Leases

9 Months Ended

Sep. 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 are as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Finance lease cost
Amortization of right-of-use assets	$	65	$	51	$	185	$	140
Interest	4		4		11		9
Operating lease cost	352		298		1,036		818
Variable lease cost and other, net	57		41		174		111
Total lease cost	$	478	$	394	$	1,406	$	1,078

Supplemental balance sheet information related to leases is as follows:

	September 30, 2020		December 31, 2019
Weighted-average remaining lease term
Operating leases	12.4 years		13.0 years
Finance leases	15.1 years		15.3 years
Weighted-average discount rate
Operating leases	3.1	%	3.2	%
Finance leases	2.9	%	3.1	%

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

	Operating Leases			Finance Leases
The remainder of 2020	$	235		$	38
2021	1,365			53
2022	1,348			46
2023	1,213			40
2024	1,130			40
Thereafter	8,055			432
Total undiscounted cash flows	13,346			649
Less: Imputed interest	(2,730		)	(121		)
Present value of lease liabilities	$	10,616		$	528
Lease liabilities, current	$	975		$	62
Lease liabilities, non-current	9,641			466
Present value of lease liabilities	$	10,616		$	528

The table above does not include lease payments that were not fixed at commencement or modification. As of September 30, 2020, we have additional operating and finance leases mostly for offices, data centers and network equipment that have not yet commenced with lease obligations of approximately $7.31 billion and $398 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 30 years.

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

	Nine Months Ended September 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	878	$	633
Operating cash flows from finance leases	$	11	$	8
Financing cash flows from finance leases	$	398	$	411
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	954	$	3,756
Finance leases	$	101	$	128

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 are as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Finance lease cost
Amortization of right-of-use assets	$	65	$	51	$	185	$	140
Interest	4		4		11		9
Operating lease cost	352		298		1,036		818
Variable lease cost and other, net	57		41		174		111
Total lease cost	$	478	$	394	$	1,406	$	1,078

Supplemental balance sheet information related to leases is as follows:

	September 30, 2020		December 31, 2019
Weighted-average remaining lease term
Operating leases	12.4 years		13.0 years
Finance leases	15.1 years		15.3 years
Weighted-average discount rate
Operating leases	3.1	%	3.2	%
Finance leases	2.9	%	3.1	%

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

	Operating Leases			Finance Leases
The remainder of 2020	$	235		$	38
2021	1,365			53
2022	1,348			46
2023	1,213			40
2024	1,130			40
Thereafter	8,055			432
Total undiscounted cash flows	13,346			649
Less: Imputed interest	(2,730		)	(121		)
Present value of lease liabilities	$	10,616		$	528
Lease liabilities, current	$	975		$	62
Lease liabilities, non-current	9,641			466
Present value of lease liabilities	$	10,616		$	528

The table above does not include lease payments that were not fixed at commencement or modification. As of September 30, 2020, we have additional operating and finance leases mostly for offices, data centers and network equipment that have not yet commenced with lease obligations of approximately $7.31 billion and $398 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 30 years.

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

	Nine Months Ended September 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	878	$	633
Operating cash flows from finance leases	$	11	$	8
Financing cash flows from finance leases	$	398	$	411
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	954	$	3,756
Finance leases	$	101	$	128