Company: GGG
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000042888-25-000011
Chunk: 96

Company: GRACO INC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 8
Chunk 96
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,297 1,574 202710,028 1,580 202810,093 1,561 202911,463 1,543 Years 2030-203465,071 7,484 

60

K. Commitments and Contingencies

Operating Lease Liabilities and AssetsThe Company owns most of the assets used in its operations, but leases certain buildings and land, vehicles, office equipment and other rental assets. The Company determines if an arrangement is a lease at inception. All of the Company’s current lease arrangements are classified as operating leases. The Company historically has not entered into financing leases. Operating lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease expense is recognized by amortizing the amount recorded as an asset on a straight-line basis over the lease term.In determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. The Company generally uses its incremental borrowing rate based on information available at the lease commencement date in determining the present value of lease payments. Supplemental information related to the Company's lease activities were as follows (in thousands):20242023Operating lease expense$10,464 $11,688 Operating lease payments9,752 11,903 Non-cash additions to operating lease assets511 6,141 Additional information related to operating leases were as follows:20242023Weighted average remaining lease term (years)2.23.1Weighted average discount rate3.76 %5.13 %Variable lease costs and short-term lease costs were not significant for the twelve months ended December 27, 2024 and December 29, 2023. As of December 27, 2024, future maturities of operating lease liabilities were as follows (in thousands): 2025$7,838 20269,363 20274,018 20281,556 2029360 Thereafter334 Total lease payments$23,469 Present value adjustment(3,353)Operating lease liabilities$20,116 Other Commitments. The Company is committed to pay suppliers under the terms of open purchase orders issued in the normal course of business totaling approximately $82 million at December 27, 2024. The