LEASES

We account for leases in accordance with ASC Topic 842, Leases, which we adopted on January 1, 2019, using the modified retrospective transition approach at the beginning of the adoption period through a cumulative-effect adjustment to retained earnings. This adoption resulted in the recognition of right-of-use assets ("ROU assets") of $165 million and lease liabilities of $172 million, with the difference of $7 million recorded to "Retained earnings", on our Consolidated Balance Sheet on January 1, 2019.

The majority of our operating leases are related to our office and warehouse space, and the majority of our financing leases are related to vehicles and forklifts. Our leases have remaining lease terms of approximately 1 year to 25 years. Options to renew, extend or terminate a lease are reflected in our lease terms when we believe it is reasonably certain we will exercise that option. When our leases do not provide an implicit or an explicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments.

Expense related to leases for first quarter 2019 was $5 million and $4 million for operating leases and financing leases, respectively. Cash flows related to operating and financing leases were immaterial in first quarter 2019.

Supplemental balance sheet information related to leases was as follows:



DOLLAR AMOUNTS IN MILLIONS		MARCH 31, 2019
LEASES	BALANCE SHEET CLASSIFICATION
Assets
Operating lease right-of-use assets	Other assets	$	125
Financing lease right-of-use assets	Property and equipment, less accumulated depreciation	34
Total leased assets		$	159
Liabilities
Current:
Operating lease liabilities	Accrued liabilities	$	14
Financing lease liabilities	Accrued liabilities	14
Noncurrent:
Operating lease liabilities	Other liabilities	113
Financing lease liabilities	Other liabilities	24
Total lease liabilities		$	165

Weighted average remaining lease term as of March 31, 2019:



Operating leases	10 years
Financing leases	3 years

Weighted average discount rate as of March 31, 2019:



Operating leases	4.3	%
Financing leases	2.9	%

Maturities of lease liabilities as of March 31, 2019:



DOLLAR AMOUNTS IN MILLIONS	OPERATING LEASES			FINANCING LEASES
2019	$	15		$	12
2020	20			12
2021	16			8
2022	17			5
2023	15			3
Thereafter	76			—
Total lease payments	159			40
Less: interest	(32		)	(2		)
Total present value of lease liabilities	$	127		$	38