XML 48 R17.htm IDEA: XBRL DOCUMENT
v3.20.2

Leases | 12 Months Ended
--- | ---
Sep. 03, 2020
Leases [Abstract] |
Leases | Leases We have finance and operating leases through which we acquire or utilize equipment and facilities in our manufacturing operations and R&D activities as well as office space and other facilities used in our SG&A functions. Our finance leases consist primarily of gas or other supply agreements that are deemed to contain embedded leases in which we effectively control the underlying gas plants or other assets used to fulfill the supply agreements. Our operating leases consist primarily of offices, other facilities, and land used in SG&A, R&D, and certain of our manufacturing operations. Certain of our operating leases include one or more options to extend the lease term for periods from one year to 10 years for real estate and one year to 30 years for land. Certain supply or service agreements require us to exercise significant judgment to determine whether the agreement contains a lease of a right-of-use asset. Our assessment includes determining whether we or the supplier control the assets used to fulfill the supply or service agreement by identifying whether we or the supplier have the right to change the type, quantity, timing, or location of the output of the assets. Our gas supply arrangements generally are deemed to contain a lease because we have the right to substantially all of the output of the assets used to produce the supply and we have the right to change the quantity and timing of the output of those assets. In determining the lease term, we assess whether we are reasonably certain to exercise options to renew or terminate a lease, and when or whether we would exercise an option to purchase the right-of-use asset. Measuring the present value of the initial lease liability requires exercising judgment to determine the discount rate, which we base on interest rates for similar borrowings issued by entities with credit ratings similar to ours. Short-term and variable lease expenses were not significant and are presented within operating lease costs in the table below. Sublease income was not significant in 2020. The components of lease expense are presented below:
For the year ended | 2020
Finance lease cost |
Amortization of right-of-use asset | $ | 140 |
Interest on lease liability | 22 |
Operating lease cost | 102 |
| $ | 264 |
Other information related to our leases were as follows:
For the year ended | 2020
Cash flows used for operating activities |
Finance leases | $ | 24 |
Operating leases(1) | 39 |
Cash flows used for financing activities from financing leases | 248
Noncash acquisitions of right-of-use assets |
Finance leases | 107
Operating leases | 11
(1)Included $48 million of reimbursements received for tenant improvements.
As of | 2020
Finance lease right-of-use asset (included in property, plant, and equipment)(1) | $ | 426 |
Weighted-average remaining lease term (in years) |
Finance leases | 5
Operating leases | 7
Weighted-average discount rate |
Finance leases | 4.51 | %
Operating leases | 2.67 | %
(1) As of August 29, 2019, prior to our adoption of ASC 842, property, plant, and equipment included $700 million for finance leases. Maturities of lease liabilities existing as of September 3, 2020 were as follows:
For the year ending | Finance Leases | Operating Leases
2021 | $ | 90 |  | $ | 70 |
2022 | 90 |  | 69 |
2023 | 70 |  | 65 |
2024 | 53 |  | 55 |
2025 | 38 |  | 47 |
2026 and thereafter | 248 |  | 401 |
Less imputed interest | (103) |  | (120) |
| $ | 486 |  | $ | 587 |
The table above excludes any lease liabilities for leases that have been executed but have not yet commenced. As of September 3, 2020, we had such lease liabilities relating to 1) operating lease payment obligations of $148 million for the initial 10-year lease term for a building, which may, at our election, be terminated after 3 years or extended for an additional 10 years, and 2) finance lease obligations of $838 million over a weighted-average period of 15 years for gas supply arrangements deemed to contain embedded leases. We will recognize right-of-use assets and associated lease liabilities at the time such assets become available for our use. As of August 29, 2019, prior to our adoption of ASC 842, future minimum operating lease commitments with an initial term in excess of one year were $54 million for 2020, $64 million for 2021, $63 million for 2022, $59 million for 2023, $53 million for 2024, and $459 million in 2025 and thereafter.
Leases | Leases We have finance and operating leases through which we acquire or utilize equipment and facilities in our manufacturing operations and R&D activities as well as office space and other facilities used in our SG&A functions. Our finance leases consist primarily of gas or other supply agreements that are deemed to contain embedded leases in which we effectively control the underlying gas plants or other assets used to fulfill the supply agreements. Our operating leases consist primarily of offices, other facilities, and land used in SG&A, R&D, and certain of our manufacturing operations. Certain of our operating leases include one or more options to extend the lease term for periods from one year to 10 years for real estate and one year to 30 years for land. Certain supply or service agreements require us to exercise significant judgment to determine whether the agreement contains a lease of a right-of-use asset. Our assessment includes determining whether we or the supplier control the assets used to fulfill the supply or service agreement by identifying whether we or the supplier have the right to change the type, quantity, timing, or location of the output of the assets. Our gas supply arrangements generally are deemed to contain a lease because we have the right to substantially all of the output of the assets used to produce the supply and we have the right to change the quantity and timing of the output of those assets. In determining the lease term, we assess whether we are reasonably certain to exercise options to renew or terminate a lease, and when or whether we would exercise an option to purchase the right-of-use asset. Measuring the present value of the initial lease liability requires exercising judgment to determine the discount rate, which we base on interest rates for similar borrowings issued by entities with credit ratings similar to ours. Short-term and variable lease expenses were not significant and are presented within operating lease costs in the table below. Sublease income was not significant in 2020. The components of lease expense are presented below:
For the year ended | 2020
Finance lease cost |
Amortization of right-of-use asset | $ | 140 |
Interest on lease liability | 22 |
Operating lease cost | 102 |
| $ | 264 |
Other information related to our leases were as follows:
For the year ended | 2020
Cash flows used for operating activities |
Finance leases | $ | 24 |
Operating leases(1) | 39 |
Cash flows used for financing activities from financing leases | 248
Noncash acquisitions of right-of-use assets |
Finance leases | 107
Operating leases | 11
(1)Included $48 million of reimbursements received for tenant improvements.
As of | 2020
Finance lease right-of-use asset (included in property, plant, and equipment)(1) | $ | 426 |
Weighted-average remaining lease term (in years) |
Finance leases | 5
Operating leases | 7
Weighted-average discount rate |
Finance leases | 4.51 | %
Operating leases | 2.67 | %
(1) As of August 29, 2019, prior to our adoption of ASC 842, property, plant, and equipment included $700 million for finance leases. Maturities of lease liabilities existing as of September 3, 2020 were as follows:
For the year ending | Finance Leases | Operating Leases
2021 | $ | 90 |  | $ | 70 |
2022 | 90 |  | 69 |
2023 | 70 |  | 65 |
2024 | 53 |  | 55 |
2025 | 38 |  | 47 |
2026 and thereafter | 248 |  | 401 |
Less imputed interest | (103) |  | (120) |
| $ | 486 |  | $ | 587 |
The table above excludes any lease liabilities for leases that have been executed but have not yet commenced. As of September 3, 2020, we had such lease liabilities relating to 1) operating lease payment obligations of $148 million for the initial 10-year lease term for a building, which may, at our election, be terminated after 3 years or extended for an additional 10 years, and 2) finance lease obligations of $838 million over a weighted-average period of 15 years for gas supply arrangements deemed to contain embedded leases. We will recognize right-of-use assets and associated lease liabilities at the time such assets become available for our use. As of August 29, 2019, prior to our adoption of ASC 842, future minimum operating lease commitments with an initial term in excess of one year were $54 million for 2020, $64 million for 2021, $63 million for 2022, $59 million for 2023, $53 million for 2024, and $459 million in 2025 and thereafter.

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration