Leases

3 Months Ended

Mar. 31, 2023

12.

Leases

The Company leases certain manufacturing facilities, warehouses, office space, railcars and equipment. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. All recorded leases are classified as operating leases and lease expense is recognized on a straight-line basis over the lease term. For leases beginning in 2019, lease components (base rental costs) are accounted for separately from the nonlease components (e.g., common-area maintenance costs). For leases that do not provide an implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

A summary of the Company’s lease information is as follows:


		March 31,			December 31,
	Classification	2023			2022
Assets
Right of use assets	Other Assets	$	158.0		$	162.6

Liabilities
Current lease liabilities	Accounts Payable and Accrued Expenses	$	21.9		$	21.9
Long-term lease liabilities	Deferred and Other Long-term Liabilities		148.8			151.9
Total lease liabilities		$	170.7		$	173.8

Other information
Weighted-average remaining lease term (years)			8.8			8.9
Weighted-average discount rate			4.5	%		4.4	%


	Three Months		Three Months
	Ended		Ended
	March 31, 2023		March 31, 2022
Statement of Income
Lease cost(1)	$	7.7	$	7.9

Other information
Leased assets obtained in exchange for new lease liabilities net of modifications	$	1.0	$	1.5
Cash paid for amounts included in the measurement of lease liabilities	$	7.6	$	7.5

(1)

Lease expense is included in cost of sales or SG&A expenses based on the nature of the leased item. Short-term lease expense is excluded from this amount and is not material. The Company also has certain variable leases which are not material. The non-cash component of lease expense for the first three months of 2023 and 2022 was $5.9 and $6.2, respectively, and is included in the Amortization caption in the condensed consolidated statement of cash flows.

The Company’s minimum annual rentals including reasonably assured renewal options under lease agreements are as follows:


	Operating
	Leases
2023	$	21.9
2024		28.4
2025		27.0
2026		19.3
2027		18.5
2028 and thereafter		94.8
Total future minimum lease commitments		209.9
Less: Imputed interest		(39.2	)
Present value of lease liabilities	$	170.7