XML 32 R17.htm IDEA: XBRL DOCUMENT v3.20.2
Leasing
 6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
LEASING 10. LEASING
Lessee We lease property, vehicles and equipment under operating and financing leases.  For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. We determine the lease term by assuming the exercise of renewal options that are reasonably certain. Leases with a lease term 12 months or less at inception are not recorded on our Condensed Consolidated Balance Sheet and are expensed on a straight-line basis over the lease term in our Condensed Consolidated Statement of Operations. Our leases may include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Our incremental borrowing rate is based on a credit-adjusted risk-free rate at commencement date, which best approximates a secured rate over a similar term of lease. Additionally, we do not separate lease and non-lease components for any asset classes, except for those leases embedded in certain service arrangements. Fixed and in-substance fixed payments are included in the recognition of the operating and financing assets and lease liabilities, however, variable lease payments, other than those based on a rate or index, are recognized in the Condensed Consolidated Statements of Operations in the period in which the obligation for those payments is incurred. The Company’s variable lease payments generally relate to payments tied to various indices, non-lease components and payments above a contractual minimum fixed payment.

The following table presents our lease balances as of June 30, 2020 and December 31, 2019:
In millionsLocation in the Condensed Consolidated Balance SheetJune 30, 2020December 31, 2019
Assets
       Operating lease assetsOperating lease assets$347  $391  
       Finance lease assetsProperty, plant and equipment, net54  38  
       Accumulated Amortization of Finance lease assetsProperty, plant and equipment, net(12) (5) 
Total leased assets$389  $424  
Liabilities
Current
       Operating lease liabilitiesOther current liabilities$83  $91  
       Finance lease liabilitiesOther current liabilities14  10  
Noncurrent
       Operating lease liabilitiesOperating lease liabilities334  369  
       Finance lease liabilitiesOther liabilities31  25  
Total lease liabilities$462  $495  

The following tables present our lease costs for operating and finance leases:
In millionsThree months ended June 30, 2020Six months ended June 30, 2020
Operating lease cost$30  $62  
Finance lease cost
       Amortization of leased assets3  6  
  Interest on lease liabilities1  1  
Short-Term lease cost1  2  
Variable lease cost9  16  
      Total lease cost$44  $87  


In millionsFor the three months ended June 30, 2019For the six months ended June 30, 2019
Operating lease cost$34  $69  
Finance lease cost
Amortization of leased assets1  1  
Interest on lease liabilities—  —  
Short-Term lease cost1  3  
Variable lease cost7  16  
Total lease cost$43  $89  

The following tables present the supplemental cash flow information:
In millionsThree months ended June 30, 2020Six months ended June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
         Operating cash flows from operating leases$31  $61  
         Operating cash flows from finance leases$1  $1  
         Financing cash flows from finance leases$3  $6  
Lease Assets Obtained in Exchange for Lease Obligations
Operating Leases$4  $2  
Finance Leases$7  $15  

In millionsFor the three months ended June 30, 2019For the six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
         Operating cash flows from operating leases$38  $70  
         Operating cash flows from finance leases$—  $—  
         Financing cash flows from finance leases$—  $—  
Lease Assets Obtained in Exchange for Lease Obligations
Operating Leases$8  $20  
Finance Leases$8  $9  

The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the Condensed Consolidated Balance Sheet as of June 30, 2020:
In millionsOperating LeasesFinance Leases
Remainder of 2020$59  $8  
202189  16  
202267  15  
202345  8  
202438  1  
Thereafter271  —  
Total lease payments569  48  
Less: Amount representing interest(152) (3) 
Present value of lease liabilities$417  $45  

As of June 30, 2020, we have additional operating leases of $69 million, primarily for a real estate lease in Europe, that have not yet commenced. This operating lease is expected to commence in 2021 with a lease term of 10 years.

The following table presents the weighted average remaining lease term and interest rates:
June 30, 2020December 31, 2019
Weighted average lease term:
       Operating leases9.1 years8.9 years
       Finance leases3.1 years3.4 years
Weighted average interest rates:
       Operating leases6.45 %6.42 %
       Finance leases4.44 %3.72 %
Lessor We have various arrangements for certain point-of-sale equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material.
LEASING 10. LEASING
Lessee We lease property, vehicles and equipment under operating and financing leases.  For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. We determine the lease term by assuming the exercise of renewal options that are reasonably certain. Leases with a lease term 12 months or less at inception are not recorded on our Condensed Consolidated Balance Sheet and are expensed on a straight-line basis over the lease term in our Condensed Consolidated Statement of Operations. Our leases may include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Our incremental borrowing rate is based on a credit-adjusted risk-free rate at commencement date, which best approximates a secured rate over a similar term of lease. Additionally, we do not separate lease and non-lease components for any asset classes, except for those leases embedded in certain service arrangements. Fixed and in-substance fixed payments are included in the recognition of the operating and financing assets and lease liabilities, however, variable lease payments, other than those based on a rate or index, are recognized in the Condensed Consolidated Statements of Operations in the period in which the obligation for those payments is incurred. The Company’s variable lease payments generally relate to payments tied to various indices, non-lease components and payments above a contractual minimum fixed payment.

The following table presents our lease balances as of June 30, 2020 and December 31, 2019:
In millionsLocation in the Condensed Consolidated Balance SheetJune 30, 2020December 31, 2019
Assets
       Operating lease assetsOperating lease assets$347  $391  
       Finance lease assetsProperty, plant and equipment, net54  38  
       Accumulated Amortization of Finance lease assetsProperty, plant and equipment, net(12) (5) 
Total leased assets$389  $424  
Liabilities
Current
       Operating lease liabilitiesOther current liabilities$83  $91  
       Finance lease liabilitiesOther current liabilities14  10  
Noncurrent
       Operating lease liabilitiesOperating lease liabilities334  369  
       Finance lease liabilitiesOther liabilities31  25  
Total lease liabilities$462  $495  

The following tables present our lease costs for operating and finance leases:
In millionsThree months ended June 30, 2020Six months ended June 30, 2020
Operating lease cost$30  $62  
Finance lease cost
       Amortization of leased assets3  6  
  Interest on lease liabilities1  1  
Short-Term lease cost1  2  
Variable lease cost9  16  
      Total lease cost$44  $87  


In millionsFor the three months ended June 30, 2019For the six months ended June 30, 2019
Operating lease cost$34  $69  
Finance lease cost
Amortization of leased assets1  1  
Interest on lease liabilities—  —  
Short-Term lease cost1  3  
Variable lease cost7  16  
Total lease cost$43  $89  

The following tables present the supplemental cash flow information:
In millionsThree months ended June 30, 2020Six months ended June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
         Operating cash flows from operating leases$31  $61  
         Operating cash flows from finance leases$1  $1  
         Financing cash flows from finance leases$3  $6  
Lease Assets Obtained in Exchange for Lease Obligations
Operating Leases$4  $2  
Finance Leases$7  $15  

In millionsFor the three months ended June 30, 2019For the six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
         Operating cash flows from operating leases$38  $70  
         Operating cash flows from finance leases$—  $—  
         Financing cash flows from finance leases$—  $—  
Lease Assets Obtained in Exchange for Lease Obligations
Operating Leases$8  $20  
Finance Leases$8  $9  

The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the Condensed Consolidated Balance Sheet as of June 30, 2020:
In millionsOperating LeasesFinance Leases
Remainder of 2020$59  $8  
202189  16  
202267  15  
202345  8  
202438  1  
Thereafter271  —  
Total lease payments569  48  
Less: Amount representing interest(152) (3) 
Present value of lease liabilities$417  $45  

As of June 30, 2020, we have additional operating leases of $69 million, primarily for a real estate lease in Europe, that have not yet commenced. This operating lease is expected to commence in 2021 with a lease term of 10 years.

The following table presents the weighted average remaining lease term and interest rates:
June 30, 2020December 31, 2019
Weighted average lease term:
       Operating leases9.1 years8.9 years
       Finance leases3.1 years3.4 years
Weighted average interest rates:
       Operating leases6.45 %6.42 %
       Finance leases4.44 %3.72 %
Lessor We have various arrangements for certain point-of-sale equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material.