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You have been hired as a financial analyst by an asset management firm, Bicentennial, LLC. A fund manager, John Edward, is constructing a new equity investment fund focusing on the burgeoning industry of electric vehicles. John assigns you a financial statement analysis project comparing recent operational performances and current financial position of the three companies: Ford, General Motors, and Tesla Inc. Specifically, John is expecting you to read those companies annual reports in the Form 10-K and assist him to understand the financial implication of the following four areas: (1) the use of finance and operating leases, (2) financial reporting of pension liabilities, (3) the efficiency of tax planning and the reporting of tax positions; and (4) cash management policy and soundness of operating, investing, and financing cash flows.

Question 2. General Motors (GM) is also reporting lease accounts in both asset and liability sections of its balance sheet on page 52. In Footnote 12. Accrued and Other Liabilities, GM is disclosing that its operating lease liability for FY 2020 is $969 million. Interestingly, GM is treating its finance leases similar to other interest-paying debts (See Footnote 13. Debt). Tesla is also classifying the Finance lease as a part of Debt (see Footnote 12 on page 81). Can you think of any reason justifying this approach treating Operating Lease and Finance Lease differently? In other words, why treating the Finance lease as interest-paying debt is acceptable (As a reference, see Fords 10-K page 148, Footnote 18 where total lease expenses are decomposed. Also, think of the journal entries made to recognize lease expenses under Finance lease vs. Operating Lease).

Ford note 18

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GENERAL MOTORS COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except per share amounts) December 31, 2020 December 31, 2019 19,992 $ 9,046 8,035 26,209 10,235 7,407 80,924 19,069 4,174 6,797 26,601 10,398 7,953 74,992 31,783 8,406 37,632 5,230 39,819 24,136 7,264 154,270 235,194 26,355 8,562 38,750 5,337 42,055 24,640 7,346 153,045 228,037 $ 19,928 $ 21,018 ASSETS Current Assets Cash and cash equivalents Marketable debt securities (Note 4) Accounts and notes receivable (net of allowance of $224 and $201) GM Financial receivables, net (Note 5; Note 11 at VIES) Inventories (Note 6) Other current assets (Note 4; Note 11 at VIES) Total current assets Non-current Assets GM Financial receivables, net (Note 5; Note 11 at VIES) Equity in net assets of nonconsolidated affiliates (Note 8) Property, net (Note 9) Goodwill and intangible assets, net (Note 10) Equipment on operating leases, net (Note 7; Note 11 at VIES) Deferred income taxes (Note 17) Other assets (Note 4; Note 11 at VIES) Total non-current assets Total Assets LIABILITIES AND EQUITY Current Liabilities Accounts payable (principally trade) Short-term debt and current portion of long-term debt (Note 13) Automotive GM Financial (Note 11 at VIES) Accrued liabilities (Note 12) Total current liabilities Non-current Liabilities Long-term debt (Note 13) Automotive GM Financial (Note 11 at VIES) Postretirement benefits other than pensions (Note 15) Pensions (Note 15) Other liabilities (Note 12) Total non-current liabilities Total Liabilities Commitments and contingencies (Note 16) Equity (Note 20) Common stock, $0.01 par value Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interests Total Equity Total Liabilities and Equity 1,276 35,637 23,069 79,910 1,897 35,503 26,487 84,905 16,193 56,788 6,277 12,902 13,447 105,607 185,517 12,489 53,435 5,935 12,170 13,146 97,175 182,080 14 26,542 31,962 (13,488) 45,030 4,647 49,677 235,194 14 26,074 26,860 (11,156) 41,792 4,165 45,957 228,037 $ Note 12. Accrued and Other Liabilities December 31, 2020 December 31, 2019 $ Accrued liabilities Dealer and customer allowances, claims and discounts Deferred revenue Product warranty and related liabilities Payrolls and employee benefits excluding postemployment benefits Other Total accrued liabilities 7,300 $ 3,132 3,048 1,864 7,725 23,069 $ 10,402 3,234 2,987 1,969 7,895 26,487 $ $ Other liabilities Deferred revenue Product warranty and related liabilities Operating lease liabilities Employee benefits excluding postemployment benefits Postemployment benefits including facility idling reserves Other Total other liabilities 2,715 $ 5,193 969 822 739 3,009 13,447 $ 2,962 4,811 1,010 704 633 3,026 13,146 $ Years Ended December 31, 2019 2020 2018 $ Product Warranty and Related Liabilities Warranty balance at beginning of period Warranties issued and assumed in period recall campaigns Warranties issued and assumed in period - product warranty Payments Adjustments to pre-existing warranties Effect of foreign currency and other Warranty balance at end of period 7,798 $ 1,628 1,773 (2,986) 41 (12) 8,242 $ 7,590 $ 745 2,001 (3,012) 455 19 7,798 $ 8,332 665 2,143 (2,903) (464) (183) 7,590 $ In the three months ended December 31, 2020, we recorded an accrual of $1.1 billion, which represents our current estimate of the expected costs of complying with the recall related to the Takata passenger-side inflators in certain GMT900 vehicles, which are full-size pickup trucks and SUVs. This accrual is reflected in Warranties issued and assumed in period recall campaigns in the table above. Refer to Note 16 for additional information on Takata matters. Note 13. Debt Automotive The following table presents debt in our automotive operations: December 31, 2020 Carrying Amount Fair Value $ 303 $ 332 16,929 20,988 237 256 $ 17,469 $ 21,576 December 31, 2019 Carrying Amount Fair Value $ 167 $ 165 13,909 15,247 310 516 $ 14,386 $ 15,928 Secured debt Unsecured debt Finance lease liabilities Total automotive debt(a) Fair value utilizing Level 1 inputs Fair value utilizing Level 2 inputs Available under credit facility agreements(b) Weighted-average interest rate on outstanding short-term debt(c) Weighted average interest rate on outstanding long-term debt(c) $ $ $ $ $ 19,826 1,750 18,222 3.8 % 5.6 % $ 13,628 2,300 17,285 4.9 % 5.4 % (a) Includes net discount and debt issuance costs of $540 million at December 31, 2020 and 2019. (b) Excludes our 364-day, $2.0 billion facility designated for exclusive use by GM Financial. (C) Includes coupon rates on debt denominated in various foreign currencies and interest free loans. Unsecured debt primarily consists of revolving credit facilities and senior notes. In March 2020, we borrowed: (1) $3.4 billion against our three-year, $4.0 billion facility; (2) $2.0 billion against our three-year, $3.0 billion facility, which reduced to $2.0 billion in May 2020 (three-year, $2.0 billion transformation facility); and (3) $10.5 billion against our five-year, $10.5 billion facility with maturity dates ranging from 2021 to 2023. We repaid all amounts drawn under the revolving credit facilities as of December 31, 2020. We did not have any borrowings against our revolving credit facilities at December 31, 2019. In April 2020, we renewed our 364-day, $2.0 billion facility dedicated for exclusive use by GM Financial for an additional 364-day term and extended $3.6 billion of the three-year, $4.0 billion facility for an additional year expiring in April 2022. The remaining portion will expire in April 2021, unless extended. As part of the extension of the three-year, $4.0 billion facility, we agreed not to execute any share repurchases while we have any outstanding borrowings under the revolving credit facilities, except for the three-year, $2.0 billion transformation facility. In addition, we are restricted from paying dividends on our common shares if outstanding borrowings under the revolving credit facilities exceed $5.0 billion, with the exception of the three-year, $2.0 billion transformation facility. In May 2020, we issued $4.0 billion in aggregate principal amount senior unsecured notes with a weighted average interest rate of 6.11% and maturity dates ranging from 2023 to 2027. The notes are governed by a sixth supplemental indenture and the same base indenture that governs our existing notes, which contains terms and covenants customary to these types of securities, including a limitation on the amount of certain secured debt we may incur. The net proceeds from the issuance of these senior unsecured notes provide additional financial flexibility and will be used for general corporate purposes. In May 2020, we entered into a new unsecured 364-day, $2.0 billion revolving credit facility as an additional source of available liquidity. In August 2020, we repaid $500 million of our floating rate senior unsecured debt upon maturity. Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Assets and Fair Value Measurements The following tables summarize the fair value of U.S. and non-U.S. defined benefit pension plan assets by asset class: December 31, 2020 Level 2 Level 3 Level 1 Total Level 1 December 31, 2019 Level 2 Level 3 Total 1 $ 1 $ $ 7,429 $ $ 13,231 26,475 (834) (8) $ 6,595 $ 39,698 $ 7,430 $ 13,231 26,475 (415) 46,721 $ 6,232 $ 19 $ 13,843 24.809 (47) 25 6,185 $ 38,696 $ 6,252 13,843 24,809 379 45,283 427 401 402 428 U.S. Pension Plan Assets Common and preferred stocks Government and agency debt securities(a) Corporate and other debt securities Other investments, net(b)(c) Net plan assets subject to leveling Plan assets measured at net asset value Investment funds Private equity and debt investments Real estate investments Total plan assets measured at net asset value Other plan assets, net(d) Net plan assets 7,534 3,137 3,061 13,732 624 61,077 7,031 2,951 3,484 13,466 490 $ 59,239 $ December 31, 2020 Level 2 Level 3 December 31, 2019 Level 2 Level 3 Level 1 Total Level 1 Total $ 572 $ $ 489 $ $ 11 $ 3,178 2,762 (79) 5,861 $ 572 $ 3,178 2,762 79 1 $ 3,927 3,230 (107) 7,051 $ 490 3,927 3,230 136 7,783 31 603 $ 127 127 (5) 484 248 248 $ 6,591 $ S Non-U.S. Pension Plan Assets Common and preferred stocks Government and agency debt securities(a) Corporate and other debt securities Other investments, net(b)(e) Net plan assets subject to leveling Plan assets measured at net asset value Investment funds Private equity and debt investments Real estate investments Total plan assets measured at net asset value Other plan assets (liabilities), net(d) Net plan assets 5,870 489 917 7,276 (21) $ 13,846 5,608 511 982 7,101 77 $ 14,961 (a) Includes U.S. and sovereign government and agency issues. (6) Includes net derivative assets (liabilities). (c) Level 1 Other investments, net includes derivative liabilities approximating $1.0 billion related to equity option and futures contracts at December 31, 2020. d) Cash held by the plans, net of amounts receivable/payable for unsettled security transactions and payables for investment manager fees, custody fees and other expenses. (e) Level 2 Other investments, net includes Canadian reverse repurchase agreements. The activity attributable to U.S. and non-U.S. Level 3 defined benefit pension plan investments was insignificant in the years ended December 31, 2020 and 2019. Investment Fund Strategies Investment funds include hedge funds, funds of hedge funds, equity funds and fixed income funds. Hedge funds and funds of hedge funds managers typically seek to achieve their objectives by allocating capital across a broad array of funds and/or investment managers. Equity funds invest in U.S. common and preferred stocks as well as similar equity securities issued by companies incorporated, listed or domiciled in developed and/or emerging market countries. Fixed income funds include investments in high quality funds and, to a lesser extent, high yield funds. High quality Note 18. Restructuring and Other Initiatives We have executed various restructuring and other initiatives and we may execute additional initiatives in the future, if necessary, to streamline manufacturing capacity and reduce other costs to improve the utilization of remaining facilities. To the extent these programs involve voluntary separations, a liability is generally recorded at the time offers to employees are accepted. To the extent these programs provide separation benefits in accordance with pre-existing agreements, a liability is recorded once the amount is probable and reasonably estimable. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Related charges are recorded in Automotive and other cost of sales and Automotive and other selling, general and administrative expense. The following table summarizes the reserves and charges related to restructuring and other initiatives, including postemployment benefit reserves and charges: 2020 2018 $ Balance at beginning of period Additions, interest accretion and other Payments Revisions to estimates and effect of foreign currency Balance at end of period Years Ended December 31, 2019 564 $ 1,122 $ 565 629 (678) (1,101) (99) (86) 352 $ 564 $ 227 1,637 (600) (142) 1,122 $ FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 18. LEASE COMMITMENTS (Continued) Supplemental cash flow information related to leases for the years ended December 31 was as follows (in millions): 2019 2020 $ 460 $ Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases Operating cash flows from finance leases Financing cash flows from finance leases Right-of-use assets obtained in exchange for lease liabilities Operating leases Finance leases (a) 434 15 105 35 $ 527 $ 304 306 43 The components of lease expense for the years ended December 31 were as follows (in millions): 2019 2020 $ 467 $ 53 (16) 463 57 (14) Operating lease expense Variable lease expense Sublease income Finance lease expense Amortization of right-of-use assets Interest on lease liabilities Total lease expense 15 6 525 27 15 548 $ $ The weighted average remaining lease term and weighted average discount rate at December 31 were as follows: 2019 2020 6.3 3.0 6.3 14.8 Weighted average remaining lease term (in years) Operating leases Finance leases (a) Weighted-average discount rate Operating leases Finance leases 3.4 % 3.3 % 3.8 % 3.5 % GENERAL MOTORS COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except per share amounts) December 31, 2020 December 31, 2019 19,992 $ 9,046 8,035 26,209 10,235 7,407 80,924 19,069 4,174 6,797 26,601 10,398 7,953 74,992 31,783 8,406 37,632 5,230 39,819 24,136 7,264 154,270 235,194 26,355 8,562 38,750 5,337 42,055 24,640 7,346 153,045 228,037 $ 19,928 $ 21,018 ASSETS Current Assets Cash and cash equivalents Marketable debt securities (Note 4) Accounts and notes receivable (net of allowance of $224 and $201) GM Financial receivables, net (Note 5; Note 11 at VIES) Inventories (Note 6) Other current assets (Note 4; Note 11 at VIES) Total current assets Non-current Assets GM Financial receivables, net (Note 5; Note 11 at VIES) Equity in net assets of nonconsolidated affiliates (Note 8) Property, net (Note 9) Goodwill and intangible assets, net (Note 10) Equipment on operating leases, net (Note 7; Note 11 at VIES) Deferred income taxes (Note 17) Other assets (Note 4; Note 11 at VIES) Total non-current assets Total Assets LIABILITIES AND EQUITY Current Liabilities Accounts payable (principally trade) Short-term debt and current portion of long-term debt (Note 13) Automotive GM Financial (Note 11 at VIES) Accrued liabilities (Note 12) Total current liabilities Non-current Liabilities Long-term debt (Note 13) Automotive GM Financial (Note 11 at VIES) Postretirement benefits other than pensions (Note 15) Pensions (Note 15) Other liabilities (Note 12) Total non-current liabilities Total Liabilities Commitments and contingencies (Note 16) Equity (Note 20) Common stock, $0.01 par value Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interests Total Equity Total Liabilities and Equity 1,276 35,637 23,069 79,910 1,897 35,503 26,487 84,905 16,193 56,788 6,277 12,902 13,447 105,607 185,517 12,489 53,435 5,935 12,170 13,146 97,175 182,080 14 26,542 31,962 (13,488) 45,030 4,647 49,677 235,194 14 26,074 26,860 (11,156) 41,792 4,165 45,957 228,037 $ Note 12. Accrued and Other Liabilities December 31, 2020 December 31, 2019 $ Accrued liabilities Dealer and customer allowances, claims and discounts Deferred revenue Product warranty and related liabilities Payrolls and employee benefits excluding postemployment benefits Other Total accrued liabilities 7,300 $ 3,132 3,048 1,864 7,725 23,069 $ 10,402 3,234 2,987 1,969 7,895 26,487 $ $ Other liabilities Deferred revenue Product warranty and related liabilities Operating lease liabilities Employee benefits excluding postemployment benefits Postemployment benefits including facility idling reserves Other Total other liabilities 2,715 $ 5,193 969 822 739 3,009 13,447 $ 2,962 4,811 1,010 704 633 3,026 13,146 $ Years Ended December 31, 2019 2020 2018 $ Product Warranty and Related Liabilities Warranty balance at beginning of period Warranties issued and assumed in period recall campaigns Warranties issued and assumed in period - product warranty Payments Adjustments to pre-existing warranties Effect of foreign currency and other Warranty balance at end of period 7,798 $ 1,628 1,773 (2,986) 41 (12) 8,242 $ 7,590 $ 745 2,001 (3,012) 455 19 7,798 $ 8,332 665 2,143 (2,903) (464) (183) 7,590 $ In the three months ended December 31, 2020, we recorded an accrual of $1.1 billion, which represents our current estimate of the expected costs of complying with the recall related to the Takata passenger-side inflators in certain GMT900 vehicles, which are full-size pickup trucks and SUVs. This accrual is reflected in Warranties issued and assumed in period recall campaigns in the table above. Refer to Note 16 for additional information on Takata matters. Note 13. Debt Automotive The following table presents debt in our automotive operations: December 31, 2020 Carrying Amount Fair Value $ 303 $ 332 16,929 20,988 237 256 $ 17,469 $ 21,576 December 31, 2019 Carrying Amount Fair Value $ 167 $ 165 13,909 15,247 310 516 $ 14,386 $ 15,928 Secured debt Unsecured debt Finance lease liabilities Total automotive debt(a) Fair value utilizing Level 1 inputs Fair value utilizing Level 2 inputs Available under credit facility agreements(b) Weighted-average interest rate on outstanding short-term debt(c) Weighted average interest rate on outstanding long-term debt(c) $ $ $ $ $ 19,826 1,750 18,222 3.8 % 5.6 % $ 13,628 2,300 17,285 4.9 % 5.4 % (a) Includes net discount and debt issuance costs of $540 million at December 31, 2020 and 2019. (b) Excludes our 364-day, $2.0 billion facility designated for exclusive use by GM Financial. (C) Includes coupon rates on debt denominated in various foreign currencies and interest free loans. Unsecured debt primarily consists of revolving credit facilities and senior notes. In March 2020, we borrowed: (1) $3.4 billion against our three-year, $4.0 billion facility; (2) $2.0 billion against our three-year, $3.0 billion facility, which reduced to $2.0 billion in May 2020 (three-year, $2.0 billion transformation facility); and (3) $10.5 billion against our five-year, $10.5 billion facility with maturity dates ranging from 2021 to 2023. We repaid all amounts drawn under the revolving credit facilities as of December 31, 2020. We did not have any borrowings against our revolving credit facilities at December 31, 2019. In April 2020, we renewed our 364-day, $2.0 billion facility dedicated for exclusive use by GM Financial for an additional 364-day term and extended $3.6 billion of the three-year, $4.0 billion facility for an additional year expiring in April 2022. The remaining portion will expire in April 2021, unless extended. As part of the extension of the three-year, $4.0 billion facility, we agreed not to execute any share repurchases while we have any outstanding borrowings under the revolving credit facilities, except for the three-year, $2.0 billion transformation facility. In addition, we are restricted from paying dividends on our common shares if outstanding borrowings under the revolving credit facilities exceed $5.0 billion, with the exception of the three-year, $2.0 billion transformation facility. In May 2020, we issued $4.0 billion in aggregate principal amount senior unsecured notes with a weighted average interest rate of 6.11% and maturity dates ranging from 2023 to 2027. The notes are governed by a sixth supplemental indenture and the same base indenture that governs our existing notes, which contains terms and covenants customary to these types of securities, including a limitation on the amount of certain secured debt we may incur. The net proceeds from the issuance of these senior unsecured notes provide additional financial flexibility and will be used for general corporate purposes. In May 2020, we entered into a new unsecured 364-day, $2.0 billion revolving credit facility as an additional source of available liquidity. In August 2020, we repaid $500 million of our floating rate senior unsecured debt upon maturity. Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Assets and Fair Value Measurements The following tables summarize the fair value of U.S. and non-U.S. defined benefit pension plan assets by asset class: December 31, 2020 Level 2 Level 3 Level 1 Total Level 1 December 31, 2019 Level 2 Level 3 Total 1 $ 1 $ $ 7,429 $ $ 13,231 26,475 (834) (8) $ 6,595 $ 39,698 $ 7,430 $ 13,231 26,475 (415) 46,721 $ 6,232 $ 19 $ 13,843 24.809 (47) 25 6,185 $ 38,696 $ 6,252 13,843 24,809 379 45,283 427 401 402 428 U.S. Pension Plan Assets Common and preferred stocks Government and agency debt securities(a) Corporate and other debt securities Other investments, net(b)(c) Net plan assets subject to leveling Plan assets measured at net asset value Investment funds Private equity and debt investments Real estate investments Total plan assets measured at net asset value Other plan assets, net(d) Net plan assets 7,534 3,137 3,061 13,732 624 61,077 7,031 2,951 3,484 13,466 490 $ 59,239 $ December 31, 2020 Level 2 Level 3 December 31, 2019 Level 2 Level 3 Level 1 Total Level 1 Total $ 572 $ $ 489 $ $ 11 $ 3,178 2,762 (79) 5,861 $ 572 $ 3,178 2,762 79 1 $ 3,927 3,230 (107) 7,051 $ 490 3,927 3,230 136 7,783 31 603 $ 127 127 (5) 484 248 248 $ 6,591 $ S Non-U.S. Pension Plan Assets Common and preferred stocks Government and agency debt securities(a) Corporate and other debt securities Other investments, net(b)(e) Net plan assets subject to leveling Plan assets measured at net asset value Investment funds Private equity and debt investments Real estate investments Total plan assets measured at net asset value Other plan assets (liabilities), net(d) Net plan assets 5,870 489 917 7,276 (21) $ 13,846 5,608 511 982 7,101 77 $ 14,961 (a) Includes U.S. and sovereign government and agency issues. (6) Includes net derivative assets (liabilities). (c) Level 1 Other investments, net includes derivative liabilities approximating $1.0 billion related to equity option and futures contracts at December 31, 2020. d) Cash held by the plans, net of amounts receivable/payable for unsettled security transactions and payables for investment manager fees, custody fees and other expenses. (e) Level 2 Other investments, net includes Canadian reverse repurchase agreements. The activity attributable to U.S. and non-U.S. Level 3 defined benefit pension plan investments was insignificant in the years ended December 31, 2020 and 2019. Investment Fund Strategies Investment funds include hedge funds, funds of hedge funds, equity funds and fixed income funds. Hedge funds and funds of hedge funds managers typically seek to achieve their objectives by allocating capital across a broad array of funds and/or investment managers. Equity funds invest in U.S. common and preferred stocks as well as similar equity securities issued by companies incorporated, listed or domiciled in developed and/or emerging market countries. Fixed income funds include investments in high quality funds and, to a lesser extent, high yield funds. High quality Note 18. Restructuring and Other Initiatives We have executed various restructuring and other initiatives and we may execute additional initiatives in the future, if necessary, to streamline manufacturing capacity and reduce other costs to improve the utilization of remaining facilities. To the extent these programs involve voluntary separations, a liability is generally recorded at the time offers to employees are accepted. To the extent these programs provide separation benefits in accordance with pre-existing agreements, a liability is recorded once the amount is probable and reasonably estimable. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Related charges are recorded in Automotive and other cost of sales and Automotive and other selling, general and administrative expense. The following table summarizes the reserves and charges related to restructuring and other initiatives, including postemployment benefit reserves and charges: 2020 2018 $ Balance at beginning of period Additions, interest accretion and other Payments Revisions to estimates and effect of foreign currency Balance at end of period Years Ended December 31, 2019 564 $ 1,122 $ 565 629 (678) (1,101) (99) (86) 352 $ 564 $ 227 1,637 (600) (142) 1,122 $ FORD MOTOR COMPANY AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS NOTE 18. LEASE COMMITMENTS (Continued) Supplemental cash flow information related to leases for the years ended December 31 was as follows (in millions): 2019 2020 $ 460 $ Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases Operating cash flows from finance leases Financing cash flows from finance leases Right-of-use assets obtained in exchange for lease liabilities Operating leases Finance leases (a) 434 15 105 35 $ 527 $ 304 306 43 The components of lease expense for the years ended December 31 were as follows (in millions): 2019 2020 $ 467 $ 53 (16) 463 57 (14) Operating lease expense Variable lease expense Sublease income Finance lease expense Amortization of right-of-use assets Interest on lease liabilities Total lease expense 15 6 525 27 15 548 $ $ The weighted average remaining lease term and weighted average discount rate at December 31 were as follows: 2019 2020 6.3 3.0 6.3 14.8 Weighted average remaining lease term (in years) Operating leases Finance leases (a) Weighted-average discount rate Operating leases Finance leases 3.4 % 3.3 % 3.8 % 3.5 %

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