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LEASES
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
LEASES LEASES
We enter into operating and finance leases primarily for hotels, offices, and equipment. Most leases have initial terms of up to 20 years, and contain one or more renewals at our option, generally for five- or 10-year periods. We have generally not included these renewal periods in the lease term as it is not reasonably certain that we will exercise the renewal option.
The following table details the composition of lease expense for 2020 and 2019:
($ in millions)20202019
Operating lease cost
$157 $185 
Variable lease cost60 113 
We recorded impairment charges of $116 million in 2020 and $99 million in 2019 in the “Depreciation, amortization, and other” caption of our Income Statements to reduce the carrying amount of certain U.S. & Canada hotel leases right-of-use assets and property and equipment, including leasehold improvements. The impairment charges recorded in 2020 were due to the impact of COVID-19. We determined that we may not be able to fully recover the carrying amount of these U.S. & Canada 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. Additionally, during the year ended 2019, we recorded expense of $34 million in the “Restructuring and merger-related charges” caption of our Income Statements due to the impairment of a legacy-Starwood office building accounted for as a finance lease.
The following table presents our future minimum lease payments at year-end 2020:
($ in millions)Operating LeasesFinance Leases
2021$184 $13 
2022176 13 
2023124 14 
2024116 14 
2025106 14 
Thereafter529 138 
Total minimum lease payments$1,235 $206 
Less: Amount representing interest265 53 
Present value of minimum lease payments$970 $153 
The following table presents the composition of our current and noncurrent lease liability at year-end 2020 and 2019:
($ in millions)December 31, 2020December 31, 2019
Operating LeasesFinance LeasesOperating LeasesFinance Leases
Current (1)
$147 $7 $130 $6 
Noncurrent (2)
823 146 882 151 
$970 $153 $1,012 $157 
(1)Operating leases are recorded in the “Accrued expenses and other” and finance leases are recorded in the “Current portion of long-term debt” captions of our Balance Sheets.
(2)Operating leases are recorded in the “Operating lease liabilities” and finance leases are recorded in the “Long-term debt” captions of our Balance Sheets.
At year-end 2020, we had entered into an agreement that we expect to account for as an operating lease with a 20-year term for our new headquarters office, which is not reflected in our Balance Sheets or in the table above as the lease has not commenced.
The following table presents additional information about our lease obligations at year-end 2020 and 2019:
20202019
Operating leasesFinance leasesOperating leasesFinance leases
Weighted Average Remaining Lease Term (in years)10131114
Weighted Average Discount Rate4.6 %4.4 %4.8 %4.4 %
The following table presents supplemental cash flow information for 2020 and 2019:
($ in millions)20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases$162 $176 
Operating cash outflows for finance leases7 7 
Financing cash outflows for finance leases6 6 
Lease assets obtained in exchange for lease obligations:
Operating leases35 89 
LEASES LEASES
We enter into operating and finance leases primarily for hotels, offices, and equipment. Most leases have initial terms of up to 20 years, and contain one or more renewals at our option, generally for five- or 10-year periods. We have generally not included these renewal periods in the lease term as it is not reasonably certain that we will exercise the renewal option.
The following table details the composition of lease expense for 2020 and 2019:
($ in millions)20202019
Operating lease cost
$157 $185 
Variable lease cost60 113 
We recorded impairment charges of $116 million in 2020 and $99 million in 2019 in the “Depreciation, amortization, and other” caption of our Income Statements to reduce the carrying amount of certain U.S. & Canada hotel leases right-of-use assets and property and equipment, including leasehold improvements. The impairment charges recorded in 2020 were due to the impact of COVID-19. We determined that we may not be able to fully recover the carrying amount of these U.S. & Canada 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. Additionally, during the year ended 2019, we recorded expense of $34 million in the “Restructuring and merger-related charges” caption of our Income Statements due to the impairment of a legacy-Starwood office building accounted for as a finance lease.
The following table presents our future minimum lease payments at year-end 2020:
($ in millions)Operating LeasesFinance Leases
2021$184 $13 
2022176 13 
2023124 14 
2024116 14 
2025106 14 
Thereafter529 138 
Total minimum lease payments$1,235 $206 
Less: Amount representing interest265 53 
Present value of minimum lease payments$970 $153 
The following table presents the composition of our current and noncurrent lease liability at year-end 2020 and 2019:
($ in millions)December 31, 2020December 31, 2019
Operating LeasesFinance LeasesOperating LeasesFinance Leases
Current (1)
$147 $7 $130 $6 
Noncurrent (2)
823 146 882 151 
$970 $153 $1,012 $157 
(1)Operating leases are recorded in the “Accrued expenses and other” and finance leases are recorded in the “Current portion of long-term debt” captions of our Balance Sheets.
(2)Operating leases are recorded in the “Operating lease liabilities” and finance leases are recorded in the “Long-term debt” captions of our Balance Sheets.
At year-end 2020, we had entered into an agreement that we expect to account for as an operating lease with a 20-year term for our new headquarters office, which is not reflected in our Balance Sheets or in the table above as the lease has not commenced.
The following table presents additional information about our lease obligations at year-end 2020 and 2019:
20202019
Operating leasesFinance leasesOperating leasesFinance leases
Weighted Average Remaining Lease Term (in years)10131114
Weighted Average Discount Rate4.6 %4.4 %4.8 %4.4 %
The following table presents supplemental cash flow information for 2020 and 2019:
($ in millions)20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases$162 $176 
Operating cash outflows for finance leases7 7 
Financing cash outflows for finance leases6 6 
Lease assets obtained in exchange for lease obligations:
Operating leases35 89