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LEASES
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
LEASES LEASES
Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate.
The components of lease expense are as follows:
(In millions)202320222021
Operating lease cost$200 $179 $164 
Finance lease cost:
Amortization of lease assets15 11 12 
Interest on lease liabilities1 1 2 
Short-term lease cost18 17 15 
Variable lease cost28 27 16 
Sublease income(1)(1)(2)
Total lease cost$261 $234 $207 
During 2023 and 2022, Eaton entered into sale leaseback transactions primarily for certain non-production facilities and recorded gains of $53 million and $81 million, respectively, in Other expense (income) - net. The terms of the new operating leases ranged from 5 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021.
Supplemental cash flow information related to leases is as follows:
(In millions)202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - payments on operating leases$(180)$(159)$(158)
Operating cash outflows - interest payments on finance leases(1)(2)(2)
Financing cash outflows - payments on finance lease obligations(18)(11)(11)
Lease assets obtained in exchange for new lease obligations, including leases acquired:
Operating leases$183 $245 $145 
Finance leases38 10 14 
Supplemental balance sheet information related to leases is as follows:
December 31
(In millions)20232022
Operating Leases
Operating lease assets$648 $570 
Other current liabilities135 127 
Operating lease liabilities533 459 
Total operating lease liabilities$668 $586 
Finance Leases
Land and buildings$13 $6 
Machinery and equipment62 40 
Accumulated depreciation(36)(20)
Net property, plant and equipment$39 $26 
Current portion of long-term debt$13 $10 
Long-term debt22 18 
Total finance lease liabilities$35 $28 
December 31
20232022
Weighted-average remaining lease term
Operating leases7.6 years7.6 years
Finance leases4.4 years4.9 years
Weighted-average discount rate
Operating leases4.0 %3.3 %
Finance leases3.6 %3.0 %
Maturities of lease liabilities at December 31, 2023 are as follows:
(In millions)Operating LeasesFinance Leases
2024$156 $14 
2025126 8 
2026106 6 
202785 4 
202863 2 
Thereafter259 4 
Total lease payments795 38 
Less imputed interest127 3 
Total present value of lease liabilities$668 $35 
LEASES LEASES
Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate.
The components of lease expense are as follows:
(In millions)202320222021
Operating lease cost$200 $179 $164 
Finance lease cost:
Amortization of lease assets15 11 12 
Interest on lease liabilities1 1 2 
Short-term lease cost18 17 15 
Variable lease cost28 27 16 
Sublease income(1)(1)(2)
Total lease cost$261 $234 $207 
During 2023 and 2022, Eaton entered into sale leaseback transactions primarily for certain non-production facilities and recorded gains of $53 million and $81 million, respectively, in Other expense (income) - net. The terms of the new operating leases ranged from 5 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021.
Supplemental cash flow information related to leases is as follows:
(In millions)202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - payments on operating leases$(180)$(159)$(158)
Operating cash outflows - interest payments on finance leases(1)(2)(2)
Financing cash outflows - payments on finance lease obligations(18)(11)(11)
Lease assets obtained in exchange for new lease obligations, including leases acquired:
Operating leases$183 $245 $145 
Finance leases38 10 14 
Supplemental balance sheet information related to leases is as follows:
December 31
(In millions)20232022
Operating Leases
Operating lease assets$648 $570 
Other current liabilities135 127 
Operating lease liabilities533 459 
Total operating lease liabilities$668 $586 
Finance Leases
Land and buildings$13 $6 
Machinery and equipment62 40 
Accumulated depreciation(36)(20)
Net property, plant and equipment$39 $26 
Current portion of long-term debt$13 $10 
Long-term debt22 18 
Total finance lease liabilities$35 $28 
December 31
20232022
Weighted-average remaining lease term
Operating leases7.6 years7.6 years
Finance leases4.4 years4.9 years
Weighted-average discount rate
Operating leases4.0 %3.3 %
Finance leases3.6 %3.0 %
Maturities of lease liabilities at December 31, 2023 are as follows:
(In millions)Operating LeasesFinance Leases
2024$156 $14 
2025126 8 
2026106 6 
202785 4 
202863 2 
Thereafter259 4 
Total lease payments795 38 
Less imputed interest127 3 
Total present value of lease liabilities$668 $35