Leases (Notes)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

LEASES

The Company has leases for corporate offices, manufacturing facilities, research and development facilities, and certain transportation and office equipment, the majority of which are operating leases. The Company's leases have remaining lease terms of up to 40 years, some of which include options to extend the leases for up to 5 years.

The components of lease expense were as follows:

	December 31,
(DOLLARS IN MILLIONS)	2021		2020
Operating lease cost	$	168	$	62
Financing lease cost	7		4

Supplemental cash flow information related to leases was as follows:

	December 31,
(DOLLARS IN MILLIONS)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow for operating leases	$	129	$	52
Financing cash flow for finance leases	6		4
Right-of-use assets obtained in exchange for lease obligations
Operating leases	88		63
Finance leases	15		6

Supplemental balance sheet information related to leases was as follows:

	December 31,
(DOLLARS IN MILLIONS)	2021		2020
Operating Leases
Operating lease right-of-use assets	$	767	$	299
Current operating lease obligations(2)	109		41
Operating lease liabilities	670		265
Total operating lease liabilities	$	779	$	306
Financing Leases
Financing lease right-of-use assets(1)	$	21	$	8
Current financing lease obligations(2)	5		3
Financing lease liabilities(3)	15		4
Total financing lease liabilities	$	20	$	7

_______________________

(1)Presented in Other assets in the Consolidated Balance Sheets.

(2)Presented in Other current liabilities in the Consolidated Balance Sheets.

(3)Presented in Other liabilities in the Consolidated Balance Sheets.

Weighted average remaining lease term and discount rate were as follows:

	December 31,
	2021		2020
Weighted average remaining lease term in years
Operating leases	11.1		10.5
Finance leases	4.3		2.9
Weighted average discount rate
Operating leases	2.73	%	3.82	%
Finance leases	1.85	%	1.81	%

Maturities of lease liabilities as of December 31, 2021 were as follows:

(DOLLARS IN MILLIONS)	Operating Leases		Financing Leases		Total
2022	$	127	$	7	$	134
2023	97		5		102
2024	82		3		85
2025	78		2		80
2026	73		2		75
Thereafter	459		2		461
Total undiscounted liabilities	916		21		937
Less: Imputed interest	(137)		(1)		(138)
Total lease liabilities	$	779	$	20	$	799

Right-of-use assets and lease liabilities acquired from N&B were remeasured at the present value of the future minimum lease payments over the remaining lease term utilizing an updated incremental borrowing rate of the Company as if the acquired leases were new leases as of the Closing Date. Right-of-use assets were further adjusted for any off-market terms of the lease. The remaining lease term is based on the remaining term at the Closing Date plus any renewal or extension options that the Company is reasonably certain will be exercised. Additionally, the Company has elected short-term lease treatment for those acquired lease contracts which, at the Closing Date, have a remaining lease term of 12 months or less. For the leases acquired through the Transactions, the Company will retain the previous lease classification. This resulted in an increase in both right-of-use assets and operating lease liabilities of approximately $525 million and $523 million, respectively, as of the Closing Date.