Leases

6 Months Ended

Jun. 30, 2023

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 June 30, 2023 and December 31, 2022 was as follows:


	Balance Sheet Caption	June 30, 2023		December 31, 2022
Right-of-Use (“ROU”) Assets:
Building ROU assets - net - operating	Other noncurrent assets	$	111.5	$	104.4
Equipment ROU assets - net - operating	Other noncurrent assets	5.0		5.6
Equipment ROU assets - net - financing	Property, plant and equipment	2.0		6.1
Total ROU assets - net		$	118.5	$	116.1
Lease Liabilities:
Current lease liabilities	Accrued expenses	$	21.6	$	21.6
Noncurrent lease liabilities	Other noncurrent liabilities	101.6		96.6
Total lease liabilities		$	123.2	$	118.2

The components of lease cost for the three and six months ended June 30, 2023 and 2022 were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Fixed lease cost (1)	$	7.5	$	9.0	$	15.7	$	16.4
Variable lease cost	0.6		0.8		1.3		1.2
Total lease cost	$	8.1	$	9.8	$	17.0	$	17.6

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

Supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 was as follows:


	Six Months Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities	$	15.7	$	16.9
Right-of-use assets obtained in exchange for new lease liabilities	17.1		9.3

Other supplemental information related to leases as of June 30, 2023 and December 31, 2022 was as follows:


Lease Term and Discount Rate	June 30, 2023		December 31, 2022
Weighted-average remaining lease term (years):
Operating leases - building and equipment	7.28		7.43
Operating leases - vehicles	2.13		2.14
Financing leases - equipment	4.10		2.05
Weighted-average discount rate:
Operating leases - building and equipment	3.66	%	3.41	%
Operating leases - vehicles	2.46	%	1.70	%
Financing leases - equipment	4.96	%	4.48	%

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

Total lease liabilities at June 30, 2023 have scheduled maturities as follows:


Maturity of Lease Liabilities
2023 (excluding the six months ended June 30, 2023)	$	12.8
2024	19.6
2025	22.3
2026	19.4
2027	15.7
Thereafter	52.1
Total lease payments	141.9
Less: Imputed interest	(18.7)
Present value of lease liabilities	$	123.2