Leases

6 Months Ended

Jun. 30, 2019

A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease ROU assets and lease liabilities are included in Other assets and Other liabilities on the Company's Condensed Consolidated Balance Sheets.

ROU assets represent the Company's right to use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. Certain leases contain options to terminate before maturity. The lease term used to calculate the ROU asset includes any renewal options or lease termination that the Company expects to exercise. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. ROU assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both ROU assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company's lease agreements do not contain significant residual value guarantees, restrictions or covenants.

The Company occupies office facilities under lease agreements that expire at various dates. In addition, data processing, office and transportation equipment is leased under agreements that expire at various dates. The Company’s leases generally include lease and non-lease components, which the Company has elected to account for as a single lease component. Variable lease costs not based on an index or rate consist of non-lease components, which are being accounted for as lease components, and represent charges for services provided by the landlord and our reimbursement for the landlord’s costs, including real estate taxes and insurance. The Company does not have any significant finance leases.

Operating lease cost was $9 million and $19 million for the three and six months ended June 30, 2019. Variable lease cost was $4 million and $8 million for the three and six months ended June 30, 2019. Cash paid for amounts included in operating lease liabilities was $9 million and $17 million for the three and six months ended June 30, 2019.

The following table presents operating lease ROU assets and lease liabilities.



(In millions)	June 30, 2019
Operating lease ROU assets	$	223
Operating lease liabilities	301

The following table presents the maturities of operating lease liabilities as of June 30, 2019.



(In millions)	Operating Leases
2019 (Excluding the six months ended June 30, 2019)	$	15
2020	39
2021	42
2022	38
2023	33
Thereafter	202
Total lease payments	369
Less: Discount	(68		)
Total operating lease liabilities	$	301

The following table presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets.



	June 30, 2019
Weighted average remaining lease term	10.8 years
Weighted average discount rate	3.4	%

The following table presents the expected future minimum lease payments to be made under non-cancelable operating leases as of December 31, 2018.



(In millions)	Future Minimum Lease Payments
2019	$	35
2020	39
2021	41
2022	38
2023	32
Thereafter	200
Total	$	385