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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Schedule of cost, supplemental cash flow and other information related to leases

Components of Lease Cost



	Three Months Ended March 31,
(In millions)	2020		2019
Operating lease cost ⁽¹⁾	$	62	$	39
Finance lease cost ⁽²⁾
Amortization of right-of-use assets	59		1
Interest on lease liabilities	3		—
Total lease cost	$	124	$	40

⁽¹⁾

Operating lease expense is included within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the right-of-use (“ROU”) asset, in the consolidated statements of income. Operating lease cost includes approximately $11 million and $13 million of variable lease costs for the three months ended March 31, 2020 and 2019, respectively.

⁽²⁾

Finance lease expense is recorded as depreciation and amortization expense within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, and interest expense, net in the consolidated statements of income. Finance lease expense during the three months ended March 31, 2020 includes $38 million of accelerated amortization associated with the termination of certain vendor contracts.

Supplemental Cash Flow Information



	Three Months Ended March 31,
(In millions)	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	39	$	28
Operating cash flows from finance leases	3		—
Financing cash flows from finance leases	59		5

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	—	$	24
Finance leases	293		9

Schedule of components of lease income

Components of Lease Income



(In millions)	Three Months Ended March 31, 2020
Sales-type leases:
Selling profit ⁽¹⁾	$	14
Interest income ⁽¹⁾	19
Operating lease income ⁽²⁾	24


⁽¹⁾	Selling profit includes $28 million recorded within product revenue with a corresponding charge of $14 million recorded in cost of product in the consolidated statement of income for the three months ended March 31, 2020. Interest income is included within product revenue in the consolidated statement of income.

⁽²⁾

Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statement of income for the three months ended March 31, 2020.

Schedule of components of lease income

Components of Lease Income



(In millions)	Three Months Ended March 31, 2020
Sales-type leases:
Selling profit ⁽¹⁾	$	14
Interest income ⁽¹⁾	19
Operating lease income ⁽²⁾	24


⁽¹⁾	Selling profit includes $28 million recorded within product revenue with a corresponding charge of $14 million recorded in cost of product in the consolidated statement of income for the three months ended March 31, 2020. Interest income is included within product revenue in the consolidated statement of income.

⁽²⁾

Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statement of income for the three months ended March 31, 2020.

Schedule of components of lease income

Components of Lease Income



(In millions)	Three Months Ended March 31, 2020
Sales-type leases:
Selling profit ⁽¹⁾	$	14
Interest income ⁽¹⁾	19
Operating lease income ⁽²⁾	24


⁽¹⁾	Selling profit includes $28 million recorded within product revenue with a corresponding charge of $14 million recorded in cost of product in the consolidated statement of income for the three months ended March 31, 2020. Interest income is included within product revenue in the consolidated statement of income.

⁽²⁾

Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statement of income for the three months ended March 31, 2020.