Annual report pursuant to Section 13 and 15(d)

Leases

v3.20.4
Leases
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases
19. LEASES
The Company adopted the new accounting guidance for leases using the modified retrospective approach as of January 1, 2019. Prior-year financial statements were not recast under the new standard, and therefore those amounts are not presented in the tables below. The Company elected the package of transition provisions available for expired or existing contracts, which allowed the Company to carry forward its historical assessments of (i) whether contracts are or contain leases, (ii) lease classification and (iii) initial direct costs. The adoption of the new accounting guidance for leases resulted in the recognition of a $12 million operating right-of-use asset and a corresponding operating lease liability. Under the prior accounting standard for leases, the Company had $41 million of assets and $59 million of liabilities related to finances leases reflected on the Company’s Consolidated Balance Sheet as of December 31, 2018.
The Company leases property and equipment under finance and operating leases. For leases with terms greater than one year, the Company records the related asset and obligation at the present value of lease payments over the term. The Company does not separate lease and nonlease components of equipment leases.
The table below presents the lease-related assets and liabilities recorded on the Consolidated Balance Sheets.
Classification on the Balance Sheets December 31, 2020 December 31, 2019
Assets
Operating lease assets Other non-current assets $ 14  $ 29 
Finance lease assets Property and equipment, net 33  37 
Total lease assets $ 47  $ 66 
Liabilities
Current
Operating lease liabilities Accrued expenses and other current liabilities $ 4  $ 5 
Finance lease liabilities Current portion of long-term debt 5  5 
Non-current
Operating lease liabilities Other non-current liabilities 11  24 
Finance lease liabilities Long-term debt 50  55 
Total lease liabilities $ 70  $ 89 
The table below presents the remaining lease term and discount rates for finance and operating leases.
December 31, 2020 December 31, 2019
Weighted-average remaining lease term
Operating leases 5.5 years 7.9 years
Finance leases 8.7 years 9.7 years
Weighted-average discount rate
Operating leases 4.2  % 4.7  %
Finance leases 4.3  % 4.5  %
Undiscounted cash flows
The table below 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 Company’s Consolidated Balance Sheet as of December 31, 2020.
Operating Leases Finance Leases
2021 $ 4  $ 7 
2022 4  7 
2023 3  7 
2024 2  8 
2025 1  8 
Thereafter 3  29 
Total minimum lease payments 17  66 
Less: amount of lease payments representing interest 2  11 
Present value of future minimum lease payments 15  55 
Less: current obligations under leases 4  5 
Long-term lease obligations $ 11  $ 50 

Other information
Under the new accounting standard for leases, the Company recorded the following related to leases on the Consolidated and Combined Financial Statements:
Consolidated and Combined Statements of Cash Flows:
 Year Ended December 31,
2020 2019
Operating activities
Cash payments related to operating and finance leases $ 8  $ 9 
Financing activities
Cash payments related to finance leases 5  5 

Consolidated and Combined Statements of Income (Loss):
 Year Ended December 31,
2020 2019
Operating lease expense $ 5  $ 6 
Finance lease expense
Amortization of right-of-use assets 4  5 
Interest expense 2  3 

Under the prior accounting standard for leases, the Company incurred total rent expense of $8 million during 2018.
Leases
19. LEASES
The Company adopted the new accounting guidance for leases using the modified retrospective approach as of January 1, 2019. Prior-year financial statements were not recast under the new standard, and therefore those amounts are not presented in the tables below. The Company elected the package of transition provisions available for expired or existing contracts, which allowed the Company to carry forward its historical assessments of (i) whether contracts are or contain leases, (ii) lease classification and (iii) initial direct costs. The adoption of the new accounting guidance for leases resulted in the recognition of a $12 million operating right-of-use asset and a corresponding operating lease liability. Under the prior accounting standard for leases, the Company had $41 million of assets and $59 million of liabilities related to finances leases reflected on the Company’s Consolidated Balance Sheet as of December 31, 2018.
The Company leases property and equipment under finance and operating leases. For leases with terms greater than one year, the Company records the related asset and obligation at the present value of lease payments over the term. The Company does not separate lease and nonlease components of equipment leases.
The table below presents the lease-related assets and liabilities recorded on the Consolidated Balance Sheets.
Classification on the Balance Sheets December 31, 2020 December 31, 2019
Assets
Operating lease assets Other non-current assets $ 14  $ 29 
Finance lease assets Property and equipment, net 33  37 
Total lease assets $ 47  $ 66 
Liabilities
Current
Operating lease liabilities Accrued expenses and other current liabilities $ 4  $ 5 
Finance lease liabilities Current portion of long-term debt 5  5 
Non-current
Operating lease liabilities Other non-current liabilities 11  24 
Finance lease liabilities Long-term debt 50  55 
Total lease liabilities $ 70  $ 89 
The table below presents the remaining lease term and discount rates for finance and operating leases.
December 31, 2020 December 31, 2019
Weighted-average remaining lease term
Operating leases 5.5 years 7.9 years
Finance leases 8.7 years 9.7 years
Weighted-average discount rate
Operating leases 4.2  % 4.7  %
Finance leases 4.3  % 4.5  %
Undiscounted cash flows
The table below 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 Company’s Consolidated Balance Sheet as of December 31, 2020.
Operating Leases Finance Leases
2021 $ 4  $ 7 
2022 4  7 
2023 3  7 
2024 2  8 
2025 1  8 
Thereafter 3  29 
Total minimum lease payments 17  66 
Less: amount of lease payments representing interest 2  11 
Present value of future minimum lease payments 15  55 
Less: current obligations under leases 4  5 
Long-term lease obligations $ 11  $ 50 

Other information
Under the new accounting standard for leases, the Company recorded the following related to leases on the Consolidated and Combined Financial Statements:
Consolidated and Combined Statements of Cash Flows:
 Year Ended December 31,
2020 2019
Operating activities
Cash payments related to operating and finance leases $ 8  $ 9 
Financing activities
Cash payments related to finance leases 5  5 

Consolidated and Combined Statements of Income (Loss):
 Year Ended December 31,
2020 2019
Operating lease expense $ 5  $ 6 
Finance lease expense
Amortization of right-of-use assets 4  5 
Interest expense 2  3 

Under the prior accounting standard for leases, the Company incurred total rent expense of $8 million during 2018.