Leases

We have entered into operating leases for premises and equipment. As discussed more fully in Note 21, "New Accounting Pronouncements," beginning January 1, 2019, lease right-of-use ("ROU") assets and lease liabilities for operating leases are recognized at commencement date based on the present value of lease payments over the lease term, discounted using our incremental borrowing rate at the effective commencement date of each lease. Operating lease ROU assets are recorded in other assets while operating lease liabilities are recorded in interest, taxes and other liabilities. We have not entered into any finance leases.

Certain leases contain options to renew or terminate the lease which are recognized as part of our ROU assets and liabilities when it is reasonably certain the options will be exercised. Certain leases also contain escalation clauses. We have lease agreements that contain both lease and non-lease components, such as maintenance costs, which are accounted for separately. Operating lease cost for fixed lease payments is recognized on a straight-line basis over the lease term. Variable lease payments for real estate taxes, insurance, maintenance and utilities, which are generally based on our pro rata share of the total property, are not included in the measurement of the ROU assets or lease liabilities and are expensed as incurred. In addition, we do not recognize ROU assets or lease liabilities for short-term leases with a term of 12 months or less, which are also expensed as incurred.

We have entered into agreements to sublease certain office space, including agreements to receive rental income from our affiliates for rent. As owner or lessee of the properties, we have entered into agreements with affiliates to charge them rent based on the office space utilized by their employees during the period. See Note 14, "Related Party Transactions," for further disclosure.

The following table summarizes the components of total operating lease costs, net and provides supplemental cash flow information related to leases:



	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
	(in millions)
Operating lease cost	$	34		$	66
Variable lease cost	17			31
Short-term lease cost	2			6
Sublease income	(14		)	(28		)
Total operating lease costs, net	$	39		$	75

Supplemental disclosure of cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	31		$	62
ROU assets recognized for new operating lease liabilities	—			10

The following table presents information about our operating lease ROU assets and liabilities:



	June 30, 2019
	(dollars are in millions)
Operating lease ROU assets⁽¹⁾	$	735
Operating lease liabilities	786
Weighted-average remaining lease term	7.3 years
Weighted-average discount rate	3.2		%


⁽¹⁾	Reported net of level lease adjustments and exit cost obligations.

The following table presents a maturity analysis of our operating lease liabilities at June 30, 2019:



Year Ending December 31,
	(in millions)
2019	$	56
2020	135
2021	135
2022	131
2023	130
Thereafter	312
Total future operating lease payments	899
Less - imputed interest	(113		)
Total operating lease liabilities	$	786

At June 30, 2019, we had $24 million of additional operating leases for premises that have not yet commenced and are not reflected in the table above.

For comparative periods prior to the adoption of the new accounting guidance on January 1, 2019, we have retained the following disclosures as previously reported. Net rental expense under operating leases, which did not include certain variable lease costs, was $24 million and $47 million during the three and six months ended June 30, 2018, respectively.

Future net minimum lease commitments under noncancellable operating lease arrangements at December 31, 2018, which did not include renewals, were as follows:



Year Ending December 31,	Minimum Lease Payments		Minimum Sublease Income			Net
	(in millions)
2019	$	136	$	(58	)	$	78
2020	125		(2		)	123
2021	115		(1		)	114
2022	103		—			103
2023	91		—			91
Thereafter	182		(1		)	181
Net minimum lease commitments	$	752	$	(62	)	$	690