PPG Annual Report and 10K 2019

Notes to the Consolidated Financial Statements 2019 PPG ANNUAL REPORT AND FORM 10-K 45 and recognizing credit losses for its financial assets accounted for at amortized cost. PPG is nearly complete in the assessment and implementation of this ASU and does not believe this ASU will have a material impact on its consolidated financial position, results of operations or cash flows. 2. Leases PPG leases certain retail paint stores, warehouses, distribution facilities, office space, fleet vehicles and equipment. The components of lease expense for the year ended December 31, 2019 were as follows: ($ in millions) Classification in the Consolidated Statement of Income 2019 Operating lease cost Cost of sales, exclusive of depreciation and amortization $34 Operating lease cost Selling, general and administrative 198 Total operating lease cost $232 Finance lease cost: Amortization of right-of-use assets Depreciation $2 Interest on lease liabilities Interest expense 1 Total finance lease cost $3 Total lease cost $235 Lease expense for operating leases was $289 million and $288 million in 2018 and 2017, respectively. Total operating lease cost for the year ended December 31, 2019 is inclusive of the following: ($ in millions) 2019 Variable lease costs $15 Short-term lease costs $5 ($ in millions) Classification on the Consolidated Balance Sheet 2019 Assets: Operating Operating lease right-of-use assets $782 Finance (a) Property, plant, and equipment, net 17 Total leased assets $799 Liabilities: Current Operating Current portion of operating lease liabilities $170 Finance Short-term debt and current portion of long-term debt 3 Noncurrent Operating Operating lease liabilities $622 Finance Long-term debt 8 Total lease liabilities $803 (a) Net of accumulated depreciation of $11 million. ($ in millions) 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $210 Operating cash flows paid for finance leases $1 Financing cash flows paid for finance leases $4 Right-of-use assets obtained in exchange for lease obligations: Operating leases $219 Finance leases $1

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