Quarterly report pursuant to Section 13 or 15(d)

Leased Assets

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Leased Assets
 3 Months Ended
Mar. 31, 2024
Leases [Abstract]  
Leased Assets Leased Assets
The Company primarily leases certain logistics, office, and manufacturing facilities, as well as vehicles, copiers and other equipment. These operating leases generally have remaining lease terms between 1 month and 30 years, and some include options to extend (generally 1 to 10 years). The exercise of lease renewal options is at the Company’s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis, and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.

The table below presents the locations of the operating lease assets and liabilities in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively (in millions):

Balance Sheet Line Item March 31, 2024 December 31, 2023
Operating lease assets Operating lease right-of-use assets $ 31.1  $ 32.8 
Financing lease assets Other assets $ 0.1  $ 0.1 
Operating lease liabilities:
Current operating lease liabilities Current operating lease liabilities $ 6.6  $ 6.8 
Non-current operating lease liabilities Operating lease liability, non-current 26.5  28.1 
Total operating lease liabilities: $ 33.1  $ 34.9 
Financing lease liabilities:
Current financing lease liabilities Accrued expenses and other current liabilities $ 0.1  $ 0.1 
Non-current financing lease liabilities Deferred income taxes and other long-term liabilities 0.1  0.1 
Total financing lease liabilities: $ 0.2  $ 0.2 
The depreciable lives are limited by the expected lease term for operating lease assets and by shorter of either the expected lease term or economic useful life for financing lease assets.

The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring the lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. The Company used incremental borrowing rates as of July 1, 2021 for leases that commenced prior to that date.

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, 2024 and December 31, 2023, respectively, are:
March 31, 2024 December 31, 2023
Operating leases
Weighted average remaining lease term (in years) 6.5 6.6
Weighted average discount rate 4.32  % 4.32  %

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total lease liabilities recognized in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 (in millions):

Fiscal year ending December 31:
2024 $ 5.9 
2025 6.9 
2026 5.9 
2027 5.1 
2028 3.9 
       2029 and thereafter 10.2 
Total undiscounted future minimum lease payments 37.9 
Less: Imputed interest (4.8)
Total operating lease liabilities $ 33.1 

For the three months ended March 31, 2024 and three months ended March 31, 2023, operating lease costs (as defined under ASU 2016-02) were $2.7 million. Operating lease costs are included within costs of goods sold, selling, general and administrative, and research and development expenses on the consolidated statements of income and comprehensive income. Short-term lease costs, variable lease costs and sublease income were not material for the periods presented.
Cash paid for amounts included in the measurement of operating lease liabilities was $2.1 million and $2.6 million for the three months ended March 31, 2024 and March 31, 2023, respectively, and these amounts are included in operating activities in the unaudited Condensed Consolidated Statements of Cash Flows. Operating lease assets obtained in exchange for new operating lease liabilities were zero and $0.2 million for the three months ended March 31, 2024 and March 31, 2023, respectively
Leased Assets Leased Assets
The Company primarily leases certain logistics, office, and manufacturing facilities, as well as vehicles, copiers and other equipment. These operating leases generally have remaining lease terms between 1 month and 30 years, and some include options to extend (generally 1 to 10 years). The exercise of lease renewal options is at the Company’s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis, and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants.

The table below presents the locations of the operating lease assets and liabilities in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively (in millions):

Balance Sheet Line Item March 31, 2024 December 31, 2023
Operating lease assets Operating lease right-of-use assets $ 31.1  $ 32.8 
Financing lease assets Other assets $ 0.1  $ 0.1 
Operating lease liabilities:
Current operating lease liabilities Current operating lease liabilities $ 6.6  $ 6.8 
Non-current operating lease liabilities Operating lease liability, non-current 26.5  28.1 
Total operating lease liabilities: $ 33.1  $ 34.9 
Financing lease liabilities:
Current financing lease liabilities Accrued expenses and other current liabilities $ 0.1  $ 0.1 
Non-current financing lease liabilities Deferred income taxes and other long-term liabilities 0.1  0.1 
Total financing lease liabilities: $ 0.2  $ 0.2 
The depreciable lives are limited by the expected lease term for operating lease assets and by shorter of either the expected lease term or economic useful life for financing lease assets.

The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring the lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. The Company used incremental borrowing rates as of July 1, 2021 for leases that commenced prior to that date.

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, 2024 and December 31, 2023, respectively, are:
March 31, 2024 December 31, 2023
Operating leases
Weighted average remaining lease term (in years) 6.5 6.6
Weighted average discount rate 4.32  % 4.32  %

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total lease liabilities recognized in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 (in millions):

Fiscal year ending December 31:
2024 $ 5.9 
2025 6.9 
2026 5.9 
2027 5.1 
2028 3.9 
       2029 and thereafter 10.2 
Total undiscounted future minimum lease payments 37.9 
Less: Imputed interest (4.8)
Total operating lease liabilities $ 33.1 

For the three months ended March 31, 2024 and three months ended March 31, 2023, operating lease costs (as defined under ASU 2016-02) were $2.7 million. Operating lease costs are included within costs of goods sold, selling, general and administrative, and research and development expenses on the consolidated statements of income and comprehensive income. Short-term lease costs, variable lease costs and sublease income were not material for the periods presented.

Cash paid for amounts included in the measurement of operating lease liabilities was $2.1 million and $2.6 million for the three months ended March 31, 2024 and March 31, 2023, respectively, and these amounts are included in operating activities in the unaudited Condensed Consolidated Statements of Cash Flows. Operating lease assets obtained in exchange for new operating lease liabilities were zero and $0.2 million for the three months ended March 31, 2024 and March 31, 2023, respectively.