Leases

6 Months Ended

Jun. 30, 2019

We lease certain buildings and equipment under various noncancelable operating lease agreements. In addition, we have sub-lease agreements on a limited number of our building lease agreements. The majority of our building leases and sub-leases expire within a five to ten year period and we generally have the option to renew at the end of the lease term for an additional five to ten year period at the fair rental value at the time of renewal. The majority of our equipment leases expire within a one to three year period and we generally have the option to renew at the end of the lease term for an additional one to three year period at the fair rental value at the time of renewal.

We do not have any lease agreements or sub-lease agreements that contain variable lease payments. In addition, we do not have lease agreements or sub-lease agreements that contain residual value guarantees or impose any restrictions or covenants with the lessors.

We determine if an arrangement is a lease at inception through a formal process that evaluates our right to control the use of an identified asset for a period of time in exchange for consideration. We account for the lease and non-lease components of our building leases separately and have elected to use the available practical expedient to account for the lease and non-lease components of our equipment leases as a single component. All of our leases are classified as operating, none of which are classified as short-term leases. For each operating lease, we calculate a lease liability at commencement date based on the present value of lease payments over the lease term and a corresponding right-of-use (ROU) asset, adjusted for lease incentives.

ROU assets represent our right to use an underlying asset for a specified lease term and are included in other assets in our consolidated balance sheet. Lease liabilities represent the present value of lease payments that we are obligated to pay arising from a lease and are included in other liabilities in our consolidated balance sheet. We consider the likelihood of renewal in determining the lease terms for the calculation of the ROU asset and lease liability. As most of our leases do not provide an implicit rate of interest, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate of interest when readily determinable.

Operating lease cost is calculated on a straight-line basis over the lease term and is included in other expenses in our consolidated statement of income. We amortize the ROU asset over the lease term on a pattern determined by the difference between the straight-line lease liability expense and the accretion of the imputed interest calculated on the lease liability.

Operating lease information is as follows:



	Three Months Ended			Six Months Ended
	June 30, 2019
	(in millions of dollars)
Lease Cost
Operating Lease Cost	$	7.1		$	14.6
Sublease Income	(0.4		)	(0.8		)
Total Lease Cost	$	6.7		$	13.8

Other Information
Cash Paid for Amounts Included in the Measurement of Lease Liabilities	$	7.3		$	14.6
Weighted-Average Remaining Lease Term				7 years
Weighted-Average Discount Rate				4.68		%

As of June 30, 2019 aggregate undiscounted minimum net lease payments and the reconciliation to our lease liability are as follows:



Remainder of 2019	$	13.9
2020	25.0
2021	21.5
2022	18.0
2023	12.4
2024 and Thereafter	49.5
Total	$	140.3
Less Imputed Interest	22.8
Lease Liability	$	117.5

As of June 30, 2019, the right-of-use asset was $111.5 million.