Note 10. Leases

Adoption

Effective January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective method of applying the new standard at the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard. This allowed us to carry forward the historical lease classification. Adoption of this standard resulted in the recording of net operating lease right-of-use (ROU) assets and corresponding operating lease liabilities of $0.7 billion. Financial position for reporting periods beginning on or after January 1, 2019 are presented under the new guidance, while prior periods amounts are not adjusted and continue to be reported in accordance with previous guidance.

A significant portion of our operating and finance lease portfolio includes corporate offices, research and development facilities, manufacturing sites, information technology (IT) equipment, and automobiles. The majority of our leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for 5 years or more. Operating lease ROU assets are presented within Other assets. The current portion of operating lease liabilities are presented within Accrued liabilities, and the non-current portion of operating lease liabilities are presented within Other liabilities on the Consolidated Balance Sheet. Finance lease assets are included in Property, plant and equipment - net, and the finance lease obligations are included in Current maturities of long-term debt, and in Long-term debt on the Consolidated Balance Sheet.

A portion of our real estate leases is generally subject to annual changes in the Consumer Price Index (CPI). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of our automobile leases is considered variable. The variable lease payments for such automobiles leases are based on actual mileage incurred at the stated contractual rate.



	Three Months Ended March 31, 2019
Operating lease cost	$	54
Variable lease cost	8
Short-term lease cost	3
Financing lease cost:
Amortization of right-of-use assets	14
Interest on lease liability	8
Total financing lease cost	22
Total lease cost	$	87

Supplemental cash flow information related to leases was as follows:



	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	61
Operating cash flows from finance leases	1
Financing cash flows from finance leases	10
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	10
Finance leases	4

Supplemental balance sheet information related to leases was as follows:



	March 31, 2019
Operating leases
Other assets	$	669
Accrued liabilities	177
Other liabilities	527
Total operating lease liabilities	$	704
Financing leases
Property, plant and equipment	$	313
Accumulated depreciation	(100		)
Property, plant and equipment - net	$	213
Current maturities of long-term debt	51
Long-term debt	162
Total financing lease liabilities	$	213
Weighted-average remaining lease term
Operating leases	6 years
Financing leases	5 years
Weighted-average discount rate
Operating leases	3.2		%
Financing leases	17.0		%

As of March 31, 2019, maturities of lease liabilities were as follows:



	Operating Leases			Financing Leases
2019	$	161		$	61
2020	168			71
2021	137			60
2022	103			45
2023	72			39
Thereafter	157			48
Total lease payments	798			324
Less: interest	(94		)	(111		)
Total	$	704		$	213

As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments for operating leases having initial or remaining noncancellable lease terms in excess of one year would have been as follows:



	At December 31, 2018
2019	$	210
2020	168
2021	142
2022	109
2023	80
Thereafter	147
	$	856