Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

NOTE 10 — LEASES

We adopted ASU No. 2016-02, Leases (Topic 842), which requires leases with durations greater than 12 months to be recognized on the balance sheet, effective January 1, 2019, using the modified retrospective approach. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related assets and obligations at the present value of lease payments over the term. Many of our leases include rental escalation clauses and renewal options that are factored into our determination of lease payments, when appropriate. We do not separate lease and nonlease components of contracts. Generally, we use our estimated incremental borrowing rate to discount the lease payments, as most of our leases do not provide a readily determinable implicit interest rate.

The following table presents our lease-related assets and liabilities at December 31, 2020 and 2019 (dollars in millions):

	Balance Sheet Classification		2020			2019
Assets:
Operating leases		Right-of-use operating lease assets	$	2,024		$	1,834
Finance leases		Property and equipment		553			520
Total lease assets			$	2,577		$	2,354
Liabilities:
Current:
Operating leases		Other accrued expenses	$	379		$	350
Finance leases		Long-term debt due within one year		128			87
Noncurrent:
Operating leases		Right-of-use operating lease obligations		1,673			1,499
Finance leases		Long-term debt		494			470
Total lease liabilities			$	2,674		$	2,406
Weighted-average remaining term:
Operating leases				10.4 years			10.8 years
Finance leases				11.5 years			12.0 years
Weighted-average discount rate:
Operating leases				4.8	%		5.3	%
Finance leases				5.4	%		6.0	%

The following table presents certain information related to lease expense for finance and operating leases for the years ended December 31, 2020 and 2019 (dollars in millions):

	2020		2019
Finance lease expense:
Depreciation and amortization	$	106	$	93
Interest		31		32
Operating leases(1)		447		389
Short-term lease expense(1)		322		316
Variable lease expense(1)		154		150
	$	1,060	$	980

(1) Expenses are included in “other operating expenses” in our consolidated income statements.

The following table presents supplemental cash flow information for the years ended December 31, 2020 and 2019 (dollars in millions):

	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	445	$	404
Operating cash flows for finance leases		31		32
Financing cash flows for finance leases		86		79

Maturities of Lease Liabilities

The following table reconciles the undiscounted minimum lease payment amounts to the operating and finance lease liabilities recorded on the balance sheet at December 31, 2020 and 2019 (dollars in millions):

	2020						2019
	Operating Leases			Finance Leases			Operating Leases			Finance Leases
Year 1	$	431		$	155		$	411		$	110
Year 2		366			125			350			105
Year 3		307			81			285			99
Year 4		255			82			228			58
Year 5		207			51			182			60
Thereafter		1,136			353			1,074			368
Total minimum lease payments		2,702			847			2,530			800
Less: amount of lease payments representing interest		(650	)		(225	)		(681	)		(243	)
Present value of future minimum lease payments		2,052			622			1,849			557
Less: current lease obligations		(379	)		(128	)		(350	)		(87	)
Long-term lease obligations	$	1,673		$	494		$	1,499		$	470