Leases

12 Months Ended

Dec. 31, 2020

NOTE 8—Leases:

Teva adopted the new accounting standard ASC 842 “Leases” and all the 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, 2020 were as follows:


	Year ended December 31, 2020		Year ended December 31, 2019
	(U.S. $ in millions)		(U.S. $ in millions)
Operating lease cost:
Fixed payments and variable payments that depend on an index or rate	$	148	$	166
Variable lease payments not included in the lease liability		4		6
Short-term lease cost		3		6

		$155		$178

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


	Year ended December 31, 2020		Year ended December 31, 2019
	(U.S. $ in millions)		(U.S. $ in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	151	$	169
Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases	$	211	$	142

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


	December 31, 2020			December 31, 2019
	(U.S. $ in millions)			(U.S. $ in millions)
Operating leases:
Operating lease ROU assets	$	559		$	514
Other current liabilities		116			118
Operating lease liabilities		479			435

Total operating lease liabilities	$	595		$	553


	December 31,			December 31,
	2020			2019
Weighted average remaining lease term
Operating leases		7.5 years			7.5 years
Weighted average discount rate
Operating leases		5.2	%		6.0	%

Maturities of operating lease liabilities were as follows:


	December 31, 2020
	(U.S. $ in millions)
2021	$	137
2022		119
2023		91
2024		73
2025 and thereafter		302

Total operating lease payments	$	722

Less: imputed interest		127

Present value of lease liabilities	$	595

At the end of the third quarter of

2020

, after obtaining the right to use the building, Teva began transitioning its corporate headquarters to a consolidated site in Tel-Aviv, Israel. Teva has an operating lease for the office space in Tel Aviv for an initial term of twelve and a half years, with an option for three extensions. Teva estimates that the reasonably certain holding period of the lease for accounting purposes is twelve and a half years. As of September 30,

2020

upon initial recognition,

Teva booked $

million as operating lease right-of-use and $

million as operating lease liability.

As of December 31, 2020, Teva’s total finance lease assets and finance lease liabilities were

$29 million and $21

million, respectively. The difference between those amounts is mainly due to prepaid payments.