Leases (Notes)

12 Months Ended

Dec. 31, 2019

Montreal Brewery Sale and Leaseback Transaction

In June 2019, we completed the sale of our Montreal brewery for $96.2 million (CAD 126 million), resulting in a $61.3 million gain, which was recorded as a special item. In conjunction with the sale, we agreed to lease back the existing property to continue operations on an uninterrupted basis for a period up to 5 years with early termination options at our discretion, while our new brewery in Longueuil, Quebec is being constructed. Accordingly, we have recorded operating lease right-of-use assets and liabilities of approximately CAD 6 million assuming a lease term that is coterminous with the construction of our new brewery, which is currently expected to be operational in 2021. However, due to the uncertainty inherent in our estimates, the term of the brewery lease is subject to reassessment. Once the existing property has been entirely redeveloped by the purchaser, we plan to lease a minor portion of the future space for administrative and other purposes. We have evaluated this transaction pursuant to the accounting guidance for sale and leaseback transactions and concluded that the relevant criteria have been met for full gain recognition upon completion of the transaction in the second quarter of 2019.

Lease Financial Information

For the year ended December 31, 2019, lease expense (including immaterial short-term and variable lease costs) was as follows:



	Year ended December 31, 2019
	(In millions)
Operating lease expense	$	71.0
Finance lease expense	12.1
Total lease expense	$	83.1

Separately, as a result of our decision to close our Denver, Colorado office, we recorded an impairment loss of $1.1 million to the Denver, Colorado office lease right-of use asset in the fourth quarter of 2019.

Supplemental cash flow information related to leases for the year ended December 31, 2019 was as follows:



	Year ended December 31, 2019
	(In millions)
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows from operating leases	$	52.2
Operating cash flows from finance leases	$	3.8
Financing cash flows from finance leases	$	2.8
Supplemental non-cash information on right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	45.6
Finance leases	$	9.2

Supplemental balance sheet information related to leases as of December 31, 2019 was as follows:



		As of
		December 31, 2019
	Balance Sheet Classification	(In millions)
Operating Leases
Operating lease right-of-use assets	Other assets	$	154.5
Current operating lease liabilities	Accounts payable and other current liabilities	$	46.6
Non-current operating lease liabilities	Other liabilities	119.5
Total operating lease liabilities		$	166.1

Finance Leases
Finance lease right-of-use assets	Properties, net	$	73.0
Current finance lease liabilities	Current portion of long-term debt and short-term borrowings	$	34.5
Non-current finance lease liabilities	Long-term debt	60.0
Total finance lease liabilities		$	94.5

The weighted-average remaining lease term and discount rate as of December 31, 2019 are as follows:



	Weighted-Average Remaining Lease Term (Years)	Weighted-Average Discount Rate
Operating leases	4.5	4.2%
Finance leases	9.8	6.1%

Based on foreign exchange rates as of December 31, 2019, maturities of lease liabilities were as follows:



	Operating Leases			Finance Leases
	(In millions)
2020	$	52.2		$	38.9
2021	42.2			6.5
2022	32.8			6.5
2023	23.0			6.5
2024	11.2			6.5
Thereafter	21.3			68.7
Total lease payments	$	182.7		$	133.6
Less: interest	(16.6		)	(39.1		)
Present value of lease liabilities	$	166.1		$	94.5

Executed leases that have not yet commenced as of December 31, 2019 are immaterial.

Information as of December 31, 2018, as well as comparative period information under historical lease accounting guidance

Gross assets recorded under finance leases as of December 31, 2018 were $82.5 million. The associated accumulated amortization on these assets as of December 31, 2018 was $13.2 million. These amounts are recorded within properties, net on the consolidated balance sheet. Current and non-current finance lease liabilities as of December 31, 2018 were $3.2 million and $82.1 million, respectively, and were recorded in accounts payable and other current liabilities and other non-current liabilities, respectively, on the consolidated balance sheet. Separately, during the year ended December 31, 2018 and December 31, 2017, non-cash activities related to the recognition of finance leases was $15.5 million and $33.8 million, respectively.

Based on foreign exchange rates as of December 31, 2018, future minimum lease payments under operating leases that have initial or remaining non-cancelable terms in excess of one year, as well as finance leases, are as follows:



	Operating Leases		Finance Leases
Year	(In millions)
2019	$	49.4	$	6.1
2020	40.2		36.2
2021	32.6		5.9
2022	24.6		5.9
2023	17.0		5.8
Thereafter	21.0		64.2
Total future minimum lease payments	$	184.8	$	124.1
Less: interest on finance leases			(38.8		)
Present value of future minimum finance lease payments			$	85.3

Total rent expense was $66.1 million and $64.1 million in 2018 and 2017, respectively.

Leases