Leases

6 Months Ended

Jun. 30, 2019

The Company has operating and finance leases for land and buildings related to certain manufacturing facilities, warehouses and corporate offices, vehicle fleets and certain office and manufacturing equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company's lease terms include options to extend the lease when it is reasonably certain that the Company will exercise the option. Variable lease payment amounts that cannot be determined at commencement of the lease, such as increases in index rates, are not included in the measurement of the lease liabilities and corresponding right-of-use assets and are recognized in the period those payments are incurred. The Company separates lease and non-lease components of lease arrangements and allocates contract consideration based on standalone selling prices. Variable consideration is allocated to the lease and non-lease components to which the variable payments specifically relate to. The discount rate implicit within the Company's leases is often not determinable and therefore the Company generally uses its incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of the lease payments. The incremental borrowing rate is determined based on lease term and currency in which lease payments are made. The Company's leases do not contain any material residual value guarantees or material restrictive covenants. At June 30, 2019, the Company does not have material lease commitments that have not commenced.

The components of lease expense were as follows:



	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
Operating lease costs:
Operating lease cost	$	11	$	24
Short-term lease cost	1		3
Total operating lease costs	$	12	$	27

Finance lease cost:
Amortization of right-of-use assets	$	—	$	1
Total finance lease costs	$	—	$	1

Variable operating lease costs were $1 for the three and six months ended June 30, 2019. Interest on finance lease liabilities was less than $1 for the three and six months ended June 30, 2019.

Supplemental cash flow information related to leases was as follows:



	Six Months Ended
	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	27
Financing cash flows from finance leases	14
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	13

Operating cash flows from finance leases were less than $1 for the six months ended June 30, 2019.

Supplemental balance sheet information related to leases was as follows:



	June 30, 2019
Operating Leases:
Operating lease right-of-use assets	$	209

Current portion of operating lease liabilities	$	47
Non-current portion of operating lease liabilities	165
Total operating lease liabilities	$	212

Finance leases:
Property, plant and equipment	$	29
Accumulated depreciation	(3		)
Property, plant and equipment, net	$	26

Accrued liabilities	$	2
Other non-current liabilities	13
Total finance lease liabilities	$	15

Weighted average remaining lease term:
Operating leases	9.8 years
Finance leases	7.3 years
Weighted average discount rate:
Operating leases	4.3		%
Finance leases	3.5		%

Maturities of lease liabilities as of June 30, 2019 were as follows:



	Operating Leases			Finance Leases
2019	$	35		$	2
2020	43			3
2021	33			2
2022	25			2
2023	20			2
Thereafter	114			6
Total lease payments	270			17
Less imputed interest	(58		)	(2		)
Total	$	212		$	15

Maturities of lease liabilities as of December 31, 2018 were as follows:



	Operating Leases		Finance Leases
2019	$	54	$	5
2020	42		5
2021	34		5
2022	26		4
2023	21		4
Thereafter	117		6
Total lease payments	$	294	$	29

Leases