Leases

At the beginning of the first quarter of 2019, we adopted ASC 842, Leases, using an optional transition method which allowed us to adopt the new lease standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of earnings invested in the business in the period of adoption. We elected the package of practical expedients permitted under the transition guidance, which allowed us to carry forward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that existed prior to adoption of the new standard. We also elected to combine lease and non-lease components, to keep leases with an initial term of 12 months or less off the consolidated balance sheet and recognize the associated lease payments in the consolidated statements of earnings on a straight-line basis over the lease term.

The company has operating leases for field offices and various equipment. Our leases have remaining lease terms of one year to 10 years. We determine if an arrangement is a lease at inception.

We recorded $74.1 million of right-of-use (“ROU”) assets within property and equipment, $19.8 million of current lease liabilities within accounts payable and accrued liabilities, and $54.3 million of non-current lease liabilities within other long-term liabilities in the consolidated balance sheet on the date of adoption. No adjustment to the beginning balance of earnings invested in the business was necessary as a result of adopting this standard.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Since most of the Company’s leases do not have an implicit borrowing rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our leases may include options allowing us in our sole discretion to extend or terminate the lease, and when it is reasonably certain that we will exercise those options, we will include those periods in our lease term. Variable costs, such as payments for insurance and tax payments, are expensed when the obligation for those payments is incurred.

The components of lease expense were as follows (in millions of dollars):



	First Quarter
	2019
Operating lease cost	$	7.0
Short-term lease cost	0.7
Variable lease cost	1.8
Total lease cost	$	9.5

Supplemental consolidated balance sheet information related to leases was as follows (in millions of dollars):



	First Quarter
	2019
Operating lease ROU assets	$	69.5
Operating lease current liabilities	21.2
Operating lease non-current liabilities	50.6

Other information related to leases was as follows (in millions of dollars):



	First Quarter
	2019
Operating cash flows from operating leases	$	6.9
ROU assets obtained in exchange for new operating lease liabilities	1.3
Weighted average remaining lease term (years)	4.1
Weighted average discount rate	5.9		%

Maturities of operating lease liabilities as of first quarter-end 2019 were as follows (in millions of dollars):



2019, remaining	$	19.2
2020	20.8
2021	16.4
2022	11.4
2023	6.1
2024	3.1
Thereafter	3.7
Total future lease payments	80.7
Less: Imputed interest	8.9
Total	$	71.8

Maturities of operating leases accounted for under ASC 840 as of year-end 2018 were as follows (in millions of dollars):



Fiscal year:
2019	$	26.7
2020	20.4
2021	15.2
2022	9.8
2023	4.7
Later years	4.9

Total	$	81.7