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Note 8 - Leases
6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Leases, Lessee Disclosure [Text Block]

8.

Leases

 

We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use (“ROU”) assets related to our operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. Our lease terms that are used in determining our operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. We have lease agreements with lease and non-lease components, and in such cases, we generally account for the components separately with only the lease component included in the calculation of the right-of-use asset and lease liability.

 

We have operating leases that primarily relate to certain of our facilities, data centers and vehicles. As of June 30, 2020, our operating leases substantially have remaining terms of one year to 99 years, some of which include options to extend and/or terminate the leases. We do not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

 

Cash flow movements related to our lease activities are included in other assets and accounts payable and other liabilities as presented in net cash provided by operating activities in our condensed consolidated statement of cash flows for the six-months ended June 30, 2020.

 

As of June 30, 2020, the weighted-average remaining term of our operating leases was approximately 11 years. The weighted-average discount rate used to calculate the values associated with our operating leases was 6.76%. The table below describes the nature of lease expense and classification of operating lease expense recognized in the three and six-months ended June 30, 2020 and 2019, respectively (in millions):

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

June 30,

 
   

2020

   

2019

   

2020

   

2019

 

Lease expense

                               

Operating lease expense

  $ 3     $ 3     $ 6     $ 6  

Short-term lease expense

    -       -       1       1  

Total lease expense

  $ 3     $ 3     $ 7     $ 7  

 

The maturities of operating lease liabilities as of June 30, 2020, for the remainder of 2020 and the succeeding five years were as follows (in millions):

 

Year ending December 31,

 

Operating Leases

 

Remainder of 2020

 $5 

2021

  10 

2022

  10 

2023

  8 

2024

  8 

Thereafter

  47 

Total lease payments

  88 

Less: Imputed interest

  (27)

Present value of lease liabilities

 $61