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Leases

3 Months Ended

Mar. 31, 2020

We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and nonlease components related to leases of real property.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 25 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do no contain any material residual value guarantees or material restrictive covenants.

We rent or sublease certain real estate to third parties.

The table below presents the lease-related liabilities recorded on the balance sheet (in millions):



	March 31, 2020			December 31, 2019
Operating lease liabilities:
Current portion included in accrued liabilities	$	25.4		$	25.2
Noncurrent operating lease liabilities	231.3			238.5
Total operating lease liabilities	256.7			263.7
Finance lease liabilities:
Current portion included in current maturities of long-term debt	1.1			1.1
Long-term portion of lease liabilities in long-term debt	29.2			29.5
Total finance lease liabilities ¹	30.3			30.6
Total lease liabilities	$	287.0		$	294.3
Weighted-average remaining lease term:
Operating leases	13 years
Finance leases	13 years
Weighted-average discount rate:
Operating leases	5.05		%
Finance leases	5.81		%

¹Corresponding finance lease assets are not material and are included in property and equipment, net of accumulated depreciation.

The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows (in millions):



	Three Months Ended March 31,			Three Months Ended March 31,
	2020			2019
Operating lease cost ¹	$	11.9		$	12.0
Variable lease cost ²	0.9			0.8
Sublease income	(1.1		)	(1.0		)
Total lease costs	$	11.7		$	11.8

¹Includes short-term and month-to-month lease costs, which are immaterial.

²Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate.

As of March 31, 2020, the maturities of our operating lease liabilities were as follows (in millions):



	Operating Leases
Remainder of 2020	$	37.8
Year Ending December 31,
2021	34.8
2022	32.0
2023	27.1
2024	24.7
Thereafter	202.9
Total minimum lease payments	359.3
Less:
Present value adjustment	(102.6		)
Operating lease liabilities	$	256.7

Leases