RENTALS AND LEASES

12 Months Ended

Dec. 31, 2024

RENTALS AND LEASES

RENTALS AND LEASES

13. RENTALS AND LEASES

Lessee

The Company leases sales and administrative office facilities, distribution centers, research and manufacturing facilities, as well as vehicles and other equipment under operating leases. Certain of the Company’s lease arrangements are finance leases, which are immaterial individually and in the aggregate.

The Company’s operating lease cost was as follows:

(millions)	2024		2023		2022
Operating lease cost*		$218.0		$215.4		$196.9

*Includes immaterial short-term and variable lease costs

Future maturity of operating lease liabilities as of December 31, 2024 were as follows:

(millions)
2025	$159
2026	148
2027	120
2028	80
2029	50
Thereafter	252
Total lease payments	809
Less: imputed interest	91
Present value of lease liabilities	$718

The Company’s operating leases term and discount rate were as follows:

	December 31			December 31			December 31
	2024			2023			2022
Weighted-average remaining lease terms (years)		7.01			6.44			6.71
Weighted-average discount rate		4.76	%		4.02	%		2.98	%

The Company’s other lease information was as follows:

	December 31		December 31		December 31
(millions)	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$207.7		$170.6		$157.3
Leased assets obtained in exchange for new operating lease liabilities		336.0		251.5		202.7

Lessor

The Company leases warewashing and water treatment equipment to customers under operating leases.

Gross assets under operating leases recorded in Property, plant and equipment, net is $1,481.7 million and $1,397.5 million, and related accumulated depreciation is $932.9 million and $878.9 million, as of December 31, 2024 and 2023, respectively.

The Company’s operating lease revenue was as follows:

(millions)	2024		2023		2022
Operating lease revenue*		$534.9		$511.8		$466.7

*Includes immaterial variable lease revenue

Future revenue from operating leases for existing contracts as of December 31, 2024 were as follows:

(millions)
2025	$438
2026	315
2027	252
2028	174
2029	90
Thereafter	51
Total lease revenue	$1,320

The Company mitigates the risk of residual value subsequent to the lease term by redeploying assets. As such, the Company expects to receive revenue from the operating lease assets through the remaining useful life and therefore subsequent to the initial contract termination date.