Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

NOTE 9 — LEASES

We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related assets and obligations at the present value of lease payments over the term. Many of our leases include rental escalation clauses and renewal options that are factored into our determination of lease payments, when appropriate. We do not separate lease and nonlease components of contracts. Generally, we use our estimated incremental borrowing rate to discount the lease payments, as most of our leases do not provide a readily determinable implicit interest rate.

The following table presents our lease-related assets and liabilities at December 31, 2022 and 2021 (dollars in millions):

	Balance Sheet Classification	2022			2021
Assets:
Operating leases	Right-of-use operating lease assets	$	2,065		$	2,113
Finance leases	Property and equipment		587			637
Total lease assets		$	2,652		$	2,750
Liabilities:
Current:
Operating leases	Other accrued expenses	$	364		$	392
Finance leases	Long-term debt due within one year		131			143
Noncurrent:
Operating leases	Right-of-use operating lease obligations		1,752			1,755
Finance leases	Long-term debt		579			577
Total lease liabilities		$	2,826		$	2,867
Weighted-average remaining term:
Operating leases			10.1 years			10.2 years
Finance leases			9.5 years			10.4 years
Weighted-average discount rate:
Operating leases			4.4	%		4.4	%
Finance leases			4.5	%		4.4	%

The following table presents certain information related to expenses for finance and operating leases for the years ended December 31, 2022, 2021 and 2020 (dollars in millions):

	2022		2021		2020
Finance lease expense:
Depreciation and amortization	$	163	$	135	$	106
Interest		29		29		31
Operating leases(1)		484		478		447
Short-term lease expense(1)		329		354		322
Variable lease expense(1)		163		157		154
	$	1,168	$	1,153	$	1,060

(1) Expenses are included in “other operating expenses” in our consolidated income statements.

The following table presents supplemental cash flow information for the years ended December 31, 2022, 2021 and 2020 (dollars in millions):

	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	473	$	474	$	445
Operating cash flows for finance leases		29		29		31
Financing cash flows for finance leases		124		123		86

Maturities of Lease Liabilities

The following table reconciles the undiscounted minimum lease payment amounts to the operating and finance lease liabilities recorded on the balance sheet at December 31, 2022 and 2021 (dollars in millions):

	2022						2021
	Operating Leases			Finance Leases			Operating Leases			Finance Leases
Year 1	$	436		$	156		$	438		$	165
Year 2		380			164			378			126
Year 3		320			125			320			132
Year 4		269			89			267			98
Year 5		222			39			219			70
Thereafter		1,122			359			1,148			350
Total minimum lease payments		2,749			932			2,770			941
Less: amount of lease payments representing interest		(633	)		(222	)		(623	)		(221	)
Present value of future minimum lease payments		2,116			710			2,147			720
Less: current lease obligations		(364	)		(131	)		(392	)		(143	)
Long-term lease obligations	$	1,752		$	579		$	1,755		$	577