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Leases
 6 Months Ended
Jul. 02, 2023
Leases [Abstract]  
Leases Leases
The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company’s lease contracts is performed after contemplating all the relevant facts and circumstances in accordance with guidance under ASC 842 - “Leases.” Most of the Company’s real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to five years. The Company’s leases do not have any significant residual value guarantees or restrictive covenants.
As the implicit rate in the Company’s leases is normally not readily determinable, the Company generally calculates its lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years.
On January 26, 2022, the Company completed the acquisition of Metal Packaging, which included the acquisition of $33,910 in operating lease liabilities and $46,687 in finance lease liabilities as of the date of acquisition.
The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at July 2, 2023 and December 31, 2022:
ClassificationBalance Sheet LocationJuly 2, 2023December 31, 2022
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$287,154 $296,781 
Finance lease assetsOther Assets100,269 103,467 
Total lease assets$387,423 $400,248 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$50,838 $52,306 
Current finance lease liabilitiesNotes payable and current portion of debt19,875 19,015 
Total current lease liabilities$70,713 $71,321 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$242,383 $250,994 
Noncurrent finance lease liabilitiesLong-term Debt, Net of Current Portion79,124 83,905 
Total noncurrent lease liabilities$321,507 $334,899 
Total lease liabilities$392,220 $406,220 

Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use assets recorded on the balance sheet were determined based upon factors considered at the commencement date of the leases, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.
The following table sets forth the components of the Company’s total lease cost for the three- and six-month periods ended July 2, 2023 and July 3, 2022:
Three Months EndedSix Months Ended
Lease CostJuly 2, 2023July 3, 2022July 2, 2023July 3, 2022
Operating lease cost(a)$13,891 $13,251 $27,302 $26,048 
Finance lease cost:
     Amortization of lease asset(a)3,448 3,278 6,719 5,989 
     Interest on lease liabilities(b)1,179 1,281 2,373 2,247 
Variable lease cost(a) (c)11,296 7,167 20,673 14,522 
Total lease cost$29,814 $24,977 $57,067 $48,806 
(a) Production-related and administrative amounts are included in cost of sales and selling, general and administrative expenses, respectively.
(b) Included in interest expense.
(c) Also includes short term lease costs, which are deemed immaterial.
The following table sets forth certain lease-related information for the six-month periods ended July 2, 2023 and July 3, 2022:
Six Months Ended
July 2, 2023July 3, 2022
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases $27,528 $26,295 
     Operating cash flows used by finance leases$2,373 $2,247 
     Financing cash flows used by finance leases$8,435 $6,019 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities$9,221 $22,046 
     Leased assets obtained in exchange for new finance lease liabilities$4,333 $7,511 
     Modification to leased assets for increase/(decrease) in operating lease liabilities$1,173 $(4,139)
     Modification to leased assets for increase in finance lease liabilities $6 $14 
     Termination reclasses to decrease operating lease assets$(2,615)$(3,230)
     Termination reclasses to decrease operating lease liabilities$(2,686)$(3,109)
     Termination reclasses to decrease finance lease assets$— $(386)
     Termination reclasses to decrease finance lease liabilities $(12)$(9)
Leases Leases
The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company’s lease contracts is performed after contemplating all the relevant facts and circumstances in accordance with guidance under ASC 842 - “Leases.” Most of the Company’s real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to five years. The Company’s leases do not have any significant residual value guarantees or restrictive covenants.
As the implicit rate in the Company’s leases is normally not readily determinable, the Company generally calculates its lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years.
On January 26, 2022, the Company completed the acquisition of Metal Packaging, which included the acquisition of $33,910 in operating lease liabilities and $46,687 in finance lease liabilities as of the date of acquisition.
The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at July 2, 2023 and December 31, 2022:
ClassificationBalance Sheet LocationJuly 2, 2023December 31, 2022
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$287,154 $296,781 
Finance lease assetsOther Assets100,269 103,467 
Total lease assets$387,423 $400,248 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$50,838 $52,306 
Current finance lease liabilitiesNotes payable and current portion of debt19,875 19,015 
Total current lease liabilities$70,713 $71,321 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$242,383 $250,994 
Noncurrent finance lease liabilitiesLong-term Debt, Net of Current Portion79,124 83,905 
Total noncurrent lease liabilities$321,507 $334,899 
Total lease liabilities$392,220 $406,220 

Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use assets recorded on the balance sheet were determined based upon factors considered at the commencement date of the leases, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.
The following table sets forth the components of the Company’s total lease cost for the three- and six-month periods ended July 2, 2023 and July 3, 2022:
Three Months EndedSix Months Ended
Lease CostJuly 2, 2023July 3, 2022July 2, 2023July 3, 2022
Operating lease cost(a)$13,891 $13,251 $27,302 $26,048 
Finance lease cost:
     Amortization of lease asset(a)3,448 3,278 6,719 5,989 
     Interest on lease liabilities(b)1,179 1,281 2,373 2,247 
Variable lease cost(a) (c)11,296 7,167 20,673 14,522 
Total lease cost$29,814 $24,977 $57,067 $48,806 
(a) Production-related and administrative amounts are included in cost of sales and selling, general and administrative expenses, respectively.
(b) Included in interest expense.
(c) Also includes short term lease costs, which are deemed immaterial.
The following table sets forth certain lease-related information for the six-month periods ended July 2, 2023 and July 3, 2022:
Six Months Ended
July 2, 2023July 3, 2022
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases $27,528 $26,295 
     Operating cash flows used by finance leases$2,373 $2,247 
     Financing cash flows used by finance leases$8,435 $6,019 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities$9,221 $22,046 
     Leased assets obtained in exchange for new finance lease liabilities$4,333 $7,511 
     Modification to leased assets for increase/(decrease) in operating lease liabilities$1,173 $(4,139)
     Modification to leased assets for increase in finance lease liabilities $6 $14 
     Termination reclasses to decrease operating lease assets$(2,615)$(3,230)
     Termination reclasses to decrease operating lease liabilities$(2,686)$(3,109)
     Termination reclasses to decrease finance lease assets$— $(386)
     Termination reclasses to decrease finance lease liabilities $(12)$(9)