Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

Leases

As a lessee, the company leases certain logistics, office, and manufacturing facilities, as well as vehicles, copiers, and other equipment. These operating leases generally have remaining lease terms between 1 month and 30 years, and some include options to extend (generally for 1 to 10 years) or have options to terminate the arrangement within 1 year.

The company has guaranteed the residual value of three leased operating facilities with lease terms ending in 2025, and 2028, and 2029. The company has agreed with the lessor to comply with certain financial covenants consistent with its other debt arrangements (Note 3). The aggregate maximum guarantee under these three lease arrangements is $147 million. Operating lease ROU assets and lease liabilities for these lease arrangements are recorded on the consolidated balance sheet as of December 31, 2024, but exclude any amounts for residual value guarantees.

As a lessee, the consolidated financial statements include the following relating to operating leases:

(Dollars in millions)	2024			2023			2022
Statement of income
Operating lease costs	$	353		$	355		$	351
Variable lease costs	115			115			109
Statement of cash flows
Cash used in operating activities for payments of amounts included in the measurement of operating lease liabilities	$	327		$	410		$	289
Operating lease ROU assets obtained in exchange for new operating lease liabilities	262			234			430
Balance sheet
ROU assets - included in other assets	$	1,489		$	1,556
Operating lease liabilities - included in other accrued expenses	261			263
Operating lease liabilities - included in other long-term liabilities	1,239			1,244
Weighted average at end of year
Remaining operating lease term	8.6 years			9.2 years
Discount rate	4.6		%	4.0		%

Lease costs arising from finance leases, short-term leases, and sublease income are not material. See Note 3 for additional information relating to finance leases.

As of December 31, 2024, future payments of operating lease liabilities are as follows:

(In millions)
2025	$	320
2026	277
2027	235
2028	167
2029	136
2030 and thereafter	723
Total lease payments	1,858
Less: imputed interest	357
Total operating lease liability	$	1,501

As a lessor, operating leases, sales-type leases and direct financing leases are not material.