PayPal enters into various leases, which are primarily real estate operating leases. We use these properties for executive and administrative offices, data centers, product development offices, customer services and operations centers, and warehouses.

While a majority of our lease agreements do not contain an explicit interest rate, certain of our lease agreements are subject to changes based on the Consumer Price Index or another referenced index. In the event of changes to the relevant index, lease liabilities are not remeasured and instead are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In millions)
Lease expense
Operating lease expense	$	43	$	42	$	128	$	129


Sublease income	(2)		(2)		(6)		(6)
Lease expense, net	$	41	$	40	$	122	$	123


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	44	$	42	$	127	$	126
Right-of-use (“ROU”) lease assets obtained in exchange for new operating lease liabilities	$	5	$	47	$	99	$	79
Other non-cash ROU lease asset activity	$	(11)	$	—	$	(36)	$	(21)


	September 30, 2022			December 31, 2021
	(In millions, except weighted-average figures)
Operating ROU lease assets	$	588		$	659
Current operating lease liabilities	152			142
Operating lease liabilities	566			620
Total operating lease liabilities	$	718		$	762
Weighted-average remaining lease term—operating leases	5.7 years			6.1 years
Weighted-average discount rate—operating leases	3		%	3		%

Operating lease amounts include minimum lease payments under our non-cancelable operating leases primarily for office and data center facilities. The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases.

In the three and nine months ended September 30, 2022, we incurred asset impairment charges of $29 million and $64 million, respectively, within restructuring and other charges on our condensed consolidated statements of income (loss). The impairments in three and nine months ended September 30, 2022 included a reduction to our ROU lease assets in the amount of $11 million and $36 million, respectively, which were attributed to certain leased space we are no longer utilizing for our business operations, a portion of which is being subleased. In the three and nine months ended September 30, 2021, we incurred asset impairment charges of nil and $26 million, respectively, within restructuring and other charges on our condensed consolidated statements of income (loss). The impairments in the three and nine months ended September 30, 2021 included a reduction to our ROU lease assets in the amount of nil and $21 million, respectively, which was attributed to certain leased space we are no longer utilizing for our business operations, a portion of which is being subleased.

As of September 30, 2022, we have an additional operating lease for real estate, which will commence in the fourth quarter of 2022 or later with minimum lease payments aggregating to $3 million and a lease term of eight years.