Annual report pursuant to Section 13 and 15(d)

LEASES FOOTNOTE DISCLOSURE LEASES FOOTNOTE DISCLOSURE (Notes)

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LEASES FOOTNOTE DISCLOSURE LEASES FOOTNOTE DISCLOSURE (Notes)
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases of Lessee Disclosure
NOTE 8. LEASES
Our lease portfolio consists primarily of real estate and equipment leases. Our real estate leases primarily consist of land, office, distribution, warehousing and manufacturing facilities. These leases typically range in term from 2 to 50 years and may contain renewal options for periods up to 10 years at our discretion. Our equipment lease portfolio consists primarily of vehicles (including service vehicles), forktrucks and IT equipment. These leases typically range in term from two years to three years and may contain renewal options. Our leases generally do not contain variable lease payments other than (1) certain foreign real estate leases which have payments indexed to inflation and (2) certain real estate executory costs (such as taxes, insurance and maintenance), which are
paid based on actual expenses incurred by the lessor during the year. Our leases generally do not include residual value guarantees other than our service vehicle fleet, which has a residual guarantee based on a percentage of the original cost declining over the lease term.
The components of our lease cost were as follows:
Years ended December 31,
In millions 2020 2019
Operating lease cost $ 172  $ 180 
Finance lease cost
Amortization of right-of-use asset 18  18 
Interest expense 4  9 
Short-term lease cost 19  33 
Variable lease cost 12  7 
Total lease cost $ 225  $ 247 
The total rental expense for the year ended December 31, 2018, prior to adoption of the new lease standard, was $217 million.
Supplemental balance sheet information related to leases:
December 31,
In millions 2020 2019 Balance Sheet Location
Assets
Operating lease assets $ 438  $ 496  Other assets
Finance lease assets(1)
99  90  Property, plant and equipment, net
Total lease assets $ 537  $ 586 
Liabilities
Current
Operating $ 128  $ 131  Other accrued expenses
Finance 12  12  Current maturities of long-term debt
Long-term
Operating 325  370  Other liabilities
Finance 79  78  Long-term debt
Total lease liabilities $ 544  $ 591 
(1) Finance lease assets were recorded net of accumulated amortization of $58 million and $62 million at December 31, 2020 and 2019.
Supplemental cash flow and other information related to leases:
Years ended December 31,
In millions 2020 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ 149  $ 163 
Operating cash flows from finance leases 14  47 
Financing cash flows from finance leases 4  9 
Right-of-use assets obtained in exchange for lease obligations
Operating leases $ 97  $ 214 
Finance leases 19  5 
Additional information related to leases:
December 31,
2020 2019
Weighted-average remaining lease term (in years)
Operating leases 4.9 5.3
Finance leases 10.8 12.1
Weighted-average discount rate
Operating leases 3.4  % 3.3  %
Finance leases 4.0  % 4.4  %
Following is a summary of the future minimum lease payments due to finance and operating leases with terms of more than one year at December 31, 2020, together with the net present value of the minimum payments:
In millions Finance Leases Operating Leases
2021 $ 15  $ 143 
2022 14  109 
2023 13  74 
2024 9  56 
2025 8  43 
After 2025 55  67 
Total minimum lease payments 114  492 
Interest (23) (39)
Present value of net minimum lease payments $ 91  $ 453