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The company disclosed the following lease information in its 2018 annual report related to its leasing activities (in millions). Capital leases Operating leases 2019 $307

The company disclosed the following lease information in its 2018 annual report related to its leasing activities (in millions).

Capital leases

Operating leases

2019

$307

$2,471

2020

286

2,302

2021

262

1,202

2022

251

980

2023

116

830

After 2023

703

9,130

Total

$1,925

$16,915

Amount representing interest

(754)

Present value of net minimum lease payments

$1,171

What effect does the failure to capitalize operating leases have on the companys balance sheet? Over the life of the lease, what effect does this classification have on net income?

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