Investor Presentaiton slide image

Investor Presentaiton

Note 7. LEASES Eaton leases certain manufacturing facilities, warehouses, distribution centers, office space, vehicles, and equipment. Most real estate leases contain renewal options. The exercise of lease renewal options is at the Company's sole discretion. The Company's lease agreements typically do not contain any significant guarantees of asset values at the end of a lease or restrictive covenants. Payments within certain lease agreements are adjusted periodically for changes in an index or rate. The components of lease expense are as follows: (In millions) Operating lease cost Finance lease cost: Amortization of lease assets Interest on lease liabilities Short-term lease cost Variable lease cost Sublease income Total lease cost 2022 2021 2020 $ 179 $ 164 $ 184 11 12 6 1 2 1 17 15 18 27 16 3 (1) (2) (2) $ 234 $ 207 $ 210 During 2022, Eaton entered into sale leaseback transactions primarily for certain office and distribution facilities and recorded gains of $81 million in Other expense (income) - net. The terms of the new operating leases ranged from 15 to 20 years. There were no sale leaseback transactions for the year ended December 31, 2021 and gains recorded on sale leaseback transactions were $9 million for the year ended December 31, 2020. Supplemental cash flow information related to leases is as follows: (In millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows - payments on operating leases Operating cash outflows - interest payments on finance leases Financing cash outflows - payments on finance lease obligations Lease assets obtained in exchange for new lease obligations, including leases acquired: Operating leases Finance leases 2022 2021 2020 $ (159) $ (158) $ (144) (2) (2) (1) (11) (11) (8) $ 245 $ 145 $ 144 10 14 16 41
View entire presentation