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Leases
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases
Note 16 – Leases

Lessee

We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2035. Additionally, we lease dark fiber through non-cancelable operating leases with contractual terms that generally extend through 2041. The majority of cell site leases have a non-cancelable term of five to 15 years with several renewal options that can extend the lease term from five to 35 years. In addition, we have financing leases for network equipment that generally have a non-cancelable lease term of two to five years. The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease.

On September 15, 2021, we modified the terms of one of our master lease agreements, which resulted in a $1.0 billion advance rent payment. Our operating lease liabilities were reduced as a result of this prepayment.

Subsequent to December 31, 2021, on January 3, 2022, we entered into the Crown Agreement with CCI that modified the terms of our leased towers from CCI. The Crown Agreement modifies the monthly rental payment we will pay for sites currently leased by us, extends the non-cancellable lease term for the majority of our sites through December 2033 and will allow us the flexibility to facilitate our network integration and decommissioning activities through new site builds and termination of duplicate tower locations. The initial non-cancellable term is through December 31, 2033, followed by optional renewals. As a result of this modification, we will remeasure the associated right-of use assets and lease liabilities with an expected increase of
between $4.8 billion to $5.4 billion to each on the effective date of the modification, with a corresponding gross increase to both deferred tax liabilities and assets of between $1.2 billion to $1.4 billion.

The components of lease expense were as follows:
Year Ended December 31,
(in millions)202120202019
Operating lease expense$5,921 $4,438 $2,558 
Financing lease expense:
Amortization of right-of-use assets738 681 523 
Interest on lease liabilities69 81 82 
Total financing lease expense807 762 605 
Variable lease expense429 328 243 
Total lease expense$7,157 $5,528 $3,406 

Information relating to the lease term and discount rate is as follows:
Year Ended December 31,
202120202019
Weighted-Average Remaining Lease Term (Years)
Operating leases9106
Financing leases333
Weighted-Average Discount Rate
Operating leases3.6 %3.9 %4.8 %
Financing leases2.5 %3.3 %4.0 %

Maturities of lease liabilities as of December 31, 2021, were as follows:
(in millions)Operating LeasesFinance Leases
Twelve Months Ending December 31,
2022$3,868 $1,161 
20234,237 800 
20243,846 505 
20253,343 128 
20262,971 36 
Thereafter17,387 29 
Total lease payments35,652 2,659 
Less: imputed interest6,409 84 
Total$29,243 $2,575 

Interest payments for financing leases were $69 million, $79 million and $82 million for the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $98 million.

As of December 31, 2021, 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

The components of leased wireless devices under our Leasing Programs were as follows:
(in millions)Average Remaining Useful LifeDecember 31, 2021December 31, 2020
Leased wireless devices, gross
8 months
$3,832 $6,989 
Accumulated depreciation(2,373)(2,170)
Leased wireless devices, net$1,459 $4,819 

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,
2022$402 
202344 
Total$446 
Leases
Note 16 – Leases

Lessee

We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2035. Additionally, we lease dark fiber through non-cancelable operating leases with contractual terms that generally extend through 2041. The majority of cell site leases have a non-cancelable term of five to 15 years with several renewal options that can extend the lease term from five to 35 years. In addition, we have financing leases for network equipment that generally have a non-cancelable lease term of two to five years. The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease.

On September 15, 2021, we modified the terms of one of our master lease agreements, which resulted in a $1.0 billion advance rent payment. Our operating lease liabilities were reduced as a result of this prepayment.

Subsequent to December 31, 2021, on January 3, 2022, we entered into the Crown Agreement with CCI that modified the terms of our leased towers from CCI. The Crown Agreement modifies the monthly rental payment we will pay for sites currently leased by us, extends the non-cancellable lease term for the majority of our sites through December 2033 and will allow us the flexibility to facilitate our network integration and decommissioning activities through new site builds and termination of duplicate tower locations. The initial non-cancellable term is through December 31, 2033, followed by optional renewals. As a result of this modification, we will remeasure the associated right-of use assets and lease liabilities with an expected increase of
between $4.8 billion to $5.4 billion to each on the effective date of the modification, with a corresponding gross increase to both deferred tax liabilities and assets of between $1.2 billion to $1.4 billion.

The components of lease expense were as follows:
Year Ended December 31,
(in millions)202120202019
Operating lease expense$5,921 $4,438 $2,558 
Financing lease expense:
Amortization of right-of-use assets738 681 523 
Interest on lease liabilities69 81 82 
Total financing lease expense807 762 605 
Variable lease expense429 328 243 
Total lease expense$7,157 $5,528 $3,406 

Information relating to the lease term and discount rate is as follows:
Year Ended December 31,
202120202019
Weighted-Average Remaining Lease Term (Years)
Operating leases9106
Financing leases333
Weighted-Average Discount Rate
Operating leases3.6 %3.9 %4.8 %
Financing leases2.5 %3.3 %4.0 %

Maturities of lease liabilities as of December 31, 2021, were as follows:
(in millions)Operating LeasesFinance Leases
Twelve Months Ending December 31,
2022$3,868 $1,161 
20234,237 800 
20243,846 505 
20253,343 128 
20262,971 36 
Thereafter17,387 29 
Total lease payments35,652 2,659 
Less: imputed interest6,409 84 
Total$29,243 $2,575 

Interest payments for financing leases were $69 million, $79 million and $82 million for the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $98 million.

As of December 31, 2021, 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

The components of leased wireless devices under our Leasing Programs were as follows:
(in millions)Average Remaining Useful LifeDecember 31, 2021December 31, 2020
Leased wireless devices, gross
8 months
$3,832 $6,989 
Accumulated depreciation(2,373)(2,170)
Leased wireless devices, net$1,459 $4,819 

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,
2022$402 
202344 
Total$446