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LEASES

9 Months Ended

Sep. 30, 2019

Leases as Lessor

The components of lease income were as follows:


	Three months ended September 30,					Nine months ended September 30,
	2019		2018	2019		2018
	(In thousands)
Operating leases
Lease income related to lease payments	$	381,170	344,031	$	1,116,029	1,013,728
Lease income related to commercial rental ⁽¹⁾	249,941		242,719	708,181		657,328

Sales type leases

Interest income related to net investment in leases	11,169		9,555	33,057		29,075




Variable lease income excluding commercial rental ⁽¹⁾	69,641		60,845	183,489		169,478

————————————

(1)Lease income related to commercial rental includes both fixed and variable lease income. Variable lease income is approximately 15% to 25% of total commercial rental income based on management's internal estimates.

The components of net investment in sales-type leases were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
Net investment in the lease — lease payment receivable	$	580,047	505,057
Net investment in the lease — unguaranteed residual value in assets	55,528		46,209

	$	635,575	551,266

————————————

Note: The net investment in the sales-type lease shown above are included in "Receivables, net" and "Sales-type leases and other assets" in the Consolidated Condensed Balance Sheets.

Maturities of sales-type lease receivables were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	39,210	133,557
2020	168,652		136,924
2021	145,008		114,983
2022	115,490		85,146
2023	82,193		52,161
Thereafter	139,651		78,935
Total undiscounted cash flows	690,204		601,706
Present value of lease payments (recognized as lease receivables)	(580,047)		(505,057)
Difference between undiscounted cash flows and discounted cash flows	$	110,157	96,649

Maturities of operating lease payments were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	347,696	1,159,851
2020	1,211,789		892,721
2021	952,610		646,008
2022	673,422		421,050
2023	447,920		249,255
Thereafter	491,477		203,632
Total undiscounted cash flows	$	4,124,914	3,572,517

Leases as Lessee

The components of lease expense were as follows:


		Three months ended September 30,					Nine months ended September 30,
	Classification	2019		2018	2019		2018
		(In thousands)
Finance lease cost
Amortization of right-of-use assets	Other operating expenses, SG&A	$	3,735	3,805	$	10,257	10,787
Interest on lease liabilities	Interest expense	638		689	1,916		1,886
Operating lease cost	Other operating expenses, SG&A	23,722		23,063	70,578		64,506
Short-term lease and other	Other operating expenses, SG&A	2,480		835	6,569		2,648
Variable lease cost	Other operating expenses, SG&A	4,320		3,647	9,920		8,092
Sublease income	Cost of lease & related maintenance and rental, cost of services	(5,691)		(6,490)	(17,201)		(19,050)
Total lease cost		$	29,204	25,549	$	82,039	68,869

Supplemental cash flow information related to leases was as follows:


	Nine months ended September 30,
	2019		2018
	(In thousands)
Cash paid for amounts included in measurement of liabilities
Operating cash flows from finance leases	$	1,916	1,886
Operating cash flows from operating leases	69,848		63,286
Financing cash flows from finance leases	14,650		13,420
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	15,336		12,889
Operating leases	70,365		96,295

Supplemental balance sheet information relates to leases was as follows:


	Classification	September 30, 2019		December 31, 2018
		(In thousands)
Assets
Operating lease right-of-use assets	Sales-type leases and other assets	$	209,556	203,834
Finance lease assets	Operating property and equipment, net and revenue earning equipment, net	41,346		41,647
Total leased assets		$	250,902	245,481

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	72,888	73,422
Finance	Short-term debt and current portion of long-term debt	12,209		14,543

Noncurrent
Operating	Other non-current liabilities	144,834		137,384
Finance	Long-term debt	36,351		32,909
Total lease liabilities		$	266,282	258,258

September 30, 2019

December 31, 2018

(In thousands)

Weighted-average remaining lease term

Operating

4 years

Finance

6 years

7 years

Weighted-average discount rate

Operating

3.9

3.7

Finance

7.2

8.0

Maturities of operating and finance lease liabilities were as follows:


	Operating Leases		Finance Leases	Total
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	22,200	3,962	26,162
2020	72,840		13,709	86,549
2021	51,964		12,048	64,012
2022	37,869		8,130	45,999
2023	26,558		5,532	32,090
Thereafter	23,570		14,178	37,748
Total lease payments	235,001		57,559	292,560
Less: Imputed Interest	(17,279)		(8,999)	(26,278)
Present value of lease liabilities	$	217,722	48,560	266,282

As of September 30, 2019, we have entered into additional facility operating leases that have not yet commenced of $7 million. The operating leases will commence in 2019 with lease terms of generally 2 to 5 years.

LEASES

Leases as Lessor

The components of lease income were as follows:


	Three months ended September 30,					Nine months ended September 30,
	2019		2018	2019		2018
	(In thousands)
Operating leases
Lease income related to lease payments	$	381,170	344,031	$	1,116,029	1,013,728
Lease income related to commercial rental ⁽¹⁾	249,941		242,719	708,181		657,328

Sales type leases

Interest income related to net investment in leases	11,169		9,555	33,057		29,075




Variable lease income excluding commercial rental ⁽¹⁾	69,641		60,845	183,489		169,478

————————————

The components of net investment in sales-type leases were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
Net investment in the lease — lease payment receivable	$	580,047	505,057
Net investment in the lease — unguaranteed residual value in assets	55,528		46,209

	$	635,575	551,266

————————————

Note: The net investment in the sales-type lease shown above are included in "Receivables, net" and "Sales-type leases and other assets" in the Consolidated Condensed Balance Sheets.

Maturities of sales-type lease receivables were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	39,210	133,557
2020	168,652		136,924
2021	145,008		114,983
2022	115,490		85,146
2023	82,193		52,161
Thereafter	139,651		78,935
Total undiscounted cash flows	690,204		601,706
Present value of lease payments (recognized as lease receivables)	(580,047)		(505,057)
Difference between undiscounted cash flows and discounted cash flows	$	110,157	96,649

Maturities of operating lease payments were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	347,696	1,159,851
2020	1,211,789		892,721
2021	952,610		646,008
2022	673,422		421,050
2023	447,920		249,255
Thereafter	491,477		203,632
Total undiscounted cash flows	$	4,124,914	3,572,517

Leases as Lessee

The components of lease expense were as follows:


		Three months ended September 30,					Nine months ended September 30,
	Classification	2019		2018	2019		2018
		(In thousands)
Finance lease cost
Amortization of right-of-use assets	Other operating expenses, SG&A	$	3,735	3,805	$	10,257	10,787
Interest on lease liabilities	Interest expense	638		689	1,916		1,886
Operating lease cost	Other operating expenses, SG&A	23,722		23,063	70,578		64,506
Short-term lease and other	Other operating expenses, SG&A	2,480		835	6,569		2,648
Variable lease cost	Other operating expenses, SG&A	4,320		3,647	9,920		8,092
Sublease income	Cost of lease & related maintenance and rental, cost of services	(5,691)		(6,490)	(17,201)		(19,050)
Total lease cost		$	29,204	25,549	$	82,039	68,869

Supplemental cash flow information related to leases was as follows:


	Nine months ended September 30,
	2019		2018
	(In thousands)
Cash paid for amounts included in measurement of liabilities
Operating cash flows from finance leases	$	1,916	1,886
Operating cash flows from operating leases	69,848		63,286
Financing cash flows from finance leases	14,650		13,420
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	15,336		12,889
Operating leases	70,365		96,295

Supplemental balance sheet information relates to leases was as follows:


	Classification	September 30, 2019		December 31, 2018
		(In thousands)
Assets
Operating lease right-of-use assets	Sales-type leases and other assets	$	209,556	203,834
Finance lease assets	Operating property and equipment, net and revenue earning equipment, net	41,346		41,647
Total leased assets		$	250,902	245,481

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	72,888	73,422
Finance	Short-term debt and current portion of long-term debt	12,209		14,543

Noncurrent
Operating	Other non-current liabilities	144,834		137,384
Finance	Long-term debt	36,351		32,909
Total lease liabilities		$	266,282	258,258

September 30, 2019

December 31, 2018

(In thousands)

Weighted-average remaining lease term

Operating

4 years

Finance

6 years

7 years

Weighted-average discount rate

Operating

3.9

3.7

Finance

7.2

8.0

Maturities of operating and finance lease liabilities were as follows:


	Operating Leases		Finance Leases	Total
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	22,200	3,962	26,162
2020	72,840		13,709	86,549
2021	51,964		12,048	64,012
2022	37,869		8,130	45,999
2023	26,558		5,532	32,090
Thereafter	23,570		14,178	37,748
Total lease payments	235,001		57,559	292,560
Less: Imputed Interest	(17,279)		(8,999)	(26,278)
Present value of lease liabilities	$	217,722	48,560	266,282

LEASES

Leases as Lessor

The components of lease income were as follows:


	Three months ended September 30,					Nine months ended September 30,
	2019		2018	2019		2018
	(In thousands)
Operating leases
Lease income related to lease payments	$	381,170	344,031	$	1,116,029	1,013,728
Lease income related to commercial rental ⁽¹⁾	249,941		242,719	708,181		657,328

Sales type leases

Interest income related to net investment in leases	11,169		9,555	33,057		29,075




Variable lease income excluding commercial rental ⁽¹⁾	69,641		60,845	183,489		169,478

————————————

The components of net investment in sales-type leases were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
Net investment in the lease — lease payment receivable	$	580,047	505,057
Net investment in the lease — unguaranteed residual value in assets	55,528		46,209

	$	635,575	551,266

————————————

Note: The net investment in the sales-type lease shown above are included in "Receivables, net" and "Sales-type leases and other assets" in the Consolidated Condensed Balance Sheets.

Maturities of sales-type lease receivables were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	39,210	133,557
2020	168,652		136,924
2021	145,008		114,983
2022	115,490		85,146
2023	82,193		52,161
Thereafter	139,651		78,935
Total undiscounted cash flows	690,204		601,706
Present value of lease payments (recognized as lease receivables)	(580,047)		(505,057)
Difference between undiscounted cash flows and discounted cash flows	$	110,157	96,649

Maturities of operating lease payments were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	347,696	1,159,851
2020	1,211,789		892,721
2021	952,610		646,008
2022	673,422		421,050
2023	447,920		249,255
Thereafter	491,477		203,632
Total undiscounted cash flows	$	4,124,914	3,572,517

Leases as Lessee

The components of lease expense were as follows:


		Three months ended September 30,					Nine months ended September 30,
	Classification	2019		2018	2019		2018
		(In thousands)
Finance lease cost
Amortization of right-of-use assets	Other operating expenses, SG&A	$	3,735	3,805	$	10,257	10,787
Interest on lease liabilities	Interest expense	638		689	1,916		1,886
Operating lease cost	Other operating expenses, SG&A	23,722		23,063	70,578		64,506
Short-term lease and other	Other operating expenses, SG&A	2,480		835	6,569		2,648
Variable lease cost	Other operating expenses, SG&A	4,320		3,647	9,920		8,092
Sublease income	Cost of lease & related maintenance and rental, cost of services	(5,691)		(6,490)	(17,201)		(19,050)
Total lease cost		$	29,204	25,549	$	82,039	68,869

Supplemental cash flow information related to leases was as follows:


	Nine months ended September 30,
	2019		2018
	(In thousands)
Cash paid for amounts included in measurement of liabilities
Operating cash flows from finance leases	$	1,916	1,886
Operating cash flows from operating leases	69,848		63,286
Financing cash flows from finance leases	14,650		13,420
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	15,336		12,889
Operating leases	70,365		96,295

Supplemental balance sheet information relates to leases was as follows:


	Classification	September 30, 2019		December 31, 2018
		(In thousands)
Assets
Operating lease right-of-use assets	Sales-type leases and other assets	$	209,556	203,834
Finance lease assets	Operating property and equipment, net and revenue earning equipment, net	41,346		41,647
Total leased assets		$	250,902	245,481

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	72,888	73,422
Finance	Short-term debt and current portion of long-term debt	12,209		14,543

Noncurrent
Operating	Other non-current liabilities	144,834		137,384
Finance	Long-term debt	36,351		32,909
Total lease liabilities		$	266,282	258,258

September 30, 2019

December 31, 2018

(In thousands)

Weighted-average remaining lease term

Operating

4 years

Finance

6 years

7 years

Weighted-average discount rate

Operating

3.9

3.7

Finance

7.2

8.0

Maturities of operating and finance lease liabilities were as follows:


	Operating Leases		Finance Leases	Total
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	22,200	3,962	26,162
2020	72,840		13,709	86,549
2021	51,964		12,048	64,012
2022	37,869		8,130	45,999
2023	26,558		5,532	32,090
Thereafter	23,570		14,178	37,748
Total lease payments	235,001		57,559	292,560
Less: Imputed Interest	(17,279)		(8,999)	(26,278)
Present value of lease liabilities	$	217,722	48,560	266,282

LEASES

Leases as Lessor

The components of lease income were as follows:


	Three months ended September 30,					Nine months ended September 30,
	2019		2018	2019		2018
	(In thousands)
Operating leases
Lease income related to lease payments	$	381,170	344,031	$	1,116,029	1,013,728
Lease income related to commercial rental ⁽¹⁾	249,941		242,719	708,181		657,328

Sales type leases

Interest income related to net investment in leases	11,169		9,555	33,057		29,075




Variable lease income excluding commercial rental ⁽¹⁾	69,641		60,845	183,489		169,478

————————————

The components of net investment in sales-type leases were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
Net investment in the lease — lease payment receivable	$	580,047	505,057
Net investment in the lease — unguaranteed residual value in assets	55,528		46,209

	$	635,575	551,266

————————————

Note: The net investment in the sales-type lease shown above are included in "Receivables, net" and "Sales-type leases and other assets" in the Consolidated Condensed Balance Sheets.

Maturities of sales-type lease receivables were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	39,210	133,557
2020	168,652		136,924
2021	145,008		114,983
2022	115,490		85,146
2023	82,193		52,161
Thereafter	139,651		78,935
Total undiscounted cash flows	690,204		601,706
Present value of lease payments (recognized as lease receivables)	(580,047)		(505,057)
Difference between undiscounted cash flows and discounted cash flows	$	110,157	96,649

Maturities of operating lease payments were as follows:


	September 30, 2019		December 31, 2018
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	347,696	1,159,851
2020	1,211,789		892,721
2021	952,610		646,008
2022	673,422		421,050
2023	447,920		249,255
Thereafter	491,477		203,632
Total undiscounted cash flows	$	4,124,914	3,572,517

Leases as Lessee

The components of lease expense were as follows:


		Three months ended September 30,					Nine months ended September 30,
	Classification	2019		2018	2019		2018
		(In thousands)
Finance lease cost
Amortization of right-of-use assets	Other operating expenses, SG&A	$	3,735	3,805	$	10,257	10,787
Interest on lease liabilities	Interest expense	638		689	1,916		1,886
Operating lease cost	Other operating expenses, SG&A	23,722		23,063	70,578		64,506
Short-term lease and other	Other operating expenses, SG&A	2,480		835	6,569		2,648
Variable lease cost	Other operating expenses, SG&A	4,320		3,647	9,920		8,092
Sublease income	Cost of lease & related maintenance and rental, cost of services	(5,691)		(6,490)	(17,201)		(19,050)
Total lease cost		$	29,204	25,549	$	82,039	68,869

Supplemental cash flow information related to leases was as follows:


	Nine months ended September 30,
	2019		2018
	(In thousands)
Cash paid for amounts included in measurement of liabilities
Operating cash flows from finance leases	$	1,916	1,886
Operating cash flows from operating leases	69,848		63,286
Financing cash flows from finance leases	14,650		13,420
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	15,336		12,889
Operating leases	70,365		96,295

Supplemental balance sheet information relates to leases was as follows:


	Classification	September 30, 2019		December 31, 2018
		(In thousands)
Assets
Operating lease right-of-use assets	Sales-type leases and other assets	$	209,556	203,834
Finance lease assets	Operating property and equipment, net and revenue earning equipment, net	41,346		41,647
Total leased assets		$	250,902	245,481

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	72,888	73,422
Finance	Short-term debt and current portion of long-term debt	12,209		14,543

Noncurrent
Operating	Other non-current liabilities	144,834		137,384
Finance	Long-term debt	36,351		32,909
Total lease liabilities		$	266,282	258,258

September 30, 2019

December 31, 2018

(In thousands)

Weighted-average remaining lease term

Operating

4 years

Finance

6 years

7 years

Weighted-average discount rate

Operating

3.9

3.7

Finance

7.2

8.0

Maturities of operating and finance lease liabilities were as follows:


	Operating Leases		Finance Leases	Total
	(In thousands)
2019 (remaining three months ending December 31, 2019)	$	22,200	3,962	26,162
2020	72,840		13,709	86,549
2021	51,964		12,048	64,012
2022	37,869		8,130	45,999
2023	26,558		5,532	32,090
Thereafter	23,570		14,178	37,748
Total lease payments	235,001		57,559	292,560
Less: Imputed Interest	(17,279)		(8,999)	(26,278)
Present value of lease liabilities	$	217,722	48,560	266,282