Leases

12 Months Ended

Dec. 31, 2020

8. Leases

The Company leases certain facilities and equipment to support its operations around the world. These leases generally require the Company to pay maintenance, insurance, taxes and other operating costs in addition to rent. Renewal options are common in longer term leases; however, it is rare that the Company intends to exercise a lease option at inception due to the cyclical nature of the Company’s business. Residual value guarantees are not typically part of the Company’s leases. Occasionally, the Company sub-leases excess facility space, generally at terms similar to the source lease. The Company reviews new agreements to determine if they include a lease and, when they do, uses its incremental borrowing rate to determine the present value of the future lease payments as most do not include implicit interest rates.

Components of leases are as follows (in millions):

	December 31,
	2020		2019
Current portion of lease liabilities:
Operating	$	82	$	84
Financing		28		30
Total	$	110	$	114

	December 31,
	2020		2019
Long-term portion of lease liability:
Operating	$	376	$	424
Financing		236		250
Total	$	612	$	674

Components of lease expense were as follows (in millions):

	Years Ended
	December 31, 2020			December 31, 2019
Lease cost
Finance lease cost
Amortization of right-of-use assets	$	31		$	32
Interest on lease liabilities		11			13
Operating lease cost		96			115
Short-term lease cost		64			68
Sub-lease income		(10	)		(11	)
Total	$	192		$	217

Supplemental information related to the Company’s leases is as follows (in millions):

	Years Ended
	December 31, 2020			December 31, 2019
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - finance leases	$	11		$	13
Operating cash flows - operating leases		96			115
Financing cash flows - finance leases		31			32
Right-of-use assets obtained in exchange for new:
Operating lease liabilities		47			53
Finance lease liabilities	$	16		$	12

Weighted average remaining lease term at December 31, 2020:
Operating leases	11 years			10 years
Finance leases	18 years			16 years
Weighted average discount rate at December 31, 2020:
Operating leases		4.93	%		4.48	%
Finance leases		3.92	%		4.58	%

Future minimum lease commitments for leases with initial or remaining terms of one year or more at December 31, 2020, are payable as follows (in millions):

	Operating			Finance
2021	$	101		$	36
2022		81			30
2023		64			23
2024		55			19
2025		44			18
Thereafter		245			228
Total lease payments		590			354
Less: Interest		(132	)		(90	)
Present value of lease liabilities	$	458		$	264