COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings and Loss Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded within “Accrued liabilities” on the Consolidated Balance Sheets. The Company accrues contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. In the event any losses are sustained in excess of accruals, they are charged against income in the period they occur. In evaluating loss contingencies, management takes into consideration factors such as historical experience with matters of similar nature, specific facts and circumstances, and the likelihood of prevailing. Management evaluates and updates accruals as matters progress over time. It is reasonably possible that some of the matters for which accruals have not been established could be decided unfavorably to the Company and could require recognizing future expenditures. Legal costs related to contingencies are recognized as expenses as they are incurred.

The Company is involved in legal proceedings and evaluates other loss contingencies, primarily related to supplier contract claims and employment matters which may result in obligations of the Company. The Company believes it has valid defenses

with respect to these matters. However, as of December 31, 2023, the Company has accrued approximately $80 million for probable losses related to these matters. It is reasonably possible that losses could occur in excess of amounts accrued. As of December 31, 2023, the Company estimates its reasonably possible risk of loss to be up to approximately $160 million, which includes the amounts accrued. We expect the majority of the matters to be resolved within the next 12 months.

Unconditional Purchase Obligations

During the year ended December 31, 2023, the Company entered into unrecognized commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily relate to inventory purchase requirements varying by vendor and data services, including hosting, storage, and compute from Amazon. Future payments under unconditional purchase obligations having a remaining term in excess of one year as of December 31, 2023 are as follows (in millions):


	Total Future Payments
2024	$	124
2025	148
2026	153
2027	79
2028	37
Thereafter	7
Total	$	548