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Leases | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Leases | NOTE 9 — 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. Prior period financial statement amounts and disclosures have not been adjusted to reflect the provisions of the new standard. We elected the package of transition provisions available which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related right-of-use assets and right-of-use 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 based on information available at lease commencement, 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 September 30, 2019 (dollars in millions):
|  | Balance Sheet Classification |  |  | September 30, 2019 |
Assets: |  |  |  |  |  |  |  |
Operating leases |  |  | Right-of-use operating lease assets |  |  | $ | 1,770 |
Finance leases |  |  | Property and equipment |  |  |  | 486 |
Total lease assets |  |  |  |  |  | $ | 2,256 |
Liabilities: |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |
Operating leases |  |  | Other accrued expenses |  |  | $ | 344 |
Finance leases |  |  | Long-term debt due within one year |  |  |  | 89 |
Noncurrent: |  |  |  |  |  |  |  |
Operating leases |  |  | Right-of-use operating lease obligations |  |  |  | 1,440 |
Finance leases |  |  | Long-term debt |  |  |  | 451 |
Total lease liabilities |  |  |  |  |  | $ | 2,324 |
Weighted-average remaining term: |  |  |  |  |  |  |  |
Operating leases |  |  |  |  |  |  | 10.8 years |
Finance leases |  |  |  |  |  |  | 10.6 years |
Weighted-average discount rate: |  |  |  |  |  |  |  |
Operating leases(1) |  |  |  |  |  |  | 5.4 | %
Finance leases |  |  |  |  |  |  | 6.1 | %
(1) | Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.
The following table presents certain information related to lease expense for finance and operating leases for the quarter and nine months ended September 30, 2019 (dollars in millions):
|  | 2019 |
|  | Quarter |  |  | Nine Months |
Finance lease expense: |  |  |  |  |  |  |  |
Amortization of leased assets |  | $ | 33 |  |  | $ | 70 |
Interest on lease liabilities |  |  | 9 |  |  |  | 24 |
Operating leases(2) |  |  | 94 |  |  |  | 287 |
Short-term lease expense(2) |  |  | 82 |  |  |  | 235 |
Variable lease expense(2) |  |  | 40 |  |  |  | 114 |
|  | $ | 258 |  |  | $ | 730 |
(2) | Expenses are included in “other operating expenses” in our condensed consolidated income statements.
Other Information The following table presents supplemental cash flow information for the nine months ended September 30, 2019 (dollars in millions):
|  | 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows for operating leases |  | $ | 293 |
Operating cash flows for finance leases |  |  | 24 |
Financing cash flows for finance leases |  |  | 58 |
Maturities of Lease Liabilities The following table reconciles the undiscounted cash flows to the finance lease liabilities and operating lease liabilities recorded on the balance sheet at September 30, 2019 (dollars in millions):
|  | Operating Leases |  |  | Finance Leases |
Year 1 |  | $ | 388 |  |  | $ | 107 |
Year 2 |  |  | 339 |  |  |  | 102 |
Year 3 |  |  | 279 |  |  |  | 97 |
Year 4 |  |  | 221 |  |  |  | 57 |
Year 5 |  |  | 175 |  |  |  | 61 |
Thereafter |  |  | 1,038 |  |  |  | 353 |
Total minimum lease payments |  |  | 2,440 |  |  |  | 777 |
Less: amount of lease payments representing interest |  |  | (656 | ) |  |  | (237 | )
Present value of future minimum lease payments |  |  | 1,784 |  |  |  | 540 |
Less: current obligations under leases |  |  | (344 | ) |  |  | (89 | )
Long-term lease obligations |  | $ | 1,440 |  |  | $ | 451 |

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- References No definition available. + Details
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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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