Commitments and Contingencies

Leases

Our leases consist primarily of real estate, vehicles and other equipment. We determine if an arrangement is a lease at inception. Lease assets and liabilities are recognized upon commencement of the lease based on the present value of the future minimum lease payments over the lease term. The lease term includes options to extend the lease when it is reasonably certain that we will exercise that option. We generally utilize our incremental borrowing rate based on information available at the commencement of the lease in determining the present value of future payments. The lease asset also includes any lease payments made and initial direct costs incurred and excludes lease incentives. Lease assets and liabilities are not recorded for leases with an initial term of one year or less. Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our condensed consolidated statement of income for the three months ended March 31, 2019 were $274 million. These amounts do not include lease costs associated with production activities or other amounts capitalized in our condensed consolidated balance sheet, which are not material.

The table below summarizes the operating lease assets and liabilities recorded in our condensed consolidated balance sheet.

Condensed Consolidated Balance Sheet



(in millions)	March 31, 2019
Other noncurrent assets, net	$	4,100
Accrued expenses and other current liabilities	$	693
Other noncurrent liabilities	$	4,014

The table below summarizes our future minimum rental commitments for operating leases as of March 31, 2019 applying the new accounting guidance.



(in millions)	March 31, 2019
Remaining nine months of 2019	$	669
2020	832
2021	724
2022	592
2023	501
Thereafter	2,536
Total future minimum lease payments	5,854
Less: imputed interest	1,147
Total liability	$	4,707

The weighted average remaining lease term for operating leases and the weighted average discount rate used to calculate our operating lease liabilities as of March 31, 2019 were 10 years and 3.84%, respectively.

For the three months ended March 31, 2019, cash payments for operating leases recorded in the condensed consolidated balance sheet were $213 million. Leases that have not yet commenced and lease assets and liabilities associated with leases entered into during the period were not material.

The tables below summarize our future minimum rental commitments for operating leases as of December 31, 2018 and rent expense for operating leases for the three months ended March 31, 2018 using the accounting guidance in effect at that time. These amounts have been updated to include $804 million of future cash payments related to additional contracts determined to be operating leases in connection with the Sky transaction.



(in millions)	December 31, 2018
2019	$	891
2020	$	824
2021	$	722
2022	$	592
2023	$	513
Thereafter	$	2,608

(in millions)	Three Months Ended March 31, 2018
Rental expense	$	186

Redeemable Subsidiary Preferred Stock

As of March 31, 2019, the fair value of the NBCUniversal Enterprise redeemable subsidiary preferred stock was $739 million. The estimated fair value is based on Level 2 inputs that use pricing models whose inputs are derived primarily from or corroborated by observable market data through correlation or other means for substantially the full term of the financial instrument.

Contingencies

We are a defendant in several unrelated lawsuits claiming infringement of various patents relating to various aspects of our businesses. In certain of these cases, other industry participants are also defendants, and also in certain of these cases, we expect that any potential liability would be in part or in whole the responsibility of our equipment and technology vendors under applicable contractual indemnification provisions. In addition, we are subject to other legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such actions is not expected to materially affect our results of operations, cash flows or financial position, any litigation resulting from any such legal proceedings or claims could be time-consuming and injure our reputation.