Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

LEASES

The following table presents our future minimum lease payments as of March 31, 2020:

($ in millions)	Operating Leases			Finance Leases
2020, remaining	$	135		$	10
2021	171			13
2022	166			13
2023	115			13
2024	106			14
Thereafter	570			151
Total minimum lease payments	$	1,263		$	214
Less: Amount representing interest	(280		)	(58		)
Present value of minimum lease payments	$	983		$	156
Current (1)	137			6
Noncurrent (2)	846			150
	$	983		$	156

⁽¹⁾  Operating leases recorded in the “Accrued expenses and other” and finance leases recorded in the “Current portion of long-term debt” captions of our Balance Sheets.

⁽²⁾  Operating leases recorded in the “Operating lease liabilities” and finance leases recorded in the “Long-term debt” captions of our Balance Sheets.

As of March 31, 2020, we had entered into an agreement that we expect to account for as an operating lease with a 20-year term for our new headquarters office, which is not reflected in our Balance Sheets or in the table above as the lease has not commenced.

In the 2020 first quarter, we recorded impairment charges of $74 million for right-of-use assets and $16 million for property and equipment, including leasehold improvements, in the “Depreciation, amortization, and other” caption of our Income Statements relating to the impact of COVID-19 on several North America leased hotels. We determined that we may not be able to fully recover the carrying amount of these North America hotel leases after evaluating the assets for recovery due to declines in market performance and future cash flow projections. We estimated the fair value using an income approach reflecting internally developed Level 3 discounted cash flows that included, among other things, our expectations of future cash flows based on historical experience and projected growth rates, usage estimates, and demand trends.

Leases

LEASES

The following table presents our future minimum lease payments as of March 31, 2020:

($ in millions)	Operating Leases			Finance Leases
2020, remaining	$	135		$	10
2021	171			13
2022	166			13
2023	115			13
2024	106			14
Thereafter	570			151
Total minimum lease payments	$	1,263		$	214
Less: Amount representing interest	(280		)	(58		)
Present value of minimum lease payments	$	983		$	156
Current (1)	137			6
Noncurrent (2)	846			150
	$	983		$	156

⁽¹⁾  Operating leases recorded in the “Accrued expenses and other” and finance leases recorded in the “Current portion of long-term debt” captions of our Balance Sheets.

⁽²⁾  Operating leases recorded in the “Operating lease liabilities” and finance leases recorded in the “Long-term debt” captions of our Balance Sheets.

As of March 31, 2020, we had entered into an agreement that we expect to account for as an operating lease with a 20-year term for our new headquarters office, which is not reflected in our Balance Sheets or in the table above as the lease has not commenced.

In the 2020 first quarter, we recorded impairment charges of $74 million for right-of-use assets and $16 million for property and equipment, including leasehold improvements, in the “Depreciation, amortization, and other” caption of our Income Statements relating to the impact of COVID-19 on several North America leased hotels. We determined that we may not be able to fully recover the carrying amount of these North America hotel leases after evaluating the assets for recovery due to declines in market performance and future cash flow projections. We estimated the fair value using an income approach reflecting internally developed Level 3 discounted cash flows that included, among other things, our expectations of future cash flows based on historical experience and projected growth rates, usage estimates, and demand trends.