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Leases | 3 Months Ended
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Mar. 31, 2019
Leases [Abstract] |
Leases | LEASES We determine if an arrangement is or contains a lease at inception. We enter into leases primarily for our wholesale distribution facilities, manufacturing equipment, administrative offices, retail stores, vehicles and data processing equipment under varying terms and conditions. Our leases have remaining lease terms of less than 1 year to approximately 50 years. Most of our leases include options to extend the lease, with renewal terms ranging from 1 to 50 years or more, and some include options to terminate the lease within 1 year. If it is reasonably certain that an option to extend or terminate a lease will be exercised, that option is considered in the lease term at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize short-term lease expense for these leases on a straight-line basis over the lease term. Certain of our lease agreements include variable lease payments, generally based on consumer price indices. Variable lease payments that are assigned to an index are determined based on the initial index at commencement, and the variability based on changes in the index is accounted for as it changes. The variable portion of payments is not included in the initial measurement of the right-of-use asset or lease liability due to the uncertainty of the payment amount and are recorded as lease expense in the period incurred. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have lease agreements with lease and non-lease components, which are accounted for separately. Operating leases are included in Operating Lease Right-of-Use (“ROU”) Assets, Operating Lease Liabilities due Within One Year and Operating Lease Liabilities on our Consolidated Balance Sheets. Finance leases are included in Property, Plant and Equipment, Long Term Debt and Finance Leases due Within One Year, and Long Term Debt and Finance Leases on our Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Generally, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments, unless there is a rate implicit in the lease agreement. Operating lease cost is recognized on a straight-line basis over the lease term. The components of lease expense included in Income (Loss) before Income Taxes are as follows:
| Three Months Ended
| March 31,
(In millions) | 2019
Operating Lease Cost | $ | 74 |
Finance Lease Cost |
Amortization of ROU Assets | 2 |
Interest on Lease Liabilities | 5 |
Short Term Lease Cost | 1 |
Variable Lease Cost | 2 |
Sublease Income | (4 | )
Total Lease Cost | $ | 80 |
Supplemental cash flow information related to leases is as follows:
| Three Months Ended
| March 31,
(In millions) | 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities |
Operating Cash Flows for Operating Leases | $ | 71 |
Operating Cash Flows for Finance Leases | 5 |
Financing Cash Flows for Finance Leases | 2 |
ROU Assets Obtained in Exchange for Lease Obligations |
Operating Leases | 37 |
Finance Leases | 28 |
Supplemental balance sheet information related to leases is as follows:
| March 31,
(In millions, except lease term and discount rate) | 2019
Operating Leases |
Operating Lease ROU Assets | $ | 862 |
Operating Lease Liabilities due Within One Year | $ | 203 |
Operating Lease Liabilities | 667 |
Total Operating Lease Liabilities | $ | 870 |
Finance Leases |
Property, Plant and Equipment, at cost | $ | 263 |
Accumulated Depreciation | 52 |
Property, Plant and Equipment, net | $ | 211 |
Long Term Debt and Finance Leases due Within One Year | $ | 5 |
Long Term Debt and Finance Leases | 240 |
Total Finance Lease Liabilities | $ | 245 |
Weighted Average Remaining Lease Term |
Operating Leases | 6.9 years |
Finance Leases | 32.4 years |
Weighted Average Discount Rate |
Operating Leases | 6.71 | %
Finance Leases | 8.44 | %
Future maturities of our lease liabilities, excluding subleases, as of March 31, 2019 are as follows:
(In millions) | Operating Leases |  | Finance Leases
2019 (excluding the three months ended March 31) | $ | 190 |  |  | $ | 19 |
2020 | 213 |  |  | 23 |
2021 | 162 |  |  | 34 |
2022 | 113 |  |  | 21 |
2023 | 86 |  |  | 20 |
Thereafter | 359 |  |  | 706 |
Total Lease Payments | 1,123 |  |  | 823 |
Less: Imputed Interest | 253 |  |  | 578 |
Total | $ | 870 |  |  | $ | 245 |
Future maturities of our lease liabilities as of December 31, 2018 were as follows:
|  |  |  |  |  |  |  |  |  |  | 2024 and |  |
(In millions) | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | Beyond |  | Total
Capital Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum lease payments | $ | 8 |  |  | $ | 7 |  |  | $ | 18 |  |  | $ | 3 |  |  | $ | 2 |  |  | $ | 23 |  |  | $ | 61 |
Imputed interest | (3 | ) |  | (3 | ) |  | (3 | ) |  | (1 | ) |  | (1 | ) |  | (13 | ) |  | (24 | )
Present value | $ | 5 |  |  | $ | 4 |  |  | $ | 15 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 10 |  |  | $ | 37 |
Operating Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum lease payments | $ | 266 |  |  | $ | 214 |  |  | $ | 161 |  |  | $ | 110 |  |  | $ | 84 |  |  | $ | 391 |  |  | $ | 1,226 |
Minimum sublease rentals | (15 | ) |  | (12 | ) |  | (8 | ) |  | (5 | ) |  | (3 | ) |  | (6 | ) |  | (49 | )
| $ | 251 |  |  | $ | 202 |  |  | $ | 153 |  |  | $ | 105 |  |  | $ | 81 |  |  | $ | 385 |  |  | $ | 1,177 |
Imputed interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (263 | )
Present value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 914 |
As of March 31, 2019, we have additional operating leases that have not yet commenced for which the present value of lease payments over the respective lease terms totals $33 million. Accordingly, these leases are not recorded on the Consolidated Balance Sheet at March 31, 2019. These operating leases will commence between 2019 and 2022 with lease terms of 1 year to 15 years.
Leases | LEASES We determine if an arrangement is or contains a lease at inception. We enter into leases primarily for our wholesale distribution facilities, manufacturing equipment, administrative offices, retail stores, vehicles and data processing equipment under varying terms and conditions. Our leases have remaining lease terms of less than 1 year to approximately 50 years. Most of our leases include options to extend the lease, with renewal terms ranging from 1 to 50 years or more, and some include options to terminate the lease within 1 year. If it is reasonably certain that an option to extend or terminate a lease will be exercised, that option is considered in the lease term at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize short-term lease expense for these leases on a straight-line basis over the lease term. Certain of our lease agreements include variable lease payments, generally based on consumer price indices. Variable lease payments that are assigned to an index are determined based on the initial index at commencement, and the variability based on changes in the index is accounted for as it changes. The variable portion of payments is not included in the initial measurement of the right-of-use asset or lease liability due to the uncertainty of the payment amount and are recorded as lease expense in the period incurred. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have lease agreements with lease and non-lease components, which are accounted for separately. Operating leases are included in Operating Lease Right-of-Use (“ROU”) Assets, Operating Lease Liabilities due Within One Year and Operating Lease Liabilities on our Consolidated Balance Sheets. Finance leases are included in Property, Plant and Equipment, Long Term Debt and Finance Leases due Within One Year, and Long Term Debt and Finance Leases on our Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Generally, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments, unless there is a rate implicit in the lease agreement. Operating lease cost is recognized on a straight-line basis over the lease term. The components of lease expense included in Income (Loss) before Income Taxes are as follows:
| Three Months Ended
| March 31,
(In millions) | 2019
Operating Lease Cost | $ | 74 |
Finance Lease Cost |
Amortization of ROU Assets | 2 |
Interest on Lease Liabilities | 5 |
Short Term Lease Cost | 1 |
Variable Lease Cost | 2 |
Sublease Income | (4 | )
Total Lease Cost | $ | 80 |
Supplemental cash flow information related to leases is as follows:
| Three Months Ended
| March 31,
(In millions) | 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities |
Operating Cash Flows for Operating Leases | $ | 71 |
Operating Cash Flows for Finance Leases | 5 |
Financing Cash Flows for Finance Leases | 2 |
ROU Assets Obtained in Exchange for Lease Obligations |
Operating Leases | 37 |
Finance Leases | 28 |
Supplemental balance sheet information related to leases is as follows:
| March 31,
(In millions, except lease term and discount rate) | 2019
Operating Leases |
Operating Lease ROU Assets | $ | 862 |
Operating Lease Liabilities due Within One Year | $ | 203 |
Operating Lease Liabilities | 667 |
Total Operating Lease Liabilities | $ | 870 |
Finance Leases |
Property, Plant and Equipment, at cost | $ | 263 |
Accumulated Depreciation | 52 |
Property, Plant and Equipment, net | $ | 211 |
Long Term Debt and Finance Leases due Within One Year | $ | 5 |
Long Term Debt and Finance Leases | 240 |
Total Finance Lease Liabilities | $ | 245 |
Weighted Average Remaining Lease Term |
Operating Leases | 6.9 years |
Finance Leases | 32.4 years |
Weighted Average Discount Rate |
Operating Leases | 6.71 | %
Finance Leases | 8.44 | %
Future maturities of our lease liabilities, excluding subleases, as of March 31, 2019 are as follows:
(In millions) | Operating Leases |  | Finance Leases
2019 (excluding the three months ended March 31) | $ | 190 |  |  | $ | 19 |
2020 | 213 |  |  | 23 |
2021 | 162 |  |  | 34 |
2022 | 113 |  |  | 21 |
2023 | 86 |  |  | 20 |
Thereafter | 359 |  |  | 706 |
Total Lease Payments | 1,123 |  |  | 823 |
Less: Imputed Interest | 253 |  |  | 578 |
Total | $ | 870 |  |  | $ | 245 |
Future maturities of our lease liabilities as of December 31, 2018 were as follows:
|  |  |  |  |  |  |  |  |  |  | 2024 and |  |
(In millions) | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | Beyond |  | Total
Capital Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum lease payments | $ | 8 |  |  | $ | 7 |  |  | $ | 18 |  |  | $ | 3 |  |  | $ | 2 |  |  | $ | 23 |  |  | $ | 61 |
Imputed interest | (3 | ) |  | (3 | ) |  | (3 | ) |  | (1 | ) |  | (1 | ) |  | (13 | ) |  | (24 | )
Present value | $ | 5 |  |  | $ | 4 |  |  | $ | 15 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 10 |  |  | $ | 37 |
Operating Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum lease payments | $ | 266 |  |  | $ | 214 |  |  | $ | 161 |  |  | $ | 110 |  |  | $ | 84 |  |  | $ | 391 |  |  | $ | 1,226 |
Minimum sublease rentals | (15 | ) |  | (12 | ) |  | (8 | ) |  | (5 | ) |  | (3 | ) |  | (6 | ) |  | (49 | )
| $ | 251 |  |  | $ | 202 |  |  | $ | 153 |  |  | $ | 105 |  |  | $ | 81 |  |  | $ | 385 |  |  | $ | 1,177 |
Imputed interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (263 | )
Present value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 914 |
As of March 31, 2019, we have additional operating leases that have not yet commenced for which the present value of lease payments over the respective lease terms totals $33 million. Accordingly, these leases are not recorded on the Consolidated Balance Sheet at March 31, 2019. These operating leases will commence between 2019 and 2022 with lease terms of 1 year to 15 years.

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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 + Details
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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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