Leases

3 Months Ended

Mar. 31, 2023

LEASES

Total rental expense for the three months ended March 31, 2023 and 2022, was $13.6 million and $10.7 million, respectively, and is classified within Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. Rental expense related to short-term leases, variable lease payments or other leases or lease components not included within the right of use ("ROU") asset or lease liability totaled $3.2 million and $1.6 million, respectively, for the three months ended March 31, 2023 and 2022. No material lease costs have been capitalized on the Condensed and Consolidated Balance Sheets as of March 31, 2023 or December 31, 2022.

As a lessee, the Company categorizes its leases into two general categories: real estate leases and equipment leases. Amounts included within the Condensed and Consolidated Balance Sheets related to the Company’s ROU asset and lease liability for both real estate and equipment leases were as follows:


		March 31, 2023								December 31, 2022
In millions	Balance Sheet classification	Real estate			Equipment			Total		Real estate			Equipment			Total
ROU asset	Other noncurrent assets	$	106.2		$	28.1		$	134.3	$	69.3		$	28.8		$	98.1
Lease liability - current	Accrued expenses and other current liabilities	17.7			13.9			31.6		17.7			14.1			31.8
Lease liability - noncurrent	Other noncurrent liabilities	91.9			14.3			106.2		54.8			14.7			69.5

Other information:
Weighted-average remaining term (years)		12.2			2.4					5.9			2.4
Weighted-average discount rate		4.8		%	2.8		%			3.5		%	2.1		%

The following table summarizes additional information related to the Company’s leases for the three months ended March 31:


	2023						2022
In millions	Real estate		Equipment		Total		Real estate		Equipment		Total
Cash paid for amounts included in the measurement of lease liabilities	$	5.9	$	4.5	$	10.4	$	4.9	$	4.2	$	9.1
ROU assets obtained in exchange for new lease liabilities	41.4		1.9		43.3		18.8		1.4		20.2

During the three months ended March 31, 2023, the Company commenced a new long-term lease of a manufacturing facility in Mexico, which added an ROU asset and corresponding lease liability of approximately $37 million.

Future Repayments

Scheduled minimum lease payments required under non-cancellable operating leases for both the real estate and equipment lease portfolios for the remainder of 2023 and for each of the years thereafter as of March 31, 2023, are as follows:


In millions	Remainder of 2023		2024		2025		2026		2027		Thereafter		Total
Real estate leases	$	16.7	$	18.6	$	16.3	$	13.0	$	10.3	$	87.7	$	162.6
Equipment leases	11.3		10.6		5.5		1.3		0.2		0.1		29.0
Total	$	28.0	$	29.2	$	21.8	$	14.3	$	10.5	$	87.8	$	191.6

The difference between the total undiscounted minimum lease payments and the combined current and noncurrent lease liabilities as of March 31, 2023, is due to imputed interest of $53.8 million.