LEASES

3 Months Ended

Mar. 31, 2019

On January 1, 2019, we adopted Topic 842 using the modified retrospective method for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with Topic 840. On January 1, 2019, we recorded operating lease ROU assets of $16.5 million and operating lease liabilities of $17.3 million, related to real estate and equipment leases, based on the present value of the future lease payments on the date of adoption.

The components of lease cost for the three months ended March 31, 2019 are as follows (in millions):



	Classification	Three Months Ended March 31, 2019
Operating lease cost	Facilities and grounds expense	$	0.9
Short-term lease cost	Facilities and grounds expense	$	0.1

Finance lease cost:
Depreciation of leased assets	Depreciation and amortization	$	0.1
Interest on lease liabilities	Interest expense	0.1
Total finance lease cost		0.2
Total lease cost		$	1.2

Variable lease expense was immaterial for the three months ended March 31, 2019.

Supplemental cash flow information related to our leases for the three months ended March 31, 2019 is as follows (in millions):



	Three Months Ended March 31, 2019
Cash paid for operating leases included in operating activities	$	1.0
Cash paid for finance leases included in financing activities	0.2

Supplemental balance sheet information related to leases as of March 31, 2019 is as follows (in millions):



Lease Type	Balance Sheet Classification	March 31, 2019
Operating lease right-of-use assets⁽¹⁾	Operating lease right-of-use assets	$	15.9
Finance lease right-of-use assets⁽²⁾	Property, plant and equipment, net	5.6
Total right-of-use assets		$	21.5

Operating	Current portion of operating lease obligations	$	2.7
Finance	Current portion of finance lease obligations	0.3
Total current lease liabilities		3.0
Operating	Obligations under operating leases, net of current portion	14.0
Finance	Obligations under finance leases, net of current portion	6.1
Total non-current lease liabilities		20.1
Total lease liabilities		$	23.1




(1)	Operating lease right-of-use assets are presented net of accumulated amortization of $0.6 million.
(2)	Finance lease right-of-use assets are presented net of accumulated depreciation of $1.7 million.

The average lease terms and discount rates as of March 31, 2019 are as follows:



	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	10.2	8.1	%
Finance leases	7.7	8.2	%

The aggregate future lease payments for operating and finance leases as of March 31, 2019 are as follows (in millions):



	Operating			Finance
Lease payments due:
Remainder of 2019	$	2.9		$	0.7
2020	3.9			0.8
2021	3.9			0.8
2022	1.7			0.8
2023	1.4			0.9
Thereafter	10.0			7.1
Total lease payments	23.8			11.1
Less: Interest	(7.1		)	(4.7		)
Present value of lease liabilities	$	16.7		$	6.4

As of March 31, 2019, we had no additional significant operating or finance leases that had not yet commenced.

LEASES