v3.23.3
Leases
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
Leases Leases
We have entered into various non-cancelable operating lease agreements mostly for our offices, data centers, and colocations. We have also entered into various non-cancelable finance lease agreements for certain network infrastructure. Our leases have original lease periods expiring between the remainder of 2023 and 2093. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs are as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Finance lease cost:
Amortization of right-of-use assets$80 $92 $264 $285 
Interest5 4 15 12 
Operating lease cost487 480 1,560 1,326 
Variable lease cost and other, net163 87 399 263 
Total lease cost$735 $663 $2,238 $1,886 

We also recorded net impairment losses for operating lease right-of-use assets as a part of our facilities consolidation restructuring efforts of $179 million and $990 million for the three and nine months ended September 30, 2023, respectively, and $353 million for the three and nine months ended September 30, 2022. For additional information, see Note 3 — Restructuring.

Supplemental balance sheet information related to lease liabilities is as follows:
September 30, 2023December 31, 2022
Weighted-average remaining lease term:
Finance leases13.9 years14.4 years
Operating leases 11.9 years12.5 years
Weighted-average discount rate:
Finance leases3.3 %3.1 %
Operating leases3.5 %3.2 %
The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2023 (in millions):
Operating LeasesFinance Leases
The remainder of 2023$387 $61 
20242,291 60 
20252,073 61 
20262,021 60 
20272,007 57 
Thereafter13,562 505 
Total undiscounted cash flows22,341 804 
Less: Imputed interest(4,507)(145)
Present value of lease liabilities (1)
$17,834 $659 
Lease liabilities, current$1,460 $85 
Lease liabilities, non-current16,374 574 
Present value of lease liabilities (1)
$17,834 $659 
____________________________________
(1)    Lease liabilities include those operating leases that we plan to sublease or abandon as a part of our facilities consolidation restructuring efforts. For additional information, see Note 3 — Restructuring.

The table above does not include lease payments that were not fixed at commencement or lease modification. As of September 30, 2023, we have additional operating and finance leases, that have not yet commenced, with lease obligations of approximately $7.51 billion and $1.23 billion, respectively, primarily for data centers, colocations, and network infrastructure. These operating and finance leases will commence between the remainder of 2023 and 2028 with lease terms of greater than one year to 30 years.

Supplemental cash flow information related to leases is as follows (in millions):
Nine Months Ended September 30,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases (1)
$1,685 $1,197 
Operating cash flows for finance leases$15 $11 
Financing cash flows for finance leases$751 $615 
Lease liabilities arising from obtaining right-of-use assets:
Operating leases$3,042 $3,565 
Finance leases$460 $114 
____________________________________
(1)Cash flows for operating leases during the nine months ended September 30, 2023 include cash paid for terminations of certain operating leases.
Leases Leases
We have entered into various non-cancelable operating lease agreements mostly for our offices, data centers, and colocations. We have also entered into various non-cancelable finance lease agreements for certain network infrastructure. Our leases have original lease periods expiring between the remainder of 2023 and 2093. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs are as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Finance lease cost:
Amortization of right-of-use assets$80 $92 $264 $285 
Interest5 4 15 12 
Operating lease cost487 480 1,560 1,326 
Variable lease cost and other, net163 87 399 263 
Total lease cost$735 $663 $2,238 $1,886 

We also recorded net impairment losses for operating lease right-of-use assets as a part of our facilities consolidation restructuring efforts of $179 million and $990 million for the three and nine months ended September 30, 2023, respectively, and $353 million for the three and nine months ended September 30, 2022. For additional information, see Note 3 — Restructuring.

Supplemental balance sheet information related to lease liabilities is as follows:
September 30, 2023December 31, 2022
Weighted-average remaining lease term:
Finance leases13.9 years14.4 years
Operating leases 11.9 years12.5 years
Weighted-average discount rate:
Finance leases3.3 %3.1 %
Operating leases3.5 %3.2 %
The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2023 (in millions):
Operating LeasesFinance Leases
The remainder of 2023$387 $61 
20242,291 60 
20252,073 61 
20262,021 60 
20272,007 57 
Thereafter13,562 505 
Total undiscounted cash flows22,341 804 
Less: Imputed interest(4,507)(145)
Present value of lease liabilities (1)
$17,834 $659 
Lease liabilities, current$1,460 $85 
Lease liabilities, non-current16,374 574 
Present value of lease liabilities (1)
$17,834 $659 
____________________________________
(1)    Lease liabilities include those operating leases that we plan to sublease or abandon as a part of our facilities consolidation restructuring efforts. For additional information, see Note 3 — Restructuring.

The table above does not include lease payments that were not fixed at commencement or lease modification. As of September 30, 2023, we have additional operating and finance leases, that have not yet commenced, with lease obligations of approximately $7.51 billion and $1.23 billion, respectively, primarily for data centers, colocations, and network infrastructure. These operating and finance leases will commence between the remainder of 2023 and 2028 with lease terms of greater than one year to 30 years.

Supplemental cash flow information related to leases is as follows (in millions):
Nine Months Ended September 30,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases (1)
$1,685 $1,197 
Operating cash flows for finance leases$15 $11 
Financing cash flows for finance leases$751 $615 
Lease liabilities arising from obtaining right-of-use assets:
Operating leases$3,042 $3,565 
Finance leases$460 $114 
____________________________________
(1)Cash flows for operating leases during the nine months ended September 30, 2023 include cash paid for terminations of certain operating leases.