Leases (Notes)

12 Months Ended

Dec. 31, 2024

LEASES

The Company's lease portfolio includes various contracts for real estate, vehicles, information technology and other equipment. At contract inception, the Company determines a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as the right to direct the use of that asset. If a contract is considered to be a lease, the Company recognizes a lease liability based on the present value of the future lease payments, with an offsetting entry to recognize a right-of-use asset. Options to extend or terminate a lease are included when it is reasonably certain an option will be exercised. As a majority of the Company's leases do not provide an implicit rate within the lease, an incremental borrowing rate is used which is based on information available at the commencement date.

The following table includes a summary of the Company's lease portfolio and Balance Sheet classification:


In millions	Classification	December 31, 2024			December 31, 2023
Assets
Operating lease right-of-use assets (1)	Other noncurrent assets	$	602.6		$	513.1
Liabilities
Operating lease current	Other current liabilities	173.5			155.4
Operating lease noncurrent	Other noncurrent liabilities	441.2			367.3

Weighted average remaining lease term		5.0 years			5.0 years
Weighted average discount rate		4.6		%	4.5		%

(1) Prepaid lease payments and lease incentives are recorded as part of the right-of-use asset. The net impact was $12.1 million and $9.6 million at December 31, 2024 and December 31, 2023, respectively.

The Company accounts for each separate lease component of a contract and its associated non-lease component as a single lease component. In addition, the Company utilizes a portfolio approach for the vehicle, information technology and equipment asset classes as the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases within the portfolio.

The following table includes lease costs and related cash flow information for the years ended December 31:


In millions	2024		2023
Operating lease expense	$	197.8	$	187.8
Variable lease expense	35.6		31.0
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	195.4		185.3
Right-of-use assets obtained in exchange for new operating lease liabilities	244.9		179.2

Operating lease expense is recognized on a straight-line basis over the lease term. In addition, the Company has certain leases that contain variable lease payments which are based on an index, a rate referenced in the lease or on the actual usage of the

leased asset. These payments are not included in the right-of-use asset or lease liability and are expensed as incurred as variable lease expense.

Maturities of lease obligations were as follows:


In millions	December 31, 2024
Operating leases:
2025	$	202.6
2026	172.5
2027	124.5
2028	84.0
2029	47.2
After 2029	90.7
Total lease payments	$	721.5
Less: Interest	(106.8)
Present value of lease liabilities	$	614.7