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Leases
 3 Months Ended
Mar. 31, 2024
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.
The Company completed the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill on September 8, 2023. The acquisitions included operating lease liabilities of $34,604. For additional information about these acquisitions, see Note 3.
The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at March 31, 2024 and December 31, 2023:
ClassificationBalance Sheet LocationMarch 31, 2024December 31, 2023
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$332,587 $314,944 
Finance lease assetsOther Assets92,684 94,026 
Total lease assets$425,271 $408,970 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$55,269 $54,803 
Current finance lease liabilitiesNotes payable and current portion of debt23,259 18,791 
Total current lease liabilities$78,528 $73,594 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$282,877 $265,454 
Noncurrent finance lease liabilitiesLong-term Debt, Net of Current Portion63,955 70,203 
Total noncurrent lease liabilities$346,832 $335,657 
Total lease liabilities$425,360 $409,251 
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-month periods ended March 31, 2024 and April 2, 2023:
Three Months Ended
Lease CostMarch 31, 2024April 2, 2023
Operating lease cost(a)$16,192 $13,411 
Finance lease cost:
     Amortization of lease asset(a)3,440 3,270 
     Interest on lease liabilities(b)1,056 1,194 
Variable lease cost(a) (c)10,100 9,378 
Total lease cost$30,788 $27,253 
(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 three-month periods ended March 31, 2024 and April 2, 2023:
Three Months Ended
March 31, 2024April 2, 2023
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases $14,355 $13,561 
     Operating cash flows used by finance leases$1,056 $1,194 
     Financing cash flows used by finance leases$3,946 $4,581 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities$26,818 $6,513 
     Leased assets obtained in exchange for new finance lease liabilities$2,292 $2,805 
     Modification to leased assets for increase in operating lease liabilities$4,171 $3,957 
     Termination reclasses to decrease operating lease assets$(1,202)$(2,029)
     Termination reclasses to decrease operating lease liabilities$(1,432)$(2,090)
     Termination reclasses to decrease finance lease assets$— $(962)
     Termination reclasses to decrease finance lease liabilities $— $(12)
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.
The Company completed the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill on September 8, 2023. The acquisitions included operating lease liabilities of $34,604. For additional information about these acquisitions, see Note 3.
The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at March 31, 2024 and December 31, 2023:
ClassificationBalance Sheet LocationMarch 31, 2024December 31, 2023
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$332,587 $314,944 
Finance lease assetsOther Assets92,684 94,026 
Total lease assets$425,271 $408,970 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$55,269 $54,803 
Current finance lease liabilitiesNotes payable and current portion of debt23,259 18,791 
Total current lease liabilities$78,528 $73,594 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$282,877 $265,454 
Noncurrent finance lease liabilitiesLong-term Debt, Net of Current Portion63,955 70,203 
Total noncurrent lease liabilities$346,832 $335,657 
Total lease liabilities$425,360 $409,251 
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-month periods ended March 31, 2024 and April 2, 2023:
Three Months Ended
Lease CostMarch 31, 2024April 2, 2023
Operating lease cost(a)$16,192 $13,411 
Finance lease cost:
     Amortization of lease asset(a)3,440 3,270 
     Interest on lease liabilities(b)1,056 1,194 
Variable lease cost(a) (c)10,100 9,378 
Total lease cost$30,788 $27,253 
(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 three-month periods ended March 31, 2024 and April 2, 2023:
Three Months Ended
March 31, 2024April 2, 2023
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases $14,355 $13,561 
     Operating cash flows used by finance leases$1,056 $1,194 
     Financing cash flows used by finance leases$3,946 $4,581 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities$26,818 $6,513 
     Leased assets obtained in exchange for new finance lease liabilities$2,292 $2,805 
     Modification to leased assets for increase in operating lease liabilities$4,171 $3,957 
     Termination reclasses to decrease operating lease assets$(1,202)$(2,029)
     Termination reclasses to decrease operating lease liabilities$(1,432)$(2,090)
     Termination reclasses to decrease finance lease assets$— $(962)
     Termination reclasses to decrease finance lease liabilities $— $(12)