Leases

9 Months Ended

Sep. 30, 2023

We have entered into various operating lease agreements for automobiles, offices and manufacturing facilities throughout the world. At September 30, 2023, our operating leases had remaining lease terms of up to 37 years, including any reasonably probable extensions.

Lease balances within our consolidated balance sheet were as follows:


(In thousands)	September 30, 2023		December 31, 2022
Assets:
Operating lease right-of-use assets	$	17,777	$	21,599
Liabilities:
Other accrued liabilities	$	4,770	$	5,509
Long-term operating lease obligations	11,553		15,027
Total lease liabilities	$	16,323	$	20,536

Operating lease expense, including variable and short-term lease costs, which were insignificant to the total operating lease cash flows, and supplemental cash flow information were as follows:


(In thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of sales	$	738	$	741	$	2,242	$	2,138
Selling, general and administrative expenses	1,030		1,128		3,215		3,315
Total operating lease expense	$	1,768	$	1,869	$	5,457	$	5,453
Operating cash outflows from operating leases	$	2,301	$	1,858	5,878		5,318
Operating lease right-of-use assets obtained in exchange for lease obligations	$	242	$	1,604	$	2,202	$	4,535

We entered into lease amendments for our southwestern China and Mexico factories during the three months ended September 30, 2023 as a part of our manufacturing footprint optimization efforts. As a result of these modifications, our operating lease right-of-use assets decreased by $1.2 million and our total lease liabilities decreased by $1.3 million.

The weighted average remaining lease liability term and the weighted average discount rate were as follows:


	September 30, 2023		December 31, 2022
Weighted average lease liability term (in years)	4.9		5.1
Weighted average discount rate	4.53	%	3.82	%

The following table reconciles the undiscounted cash flows for each of the first five years and thereafter to the operating lease liabilities recognized in our consolidated balance sheet at September 30, 2023. The reconciliation excludes short-term leases that are not recorded on the balance sheet.


(In thousands)	September 30, 2023
2023 (remaining 3 months)	$	1,230
2024	5,144
2025	3,908
2026	2,918
2027	2,158
Thereafter	3,084
Total lease payments	18,442
Less: imputed interest	(2,119)
Total lease liabilities	$	16,323

At September 30, 2023, we did not have any operating leases that had not yet commenced.