Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Leases

The Company has operating and finance leases for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment. The leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 month to 5 year(s). As of March 31, 2019, assets recorded under finance leases were $48 million, and accumulated depreciation associated with finance leases was $2 million.

The Company has elected the practical expedient not to separate lease components from non-lease components for all its underlying assets.

If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency.

The components of lease expense for the three months ended were as follows:

(in millions)	March 31, 2019
Operating lease cost	$	5
Finance lease cost
Amortization of right-of-use assets	1
Interest on lease liabilities	—
Total finance lease cost	1
Short-term lease cost	—
Variable lease cost	—
Total lease cost	$	6

Other information related to leases for the three months ended was as follows:

(in millions, except lease term and discount rate)	March 31, 2019
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases	$	4
Operating cash flows used for finance leases	—
Financing cash flows used for finance leases	—
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	4
Finance leases	33
Weighted-average remaining lease term
Operating Leases	7
Finance Leases	12
Weighted-average discount rate
Operating leases	4.1		%
Finance leases	4.9		%

Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows:

(in millions)	Operating Leases		Finance Leases
2019 (excluding the three months ended March 31, 2019)	$	13	$	2
2020	15		3
2021	12		14
2022	10		3
2023	8		3
Thereafter	24		38
Total lease payments	82		63
Less imputed interest	13		18
Total lease liabilities	$	69	$	45

Leases obligations reported as of March 31, 2019 were as follows:

(in millions)	Operating Leases		Finance Leases
Other current liabilities	$	13	$	1
Lease liabilities - non current	53		33
Total lease liabilities	$	66	$	34

As of March 31, 2019, the Company has additional obligations relating to operating leases, primarily for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment, that have not yet commenced of $39 million. These operating leases will commence during 2019 with lease terms of 2 years to 15 years.

Leases

Leases

The Company has operating and finance leases for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment. The leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 month to 5 year(s). As of March 31, 2019, assets recorded under finance leases were $48 million, and accumulated depreciation associated with finance leases was $2 million.

The Company has elected the practical expedient not to separate lease components from non-lease components for all its underlying assets.

If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency.

The components of lease expense for the three months ended were as follows:

(in millions)	March 31, 2019
Operating lease cost	$	5
Finance lease cost
Amortization of right-of-use assets	1
Interest on lease liabilities	—
Total finance lease cost	1
Short-term lease cost	—
Variable lease cost	—
Total lease cost	$	6

Other information related to leases for the three months ended was as follows:

(in millions, except lease term and discount rate)	March 31, 2019
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases	$	4
Operating cash flows used for finance leases	—
Financing cash flows used for finance leases	—
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	4
Finance leases	33
Weighted-average remaining lease term
Operating Leases	7
Finance Leases	12
Weighted-average discount rate
Operating leases	4.1		%
Finance leases	4.9		%

Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows:

(in millions)	Operating Leases		Finance Leases
2019 (excluding the three months ended March 31, 2019)	$	13	$	2
2020	15		3
2021	12		14
2022	10		3
2023	8		3
Thereafter	24		38
Total lease payments	82		63
Less imputed interest	13		18
Total lease liabilities	$	69	$	45

Leases obligations reported as of March 31, 2019 were as follows:

(in millions)	Operating Leases		Finance Leases
Other current liabilities	$	13	$	1
Lease liabilities - non current	53		33
Total lease liabilities	$	66	$	34

As of March 31, 2019, the Company has additional obligations relating to operating leases, primarily for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment, that have not yet commenced of $39 million. These operating leases will commence during 2019 with lease terms of 2 years to 15 years.