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Leases (Notes) | 3 Months Ended
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Mar. 31, 2019
Leases [Abstract] |
Leases of Lessee Disclosure [Text Block] | NOTE 2 - LEASES On January 1, 2019, we adopted ASU 2016-02, "Leases (Topic 842)" (ASC 842), which supersedes the lease accounting requirements in ASC Topic 840, "Leases". The new standard requires entities to recognize, separately from each other, an asset for its right to use (ROU) the underlying asset equal to the liability for its finance and operating lease obligations. Further, the company is required to present separately the current and non-current portion of the ROU asset and corresponding lease liability. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842)" Targeted Improvements, which provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard. We have elected to adopt using this optional transition method. We determine if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Our lease portfolio consists primarily of real estate, mobile equipment at our manufacturing facilities, railcars to transport our products, and a fleet of vehicles. As part of our adoption of ASC 842, we have also elected to apply the following practical expedients as permitted under the new standard:
• | Package of practical expedients - we will not reassess whether expiring or existing contracts contain a lease, will not reassess the classification of expired or existing leases, and will not reassess whether lease initial direct costs would qualify for capitalization under the new lease accounting standard.
• | Lease and non-lease components as lessee - for leases across all asset classes in which we are a lessee, we will not separate non-lease components from lease components and instead will account for each separate lease component and the non-lease components associated with that lease component as a single lease component.
• | Short-term leases - we have elected not to recognize ROU assets and lease liabilities for short-term leases across all asset classes that have a lease term of 12 months or less. We recognize the lease payments associated with our short-term leases as an expense on a straight-line basis over the lease term.
Key estimates and judgments include how we determined the discount rate used to record the unpaid lease payments at present value and lease term.
• | ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of our leases do not provide an implicit rate, we used our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
• | The lease term for all of our leases includes the noncancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that we are reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
Quantitative Information
|  | Classification |  | March 31, 2019
Consolidated Balance Sheet |  |  |  |
Assets: |  |  |  |
Operating lease assets |  | Operating lease assets |  | $ | 23 |
Finance lease assets |  | Property, plant, and equipment, net |  | 2 |
Total lease assets |  |  |  | $ | 24 |
Liabilities: |  |  |  |
Current |  |  |  |
Operating |  | Accounts payable and accrued liabilities |  | $ | 8 |
Finance |  | Current portion of long-term debt |  | 1 |
Noncurrent |  |  |  |
Operating |  | Noncurrent operating lease liabilities |  | 14 |
Finance |  | Long-term debt, excluding current portion |  | 1 |
Total lease liabilities |  |  |  | $ | 24 |
Consolidated Statement of Income |  |  |  |
Lease Cost: |  |  |  |
Operating lease cost |  | Cost of sales and Selling, general and administrative expenses |  | $ | 2 |
Finance lease cost |  |  |  |
Amortization of leased assets |  | Cost of sales |  | — |
Interest on lease liabilities |  | Interest expense, net of capitalized interest |  | — |
Total lease cost |  |  |  | $ | 2 |
Maturity of Lease Liabilities |  | Operating Leases |  | Finance Leases |  | Total
2019 |  | $ | 7 |  |  | $ | — |  |  | $ | 7 |
2020 |  | 8 |  |  | — |  |  | 8 |
2021 |  | 5 |  |  | — |  |  | 6 |
2022 |  | 3 |  |  | — |  |  | 3 |
2023 |  | 1 |  |  | — |  |  | 1 |
2024 and thereafter |  | — |  |  | — |  |  | — |
Total lease payments |  | 24 |  |  | 2 |  |  | 25 |
Less: Interest |  | (1 | ) |  | — |  |  | (1 | )
Present value of lease liabilities |  | $ | 23 |  |  | $ | 2 |  |  | $ | 24 |
Lease Term and Discount Rate |  | March 31, 2019
Weighted-average remaining lease term (years) |  |
Operating leases |  | 3.2 |
Finance leases |  | 3.4 |
Weighted-average discount rate |  |
Operating leases |  | 4.6 | %
Finance leases |  | 4.3 | %
Other Information |  | March 31, 2019
Short-term lease cost |  | $ | 1 |
Variable lease cost |  | 6 |
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from finance leases |  | — |
Operating cash flows from operating leases |  | 2 |
Financing cash flows from finance leases |  | — |
Right-of-use assets obtained in exchange for new operating lease liabilities |  | 6 |
Right-of-use assets obtained in exchange for new financing lease liabilities |  | 1 |
Shown in the table below are future minimum operating lease commitments as of December 31, 2018, as disclosed in our 2018 Form 10-K, prior to adoption of the new lease standard.
Dollar amounts in millions |
Year ended December 31, |
2019 | $ | 8 |
2020 | 7 |
2021 | 5 |
2022 | 2 |
2023 | — |
2024 and thereafter | — |
Total | $ | 22 |
Quantitative Information
|  | Classification |  | March 31, 2019
Consolidated Balance Sheet |  |  |  |
Assets: |  |  |  |
Operating lease assets |  | Operating lease assets |  | $ | 23 |
Finance lease assets |  | Property, plant, and equipment, net |  | 2 |
Total lease assets |  |  |  | $ | 24 |
Liabilities: |  |  |  |
Current |  |  |  |
Operating |  | Accounts payable and accrued liabilities |  | $ | 8 |
Finance |  | Current portion of long-term debt |  | 1 |
Noncurrent |  |  |  |
Operating |  | Noncurrent operating lease liabilities |  | 14 |
Finance |  | Long-term debt, excluding current portion |  | 1 |
Total lease liabilities |  |  |  | $ | 24 |
Consolidated Statement of Income |  |  |  |
Lease Cost: |  |  |  |
Operating lease cost |  | Cost of sales and Selling, general and administrative expenses |  | $ | 2 |
Finance lease cost |  |  |  |
Amortization of leased assets |  | Cost of sales |  | — |
Interest on lease liabilities |  | Interest expense, net of capitalized interest |  | — |
Total lease cost |  |  |  | $ | 2 |
Maturity of Lease Liabilities |  | Operating Leases |  | Finance Leases |  | Total
2019 |  | $ | 7 |  |  | $ | — |  |  | $ | 7 |
2020 |  | 8 |  |  | — |  |  | 8 |
2021 |  | 5 |  |  | — |  |  | 6 |
2022 |  | 3 |  |  | — |  |  | 3 |
2023 |  | 1 |  |  | — |  |  | 1 |
2024 and thereafter |  | — |  |  | — |  |  | — |
Total lease payments |  | 24 |  |  | 2 |  |  | 25 |
Less: Interest |  | (1 | ) |  | — |  |  | (1 | )
Present value of lease liabilities |  | $ | 23 |  |  | $ | 2 |  |  | $ | 24 |
Lease Term and Discount Rate |  | March 31, 2019
Weighted-average remaining lease term (years) |  |
Operating leases |  | 3.2 |
Finance leases |  | 3.4 |
Weighted-average discount rate |  |
Operating leases |  | 4.6 | %
Finance leases |  | 4.3 | %
Other Information |  | March 31, 2019
Short-term lease cost |  | $ | 1 |
Variable lease cost |  | 6 |
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from finance leases |  | — |
Operating cash flows from operating leases |  | 2 |
Financing cash flows from finance leases |  | — |
Right-of-use assets obtained in exchange for new operating lease liabilities |  | 6 |
Right-of-use assets obtained in exchange for new financing lease liabilities |  | 1 |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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