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Leases | 12 Months Ended
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Dec. 31, 2020
Leases [Abstract] |
Leases | Leases Effective January 1, 2019 (the "implementation date"), the Company adopted new guidance intended to improve financial reporting for leases. A lease is defined as a party obtaining the right to use an asset legally owned by another party. The Company determines if an arrangement is a lease at inception. For operating leases entered into prior to January 1, 2019, the Right-of-Use ("ROU") assets and operating lease liabilities were recognized in the balance sheet on the implementation date based on the present value of the remaining future minimum payments over the lease term from the implementation date. This ROU asset was adjusted for unamortized lease incentives and restructuring liabilities that existed on the implementation date. For leases entered into subsequent to January 1, 2019, the operating lease ROU asset and operating lease liabilities are based on the present value of minimum payments over the lease term at the commencement date of the lease. The Company uses discount rates to determine the present value of future lease payments. The Company primarily uses its incremental borrowing rate adjusted to reflect a secured rate, based on the information available for leases, including the lease term and interest rate environment in the country in which the lease exists. The lease terms used to calculate the ROU asset and lease liability may include options to extend or terminate when it is reasonably certain that the Company will exercise that option. The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years. The Company utilizes these leased office facilities for use by its employees in countries in which the Company conducts its business. Leases are negotiated with third-parties and, in some instances contain renewal, expansion and termination options. The Company also subleases certain office facilities to third-parties when the Company no longer utilizes the space. None of the Company’s leases restrict the payment of dividends or the incurrence of debt or additional lease obligations, or contain significant purchase options. In addition to the base rental costs, the Company's lease agreements generally provide for rent escalations resulting from increased assessments for real estate taxes and other charges. A portion of our real estate lease portfolio contains base rents subject to annual changes in the Consumer Price Index ("CPI") as well as charges for operating expenses which are reimbursable to the landlord based on actual usage. Changes to the CPI and payments for such reimbursable operating expenses are considered variable and are recognized as variable lease costs in the period in which the obligation for those payments was incurred. Approxi mately 99% of the Company's lease obligations are for the use of office space. All of the Company's material leases are operating leases. As a practical expedient, the Company has elected an accounting policy not to separate non-lease components from lease components and instead account as a single lease component. The Company has also elected not to recognize ROU assets and lease liabilities for leases that, at the commencement date, are for 12 months or less. The Company determined that $28 million and $9 million of its ROU assets were impaired, and therefore, recorded a charge to the consolidated statement of income for the year ended December 31, 2020 and 2019, respectively, with an offsetting reduction to ROU assets. The following chart provides additional information about the Company’s property leases:
For the Year Ended December 31, (In millions) |  | 2020 | 2019
Lease Cost: |  |  |
Operating lease cost (a) |  | $ | 396 |  | $ | 371 |
Short-term lease cost |  | 3 |  | 8 |
Variable lease cost |  | 138 |  | 150 |
Sublease income |  | (19) |  | (18) |
Net lease cost |  | $ | 518 |  | $ | 511 |
Other information: |  |  |
Operating cash outflows from operating leases |  | $ | 420 |  | $ | 392 |
Right of use assets obtained in exchange for new operating lease liabilities |  | $ | 261 |  | $ | 140 |
Weighted-average remaining lease term – real estate |  | 8.42 years | 8.78 years
Weighted-average discount rate – real estate leases |  | 2.94 | % | 3.10 | %
(a) Excludes ROU asset impairment charges. Future minimum lease payments for the Company’s operating leases as of December 31, 2020 are as follows:
Payment Dates (In millions) | Real Estate Leases
2021 | $ | 410 |
2022 | 380 |
2023 | 331 |
2024 | 288 |
2025 | 256 |
Subsequent years | 905 |
Total future lease payments | 2,570 |
Less: Imputed interest | (304) |
Total | 2,266 |
Current lease liabilities | 342 |
Long-term lease liabilities | 1,924 |
Total lease liabilities | $ | 2,266 |
Note: Table excludes obligations for leases with original terms of 12 months or less which have not been recognized as a right to use asset or liability in the consolidated balance sheets. As of December 31, 2020, the Company had additional operating real estate leases that had not yet commenc ed of $3 million. T hese operating leases will commence over the next 12 months. The consolidated statement of income in 2018 included operating lease costs of $383 million, net of subleases.

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- 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
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