LEASES

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

LEASES

The Company leases real estate, automobiles and equipment under various operating and finance leases. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the implicit rate is not readily determinable in most of the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Beginning January 1, 2019, any new real estate and equipment operating lease agreements with lease and nonlease components, will be accounted for as a single lease component; auto leases will be accounted for as separate lease components.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of approximately 1 year to 11 years. Many of the Company's real estate and equipment leases have one or more options to renew, with terms that can extend primarily from 1 year to 3 years, which are not included in the initial lease term. The Company does not have lease agreements with residual value guarantees, sale-and-leaseback terms, or material restrictive covenants. The Company does not have any material sublease arrangements.

The net present value of finance and operating lease assets and liabilities consist of the following:

(in millions, except percentages)	Location in the Consolidated Balance Sheets	June 30, 2019
Assets
Current assets
Finance leases	Property, plant, and equipment, net	$	1.6
Operating leases	Operating lease right-of-use assets, net	155.8
Total right-of-use assets		$	157.4
Liabilities
Current liabilities
Finance leases	Notes payable and current portion of long-term debt	$	0.2
Operating leases	Accrued liabilities	39.7
Noncurrent liabilities
Finance leases	Long-term debt	1.4
Operating leases	Operating lease liability	119.3
Total lease liabilities		$	160.6
Supplemental information:
Weighted-average discount rate
Finance leases		3.5		%
Operating leases		3.0		%
Weighted-average remaining lease term in years
Finance leases		7.2
Operating leases		5.7

The lease cost recognized in the Consolidated Statements of Operations for the three and six months ended June 30, 2019 were as follows:

(in millions)	Three Months Ended		Six Months Ended
Finance lease cost
Amortization of right-of-use assets	$	0.1	$	0.2
Operating lease cost	12.5		25.7
Short-term lease cost	0.3		0.4
Variable lease cost	2.0		3.9
Total lease cost	$	14.9	$	30.2

The contractual maturity dates of the remaining lease liabilities at June 30, 2019 consist of the following:

(in millions)	Finance Leases		Operating Leases		Total
2019, excluding the six months ended June 30, 2019	$	0.1	$	23.0	$	23.1
2020	0.3		38.8		39.1
2021	0.3		29.7		30.0
2022	0.3		22.4		22.7
2023	0.2		17.4		17.6
2024 and beyond	0.7		43.8		44.5
Total lease payments	$	1.9	$	175.1	$	177.0
Less imputed interest	0.3		16.1		16.4
Present value of lease liabilities	$	1.6	$	159.0	$	160.6

The contractual maturity dates presented under prior lease accounting guidance of the remaining rental commitments at December 31, 2018 were as follows:

(in millions)	Finance Leases		Operating Leases		Total
2019	$	4.2	$	36.6	$	40.8
2020	4.2		28.5		32.7
2021	2.5		22.1		24.6
2022	1.8		16.4		18.2
2023	1.3		12.7		14.0
2024 and beyond	1.1		16.9		18.0
Total lease payments	$	15.1	$	133.2	$	148.3

The supplemental cash flow information for the three and six months ended June 30, 2019 were as follows:

(in millions)	Three Months Ended		Six Months Ended
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12.6	$	25.2
Financing cash flows from finance leases	0.1		0.2
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	1.5	$	5.8

Leases

LEASES

The Company leases real estate, automobiles and equipment under various operating and finance leases. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the implicit rate is not readily determinable in most of the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Beginning January 1, 2019, any new real estate and equipment operating lease agreements with lease and nonlease components, will be accounted for as a single lease component; auto leases will be accounted for as separate lease components.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of approximately 1 year to 11 years. Many of the Company's real estate and equipment leases have one or more options to renew, with terms that can extend primarily from 1 year to 3 years, which are not included in the initial lease term. The Company does not have lease agreements with residual value guarantees, sale-and-leaseback terms, or material restrictive covenants. The Company does not have any material sublease arrangements.

The net present value of finance and operating lease assets and liabilities consist of the following:

(in millions, except percentages)	Location in the Consolidated Balance Sheets	June 30, 2019
Assets
Current assets
Finance leases	Property, plant, and equipment, net	$	1.6
Operating leases	Operating lease right-of-use assets, net	155.8
Total right-of-use assets		$	157.4
Liabilities
Current liabilities
Finance leases	Notes payable and current portion of long-term debt	$	0.2
Operating leases	Accrued liabilities	39.7
Noncurrent liabilities
Finance leases	Long-term debt	1.4
Operating leases	Operating lease liability	119.3
Total lease liabilities		$	160.6
Supplemental information:
Weighted-average discount rate
Finance leases		3.5		%
Operating leases		3.0		%
Weighted-average remaining lease term in years
Finance leases		7.2
Operating leases		5.7

The lease cost recognized in the Consolidated Statements of Operations for the three and six months ended June 30, 2019 were as follows:

(in millions)	Three Months Ended		Six Months Ended
Finance lease cost
Amortization of right-of-use assets	$	0.1	$	0.2
Operating lease cost	12.5		25.7
Short-term lease cost	0.3		0.4
Variable lease cost	2.0		3.9
Total lease cost	$	14.9	$	30.2

The contractual maturity dates of the remaining lease liabilities at June 30, 2019 consist of the following:

(in millions)	Finance Leases		Operating Leases		Total
2019, excluding the six months ended June 30, 2019	$	0.1	$	23.0	$	23.1
2020	0.3		38.8		39.1
2021	0.3		29.7		30.0
2022	0.3		22.4		22.7
2023	0.2		17.4		17.6
2024 and beyond	0.7		43.8		44.5
Total lease payments	$	1.9	$	175.1	$	177.0
Less imputed interest	0.3		16.1		16.4
Present value of lease liabilities	$	1.6	$	159.0	$	160.6

The contractual maturity dates presented under prior lease accounting guidance of the remaining rental commitments at December 31, 2018 were as follows:

(in millions)	Finance Leases		Operating Leases		Total
2019	$	4.2	$	36.6	$	40.8
2020	4.2		28.5		32.7
2021	2.5		22.1		24.6
2022	1.8		16.4		18.2
2023	1.3		12.7		14.0
2024 and beyond	1.1		16.9		18.0
Total lease payments	$	15.1	$	133.2	$	148.3

The supplemental cash flow information for the three and six months ended June 30, 2019 were as follows:

(in millions)	Three Months Ended		Six Months Ended
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12.6	$	25.2
Financing cash flows from finance leases	0.1		0.2
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	1.5	$	5.8