Leases

12 Months Ended

Dec. 31, 2022

5. Leases

The Company leases its corporate headquarters, various other facilities for distribution, manufacturing, and offices, as well as vehicles, forklifts and other equipment. The Company determines if an arrangement is a lease at inception. Leases are included in "Right of use asset, leases" ("ROU Assets"), and the current portion of the lease liability is included in "Lease liabilities" and the non-current portion is included in "Long-term lease liabilities" in the Consolidated Balance Sheet. The Company currently has an immaterial amount of financing leases and leases with terms of more than one month and less than 12 months. ROU Assets and lease liabilities are recognized based on the present value of lease payments over the lease term. Because most of the Company’s leases do not provide an implicit rate of return, the Company uses its incremental collateralized borrowing rate, on a regional basis, in determining the present value of lease payments. The incremental borrowing rate is dependent upon duration of the lease and has been segmented into three groups of time. All leases within the same region and the same group of time share the same incremental borrowing rate. The Company has lease agreements with lease and non-lease components, which are combined for accounting purposes for all classes of assets except information technology equipment.

The components of lease expense for the years ended December 31, 2022, 2021, and 2020, were as follows:


(in millions)		2022		2021		2020
Operating lease cost	$	29.5	$	29.7	$	28.3
Sublease income		(2.4)		(1.9)		(1.2)
Total lease cost	$	27.1	$	27.8	$	27.1

Other information related to leases for the years ended December 31, 2022, and 2021 was as follows:


(in millions, except lease term and discount rate)		2022				2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$		30.5		$		31.1
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$		11.4		$		41.1

Weighted average remaining lease term:
Operating leases		6.3 years

Weighted average discount rate:
Operating leases			4.6	%

Future minimum lease payments, net of sub-lease income, for all non-cancelable leases as of December 31, 2022 were as follows:


(in millions)		Operating Leases
2023	$		25.4
2024			19.6
2025			16.3
2026			13.0
2027			8.8
Thereafter			29.1
Total minimum lease payments			112.2
Less imputed interest			15.8
Future minimum payments for leases, net of sublease rental income and imputed interest	$		96.4