Leases

9 Months Ended

Sep. 30, 2024

The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. The Company’s leases have no restrictions on the payment of dividends, the acquisition of debt or additional lease obligations, or entering into additional lease obligations. The leases also do not contain significant purchase options.

Operating leases are recognized on the consolidated balance sheets as ROU assets and operating lease liabilities based on the present value of the remaining future minimum payments over the lease term at commencement date of the lease. For the three and nine months ended September 30, 2024 and 2023, the Company determined that $7 million and $9 million, respectively, and $6 million and $19 million, respectively, of the ROU assets were impaired and recorded a charge to the consolidated statements of income with an offsetting reduction to ROU assets.

The following table provides additional information about the Company’s property leases:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024			2023
Lease Cost:
Operating lease cost (a)	$	84	$	82	$	247		$	243
Short-term lease cost	1		1		4			4
Variable lease cost	31		31		85			94
Sublease income	(2)		(2)		(10)			(8)
Net lease cost	$	114	$	112	$	326		$	333
Other information:
Operating cash outflows from operating leases					$	278		$	284
Right of use assets obtained in exchange for new operating lease liabilities					$	135		$	177
Weighted average remaining lease term – real estate					7.8 years			8.1 years

Weighted average discount rate – real estate leases					3.64		%	3.28		%

(a) Excludes ROU asset impairment charges.

Future minimum lease payments for the Company’s operating leases at September 30, 2024 are as follows:


(In millions)	Real Estate Leases
2024 (excludes payments through September 30, 2024)	$	95
2025	371
2026	343
2027	305
2028	229
2029	183
Subsequent years	678
Total future lease payments	2,204
Less: Imputed interest	(273)
Total	$	1,931
Current lease liabilities	$	313
Long-term lease liabilities	1,618
Total lease liabilities	$	1,931

Note: The above table excludes obligations for leases with original terms of 12 months or less which have not been recognized as a ROU asset or liability in the consolidated balance sheets.

At September 30, 2024, the Company did not have any additional operating real estate leases that had not yet commenced.