NOTE G – LEASES

We have operating and finance leases for real estate including corporate offices, land, warehouse space, vehicles and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). We recognize lease expense on a straight-line basis over the lease term for short-term leases that we do not record on our balance sheet. If there is a change in our assessment of the lease term, and as a result, the remaining lease term extends more than 12 months from the end of the previously determined lease term, or we subsequently become reasonably certain that we will exercise an option to purchase the underlying asset, the lease no longer meets the definition of a short-term lease and is accounted for as either an operating or finance lease and recognized on the balance sheet. For leases executed in 2019 and later, we account for the lease components and the non-lease components as a single lease component, with the exception of our warehouse leases. Our leases have remaining lease terms of less than 1 year to approximately 60 years, some of which may include options to extend the leases for up to 10 years. If we are reasonably certain we will exercise an option to extend the lease, the time period covered by the extension option is included in the lease term.

We determine whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of an arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we utilize the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

The following table presents supplemental balance sheet information related to our operating leases:



(in millions)	As of March 31, 2019
Assets
Operating lease right-of-use assets in Other long-term assets	$	257
Liabilities
Operating lease liabilities in Other current liabilities	$	55
Operating lease liabilities in Other long-term liabilities	211

The following table presents the weighted average remaining lease term and discount rate information related to our operating leases:



	As of March 31, 2019
Weighted average remaining lease term	5.28 years
Weighted average discount rate	3.61%

Our operating lease cost was $18 million in the first quarter of 2019.

The following table presents supplemental cash flow information related to our operating leases:



(in millions)	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows from operating leases	$	17

Right-of-use assets obtained in exchange for operating lease obligations were immaterial as of March 31, 2019.

The following table presents the maturities of our operating lease liabilities as of March 31, 2019:



Fiscal year (in millions)	Operating Leases
2019 (excluding the first quarter of 2019)	$	54
2020	60
2021	48
2022	39
2023	30
Thereafter	65
Total future minimum operating lease payments	297
Less: imputed interest	31
Present value of operating lease liabilities	$	266

As of March 31, 2019, we have additional leases for office space and R&D space, that have not yet commenced, of approximately $63 million. These leases will commence during 2019 and 2020, with lease terms of 6 months to 15 years.