On January 1, 2019, we adopted new accounting guidance under Accounting Standards Codification Topic 842 (ASC 842) Leases. ASC 842 superseded prior lease accounting guidance and established new criteria for recognizing right-of-use assets and lease liabilities for operating lease arrangements on our Condensed Consolidated Balance Sheet. We elected to adopt this guidance utilizing the optional transition method that allowed us to not retrospectively revise prior period balance sheets to include operating leases, and to only include the disclosures required under ASC 842 for the periods subsequent to adoption.

We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain facilities and furniture under finance leases, and we also lease certain commercial office and production facilities, manufacturing machinery and equipment, vehicles and other assets under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.

The lease consideration for some of our facilities and machinery and equipment is variable, as it is based on various indices or usage of the underlying assets, respectively. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Condensed Consolidated Balance Sheet, while variable lease payments based on usage of the underlying asset have been excluded as they do not represent present rights or obligations.



	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2019		2019
	(in millions)

Finance lease cost
Amortization of right-of-use assets	$	0.2	$	0.4
Interest on lease liabilities	—		0.1
Total finance lease cost	0.2		0.5

Operating lease cost	6.7		13.4
Short-term lease cost	1.7		3.4
Variable lease cost	2.3		4.2

Total lease cost	$	10.9	$	21.5

For the three months ended June 30, 2019, $8.2 million and $2.5 million were recorded to Cost of goods sold and Selling, general and administrative expense, respectively, on our Condensed Consolidated Statement of Income, as compared to $7.2 million and $2.4 million, respectively, for the three months ended June 30, 2018. For the six months ended June 30, 2019, $16.0 million and $5.0 million were recorded to Cost of goods sold and Selling, general and administrative expense, respectively, on our Condensed Consolidated Statement of Income, as compared to $14.3 million and $5.0 million, respectively for the six months ended June 30, 2018.



	Six Months Ended
	June 30,
	2019
	(in millions, except lease term and rate)

Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from finance leases	$	0.1
Operating cash flows from operating leases	13.6
Financing cash flows from finance leases	0.4

Weighted-average remaining lease term - finance leases	3.1 years
Weighted-average remaining lease term - operating leases	5.1 years

Weighted-average discount rate - finance leases	8.1		%
Weighted-average discount rate - operating leases	6.3		%

As the rate implicit in the lease is typically unknown, the discount rate used to determine the lease liability for the majority of our leases is the collateralized incremental borrowing rate in the applicable geographic area for a similar term and amount as the lease agreement.



	Finance Leases			Operating Leases
	(in millions)
2019 (excluding the six months ended June 30, 2019)	$	0.5		$	13.0
2020	1.1			24.0
2021	1.0			16.8
2022	0.9			12.8
2023	0.9			7.9
Thereafter	—			19.0
Total future undiscounted minimum lease payments	4.4			93.5
Less: Impact of discounting	(1.4		)	(14.1		)
Total	$	3.0		$	79.4

The right-of-use assets and lease liabilities recorded on our Condensed Consolidated Balance Sheet as of June 30, 2019 are as follows:



	Finance Leases		Operating Leases
	(in millions)
Property, plant and equipment, net	$	3.0	$	—
Other assets and deferred charges	—		79.4
Total	$	3.0	$	79.4

Accrued expenses and other	$	0.8	$	22.0
Postretirement benefits and other long-term liabilities	2.2		57.4
Total	$	3.0	$	79.4

We have elected to adopt, for all classes of underlying assets, a package of practical expedients provided under ASC 842 that allow us to 1) not reassess whether existing or expired contracts contain or contained a lease; 2) not reassess the lease classification (operating or financing) of our existing leases at adoption; and 3) not reassess initial direct costs for existing leases.

ASC 842 also provides a practical expedient that allows companies to exclude balance sheet recognition of right-of-use assets and associated liabilities for lease terms of 12 months or less, which we have elected as part of our adoption of ASC 842 for all classes of underlying assets. We do not include right-of-use assets and operating lease liabilities on our Condensed Consolidated Balance Sheet for leases with a term of 12 months or less.

We have also elected to adopt the practical expedient under ASC 842 to not separate lease and non-lease components in contracts that contain both. These lease agreements are accounted for as a single lease component for all classes of underlying assets.