v3.20.4
Leases
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases
Lessee

Through the Merger, we acquired leases of real property, including cell sites, switch sites, dark fiber, retail stores and office facilities and recorded lease liabilities and associated right-of-use assets based on the discounted lease payments. Lease terms that are favorable or unfavorable to market terms were recorded as an adjustment to lease right-of-use assets on our Consolidated Balance Sheets. Favorable and unfavorable leases are amortized on a straight-line basis over the associated remaining lease term.

On September 14, 2020, T-Mobile and American Tower Corporation (“American Tower”) entered into a lease agreement (the “American Tower Lease Agreement”) that will enable us to lease American Tower towers through April 2035. The American Tower Lease Agreement extended the term and modified the rental payments for approximately 20,729 American Tower towers currently leased by us. As a result of this modification, we remeasured the associated right-of-use assets and lease liabilities resulting in an increase of $11.0 billion to each on the effective date of the modification.
The components of lease expense were as follows:
Year Ended December 31,
(in millions)20202019
Operating lease expense$4,438 $2,558 
Financing lease expense:
Amortization of right-of-use assets681 523 
Interest on lease liabilities81 82 
Total financing lease expense762 605 
Variable lease expense328 243 
Total lease expense$5,528 $3,406 

Information relating to the lease term and discount rate is as follows:
Year Ended December 31,
20202019
Weighted Average Remaining Lease Term (Years)
Operating leases106
Financing leases33
Weighted Average Discount Rate
Operating leases3.9 %4.8 %
Financing leases3.3 %4.0 %

Maturities of lease liabilities as of December 31, 2020, were as follows:
(in millions)Operating LeasesFinance Leases
Twelve Months Ending December 31,
2021$4,903 $1,121 
20224,354 795 
20233,759 422 
20243,339 137 
20252,807 92 
Thereafter18,940 61 
Total lease payments38,102 2,628 
Less: imputed interest7,515 121 
Total$30,587 $2,507 

Interest payments for financing leases were $79 million and $82 million for the years ended December 31, 2020 and 2019, respectively.

As of December 31, 2020, we have additional operating leases for cell sites and commercial properties that have not yet commenced with future lease payments of approximately $227 million.

As of December 31, 2020, we were contingently liable for future ground lease payments related to certain tower obligations. These contingent obligations are not included in the above table as the amounts owed are contractually owed by Crown Castle International Corp. based on the subleasing arrangement. See Note 9 - Tower Obligations for further information.
Lessor

Through the Merger, we acquired leased wireless devices with a fair value of $5.8 billion as of April 1, 2020.

The components of leased wireless devices under our Leasing Programs were as follows:
(in millions)Average Remaining Useful LifeDecember 31, 2020December 31, 2019
Leased wireless devices, gross
8 months
$6,989 $1,139 
Accumulated depreciation(2,170)(407)
Leased wireless devices, net$4,819 $732 

For equipment revenues from the lease of mobile communication devices, see Note 10 - Revenue from Contracts with Customers.

Future minimum payments expected to be received over the lease term related to leased wireless devices, which exclude optional residual buy-out amounts at the end of the lease term, are summarized below:
(in millions)Expected Payments
Twelve Months Ending December 31,
2021$1,687 
202292 
Total$1,779 
Leases
Lessee

Through the Merger, we acquired leases of real property, including cell sites, switch sites, dark fiber, retail stores and office facilities and recorded lease liabilities and associated right-of-use assets based on the discounted lease payments. Lease terms that are favorable or unfavorable to market terms were recorded as an adjustment to lease right-of-use assets on our Consolidated Balance Sheets. Favorable and unfavorable leases are amortized on a straight-line basis over the associated remaining lease term.

On September 14, 2020, T-Mobile and American Tower Corporation (“American Tower”) entered into a lease agreement (the “American Tower Lease Agreement”) that will enable us to lease American Tower towers through April 2035. The American Tower Lease Agreement extended the term and modified the rental payments for approximately 20,729 American Tower towers currently leased by us. As a result of this modification, we remeasured the associated right-of-use assets and lease liabilities resulting in an increase of $11.0 billion to each on the effective date of the modification.
The components of lease expense were as follows:
Year Ended December 31,
(in millions)20202019
Operating lease expense$4,438 $2,558 
Financing lease expense:
Amortization of right-of-use assets681 523 
Interest on lease liabilities81 82 
Total financing lease expense762 605 
Variable lease expense328 243 
Total lease expense$5,528 $3,406 

Information relating to the lease term and discount rate is as follows:
Year Ended December 31,
20202019
Weighted Average Remaining Lease Term (Years)
Operating leases106
Financing leases33
Weighted Average Discount Rate
Operating leases3.9 %4.8 %
Financing leases3.3 %4.0 %

Maturities of lease liabilities as of December 31, 2020, were as follows:
(in millions)Operating LeasesFinance Leases
Twelve Months Ending December 31,
2021$4,903 $1,121 
20224,354 795 
20233,759 422 
20243,339 137 
20252,807 92 
Thereafter18,940 61 
Total lease payments38,102 2,628 
Less: imputed interest7,515 121 
Total$30,587 $2,507 

Interest payments for financing leases were $79 million and $82 million for the years ended December 31, 2020 and 2019, respectively.

As of December 31, 2020, we have additional operating leases for cell sites and commercial properties that have not yet commenced with future lease payments of approximately $227 million.

As of December 31, 2020, we were contingently liable for future ground lease payments related to certain tower obligations. These contingent obligations are not included in the above table as the amounts owed are contractually owed by Crown Castle International Corp. based on the subleasing arrangement. See Note 9 - Tower Obligations for further information.
Lessor

Through the Merger, we acquired leased wireless devices with a fair value of $5.8 billion as of April 1, 2020.

The components of leased wireless devices under our Leasing Programs were as follows:
(in millions)Average Remaining Useful LifeDecember 31, 2020December 31, 2019
Leased wireless devices, gross
8 months
$6,989 $1,139 
Accumulated depreciation(2,170)(407)
Leased wireless devices, net$4,819 $732 

For equipment revenues from the lease of mobile communication devices, see Note 10 - Revenue from Contracts with Customers.

Future minimum payments expected to be received over the lease term related to leased wireless devices, which exclude optional residual buy-out amounts at the end of the lease term, are summarized below:
(in millions)Expected Payments
Twelve Months Ending December 31,
2021$1,687 
202292 
Total$1,779