Quarterly report pursuant to Section 13 or 15(d)

LEASES FOOTNOTE DISCLOSURE (Notes)

v3.19.3
LEASES FOOTNOTE DISCLOSURE (Notes)
9 Months Ended
Sep. 29, 2019
Leases [Abstract]  
Leases of Lessee Disclosure
Leases

Our lease portfolio consists primarily of real estate and equipment leases. Our real estate leases primarily consist of office, distribution, warehousing and manufacturing facilities. These leases typically range in term from 2 to 30 years and may contain renewal options for periods up to 2 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 expense were as follows:
 
 
Three months ended
 
Nine months ended
In millions
 
September 29,
2019
 
September 29,
2019
Operating lease cost
 
$
51

 
$
155

Finance lease cost
 
 
 
 
Amortization of right-of-use asset
 
3

 
12

Interest expense
 
1

 
7

Short-term lease cost
 
2

 
4

Variable lease cost
 
2

 
4

Total lease cost
 
$
59

 
$
182


Supplemental balance sheet information related to leases:
In millions
 
September 29, 2019
 
Balance Sheet Location
Assets
 
 
 
 
Operating lease assets
 
$
446

 
Other assets
Finance lease assets(1)
 
124

 
Property, plant and equipment, net
Total lease assets
 
$
570

 
 
 
 
 
 
 
Liabilities
 
 
 
 
Current
 
 
 
 
Operating
 
$
124

 
Other accrued expenses
Finance
 
12

 
Current maturities of long-term debt
Long-term
 
 
 
 
Operating
 
333

 
Other liabilities
Finance
 
110

 
Long-term debt
Total lease liabilities
 
$
579

 
 
____________________________________
(1) Finance lease assets are recorded net of accumulated amortization of $62 million at September 29, 2019.
Supplemental cash flow and other information related to leases:
 
 
Three months ended
 
Nine months ended
In millions
 
September 29,
2019
 
September 29,
2019
Cash paid for amounts included in the measurement of lease liabilities
 
 
 
 
Operating cash flows from operating leases
 
$
38

 
$
115

Operating cash flows from finance leases
 
2

 
7

Financing cash flows from finance leases
 
3

 
10

 
 
 
 
 
Right-of-use assets obtained in exchange for lease obligations
 
 
 
 
Operating leases
 
51

 
129

Finance leases
 
1

 
7


Additional information related to leases:
 
 
September 29,
2019
Weighted-average remaining lease term (in years)
 
 
Operating leases
 
5.3

Finance leases
 
13.9

 
 
 
Weighted-average discount rate
 
 
Operating leases
 
3.3
%
Finance leases
 
7.2
%

Following is a summary of the future minimum lease payments due to finance and operating leases with terms of more than one year at September 29, 2019, together with the net present value of the minimum payments due to finance leases:
In millions
 
Finance Leases
 
Operating Leases
2019
 
$
5

 
$
38

2020
 
19

 
129

2021
 
16

 
102

2022
 
15

 
77

2023
 
14

 
51

After 2023
 
146

 
110

Total minimum lease payments
 
215

 
507

Interest
 
(93
)
 
(50
)
Present value of net minimum lease payments
 
$
122

 
$
457


Following is a summary of the future minimum lease payments due to capital and operating leases with terms of more than one year at December 31, 2018, together with the net present value of the minimum payments due to capital leases under the previous lease standard:
In millions
 
Capital Leases
 
Operating Leases
2019
 
$
30

 
$
138

2020
 
21

 
109

2021
 
16

 
81

2022
 
14

 
60

2023
 
13

 
39

After 2023
 
144

 
81

Total minimum lease payments
 
$
238

 
$
508

Interest
 
(106
)
 
 

Present value of net minimum lease payments
 
$
132