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Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases, Operating

Note 5. Leases

We have operating and finance leases for manufacturing and distribution facilities, vehicles, equipment and office space. Our leases have remaining lease terms of 1 to 19 years, some of which include options to extend the leases for up to 6 years. We assume the majority of our termination options will not be exercised when determining the lease term of our leases. We do not include significant restrictions or covenants in our lease agreements, and residual value guarantees are generally not included within our operating leases, with the exception of some fleet leases. Some of our leasing arrangements require variable payments that are dependent on usage or output or may vary for other reasons, such as product costs, insurance and tax payments. These variable payment leases are not included in our recorded lease assets and liabilities and are expensed as incurred. Certain leases are tied to a variable index or rate and are included in our lease assets and liabilities based on the indices or rates as of lease commencement.

The components of lease costs were as follows:

			For the Years Ended December 31,
			2020						2019
			(in millions)
Operating lease cost			$	236					$	222
Finance lease cost:
Amortization of right-of-use assets			60						29
Interest on lease liabilities			7						4
Short-term lease cost			26						39
Variable lease cost			442						474
Sublease income			(7)						(6)
Total lease cost			$	764					$	762

Rent expenses under prior lease accounting rules (ASC 840) recorded in continuing operations were $260 million in 2018.

Supplemental cash flow information related to leases was as follows:

			For the Years Ended December 31,
			2020						2019
			(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	(236)					$	(234)
Operating cash flows from finance leases			(7)						(4)
Financing cash flows from finance leases			(56)						(27)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			$	208					$	95
Finance leases			180						99

Supplemental balance sheet information related to leases was as follows:

			As of December 31,
			2020						2019
			(in millions)
Operating Leases:
Operating lease right-of-use assets, net of amortization			$	638					$	568
Other current liabilities			$	190					$	178
Long-term operating lease liabilities			470						403
Total operating lease liabilities			$	660					$	581
Finance Leases:
Finance leases, net of amortization (within property, plant & equipment)			$	252					$	122
Current portion of long-term debt			$	74					$	32
Long-term debt			182						91
Total finance lease liabilities			$	256					$	123
Weighted Average Remaining Lease Term
Operating leases			6.3 years						5.2 years
Finance leases			4.4 years						4.6 years
Weighted Average Discount Rate
Operating leases			3.2		%				3.5		%
Finance leases			3.2		%				3.7		%

Maturities of lease liabilities were as follows:

			As of December 31, 2020
			Operating Leases						Finance Leases
			(in millions)
Year Ending December 31:
2021			$	203					$	81
2022			155						71
2023			107						51
2024			72						33
2025			51						18
Thereafter			169						22
Total future undiscounted lease payments			$	757					$	276
Less imputed interest			(97)						(20)
Total reported lease liability			$	660					$	256

Leases, Finance

Note 5. Leases

We have operating and finance leases for manufacturing and distribution facilities, vehicles, equipment and office space. Our leases have remaining lease terms of 1 to 19 years, some of which include options to extend the leases for up to 6 years. We assume the majority of our termination options will not be exercised when determining the lease term of our leases. We do not include significant restrictions or covenants in our lease agreements, and residual value guarantees are generally not included within our operating leases, with the exception of some fleet leases. Some of our leasing arrangements require variable payments that are dependent on usage or output or may vary for other reasons, such as product costs, insurance and tax payments. These variable payment leases are not included in our recorded lease assets and liabilities and are expensed as incurred. Certain leases are tied to a variable index or rate and are included in our lease assets and liabilities based on the indices or rates as of lease commencement.

The components of lease costs were as follows:

			For the Years Ended December 31,
			2020						2019
			(in millions)
Operating lease cost			$	236					$	222
Finance lease cost:
Amortization of right-of-use assets			60						29
Interest on lease liabilities			7						4
Short-term lease cost			26						39
Variable lease cost			442						474
Sublease income			(7)						(6)
Total lease cost			$	764					$	762

Rent expenses under prior lease accounting rules (ASC 840) recorded in continuing operations were $260 million in 2018.

Supplemental cash flow information related to leases was as follows:

			For the Years Ended December 31,
			2020						2019
			(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	(236)					$	(234)
Operating cash flows from finance leases			(7)						(4)
Financing cash flows from finance leases			(56)						(27)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			$	208					$	95
Finance leases			180						99

Supplemental balance sheet information related to leases was as follows:

			As of December 31,
			2020						2019
			(in millions)
Operating Leases:
Operating lease right-of-use assets, net of amortization			$	638					$	568
Other current liabilities			$	190					$	178
Long-term operating lease liabilities			470						403
Total operating lease liabilities			$	660					$	581
Finance Leases:
Finance leases, net of amortization (within property, plant & equipment)			$	252					$	122
Current portion of long-term debt			$	74					$	32
Long-term debt			182						91
Total finance lease liabilities			$	256					$	123
Weighted Average Remaining Lease Term
Operating leases			6.3 years						5.2 years
Finance leases			4.4 years						4.6 years
Weighted Average Discount Rate
Operating leases			3.2		%				3.5		%
Finance leases			3.2		%				3.7		%

Maturities of lease liabilities were as follows:

			As of December 31, 2020
			Operating Leases						Finance Leases
			(in millions)
Year Ending December 31:
2021			$	203					$	81
2022			155						71
2023			107						51
2024			72						33
2025			51						18
Thereafter			169						22
Total future undiscounted lease payments			$	757					$	276
Less imputed interest			(97)						(20)
Total reported lease liability			$	660					$	256

X

- References

No definition available.

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- 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

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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

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