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Leases | 12 Months Ended
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Dec. 31, 2022
Leases [Abstract] |
Leases | Leases The Company leases certain land, buildings, machinery, equipment, vehicles and office and computer equipment under finance and operating leases. The Company accounts for these leases pursuant to ASU 2016-02, “Leases”. Under the standard, lessees are required to record an asset (a right-of-use “ROU” asset or finance lease asset) and a lease liability. ROU assets represent the Company’s right to use an underlying asset during the lease term while lease liabilities represent the Company’s obligation to make lease payments during the lease term. The standard allows for two types of leases for income statement recognition purposes: operating leases and finance leases. Operating leases result in the recognition of a single lease expense on a straight-line basis over the lease term whereas finance leases result in an accelerated expense. ASU 2016-02 also contains guidance regarding the identification of embedded leases in service and supply contracts, as well as the identification of lease and nonlease components of an arrangement. All leases greater than 12 months result in the recognition of an ROU asset and liability at the lease commencement date based on the present value of the lease payments over the lease term. The present value of the lease payments is calculated using the applicable weighted-average discount rate. The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company estimates an applicable incremental borrowing rate. The incremental borrowing rate is estimated using the currency denomination of the lease, the contractual lease term and the Company’s applicable borrowing rate. The Company does not recognize an ROU asset or lease liability with respect to operating leases with an initial term of 12 months or less and recognizes expense on such leases on a straight-line basis over the lease term. The Company accounts for lease components separately from nonlease components other than for real estate and office equipment. The Company evaluated its supplier agreements for the existence of leases and determined these leases comprised an insignificant portion of its supplier agreements. As such, these leases were not material to the Company’s Consolidated Balance Sheets. The Company has certain leases that contain one or more options to terminate or renew that can extend the lease term up to 14 years. Options that the company is reasonably certain to exercise are included in the lease term. The depreciable life of ROU assets and leasehold improvements are limited by the expected lease term. The Company has certain lease agreements that include variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable government authority. Generally, the Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. Total lease assets and liabilities at December 31, 2022 and 2021 were as follows (in millions):
Lease Assets |  | Classification |  | As of December 31, 2022 |  | As of December 31, 2021
Operating ROU assets |  | Right-of-use lease assets |  | $ | 163.9 |  |  | $ | 154.1 |
Finance lease assets |  | Property, plant and equipment, net(1) |  | 6.7 |  |  | 10.6 |
Total lease assets |  |  |  | $ | 170.6 |  |  | $ | 164.7 |
Lease Liabilities |  | Classification |  | As of December 31, 2022 |  | As of December 31, 2021
Current: |  |  |  |  |  |
Operating |  | Accrued expenses |  | $ | 42.2 |  |  | $ | 42.3 |
Finance |  | Other current liabilities |  | 0.7 |  |  | 3.8 |
Noncurrent: |  |  |  |  |  |
Operating |  | Operating lease liabilities |  | 125.4 |  |  | 115.5 |
Finance |  | Other noncurrent liabilities |  | 5.4 |  |  | 6.0 |
Total lease liabilities |  |  |  | $ | 173.7 |  |  | $ | 167.6 |
____________________________________ (1) Finance lease assets are recorded net of accumulated depreciation of $5.1 million and $7.8 million as of December 31, 2022 and 2021, respectively. Total lease costs for 2022 and 2021 are set forth below (in millions):
|  | Classification |  | Year Ended December 31, 2022 |  | Year Ended December 31, 2021
Operating lease cost |  | Selling, general and administrative expenses |  | $ | 51.2 |  |  | $ | 59.0 |
Variable lease cost |  | Selling, general and administrative expenses |  | 1.7 |  |  | 1.0 |
Short-term lease cost |  | Selling, general and administrative expenses |  | 17.5 |  |  | 18.7 |
Finance lease cost: |  |  |  |  |  |
Amortization of lease assets |  | Depreciation expense(1) |  | 1.0 |  |  | 2.4 |
Interest on lease liabilities |  | Interest expense, net |  | 0.2 |  |  | 0.3 |
Total lease cost |  |  |  | $ | 71.6 |  |  | $ | 81.4 |
____________________________________ (1) Depreciation expense was included in both cost of goods sold and selling, general and administrative expenses. Lease payment amounts for operating and finance leases with remaining terms greater than one year as of December 31, 2022 were as follows (in millions):
|  |  |  | December 31, 2022
|  |  |  |  |  | Operating Leases |  | Finance Leases
2023 |  |  |  |  |  | $ | 47.8 |  |  | $ | 0.8 |
2024 |  |  |  |  |  | 36.6 |  |  | 0.6 |
2025 |  |  |  |  |  | 27.0 |  |  | 0.4 |
2026 |  |  |  |  |  | 19.1 |  |  | 0.2 |
2027 |  |  |  |  |  | 13.4 |  |  | 0.2 |
Thereafter |  |  |  |  |  | 51.2 |  |  | 6.0 |
Total lease payments |  |  |  |  |  | 195.1 |  |  | 8.2 |
Less: imputed interest(1) |  |  |  |  |  | (27.5) |  |  | (2.1) |
Present value of lease liabilities |  |  |  |  |  | $ | 167.6 |  |  | $ | 6.1 |
____________________________________ (1) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available Lease payment amounts for operating and finance leases with remaining terms greater than one year as of December 31, 2021 were as follows (in millions):
|  |  |  | December 31, 2021
|  |  |  |  |  | Operating Leases |  | Finance Leases
2022 |  |  |  |  |  | $ | 45.7 |  |  | $ | 4.0 |
2023 |  |  |  |  |  | 36.2 |  |  | 0.9 |
2024 |  |  |  |  |  | 24.5 |  |  | 0.6 |
2025 |  |  |  |  |  | 17.3 |  |  | 0.4 |
2026 |  |  |  |  |  | 12.3 |  |  | 0.2 |
Thereafter |  |  |  |  |  | 39.1 |  |  | 6.3 |
Total lease payments |  |  |  |  |  | 175.1 |  |  | 12.4 |
Less: imputed interest(1) |  |  |  |  |  | (17.3) |  |  | (2.5) |
Present value of lease liabilities |  |  |  |  |  | $ | 157.8 |  |  | $ | 9.9 |
____________________________________ (1) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available The following table summarizes the weighted-average remaining lease term and weighted-average discount rate:
|  | As of December 31, 2022 |  | As of December 31, 2021
Weighted-average remaining lease term: |  |  |  |
Operating leases |  | 7 years |  | 7 years
Finance leases |  | 17 years |  | 12 years
Weighted-average discount rate: |  |  |  |
Operating leases |  | 4.7 | % |  | 3.1 | %
Finance leases |  | 2.7 | % |  | 2.4 | %
The following table summarizes the supplemental cash flow information for 2022 and 2021 (in millions):
|  | Year Ended December 31, 2022 |  | Year Ended December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 52.3 |  |  | $ | 59.8 |
Operating cash flows from finance leases |  | 0.2 |  |  | 0.2 |
Financing cash flows from finance leases |  | 1.0 |  |  | 2.6 |
Leased assets obtained in exchange for lease obligations: |  |  |  |
Operating leases |  | $ | 65.5 |  |  | $ | 50.6 |
Finance leases |  | 0.4 |  |  | 0.9 |
Leases | Leases The Company leases certain land, buildings, machinery, equipment, vehicles and office and computer equipment under finance and operating leases. The Company accounts for these leases pursuant to ASU 2016-02, “Leases”. Under the standard, lessees are required to record an asset (a right-of-use “ROU” asset or finance lease asset) and a lease liability. ROU assets represent the Company’s right to use an underlying asset during the lease term while lease liabilities represent the Company’s obligation to make lease payments during the lease term. The standard allows for two types of leases for income statement recognition purposes: operating leases and finance leases. Operating leases result in the recognition of a single lease expense on a straight-line basis over the lease term whereas finance leases result in an accelerated expense. ASU 2016-02 also contains guidance regarding the identification of embedded leases in service and supply contracts, as well as the identification of lease and nonlease components of an arrangement. All leases greater than 12 months result in the recognition of an ROU asset and liability at the lease commencement date based on the present value of the lease payments over the lease term. The present value of the lease payments is calculated using the applicable weighted-average discount rate. The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company estimates an applicable incremental borrowing rate. The incremental borrowing rate is estimated using the currency denomination of the lease, the contractual lease term and the Company’s applicable borrowing rate. The Company does not recognize an ROU asset or lease liability with respect to operating leases with an initial term of 12 months or less and recognizes expense on such leases on a straight-line basis over the lease term. The Company accounts for lease components separately from nonlease components other than for real estate and office equipment. The Company evaluated its supplier agreements for the existence of leases and determined these leases comprised an insignificant portion of its supplier agreements. As such, these leases were not material to the Company’s Consolidated Balance Sheets. The Company has certain leases that contain one or more options to terminate or renew that can extend the lease term up to 14 years. Options that the company is reasonably certain to exercise are included in the lease term. The depreciable life of ROU assets and leasehold improvements are limited by the expected lease term. The Company has certain lease agreements that include variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable government authority. Generally, the Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. Total lease assets and liabilities at December 31, 2022 and 2021 were as follows (in millions):
Lease Assets |  | Classification |  | As of December 31, 2022 |  | As of December 31, 2021
Operating ROU assets |  | Right-of-use lease assets |  | $ | 163.9 |  |  | $ | 154.1 |
Finance lease assets |  | Property, plant and equipment, net(1) |  | 6.7 |  |  | 10.6 |
Total lease assets |  |  |  | $ | 170.6 |  |  | $ | 164.7 |
Lease Liabilities |  | Classification |  | As of December 31, 2022 |  | As of December 31, 2021
Current: |  |  |  |  |  |
Operating |  | Accrued expenses |  | $ | 42.2 |  |  | $ | 42.3 |
Finance |  | Other current liabilities |  | 0.7 |  |  | 3.8 |
Noncurrent: |  |  |  |  |  |
Operating |  | Operating lease liabilities |  | 125.4 |  |  | 115.5 |
Finance |  | Other noncurrent liabilities |  | 5.4 |  |  | 6.0 |
Total lease liabilities |  |  |  | $ | 173.7 |  |  | $ | 167.6 |
____________________________________ (1) Finance lease assets are recorded net of accumulated depreciation of $5.1 million and $7.8 million as of December 31, 2022 and 2021, respectively. Total lease costs for 2022 and 2021 are set forth below (in millions):
|  | Classification |  | Year Ended December 31, 2022 |  | Year Ended December 31, 2021
Operating lease cost |  | Selling, general and administrative expenses |  | $ | 51.2 |  |  | $ | 59.0 |
Variable lease cost |  | Selling, general and administrative expenses |  | 1.7 |  |  | 1.0 |
Short-term lease cost |  | Selling, general and administrative expenses |  | 17.5 |  |  | 18.7 |
Finance lease cost: |  |  |  |  |  |
Amortization of lease assets |  | Depreciation expense(1) |  | 1.0 |  |  | 2.4 |
Interest on lease liabilities |  | Interest expense, net |  | 0.2 |  |  | 0.3 |
Total lease cost |  |  |  | $ | 71.6 |  |  | $ | 81.4 |
____________________________________ (1) Depreciation expense was included in both cost of goods sold and selling, general and administrative expenses. Lease payment amounts for operating and finance leases with remaining terms greater than one year as of December 31, 2022 were as follows (in millions):
|  |  |  | December 31, 2022
|  |  |  |  |  | Operating Leases |  | Finance Leases
2023 |  |  |  |  |  | $ | 47.8 |  |  | $ | 0.8 |
2024 |  |  |  |  |  | 36.6 |  |  | 0.6 |
2025 |  |  |  |  |  | 27.0 |  |  | 0.4 |
2026 |  |  |  |  |  | 19.1 |  |  | 0.2 |
2027 |  |  |  |  |  | 13.4 |  |  | 0.2 |
Thereafter |  |  |  |  |  | 51.2 |  |  | 6.0 |
Total lease payments |  |  |  |  |  | 195.1 |  |  | 8.2 |
Less: imputed interest(1) |  |  |  |  |  | (27.5) |  |  | (2.1) |
Present value of lease liabilities |  |  |  |  |  | $ | 167.6 |  |  | $ | 6.1 |
____________________________________ (1) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available Lease payment amounts for operating and finance leases with remaining terms greater than one year as of December 31, 2021 were as follows (in millions):
|  |  |  | December 31, 2021
|  |  |  |  |  | Operating Leases |  | Finance Leases
2022 |  |  |  |  |  | $ | 45.7 |  |  | $ | 4.0 |
2023 |  |  |  |  |  | 36.2 |  |  | 0.9 |
2024 |  |  |  |  |  | 24.5 |  |  | 0.6 |
2025 |  |  |  |  |  | 17.3 |  |  | 0.4 |
2026 |  |  |  |  |  | 12.3 |  |  | 0.2 |
Thereafter |  |  |  |  |  | 39.1 |  |  | 6.3 |
Total lease payments |  |  |  |  |  | 175.1 |  |  | 12.4 |
Less: imputed interest(1) |  |  |  |  |  | (17.3) |  |  | (2.5) |
Present value of lease liabilities |  |  |  |  |  | $ | 157.8 |  |  | $ | 9.9 |
____________________________________ (1) Calculated using the implicit interest rate for each lease or the Company’s incremental borrowing rate, when implicit rate is not available The following table summarizes the weighted-average remaining lease term and weighted-average discount rate:
|  | As of December 31, 2022 |  | As of December 31, 2021
Weighted-average remaining lease term: |  |  |  |
Operating leases |  | 7 years |  | 7 years
Finance leases |  | 17 years |  | 12 years
Weighted-average discount rate: |  |  |  |
Operating leases |  | 4.7 | % |  | 3.1 | %
Finance leases |  | 2.7 | % |  | 2.4 | %
The following table summarizes the supplemental cash flow information for 2022 and 2021 (in millions):
|  | Year Ended December 31, 2022 |  | Year Ended December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 52.3 |  |  | $ | 59.8 |
Operating cash flows from finance leases |  | 0.2 |  |  | 0.2 |
Financing cash flows from finance leases |  | 1.0 |  |  | 2.6 |
Leased assets obtained in exchange for lease obligations: |  |  |  |
Operating leases |  | $ | 65.5 |  |  | $ | 50.6 |
Finance leases |  | 0.4 |  |  | 0.9 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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