Karman Holdings Inc. Leases Disclosure
The Company has certain property leases, with former owners and members for facilities of the Company’s subsidiaries. Most of these leases are accounted for as finance leases except for facilities leased by AEC and a plane hangar leased by Systima, which are accounted for as operating leases. Total lease payments amounted to $11,281,976, $6,221,525 and $6,024,177 for the years ended December 31, 2024, 2023 and 2022. The Company has month-to-month rentals and other short-term leases, which are expensed as incurred. Expenses associated with short term leases were $581,733, $426,415 and $1,056,490 for the years ended December 31, 2024, 2023 and 2022, respectively.
Consolidated Lease Summary
On a consolidated basis, lease activity for the years ended December 31, 2024, 2023 and 2022 were as follows:
|
|
Years Ended December 31, |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|||
Finance lease expense |
|
|
|
|
|
|
|
|
|
|||
Amortization of ROU assets |
|
$ |
6,245,535 |
|
|
$ |
4,763,656 |
|
|
$ |
4,527,210 |
|
Interest on lease liabilities |
|
|
6,729,126 |
|
|
$ |
5,470,425 |
|
|
$ |
5,407,279 |
|
Operating lease expense |
|
|
1,772,450 |
|
|
$ |
1,676,970 |
|
|
$ |
1,191,998 |
|
Total |
|
$ |
14,747,111 |
|
|
$ |
11,911,051 |
|
|
$ |
11,126,487 |
|
Amortization of ROU assets are included in the depreciation and amortization expense line of the Consolidated Statements of Operations.
On a consolidated basis, supplemental cash flow information for the years ended December 31, 2024, 2023 and 2022 were as follows:
|
|
Years Ended December 31, |
|
|||||||||
Cash paid for amounts included in the measurement of lease liabilities |
|
2024 |
|
|
2023 |
|
|
2022 |
|
|||
Operating cash flows from finance leases |
|
$ |
6,609,802 |
|
|
$ |
5,386,787 |
|
|
$ |
5,426,631 |
|
Financing cash flows from finance leases |
|
$ |
2,868,896 |
|
|
$ |
1,532,011 |
|
|
$ |
1,095,868 |
|
Operating cash flows from operating leases |
|
$ |
1,804,278 |
|
|
$ |
1,455,186 |
|
|
$ |
925,256 |
|
ROU assets obtained in exchange for new finance lease liabilities |
|
$ |
7,077,736 |
|
|
$ |
7,711,985 |
|
|
$ |
2,061,241 |
|
ROU assets obtained in exchange for new operating lease liabilities |
|
$ |
885,214 |
|
|
$ |
2,801,902 |
|
|
$ |
295,044 |
|
Weighted-average remaining lease term in years for finance leases |
|
|
13.75 |
|
|
|
15.00 |
|
|
|
16.87 |
|
Weighted-average remaining lease term in years for operating leases |
|
|
6.16 |
|
|
|
6.94 |
|
|
|
8.83 |
|
Weighted-average discount rate for finance leases |
|
|
8.42 |
% |
|
|
7.88 |
% |
|
|
7.51 |
% |
Weighted-average discount rate for operating leases |
|
|
9.52 |
% |
|
|
8.97 |
% |
|
|
7.54 |
% |
On a consolidated basis, maturities of lease liabilities are as follows:
Year ending December 31, |
|
Finance Lease |
|
|
Operating Lease |
|
|
Total |
|
|||
2025 |
|
$ |
10,637,960 |
|
|
$ |
2,111,008 |
|
|
$ |
12,748,968 |
|
2026 |
|
|
10,756,725 |
|
|
|
1,709,330 |
|
|
|
12,466,055 |
|
2027 |
|
|
10,909,616 |
|
|
|
1,724,830 |
|
|
|
12,634,446 |
|
2028 |
|
|
10,936,181 |
|
|
|
1,353,031 |
|
|
|
12,289,212 |
|
2029 |
|
|
9,286,319 |
|
|
|
394,546 |
|
|
|
9,680,865 |
|
Thereafter |
|
|
89,595,197 |
|
|
|
1,791,426 |
|
|
|
91,386,623 |
|
Total undiscounted cash flows |
|
|
142,121,998 |
|
|
|
9,084,171 |
|
|
|
151,206,169 |
|
Less: present value discount |
|
|
(60,184,569 |
) |
|
|
(2,213,710 |
) |
|
|
(62,398,279 |
) |
Total lease liabilities |
|
$ |
81,937,429 |
|
|
$ |
6,870,461 |
|
|
$ |
88,807,890 |
|
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About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.