Leases (Notes)

3 Months Ended

Mar. 31, 2019

We lease certain retail stores, land, building and various equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 15 years or more. The exercise of existing lease renewal options is at our sole discretion. 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.

Some of our lease agreements include a rate based on equipment usage and others include a rate with fixed increases or inflationary indices based increase. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We rent or sublease certain real estate and equipment to third parties. Our sublease portfolio consists primarily of operating leases within our stores and crude storage equipment.



(in millions)	Three Months Ended March 31, 2019
Lease Cost
Operating lease costs	$	13.5
Short-term lease costs ⁽¹⁾	3.6
Sublease income	(1.7		)
Net lease costs	$	15.4

Other Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(13.5	)

Weighted-average remaining lease term (years) operating leases	7.2

Weighted-average discount rate operating leases ⁽²⁾	6.3		%

⁽¹⁾Includes an immaterial amount of variable lease cost.

⁽²⁾ Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842.

The following is an estimate of the maturity of our lease liabilities for operating leases having remaining noncancelable terms in excess of one year as of March 31, 2019 (in millions) under the new lease guidance ("ASC 842"):



Maturity of Lease Liabilities	Total
April 1 to December 31, 2019	36.3
2020	43.6
2021	41.1
2022	30.1
2023	24.9
Thereafter	85.6
Total future lease payments	261.6
Less: Interest	60.8
Present Value of Lease Liabilities	$	200.8

The following is an estimate of our future minimum lease payments for operating leases having remaining noncancelable terms in excess of one year as of December 31, 2018 (in millions) under the legacy lease guidance ("ASC 840"):



Minimum Lease Payments
2019	$	48.1
2020	42.1
2021	39.5
2022	28.5
2023	23.4
Thereafter	77.9
Total future minimum lease payments	$	259.5