Leases Lessee Disclosure (Notes)

3 Months Ended

Mar. 31, 2019

Leases of Lessee Disclosure [Text Block]

LEASES

The Company's lease portfolio consists primarily of office space and equipment. The Company has approximately 1,000 real estate leases with lease terms ranging from less than 1 year to 17 years and includes the Company's brokerage sales offices, regional and branch offices for our title and relocation businesses, corporate headquarters, regional headquarters, and facilities serving as local administration, training and storage. The Company's brokerage sales offices are generally located in shopping centers and small office parks, typically with lease terms of 1 year to 5 years. In addition, the Company's has equipment leases which primarily consist of furniture, computers and other office equipment.

Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. At lease commencement, the Company records a liability for its lease obligation measured at the present value of future lease payments and a right-of-use asset equal to the lease liability adjusted for prepayments and lease incentives. The Company uses its collateralized incremental borrowing rate to calculate the present value of lease liabilities as most of its leases do not provide an implicit rate that is readily determinable. The Company does not recognize a lease obligation and right-of-use asset on its balance sheet for any leases with terms of 12 months or less. Some real estate leases include one or more options to renew or terminate a lease. The exercise of a lease renewal or termination option is assessed at commencement of the lease and only reflected in the lease term if the Company is reasonably certain to exercise the option. The Company has lease agreements that contain both lease and non-lease components, such as common area maintenance fees, and has made a policy election to combine both fixed lease and non-lease components in total gross rent for all of its leases. Expense for operating leases is recognized a straight-line basis over the lease term.

Supplemental balance sheet information related to the Company's leases was as follows:



Lease Type	Balance Sheet Classification	March 31, 2019
Assets:
Operating lease assets	Operating lease assets, net	$	544
Finance lease assets (1)	Property and equipment, net	38
Total lease assets, net		$	582

Liabilities:
Current:
Operating lease liabilities	Current portion of operating lease liabilities	$	130
Finance lease liabilities	Accrued expenses and other current liabilities	12
Non-current:
Operating lease liabilities	Long-term operating lease liabilities	473
Finance lease liabilities	Other non-current liabilities	20
Total lease liabilities		$	635

Weighted Average Lease Term and Discount Rate
Weighted average remaining lease term (years):
Operating leases		5.7
Finance leases		3.3

Weighted average discount rate:
Operating leases		5.3		%
Finance leases		3.9		%

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(1)	Finance lease assets are recorded net of accumulated amortization of $32 million.

As of March 31, 2019, maturities of lease liabilities by fiscal year were as follows:



Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
Remaining 2019	$	115	$	9	$	124
2020	151		11		162
2021	120		8		128
2022	95		5		100
2023	69		1		70
Thereafter	154		—		154
Total lease payments	704		34		738
Less: Interest	101		2		103
Present value of lease liabilities	$	603	$	32	$	635

As previously disclosed in our 2018 Annual Report on Form 10-K and under historical lease accounting guidance, future minimum lease payments for noncancelable operating leases as of December 31, 2018 were as follows:



Year	As of December 31, 2018
2019	$	165
2020	144
2021	120
2022	95
2023	79
Thereafter	196
Total	$	799

Supplemental income statement information related to the Company's leases is as follows:



	Three months ended
Lease Costs	March 31, 2019
Operating lease costs	$	42
Finance lease costs:
Amortization of leased assets	3
Interest on lease liabilities	—
Other lease costs (1)	7
Impairment loss	1
Less: Sublease income, gross	1
Net lease cost	$	52

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(1)	Primarily consists of variable lease costs.

Supplemental cash flow information related to leases was as follows:



	Three months ended
	March 31, 2019
Supplemental cash flow information:
Operating cash flows from operating leases	$	43
Operating cash flows from finance leases	—
Financing cash flows from finance leases	4

Supplemental non-cash information:
Lease assets obtained in exchange for lease obligations:
Operating leases	$	13
Finance leases	5

Significant non-cash transactions included finance lease additions of $4 million for the three months ended March 31, 2018, which resulted in non-cash additions to property and equipment, net and other non-current liabilities.