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Note 10 - Leases

12 Months Ended

Dec. 31, 2023

Lessee, Operating Leases and Finance Leases [Text Block]

10.

Leases

The Company leases certain manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery and computer equipment globally under both finance and operating leases. The Company’s leases have remaining lease terms of up to 18 years, of which certain leases, primarily within the buildings and improvements asset class, include options to extend for up to 10 additional years. Further, the Company leases certain buildings from a related party, which the Company has determined to be arm's length transactions.

The Company determines if an arrangement is or contains a lease at contract inception. The Company recognizes a right of use (ROU) asset and lease liability at the lease commencement date based on the present value of the lease payments over the lease term. As the Company’s leases generally do not provide an implicit interest rate, the incremental borrowing rate is used to determine the present value of lease payments. The incremental borrowing rate is a collateralized rate determined based on the lease term, the Company’s credit rating, and other market information available at the commencement date. The ROU asset also includes any lease payments made prior to the commencement date and is reduced by any lease incentives. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term, while lease expense for finance leases is recognized as depreciation and interest expense using the effective interest method. The Company’s variable lease expense generally consists of property tax and insurance payments that are variable in nature, however, these amounts are immaterial to the consolidated financial statements and are therefore not separately reported.

The Company has lease agreements with both lease and non-lease components, which it elected to account for as a single lease component. However, the Company did not elect to apply the recognition exception for short-term leases. The Company is applying these elections to all asset classes.

The Company is a lessor of certain of its C&I mobile products as part of a rental fleet, as well as two of its buildings that it leases to third parties. The lease income related to these arrangements is not material to the consolidated financial statements.

The Company records its operating lease cost and amortization of finance lease ROU assets within cost of goods sold or operating expenses in the consolidated statements of comprehensive income depending on the cost center of the underlying asset. The Company records its finance lease interest cost within interest expense in the consolidated statements of comprehensive income.

The components of total lease cost consist of the following:

	Year Ended December 31,
	2023		2022		2021

Operating lease cost	$	38,980	$	36,292	$	22,432
Finance lease cost:
Amortization of ROU assets		4,142		3,298		3,187
Interest on lease liabilities		2,540		1,945		2,021
Total lease cost	$	45,662	$	41,535	$	27,640

Supplemental balance sheet information related to the Company’s leases is as follows:

	December 31,
	2023			2022
Operating Leases
Operating lease ROU assets (1)	$	70,937		$	100,083

Operating lease liabilities - current (2)	$	29,388		$	30,330
Operating lease liabilities - noncurrent (3)		44,760			73,547
Total operating lease liabilities	$	74,148		$	103,877

Finance Leases
Finance lease ROU assets, gross	$	82,744		$	35,470
Accumulated depreciation - finance lease ROU assets		(14,665	)		(10,751	)
Finance lease ROU assets, net (4)	$	68,079		$	24,719

Finance lease liabilities - current (5)	$	3,785		$	2,650
Finance lease liabilities - noncurrent (6)		67,523			24,770
Total finance lease liabilities	$	71,308		$	27,420

(1)

Recorded in the operating lease and other assets line within the consolidated balance sheets

(2)

Recorded in the other accrued liabilities line within the consolidated balance sheets

(3)

Recorded in the operating lease and other long-term liabilities line within the consolidated balance sheets

(4)

Recorded in the property and equipment, net line within the consolidated balance sheets

(5)

Recorded in the current portion of long-term borrowings and finance lease obligations line within the consolidated balance sheets

(6)

Recorded in the long-term borrowings and finance lease obligations line within the consolidated balance sheets

Supplemental cash flow information related to the Company’s leases is as follows:

	Year Ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows - operating leases	$	39,073	$	36,020	$	21,250
Operating cash flows - finance leases		2,409		1,919		1,972
Financing cash flows - finance leases		3,618		4,931		4,679

ROU assets obtained in exchange for lease liabilities
Operating leases		17,830		28,766		55,057
Finance leases		47,715		2,874		4,026

Weighted average remaining lease term and discount rate information related to the Company’s leases as of December 31, 2023 and 2022 is as follows:

	December 31,
	2023			2022
Weighted average remaining lease term (in years)
Operating Leases		4.55			4.65
Finance Leases		5.34			11.26

Weighted average discount rate
Operating Leases		4.63	%		4.82	%
Finance Leases		6.64	%		7.58	%

The maturities of the Company’s lease liabilities as of December 31, 2023 are as follows:

	*Finance Leases*			*Operating Leases*
2024	$	8,043		$	32,145
2025 (1)		48,297			18,887
2026		4,243			8,278
2027		3,896			7,667
2028		3,472			6,157
After 2028		22,616			12,014
Total minimum lease payments		90,567			85,148
Interest component		(19,259	)		(11,000	)
Present value of minimum lease payments	$	71,308		$	74,148

(1)	Includes a payment for a purchase option reasonably certain to be exercised in 2025.