ACCO BRANDS Corp Leases Disclosure
4. 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, 2023, 2022, and 2021, were as follows:
(in millions) |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|||
Operating lease cost |
|
$ |
28.6 |
|
|
$ |
29.5 |
|
|
$ |
29.7 |
|
Sublease income |
|
|
(2.5 |
) |
|
|
(2.4 |
) |
|
|
(1.9 |
) |
Total lease cost |
|
$ |
26.1 |
|
|
$ |
27.1 |
|
|
$ |
27.8 |
|
Other information related to leases for the years ended December 31, 2023, and 2022 was as follows:
(in millions, except lease term and discount rate) |
|
2023 |
|
|
2022 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating cash flows from operating leases |
|
$ |
29.8 |
|
|
$ |
30.5 |
|
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
||
Operating leases |
|
$ |
23.2 |
|
|
$ |
11.4 |
|
|
|
|
|
|
|
|
||
Weighted average remaining lease term: |
|
|
|
|
|
|
||
Operating leases |
|
6 years |
|
|
|
|
||
|
|
|
|
|
|
|
||
Weighted average discount rate: |
|
|
|
|
|
|
||
Operating leases |
|
|
5.2 |
% |
|
|
|
|
Future minimum lease payments, net of sub-lease income, for all non-cancelable leases as of December 31, 2023 were as follows:
(in millions) |
|
Operating |
|
|
2024 |
|
$ |
26.6 |
|
2025 |
|
|
24.4 |
|
2026 |
|
|
19.8 |
|
2027 |
|
|
14.5 |
|
2028 |
|
|
12.3 |
|
Thereafter |
|
|
25.5 |
|
Total minimum lease payments |
|
|
123.1 |
|
Less imputed interest |
|
|
25.8 |
|
Future minimum payments for leases, net of sublease rental income and imputed interest |
|
$ |
97.3 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Feb 23, 2024 | Showing above |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 27, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.