Less: imputed interest

  
Lease costs and related information were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended December 31 |
| ($ in millions) |  | 2021 |  | 2020 |  | 2019 |
| Operating lease costs |  | $ | 53  |  |  | $ | 55  |  |  | $ | 47  |  |
| Short-term operating lease costs |  | $ | 43  |  |  | $ | 38  |  |  | $ | 44  |  |
| Variable operating lease costs |  | $ | 4  |  |  | $ | 4  |  |  | $ | 5  |  |
| Operating cash flows from operating leases |  | $ | (52) |  |  | $ | (54) |  |  | $ | (46) |  |
| Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 97  |  |  | $ | 61  |  |  | $ | 38  |  |
| Weighted-average remaining lease term (years) - operating leases |  | 8 years |  | 10 years |  | 10 years |
| Weighted-average discount rate - operating leases |  | 3.6  | % |  | 4.1  | % |  | 4.2  | % |

  
The undiscounted future non-cancellable lease payments under the Company's operating leases as of December 31, 2021, were as follows:

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| ($ in millions) |  | December 31, 2021 |
| 2022 |  | $ | 59  |  |
| 2023 |  | 48  |  |
| 2024 |  | 41  |  |
| 2025 |  | 33  |  |
| 2026 |  | 24  |  |
| Thereafter |  | 90  |  |
| Total lease payments |  | 295  |  |
| Less: imputed interest |  | 49  |  |
| Present value of lease liabilities |  | $ | 246  |  |

  
Lease liabilities included in the Company's consolidated statements of financial position as of December 31, 2021 and 2020, were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | December 31 |
| ($ in millions) |  | 2021 |  | 2020 |
| Short-term operating lease liabilities |  | $ | 52  |  |  | $ | 37  |  |
| Lease liabilities included in liabilities held for sale |  | —  |  |  | 27  |  |
| Long-term operating lease liabilities |  | 194  |  |  | 157  |  |
| Total operating lease liabilities |  | $ | 246  |  |  | $ | 221  |  |

  
  
16. COMMITMENTS AND CONTINGENCIES  
Contract Performance Contingencies - Contract profit margins may include estimates of revenues for matters on which the customer and the Company have not reached agreement, such as settlements in the process of negotiation, contract changes, claims, and requests for equitable adjustment for unanticipated contract costs. These estimates are based upon management's best assessment of the underlying causal events and circumstances and recognized to the extent of expected recovery based upon contractual entitlements and the probability of successful negotiation with the customer. As of December 31, 2021, amounts recognized in connection with claims and requests for equitable adjustment were not material individually or in the aggregate.  
Guarantees of Performance Obligations - From time to time in the ordinary course of business, HII enters into joint ventures, teaming agreements, and other business arrangements in connection with the Company's products and services or to pursue strategic objectives. The Company attempts to limit its exposure under these arrangements to its investment or the extent of obligations under the applicable contract. In some cases, however, HII may be required to guarantee performance of the arrangement's obligations and, in such cases, generally obtains cross-indemnification from the other members of the arrangement.   
92
