Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Leases

The Company has operating and finance leases for real estate and equipment. Generally, the leases have remaining terms of one month to ten years. Leases with an initial term of 12 months or less, which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

In addition, some leases include options to terminate the lease. The Company generally negotiates these termination clauses in anticipation of any changes in market conditions; however, because a termination option requires approval from management, the Company assumes the majority of its termination options will not be exercised when determining the lease term.

Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable portion of lease payments is not included in the computation of the right-of-use assets or lease liabilities. Rather, variable payments, other than those dependent upon a market index or rate, are expensed when the obligation for those payments is incurred and are included in “Cost of sales (exclusive of depreciation and amortization)”, “Selling, general, and administrative” and “Engineering, research, and development” within the consolidated statements of income (loss).

The Company’s lease agreements do not include significant restrictions or covenants and residual value guarantees are generally not included within its operating leases.

The components of lease expense were as follows:

	Year Ended December 31
	2021		2020		2019
Operating lease expense	$	126	$	122	$	131
Finance lease expense (amortization of right-of-use assets)	5		2		1
Short-term lease expense	8		6		13
Variable lease expense	6		24		26
Sublease income	(4)		(1)		(1)
Total lease expense	$	141	$	153	$	170

Other information related to leases was as follows:

	Year Ended December 31
	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	126	$	143	$	160
Financing cash flows from finance leases	$	4	$	2	$	1
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	94	$	98	$	170
Finance leases	$	6	$	7	$	—

Supplemental balance sheet information related to leases was as follows:

	December 31
	2021		2020
Operating leases
Other assets	$	319	$	328
Accrued expenses and other current liabilities	$	92	$	95
Deferred credits and other liabilities	240		241
Total operating lease liabilities	$	332	$	336
Finance leases
Property, plant and equipment, cost	$	24	$	13
Accumulated depreciation and amortization	(10)		(6)
Total finance lease right-of-use assets	$	14	$	7
Short-term debt, including current maturities of long-term debt	$	4	$	3
Long-term debt	9		5
Total finance lease liabilities	$	13	$	8

Maturities of lease liabilities under non-cancellable leases at December 31, 2021 were as follows:

Year ending December 31	Operating leases		Finance leases
2022	$	100	$	5
2023	79		4
2024	53		3
2025	37		2
2026	25		—
Thereafter	68		—
Total future undiscounted lease payments	362		14
Less: imputed interest	(30)		(1)
Total reported lease liability	$	332	$	13

	December 31
	2021			2020
	Weighted average remaining lease term (in years)	Weighted average discount rate		Weighted average remaining lease term (in years)	Weighted average discount rate
Operating leases	6.16	3.42	%	5.38	3.63	%
Finance leases	3.35	2.66	%	3.97	3.07	%

Leases

Leases

The Company has operating and finance leases for real estate and equipment. Generally, the leases have remaining terms of one month to ten years. Leases with an initial term of 12 months or less, which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

In addition, some leases include options to terminate the lease. The Company generally negotiates these termination clauses in anticipation of any changes in market conditions; however, because a termination option requires approval from management, the Company assumes the majority of its termination options will not be exercised when determining the lease term.

Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable portion of lease payments is not included in the computation of the right-of-use assets or lease liabilities. Rather, variable payments, other than those dependent upon a market index or rate, are expensed when the obligation for those payments is incurred and are included in “Cost of sales (exclusive of depreciation and amortization)”, “Selling, general, and administrative” and “Engineering, research, and development” within the consolidated statements of income (loss).

The Company’s lease agreements do not include significant restrictions or covenants and residual value guarantees are generally not included within its operating leases.

The components of lease expense were as follows:

	Year Ended December 31
	2021		2020		2019
Operating lease expense	$	126	$	122	$	131
Finance lease expense (amortization of right-of-use assets)	5		2		1
Short-term lease expense	8		6		13
Variable lease expense	6		24		26
Sublease income	(4)		(1)		(1)
Total lease expense	$	141	$	153	$	170

Other information related to leases was as follows:

	Year Ended December 31
	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	126	$	143	$	160
Financing cash flows from finance leases	$	4	$	2	$	1
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	94	$	98	$	170
Finance leases	$	6	$	7	$	—

Supplemental balance sheet information related to leases was as follows:

	December 31
	2021		2020
Operating leases
Other assets	$	319	$	328
Accrued expenses and other current liabilities	$	92	$	95
Deferred credits and other liabilities	240		241
Total operating lease liabilities	$	332	$	336
Finance leases
Property, plant and equipment, cost	$	24	$	13
Accumulated depreciation and amortization	(10)		(6)
Total finance lease right-of-use assets	$	14	$	7
Short-term debt, including current maturities of long-term debt	$	4	$	3
Long-term debt	9		5
Total finance lease liabilities	$	13	$	8

Maturities of lease liabilities under non-cancellable leases at December 31, 2021 were as follows:

Year ending December 31	Operating leases		Finance leases
2022	$	100	$	5
2023	79		4
2024	53		3
2025	37		2
2026	25		—
Thereafter	68		—
Total future undiscounted lease payments	362		14
Less: imputed interest	(30)		(1)
Total reported lease liability	$	332	$	13

	December 31
	2021			2020
	Weighted average remaining lease term (in years)	Weighted average discount rate		Weighted average remaining lease term (in years)	Weighted average discount rate
Operating leases	6.16	3.42	%	5.38	3.63	%
Finance leases	3.35	2.66	%	3.97	3.07	%