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Leases

12 Months Ended

Dec. 31, 2019

NOTE 8—Leases:

Teva adopted the new accounting standard ASC 842 “Leases” and all related amendments on January 1, 2019 and used the effective date as Teva’s date of initial application.

The components of operating lease cost for the year ended December 31, 2019 were as follows:


	Year ended December 31, 2019
	(U.S. $ in millions)
Operating lease cost:
Fixed payments and variable payments that depend on an index or rate	$	166
Variable lease payments not included in the lease liability		6
Short-term lease cost		6

Total operating lease cost	$	178

Supplemental cash flow information related to operating leases was as follows:


	Year ended December 31, 2019
	(U.S. $ in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	169

Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases	$	142

Supplemental balance sheet information related to operating leases was as follows:


	December 31, 2019
	(U.S. $ in millions)
Operating leases:
Operating lease ROU assets	$	514
Other current liabilities		118
Operating lease liabilities		435

Total operating lease liabilities	$	553

	December 31,
	2019
Weighted average remaining lease term
Operating leases		7.5 years
Weighted average discount rate
Operating leases		6.0	%

Maturities of operating lease liabilities were as follows:


	December 31,
	2019
	(U.S. $ in millions)
2020	$	146
2021		117
2022		92
2023		66
2024 and thereafter		298
Total operating lease payments	$	719
Less: imputed interest		166
Present value of lease liabilities	$	553

	December 31,
	2018
	(U.S. $ in millions)
According to ASC 840:
2019	$	193
2020		154
2021		118
2022		91
2023		66
2024 and thereafter		283
Total lease payments	$	905

As of December 31, 2019, Teva has additional operating leases for office space which have yet to commence, with undiscounted future payments of $92 million. These operating leases will commence during fiscal year 2020 with lease terms of 9 to 12 years.

On October 10, 2019, Teva entered into an agreement to sell and lease back the land and building of its distribution center in Israel. Net proceeds from the asset sale amounted to $128 million.

As of December 31, 2019, Teva’s total finance lease assets and finance lease liabilities

were

$37 million and $29 million, respectively. The difference between those amounts is mainly due to prepaid payments.