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Leasing
6 Months Ended
Jun. 30, 2021
Leases [Abstract]  
LEASING 10. LEASINGLessee 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 lease commencement 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, 2021 and December 31, 2020:
In millionsLocation in the Condensed Consolidated Balance SheetJune 30, 2021December 31, 2020
Assets
       Operating lease assetsOperating lease assets$439 $344 
       Finance lease assetsProperty, plant and equipment, net63 55 
       Accumulated amortization of finance lease assetsProperty, plant and equipment, net(26)(18)
Total leased assets$476 $381 
Liabilities
Current
       Operating lease liabilitiesOther current liabilities$105 $85 
       Finance lease liabilitiesOther current liabilities1715 
Noncurrent
       Operating lease liabilitiesOperating lease liabilities420325 
       Finance lease liabilitiesOther liabilities2123 
Total lease liabilities$563 $448 

The following tables present our lease costs for operating and finance leases:
Three months ended June 30Six months ended June 30
In millions2021202020212020
Operating lease cost$34 $30 $65 $62 
Finance lease cost
       Amortization of leased assets4 8 
  Interest on lease liabilities1 1 
Short-Term lease cost1 2 
Variable lease cost5 11 16 
      Total lease cost$45 $44 $87 $87 

The following tables present the supplemental cash flow information:
Three months ended June 30Six months ended June 30
In millions2021202020212020
Cash paid for amounts included in the measurement of lease liabilities:
         Operating cash flows from operating leases$43 $31 $74 $61 
         Operating cash flows from finance leases$1 $$1 $
         Financing cash flows from finance leases$4 $$8 $
Lease Assets Obtained in Exchange for Lease Obligations
Operating Leases$61 $$130 $
Finance Leases$1 $$2 $15 
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, 2021:
In millionsOperating LeasesFinance Leases
Remainder of 2021$70 $
2022106 17 
202377 11 
202462 
202551 — 
Thereafter306 — 
Total lease payments672 40 
Less: Amount representing interest147 
Present value of lease liabilities$525 $38 
The following table presents the weighted average remaining lease term and interest rates:
June 30, 2021December 31, 2020
Weighted average lease term:
       Operating leases8.5 years8.7 years
       Finance leases2.4 years2.7 years
Weighted average interest rates:
       Operating leases5.67 %6.45 %
       Finance leases3.99 %4.59 %
    

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. LEASINGLessee 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 lease commencement 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, 2021 and December 31, 2020:
In millionsLocation in the Condensed Consolidated Balance SheetJune 30, 2021December 31, 2020
Assets
       Operating lease assetsOperating lease assets$439 $344 
       Finance lease assetsProperty, plant and equipment, net63 55 
       Accumulated amortization of finance lease assetsProperty, plant and equipment, net(26)(18)
Total leased assets$476 $381 
Liabilities
Current
       Operating lease liabilitiesOther current liabilities$105 $85 
       Finance lease liabilitiesOther current liabilities1715 
Noncurrent
       Operating lease liabilitiesOperating lease liabilities420325 
       Finance lease liabilitiesOther liabilities2123 
Total lease liabilities$563 $448 

The following tables present our lease costs for operating and finance leases:
Three months ended June 30Six months ended June 30
In millions2021202020212020
Operating lease cost$34 $30 $65 $62 
Finance lease cost
       Amortization of leased assets4 8 
  Interest on lease liabilities1 1 
Short-Term lease cost1 2 
Variable lease cost5 11 16 
      Total lease cost$45 $44 $87 $87 

The following tables present the supplemental cash flow information:
Three months ended June 30Six months ended June 30
In millions2021202020212020
Cash paid for amounts included in the measurement of lease liabilities:
         Operating cash flows from operating leases$43 $31 $74 $61 
         Operating cash flows from finance leases$1 $$1 $
         Financing cash flows from finance leases$4 $$8 $
Lease Assets Obtained in Exchange for Lease Obligations
Operating Leases$61 $$130 $
Finance Leases$1 $$2 $15 
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, 2021:
In millionsOperating LeasesFinance Leases
Remainder of 2021$70 $
2022106 17 
202377 11 
202462 
202551 — 
Thereafter306 — 
Total lease payments672 40 
Less: Amount representing interest147 
Present value of lease liabilities$525 $38 
The following table presents the weighted average remaining lease term and interest rates:
June 30, 2021December 31, 2020
Weighted average lease term:
       Operating leases8.5 years8.7 years
       Finance leases2.4 years2.7 years
Weighted average interest rates:
       Operating leases5.67 %6.45 %
       Finance leases3.99 %4.59 %
    

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.