Leases

The Company leases real estate, office equipment and service vehicles. The Company's leases have remaining lease terms of up to 15 years, some of which include options to extend the leases for up to 20 years. The Company has included the initial lease term in the case where there are options to extend as it has determined that it is not reasonably certain that the Company would exercise those options.

Leases are classified as either finance or operating at inception of the lease, with classification affecting the pattern of expense recognition in the income statement. Operating leases result in the recognition of ROU assets and lease liabilities on the balance sheet. ROU assets represent the Company's right to use the leased asset for the lease term and lease liabilities represent the obligation to make lease payments. The liability is calculated as the present value of the remaining minimum rental payments for existing operating leases using either the rate implicit in the lease or, if none exists, the Company's incremental borrowing rate. The Company's capital leases are accounted for as finance leases; no significant changes have been made for the accounting of such leases.

The Company also leases certain equipment that it rents to its customers where the payments vary based upon the amount of time the equipment is on rent. There are no fixed payments on these leases and, therefore, no lease liability or ROU assets have been recorded. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term.

The components of lease expense consist of the following (in millions):



	Classification	Three Months Ended March 31, 2019
Operating lease cost^(a)	Direct operating	$	22.4
Finance lease cost:
Amortization of ROU assets	Depreciation and amortization^(b)	2.4
Interest on lease liabilities	Interest expense, net	0.4
Sublease income	Equipment rental revenue	(14.7		)
Net lease cost		$	10.5

(a) Includes short-term leases and variable lease costs of $11.6 million and $1.6 million, respectively.

(b) Depreciation and amortization is included with selling, general and administrative expense.

Balance sheet information related to leases consists of the following (in millions):



	Classification	March 31, 2019
Assets
Operating lease ROU assets	Right-of-use assets	$	161.7
Finance lease ROU assets	Property and equipment, net^(a)	33.0
Total leased assets		$	194.7
Liabilities
Current
Operating	Current maturities of operating lease liabilities	$	26.1
Finance	Current maturities of long-term debt and financing obligations	19.6
Non-current
Operating	Operating lease liabilities	138.1
Finance	Long-term debt, net	14.0
Total lease liabilities		$	197.8

Weighted average remaining lease term
Operating leases		7.7
Finance leases		3.3
Weighted average discount rate
Operating leases		4.25		%
Finance leases		3.81		%

(a) Finance lease right-of-use assets are recorded net of accumulated amortization of $53.1 million.

Cash flow information related to leases consists of the following (in millions):



	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9.9
Operating cash flows from finance leases	0.4
Financing cash flows from finance leases	3.3
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	8.7
Finance leases	0.4

Maturities of lease liabilities are as follows (in millions):



	Operating Leases			Finance Leases
2019	$	26.4		$	19.4
2020	30.0			12.6
2021	24.4			1.4
2022	21.0			1.2
2023	18.8			0.7
After 2024	75.5			—
Total lease payments	196.1			35.3
Less: Interest	(31.9		)	(1.7		)
Present value of lease liabilities	$	164.2		$	33.6