Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Leases

We have entered into various non-cancelable operating lease agreements for certain of our offices, data centers, land, colocations, and equipment. We have also entered into various non-cancelable finance lease agreements for certain network equipment. Our leases have original lease periods expiring between the remainder of 2020 and 2093. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs, lease term and discount rate are as follows (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Finance lease cost
Amortization of right-of-use assets	$	60		$	47		$	120		$	89
Interest	4			3			7			5
Operating lease cost	344			274			684			520
Variable lease cost and other, net	57			21			117			70
Total lease cost	$	465		$	345		$	928		$	684
Weighted-average remaining lease term
Operating leases	12.6 years			13.1 years			12.6 years			13.1 years
Finance leases	15.0 years			15.3 years			15.0 years			15.3 years
Weighted-average discount rate
Operating leases	3.1		%	3.5		%	3.1		%	3.5		%
Finance leases	3.1		%	3.2		%	3.1		%	3.2		%

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2020 (in millions):

	Operating Leases			Finance Leases
The remainder of 2020	$	528		$	38
2021	1,315			49
2022	1,254			39
2023	1,174			37
2024	1,099			37
Thereafter	7,932			389
Total undiscounted cash flows	13,302			589
Less: Imputed interest	(2,770		)	(117		)
Present value of lease liabilities	$	10,532		$	472
Lease liabilities, current	$	899		$	48
Lease liabilities, non-current	9,633			424
Present value of lease liabilities	$	10,532		$	472

The table above does not include lease payments that were not fixed at commencement or modification. As of June 30, 2020, we have additional operating and finance leases for facilities and network equipment that have not yet commenced with lease obligations of approximately $4.91 billion and $364 million, respectively. These operating and finance leases will commence between the remainder of 2020 and 2023 with lease terms of greater than one year to 25 years.

Subsequent to June 30, 2020, we entered into an approximately $1.0 billion non-cancelable lease agreement for a data center.

Supplemental cash flow information related to leases are as follows (in millions):

	Six Months Ended June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	572	$	388
Operating cash flows from finance leases	$	7	$	5
Financing cash flows from finance leases	$	209	$	267
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	689	$	2,203
Finance leases	$	33	$	75

Leases

Leases

We have entered into various non-cancelable operating lease agreements for certain of our offices, data centers, land, colocations, and equipment. We have also entered into various non-cancelable finance lease agreements for certain network equipment. Our leases have original lease periods expiring between the remainder of 2020 and 2093. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs, lease term and discount rate are as follows (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Finance lease cost
Amortization of right-of-use assets	$	60		$	47		$	120		$	89
Interest	4			3			7			5
Operating lease cost	344			274			684			520
Variable lease cost and other, net	57			21			117			70
Total lease cost	$	465		$	345		$	928		$	684
Weighted-average remaining lease term
Operating leases	12.6 years			13.1 years			12.6 years			13.1 years
Finance leases	15.0 years			15.3 years			15.0 years			15.3 years
Weighted-average discount rate
Operating leases	3.1		%	3.5		%	3.1		%	3.5		%
Finance leases	3.1		%	3.2		%	3.1		%	3.2		%

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2020 (in millions):

	Operating Leases			Finance Leases
The remainder of 2020	$	528		$	38
2021	1,315			49
2022	1,254			39
2023	1,174			37
2024	1,099			37
Thereafter	7,932			389
Total undiscounted cash flows	13,302			589
Less: Imputed interest	(2,770		)	(117		)
Present value of lease liabilities	$	10,532		$	472
Lease liabilities, current	$	899		$	48
Lease liabilities, non-current	9,633			424
Present value of lease liabilities	$	10,532		$	472

The table above does not include lease payments that were not fixed at commencement or modification. As of June 30, 2020, we have additional operating and finance leases for facilities and network equipment that have not yet commenced with lease obligations of approximately $4.91 billion and $364 million, respectively. These operating and finance leases will commence between the remainder of 2020 and 2023 with lease terms of greater than one year to 25 years.

Subsequent to June 30, 2020, we entered into an approximately $1.0 billion non-cancelable lease agreement for a data center.

Supplemental cash flow information related to leases are as follows (in millions):

	Six Months Ended June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	572	$	388
Operating cash flows from finance leases	$	7	$	5
Financing cash flows from finance leases	$	209	$	267
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	689	$	2,203
Finance leases	$	33	$	75