Leases

12 Months Ended

Dec. 31, 2022

The Company leases certain office facilities, warehouses, manufacturing plants, equipment (which includes both office and plant equipment) and vehicles under operating leases and certain plant equipment under financing leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Certain leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. The Company does not include renewal periods in any of the leases’ terms until the renewal is executed as they are generally not reasonably certain of being exercised. The Company does not have any material purchase options.

Certain of the Company’s lease agreements have rental payments that are adjusted periodically for inflation or that are based on usage. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 was as follows:


	Balance Sheet Caption	December 31, 2022		December 31, 2021
		(In millions)
Right-of-Use (“ROU”) Assets:
Building ROU assets - net - operating	Other noncurrent assets	$	104.4	$	101.0
Equipment ROU assets - net - operating	Other noncurrent assets	5.6		6.2
Equipment ROU assets - net - financing	Property, plant and equipment - net	6.1		—
Total ROU assets - net		$	116.1	$	107.2
Lease Liabilities:
Current lease liabilities	Accrued expenses	$	21.6	$	17.6
Noncurrent lease liabilities	Other noncurrent liabilities	96.6		93.4
Total lease liabilities		$	118.2	$	111.0

Refer to Note 15 for discussion on impairment of building right-of-use assets.

The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were as follows:


	2022		2021		2020
	(In millions)
Fixed lease cost (1)	$	30.8	$	31.5	$	29.5
Variable lease cost	2.3		2.3		1.9
Total lease expense	$	33.1	$	33.8	$	31.4

(1) Includes short-term leases, which are immaterial.

Supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020 was as follows:


	2022		2021		2020
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities	$	31.7	$	31.2	$	28.7
Right-of-use assets obtained in exchange for new lease liabilities	19.0		16.0		40.4

Other supplemental information related to leases as of December 31, 2022 and 2021 was as follows:


Lease Term and Discount Rate	December 31, 2022		December 31, 2021
Weighted-average remaining lease term (years):
Operating leases - building and equipment	7.43		8.50
Operating leases - vehicles	2.14		2.34
Financing leases - equipment	2.05		—
Weighted-average discount rate:
Operating leases - building and equipment	3.41	%	3.27	%
Operating leases - vehicles	1.70	%	1.08	%
Financing leases - equipment	4.48	%	—

The Company uses its incremental borrowing rate to determine the present value of the lease payments.

Total lease liabilities at December 31, 2022 have scheduled maturities as follows:


Maturity of Lease Liabilities
	(In millions)
2023	$	24.4
2024	21.7
2025	19.9
2026	15.6
2027	12.7
Thereafter	40.1
Total lease payments	134.4
Less: Imputed interest	(16.2)
Present value of lease liabilities	$	118.2

Total lease liabilities at December 31, 2021 had scheduled maturities as follows:


Maturity of Lease Liabilities
	(In millions)
2022	$	20.1
2023	18.3
2024	15.6
2025	13.3
2026	12.0
Thereafter	48.3
Total lease payments	127.6
Less: Imputed interest	(16.6)
Present value of lease liabilities	$	111.0