Leases (Notes)

12 Months Ended

Dec. 31, 2021

Leases of Lessee Disclosure [Text Block]

LEASES

The company has operating and finance leases for real estate, transportation, certain machinery and equipment, and information technology assets. The company’s leases have remaining lease terms of 1 to 50 years. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend the lease when it is reasonably certain that the company will exercise that option. Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable lease payments are not presented as part of the initial ROU asset or lease liability.

Certain of the company's leases include residual value guarantees. These residual value guarantees are based on a percentage of the lessor's asset acquisition price and the amount of such guarantee declines over the course of the lease term. The portion of residual value guarantees that are probable of payment are included in the related lease liability. At December 31, 2021, the company has future maximum payments for residual value guarantees in operating leases of $193 million with final expirations through 2028. The company's lease agreements do not contain any material restrictive covenants. The components of lease cost are as follows:


	For the Year Ended December 31,
(In millions)	2021		2020
Operating lease cost	$	158	$	197
Finance lease cost
Amortization of right-of-use assets	1		2
Interest on lease liabilities	—		—
Total finance lease cost	1		2
Short-term lease cost	14		14
Variable lease cost	8		7

Total lease cost	$	181	$	220

New leases entered into during the years ended December 31, 2021 and December 31, 2020 were not material, on an individual basis.

Supplemental cash flow information related to leases is as follows:


	For the Year Ended December 31,
(In millions)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	169	$	202
Operating cash outflows from finance leases	$	—	$	—
Financing cash outflows from finance leases	$	1	$	1

Supplemental balance sheet information related to leases is as follows:


(In millions)	December 31, 2021		December 31, 2020
Operating Leases
Operating lease right-of-use assets1	$	458	$	521
Current operating lease liabilities2	121		138
Noncurrent operating lease liabilities3	338		391
Total operating lease liabilities	$	459	$	529

Finance Leases
Property, plant, and equipment, gross	$	15	$	15
Accumulated depreciation	(11)		(10)
Property, plant, and equipment, net	4		5
Short-term borrowings and finance lease obligations	1		1
Long-Term Debt	3		4
Total finance lease liabilities	$	4	$	5

1.Included in other assets in the Consolidated Balance Sheet.

2.Included in accrued and other current liabilities in the Consolidated Balance Sheet.

3.Included in other noncurrent obligations in the Consolidated Balance Sheet.

The company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable.


Lease Term and Discount Rate	December 31, 2021		December 31, 2020
Weighted-average remaining lease term (years)
Operating leases	7.41		7.71
Financing leases	3.36		4.26
Weighted average discount rate
Operating leases	2.75	%	3.06	%
Financing leases	3.29	%	3.28	%

Maturities of lease liabilities are as follows:


Maturity of Lease Liabilities at December 31, 2021	Operating Leases		Financing Leases
(In millions)
2022	$	132	$	1
2023	94		1
2024	71		1
2025	60		1
2026	49		—
2027 and thereafter	106		—
Total lease payments	512		4
Less: Interest	53		—
Present value of lease liabilities	$	459	$	4


Maturity of Lease Liabilities at December 31, 2020	Operating Leases		Financing Leases
(In millions)
2021	$	152	$	1
2022	114		1
2023	83		1
2024	61		1
2025	51		1
2026 and thereafter	137		—
Total lease payments	598		5
Less: Interest	69		—
Present value of lease liabilities	$	529	$	5