LEASES

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

LEASES

LEASES

Lessee

The Company has mainly operating lease contracts for buildings, plant and machinery, vehicles, IT equipment and machinery.

Leases with a term of 12 months or less are not recorded in the balance sheet. For these leases the Company recognized, on a straight-line basis over the lease term, lease expense of $3 million and $4 million in the three months ended March 31, 2020 and 2019, respectively.

For the three months ended March 31, 2020 and 2019, the Company incurred operating lease expenses of $35 million and $39 million, respectively.

At March 31, 2020, the Company has recorded approximately $419 million of right-of-use assets and $416 million of related lease liability included in Other Assets and Other Liabilities, respectively. At March 31, 2020, the weighted average remaining lease term (calculated on the basis of the remaining lease term and the lease liability balance for each lease) and the weighted average discount rate for operating leases were 7.0 years and 3.4%, respectively.

During the three months ended March 31, 2020 and 2019, leased assets obtained in exchange for operating lease obligations were $16 million and $18 million, respectively. The operating cash outflow for amounts included in the measurement of operating lease obligations was $36 million and $40 million as of March 31, 2020 and 2019, respectively.

Future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows:

Operating Leases	($ million)
2020 (excluding the three months ended March 31, 2020)	$	90
2021	95
2022	70
2023	53
2024	38
2025 and thereafter	124
Total future minimum lease payments	$	470
Less: Interest	(54)
Total	$	416

Lessor

The Company, primarily through its Financial Services segment, leases equipment and vehicles to retail customers under operating leases. Our leases typically have terms of 3 to 5 years with options available for the lessee to purchase the equipment at the lease term date. Revenue for non-lease components are accounted for separately.

The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date:

	Amount
	(in millions)
2020	$	200
2021	149
2022	82
2023	30
2024	8
2025 and thereafter	3
Total undiscounted lease payments	$	472

LEASES

LEASES

Lessee

The Company has mainly operating lease contracts for buildings, plant and machinery, vehicles, IT equipment and machinery.

Leases with a term of 12 months or less are not recorded in the balance sheet. For these leases the Company recognized, on a straight-line basis over the lease term, lease expense of $3 million and $4 million in the three months ended March 31, 2020 and 2019, respectively.

For the three months ended March 31, 2020 and 2019, the Company incurred operating lease expenses of $35 million and $39 million, respectively.

At March 31, 2020, the Company has recorded approximately $419 million of right-of-use assets and $416 million of related lease liability included in Other Assets and Other Liabilities, respectively. At March 31, 2020, the weighted average remaining lease term (calculated on the basis of the remaining lease term and the lease liability balance for each lease) and the weighted average discount rate for operating leases were 7.0 years and 3.4%, respectively.

During the three months ended March 31, 2020 and 2019, leased assets obtained in exchange for operating lease obligations were $16 million and $18 million, respectively. The operating cash outflow for amounts included in the measurement of operating lease obligations was $36 million and $40 million as of March 31, 2020 and 2019, respectively.

Future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows:

Operating Leases	($ million)
2020 (excluding the three months ended March 31, 2020)	$	90
2021	95
2022	70
2023	53
2024	38
2025 and thereafter	124
Total future minimum lease payments	$	470
Less: Interest	(54)
Total	$	416

Lessor

The Company, primarily through its Financial Services segment, leases equipment and vehicles to retail customers under operating leases. Our leases typically have terms of 3 to 5 years with options available for the lessee to purchase the equipment at the lease term date. Revenue for non-lease components are accounted for separately.

The following table sets out a maturity analysis of operating lease payments, showing the undiscounted lease payments to be received after the reporting date:

	Amount
	(in millions)
2020	$	200
2021	149
2022	82
2023	30
2024	8
2025 and thereafter	3
Total undiscounted lease payments	$	472