Leases

12 Months Ended

Dec. 31, 2019

AbbVie's lease portfolio primarily consists of real estate properties, vehicles and equipment. The following table summarizes the amounts and location of operating and finance leases on the consolidated balance sheet:



(in millions)	Balance sheet caption	December 31, 2019
Assets
Operating	Other assets	$	344
Finance	Property and equipment, net	23
Total lease assets		$	367
Liabilities
Operating
Current	Accounts payable and accrued liabilities	$	109
Noncurrent	Other long-term liabilities	251
Finance
Current	Current portion of long-term debt and finance lease obligations	7
Noncurrent	Long-term debt and finance lease obligations	20
Total lease liabilities		$	387

The following table summarizes the lease costs recognized in the consolidated statement of earnings:



year ended December 31 (in millions)	2019
Operating lease cost	$	124
Short-term lease cost	34
Variable lease cost	62
Total lease cost	$	220

Sublease income and finance lease costs were insignificant in 2019. Lease expense prior to the adoption of ASU No. 2016-02 was $161 million in 2018 and $169 million in 2017.

The following table presents the weighted-average remaining lease term and weighted-average discount rate for operating and finance leases:



	December 31, 2019
Weighted-average remaining lease term (years)
Operating	5
Finance	3
Weighted-average discount rate
Operating	3.9	%
Finance	3.9	%

The following table presents supplementary cash flow information regarding the company's leases:



year ended December 31 (in millions)	2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	125
Right-of-use assets obtained in exchange for new operating lease liabilities	26

Finance lease cash flows were insignificant in 2019.

The following table summarizes the future maturities of AbbVie's operating and finance lease liabilities as of December 31, 2019:



(in millions)	Operating leases		Finance leases		Total ^(a)(b)
2020	$	119	$	10	$	129
2021	104		9		113
2022	59		8		67
2023	38		1		39
2024	22		—		22
Thereafter	58		—		58
Total lease payments	400		28		428
Less: Interest	40		1		41
Present value of lease liabilities	$	360	$	27	$	387


(a)	Total lease payments exclude approximately $350 million of contractual minimum lease payments for leases executed but not yet commenced. These leases will commence in 2020 with lease terms of approximately 11 years.


(b)	Lease payments recognized as part of lease liabilities for optional renewal periods are insignificant.

Future minimum lease payments for non-cancelable operating leases and capital leases as of December 31, 2018 prior to the adoption of ASU No. 2016-02 did not differ materially from future lease payments, inclusive of payments for leases executed but not yet commenced, under the new standard.