v3.22.0.1
Leases
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases
Note 6 - Leases    
Our leases primarily include corporate offices, data centers, and servers. The lease term of operating and finance leases vary from less than a year to 76 years. We have leases that include one or more options to extend the lease term for up to 14 years as well as options to terminate the lease within one year. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Our lease agreements generally do not contain any residual value guarantees or restrictive covenants.
The components of our lease expense were as follows (in millions):
Year Ended December 31,
201920202021
Lease cost
Finance lease cost:
      Amortization of assets$150 $199 $217 
      Interest of lease liabilities15 16 12 
Operating lease cost (1)
321 482 299 
Short-term lease cost28 17 7 
Variable lease cost100 109 96 
Sublease income(2)(2)(5)
Total lease cost$612 $821 $626 
(1) We exited certain leased offices, primarily due to the City of San Francisco’s extended shelter-in-place orders and our restructuring activities, resulting in accelerated lease cost of $118 million for the year ended December 31, 2020.
Supplemental cash flow information related to leases was as follows (in millions):
Year Ended December 31,
201920202021
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from financing leases$12 $14 $11 
Operating cash flows from operating leases275 250 297 
Financing cash flows from financing leases138 224 226 
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities$918 $202 $273 
Finance lease liabilities251 196 184 
Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):
As of December 31,
20202021
Operating Leases
Operating lease right-of-use assets$1,274 $1,388 
Operating lease liability, current$175 $185 
Operating lease liabilities, non-current1,544 1,644 
     Total operating lease liabilities$1,719 $1,829 
As of December 31,
20202021
Finance Leases
Property and equipment, at cost$596 $650 
Accumulated depreciation(303)(390)
     Property and equipment, net $293 $260 
Other current liabilities$177 $191 
Other long-term liabilities120 43 
     Total finance leases liabilities$297 $234 

As of December 31,
20202021
Weighted-average remaining lease term
     Operating leases16 years15 years
     Finance leases2 years2 years
Weighted-average discount rate
     Operating leases7.0 %6.7 %
     Finance leases5.4 %4.2 %
Maturities of lease liabilities were as follows (in millions):
As of December 31, 2021
Operating LeasesFinance Leases
2022$280 $140 
2023312 60 
2024264 34 
2025214 9 
2026198 — 
Thereafter2,067 1 
Total undiscounted lease payments3,335 244 
Less: imputed interest(1,506)(10)
Total lease liabilities$1,829 $234 
As of December 31, 2021, we had additional operating leases and finance leases, primarily for corporate offices and servers, that have not yet commenced of $421 million and $19 million, respectively. These operating and finance leases will commence between fiscal year 2022 and fiscal year 2023 with lease terms of 2 years to 13 years.
Mission Bay 1 & 2
In 2015, we entered into a joint venture (“JV”) agreement with a real estate developer (“JV Partner”) to develop land (“the Land”) in San Francisco to construct our new headquarters (the “Headquarters”). The Headquarters consists of two adjacent office buildings totaling approximately 423,000 rentable square feet. In connection with the JV arrangement, we acquired a 49% interest in the JV, the principal asset of which was the Land.
In 2016, we and the JV Partner agreed to dissolve the JV and terminate our commitment to the lease of the Headquarters (together “the real estate transaction”) and we retained a 49% indirect interest in the Land (“Indirect Interest”). Under the terms of the real estate transaction, we obtained the rights and title to the partially constructed building, completed the development of the two office buildings and retained a 100% ownership in the buildings. In connection with the real estate transaction, we also executed two 75-year land lease agreements (“Land Leases”). As of December 31, 2021, commitments under the Land Leases total $141 million until February 2032. After 2032, the annual rent amount will adjust annually based on the prevailing consumer price index.
The real estate transaction is accounted for as a financing transaction of our 49% Indirect Interest due to our continuing involvement through a purchase option on the Indirect Interest. As a financing transaction, the cash and deferred sales proceeds received from the real estate transaction are recorded as a financing obligation. As of December 31, 2021, our Indirect Interest of $65 million is included in property and equipment, net and a corresponding financing obligation of $76 million is included in other long-
term liabilities. Future land lease payments of $1.7 billion is allocated 49% to the financing obligation of the Indirect Interest and 51% to the operating lease of land.
Future minimum payments related to the financing obligations as of December 31, 2021 are summarized below (in millions):
Future Minimum Payments
Fiscal Year Ending December 31,
2022$6 
20236 
20246 
20257 
20267 
Thereafter813 
Total$845 
Leases
Note 6 - Leases    
Our leases primarily include corporate offices, data centers, and servers. The lease term of operating and finance leases vary from less than a year to 76 years. We have leases that include one or more options to extend the lease term for up to 14 years as well as options to terminate the lease within one year. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Our lease agreements generally do not contain any residual value guarantees or restrictive covenants.
The components of our lease expense were as follows (in millions):
Year Ended December 31,
201920202021
Lease cost
Finance lease cost:
      Amortization of assets$150 $199 $217 
      Interest of lease liabilities15 16 12 
Operating lease cost (1)
321 482 299 
Short-term lease cost28 17 7 
Variable lease cost100 109 96 
Sublease income(2)(2)(5)
Total lease cost$612 $821 $626 
(1) We exited certain leased offices, primarily due to the City of San Francisco’s extended shelter-in-place orders and our restructuring activities, resulting in accelerated lease cost of $118 million for the year ended December 31, 2020.
Supplemental cash flow information related to leases was as follows (in millions):
Year Ended December 31,
201920202021
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from financing leases$12 $14 $11 
Operating cash flows from operating leases275 250 297 
Financing cash flows from financing leases138 224 226 
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities$918 $202 $273 
Finance lease liabilities251 196 184 
Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):
As of December 31,
20202021
Operating Leases
Operating lease right-of-use assets$1,274 $1,388 
Operating lease liability, current$175 $185 
Operating lease liabilities, non-current1,544 1,644 
     Total operating lease liabilities$1,719 $1,829 
As of December 31,
20202021
Finance Leases
Property and equipment, at cost$596 $650 
Accumulated depreciation(303)(390)
     Property and equipment, net $293 $260 
Other current liabilities$177 $191 
Other long-term liabilities120 43 
     Total finance leases liabilities$297 $234 

As of December 31,
20202021
Weighted-average remaining lease term
     Operating leases16 years15 years
     Finance leases2 years2 years
Weighted-average discount rate
     Operating leases7.0 %6.7 %
     Finance leases5.4 %4.2 %
Maturities of lease liabilities were as follows (in millions):
As of December 31, 2021
Operating LeasesFinance Leases
2022$280 $140 
2023312 60 
2024264 34 
2025214 9 
2026198 — 
Thereafter2,067 1 
Total undiscounted lease payments3,335 244 
Less: imputed interest(1,506)(10)
Total lease liabilities$1,829 $234 
As of December 31, 2021, we had additional operating leases and finance leases, primarily for corporate offices and servers, that have not yet commenced of $421 million and $19 million, respectively. These operating and finance leases will commence between fiscal year 2022 and fiscal year 2023 with lease terms of 2 years to 13 years.
Mission Bay 1 & 2
In 2015, we entered into a joint venture (“JV”) agreement with a real estate developer (“JV Partner”) to develop land (“the Land”) in San Francisco to construct our new headquarters (the “Headquarters”). The Headquarters consists of two adjacent office buildings totaling approximately 423,000 rentable square feet. In connection with the JV arrangement, we acquired a 49% interest in the JV, the principal asset of which was the Land.
In 2016, we and the JV Partner agreed to dissolve the JV and terminate our commitment to the lease of the Headquarters (together “the real estate transaction”) and we retained a 49% indirect interest in the Land (“Indirect Interest”). Under the terms of the real estate transaction, we obtained the rights and title to the partially constructed building, completed the development of the two office buildings and retained a 100% ownership in the buildings. In connection with the real estate transaction, we also executed two 75-year land lease agreements (“Land Leases”). As of December 31, 2021, commitments under the Land Leases total $141 million until February 2032. After 2032, the annual rent amount will adjust annually based on the prevailing consumer price index.
The real estate transaction is accounted for as a financing transaction of our 49% Indirect Interest due to our continuing involvement through a purchase option on the Indirect Interest. As a financing transaction, the cash and deferred sales proceeds received from the real estate transaction are recorded as a financing obligation. As of December 31, 2021, our Indirect Interest of $65 million is included in property and equipment, net and a corresponding financing obligation of $76 million is included in other long-
term liabilities. Future land lease payments of $1.7 billion is allocated 49% to the financing obligation of the Indirect Interest and 51% to the operating lease of land.
Future minimum payments related to the financing obligations as of December 31, 2021 are summarized below (in millions):
Future Minimum Payments
Fiscal Year Ending December 31,
2022$6 
20236 
20246 
20257 
20267 
Thereafter813 
Total$845