Leases

9 Months Ended

Sep. 30, 2023

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

Certain leases can 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 contain provisions for future rent increases or have rental payments that are adjusted periodically for inflation or based on usage. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company does not have any significant leases that have not yet commenced.

Supplemental balance sheet information related to leases as of September 30, 2023 and December 31, 2022 was as follows:


	Balance Sheet Caption	September 30, 2023		December 31, 2022
Right-of-Use (“ROU”) Assets:
Building ROU assets - net	Other noncurrent assets	$	106.3	$	104.4
Equipment ROU assets - net	Other noncurrent assets	6.5		5.6
Total ROU assets - net		$	112.8	$	110.0
Lease Liabilities:
Current lease liabilities	Accrued expenses	$	21.0	$	21.6
Noncurrent lease liabilities	Other noncurrent liabilities	96.9		96.6
Total lease liabilities		$	117.9	$	118.2

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Fixed lease cost (1)	$	8.5	$	11.4	$	24.2	$	27.8
Variable lease cost	0.6		0.6		1.9		1.8
Total lease cost	$	9.1	$	12.0	$	26.1	$	29.6

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

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


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities	$	24.8	$	28.1
Right-of-use assets obtained in exchange for new lease liabilities	17.6		7.1

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


Lease Term and Discount Rate	September 30, 2023		December 31, 2022
Weighted-average remaining lease term (years):
Building and equipment	7.14		7.43
Vehicles	2.61		2.14
Weighted-average discount rate:
Building and equipment	3.68	%	3.41	%
Vehicles	2.81	%	1.70	%

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

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


Maturity of Lease Liabilities
2023 (excluding the nine months ended September 30, 2023)	$	6.4
2024	19.6
2025	22.3
2026	19.5
2027	15.5
Thereafter	52.0
Total lease payments	135.3
Less: Imputed interest	(17.4)
Present value of lease liabilities	$	117.9