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Leases Leases | 3 Months Ended
--- | ---
Mar. 31, 2019
Leases [Abstract] |
Leases | LEASES The Company leases real estate, office equipment, and dealership operating assets under long-term lease agreements, and subleases certain real estate to third parties. The Company’s real estate leases in the U.S., U.K., and Brazil generally have initial terms of 15 years, 20 years and five years, respectively. The Company uses an implicit rate to determine the present value of its lease payments when that rate is readily determinable from a leasing agreement; and when such a rate is not readily determinable, the Company uses its incremental borrowing rate based on information available as of the measurement date. For leases effective on or after January 1, 2019, the Company determines if an arrangement is a lease at inception and recognizes ROU assets and lease liabilities at commencement date based on the present value of lease payments over the lease term. And for such leases effective on or after January 1, 2019, the aggregate present value of the Company’s lease payments may include options to purchase the leased property or lease terms with options to renew or terminate the lease, when it is reasonably certain that the Company will exercise such an option. The exercise of lease renewals, terminations, or purchase options is generally at the Company’s discretion. The Company’s leases may also include rental payments adjusted periodically for inflation. Payments based on a change in an index or rate are not considered in the determination of lease payments for purposes of measuring the related lease liability. Subsequent to the recognition of its ROU assets and lease liabilities, the Company recognizes lease expense related to its operating lease payments on a straight-line basis over the lease term. None of the Company’s lease agreements contains material residual value guarantees or material restrictive covenants. Effective January 1, 2019, operating leases are included in the Company’s Consolidated Balance Sheets as Operating lease assets, Current operating lease liabilities, and Operating lease liabilities, net of current portion. Finance leases are historically, and will continue to be, included within Property and equipment, net, Current maturities of long-term debt and short-term financing, and Long-term debt, net of current maturities in the Company’s Consolidated Balance Sheets. The components of operating and finance leases included in the Company’s Consolidated Balance Sheet as of March 31, 2019 were as follows (in thousands):
Leases |  | Balance Sheet Classification |  | March 31, 2019
Assets: |  |  |  |
Operating |  | Operating lease assets |  | $ | 214,776 |
Finance |  | Property and equipment, net |  | 41,634 |
Total |  |  |  | $ | 256,410 |
Liabilities: |  |  |  |
Current |  |  |  |
Operating |  | Current operating lease liabilities |  | $ | 23,907 |
Finance |  | Current maturities of long-term debt and short-term financing |  | 6,025 |
Noncurrent |  |  |  |
Operating |  | Operating lease liabilities, net of current portion |  | 204,331 |
Finance |  | Long-term debt, net of current maturities |  | 41,314 |
Total |  |  |  | $ | 275,577 |
Maturities of the Company’s lease liabilities as of March 31, 2019 were as follows (in thousands):
|  | March 31, 2019
|  | Operating Leases |  | Finance Leases
2019 (excluding the three months ended March 31, 2019) |  | $ | 26,054 |  |  | $ | 7,771 |
2020 |  | 37,710 |  |  | 7,765 |
2021 |  | 34,646 |  |  | 7,758 |
2022 |  | 30,893 |  |  | 5,378 |
2023 |  | 27,869 |  |  | 5,637 |
Thereafter |  | 164,742 |  |  | 40,416 |
Total lease payments |  | 321,914 |  |  | 74,725 |
Less: Interest |  | (93,676 | ) |  | (27,386 | )
Present value of lease liabilities |  | $ | 228,238 |  |  | $ | 47,339 |
As of March 31, 2019, the Company’s weighted-average remaining lease terms for its operating and finance leases were approximately 11.6 years and 12.3 years, respectively. The weighted-average discount rates used to determine the Company’s operating and finance lease liabilities were 5.6% and 9.4%, respectively as of March 31, 2019. The components of lease expense included in the Company’s Consolidated Statements of Operations for the three months ended March 31, 2019 are as follows (in thousands):
Lease Expense |  | Income Statement Classification |  | Three Months Ended March 31,
|  |  |  | 2019
Operating (1) |  | Selling, general and administrative expenses |  | $ | 10,950 |
Finance: |  |  |  |
Amortization of lease assets |  | Depreciation and amortization expense |  | 1,123 |
Interest on lease liabilities |  | Other interest expense, net |  | 972 |
Sublease income (2) |  | Selling, general and administrative expenses |  | (320 | )
Net lease expense |  |  |  | $ | 12,725 |
(1) Includes short-term lease and variable lease expenses, which are immaterial. (2) Excludes rental income from owned properties of $0.1 million for the three months ended March 31, 2019, which is included in Finance, insurance and other, net. Supplemental cash flow information related to leases for the three months ended March 31, 2019 are as follows (in thousands):
Other Information |  | Three Months Ended March 31,
|  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases |  | $ | 11,664 |
Operating cash flows from finance leases |  | 972 |
Financing cash flows from finance leases |  | 969 |
Right-of-use assets obtained in exchange for lease obligations: |  |
Operating leases |  | $ | 5,032 |
Leases | LEASES The Company leases real estate, office equipment, and dealership operating assets under long-term lease agreements, and subleases certain real estate to third parties. The Company’s real estate leases in the U.S., U.K., and Brazil generally have initial terms of 15 years, 20 years and five years, respectively. The Company uses an implicit rate to determine the present value of its lease payments when that rate is readily determinable from a leasing agreement; and when such a rate is not readily determinable, the Company uses its incremental borrowing rate based on information available as of the measurement date. For leases effective on or after January 1, 2019, the Company determines if an arrangement is a lease at inception and recognizes ROU assets and lease liabilities at commencement date based on the present value of lease payments over the lease term. And for such leases effective on or after January 1, 2019, the aggregate present value of the Company’s lease payments may include options to purchase the leased property or lease terms with options to renew or terminate the lease, when it is reasonably certain that the Company will exercise such an option. The exercise of lease renewals, terminations, or purchase options is generally at the Company’s discretion. The Company’s leases may also include rental payments adjusted periodically for inflation. Payments based on a change in an index or rate are not considered in the determination of lease payments for purposes of measuring the related lease liability. Subsequent to the recognition of its ROU assets and lease liabilities, the Company recognizes lease expense related to its operating lease payments on a straight-line basis over the lease term. None of the Company’s lease agreements contains material residual value guarantees or material restrictive covenants. Effective January 1, 2019, operating leases are included in the Company’s Consolidated Balance Sheets as Operating lease assets, Current operating lease liabilities, and Operating lease liabilities, net of current portion. Finance leases are historically, and will continue to be, included within Property and equipment, net, Current maturities of long-term debt and short-term financing, and Long-term debt, net of current maturities in the Company’s Consolidated Balance Sheets. The components of operating and finance leases included in the Company’s Consolidated Balance Sheet as of March 31, 2019 were as follows (in thousands):
Leases |  | Balance Sheet Classification |  | March 31, 2019
Assets: |  |  |  |
Operating |  | Operating lease assets |  | $ | 214,776 |
Finance |  | Property and equipment, net |  | 41,634 |
Total |  |  |  | $ | 256,410 |
Liabilities: |  |  |  |
Current |  |  |  |
Operating |  | Current operating lease liabilities |  | $ | 23,907 |
Finance |  | Current maturities of long-term debt and short-term financing |  | 6,025 |
Noncurrent |  |  |  |
Operating |  | Operating lease liabilities, net of current portion |  | 204,331 |
Finance |  | Long-term debt, net of current maturities |  | 41,314 |
Total |  |  |  | $ | 275,577 |
Maturities of the Company’s lease liabilities as of March 31, 2019 were as follows (in thousands):
|  | March 31, 2019
|  | Operating Leases |  | Finance Leases
2019 (excluding the three months ended March 31, 2019) |  | $ | 26,054 |  |  | $ | 7,771 |
2020 |  | 37,710 |  |  | 7,765 |
2021 |  | 34,646 |  |  | 7,758 |
2022 |  | 30,893 |  |  | 5,378 |
2023 |  | 27,869 |  |  | 5,637 |
Thereafter |  | 164,742 |  |  | 40,416 |
Total lease payments |  | 321,914 |  |  | 74,725 |
Less: Interest |  | (93,676 | ) |  | (27,386 | )
Present value of lease liabilities |  | $ | 228,238 |  |  | $ | 47,339 |
As of March 31, 2019, the Company’s weighted-average remaining lease terms for its operating and finance leases were approximately 11.6 years and 12.3 years, respectively. The weighted-average discount rates used to determine the Company’s operating and finance lease liabilities were 5.6% and 9.4%, respectively as of March 31, 2019. The components of lease expense included in the Company’s Consolidated Statements of Operations for the three months ended March 31, 2019 are as follows (in thousands):
Lease Expense |  | Income Statement Classification |  | Three Months Ended March 31,
|  |  |  | 2019
Operating (1) |  | Selling, general and administrative expenses |  | $ | 10,950 |
Finance: |  |  |  |
Amortization of lease assets |  | Depreciation and amortization expense |  | 1,123 |
Interest on lease liabilities |  | Other interest expense, net |  | 972 |
Sublease income (2) |  | Selling, general and administrative expenses |  | (320 | )
Net lease expense |  |  |  | $ | 12,725 |
(1) Includes short-term lease and variable lease expenses, which are immaterial. (2) Excludes rental income from owned properties of $0.1 million for the three months ended March 31, 2019, which is included in Finance, insurance and other, net. Supplemental cash flow information related to leases for the three months ended March 31, 2019 are as follows (in thousands):
Other Information |  | Three Months Ended March 31,
|  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases |  | $ | 11,664 |
Operating cash flows from finance leases |  | 972 |
Financing cash flows from finance leases |  | 969 |
Right-of-use assets obtained in exchange for lease obligations: |  |
Operating leases |  | $ | 5,032 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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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 -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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