Leases

9 Months Ended

Sep. 30, 2022

NOTE 11 — LEASES

The Company adopted Topic 842 and all related amendments effective for the annual reporting period ended December 31, 2021, with an effective date of January 1, 2021, using the modified retrospective method. Comparative 2021 results have been recast to reflect the adoption of Topic 842.

The Company primarily has operating and finance leases for branch facilities, corporate office, and certain equipment which encompass both related party and third-party leases. The Company’s leases have remaining lease terms that range from less than one year to leases that mature through March 2037 and contain provisions to renew the leases for additional terms of five to twenty years.

The Company leases and subleases certain lift trucks to customers under short and long-term operating lease agreements. The sublease income is included in "Rental revenue" on our Condensed Consolidated Statements of Income (Loss). Sublease income below includes subleases that are not included in "Rental revenue" due to being outside our normal business operations. The costs of the head lease for these subleases are included in operating lease expense below.

At September 30, 2022 and December 31, 2021, assets recorded under finance leases, net of accumulated depreciation were $16.6 million and $11.3 million, respectively. The assets are depreciated over the lower of their related lease terms or their estimated useful lives.

The components of lease expense (including related party leases) were as follows (amounts in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Operating lease expense	$	6.2	$	5.8	$	18.5		$	17.5
Short-term lease expense		1.3		1.0		3.0			3.4
Low-value lease expense		0.1		0.1		0.2			0.5
Variable lease expense		2.0		0.2		4.7			0.3
Finance lease expense:
Amortization of right-of-use assets		1.1		0.6		2.8			1.3
Interest on lease liabilities		0.3		0.1		0.7			0.3
Sublease income		—		—		(0.1	)		—
Total lease expense	$	11.0	$	7.8	$	29.8		$	23.3

Other information related to leases is presented in the table below (amounts in millions unless otherwise noted):


Supplemental Cash Flows Information	Nine Months Ended September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	17.9	$	16.7
Operating cash flows for finance leases		0.7		0.3
Financing cash flows for finance leases		2.5		1.2
Non-cash right-of-use assets obtained in exchange for lease obligations:
Operating leases		14.5		7.2
Finance leases		7.8		10.5

Weighted Average Remaining Lease Term (in years):

Operating leases		6.9		6.8
Finance leases		4.5		5.0

Weighted Average Discount Rate (in %):
Operating leases		7.0		6.6
Finance leases		6.6		5.9

Minimum future lease payments under non-cancellable operating and finance leases described above as of September 30, 2022 were as follows (amounts in millions):


Years	Operating Leases			Finance Leases
Remainder of 2022	$	6.2		$	1.2
2023		24.0			4.5
2024		22.5			4.4
2025		19.2			4.1
2026		16.1			3.3
Thereafter		49.2			2.0
Total future minimum lease payments	$	137.2		$	19.5
Less: imputed interest		(30.0	)		(2.5	)
Total	$	107.2		$	17.0

Amounts recognized in the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	September 30, 2022			December 31, 2021
Current portion of long-term debt	$	3.6		$	2.6
Current operating lease liabilities		17.8			16.2
Finance lease obligations, net of current portion		13.4			9.0
Long-term operating lease liabilities, net of current portion		89.4			88.4
	$	124.2		$	116.2

As of September 30, 2022, the Company did not have leases that were executed but had not yet commenced.

See Note 12, Contingencies, for more information on certain contracts where the Company guarantees the performance of the third-party lessee.