Lessee ROU Assets and Lease Liabilities

12 Months Ended

Dec. 28, 2024

11. Lessee ROU Assets and Lease Liabilities

The Company leases certain facilities in North and South America, Europe, the Middle East and Asia-Pacific regions under operating lease agreements expiring at various dates through January 2032. In addition, the Company leases equipment in the U.S. and Europe pursuant to leases that are classified as operating leases and expire at various dates through November 2028. The majority of these leases are non-cancellable and generally do not contain any material restrictive covenants, material residual value guarantees, or other material guarantees. The Company recognizes lease costs under these agreements using a straight-line method based on total lease payments. Certain facility leases contain predetermined price escalations and in some cases renewal options, the longest of which is for five years.

The Company generally estimates the applicable discount rate used to determine the net present value of lease payments based on available information at the lease commencement date. For the years ended December 28, 2024 and December 30, 2023, the weighted-average discount rate used by the Company for all operating leases was approximately 4.6% and 4.1%, respectively.

The balance sheet classifications for amounts related to the Company’s operating leases for which it is the lessee are as follows:


(in millions)	Balance Sheet Classification	December 28, 2024		December 30, 2023
Lessee ROU assets	Other non-current assets	$	74.4	$	59.1

Lessee current lease liabilities	Other current liabilities	21.4		18.2
Lessee non-current lease liabilities	Other non-current liabilities	59.5		45.8
Total operating lease liabilities		$	80.9	$	64.0

For the years ended December 28, 2024 and December 30, 2023, accumulated amortization for lessee ROU assets was $59.8 million and $48.9 million, respectively.

For the years ended December 28, 2024 and December 30, 2023, the weighted-average remaining lease term for the Company’s operating leases was 5.0 years and 5.6 years, respectively.

As of December 28, 2024, estimated future operating lease payments for each of the following fiscal years were as follows:


Fiscal year	Amount (in millions)

2025	$	24.1
2026	19.7
2027	14.9
2028	12.8
2029	7.2
Thereafter(1)	12.9
Total	91.6
Imputed interest	(10.7)
Present value	$	80.9

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(1) Includes optional renewal period for certain leases.

For the years ended December 28, 2024, December 30, 2023 and December 31, 2022, the Company’s operating lease costs were approximately $25.7 million, $22.7 million and $18.0 million, respectively.

During the year ended December 28, 2024, the Company recorded an adjustment of approximately $3.5 million as a result of abandoning a lease for a facility in the non-healthcare segment, which was recorded in selling, general, and administrative expense in the consolidated statements of operations.

In connection with the Company’s strategic realignment initiative, the Company’s healthcare segment exited three leased properties in an effort to reduce its facilities footprint. The Company recorded an adjustment of approximately $2.1 million to reduce the ROU asset during the three months ended December 28, 2024, which was recorded in selling, general and administrative expense in the consolidated statements of operations.