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Leases

12 Months Ended

Dec. 31, 2019

Lease Accounting

We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and non-lease components related to leases of real property.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 26 or more years. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We rent or sublease certain real estate to third parties.

As described further in “Note 21. Changes in Accounting Policies,” we adopted Topic 842 as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting under Topic 840.

The table below presents the lease-related liabilities recorded on the balance sheet (in millions):



	December 31, 2019			December 31, 2018
Operating lease liabilities:
Current portion included in accrued liabilities	$	25.2		$	—
Noncurrent operating lease liabilities	238.5			—
Total operating lease liabilities	263.7			—
Finance lease liabilities:
Current portion included in current maturities of long-term debt	1.1			2.0
Long-term portion of lease liabilities in long-term debt	29.5			28.8
Total finance lease liabilities ¹	30.6			30.8
Total lease liabilities	$	294.3		$	30.8
Weighted-average remaining lease term:
Operating leases	13 years
Finance leases	13 years
Weighted-average discount rate:
Operating leases	5.81		%
Finance leases	5.08		%

¹Corresponding finance lease right-of-use assets are not material and are included in property and equipment, net of accumulated depreciation.

The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows (in millions):



	Year Ended December 31,
	2019
Operating lease cost ¹	$	48.5
Variable lease cost ²	1.4
Sublease income	(4.6		)
Total lease costs	$	45.3

¹Includes short-term and month-to-month lease costs, which are immaterial.

²Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate.

Rent expense, net of sublease income, for all operating leases was $43.3 million and $33.4 million for the years ended December 31, 2018 and 2017, respectively. These amounts are included as a component of selling, general and administrative expenses in our Consolidated Statements of Operations.

As of December 31, 2019, the maturities of our operating lease liabilities were as follows (in millions):



	Operating Leases
Year Ending December 31,
2020	$	37.7
2021	35.1
2022	33.1
2023	28.2
2024	25.7
Thereafter	210.3
Total minimum lease payments	370.1
Less:
Present value adjustment	(106.4		)
Operating lease liabilities	$	263.7

Leases