v3.22.4
LEASES
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Operating lease cost$124 $114 $115 
Finance lease cost
Amortization of right-of-use assets6 7 5 
Interest on lease liabilities5 5 5 
Variable lease cost62 52 54 
Lease cost$197 $178 $179 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
(in millions)202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$141 $124 $127 
Operating cash flows from finance leases5 5 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations74 71 67 
Right-of-use finance lease assets obtained in exchange for lease obligations3 4 8 
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of
December 31, 2022 and 2021 include:
(in millions)20222021
Operating leases
Operating lease right-of-use assets$550 $630 
Accrued expenses and other current liabilities$121 $128 
Operating lease liabilities456 522 
Total operating lease liabilities$577 $650 
Finance leases
Property, plant and equipment, at cost$84 $86 
Accumulated depreciation(35)(31)
Property, plant and equipment, net$49 $55 
Current maturities of long-term debt and finance lease obligations$2 $2 
Long-term debt and finance lease obligations62 68 
Total finance lease liabilities$64 $70 
Lease term and discount rates as of December 31, 2022 and 2021 were:
December 31, 2022December 31, 2021
Weighted-average remaining lease term (years)
Operating leases78
Finance leases1112
Weighted-average discount rate
Operating leases2.7 %1.8 %
Finance leases9.4 %9.3 %
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
(in millions)Finance LeasesOperating Leases
2023$9 $127 
20249 110 
20259 88 
20269 70 
20278 60 
Thereafter61 174 
Total minimum lease payments105 629 
Less: imputed interest(41)(52)
Present value of lease liabilities$64 $577 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Sales-type lease revenue$15 $27 $38 
Operating lease revenue514 136 84 
Variable lease revenue54 79 80 
Total lease revenue$583 $242 $202 
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
(in millions)20222021
Minimum lease payments$87 $111 
Unguaranteed residual values1 4 
Net investment in leases $88 $115 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2022December 31, 2021
Accounts receivable, net$35 $40 
Other non-current assets53 75 
Total$88 $115 
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022.
Maturities of sales-type and operating leases as of December 31, 2022 were:
(in millions)Sales-type LeasesOperating Leases
2023$39 $80 
202427 72 
202517 71 
20264 54 
20271 3 
Thereafter— — 
Total minimum lease payments88 $280 
Less: imputed interest(1)
Present value of minimum lease payments$87 
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Operating lease cost$124 $114 $115 
Finance lease cost
Amortization of right-of-use assets6 7 5 
Interest on lease liabilities5 5 5 
Variable lease cost62 52 54 
Lease cost$197 $178 $179 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
(in millions)202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$141 $124 $127 
Operating cash flows from finance leases5 5 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations74 71 67 
Right-of-use finance lease assets obtained in exchange for lease obligations3 4 8 
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of
December 31, 2022 and 2021 include:
(in millions)20222021
Operating leases
Operating lease right-of-use assets$550 $630 
Accrued expenses and other current liabilities$121 $128 
Operating lease liabilities456 522 
Total operating lease liabilities$577 $650 
Finance leases
Property, plant and equipment, at cost$84 $86 
Accumulated depreciation(35)(31)
Property, plant and equipment, net$49 $55 
Current maturities of long-term debt and finance lease obligations$2 $2 
Long-term debt and finance lease obligations62 68 
Total finance lease liabilities$64 $70 
Lease term and discount rates as of December 31, 2022 and 2021 were:
December 31, 2022December 31, 2021
Weighted-average remaining lease term (years)
Operating leases78
Finance leases1112
Weighted-average discount rate
Operating leases2.7 %1.8 %
Finance leases9.4 %9.3 %
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
(in millions)Finance LeasesOperating Leases
2023$9 $127 
20249 110 
20259 88 
20269 70 
20278 60 
Thereafter61 174 
Total minimum lease payments105 629 
Less: imputed interest(41)(52)
Present value of lease liabilities$64 $577 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Sales-type lease revenue$15 $27 $38 
Operating lease revenue514 136 84 
Variable lease revenue54 79 80 
Total lease revenue$583 $242 $202 
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
(in millions)20222021
Minimum lease payments$87 $111 
Unguaranteed residual values1 4 
Net investment in leases $88 $115 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2022December 31, 2021
Accounts receivable, net$35 $40 
Other non-current assets53 75 
Total$88 $115 
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022.
Maturities of sales-type and operating leases as of December 31, 2022 were:
(in millions)Sales-type LeasesOperating Leases
2023$39 $80 
202427 72 
202517 71 
20264 54 
20271 3 
Thereafter— — 
Total minimum lease payments88 $280 
Less: imputed interest(1)
Present value of minimum lease payments$87 
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Operating lease cost$124 $114 $115 
Finance lease cost
Amortization of right-of-use assets6 7 5 
Interest on lease liabilities5 5 5 
Variable lease cost62 52 54 
Lease cost$197 $178 $179 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
(in millions)202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$141 $124 $127 
Operating cash flows from finance leases5 5 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations74 71 67 
Right-of-use finance lease assets obtained in exchange for lease obligations3 4 8 
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of
December 31, 2022 and 2021 include:
(in millions)20222021
Operating leases
Operating lease right-of-use assets$550 $630 
Accrued expenses and other current liabilities$121 $128 
Operating lease liabilities456 522 
Total operating lease liabilities$577 $650 
Finance leases
Property, plant and equipment, at cost$84 $86 
Accumulated depreciation(35)(31)
Property, plant and equipment, net$49 $55 
Current maturities of long-term debt and finance lease obligations$2 $2 
Long-term debt and finance lease obligations62 68 
Total finance lease liabilities$64 $70 
Lease term and discount rates as of December 31, 2022 and 2021 were:
December 31, 2022December 31, 2021
Weighted-average remaining lease term (years)
Operating leases78
Finance leases1112
Weighted-average discount rate
Operating leases2.7 %1.8 %
Finance leases9.4 %9.3 %
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
(in millions)Finance LeasesOperating Leases
2023$9 $127 
20249 110 
20259 88 
20269 70 
20278 60 
Thereafter61 174 
Total minimum lease payments105 629 
Less: imputed interest(41)(52)
Present value of lease liabilities$64 $577 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Sales-type lease revenue$15 $27 $38 
Operating lease revenue514 136 84 
Variable lease revenue54 79 80 
Total lease revenue$583 $242 $202 
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
(in millions)20222021
Minimum lease payments$87 $111 
Unguaranteed residual values1 4 
Net investment in leases $88 $115 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2022December 31, 2021
Accounts receivable, net$35 $40 
Other non-current assets53 75 
Total$88 $115 
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022.
Maturities of sales-type and operating leases as of December 31, 2022 were:
(in millions)Sales-type LeasesOperating Leases
2023$39 $80 
202427 72 
202517 71 
20264 54 
20271 3 
Thereafter— — 
Total minimum lease payments88 $280 
Less: imputed interest(1)
Present value of minimum lease payments$87 
LEASES
LEASES
Lessee Activity
We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.
Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months.
We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease.
Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.
The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Operating lease cost$124 $114 $115 
Finance lease cost
Amortization of right-of-use assets6 7 5 
Interest on lease liabilities5 5 5 
Variable lease cost62 52 54 
Lease cost$197 $178 $179 
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
(in millions)202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$141 $124 $127 
Operating cash flows from finance leases5 5 4 
Financing cash flows from finance leases4 4 4 
Right-of-use operating lease assets obtained in exchange for lease obligations74 71 67 
Right-of-use finance lease assets obtained in exchange for lease obligations3 4 8 
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of
December 31, 2022 and 2021 include:
(in millions)20222021
Operating leases
Operating lease right-of-use assets$550 $630 
Accrued expenses and other current liabilities$121 $128 
Operating lease liabilities456 522 
Total operating lease liabilities$577 $650 
Finance leases
Property, plant and equipment, at cost$84 $86 
Accumulated depreciation(35)(31)
Property, plant and equipment, net$49 $55 
Current maturities of long-term debt and finance lease obligations$2 $2 
Long-term debt and finance lease obligations62 68 
Total finance lease liabilities$64 $70 
Lease term and discount rates as of December 31, 2022 and 2021 were:
December 31, 2022December 31, 2021
Weighted-average remaining lease term (years)
Operating leases78
Finance leases1112
Weighted-average discount rate
Operating leases2.7 %1.8 %
Finance leases9.4 %9.3 %
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
(in millions)Finance LeasesOperating Leases
2023$9 $127 
20249 110 
20259 88 
20269 70 
20278 60 
Thereafter61 174 
Total minimum lease payments105 629 
Less: imputed interest(41)(52)
Present value of lease liabilities$64 $577 
Lessor Activity
We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices.
The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
(in millions)202220212020
Sales-type lease revenue$15 $27 $38 
Operating lease revenue514 136 84 
Variable lease revenue54 79 80 
Total lease revenue$583 $242 $202 
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
(in millions)20222021
Minimum lease payments$87 $111 
Unguaranteed residual values1 4 
Net investment in leases $88 $115 
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
(in millions)December 31, 2022December 31, 2021
Accounts receivable, net$35 $40 
Other non-current assets53 75 
Total$88 $115 
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022.
Maturities of sales-type and operating leases as of December 31, 2022 were:
(in millions)Sales-type LeasesOperating Leases
2023$39 $80 
202427 72 
202517 71 
20264 54 
20271 3 
Thereafter— — 
Total minimum lease payments88 $280 
Less: imputed interest(1)
Present value of minimum lease payments$87