Leases (Notes)

12 Months Ended

Dec. 31, 2020

LEASES

The Company has operating leases for office space, warehouses, distribution centers, research and development facilities, manufacturing locations and certain equipment, primarily automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for up to 30 years, and some leases include options to terminate the leases within 30 days. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for common area maintenance, utilities, inflation and/or changes in other indexes. The Company’s finance leases were not material as of December 31, 2020 and 2019. Right-of-use (“ROU”) assets arising from finance leases are included in property, plant and equipment, net and the liabilities are included in notes payable and current portion of long-term debt and long-term debt in the accompanying Consolidated Balance Sheets.

The components of operating lease expense for the years ended December 31 were as follows ($ in millions):


	2020		2019
Fixed operating lease expense (a)	$	216	$	196
Variable operating lease expense	46		45
Total operating lease expense	$	262	$	241

(a) Includes short-term leases and sublease income, both of which were immaterial.

Supplemental cash flow information related to the Company’s operating leases for the years ended December 31 were as follows ($ in millions):


	2020		2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	221	$	202
ROU assets obtained in exchange for operating lease obligations	246		145

The following table presents the lease balances within the Consolidated Balance Sheets, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases as of December 31 ($ in millions):


		2020			2019
Lease Assets and Liabilities	Classification
Assets:
Operating lease ROU assets	Other long-term assets	$	942		$	764

Liabilities:
Current:
Operating lease liabilities	Accrued expenses and other liabilities	$	189		$	158
Long-term:
Operating lease liabilities	Other long-term liabilities	785			639
Total operating lease liabilities		$	974		$	797

Weighted average remaining lease term		7 years			7 years
Weighted average discount rate		2.8		%	3.1		%

The following table presents the maturity of the Company’s operating lease liabilities as of December 31, 2020 ($ in millions):


2021	$	213
2022	181
2023	151
2024	128
2025	105
Thereafter	302
Total operating lease payments	1,080
Less: imputed interest	106
Total operating lease liabilities	$	974

As of December 31, 2020, the Company had no additional significant operating or finance leases that had not yet commenced.

ASC 840 Comparative Disclosures

Total rent expense under ASC 840 for all operating leases was $234 million for the year ended December 31, 2018.