Leases

12 Months Ended

Dec. 31, 2022

Lease agreements primarily cover office facilities and machinery and equipment and expire at various dates. Leases, predominantly operating leases, are included in Other assets and Other liabilities on the Consolidated Balance Sheets. The lease agreements do not contain significant residual value guarantees, restrictions or covenants.

Operating lease right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is typically the secured borrowing rate, as most of the leases do not provide an implicit rate. The operating lease right of use asset was $328 million and $272 million and the operating lease liability was $397 million and $363 million at December 31, 2022 and 2021.

Total lease expense was $89 million, $92 million and $110 million for the years ended December 31, 2022, 2021 and 2020 which includes operating lease expense of $60 million, $66 million and $84 million, variable lease expense of $26 million, $23 million and $22 million and short term lease expense of $3 million, $3 million and $4 million. Cash paid for amounts included in operating lease liabilities was $64 million, $65 million and $86 million for year ended December 31, 2022, 2021 and 2020. Operating lease right of use assets obtained in exchange for lease obligations was $118 million, $35 million and $40 million for the years ended December 31, 2022, 2021 and 2020.

The table below presents the maturities of lease liabilities:


	Operating
As of December 31, 2022	Leases
(In millions)

2023	$	60
2024	53
2025	46
2026	43
2027	41
Thereafter	312
Total	555
Less: discount	158
Total lease liabilities	$	397

The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating the operating lease asset and liability.


As of December 31, 2022

Weighted average remaining lease term	10.7 years
Weighted average discount rate	3.8	%