Leases

12 Months Ended

Dec. 31, 2023

In the ordinary course of business, the Company renews and enters into new leases for office property and equipment. At the lease inception date, the Company determines whether a contract contains a lease and its classification as a finance or operating lease. Primarily all of the Company’s leases are classified as operating leases. The Company’s operating leases have remaining lease terms of up to 14 years, some of which include options to extend the lease term. The Company considers these options when determining the lease term and measuring its lease liability and right-of-use asset. In addition, the Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Short-term operating leases with an initial term of twelve months or less were excluded on the Company's consolidated balance sheet and represent an inconsequential amount of operating lease expense.

As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

Additional information regarding the Company’s operating leases is as follows:






















	December 31,
	2023			2022
Operating lease costs	$	33		$	34
Sublease income (1)	$	(2)		$	(1)
Cash payments included in the measurement of lease liabilities reported in operating cash flows	$	31		$	26
Right-of-use assets obtained in exchange for new lease liabilities	$	28		$	43
Right-of-use assets (2)	$	125		$	123
Operating lease liability (2)	$	156		$	152
Weighted average discount rate	4.7		%	4.2		%
Weighted average remaining lease term	7.2 years			6.6 years

(1) The sublease income primarily relates to office property in Raleigh, North Carolina.

(2) The right-of-use assets are included in ‘other assets’ while the operating lease liability is included in ‘other liabilities.’

The following table presents the contractual maturities of the Company's operating lease liabilities at December 31, 2023:


Years Ending December 31,
2024	$	32
2025	27
2026	26
2027	22
2028	19
2029 and thereafter	60
Total undiscounted lease liability	$	186
Less: present value adjustment	(30)
Operating lease liability	$	156

Rental expense was approximately $38 million, $39 million and $37 million for 2023, 2022 and 2021, respectively.