LEASES

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lessee, Operating Leases

LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Some of our leases may include options to extend or terminate the lease. 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.

	Classification	January 1, 2019		March 31, 2019
Assets
Operating right-of-use assets	Right-of-use asset	$	187.5	$	180.3
Finance right-of-use assets	Property, Plant and Equipment	3.2		3.2
Total right-of-use assets		190.7		183.5
Liabilities
Current
Operating lease liabilities	Other accrued liabilities	$	45.4	$	43.9
Finance lease liabilities	Other accrued liabilities	1.1		1.2
Total current lease liabilities		46.5		45.1
Noncurrent
Operating lease liabilities	Long-term operating lease liability	$	155.9	$	150.4
Finance lease liabilities	Long-term debt	1.9		2.0
Total noncurrent lease liabilities		$	157.8	$	152.4
Total lease liability		$	204.3	$	197.5

The table below shows the lease income and expenses recorded in the Consolidated Statement of Operations incurred during the three months ended March 31, 2019.

Lease Cost	Classification	Three months ended March 31, 2019
Operating lease cost (1)	Selling, general and administrative expenses	$	16.8
Finance lease cost
Amortization of right-of-use assets	Selling, general and administrative expenses	0.4
Interest on lease liabilities	Interest Expense	0.1
Short-term leases costs	Selling, general and administrative expenses	1.1
Sublease income (2)	Selling, general and administrative expenses	(3.2		)
Net lease cost		$	15.2

⁽¹⁾ Includes variable lease costs which are immaterial. These are presented in selling, general and administrative expenses in our Consolidated Statements of Operations.

⁽²⁾ Sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

The maturity analysis of the finance and operating lease liabilities is reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities as recognized in the March 31, 2019 Consolidated Balance Sheet:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	44.8	$	1.1	$	45.9
2020	49.6		1.2		50.8
2021	40.4		0.8		41.2
2022	34.7		0.6		35.3
2023	24.6		0.1		24.7
2024	17.7		—		17.7
Thereafter	29.3		—		29.3
Total lease payments	$	241.1	$	3.8	$	244.9
Less: Interest	46.8		0.6		47.4
Present value of lease liabilities	$	194.3	$	3.2	$	197.5

At December 31, 2018 our operating and finance lease obligations by due dates were as follows:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	56.4	$	1.1	$	57.5
2020	42.0		0.6		42.6
2021	35.3		0.4		35.7
2022	31.1		0.2		31.3
2023	22.4		0.1		22.5
Thereafter	46.9		0.1		47.0
Total lease payments(1)	$	234.1	$	2.5	$	236.6

⁽¹⁾ Total lease payments of $236.6 represent undiscounted cash flows and therefore do not reconcile to the total discounted lease liability of $204.3 at January 1, 2019 shown above.

The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating and finance lease population. As noted in our lease accounting policy (See Note 1, Accounting Policies), the Company uses the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate	March 31, 2019
Weighted-average remaining lease term (years)
Operating leases	5.3
Finance leases	3.0
Weighted-average discount rate
Operating leases	8.3	%
Finance leases	11.6	%

The table below sets out the classification of lease payments in the Consolidated Statement of Cash Flows. The right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the three months ended March 31, 2019.

Other Information	Three Months Ended March 31, 2019
- Operating Cash Flows From Operating Leases	16.4
- Financing Cash Flows From Finance Leases	0.3
Cash Paid For Amounts Included In Measurement of Liabilities	$	16.7
Right-of-use Assets Obtained In Exchange For New Finance Liabilities	$	0.7
Right-of-use Assets Obtained In Exchange For New Operating Liabilities	$	12.8

Lessee, Finance Leases

LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Some of our leases may include options to extend or terminate the lease. 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.

	Classification	January 1, 2019		March 31, 2019
Assets
Operating right-of-use assets	Right-of-use asset	$	187.5	$	180.3
Finance right-of-use assets	Property, Plant and Equipment	3.2		3.2
Total right-of-use assets		190.7		183.5
Liabilities
Current
Operating lease liabilities	Other accrued liabilities	$	45.4	$	43.9
Finance lease liabilities	Other accrued liabilities	1.1		1.2
Total current lease liabilities		46.5		45.1
Noncurrent
Operating lease liabilities	Long-term operating lease liability	$	155.9	$	150.4
Finance lease liabilities	Long-term debt	1.9		2.0
Total noncurrent lease liabilities		$	157.8	$	152.4
Total lease liability		$	204.3	$	197.5

The table below shows the lease income and expenses recorded in the Consolidated Statement of Operations incurred during the three months ended March 31, 2019.

Lease Cost	Classification	Three months ended March 31, 2019
Operating lease cost (1)	Selling, general and administrative expenses	$	16.8
Finance lease cost
Amortization of right-of-use assets	Selling, general and administrative expenses	0.4
Interest on lease liabilities	Interest Expense	0.1
Short-term leases costs	Selling, general and administrative expenses	1.1
Sublease income (2)	Selling, general and administrative expenses	(3.2		)
Net lease cost		$	15.2

⁽¹⁾ Includes variable lease costs which are immaterial. These are presented in selling, general and administrative expenses in our Consolidated Statements of Operations.

⁽²⁾ Sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

The maturity analysis of the finance and operating lease liabilities is reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities as recognized in the March 31, 2019 Consolidated Balance Sheet:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	44.8	$	1.1	$	45.9
2020	49.6		1.2		50.8
2021	40.4		0.8		41.2
2022	34.7		0.6		35.3
2023	24.6		0.1		24.7
2024	17.7		—		17.7
Thereafter	29.3		—		29.3
Total lease payments	$	241.1	$	3.8	$	244.9
Less: Interest	46.8		0.6		47.4
Present value of lease liabilities	$	194.3	$	3.2	$	197.5

At December 31, 2018 our operating and finance lease obligations by due dates were as follows:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	56.4	$	1.1	$	57.5
2020	42.0		0.6		42.6
2021	35.3		0.4		35.7
2022	31.1		0.2		31.3
2023	22.4		0.1		22.5
Thereafter	46.9		0.1		47.0
Total lease payments(1)	$	234.1	$	2.5	$	236.6

⁽¹⁾ Total lease payments of $236.6 represent undiscounted cash flows and therefore do not reconcile to the total discounted lease liability of $204.3 at January 1, 2019 shown above.

The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating and finance lease population. As noted in our lease accounting policy (See Note 1, Accounting Policies), the Company uses the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate	March 31, 2019
Weighted-average remaining lease term (years)
Operating leases	5.3
Finance leases	3.0
Weighted-average discount rate
Operating leases	8.3	%
Finance leases	11.6	%

The table below sets out the classification of lease payments in the Consolidated Statement of Cash Flows. The right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the three months ended March 31, 2019.

Other Information	Three Months Ended March 31, 2019
- Operating Cash Flows From Operating Leases	16.4
- Financing Cash Flows From Finance Leases	0.3
Cash Paid For Amounts Included In Measurement of Liabilities	$	16.7
Right-of-use Assets Obtained In Exchange For New Finance Liabilities	$	0.7
Right-of-use Assets Obtained In Exchange For New Operating Liabilities	$	12.8