Company: MGRC
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023116
Chunk: 16

Company: MCGRATH RENTCORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 16
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 lease and non-lease components, which are accounted for separately.  Right-Of-Use (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term.  Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred, which are not material.  The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.  The Company uses the interest rate stated in the lease as the discount rate.  If the interest rate is not stated, the Company uses its incremental borrowing rate based on information available on lease commencement date in determining the present value of lease payments.  Many of the Company’s real estate lease agreements include options to extend the lease, which are not included in the minimum lease terms unless they are reasonably certain to be exercised.  These leases include one or more options to renew, with renewal terms that may extend the lease term from one to three years.  The amount of payments associated with such options is not material.  Short-term leases are leases having a term of twelve months or less and exclude leases with a lease term of one month or less.  The Company recognizes short-term leases on a straight-line basis and does not record a related ROU asset or liability for such leases.  At December 31, 2024 and 2023 the Company’s ROU assets and operating lease liabilities were $12.6 million and $14.8 million, respectively, which are recorded in Prepaid expenses and other assets and Accrued liabilities on the Company’s Consolidated Balance Sheets. During the years ended December 31, 2024 and 2023, operating lease expense was $6.4 million and $6.7 million, respectively, which included short term lease expense of $0.3 million and $0.1 million, respectively.  At December 31, 2024 and 2023, the weighted-average remaining lease term for operating leases was 3.5 years and the weighted average discount rate was 5.37% and 4.94%, respectively.  The Company had no sub-lease income or finance leases during the years ended December 31, 2024 and 2023.Supplemental cash flow information related to leases was as follows:   

        (in thousands)
         
        Year Ended December 31,

        2024

        2023