COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

We have noncancelable operating leases for office and plant facilities, equipment and automobiles that expire at various dates through 2040. Certain operating leases have renewal options and rent escalation clauses as well as various purchase options.

Lease right-of-use assets represent the right to use an underlying asset pursuant to the lease for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Lease right-of-use assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate generally applicable to the location of the lease right-of-use asset, unless an implicit rate is readily determinable. We combine lease and certain non-lease components in determining the lease payments subject to the initial present value calculation. Lease right-of-use assets include upfront lease payments and exclude lease incentives, where applicable. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.

Lease expense for operating leases consists of both fixed and variable components. Expense related to fixed lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are generally expensed as incurred, where applicable, and include certain index-based changes in rent, certain non-lease components, such as maintenance and other services provided by the lessor, and other charges included in the lease. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The depreciable life of lease right-of-use assets is generally the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise for such assets.

We recognized total lease expense of $98.4 million, $91.0 million and $86.7 million for the years ended December 31, 2023, 2022 and 2021, respectively, primarily related to operating lease costs paid to lessors from operating cash flows. Right-of-use assets obtained in exchange for new operating lease liabilities, a non-cash item, were $67.3 million, $20.7 million and $73.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Operating lease right-of-use assets were recorded in our Consolidated Balance Sheets as other assets, net of $223.9 million and $205.8 million as of December 31, 2023 and 2022, respectively. Operating lease liabilities of $233.8 million and $214.7 million were recorded in our Consolidated Balance Sheets as accrued liabilities of $45.9 million and $41.8 million and other liabilities of $187.9 million and $172.9 million as of December 31, 2023 and 2022, respectively. At December 31, 2023, our operating leases had a weighted average discount rate of 5.2 percent and a weighted average remaining lease term of approximately 7 years.

To a lesser extent, we have certain leases that qualify as finance leases. Finance lease right-of-use assets were recorded in our Consolidated Balance Sheets as property, plant and equipment, net of $64.5 million and $67.6 million as of December 31, 2023 and 2022, respectively. Finance lease liabilities of $63.3 million and $65.7 million were recorded in our Consolidated Balance Sheets as current portion of long term-debt of $27.6 million and $2.8 million as of December 31, 2023 and 2022, respectively, and long-term debt of $35.7 million and $62.9 million as of December 31, 2023 and 2022, respectively. At December 31, 2023, our finance leases had a weighted average discount rate of 4.5 percent and a weighted average remaining lease term of approximately 9 years.

The aggregate annual maturities of lease liabilities are as follows (dollars in thousands):


	Operating		Finance
	Leases		Leases
2024	$	55,969	$	29,829
2025	52,029		3,047
2026	38,240		3,064
2027	27,136		3,113
2028	19,250		3,139
Thereafter	88,943		36,544
Total lease payments	281,567		78,736
Less imputed interest	(47,794)		(15,434)
Total	$	233,773	$	63,302

At December 31, 2023, we did not have any significant operating or finance leases that had not commenced.

At December 31, 2023, we had noncancelable commitments for capital expenditures in 2024 of $35.9 million.

On July 12, 2022, we concluded a settlement with the European Commission to end a long-running investigation of our metal packaging operations in Europe. This investigation was started in 2015 by the German antitrust authority and was transferred in 2018 to the European Commission. With the settlement, the European Commission closed its investigation and we paid a fine of €23.9 million in October 2022, although we do not fully concur with the facts and legal qualifications put forth by the European Commission.

We are a party to other legal proceedings, contract disputes and claims arising in the ordinary course of our business. We are not a party to, and none of our properties are subject to, any pending legal proceedings which could have a material adverse effect on our business or financial condition.