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Leases | 12 Months Ended
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Dec. 31, 2023
Leases [Abstract] |
Leases | 4. Leases Generally, the Company leases certain office space, warehouses, distribution centers, manufacturing centers, and equipment. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. The Company also rents or subleases certain real estate to third parties. Sublease income was not material for the years ended December 31, 2023, 2022, and 2021. In general, the Company’s leases include one or more options to renew, with renewal terms that generally vary from one to ten years. The exercise of lease renewal options is generally at the Company’s sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of twelve months or less are not recorded on the Company’s consolidated balance sheets, and the Company does not separate nonlease components from lease components. The Company’s lease assets and liabilities recognized within its consolidated balance sheets were as follows:
|  | December 31, |  |  |
|  | 2023 |  |  | 2022 |  |  | Balance Sheet Location
|  | (in millions) |  |  |
ASSETS: |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  | $ | 185.8 |  |  | $ | 207.1 |  |  | Operating lease right-of-use assets
Finance lease right-of-use assets |  |  | 1.6 |  |  |  | 1.3 |  |  | Property, plant, and equipment, at cost, net of accumulated depreciation and amortization(1)
Total lease assets |  | $ | 187.4 |  |  | $ | 208.4 |  |  |
LIABILITIES: |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |
Operating lease liabilities |  | $ | 39.5 |  |  | $ | 37.4 |  |  | Other current liabilities
Finance lease liabilities |  |  | 0.8 |  |  |  | 0.6 |  |  | Current portion of long-term debt
Non-current: |  |  |  |  |  |  |  |
Operating lease liabilities |  |  | 167.6 |  |  |  | 192.4 |  |  | Non-current operating lease liabilities
Finance lease liabilities |  |  | 0.9 |  |  |  | 0.7 |  |  | Long-term debt, net of current portion
Total lease liabilities |  | $ | 208.8 |  |  | $ | 231.1 |  |  |
(1) Finance lease assets are recorded net of accumulated amortization of $2.9 million and $2.3 million as of December 31, 2023 and 2022, respectively. Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost are as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (in millions) |
Operating lease cost(1)(2) |  | $ | 61.3 |  |  | $ | 65.9 |  |  | $ | 67.1 |
Finance lease cost |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  | 0.6 |  |  |  | 0.4 |  |  |  | 0.3 |
Interest on lease liabilities |  |  | 0.1 |  |  |  | — |  |  |  | — |
Net lease cost |  | $ | 62.0 |  |  | $ | 66.3 |  |  | $ | 67.4 |
(1) Includes short-term leases and variable lease costs, which were $6.2 million and $3.2 million, respectively, for the year ended December 31, 2023, $7.0 million and $3.0 million, respectively, for the year ended December 31, 2022, and $9.5 million and $1.9 million, respectively, for the year ended December 31, 2021. Variable lease costs, which include items such as real estate taxes, common area maintenance, and changes based on an index or rate, are not included in the calculation of the right-of-use assets and are recognized as incurred. (2) Amount includes $56.7 million, $61.4 million, and $62.7 million recorded to selling, general, and administrative expenses within the Company’s consolidated statements of income for the years ended December 31, 2023, 2022, and 2021, respectively, and $4.6 million, $4.5 million, and $4.4 million capitalized as part of the cost of another asset, which includes inventories, for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, annual scheduled lease payments were as follows:
|  | Operating Leases(1) |  |  | Finance Leases |
|  | (in millions) |
2024 |  | $ | 48.8 |  |  | $ | 0.9 |
2025 |  |  | 41.2 |  |  |  | 0.5 |
2026 |  |  | 31.2 |  |  |  | 0.3 |
2027 |  |  | 27.1 |  |  |  | 0.1 |
2028 |  |  | 22.0 |  |  |  | — |
Thereafter |  |  | 79.6 |  |  |  | — |
Total lease payments |  |  | 249.9 |  |  |  | 1.8 |
Less: imputed interest |  |  | 42.8 |  |  |  | 0.1 |
Present value of lease liabilities |  | $ | 207.1 |  |  | $ | 1.7 |
(1) Operating lease payments exclude $1.7 million of legally binding minimum lease payments for leases signed but not yet commenced. In general, for the majority of the Company’s material leases, the renewal options are not included in the calculation of its right-of-use assets and lease liabilities, as the Company does not believe that it is reasonably certain that these renewal options will be exercised. Periodically, the Company assesses its leases to determine whether it is reasonably certain that these renewal options will be exercised. The majority of the Company’s leases are for real estate and in general, the individual lease contracts do not provide information about the rate implicit in the lease. Because the Company is not able to determine the rate implicit in its leases, it instead generally uses its incremental borrowing rate to determine the present value of lease liabilities. In determining its incremental borrowing rate, the Company reviewed the terms of its leases, its senior secured credit facility, swap rates, and other factors. The weighted-average remaining lease term and weighted-average discount rate used to calculate the present value of lease liabilities are as follows:
|  | December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Weighted-average remaining lease term: |  |  |  |  |  |  |  |  |
Operating leases |  | 6.7 years |  |  | 7.3 years |  |  | 7.8 years |
Finance leases |  | 2.5 years |  |  | 2.5 years |  |  | 3.0 years |
Weighted-average discount rate: |  |  |  |  |  |  |  |  |
Operating leases |  |  | 5.2 | % |  |  | 4.9 | % |  |  | 4.8 | %
Finance leases |  |  | 5.5 | % |  |  | 4.4 | % |  |  | 3.6 | %
Supplemental cash flow information related to leases is as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (in millions) |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |
Operating cash flows for operating leases |  | $ | 52.0 |  |  | $ | 56.6 |  |  | $ | 50.2 |
Operating cash flows for finance leases |  |  | 0.1 |  |  |  | — |  |  |  | — |
Financing cash flows for finance leases |  |  | 0.6 |  |  |  | 0.4 |  |  |  | 0.3 |
Right-of-use assets obtained in exchange for new lease liabilities: |  |  |  |  |  |  |  |  |
Operating leases |  |  | 19.5 |  |  |  | 36.3 |  |  |  | 46.0 |
Finance leases |  |  | 1.1 |  |  |  | 0.7 |  |  |  | 1.0 |

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