of net minimum lease payments $ 111  $ 512