Leases (Tables)
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12 Months Ended |
Dec. 31, 2019 |
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| Leases |
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| Schedule of various components of lease costs |
| | | | ($ in millions) | | | | For the year ended December 31: | | 2019 | Finance lease cost | | $ | 30 | Operating lease cost | | | 1,645 | Short-term lease cost | | | 38 | Variable lease cost | | | 534 | Sublease income | | | (24) | Total lease cost | | $ | 2,223 |
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| Schedule of supplemental information relating to the cash flows arising from lease transactions |
| | | | | ($ in millions) | | | | | For the year ended December 31: | | 2019 | | Cash paid for amounts included in the measurement of lease liabilities | | | | | Operating cash outflows from finance leases | | $ | 8 | | Financing cash outflows from finance leases | | | 22 | | Operating cash outflows from operating leases | | | 1,541 | | ROU assets obtained in exchange for new finance lease liabilities | | | 209 | * | ROU assets obtained in exchange for new operating lease liabilities | | | 6,481 | * |
* Includes opening balance additions as a result of the adoption of the new lease guidance effective January 1, 2019. The post adoption addition of leases for the year ended December 31, 2019 was $1,679 million for operating leases and immaterial for finance leases.
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| Schedule of weighted-average lease terms and discount rates |
| | | | At December 31: | | 2019 | | Finance leases | | | | Weighted-average remaining lease term | | 4.8 | yrs. | Weighted-average discount rate | | 1.62 | % | Operating leases | | | | Weighted-average remaining lease term | | 5.4 | yrs. | Weighted-average discount rate | | 3.03 | % |
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| Schedule of expected undiscounted cash out flows for operating and finance leases |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Imputed | | | | ($ in millions) | | 2020 | | 2021 | | 2022 | | 2023 | | 2024 | | Thereafter | | Interest* | | Total** | Finance leases | | $ | 62 | | $ | 59 | | $ | 48 | | $ | 31 | | $ | 12 | | $ | 46 | | $ | (54) | | $ | 204 | Operating leases | | | 1,486 | | | 1,198 | | | 928 | | | 673 | | | 514 | | | 806 | | | (346) | | | 5,259 |
* Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. ** The company entered into lease agreements for certain facilities and equipment with payments totaling approximately $181 million that have not yet commenced as of December 31, 2019, and therefore are not included in this table.
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| Operating lease commitments |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beyond | ($ in millions) | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 | | 2023 | Operating lease commitments | | | | | | | | | | | | | | | | | | | Gross minimum rental commitments (including vacant space below) | | $ | 1,581 | | $ | 1,233 | | $ | 914 | | $ | 640 | | $ | 445 | | $ | 815 | Vacant space | | | 29 | | | 23 | | | 14 | | | 9 | | | 5 | | | 8 | Sublease income commitments | | | 11 | | | 7 | | | 5 | | | 4 | | | 4 | | | 2 | Capital lease commitments | | | 3 | | | 3 | | | 3 | | | 3 | | | 2 | | | 28 |
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| Capital lease commitments |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Beyond | ($ in millions) | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 | | 2023 | Operating lease commitments | | | | | | | | | | | | | | | | | | | Gross minimum rental commitments (including vacant space below) | | $ | 1,581 | | $ | 1,233 | | $ | 914 | | $ | 640 | | $ | 445 | | $ | 815 | Vacant space | | | 29 | | | 23 | | | 14 | | | 9 | | | 5 | | | 8 | Sublease income commitments | | | 11 | | | 7 | | | 5 | | | 4 | | | 4 | | | 2 | Capital lease commitments | | | 3 | | | 3 | | | 3 | | | 3 | | | 2 | | | 28 |
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| Schedule of amounts included in the Consolidated Statement of Earnings related to lessor activity |
| | | | ($ in millions) | | | | For the year ended December 31: | | 2019 | Lease income–sales-type and direct financing leases | | | | Sales-type lease selling price | | $ | 1,509 | Less: Carrying value of underlying assets excluding unguaranteed residual value | | | 591 | Gross profit | | | 918 | Interest income on lease receivables | | | 303 | Total sales-type and direct financing lease income | | | 1,221 | Lease income–operating leases | | | 324 | Variable lease income | | | 56 | Total lease income | | $ | 1,601 |
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| Schedule of maturity analysis of the lease payments due to IBM on sales-type and direct financing leases |
| | | | | ($ in millions) | | Total | | 2020 | | $ | 2,632 | | 2021 | | | 1,921 | | 2022 | | | 1,053 | | 2023 | | | 382 | | 2024 | | | 82 | | Thereafter | | | 7 | | Total undiscounted cash flows | | $ | 6,077 | | Present value of lease payments (recognized as financing receivables) | | | 5,567 | * | Difference between undiscounted cash flows and discounted cash flows | | $ | (509) | |
* The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet, due to certain items including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the future lease payments.
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| Schedule of maturity analysis of the undiscounted lease payments due to IBM on operating leases |
| | | | ($ in millions) | | Total | 2020 | | $ | 145 | 2021 | | | 35 | 2022 | | | 4 | 2023 | | | 0 | 2024 | | | 0 | Thereafter | | | — | Total undiscounted cash flows | | $ | 184 |
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