Leases

9 Months Ended

Oct. 01, 2022

The Company has operating leases for production, office and warehouse facilities, manufacturing and office equipment and vehicles. Operating lease assets and obligations included in the accompanying condensed consolidated balance sheets are shown below (in millions):


	October 1, 2022		December 31, 2021
Right-of-use assets under operating leases:
Other long-term assets	$	652.3	$	627.9
Lease obligations under operating leases:
Accrued liabilities	$	130.4	$	125.6
Other long-term liabilities	555.8		523.6
	$	686.2	$	649.2

Maturities of lease obligations as of October 1, 2022, are shown below (in millions):


	October 1, 2022
2022 (1)	$	41.1
2023	142.0
2024	123.0
2025	104.7
2026	92.5
Thereafter	270.4
Total undiscounted cash flows	773.7
Less: Imputed interest	(87.5)
Lease obligations under operating leases	$	686.2

(1) For the remaining three months

Cash flow information related to operating leases is shown below (in millions):


	Nine Months Ended
	October 1, 2022		October 2, 2021
Non-cash activity:
Right-of-use assets obtained in exchange for operating lease obligations	$	166.6	$	200.0
Operating cash flows:
Cash paid related to operating lease obligations	$	121.5	$	121.7

In addition to the right-of-use assets obtained in exchange for operating lease obligations shown above, in the nine months ended October 1, 2022, the Company acquired $34.1 million of right-of-use assets and related lease liabilities in connection with its acquisition of Kongsberg ICS. See Note 3, "Acquisition of Kongsberg ICS."

Lease expense included in the accompanying condensed consolidated statements of comprehensive income (loss) is shown below (in millions):


	Three Months Ended				Nine Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Operating lease expense	$	40.5	$	40.7	$	122.8	$	119.6
Short-term lease expense	5.7		5.0		16.5		13.6
Variable lease expense	2.1		1.7		6.2		6.1
Total lease expense	$	48.3	$	47.4	$	145.5	$	139.3

In the nine months ended October 1, 2022, the Company recognized right-of-use asset impairment charges of $6.4 million in conjunction with its restructuring actions (Note 4, "Restructuring"). In the three and nine months ended October 1, 2022, the Company recognized additional right-of-use asset impairment charges of $7.0 million related to its Russian operations (Note 2, "Current Operating Environment"). The impairment charges are included in cost of sales in the accompanying condensed consolidated statements of comprehensive income (loss) for the three and nine months ended October 1, 2022, as applicable.

The weighted average lease term and discount rate for operating leases are shown below:


	October 1, 2022
Weighted average remaining lease term	Seven years
Weighted average discount rate	3.2	%

The Company is party to a finance lease agreement, which is not material to the accompanying condensed consolidated financial statements (Note 9, "Debt").

For further information related to the Company's leases, see Note 8, "Leases," to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.