Leases

12 Months Ended

Dec. 31, 2020

LEASES

The Company leases certain facilities within the U.S., Europe and Canada from which the Company manufactures vehicles and equipment, and provides sales, service and/or equipment rentals. Some of the Company’s lease agreements contain options to renew. The Company also leases vehicles and various other equipment. The Company’s lease agreements may contain lease and non-lease components, which are accounted for separately. Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets.

In connection with acquisitions completed in recent years, the Company has entered into certain lease agreements for facilities owned by affiliates of the sellers. All lease agreements contain an annual rent that is considered to be market-based. Total rent paid under these arrangements was $1.5 million, $0.8 million and $0.3 million during the years ended December 31, 2020, 2019 and 2018, respectively. The Company’s total lease liabilities under these agreements were $4.7 million as of both December 31, 2020 and 2019.

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term.

The following table summarizes the Company’s total lease costs and supplemental cash flow information arising from operating lease transactions:


(in millions)	For the Years Ended December 31,
	2020		2019
Total operating lease costs (a)	$	13.3	$	12.6

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	9.2		8.6

(a) Includes short-term leases and variable lease costs. Total rental expense on all operating leases previously reported under ASC 840, Leases was $8.8 million in 2018.

The following table summarizes the components of lease right-of-use assets and liabilities:


(in millions)	2020		2019		Affected Line Item in Consolidated Balance Sheets
Assets
Operating lease right-of-use assets	$	21.9	$	27.6	Operating lease right-of-use assets
Finance lease right-of-use assets	0.6		0.6		Properties and equipment, net
Total lease right-of-use assets	$	22.5	$	28.2

Liabilities
Current:
Operating leases	$	8.2	$	8.2	Current operating lease liabilities
Finance leases	0.2		0.2		Current portion of long-term borrowings and finance lease obligations
Noncurrent:
Operating leases	15.5		21.6		Long-term operating lease liabilities
Finance leases	0.4		0.4		Long-term borrowings and finance lease obligations
Total lease liabilities	$	24.3	$	30.4

The weighted-average remaining lease terms and discount rates of the Company’s operating leases were as follows:


	2020		2019
Weighted-average remaining lease term of operating leases	3.3 years		3.8 years
Weighted-average discount rate of operating leases	3.5	%	3.8	%

Maturities of operating lease liabilities as of December 31, 2020 were as follows:


(in millions)
2021	$	8.9
2022	7.9
2023	4.9
2024	1.9
2025	0.5
Thereafter	0.9
Total lease payments	25.0
Less: Imputed interest	1.3
Present value of operating lease liabilities	$	23.7