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Leases

12 Months Ended

Jan. 01, 2023

The Company has operating and financing leases for headquarters and field offices and various equipment. Our leases generally have remaining lease terms of one year to 10 years. We determine if an arrangement is a lease at inception.

The components of lease expense are as follows (in millions of dollars):


		December Year to Date
Description	Statements of Earnings Location	2022		2021		2020
Operating:
Operating lease cost	Selling, general and administrative expenses	$	22.8	$	25.8	$	27.0
Short-term lease cost	Selling, general and administrative expenses	2.4		2.6		3.6
Variable lease cost	Selling, general and administrative expenses	5.2		5.7		6.8
Financing:
Amortization of ROU assets	Selling, general and administrative expenses	0.6		1.4		1.3
Interest on lease liabilities	Other income (expense), net	0.1		0.2		0.4
Total lease cost		$	31.1	$	35.7	$	39.1

Supplemental consolidated balance sheet information related to leases is as follows (in millions of dollars):


Description	Balance Sheet Location	As of Year-End 2022		As of Year-End 2021
ROU Assets:
Operating	Operating lease right-of-use assets	$	66.8	$	75.8
Financing	Property and equipment	5.0		6.3
Total lease assets		$	71.8	$	82.1

ROU Liabilities:
Operating - current	Operating lease liabilities, current	$	14.7	$	17.5
Financing - current	Accounts payable and accrued liabilities	1.2		1.9
Operating - noncurrent	Operating lease liabilities, noncurrent	55.0		61.4
Financing - noncurrent	Other long-term liabilities	—		1.2
Total lease liabilities		$	70.9	$	82.0

Weighted average remaining lease terms and discount rates are as follows:


	December Year to Date
	2022		2021
Weighted average remaining lease term (years):
Operating leases	7.9		8.1
Financing leases	1.3		2.1
Weighted average discount rate:
Operating leases	5.1	%	4.9	%
Financing leases	5.4	%	5.3	%

Other information related to leases is as follows (in millions of dollars):


	December Year to Date
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	22.4	$	26.1	$	25.4
Financing cash flows from financing leases	1.4		1.5		2.0

ROU assets obtained in exchange for new lease obligations:
Operating leases	$	10.7	$	14.9	$	43.3
Financing leases	—		—		3.1

Maturities of lease liabilities as of year-end 2022 are as follows (in millions of dollars):


	Operating Leases		Financing Leases
2023	$	17.8	$	1.3
2024	13.2		—
2025	10.1		—
2026	7.7		—
2027	5.5		—
Thereafter	30.3		—
Total future lease payments	84.6		1.3
Less: Imputed interest	15.0		0.1
Total	$	69.6	$	1.2

During the first quarter of 2020, the Company sold three of four headquarters properties and entered into a leaseback agreement, which is accounted for as an operating lease (see Sale of Assets footnote). As of first quarter-end 2020, we recognized $37.6 million of ROU assets within operating lease right-of-use assets, $1.2 million of current lease liabilities within operating lease liabilities, current and $36.1 million of noncurrent lease liabilities within operating lease liabilities, noncurrent in the consolidated balance sheet, with a discount rate of 4.8% over a 15-year lease term related to this lease.

Leases

The components of lease expense are as follows (in millions of dollars):


		December Year to Date
Description	Statements of Earnings Location	2022		2021		2020
Operating:
Operating lease cost	Selling, general and administrative expenses	$	22.8	$	25.8	$	27.0
Short-term lease cost	Selling, general and administrative expenses	2.4		2.6		3.6
Variable lease cost	Selling, general and administrative expenses	5.2		5.7		6.8
Financing:
Amortization of ROU assets	Selling, general and administrative expenses	0.6		1.4		1.3
Interest on lease liabilities	Other income (expense), net	0.1		0.2		0.4
Total lease cost		$	31.1	$	35.7	$	39.1

Supplemental consolidated balance sheet information related to leases is as follows (in millions of dollars):


Description	Balance Sheet Location	As of Year-End 2022		As of Year-End 2021
ROU Assets:
Operating	Operating lease right-of-use assets	$	66.8	$	75.8
Financing	Property and equipment	5.0		6.3
Total lease assets		$	71.8	$	82.1

ROU Liabilities:
Operating - current	Operating lease liabilities, current	$	14.7	$	17.5
Financing - current	Accounts payable and accrued liabilities	1.2		1.9
Operating - noncurrent	Operating lease liabilities, noncurrent	55.0		61.4
Financing - noncurrent	Other long-term liabilities	—		1.2
Total lease liabilities		$	70.9	$	82.0

Weighted average remaining lease terms and discount rates are as follows:


	December Year to Date
	2022		2021
Weighted average remaining lease term (years):
Operating leases	7.9		8.1
Financing leases	1.3		2.1
Weighted average discount rate:
Operating leases	5.1	%	4.9	%
Financing leases	5.4	%	5.3	%

Other information related to leases is as follows (in millions of dollars):


	December Year to Date
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	22.4	$	26.1	$	25.4
Financing cash flows from financing leases	1.4		1.5		2.0

ROU assets obtained in exchange for new lease obligations:
Operating leases	$	10.7	$	14.9	$	43.3
Financing leases	—		—		3.1

Maturities of lease liabilities as of year-end 2022 are as follows (in millions of dollars):


	Operating Leases		Financing Leases
2023	$	17.8	$	1.3
2024	13.2		—
2025	10.1		—
2026	7.7		—
2027	5.5		—
Thereafter	30.3		—
Total future lease payments	84.6		1.3
Less: Imputed interest	15.0		0.1
Total	$	69.6	$	1.2