Leases

9 Months Ended

Sep. 30, 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:


		September 30,			December 31,
	Classification	2023			2022
Assets
Right of use assets	Other Assets	$	152.1		$	162.6

Liabilities
Current lease liabilities	Accrued and Other Liabilities	$	23.6		$	21.9
Long-term lease liabilities	Deferred and Other Long-term Liabilities		141.4			151.9
Total lease liabilities		$	165.0		$	173.8

Other information
Weighted-average remaining lease term (years)			8.4			8.9
Weighted-average discount rate			4.5	%		4.4	%


	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Statement of Income
Lease cost(1)	$	7.9	$	7.7	$	23.5	$	23.1

Other information
Leased assets obtained in exchange for new lease liabilities net of modifications(2)	$	2.2	$	9.5	$	7.3	$	26.8
Cash paid for amounts included in the measurement of lease liabilities	$	7.6	$	7.8	$	23.1	$	23.3

(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 nine months of 2023 and 2022 was $17.9 and $18.0, respectively, and is included in the Amortization caption in the condensed consolidated statement of cash flows.

(2)

In September 2022, the Company amended its contract at one of its international locations. This resulted in an increase to the Company’s right of use assets and corresponding lease liabilities of approximately $8.2 recorded in the third quarter of 2022. In June 2022, the Company amended its contract at one of its leased manufacturing facilities. This resulted in an increase to the Company’s right of use assets and corresponding lease liabilities of approximately $15.2 recorded in the second quarter of 2022.

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


	Operating
	Leases
2023	$	7.6
2024		30.5
2025		28.6
2026		20.1
2027		19.0
2028 and thereafter		95.3
Total future minimum lease commitments		201.1
Less: Imputed interest		(36.1	)
Present value of lease liabilities	$	165.0