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Leases | 6 Months Ended
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Jun. 30, 2024
Leases [Abstract] |
Leases | Leases We lease land and facilities, including certain dealerships and office space. Our property leases are generally for an initial period between 5 and 20 years and are typically structured to include renewal options at our election. We include renewal options that we are reasonably certain to exercise in the measurement of our lease liabilities and right-of-use assets. We also have equipment leases that primarily relate to office and computer equipment, service and shop equipment, company vehicles, and other miscellaneous items. These leases are generally for a period of less than 5 years. We do not have any material leases, individually or in the aggregate, classified as a finance leasing arrangement. We estimate the total undiscounted rent obligations under these leases, including any extension periods that we are reasonably certain to exercise, to be $5.3 billion as of June 30, 2024. Some of our lease arrangements include rental payments that are adjusted based on an index or rate, such as the Consumer Price Index (CPI). As the rate implicit in the lease is generally not readily determinable for our operating leases, the discount rates used to determine the present value of our lease liability are based on our incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. Our incremental borrowing rate for a lease is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Pursuant to the leases for some of our larger facilities, we are required to comply with specified financial ratios, including a "rent coverage" ratio and a ratio of debt to earnings before interest, taxes, depreciation, and amortization ("EBITDA"), each as defined. For these leases, non-compliance with the ratios may require us to post collateral in the form of a letter of credit. A breach of the other lease covenants gives rise to certain remedies by the landlord, the most severe of which include the termination of the applicable lease and acceleration of the total rent payments due under the lease. In connection with the sale, relocation, and closure of certain of our dealerships, we have entered into a number of third-party sublease agreements. The rent paid by our sub-tenants on such properties was $3.7 million and $7.6 million for the three and six months ended June 30, 2024, and $4.3 million and $8.5 million for the three and six months ended June 30, 2023, respectively. We have in the past and may in the future enter into sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell property to third parties and agree to lease those assets back for a certain period of time. Such sales generate proceeds that vary from period to period. We do not have any material leases that have not yet commenced as of June 30, 2024. The following table summarizes our net operating lease cost during the three and six months ended June 30, 2024 and 2023:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Lease Cost |  |  |  |  |  |  |
Operating lease cost (1) | $ | 66.1 |  |  | $ | 65.2 |  |  | $ | 133.4 |  |  | $ | 129.6 |
Sublease income | (3.7) |  |  | (4.3) |  |  | (7.6) |  |  | (8.5) |
Total lease cost | $ | 62.4 |  |  | $ | 60.9 |  |  | $ | 125.8 |  |  | $ | 121.1 |
_________________ |  |  |  |  |  |  |
(1)Includes short-term leases and variable lease costs, which are immaterial.
The following table summarizes supplemental cash flow information related to our operating leases:
| Six Months Ended June 30, 2024 |  | Six Months Ended June 30, 2023
Other Information |  |  |
Cash paid for amounts included in the measurement of lease liabilities |  |  |
Operating cash flows from operating leases | $ | 133.5 |  |  | $ | 129.3 |
Right-of-use assets modified or obtained in exchange for operating lease liabilities, net | $ | 112.2 |  |  | $ | (4.4) |
Supplemental balance sheet information related to the weighted average remaining lease term and discount rate of our leases is as follows:
| June 30, 2024 |  | December 31, 2023
Lease Term and Discount Rate |  |  |
Weighted-average remaining lease term - operating leases | 24 years |  | 24 years
Weighted-average discount rate - operating leases | 6.7 | % |  | 6.7 | %
The following table summarizes the maturity of our lease liabilities on an undiscounted cash flow basis and a reconciliation to the operating lease liabilities recognized on our consolidated condensed balance sheet as of June 30, 2024:
Maturity of Lease Liabilities | June 30, 2024
2024 (1) | $ | 127.8 |
2025 | 252.1 |
2026 | 246.6 |
2027 | 237.1 |
2028 | 235.0 |
2029 | 228.8 |
2030 and thereafter | 4,014.4 |
Total future minimum lease payments | $ | 5,341.8 |
Less: Imputed interest | (2,856.6) |
Present value of future minimum lease payments | $ | 2,485.2 |
Current operating lease liabilities (2) | $ | 87.8 |
Long-term operating lease liabilities | 2,397.4 |
Total operating lease liabilities | $ | 2,485.2 |
____________________ |
(1)Excludes the six months ended June 30, 2024.
(2)Included within "Accrued expenses and other current liabilities" on Consolidated Condensed Balance Sheet as of June 30, 2024.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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