Leases

12 Months Ended

Dec. 31, 2023


9.			Leases

We regularly enter into operating leases primarily for real estate, equipment, and vehicles. Operating lease arrangements are generally utilized to secure the use of assets if the terms and conditions of the lease or the nature of the asset makes the lease arrangement more favorable than a purchase. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We have elected an accounting policy to combine lease and non-lease components.

Our building leases have remaining terms up to ten years, some of which contain options to renew up to five years, and some of which contain options to terminate. Some leases contain non-lease components, which may include items such as building common area maintenance, building parking, or general service and maintenance provided for leased assets by the lessor. Our vehicle, equipment, and other leases have remaining lease terms up to five years, some of which contain options to renew or become evergreen leases, with automatic renewing one-month terms, and some of which have options to terminate.

Our right of use assets and liabilities related to operating leases as of December 31, 2023 and December 31, 2022 are as follows:


		As of December 31,
	Balance Sheet Classification	2023		2022
		(in millions)
Right-of-use assets	Other assets	$	48.5	$	45.5

Current liability	Accrued expenses	$	10.0	$	9.2
Long-term liability	Other liabilities	40.6		38.1
Total liability		$	50.6	$	47.3

Approximately 96% of the dollar value of our operating lease assets and liabilities arise from real estate leases and approximately 4% arise from equipment and vehicle leases as of December 31, 2023. As of December 31, 2022, approximately 98% of the dollar value of our operating lease assets and liabilities arise from real estate leases and approximately 2% arise from equipment and vehicle leases.

We entered into additional operating leases, including leases acquired through business acquisitions, and renewed existing leases that resulted in new right-of-use assets totaling $12.3 million, $5.7 million, and $30.0 million for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

Most of our leases do not provide an implicit rate for calculating the right of use assets and corresponding lease liabilities. Accordingly, we determine the interest rate that we would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in similar economic environments.

Our lease costs and cash flows for the years ended December 31, 2023 and December 31, 2022 were as follows:


	Year ended
	2023		2022		2021
	(in millions)
Lease costs:
Operating lease costs	$	11.9	$	11.0	$	7.7
Short-term and variable lease costs	$	0.5	$	0.2	$	0.2

Cash flows:
Operating cash flows from operating leases	$	11.7	$	10.7	$	7.5

Our weighted average remaining lease term and discount rates at December 31, 2023 and December 31, 2022 were as follows:


	December 31, 2023		December 31, 2022
Weighted average remaining lease term (in years)	6.4		6.6
Weighted average discount rate	3.8	%	3.5	%

A maturity analysis of undiscounted operating lease liabilities is shown in the table below:


	Operating Lease Payments
	(in millions)
2024	$	11.6
2025	9.8
2026	8.7
2027	7.0
2028	5.3
Thereafter	14.7
Total lease payments	57.1
Less: interest	(6.5)
Present value of lease liabilities	$	50.6

The operating lease payments listed in the table above include all current leases. The payments also include all renewal periods that we are reasonably certain to exercise.

We rarely enter into finance leases or act as a lessor. Since finance lease amounts, lessor details, and finance lease related costs are not significant to our consolidated financial position or results of operations, additional disclosures regarding finance leases are not presented.