In February 2016, the FASB issued ASC 842, Leases, (“ASC 842”) which requires lessees to recognize a right-of-use asset (“ROU”) and a lease obligation for all leases. We adopted ASC 842 as of January 1, 2019, in accordance with the standard. ASC 842 provides an option to apply the transition provisions as of the effective date. We elected this option when we adopted the new standard using a modified retrospective transition method and recognized a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. In addition, we elected to apply a package of practical expedients and as such did not reassess at the date of initial adoption (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, or (3) initial direct costs for existing leases. Lessees can also make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less which we elected.

As of December 31, 2019, Hub has recorded $41.4 million of ROU assets and $42.0 million of Lease liabilities on our consolidated balance sheet. The lease liabilities recognized are measured based upon the present value of minimum future payments. The ROU assets are equal to lease liabilities, adjusted for prepaid and accrued rent balances which are recorded in the Consolidated Balance Sheets.

Hub currently does not have any variable lease payments that depend on an index or a rate (such as the Consumer Price Index or a market interest rate). Some leases have options to extend or terminate the agreement, which Management assesses in determining the estimated lease term. If any of the options to extend a lease are exercised, this change will be reflected as a remeasurement of the ROU asset and lease liability accordingly. As of December 31, 2019, the ROU asset and lease liabilities do not reflect any options to extend or terminate a lease as management is not reasonably certain it will exercise any of these options. Also, current leases do not contain any restrictions or covenants imposed by the leases or residual value guarantees.

Occasionally, Hub will sublease office space or parking spaces. The subleases do not relieve Hub of any of its primary obligations under the original agreement. Currently, Hub has subleases with an expected annual income totaling $0.6 million.

As of December 31, 2019, Hub signed new property lease contracts which have not commenced. Based on the present value of the lease payments, the estimated ROU assets and lease liabilities related to these contracts will total approximately $10.7 million.

Discount rates are not specified on the individual lease contracts at the commencement date. To determine the present value of the lease payments, Hub used its incremental borrowing rate which was determined based on Hub’s credit standing and factoring in the current 12-month LIBOR rate published at the time of the lease commencement. This incremental borrowing rate represents the rate of interest that Hub would have to pay to borrow on a collateralized basis over a similar term and amounts equal to the lease payments in a similar economic environment.

The following table summarizes the lease costs for the twelve months ended December 31, 2019 (in thousands), which are included in general and administrative costs in the accompanying consolidated statement of income:

	Twelve Months Ended
	December 31, 2019

Amortization of finance right-of-use assets	$	2,326
Interest on finance lease liabilities		252
Finance lease cost		2,578

Operating lease cost		10,861
Short-term lease cost		289
Sublease income		(507	)
Total lease cost	$	13,221

The table below summarizes the Company’s scheduled future minimum lease payments under operating and finance leases, recorded on the sheet, as of December 31, 2019 (in thousands):

	Operating Leases		Finance Leases
Year 1	$	9,703	$	3,183
Year 2		8,361		1,836
Year 3		7,029		8
Year 4		4,861		-
Year 5		3,706		-
Thereafter		7,190		-
Minimum lease payments		40,850		5,027
Imputed interest		3,765		159
Present value of minimum lease payments		37,085		4,868
Less: current lease liabilities		8,567		3,048
Long-term lease liabilities	$	28,518	$	1,820

Other information:	Twelve Months Ended
	December 31, 2019
Operating cash flows from operating leases	$	9,702
Financing cash flows from finance leases		2,954
Operating cash flows from finance leases		252
Cash paid for lease liabilities	$	12,908

Right-of-use assets obtained in exchange for new financing lease liabilities	$	6

Rights-of-use assets obtained in exchange for new operating lease liabilities	$	13,242

The weighted average remaining lease term and discount rates as of December 31, 2019 (in thousands) are as follows:

Weighted average remaining lease term — finance leases	1.59 years
Weighted average remaining lease term — operating leases	5.38 years

Discount rate — finance leases		3.88	%
Discount rate — operating leases		3.44	%