On January 1, 2019, we adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”). This pronouncement requires lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. We adopted this pronouncement utilizing the transition practical expedient which eliminates the requirement that the new lease standard be applied to comparative periods presented in the year of adoption.

As part of our adoption, we elected to utilize the package of practical expedients permitted under the new standard, which allowed us to not reassess: (a) whether an existing contract is or contains a lease, (b) the classification for existing leases and (c) initial direct costs. Further, as permitted by the standard, we made an accounting policy election not to record right-of-use assets or lease liabilities for leases with an initial term of 12 months or less. Instead, consistent with previous accounting guidance, we will recognize payments for such leases in the statement of operations on a straight-line basis over the lease term.

We lease real estate, vehicles and equipment under various operating and finance leases. A lease exists when a contract or part of a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining whether a lease exists, we consider whether a contract provides us with both: (a) the right to obtain substantially all of the economic benefits from the use of the identified asset and (b) the right to direct the use of the identified asset.

Many of our leases include base rental periods coupled with options to renew or terminate the lease, generally at our discretion. Certain leases additionally include options to purchase the leased asset. In evaluating the lease term, we consider whether we are reasonably certain to exercise such options. To the extent a significant economic incentive exists to exercise an option, that option is included within the lease term. However, based on the nature of our lease arrangements, options generally do not provide us with a significant economic incentive and are therefore excluded from the lease term for the majority of our arrangements.

Our leases typically include a combination of fixed and variable payments. Fixed payments are generally included when measuring the right-of-use asset and lease liability. Variable payments, which primarily represent payments based on usage of the underlying asset, are generally excluded from such measurement and expensed as incurred. In addition, certain of our lease arrangements may contain a lease coupled with an arrangement to provide other services, such as maintenance, or may require us to make other payments on behalf of the lessor related to the leased asset, such as payments for taxes or insurance. As permitted by ASC 842, we have elected to account for these non-lease components together with the associated lease component. This election has been made for each of our asset classes.

The measurement of right-of-use assets and lease liabilities requires us to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for the majority of our leases, the rate implicit in the lease is not known. In these instances, we utilize an incremental borrowing rate, which represents the rate of interest that we would pay to borrow on a collateralized basis over a similar term.

Our lease arrangements generally do not contain significant restrictions or covenants; however, certain of our vehicle and equipment leases include residual value guarantees, whereby we provide a guarantee to the lessor that the value of the underlying asset will be at least a specified amount at the end of the lease. Amounts probable of being owed under these guarantees are included within the measurement of the right-of-use asset and lease liability.



	Classification on the Consolidated Balance Sheet	June 30, 2019
Assets
Operating lease assets	Operating lease right-of-use assets	$	233,173
Finance lease assets	Property, plant and equipment, net	10,125
Total lease assets		$	243,298

Liabilities
Current
Operating	Operating lease liabilities, current	$	49,970
Finance	Current maturities of long-term debt and finance lease liabilities	4,379
Noncurrent
Operating	Operating lease liabilities, long-term	195,149
Finance	Long-term debt and finance lease liabilities	5,897
Total lease liabilities		$	255,395



	For the six months ended June 30, 2019
Finance lease expense:
Amortization expense	$	2,286
Interest expense	222
Operating lease expense	32,612
Short-term lease expense	72,729
Variable lease expense	2,107
Total lease expense	$	109,956



	June 30, 2019
Weighted-average remaining lease term:
Operating leases	6.8 years
Finance leases	3.1 years
Weighed-average discount rate:
Operating leases	4.23	%
Finance leases	4.17	%



	For the six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	32,405
Operating cash flows used for finance leases	$	222
Financing cash flows used for finance leases	$	2,151
Right-of-use assets obtained in exchange for new operating lease liabilities	$	43,431
Right-of-use assets obtained in exchange for new finance lease liabilities	$	5,753

The following table reconciles future minimum lease payments on an undiscounted cash flow basis to the lease liabilities reported in the Consolidated Balance Sheet as of June 30, 2019 (in thousands):



	Operating Leases			Finance Leases
July 1, 2019 to June 30, 2020	$	59,252		$	4,709
July 1, 2020 to June 30, 2021	49,297			3,015
July 1, 2021 to June 30, 2022	40,248			1,912
July 1, 2022 to June 30, 2023	33,200			898
July 1, 2023 to June 30, 2024	25,094			243
Thereafter	76,390			157
Total minimum lease payments	283,481			10,934
Less: Amount of lease payments representing interest	(38,362		)	(658		)
Present value of future minimum lease payments	$	245,119		$	10,276


Current portion of lease liabilities	$	49,970		$	4,379
Noncurrent portion of lease liabilities	195,149			5,897
Present value of future minimum lease payments	$	245,119		$	10,276