Leasing Arrangements

6 Months Ended

Jun. 30, 2020

Note 5 — LEASING ARRANGEMENTS

We lease certain manufacturing facilities, warehouse space, machinery and equipment, vehicles and information technology equipment under operating leases. The majority of our leases are operating leases. Finance leases are immaterial to our condensed consolidated financial statements. Operating lease assets and obligations are reflected within Operating lease assets, net, Current operating lease obligations, and Non-current operating lease obligations, respectively, on the Condensed Consolidated Balance Sheets.

Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred. The components of lease cost from continued operations recognized within our Condensed Consolidated Statements of Income were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	Condensed Consolidated Statements of Income Location	2020		2019		2020		2019
Lease cost:
Operating lease cost	Cost of sales	$	2.4	$	2.8	$	4.2	$	5.5
Operating lease cost	Selling and administrative expense	4.3		3.3		9.1		6.5
Total operating lease cost		$	6.7	$	6.1	$	13.3	$	12.0

We often have options to renew lease terms for buildings and other assets. The exercise of lease renewal options are generally at our sole discretion. In addition, certain lease arrangements may be terminated prior to their original expiration date at our discretion. We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. The weighted average remaining lease term for our operating leases as of June 30, 2020 and 2019 was 3.9 years and 4.3 years, respectively.

The discount rate implicit within our leases is generally not determinable and, therefore, the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for our leases is determined based on lease term and currency in which lease payments are made, adjusted for impacts of collateral. The weighted average discount rates used to measure our operating lease liabilities as of June 30, 2020 and 2019 was 4.3% and 4.7%, respectively.

Maturity Analysis of Lease Liabilities:


	As of June 30, 2020
(In millions)	Operating Leases
2020	$	12.4
2021	18.2
2022	13.4
2023	9.1
2024	5.0
Thereafter	7.7
Total lease payments	65.8
Less amount of lease payment representing interest	(6.8)
Total present value of lease payments	$	59.0