Leases Leases (Notes)

9 Months Ended

Dec. 31, 2022

15. Leases

The Company’s lease arrangements generally include real estate (manufacturing facilities, sales offices, distribution centers, warehouses), vehicles, and equipment. Leases with a term greater than one year are recognized on the Consolidated Balance Sheet; the Company has elected not to recognize leases with terms of one year or less on the Consolidated Balance Sheet. Lease obligations and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The Company recognizes lease expense on a straight-line basis over the lease term.

The Company's leases have lease terms ranging from 1 to 23 years, some of which include options to extend or terminate the lease. The exercise of lease renew all options is at the Company’s sole discretion. When deemed reasonably certain of exercise, the renewal options are included in the determination of the lease term. The Company’s lease agreements do not contain material residual value guarantees or any material restrictive covenants.

The following table illustrates the lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheet (in thousands):


	December 31, 2022		March 31, 2022
Operating leases:
Other assets	$	32,622	$	30,809

Accrued liabilities	6,964		7,965
Other non current liabilities	26,574		23,711
Total operating liabilities	$	33,538	$	31,676

Finance lease:
Net property, plant, and equipment	$	12,847	$	13,525

Current portion of long-term debt and finance lease obligation	590		544
Term loan and finance lease obligations	13,093		13,540
Total finance liabilities	$	13,683	$	14,084

Operating lease expense of $2,323,000 and $2,332,000 and $6,810,000 and $6,940,000 for the three and nine months ended December 31, 2022 and December 31, 2021, respectively, is included in income from operations on the Condensed Consolidated Statements of Operations. Short-term lease expense, sublease income, and variable lease expenses were not material for the three and nine months ended December 31, 2022 and December 31, 2021, respectively. Finance lease expense of $250,000 for the three months ended December 31, 2022 and December 31, 2021, and $751,000 and $734,000 for the nine months ended December 31, 2022 and December 31, 2021, respectively, is included in Income from operations. Interest and debt expense related to the finance lease of $156,000 and $162,000 and $470,000 and $477,000 is included the Company's Condensed Consolidated Statements of Operations in the three and nine months ended December 31, 2022 and December 31, 2021, respectively.

Supplemental cash flow information related to leases is as follows (in thousands):


	Nine months ended, December 30,
	2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities	$	6,678	$	6,885
Cash paid for amounts included in the measurement of finance lease liabilities	$	872	$	847
ROU assets obtained in exchange for new operating lease liabilities	$	8,592	$	3,670
ROU assets obtained in exchange for new finance lease liabilities	$	—	$	14,582