Leases

12 Months Ended

Dec. 31, 2024

7. Leases

The Company’s operating leases are primarily comprised of real estate, railcar, storage tank, warehouse, auto, trailer and manufacturing/office equipment leases. Real estate and railcars comprise approximately 47 percent and 36 percent, respectively, of the Company’s consolidated right of use (ROU) asset balance. Except for real estate, typical lease terms range from one to ten years. Real estate lease terms typically range from one to fifty years. The Company’s four principal real estate leases consist of the office lease for the corporate headquarters in Northbrook, Illinois and land leases in the Philippines, Singapore and Lake Providence, Louisiana. As of December 31, 2024, the Company had no leases that had not commenced.

As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate (IBR) based on the information available at the commencement date in determining the present value of lease payments. IBRs were specifically determined for the United States, Philippines, Singapore, Brazil and China, typically for five-year increments. The U.S.

IBR was used for all other countries as the leases in these countries are not material. The total value of leases that reside in the five countries identified above represents approximately 97 percent of the Company’s consolidated ROU asset balance. Lease cost is recognized in both the Cost of Sales and Operating Expenses sections of the Consolidated Statements of Income.


(In thousands)	Year ended December 31, 2024		Year ended December 31, 2023

Lease Cost
Operating lease cost	$	18,424	$	17,820
Short-term lease cost		11,592		10,786
Variable lease cost		1,681		2,354
Total lease cost	$	31,697	$	30,960
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	18,453	$	17,838
Right-of-use assets obtained in exchange for new operating lease liabilities		4,715		12,134

The following table outlines maturities of lease liabilities as of December 31, 2024:


(In thousands)
Undiscounted Cash Flows:
2025	$	17,640
2026		12,432
2027		9,805
2028		7,863
2029		7,185
Subsequent to 2029		29,666
Total Undiscounted Cash Flows	$	84,591
Less: Imputed interest		(12,025	)
Present value	$	72,566
Current operating lease liabilities (1)		15,174
Non-current operating lease liabilities		57,392
Total lease liabilities	$	72,566

(1)

This item is included in Accrued liabilities line on the Company’s Consolidated Balance Sheet.


Weighted-average remaining lease term-operating leases		8 Years
Weighted-average discount rate-operating leases		3.9 %