LEASES

12 Months Ended

Dec. 31, 2021

NOTE 17: LEASES

We account for leases in accordance with ASC Topic 842, Leases, which we adopted on January 1, 2019 using the modified retrospective transition approach at the beginning of the adoption period through a cumulative-effect adjustment to retained earnings. This adoption resulted in the recognition of right-of-use assets ("ROU assets") of $165 million and lease liabilities of $172 million, with the difference of $7 million recorded to "Retained earnings", on our Consolidated Balance Sheet on January 1, 2019.

The majority of our operating leases are related to our office and warehouse space, and the majority of our financing leases are related to vehicles and forklifts. Our leases have remaining lease terms of approximately 1 year to 25 years. Options to renew, extend or terminate a lease are reflected in our lease terms when we believe it is reasonably certain we will exercise that option. When our leases do not provide an implicit or an explicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments.

Lease Expense

DOLLAR AMOUNTS IN MILLIONS
	2021		2020		2019
Operating lease costs	$	20	$	21	$	20
Financing lease costs		9		12		15

Total lease costs	$	29	$	33	$	35

Supplemental Cash Flow Information

DOLLAR AMOUNTS IN MILLIONS
	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	19	$	20	$	20
Financing cash flows for financing leases⁽¹⁾	$	11	$	13	$	16
ROU assets obtained in exchange for new (modified) lease liabilities:
Operating leases	$	9	$	3	$	6
Financing leases	$	4	$	4	$	5

(1)	Interest expense related to financing leases was immaterial during 2021, 2020 and 2019.

Supplemental Balance Sheet Information Related to Leases

DOLLAR AMOUNTS IN MILLIONS
		DECEMBER 31, 2021		DECEMBER 31, 2020
LEASES	BALANCE SHEET CLASSIFICATION
Assets
Operating lease ROU assets	Other assets	$	101	$	106
Financing lease ROU assets	Property and equipment, net		13		19

Total leased assets		$	114	$	125

Liabilities
Current:
Operating lease liabilities	Accrued liabilities	$	17	$	16
Financing lease liabilities	Accrued liabilities		7		10
Noncurrent:
Operating lease liabilities	Other liabilities		90		95
Financing lease liabilities	Other liabilities		8		12

Total lease liabilities		$	122	$	133

Weighted Average Remaining Lease Term

Weighted Average Discount Rate


	DECEMBER 31, 2021			DECEMBER 31, 2020
Operating leases		4.1	%		4.2	%
Financing leases		2.9	%		3.1	%

Maturities of Lease Liabilities as of December 31, 2021

DOLLAR AMOUNTS IN MILLIONS
	OPERATING LEASES			FINANCING LEASES
2022	$	21		$	8
2023		19			5
2024		13			2
2025		12			1
2026		12			—
Thereafter		50			—

Total lease payments		127			16
Less: interest		(20	)		(1	)

Total present value of lease liabilities	$	107		$	15

DECEMBER 31,

2021

DECEMBER 31,

2020

Operating leases

Financing leases