Leases:
We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.
Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table provides details of our lease contracts for the years ended December 31, 2025, 2024 and 2023 (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 36,507 | | | $ | 37,331 | | | $ | 48,238 | |
| Finance lease cost: | | | | | |
| Amortization of right of use assets | 7,824 | | | 7,270 | | | 5,302 | |
| Interest on lease liabilities | 6,418 | | | 6,435 | | | 5,070 | |
| Total finance lease cost | 14,242 | | | 13,705 | | | 10,372 | |
| | | | | |
| Short-term lease cost | 24,977 | | | 25,651 | | | 20,309 | |
| Variable lease cost | 48,122 | | | 34,741 | | | 25,075 | |
| | | | | |
| | | | | |
| Total lease cost | $ | 123,848 | | | $ | 111,428 | | | $ | 103,994 | |
Supplemental cash flow information related to our lease contracts for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands): | | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 35,552 | | | $ | 35,638 | | | $ | 49,261 | |
| Operating cash flows from finance leases | 6,401 | | | 9,681 | | | 4,671 | |
| Financing cash flows from finance leases | 4,982 | | | 4,982 | | | 2,165 | |
| Right-of-use assets obtained in exchange for lease obligations: | | | | | |
| Operating leases | 44,314 | | | 25,605 | | | 48,655 | |
| Finance leases | — | | | 12,706 | | | 46,773 | |
Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at December 31, 2025 and 2024 is as follows (in thousands, except as noted): | | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Operating leases: | | | |
| Other assets | $ | 116,404 | | | $ | 118,839 | |
| | | |
| Accrued expenses | 24,561 | | | 32,626 | |
| Other noncurrent liabilities | 103,110 | | | 99,514 | |
| Total operating lease liabilities | 127,671 | | | 132,140 | |
| Finance leases: | | | |
| Net property, plant and equipment | 103,915 | | | 117,038 | |
| | | |
| Current portion of long-term debt | 4,077 | | | 5,183 | |
| Long-term debt | 102,719 | | | 113,613 | |
| Total finance lease liabilities | 106,796 | | | 118,796 | |
| Weighted average remaining lease term (in years): | | | |
| Operating leases | 13.4 | | 12.9 |
| Finance leases | 20.5 | | 20.4 |
| Weighted average discount rate (%): | | | |
| Operating leases | 5.01 | % | | 4.47 | % |
| Finance leases | 5.47 | % | | 5.55 | % |
Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands): | | | | | | | | | | | |
| Operating Leases | | Finance Leases |
| 2026 | $ | 28,150 | | | $ | 9,852 | |
| 2027 | 23,571 | | | 9,783 | |
| 2028 | 19,518 | | | 9,645 | |
| 2029 | 17,941 | | | 9,645 | |
| 2030 | 12,904 | | | 8,997 | |
| Thereafter | 99,324 | | | 122,808 | |
| Total lease payments | 201,408 | | | 170,730 | |
| Less imputed interest | 73,737 | | | 63,934 | |
| Total | $ | 127,671 | | | $ | 106,796 | |
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.