19 leases

We occupy leased premises in various locations and have the right of use of land, buildings and equipment under operating leases. Most of our leases for real estate that we use for office or network (including wireless site) purposes typically have extension options which we use to protect our investment in leasehold improvements (including wireless site equipment)and to mitigate relocation risk, and/or which reflect the importance of the underlying right-of-use lease assets to our operations. Our judgment of lease terms for leased real estate utilized in connection with our telecommunications infrastructure, more so than for any other leased asset, routinely includes periods covered by options to extend the lease terms, as we are reasonably certain to extend such leases.

For the year ended December 31, 2018, operating lease expenses, which are net of the amortization of deferred gains on the sale-leaseback of buildings and the occupancy costs associated with leased real estate, were $243 million (2017 – $245 million); occupancy costs associated with leased real estate totalled $99 million (2017 – $90 million).

As referred to in Note 16, we have consolidated our administrative real estate holdings and, in some instances, this has resulted in subletting land and buildings. The future minimum lease payments under operating leases are as follows:


	2018						2017
	Operating		Operating				Operating		Operating
	leases with		leases with				leases with		leases with
As at December 31 (millions)	arm’s-length		related party				arm’s-length		related party
Years ending	lessors 1		lessors 2		Total		lessors 1		lessors 2		Total
1 year hence	$	240	$	2	$	242	$	218	$	6	$	224
2 years hence		222		6		228		191		12		203
3 years hence		195		6		201		169		13		182
4 years hence		161		6		167		147		13		160
5 years hence		139		6		145		122		13		135
Thereafter		681		112		793		534		208		742
	$	1,638	$	138	$	1,776	$	1,381	$	265	$	1,646

Immaterial amounts for minimum lease receipts from sublet land and buildings have been netted against the minimum lease payments in this table. Minimum lease payments exclude occupancy costs and thus will differ from future amounts reported for operating lease expenses. As at December 31, 2018, commitments for occupancy costs under operating leases totalled $813 (2017 – $816).

As set out in Note 21(c), we have entered into leases with real estate joint ventures. This table includes 100% of the minimum lease payment amounts due under these leases; of the total, $46 (2017 – $109) is due to our economic interest in the real estate joint venture and $92 (2017 – $156) is due to our partners’ economic interests in the real estate joint venture.

Of the total amount above as at December 31, 2018:

Approximately 28% (2017 – 33%) was in respect of our five largest leases, all of which were for office premises over various terms, with expiry dates ranging from 2024 to 2039 (2017 – ranging from 2024 to 2036); the weighted average remaining term of these leases is approximately 13 years (2017 – 13 years).

Approximately 34% (2017 – 29%) was in respect of wireless site leases; the weighted average remaining term of these leases is approximately 14 years (2017 –14 years).

See Note 2(b) for details of significant changes to IFRS-IASB which are not yet effective and have not yet been applied, but which will significantly affect the timing of the recognition of operating lease expenses and their recognition in the Consolidated statement of financial position, as well as their classification in the Consolidated statement of income and other comprehensive income and the Consolidated statement of cash flows.