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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Leases We lease certain real and personal property under non-cancelable leases. Approximately 82% of our right-of-use assets and lease liabilities relate to our leases of real estate with the remaining amounts relating to our leases of IT equipment, fleet vehicles and manufacturing and distribution equipment. The components of lease expense were as follows (in millions):
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Finance lease cost: |  |  |  |  |
Amortization of right-of-use assets | $ | 14.5 |  |  | $ | 13.2 |  |  | $ | 11.9 |
Interest on lease liabilities | 1.7 |  |  | 0.7 |  |  | 0.5 |
Operating lease cost | 74.1 |  |  | 67.7 |  |  | 62.2 |
Short-term lease cost | 5.3 |  |  | 5.0 |  |  | 3.8 |
Variable lease cost | 26.8 |  |  | 24.5 |  |  | 21.6 |
Total lease cost | $ | 122.4 |  |  | $ | 111.1 |  |  | $ | 100.0 |
Other information |  |  |  |  |
Cash paid for amounts included in the measurement lease liabilities: |  |  |  |  |
Operating cash flows from operating leases | $ | 70.5 |  |  | $ | 66.0 |  |  | $ | 61.8 |
Financing cash flows from finance leases | $ | 15.8 |  |  | $ | 13.6 |  |  | $ | 12.3 |
Right-of-use assets obtained in exchange for new finance lease liabilities | $ | 21.3 |  |  | $ | 14.4 |  |  | $ | 14.6 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 56.4 |  |  | $ | 98.8 |  |  | $ | 61.8 |
| As of December 31,
| 2023 |  | 2022
Finance lease right-of-use assets(1) | $ | 38.4 |  |  | $ | 33.3 |
Operating lease right-of-use assets | $ | 213.6 |  |  | $ | 219.9 |
Finance lease liability, current(2) | $ | 12.1 |  |  | $ | 11.2 |
Finance lease liability, non-current(3) | $ | 32.7 |  |  | $ | 28.3 |
Operating lease liability, current | $ | 57.5 |  |  | $ | 63.3 |
Operating lease liability, non-current | $ | 164.6 |  |  | $ | 161.8 |
Weighted-average remaining lease term – finance leases | 3.4 years |  | 3.6 years
Weighted-average remaining lease term – operating leases | 5.0 years |  | 5.1 years
Weighted-average discount rate – finance leases | 4.30 | % |  | 1.92 | %
Weighted-average discount rate – operating leases | 4.14 | % |  | 3.44 | %
(1) Recorded in Property, plant and equipment in Consolidated Balance Sheet
(2) Recorded in Current maturities of long-term debt in Consolidated Balance Sheet
(3) Recorded in Long-term debt in Consolidated Balance Sheet
Future annual minimum lease payments and finance lease commitments as of December 31, 2023 were as follows (in millions). We have signed three real estate operating leases which have not yet commenced but create significant rights and obligations amounting to approximately $46.1 million and are excluded from the table below.
| Operating Leases |  | Finance Leases
2024 | $ | 64.6 |  |  | $ | 13.4 |
2025 | 51.6 |  |  | 10.8 |
2026 | 42.9 |  |  | 6.8 |
2027 | 31.6 |  |  | 3.1 |
2028 | 22.0 |  |  | 13.1 |
Thereafter | 33.5 |  |  | — |
Total minimum lease payments | $ | 246.2 |  |  | $ | 47.2 |
Less imputed interest | (24.1) |  |  | (2.4) |
Present value of minimum payments | $ | 222.1 |  |  | $ | 44.8 |
On March 1, 2019, we entered into an agreement with a financial institution to renew the lease of our corporate headquarters in Richardson, Texas for a term of five years through March 1, 2024 (the “Lake Park Renewal”). The leased property consists of an office building of approximately 192,000 square feet, land and related improvements. In December 2023, we purchased the property for $41.2 million. Environmental Environmental laws and regulations in the locations we operate can potentially impose obligations to remediate hazardous substances at our properties, properties formerly owned or operated by us, and facilities to which we have sent or send waste for treatment or disposal. We are aware of contamination at some facilities; however, we do not believe that any future remediation related to those facilities will be material to our results of operations. Total environmental accruals are included Accrued expenses and Other liabilities on the accompanying Consolidated Balance Sheets. Future environmental costs are estimates and may be subject to change due to changes in environmental remediation regulations, technology or site-specific requirements. Product Warranties and Product Related Contingencies We incur the risk of liability for claims related to the installation and service of heating and air conditioning products, and we maintain liabilities for those claims that we self-insure. We are involved in various claims and lawsuits related to our products. Our product liability insurance policies have limits that, if exceeded, may result in substantial costs that could have an adverse effect on our results of operations. In addition, warranty claims and certain product liability claims are not covered by our product liability insurance. Total product warranty liabilities are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):
| As of December 31,
| 2023 |  | 2022
Accrued expenses | $ | 45.4 |  |  | $ | 41.3 |
Other liabilities | 97.4 |  |  | 101.4 |
Total product warranty liabilities | $ | 142.8 |  |  | $ | 142.7 |
The changes in product warranty liabilities related to continuing operations for the years ended December 31, 2023 and 2022 were as follows (in millions):
Total warranty liability as of December 31, 2021 | $ | 134.2 |
Payments made in 2022 | (36.3) |
Changes resulting from issuance of new warranties | 50.5 |
Changes in estimates associated with pre-existing liabilities | (4.7) |
Changes in foreign currency translation rates and other | (1.0) |
Total warranty liability as of December 31, 2022 | $ | 142.7 |
Payments made in 2023 | (40.1) |
Changes resulting from issuance of new warranties | 53.9 |
Changes in estimates associated with pre-existing liabilities | (13.9) |
Changes in foreign currency translation rates and other | 0.2 |
Total warranty liability as of December 31, 2023 | $ | 142.8 |
Self-Insurance We use a combination of third-party insurance and self-insurance plans to provide protection against claims relating to workers’ compensation/employers’ liability, general liability, product liability, auto liability, auto physical damage and other exposures. We use large deductible insurance plans, written through third-party insurance providers, for workers’ compensation/employers’ liability, general liability, product liability and auto liability. We also carry umbrella or excess liability insurance for all third-party and self-insurance plans, except for directors’ and officers’ liability, property damage and certain other insurance programs. For directors’ and officers’ liability, property damage and certain other exposures, we use third-party insurance plans that may include per occurrence and annual aggregate limits. We believe the deductibles and liability limits for all of our insurance policies are appropriate for our business and are adequate for companies of our size in our industry. We maintain safety and manufacturing programs that are designed to remove risk, improve the effectiveness of our business processes and reduce the likelihood and significance of our various retained and insured risks. Total self-insurance liabilities were included in the following captions on the accompanying Consolidated Balance Sheets (in millions):
| As of December 31,
| 2023 |  | 2022
Accrued expenses | $ | 3.8 |  |  | $ | 3.0 |
Other liabilities | 15.1 |  |  | 14.6 |
Total self-insurance liabilities | $ | 18.9 |  |  | $ | 17.6 |
Litigation We are involved in a number of claims and lawsuits incident to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits, including costs to settle claims and lawsuits, based on experience involving similar matters and specific facts known. It is management’s opinion that none of these claims or lawsuits or any threatened litigation will have a material adverse effect, individually or in the aggregate, on our financial condition, results of operations or cash flows. Claims and lawsuits, however, involve uncertainties and it is possible that their eventual outcome could adversely affect our results of operations in a future period.

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