Leases

12 Months Ended

Aug. 31, 2023

Note 10. Leases

As of August 31, 2023, the Company had operating leases for real estate, vehicles, manufacturing equipment, IT equipment and office equipment. The Company did not have significant finance leases during the year ended August 31, 2023. Our leases typically range in term from 3 to 15 years and may contain renewal options for periods up to 5 years at our discretion. Our leases generally contain payments that are primarily fixed; however, certain lease arrangements contain variable payments, which are expensed as incurred and not included in the measurement of ROU assets and lease liabilities. These amounts include payments affected by changes in the Consumer Price Index and executory costs (such as real estate taxes, utilities and common-area maintenance), which are based on usage or performance. In addition, our leases generally do not include material residual value guarantees or material restrictive covenants.

During the year ended August 31, 2021, the Company sold and subsequently leased back a portion of its manufacturing facility in China as part of a global footprint rationalization initiative. In connection with the transaction, the Company recognized a gain of $10.0 million. The gain is recorded in "Selling, general and administrative expenses" within the Consolidated Statements of Earnings and in "Other non-cash charges (benefits)" within the Consolidated Statements of Cash Flows. The Company also incurred $4.6 million of closing related costs and value-added and land taxes associated with this transaction also included in "Selling, general and administrative expenses" within the Consolidated Statements of Earnings.

The components of lease expense for the year ended August 31, 2023 and 2022 were as follows (in thousands):


	Year Ended August 31,
	2023		2022		2021
Lease Cost:
Operating lease cost	$	13,155	$	14,316	$	15,170
Short-term lease cost	2,318		1,714		1,611
Variable lease cost	4,411		3,609		3,086

Supplemental cash flow and other information related to leases for the year ended August 31, 2023 and 2022 were as follows (in thousands):


	Year Ended August 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	13,153	$	14,166	$	15,240

Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	1,654		4,584		9,197

Supplemental balance sheet information related to leases at August 31, 2023 and 2022 were as follows (in thousands):


	August 31,
	2023			2022
Operating leases:
Other long-term assets	$	37,714		$	43,273

Other current liabilities	9,786			10,709
Other long-term liabilities	29,245			33,477
Total operating lease liabilities	$	39,031		$	44,186

Weighted Average Remaining Lease Term:
Operating leases	6.5 years			6.4 years

Weighted Average Discount Rate:
Operating leases	5.0		%	4.4		%

A summary of the future minimum lease payments due under operating leases with terms of more than one year at August 31, 2023 is as follows (in thousands):


	Operating Leases
2024	$	11,368
2025	9,533
2026	6,650
2027	3,687
2028	3,131
Thereafter	11,540
Total minimum lease payments	45,909
Less imputed interest	(6,878)
Present value of net minimum lease payments	$	39,031