Leases (Notes) | 9 Months Ended |
Sep. 30, 2019 |
Leases [Abstract] | |
Leases | LEASES We adopted ASU 2016-02, Leases, which is codified in ASC 842, as of January 1, 2019 using the optional transition method. The FASB’s authoritative guidance provided companies with the option to apply this ASU to new and existing leases within the scope of the guidance as of the beginning of the period of adoption. We elected this transition method of applying the new lease standard and have recognized right-of-use assets and lease liabilities as of January 1, 2019. Prior period amounts were not adjusted and will continue to be reported under the accounting standards in effect for those periods. Adoption of the new standard resulted in the initial recording of right-of-use lease assets and related lease liabilities of $80.6 million and $85.2 million , respectively. As of September 30, 2019 , right-of-use lease assets and related lease liabilities were $73.5 million and $80.9 million , respectively. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the term. Schneider's incremental borrowing rates are used as the discount rates for leases and are determined based on U. S. Treasury rates plus an applicable margin to arrive at all-in rates. Schneider uses multiple discount rates based on lease terms and other economic factors. The operating lease right-of-use asset also includes accrued lease expense resulting from the straight-line accounting under prior accounting methods, which is now being amortized over the remaining life of the lease. In addition, we elected the package of practical expedients provided under the guidance. The practical expedient package applies to leases that commenced prior to adoption of the new standard and permits companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification, and any initial direct costs for any existing leases. We also elected the practical expedient related to land easements, allowing us to carry forward the accounting treatment of our existing agreements for land easements, none of which were material as of January 1, 2019 . As lessee We lease real estate, transportation equipment, and office equipment under operating and finance leases. Our real estate operating leases include operating centers, distribution warehouses, offices, and drop yards. Our finance leases relate almost entirely to transportation equipment. A majority of our leases include an option to extend the lease, and a small number of our leases include an option to early terminate the lease, which may include a termination payment. If we are reasonably certain to exercise an option to extend a lease, the extension period is included as part of the right-of-use asset and lease liability. For our real estate leases, we have elected to apply the recognition requirement to leases of twelve months or less, therefore, an operating lease right-of-use asset and liability will be recognized for all these leases. For our equipment leases, we have elected to not apply the recognition requirements to leases of twelve months or less. These leases will be expensed on a straight-line basis and no operating lease right-of-use asset or liability will be recorded. We have also elected to not separate the different components within the contract for our leases; therefore, all fixed costs associated with the lease are included in the right-of-use asset and the operating lease liability. This often relates to the requirement for us to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs in addition to a base or fixed rent. Some of our leases have variable payment amounts, and the variable portions of those payments are excluded from the right-of-use asset and the lease liability. At the inception of our contracts we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. A small number of our leased real estate assets contains subleases. The lease income related to subleases is shown in the lease cost table below. Certain equipment leases contain residual value guarantees. These are guarantees made to the lessor that the value of the underlying asset returned to the lessor at the end of the lease will be at least a specified amount. None of our leases contain restrictions or covenants that restrict us from incurring other financial obligations. The following table presents our net lease costs for the three and nine months ended September 30, 2019 : Financial Statement Classification Three Months Ended Nine Months Ended (in millions) 2019 2019 Operating lease cost Operating lease cost Operating supplies and expenses $ 8.7 $ 26.5 Short-term lease cost (1) Operating supplies and expenses 2.0 5.5 Finance lease cost Amortization of right-of-use assets Depreciation and amortization 0.9 2.5 Interest on lease liabilities Interest expense — 0.2 Variable lease cost Operating supplies and expenses 0.7 2.1 Sublease income Operating revenues (1.5 ) (4.1 ) Total net lease cost $ 10.8 $ 32.7 (1) Includes short-term lease costs for leases twelve months or less, including those with a duration of one month or less. As of September 30, 2019 , remaining lease terms and discount rates under operating and finance leases were as follows: September 30, 2019 Weighted-average remaining lease term Operating leases 4.4 years Finance leases 0.3 years Weighted-average discount rate Operating leases 4.2 % Finance leases 4.7 % Other information related to our leases is as follows: Nine Months Ended (in millions) 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 26.7 Operating cash flows from finance leases 0.2 Financing cash flows from finance leases 2.0 Right-of-use assets obtained in exchange for new lease liabilities Operating leases $ 20.6 Finance leases — Operating lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities are included in capitalized software and other noncurrent assets, other current liabilities, and other noncurrent liabilities, respectively, in the consolidated balance sheet as of September 30, 2019 . At September 30, 2019 , future lease payments under operating and finance leases were as follows: (in millions) Operating Leases Finance Leases Remaining 2019 $ 8.5 $ 4.9 2020 27.2 0.4 2021 17.1 — 2022 11.1 — 2023 8.8 — 2024 and thereafter 15.9 — Total 88.6 5.3 Amount representing interest (7.7 ) — Present value of lease payments 80.9 5.3 Current maturities (27.1 ) (5.3 ) Long-term lease obligations $ 53.8 $ — For certain of our real estate leases, there are options contained within the lease agreement to extend beyond the initial lease term. The Company recognizes options as right-of-use assets and lease liabilities when deemed reasonably certain to be exercised. Future operating lease payments at September 30, 2019 include $10.6 million related to options to extend lease terms that we are reasonably certain to exercise. Options related to our FTFM service offering that were previously considered reasonably certain to be exercised have been removed from the future operating lease payments at September 30, 2019 . Under ASC 840, future minimum lease payments as of December 31, 2018 were as follows: (in millions) Operating Leases Capital Leases 2019 $ 35.8 $ 6.9 2020 25.7 0.2 2021 14.9 — 2022 8.4 — 2023 6.8 — 2024 and thereafter 12.7 — Total $ 104.3 7.1 Amount representing interest (0.2 ) Present value of minimum lease payments 6.9 Current maturities (6.7 ) Long-term capital lease obligations $ 0.2 As of September 30, 2019 , we had additional leases that had not yet commenced of $3.5 million . These leases will commence during the remainder of 2019 and have lease terms of four months to five years . The consolidated balance sheets include right-of-use assets acquired under finance leases as components of property and equipment as of September 30, 2019 and January 1, 2019, as follows: (in millions) September 30, 2019 January 1, 2019 Transportation equipment $ 19.9 $ 19.9 Real property 0.8 0.8 Other property 1.5 0.6 Accumulated amortization (13.1 ) (11.2 ) Total $ 9.1 $ 10.1 Transportation equipment is being amortized to the estimated residual value by the end of the lease. Real and other property under finance leases are being amortized to a zero net book value over the initial lease term. As lessor We finance various types of transportation-related equipment for independent third parties under lease contracts which are generally for one year to five years and are accounted for as sales-type leases with fully guaranteed residual values. At the inception of the contracts, we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. With the adoption of ASC 842, all leases for which we are the lessor meet the definition of sales-type leases. In addition, as required under ASC 842, all cash flows from lease receipts are classified as operating activities on the consolidated statement of cash flows beginning January 1, 2019. We previously presented all cash flows from lease receipts as investing activities. As of September 30, 2019 and January 1, 2019, the investment in lease receivables was as follows: September 30, 2019 January 1, 2019 Future minimum payments to be received on leases $ 146.9 $ 140.0 Guaranteed residual lease values 138.2 151.0 Total minimum lease payments to be received 285.1 291.0 Unearned income (33.3 ) (28.7 ) Net investment in leases 251.8 262.3 Current maturities of lease receivables 126.1 129.6 Less—allowance for doubtful accounts (0.6 ) (0.5 ) Current portion of lease receivables—net of allowance 125.5 129.1 Lease receivables—noncurrent $ 126.3 $ 133.2 The amounts to be received on lease receivables as of September 30, 2019 were as follows: (in millions) September 30, 2019 Remaining 2019 $ 35.8 2020 142.8 2021 75.7 2022 30.6 2023 0.2 2024 and thereafter — Total undiscounted lease cash flows 285.1 Amount representing interest (33.3 ) Present value of lease receivables 251.8 Current lease receivables, net of allowance (125.5 ) Long-term lease receivable $ 126.3 Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon receipt of notification of bankruptcy, upon the death of a customer, or in other instances in which management concludes collectability is not reasonably assured. The accrual of interest and other fees is resumed when all payments are less than 60 days past due. At September 30, 2019 , there were $0.3 million of lease payments greater than 90 days past due. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of any anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation is not realized. Repossession and estimated reconditioning costs are recorded in the consolidated statements of comprehensive income in the period incurred. Our lease payments primarily include base rentals and guaranteed residual values. In addition, we also collect one-time administrative fees and heavy vehicle use tax on our leases. We have elected to not separate the different components within the contract as the administrative fees were not material for the three and nine months ended September 30, 2019 . We have also elected to exclude all taxes assessed by a governmental authority from the consideration (e.g., heavy vehicle use tax). All of our leases require fixed payments, therefore we have no variable payment provisions. Our leases contain an option for the lessee to return, extend, or purchase the equipment at the end of the lease term for the guaranteed contract residual amount. This is estimated to approximate the fair value of the equipment. Equipment is leased under sales-type leases where the lessees guarantee the residual value of the equipment. The table below provides additional information on our sales-type leases. Three Months Ended Nine Months Ended (in millions) 2019 2019 Revenue $ 50.9 $ 159.8 Cost of goods sold (46.8 ) (144.0 ) Operating profit $ 4.1 $ 15.8 Interest income on lease receivable $ 7.0 $ 20.4 Initial direct cost incurred — — The amounts to be received on lease receivables as of December 31, 2018 under ASC 840 were as follows: (in millions) December 31, 2018 2019 $ 149.0 2020 112.7 2021 29.0 2022 0.3 2023 — 2024 and thereafter — Total $ 291.0 |
Leases | LEASES We adopted ASU 2016-02, Leases, which is codified in ASC 842, as of January 1, 2019 using the optional transition method. The FASB’s authoritative guidance provided companies with the option to apply this ASU to new and existing leases within the scope of the guidance as of the beginning of the period of adoption. We elected this transition method of applying the new lease standard and have recognized right-of-use assets and lease liabilities as of January 1, 2019. Prior period amounts were not adjusted and will continue to be reported under the accounting standards in effect for those periods. Adoption of the new standard resulted in the initial recording of right-of-use lease assets and related lease liabilities of $80.6 million and $85.2 million , respectively. As of September 30, 2019 , right-of-use lease assets and related lease liabilities were $73.5 million and $80.9 million , respectively. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the term. Schneider's incremental borrowing rates are used as the discount rates for leases and are determined based on U. S. Treasury rates plus an applicable margin to arrive at all-in rates. Schneider uses multiple discount rates based on lease terms and other economic factors. The operating lease right-of-use asset also includes accrued lease expense resulting from the straight-line accounting under prior accounting methods, which is now being amortized over the remaining life of the lease. In addition, we elected the package of practical expedients provided under the guidance. The practical expedient package applies to leases that commenced prior to adoption of the new standard and permits companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification, and any initial direct costs for any existing leases. We also elected the practical expedient related to land easements, allowing us to carry forward the accounting treatment of our existing agreements for land easements, none of which were material as of January 1, 2019 . As lessee We lease real estate, transportation equipment, and office equipment under operating and finance leases. Our real estate operating leases include operating centers, distribution warehouses, offices, and drop yards. Our finance leases relate almost entirely to transportation equipment. A majority of our leases include an option to extend the lease, and a small number of our leases include an option to early terminate the lease, which may include a termination payment. If we are reasonably certain to exercise an option to extend a lease, the extension period is included as part of the right-of-use asset and lease liability. For our real estate leases, we have elected to apply the recognition requirement to leases of twelve months or less, therefore, an operating lease right-of-use asset and liability will be recognized for all these leases. For our equipment leases, we have elected to not apply the recognition requirements to leases of twelve months or less. These leases will be expensed on a straight-line basis and no operating lease right-of-use asset or liability will be recorded. We have also elected to not separate the different components within the contract for our leases; therefore, all fixed costs associated with the lease are included in the right-of-use asset and the operating lease liability. This often relates to the requirement for us to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs in addition to a base or fixed rent. Some of our leases have variable payment amounts, and the variable portions of those payments are excluded from the right-of-use asset and the lease liability. At the inception of our contracts we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. A small number of our leased real estate assets contains subleases. The lease income related to subleases is shown in the lease cost table below. Certain equipment leases contain residual value guarantees. These are guarantees made to the lessor that the value of the underlying asset returned to the lessor at the end of the lease will be at least a specified amount. None of our leases contain restrictions or covenants that restrict us from incurring other financial obligations. The following table presents our net lease costs for the three and nine months ended September 30, 2019 : Financial Statement Classification Three Months Ended Nine Months Ended (in millions) 2019 2019 Operating lease cost Operating lease cost Operating supplies and expenses $ 8.7 $ 26.5 Short-term lease cost (1) Operating supplies and expenses 2.0 5.5 Finance lease cost Amortization of right-of-use assets Depreciation and amortization 0.9 2.5 Interest on lease liabilities Interest expense — 0.2 Variable lease cost Operating supplies and expenses 0.7 2.1 Sublease income Operating revenues (1.5 ) (4.1 ) Total net lease cost $ 10.8 $ 32.7 (1) Includes short-term lease costs for leases twelve months or less, including those with a duration of one month or less. As of September 30, 2019 , remaining lease terms and discount rates under operating and finance leases were as follows: September 30, 2019 Weighted-average remaining lease term Operating leases 4.4 years Finance leases 0.3 years Weighted-average discount rate Operating leases 4.2 % Finance leases 4.7 % Other information related to our leases is as follows: Nine Months Ended (in millions) 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 26.7 Operating cash flows from finance leases 0.2 Financing cash flows from finance leases 2.0 Right-of-use assets obtained in exchange for new lease liabilities Operating leases $ 20.6 Finance leases — Operating lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities are included in capitalized software and other noncurrent assets, other current liabilities, and other noncurrent liabilities, respectively, in the consolidated balance sheet as of September 30, 2019 . At September 30, 2019 , future lease payments under operating and finance leases were as follows: (in millions) Operating Leases Finance Leases Remaining 2019 $ 8.5 $ 4.9 2020 27.2 0.4 2021 17.1 — 2022 11.1 — 2023 8.8 — 2024 and thereafter 15.9 — Total 88.6 5.3 Amount representing interest (7.7 ) — Present value of lease payments 80.9 5.3 Current maturities (27.1 ) (5.3 ) Long-term lease obligations $ 53.8 $ — For certain of our real estate leases, there are options contained within the lease agreement to extend beyond the initial lease term. The Company recognizes options as right-of-use assets and lease liabilities when deemed reasonably certain to be exercised. Future operating lease payments at September 30, 2019 include $10.6 million related to options to extend lease terms that we are reasonably certain to exercise. Options related to our FTFM service offering that were previously considered reasonably certain to be exercised have been removed from the future operating lease payments at September 30, 2019 . Under ASC 840, future minimum lease payments as of December 31, 2018 were as follows: (in millions) Operating Leases Capital Leases 2019 $ 35.8 $ 6.9 2020 25.7 0.2 2021 14.9 — 2022 8.4 — 2023 6.8 — 2024 and thereafter 12.7 — Total $ 104.3 7.1 Amount representing interest (0.2 ) Present value of minimum lease payments 6.9 Current maturities (6.7 ) Long-term capital lease obligations $ 0.2 As of September 30, 2019 , we had additional leases that had not yet commenced of $3.5 million . These leases will commence during the remainder of 2019 and have lease terms of four months to five years . The consolidated balance sheets include right-of-use assets acquired under finance leases as components of property and equipment as of September 30, 2019 and January 1, 2019, as follows: (in millions) September 30, 2019 January 1, 2019 Transportation equipment $ 19.9 $ 19.9 Real property 0.8 0.8 Other property 1.5 0.6 Accumulated amortization (13.1 ) (11.2 ) Total $ 9.1 $ 10.1 Transportation equipment is being amortized to the estimated residual value by the end of the lease. Real and other property under finance leases are being amortized to a zero net book value over the initial lease term. As lessor We finance various types of transportation-related equipment for independent third parties under lease contracts which are generally for one year to five years and are accounted for as sales-type leases with fully guaranteed residual values. At the inception of the contracts, we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. With the adoption of ASC 842, all leases for which we are the lessor meet the definition of sales-type leases. In addition, as required under ASC 842, all cash flows from lease receipts are classified as operating activities on the consolidated statement of cash flows beginning January 1, 2019. We previously presented all cash flows from lease receipts as investing activities. As of September 30, 2019 and January 1, 2019, the investment in lease receivables was as follows: September 30, 2019 January 1, 2019 Future minimum payments to be received on leases $ 146.9 $ 140.0 Guaranteed residual lease values 138.2 151.0 Total minimum lease payments to be received 285.1 291.0 Unearned income (33.3 ) (28.7 ) Net investment in leases 251.8 262.3 Current maturities of lease receivables 126.1 129.6 Less—allowance for doubtful accounts (0.6 ) (0.5 ) Current portion of lease receivables—net of allowance 125.5 129.1 Lease receivables—noncurrent $ 126.3 $ 133.2 The amounts to be received on lease receivables as of September 30, 2019 were as follows: (in millions) September 30, 2019 Remaining 2019 $ 35.8 2020 142.8 2021 75.7 2022 30.6 2023 0.2 2024 and thereafter — Total undiscounted lease cash flows 285.1 Amount representing interest (33.3 ) Present value of lease receivables 251.8 Current lease receivables, net of allowance (125.5 ) Long-term lease receivable $ 126.3 Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon receipt of notification of bankruptcy, upon the death of a customer, or in other instances in which management concludes collectability is not reasonably assured. The accrual of interest and other fees is resumed when all payments are less than 60 days past due. At September 30, 2019 , there were $0.3 million of lease payments greater than 90 days past due. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of any anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation is not realized. Repossession and estimated reconditioning costs are recorded in the consolidated statements of comprehensive income in the period incurred. Our lease payments primarily include base rentals and guaranteed residual values. In addition, we also collect one-time administrative fees and heavy vehicle use tax on our leases. We have elected to not separate the different components within the contract as the administrative fees were not material for the three and nine months ended September 30, 2019 . We have also elected to exclude all taxes assessed by a governmental authority from the consideration (e.g., heavy vehicle use tax). All of our leases require fixed payments, therefore we have no variable payment provisions. Our leases contain an option for the lessee to return, extend, or purchase the equipment at the end of the lease term for the guaranteed contract residual amount. This is estimated to approximate the fair value of the equipment. Equipment is leased under sales-type leases where the lessees guarantee the residual value of the equipment. The table below provides additional information on our sales-type leases. Three Months Ended Nine Months Ended (in millions) 2019 2019 Revenue $ 50.9 $ 159.8 Cost of goods sold (46.8 ) (144.0 ) Operating profit $ 4.1 $ 15.8 Interest income on lease receivable $ 7.0 $ 20.4 Initial direct cost incurred — — The amounts to be received on lease receivables as of December 31, 2018 under ASC 840 were as follows: (in millions) December 31, 2018 2019 $ 149.0 2020 112.7 2021 29.0 2022 0.3 2023 — 2024 and thereafter — Total $ 291.0 |
Leases | LEASES We adopted ASU 2016-02, Leases, which is codified in ASC 842, as of January 1, 2019 using the optional transition method. The FASB’s authoritative guidance provided companies with the option to apply this ASU to new and existing leases within the scope of the guidance as of the beginning of the period of adoption. We elected this transition method of applying the new lease standard and have recognized right-of-use assets and lease liabilities as of January 1, 2019. Prior period amounts were not adjusted and will continue to be reported under the accounting standards in effect for those periods. Adoption of the new standard resulted in the initial recording of right-of-use lease assets and related lease liabilities of $80.6 million and $85.2 million , respectively. As of September 30, 2019 , right-of-use lease assets and related lease liabilities were $73.5 million and $80.9 million , respectively. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the term. Schneider's incremental borrowing rates are used as the discount rates for leases and are determined based on U. S. Treasury rates plus an applicable margin to arrive at all-in rates. Schneider uses multiple discount rates based on lease terms and other economic factors. The operating lease right-of-use asset also includes accrued lease expense resulting from the straight-line accounting under prior accounting methods, which is now being amortized over the remaining life of the lease. In addition, we elected the package of practical expedients provided under the guidance. The practical expedient package applies to leases that commenced prior to adoption of the new standard and permits companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification, and any initial direct costs for any existing leases. We also elected the practical expedient related to land easements, allowing us to carry forward the accounting treatment of our existing agreements for land easements, none of which were material as of January 1, 2019 . As lessee We lease real estate, transportation equipment, and office equipment under operating and finance leases. Our real estate operating leases include operating centers, distribution warehouses, offices, and drop yards. Our finance leases relate almost entirely to transportation equipment. A majority of our leases include an option to extend the lease, and a small number of our leases include an option to early terminate the lease, which may include a termination payment. If we are reasonably certain to exercise an option to extend a lease, the extension period is included as part of the right-of-use asset and lease liability. For our real estate leases, we have elected to apply the recognition requirement to leases of twelve months or less, therefore, an operating lease right-of-use asset and liability will be recognized for all these leases. For our equipment leases, we have elected to not apply the recognition requirements to leases of twelve months or less. These leases will be expensed on a straight-line basis and no operating lease right-of-use asset or liability will be recorded. We have also elected to not separate the different components within the contract for our leases; therefore, all fixed costs associated with the lease are included in the right-of-use asset and the operating lease liability. This often relates to the requirement for us to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs in addition to a base or fixed rent. Some of our leases have variable payment amounts, and the variable portions of those payments are excluded from the right-of-use asset and the lease liability. At the inception of our contracts we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. A small number of our leased real estate assets contains subleases. The lease income related to subleases is shown in the lease cost table below. Certain equipment leases contain residual value guarantees. These are guarantees made to the lessor that the value of the underlying asset returned to the lessor at the end of the lease will be at least a specified amount. None of our leases contain restrictions or covenants that restrict us from incurring other financial obligations. The following table presents our net lease costs for the three and nine months ended September 30, 2019 : Financial Statement Classification Three Months Ended Nine Months Ended (in millions) 2019 2019 Operating lease cost Operating lease cost Operating supplies and expenses $ 8.7 $ 26.5 Short-term lease cost (1) Operating supplies and expenses 2.0 5.5 Finance lease cost Amortization of right-of-use assets Depreciation and amortization 0.9 2.5 Interest on lease liabilities Interest expense — 0.2 Variable lease cost Operating supplies and expenses 0.7 2.1 Sublease income Operating revenues (1.5 ) (4.1 ) Total net lease cost $ 10.8 $ 32.7 (1) Includes short-term lease costs for leases twelve months or less, including those with a duration of one month or less. As of September 30, 2019 , remaining lease terms and discount rates under operating and finance leases were as follows: September 30, 2019 Weighted-average remaining lease term Operating leases 4.4 years Finance leases 0.3 years Weighted-average discount rate Operating leases 4.2 % Finance leases 4.7 % Other information related to our leases is as follows: Nine Months Ended (in millions) 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 26.7 Operating cash flows from finance leases 0.2 Financing cash flows from finance leases 2.0 Right-of-use assets obtained in exchange for new lease liabilities Operating leases $ 20.6 Finance leases — Operating lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities are included in capitalized software and other noncurrent assets, other current liabilities, and other noncurrent liabilities, respectively, in the consolidated balance sheet as of September 30, 2019 . At September 30, 2019 , future lease payments under operating and finance leases were as follows: (in millions) Operating Leases Finance Leases Remaining 2019 $ 8.5 $ 4.9 2020 27.2 0.4 2021 17.1 — 2022 11.1 — 2023 8.8 — 2024 and thereafter 15.9 — Total 88.6 5.3 Amount representing interest (7.7 ) — Present value of lease payments 80.9 5.3 Current maturities (27.1 ) (5.3 ) Long-term lease obligations $ 53.8 $ — For certain of our real estate leases, there are options contained within the lease agreement to extend beyond the initial lease term. The Company recognizes options as right-of-use assets and lease liabilities when deemed reasonably certain to be exercised. Future operating lease payments at September 30, 2019 include $10.6 million related to options to extend lease terms that we are reasonably certain to exercise. Options related to our FTFM service offering that were previously considered reasonably certain to be exercised have been removed from the future operating lease payments at September 30, 2019 . Under ASC 840, future minimum lease payments as of December 31, 2018 were as follows: (in millions) Operating Leases Capital Leases 2019 $ 35.8 $ 6.9 2020 25.7 0.2 2021 14.9 — 2022 8.4 — 2023 6.8 — 2024 and thereafter 12.7 — Total $ 104.3 7.1 Amount representing interest (0.2 ) Present value of minimum lease payments 6.9 Current maturities (6.7 ) Long-term capital lease obligations $ 0.2 As of September 30, 2019 , we had additional leases that had not yet commenced of $3.5 million . These leases will commence during the remainder of 2019 and have lease terms of four months to five years . The consolidated balance sheets include right-of-use assets acquired under finance leases as components of property and equipment as of September 30, 2019 and January 1, 2019, as follows: (in millions) September 30, 2019 January 1, 2019 Transportation equipment $ 19.9 $ 19.9 Real property 0.8 0.8 Other property 1.5 0.6 Accumulated amortization (13.1 ) (11.2 ) Total $ 9.1 $ 10.1 Transportation equipment is being amortized to the estimated residual value by the end of the lease. Real and other property under finance leases are being amortized to a zero net book value over the initial lease term. As lessor We finance various types of transportation-related equipment for independent third parties under lease contracts which are generally for one year to five years and are accounted for as sales-type leases with fully guaranteed residual values. At the inception of the contracts, we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. With the adoption of ASC 842, all leases for which we are the lessor meet the definition of sales-type leases. In addition, as required under ASC 842, all cash flows from lease receipts are classified as operating activities on the consolidated statement of cash flows beginning January 1, 2019. We previously presented all cash flows from lease receipts as investing activities. As of September 30, 2019 and January 1, 2019, the investment in lease receivables was as follows: September 30, 2019 January 1, 2019 Future minimum payments to be received on leases $ 146.9 $ 140.0 Guaranteed residual lease values 138.2 151.0 Total minimum lease payments to be received 285.1 291.0 Unearned income (33.3 ) (28.7 ) Net investment in leases 251.8 262.3 Current maturities of lease receivables 126.1 129.6 Less—allowance for doubtful accounts (0.6 ) (0.5 ) Current portion of lease receivables—net of allowance 125.5 129.1 Lease receivables—noncurrent $ 126.3 $ 133.2 The amounts to be received on lease receivables as of September 30, 2019 were as follows: (in millions) September 30, 2019 Remaining 2019 $ 35.8 2020 142.8 2021 75.7 2022 30.6 2023 0.2 2024 and thereafter — Total undiscounted lease cash flows 285.1 Amount representing interest (33.3 ) Present value of lease receivables 251.8 Current lease receivables, net of allowance (125.5 ) Long-term lease receivable $ 126.3 Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon receipt of notification of bankruptcy, upon the death of a customer, or in other instances in which management concludes collectability is not reasonably assured. The accrual of interest and other fees is resumed when all payments are less than 60 days past due. At September 30, 2019 , there were $0.3 million of lease payments greater than 90 days past due. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of any anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation is not realized. Repossession and estimated reconditioning costs are recorded in the consolidated statements of comprehensive income in the period incurred. Our lease payments primarily include base rentals and guaranteed residual values. In addition, we also collect one-time administrative fees and heavy vehicle use tax on our leases. We have elected to not separate the different components within the contract as the administrative fees were not material for the three and nine months ended September 30, 2019 . We have also elected to exclude all taxes assessed by a governmental authority from the consideration (e.g., heavy vehicle use tax). All of our leases require fixed payments, therefore we have no variable payment provisions. Our leases contain an option for the lessee to return, extend, or purchase the equipment at the end of the lease term for the guaranteed contract residual amount. This is estimated to approximate the fair value of the equipment. Equipment is leased under sales-type leases where the lessees guarantee the residual value of the equipment. The table below provides additional information on our sales-type leases. Three Months Ended Nine Months Ended (in millions) 2019 2019 Revenue $ 50.9 $ 159.8 Cost of goods sold (46.8 ) (144.0 ) Operating profit $ 4.1 $ 15.8 Interest income on lease receivable $ 7.0 $ 20.4 Initial direct cost incurred — — The amounts to be received on lease receivables as of December 31, 2018 under ASC 840 were as follows: (in millions) December 31, 2018 2019 $ 149.0 2020 112.7 2021 29.0 2022 0.3 2023 — 2024 and thereafter — Total $ 291.0 |