Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

6. 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 Condensed 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 the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its incremental borrowing rate. The Company’s operating lease right of use asset was $623 million and the Company’s operating lease liability was $702 million at June 30, 2019.

Operating lease cost was $29 million and $59 million, variable lease cost was $4 million and $8 million and short term lease cost was $2 million and $4 million for the three and six months ended June 30, 2019. Cash paid for amounts included in operating lease liabilities was $30 million and $59 million for the three and six months ended June 30, 2019.

The table below presents the future minimum lease payments to be made under non-cancelable operating leases as of December 31, 2018:

Year Ended December 31
(In millions)
2019	$	75
2020		79
2021		79
2022		68
2023		57
Thereafter		344
Total	$	702

The table below presents the maturities of lease liabilities:

	Operating
As of June 30, 2019	Leases
(In millions)
2019 (a)	$	53
2020		111
2021		108
2022		97
2023		86
Thereafter		421
Total		876
Less: discount		174
Total lease liabilities	$	702

(a) For the six-month period beginning July 1, 2019.

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 June 30, 2019
Weighted average remaining lease term	9.6	Years
Weighted average discount rate	4.7	%