v3.19.3

Leases | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Leases | Note 6 - Leases The components of lease expense were as follows (in millions):
|  | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Lease cost |  |  |  |
Finance lease cost: |  |  |  |
Amortization of assets |  | $ | 39 |  |  | $ | 110 |
Interest of lease liabilities |  | 4 |  |  | 12 |
Operating lease cost |  | 84 |  |  | 230 |
Short-term lease cost |  | 4 |  |  | 22 |
Variable lease cost |  | 26 |  |  | 80 |
Sublease income |  | — |  |  | (1 | )
Total lease cost |  | $ | 157 |  |  | $ | 453 |
Supplemental cash flow information related to leases was as follows (in millions):
|  | Nine Months Ended September 30, 2019
Other information |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from financing leases |  | $ | 10 |
Operating cash flows from operating leases |  | 192 |
Financing cash flows from financing leases |  | 120 |
Right-of-use assets obtained in exchange for lease obligations: |  |
Operating lease liabilities |  | $ | 804 |
Finance lease liabilities |  | 196 |
Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):
|  | As of September 30, 2019
Operating Leases |  |
Operating lease right-of-use assets |  | $ | 1,538 |
Operating lease liability, current |  | 197 |
Operating lease liabilities, non-current |  | 1,459 |
Total operating lease liabilities |  | $ | 1,656 |
|  | As of September 30, 2019
Finance Leases |  |
Property and equipment, at cost |  | $ | 484 |
Accumulated depreciation |  | (207 | )
Property and equipment, net |  | $ | 277 |
Other current liabilities |  | $ | 130 |
Other long-term liabilities |  | 144 |
Total finance leases liabilities |  | $ | 274 |
|  | As of September 30, 2019
Weighted-average remaining lease term |  |
Operating leases |  | 16 years |
Finance leases |  | 2 years |
Weighted-average discount rate |  |
Operating leases |  | 7.2 | %
Finance leases |  | 5.1 | %
Maturities of lease liabilities were as follows (in millions):
|  | As of September 30, 2019
|  | Operating Leases |  | Finance Leases
Remainder of 2019 |  | $ | 58 |  |  | $ | 37 |
2020 |  | 226 |  |  | 136 |
2021 |  | 290 |  |  | 98 |
2022 |  | 253 |  |  | 18 |
2023 |  | 186 |  |  | — |
Thereafter |  | 2,284 |  |  | — |
Total undiscounted lease payments |  | 3,297 |  |  | 289 |
Less: imputed interest |  | (1,641 | ) |  | (15 | )
Total lease liabilities |  | $ | 1,656 |  |  | $ | 274 |
As of September 30, 2019, the Company had additional operating leases and finance leases, primarily for corporate offices and servers, that have not yet commenced of $550 million and $3 million, respectively. These operating and finance leases will commence between fiscal year 2019 and fiscal year 2022 with lease terms of 2 years to 11 years. Mission Bay 1 & 2 In 2015, the Company entered into a joint venture (“JV”) agreement with a real estate developer (“JV Partner”) to develop land (“the Land”) in San Francisco to construct the Company’s new headquarters (the “Headquarters”). The Headquarters will consist of two adjacent office buildings totaling approximately 423,000 rentable square feet. In connection with the JV arrangement, the Company had acquired a 49% interest in the JV, the principal asset of which was the Land. In 2016, the Company and the JV Partner agreed to dissolve the JV and terminate the Company’s commitment to the lease of the Headquarters (together “the real estate transaction”) and the Company retained a 49% indirect interest in the Land (“Indirect Interest”). Under the terms of the real estate transaction, the Company obtained the rights and title to the partially constructed building, will complete the development of the two office buildings and retain a 100% ownership in the buildings. In connection with the real estate transaction, the Company also executed two 75-year land lease agreements (“Land Leases”). As of September 30, 2019, commitments under the Land Leases total $167 million until February 2032. After 2032, the annual rent amount will adjust annually based on the prevailing consumer price index. The real estate transaction is accounted for as a financing transaction of its 49% Indirect Interest due to the Company’s continuing involvement through a purchase option on the Indirect Interest. As a financing transaction, the cash and deferred sales proceeds received from the real estate transaction are recorded as a financing obligation. As of September 30, 2019, the Company’s Indirect Interest of $65 million is included in property and equipment, net and a corresponding financing obligation of $79 million is included in other long-term liabilities. Future land lease payments of $1.8 billion will be allocated 49% to the financing obligation of the Indirect Interest and 51% to the operating lease of land. Future minimum payments related to the financing obligations as of September 30, 2019 are summarized below (in millions):
|  | Future Minimum Payments
Fiscal Year Ending December 31, |  |
Remainder of 2019 |  | $ | 1 |
2020 |  | 6 |
2021 |  | 6 |
2022 |  | 6 |
2023 |  | 6 |
Thereafter |  | 833 |
Total |  | $ | 858 |
Leases | Note 6 - Leases The components of lease expense were as follows (in millions):
|  | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Lease cost |  |  |  |
Finance lease cost: |  |  |  |
Amortization of assets |  | $ | 39 |  |  | $ | 110 |
Interest of lease liabilities |  | 4 |  |  | 12 |
Operating lease cost |  | 84 |  |  | 230 |
Short-term lease cost |  | 4 |  |  | 22 |
Variable lease cost |  | 26 |  |  | 80 |
Sublease income |  | — |  |  | (1 | )
Total lease cost |  | $ | 157 |  |  | $ | 453 |
Supplemental cash flow information related to leases was as follows (in millions):
|  | Nine Months Ended September 30, 2019
Other information |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from financing leases |  | $ | 10 |
Operating cash flows from operating leases |  | 192 |
Financing cash flows from financing leases |  | 120 |
Right-of-use assets obtained in exchange for lease obligations: |  |
Operating lease liabilities |  | $ | 804 |
Finance lease liabilities |  | 196 |
Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):
|  | As of September 30, 2019
Operating Leases |  |
Operating lease right-of-use assets |  | $ | 1,538 |
Operating lease liability, current |  | 197 |
Operating lease liabilities, non-current |  | 1,459 |
Total operating lease liabilities |  | $ | 1,656 |
|  | As of September 30, 2019
Finance Leases |  |
Property and equipment, at cost |  | $ | 484 |
Accumulated depreciation |  | (207 | )
Property and equipment, net |  | $ | 277 |
Other current liabilities |  | $ | 130 |
Other long-term liabilities |  | 144 |
Total finance leases liabilities |  | $ | 274 |
|  | As of September 30, 2019
Weighted-average remaining lease term |  |
Operating leases |  | 16 years |
Finance leases |  | 2 years |
Weighted-average discount rate |  |
Operating leases |  | 7.2 | %
Finance leases |  | 5.1 | %
Maturities of lease liabilities were as follows (in millions):
|  | As of September 30, 2019
|  | Operating Leases |  | Finance Leases
Remainder of 2019 |  | $ | 58 |  |  | $ | 37 |
2020 |  | 226 |  |  | 136 |
2021 |  | 290 |  |  | 98 |
2022 |  | 253 |  |  | 18 |
2023 |  | 186 |  |  | — |
Thereafter |  | 2,284 |  |  | — |
Total undiscounted lease payments |  | 3,297 |  |  | 289 |
Less: imputed interest |  | (1,641 | ) |  | (15 | )
Total lease liabilities |  | $ | 1,656 |  |  | $ | 274 |
As of September 30, 2019, the Company had additional operating leases and finance leases, primarily for corporate offices and servers, that have not yet commenced of $550 million and $3 million, respectively. These operating and finance leases will commence between fiscal year 2019 and fiscal year 2022 with lease terms of 2 years to 11 years. Mission Bay 1 & 2 In 2015, the Company entered into a joint venture (“JV”) agreement with a real estate developer (“JV Partner”) to develop land (“the Land”) in San Francisco to construct the Company’s new headquarters (the “Headquarters”). The Headquarters will consist of two adjacent office buildings totaling approximately 423,000 rentable square feet. In connection with the JV arrangement, the Company had acquired a 49% interest in the JV, the principal asset of which was the Land. In 2016, the Company and the JV Partner agreed to dissolve the JV and terminate the Company’s commitment to the lease of the Headquarters (together “the real estate transaction”) and the Company retained a 49% indirect interest in the Land (“Indirect Interest”). Under the terms of the real estate transaction, the Company obtained the rights and title to the partially constructed building, will complete the development of the two office buildings and retain a 100% ownership in the buildings. In connection with the real estate transaction, the Company also executed two 75-year land lease agreements (“Land Leases”). As of September 30, 2019, commitments under the Land Leases total $167 million until February 2032. After 2032, the annual rent amount will adjust annually based on the prevailing consumer price index. The real estate transaction is accounted for as a financing transaction of its 49% Indirect Interest due to the Company’s continuing involvement through a purchase option on the Indirect Interest. As a financing transaction, the cash and deferred sales proceeds received from the real estate transaction are recorded as a financing obligation. As of September 30, 2019, the Company’s Indirect Interest of $65 million is included in property and equipment, net and a corresponding financing obligation of $79 million is included in other long-term liabilities. Future land lease payments of $1.8 billion will be allocated 49% to the financing obligation of the Indirect Interest and 51% to the operating lease of land. Future minimum payments related to the financing obligations as of September 30, 2019 are summarized below (in millions):
|  | Future Minimum Payments
Fiscal Year Ending December 31, |  |
Remainder of 2019 |  | $ | 1 |
2020 |  | 6 |
2021 |  | 6 |
2022 |  | 6 |
2023 |  | 6 |
Thereafter |  | 833 |
Total |  | $ | 858 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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