Leases

12 Months Ended

Dec. 31, 2019

Note 9.

Leases

The Company’s lease agreements primarily cover office facilities and machinery and equipment and expire at various dates. The Company’s leases are predominantly operating leases, which are included in Other assets and Other liabilities on the Consolidated Balance Sheet. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants.

Operating lease right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is typically the Company’s secured borrowing rate, as most of the Company’s leases do not provide an implicit rate. The Company’s operating lease right of use asset was $573

million and the Company’s operating lease liability was $694 million at December 31, 2019.

Total

lease

expense

was

146 million for the year ended December 31, 2019, which includes operating lease expense of

$121 million, variable lease

expense of

$19 million and short term lease

expense of

$6 million.

Prior to the adoption of the new lease standard, lease expense for the years ended December 31, 2018 and 2017 was

$120 million and $113 million. Cash paid for amounts included in operating lease liabilities was $117

million for year ended December 31, 2019. Operating lease right of use assets obtained in exchange for lease obligations was $54 million for the year ended December 31, 2019.

The table below presents the maturities of lease liabilities:


As of December 31, 2019	Operating Leases
(In millions)

2020	$	114
2021		113
2022		102
2023		89
2024		81
Thereafter		361

Total		860
Less: discount		166

Total lease liabilities	$	694

The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating the operating lease asset and liability.


As of December 31, 2019
Weighted average remaining lease term	9.4	Y ears
Weighted average discount rate	4.7	%

The table below presents the future minimum lease payments to be made under

non-cancelable

operating leases along with lease and sublease minimum receipts to be received on owned and leased properties as of December 31, 2018.


	Future Minimum Lease
Year Ended December 31	Payments		Receipts
(In millions)
2019	$	75	$	6
2020		79		5
2021		79		5
2022		68		4
2023		57		4
Thereafter		344		14

Total	$	702	$	38