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Loans Payable, Long-Term Debt and Leases
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Loans Payable, Long-Term Debt and Leases Loans Payable, Long-Term Debt and Leases
Loans Payable
Loans payable at December 31, 2021 included $2.3 billion of notes due in 2022 and $149 million of long-dated notes that are subject to repayment at the option of the holders. Loans payable at December 31, 2020 included $2.3 billion of notes due in 2021, $4.0 billion of commercial paper borrowings and $73 million of long-dated notes that are subject to repayment at the option of the holders. The weighted-average interest rate of commercial paper borrowings was 0.08% and 0.79% for the years ended December 31, 2021 and 2020, respectively.
Long-Term Debt
Long-term debt at December 31 consisted of:
20212020
2.75% notes due 2025
$2,495 $2,493 
2.15% notes due 2031
1,986 — 
2.75% notes due 2051
1,979 — 
3.70% notes due 2045
1,977 1,976 
2.80% notes due 2023
1,749 1,748 
3.40% notes due 2029
1,736 1,734 
1.70% notes due 2027
1,493 — 
2.90% notes due 2061
1,484 — 
4.00% notes due 2049
1,470 1,469 
4.15% notes due 2043
1,239 1,238 
1.45% notes due 2030
1,235 1,233 
2.45% notes due 2050
1,212 1,211 
1.875% euro-denominated notes due 2026
1,123 1,218 
1.90% notes due 2028
994 — 
0.75% notes due 2026
993 991 
3.90% notes due 2039
984 983 
2.35% notes due 2040
983 982 
2.90% notes due 2024
748 746 
6.50% notes due 2033
715 719 
0.50% euro-denominated notes due 2024
563 611 
1.375% euro-denominated notes due 2036
559 606 
2.50% euro-denominated notes due 2034
558 605 
3.60% notes due 2042
491 491 
6.55% notes due 2037
409 411 
5.75% notes due 2036
338 338 
5.95% debentures due 2028
306 306 
5.85% notes due 2039
271 271 
6.40% debentures due 2028
250 250 
6.30% debentures due 2026
135 135 
2.35% notes due 2022
— 1,269 
2.40% notes due 2022
— 1,032 
Other215 294 
 $30,690 $25,360 
Other (as presented in the table above) includes borrowings at variable rates that resulted in effective interest rates of zero and 0.45% for 2021 and 2020, respectively.
With the exception of the 6.30% debentures due 2026, the notes listed in the table above are redeemable in whole or in part, at Merck’s option at any time, at varying redemption prices.
In December 2021, the Company issued $8.0 billion principal amount of senior unsecured notes consisting of $1.5 billion of 1.70% notes due 2027, $1.0 billion of 1.90% notes due 2028, $2.0 billion of 2.15% notes due 2031, $2.0 billion of 2.75% notes due 2051 and $1.5 billion of 2.90% notes due 2061. Merck used the net proceeds from the offering of the 2027 notes, the 2031 notes, the 2051 notes and the 2061 notes for general corporate purposes, including the repayment of outstanding commercial paper borrowings (including commercial paper borrowings in connection with Merck’s acquisition of Acceleron), and other indebtedness. Merck allocated an amount equal to the net proceeds of the offering of the notes due in 2028 to finance or refinance, in whole or in part, projects and partnerships in the Company’s priority environmental, social and governance (ESG) areas.
Effective as of November 3, 2009, the Company executed a full and unconditional guarantee of the then existing debt of its subsidiary Merck Sharp & Dohme Corp. (MSD) and MSD executed a full and unconditional guarantee of the then existing debt of the Company (excluding commercial paper), including for payments of principal and interest. These guarantees do not extend to debt issued subsequent to that date.
Certain of the Company’s borrowings require that Merck comply with covenants and, at December 31, 2021, the Company was in compliance with these covenants.
The aggregate maturities of long-term debt for each of the next five years are as follows: 2022, $2.3 billion; 2023, $1.7 billion; 2024, $1.3 billion; 2025, $2.5 billion; 2026, $2.3 billion. Interest payments related to these debt obligations are as follows: 2022, $910 million; 2023, $875 million; 2024, $838 million; 2025, $771 million; 2026, $743 million.
The Company has a $6.0 billion credit facility that matures in June 2026. The facility provides backup liquidity for the Company’s commercial paper borrowing facility and is to be used for general corporate purposes. The Company has not drawn funding from this facility.

Leases
The Company has operating leases primarily for manufacturing facilities, research and development facilities, corporate offices, employee housing, vehicles and certain equipment. The Company determines if an arrangement is a lease at inception. When evaluating contracts for embedded leases, the Company exercises judgment to determine if there is an explicit or implicit identified asset in the contract and if Merck controls the use of that asset. Embedded leases, primarily associated with contract manufacturing organizations, are immaterial. The lease term includes options to extend or terminate the lease when it is reasonably certain that Merck will exercise that option. Real estate leases for facilities have an average remaining lease term of seven years, which include options to extend the leases for up to four years where applicable. Vehicle leases are generally in effect for four years. The Company does not record short-term leases (leases with an initial term of 12 months or less) on the balance sheet; however, Merck currently has no short-term leases.
Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since the Company’s leases do not have a readily determinable implicit discount rate, the Company uses its incremental borrowing rate to calculate the present value of lease payments by asset class. On a quarterly basis, an updated incremental borrowing rate is determined based on the average remaining lease term of each asset class and the Company’s pretax cost of debt for that same term. The updated rates for each asset class are applied prospectively to new leases. The Company does not separate lease components (e.g. payments for rent, real estate taxes and insurance costs) from non-lease components (e.g. common-area maintenance costs) in the event that the agreement contains both. Merck includes both the lease and non-lease components for purposes of calculating the right-of-use asset and related lease liability (if the non-lease components are fixed). For vehicle leases and employee housing, the Company applies a portfolio approach to account for the operating lease assets and liabilities.
Certain of the Company’s lease agreements contain variable lease payments that are adjusted periodically for inflation or for actual operating expense true-ups compared with estimated amounts; however, these amounts are immaterial. Sublease income and activity related to sale and leaseback transactions are immaterial. Merck’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease cost was $343 million in 2021, $340 million in 2020 and $333 million in 2019. Cash paid for amounts included in the measurement of operating lease liabilities was $340 million in 2021, $334 million in 2020 and $275 million in 2019. Operating lease assets obtained in exchange for lease obligations were $117 million in 2021, $473 million in 2020 and $125 million in 2019.
Supplemental balance sheet information related to operating leases is as follows:
December 3120212020
Assets
Other Assets (1)
$1,586 $1,688 
Liabilities
Accrued and other current liabilities304 291 
Other Noncurrent Liabilities1,225 1,335 
$1,529 $1,626 
Weighted-average remaining lease term (years)7.08.0
Weighted-average discount rate2.6 %2.8 %
(1) Includes prepaid leases that have no related lease liability.
Maturities of operating leases liabilities are as follows:
2022$336 
2023292 
2024242 
2025178 
2026146 
Thereafter511 
Total lease payments1,705 
Less: Imputed interest176 
$1,529 
At December 31, 2021, the Company had entered into additional real estate operating leases that had not yet commenced; the obligations associated with these leases total $86 million.