We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Current portion of lease liability and Long-term lease liability on the Consolidated Statements of Financial Position. Finance leases are included in Property and equipment, net; Current portion of long-term debt and Long-term debt on the Consolidated Statements of Financial Position.

We lease a variety of facilities, principally in the United States, for branch and service center operations and for office, storage, customer care centers and data processing space. These leases are classified as operating leases. Our facilities leases have remaining lease terms of less than one year to 23 years, some of which may include options to extend the leases for up to 15 years, and some of which may include options to terminate the leases within one year. These lease agreements contain lease and non-lease components. Non-lease components include items such as common area maintenance. For facility leases, we account for the lease and non-lease components as a single lease component.

Additionally, our Fleet Agreement allows us to obtain fleet vehicles through a leasing program. These leases are classified as finance leases. Our vehicle leases have remaining lease terms of less than one year to eight years. For vehicle leases, we account for the lease and non-lease components separately.

Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments, including fixed non-lease components, over the lease term at commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments and fixed non-lease components is recognized on a straight-line basis over the lease term.

As of December 31, 2019, assets recorded under finance leases were $221 million and accumulated depreciation associated with finance leases was $128 million.

The components of lease expense were as follows:


	Year ended
(In millions)	December 31, 2019
Finance lease cost
Depreciation of finance lease ROU assets	$	35
Interest on finance lease liabilities		5
Operating lease cost		26
Variable lease cost		3
Sublease income		(2)
Total lease cost	$	67

As the rates implicit in our leases are not readily determinable, we use a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. We use the portfolio approach and group leases into categories by lease term length, applying the corresponding incremental borrowing rates to these categories of leases.

Supplemental cash flow information and other information for leases was as follows:


	Year ended
(In millions)	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	24
Operating cash flows for finance leases		5
Financing cash flows for finance leases		34
ROU assets obtained in exchange for lease obligations:
Operating leases		12
Finance leases		43
Weighted Average Remaining Lease Term (in years):
Operating leases		10.58
Finance leases		3.34
Weighted Average Discount Rate:
Operating leases		5.55	%
Finance leases		4.13	%

As of December 31, 2019, there was $35 million and $60 million of finance leases included within Current portion of long-term debt and Long-term debt, respectively, on the Consolidated Statements of Financial Position. Future minimum lease payments under non-cancellable leases as of December 31, 2019 were as follows:


(In millions)	Operating Leases⁽¹⁾		Finance Leases
Year ended December 31,
2020	$	27	$	37
2021		22		29
2022		20		18
2023		15		12
2024		11		4
Thereafter		85		1
Total future minimum lease payments		179		101
Less imputed interest		(47)		(6)
Total	$	131	$	95

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(1)Each year through 2033 is presented net of approximately $2 million of projected annual sublease income from Frontdoor for their sublease in our Global Service Center and Memphis customer care center. Sublease income of approximately $2 million and $1 million was recognized within Selling and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2019 and 2018, respectively.

The following table is a summary of the future minimum lease payments due under capital and operating leases with terms of more than one year at December 31, 2018:

As of December 31, 2019, we have additional vehicle finance leases that have not yet commenced of $1 million. These leases are scheduled to commence in 2020 with lease terms generally of five years.

We adopted the new standard using the modified retrospective approach and applied the transition approach as of the beginning of the period of adoption. We adopted the package of practical expedients and therefore did not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases. We elected to make the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. We elected to not separate lease and non-lease components for real estate operating leases. We did not elect the hindsight practical expedient.