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Leases | 12 Months Ended
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Dec. 31, 2023
Leases [Abstract] |
Leases | 3. Leases We group our leases into two primary lease types, real estate and equipment, and into various asset classes within each type. Real estate leases primarily include manufacturing locations, office space, warehouses, and design centers, while equipment leases primarily include manufacturing equipment. Leases with an initial term of 12 months or less and certain month-to-month leases are not recorded on the balance sheet. The lease expense for these types of leases is recognized on a straight-line basis over the lease term. To determine the lease term, we include the non-cancellable period of the lease together with the following: all periods covered by an option to extend the lease if we are reasonably certain to exercise that option; any periods covered by an option to terminate the lease if we are reasonably certain not to exercise that option; and any periods covered by an option to extend or not to terminate the lease that are controlled by the lessor. The exercising of lease renewal options is based on whether future economic benefit is expected to be derived from the renewal. Most of our real estate leases contain at least one renewal option. Renewal options generally range from 1 to 5 years. Although equipment leases may also contain renewal options, we typically do not expect to extend and/or exercise these renewal options unless a compelling business reason is provided to management. Our leases may contain fixed and variable costs. Fixed costs determine the right-of-use asset. Variable costs are those costs which will vary month to month and are excluded from the calculation of the right-of-use asset. Variable lease costs are recorded to lease expense in the period in which they are incurred. Our leases do not provide an implicit borrowing rate of return. Therefore, we use our incremental borrowing rate to calculate the present value of lease payments at inception of the lease or when a lease is modified. Supplemental balance sheet information related to our operating leases was as follows (dollars in millions):
| Year Ended December 31, |
| 2023 |  |  | 2022 |
Operating lease right-of-use assets | $ | 279.6 |  |  | $ | 298.3 |
Current portion of operating lease obligations | $ | 78.6 |  |  | $ | 72.2 |
Long-term portion of operating lease obligations |  | 212.1 |  |  |  | 234.6 |
Total operating lease obligations | $ | 290.7 |  |  | $ | 306.8 |
Supplemental balance sheet information related to our finance leases was as follows (dollars in millions):
| Year Ended December 31, |
| 2023 |  |  | 2022 |
Buildings | $ | 0.3 |  |  | $ | 0.3 |
Machinery and equipment |  | 28.5 |  |  |  | 28.5 |
Total |  | 28.8 |  |  |  | 28.8 |
Less accumulated amortization |  | (24.0 | ) |  |  | (22.6 | )
Total | $ | 4.8 |  |  | $ | 6.2 |
Current portion of finance lease obligations | $ | 2.0 |  |  | $ | 1.9 |
Long-term portion of finance lease obligations |  | 8.7 |  |  |  | 10.8 |
Total finance lease obligations | $ | 10.7 |  |  | $ | 12.7 |
The Company was obligated under finance leases covering buildings and machinery and equipment in the amount of $10.7 million and $12.7 million at December 31, 2023 and 2022, respectively. Amortization of assets under finance lease obligations is included in depreciation expense. For both operating and finance leases, the weighted average remaining lease term in years and weighted average discount rates were as follows:
| Year Ended December 31, |
| 2023 |  |  | 2022 |
Weighted-average remaining lease term (years): |  |  |  |  |
Operating leases | 4.9 |  |  | 5.4 |
Finance leases | 4.8 |  |  | 5.8 |
Weighted-average discount rate: |  |  |  |  |
Operating leases |  | 3.75 | % |  |  | 3.29 | %
Finance leases |  | 6.66 | % |  |  | 6.66 | %
The components of lease expense were as follows (dollars in millions):
| Year Ended December 31, |
| 2023 |  |  | 2022 |  |  | 2021 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of finance lease assets | $ | 1.4 |  |  | $ | 1.5 |  |  | $ | 1.5 |
Interest on lease liabilities |  | 0.8 |  |  |  | 0.9 |  |  |  | 1.0 |
Total finance lease cost |  | 2.2 |  |  |  | 2.4 |  |  |  | 2.5 |
Operating lease cost |  | 87.7 |  |  |  | 81.4 |  |  |  | 77.0 |
Short-term lease cost |  | 24.6 |  |  |  | 27.0 |  |  |  | 22.7 |
Variable lease cost |  | 21.7 |  |  |  | 17.2 |  |  |  | 19.4 |
Total lease cost | $ | 136.2 |  |  | $ | 128.0 |  |  | $ | 121.6 |
We had an insignificant amount of sublease rental income for the years ended December 31, 2023, 2022, and 2021. Supplemental cash flow information related to leases was as follows (dollars in millions):
| Year Ended December 31, |
| 2023 |  |  | 2022 |  |  | 2021 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows for operating leases | $ | (77.6 | ) |  | $ | (73.6 | ) |  | $ | (71.7 | )
Operating cash flows for finance leases |  | (1.4 | ) |  |  | (1.5 | ) |  |  | (1.5 | )
Financing cash flows for finance leases |  | (0.8 | ) |  |  | (0.9 | ) |  |  | (1.0 | )
Right-of-use assets obtained in exchange for new lease obligations: |  |  |  |  |  |  |  |
Operating leases | $ | (58.9 | ) |  | $ | (83.5 | ) |  | $ | (44.4 | )
Finance leases |  | — |  |  |  | — |  |  |  | — |
Supplemental non-cash information on changes in lease liabilities | $ | 1.3 |  |  | $ | 51.6 |  |  | $ | 31.3 |
Supplemental non-cash information on changes in right-of-use assets | $ | 77.6 |  |  | $ | 23.5 |  |  | $ | 40.3 |
The future minimum payments under operating and finance lease liabilities at December 31, 2023 were as follows (dollars in millions):
|  | Operating Leases |  |  | Finance Leases |
2024 |  | $ | 88.1 |  |  | $ | 2.7 |
2025 |  |  | 75.4 |  |  |  | 2.7 |
2026 |  |  | 56.1 |  |  |  | 2.7 |
2027 |  |  | 38.0 |  |  |  | 2.7 |
2028 |  |  | 22.4 |  |  |  | 1.8 |
Thereafter |  |  | 39.4 |  |  |  | — |
Total lease payments |  |  | 319.4 |  |  |  | 12.6 |
Less imputed interest (a) |  |  | (28.7 | ) |  |  | (1.9 | )
Present value of lease liabilities |  | $ | 290.7 |  |  | $ | 10.7 |
(a) Calculated using the incremental borrowing rate for each lease applied to the future payments.

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