Leases

On January 1, 2019, the Company adopted ASU 2016-02, "Leases" (Topic 842). This ASU requires all companies to record their operating and finance leases that meet certain criteria under the standard as Right of Use ("ROU") assets with the corresponding lease obligations recorded as short term and long term liabilities. The Company adopted this standard utilizing the modified retrospective transition method that allows for a cumulative-effect adjustment in the period of adoption of the new leasing standard without restating prior periods. There was no cumulative-effect adjustment made to opening retained earnings upon adoption of this ASU. Additionally, the Company elected to adopt the available package of practical expedients under the transition guidance.

The Company has operating and finance leases for office and warehouse facilities, headquarters and call centers and certain computer, communications equipment and machinery and equipment which provide the right to use the underlying assets in exchange for agreed upon lease payments, determined by the payment schedule contained in each lease. The Company determines if an arrangement is an operating or finance lease at the inception of the lease. Leases with a term of one year or less are not considered to be ROU assets. All other leases are recorded on the balance sheet, with ROU assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company’s lease portfolio consists primarily of operating leases which expire at various dates through 2032.

The ROU assets and corresponding lease liabilities are recorded based upon the net present value of the remaining lease payments, discounted using interest rates determined by utilizing such factors as the Company's current credit facility terms, the length of the remaining term of the lease, the Company's expected debt credit rating and comparable company term loan yields. Adoption of the new standard resulted in the Company recording ROU assets and lease liabilities of approximately $54 million and $64 million, respectively, at January 1, 2019. Certain leases may include options to extend the lease, however the Company is not including any impact of such options in the valuation of its ROU assets or liabilities as they are not currently probable of being extended. The Company’s lease agreements do not contain residual value guarantees or restrictive covenants. The Company has sublease agreements for unused space we lease in the United States and Germany. The Company recorded $0.6 million of sublease income for the three months ended March 31, 2019.

The following tables detail the Company's ROU asset activity for the first quarter of 2019. The components of ROU asset lease expense included in continuing operations were as follows (in millions):



	Three Months Ended March 31,
	2019
Operating lease cost	$	2.7


Weighted Average Remaining Lease Term
Operating leases	8.1 years

Weighted Average Discount Rate
Operating leases	5.6		%

Maturities of lease liabilities were as follows (in millions):



Year Ending December 31	Operating Leases
2019 (excluding three months)	$	8.5
2020	12.1
2021	9.0
2022	8.1
2023	7.9
Thereafter	32.7
Total lease payments	78.3
Less: interest	(16.4		)
Total present value of lease liabilities	$	61.9

The Company currently leases its headquarters office facility from an entity owned by the Company’s principal shareholders.