Note 9: Leases as Lessee
The Company’s operating lease agreements primarily consist of real estate property, such as production facilities, warehouses and office buildings, in addition to personal property, such as vehicles and equipment. The majority of the Company’s lease arrangements are comprised of fixed payments and a limited number of these arrangements include a variable payment component based on certain index fluctuations.
Components of Lease Expense
The components of lease expense are as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| (in $000s) | 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 17,968 | | | $ | 10,718 | | | $ | 10,149 | |
| Finance lease cost: | | | | | |
| Amortization of lease assets | 23 | | | — | | | 1,748 | |
| Interest on lease liabilities | 6 | | | — | | | 300 | |
| Short-term lease cost | — | | | — | | | 978 | |
| | | | | |
| Sublease income | — | | | — | | | (1,365) | |
| Total lease cost | $ | 17,997 | | | $ | 10,718 | | | $ | 11,810 | |
Supplemental Cash Flow Information
Supplemental cash flow information related to leases is as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| (in $000s) | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash outflows - payments on operating leases | $ | 23,169 | | | $ | 10,208 | | | $ | 7,891 | |
| Operating cash outflows - interest payments on finance leases | $ | 6 | | | $ | — | | | $ | 300 | |
| Finance cash outflows - payments on finance lease obligations | $ | — | | | $ | — | | | $ | 2,682 | |
| Supplemental disclosure of noncash leasing activities: | | | | | |
| Right-of-use assets obtained in exchange for new operating lease liabilities (1) | $ | 26,148 | | | $ | 65,012 | | | $ | 16,077 | |
(1) Includes lease extension and option exercises.
Future Maturities and Payment Information
Maturities of lease liabilities as of December 31, 2025, are as follows:
| | | | | | | |
| (in $000s) | Operating Leases | | |
| 2026 | $ | 17,408 | | | |
| 2027 | 16,587 | | | |
| 2028 | 16,087 | | | |
| 2029 | 15,474 | | | |
| 2030 | 13,844 | | | |
| Thereafter | 114,076 | | | |
| Total lease payments | 193,476 | | | |
| Less: imputed interest | (78,612) | | | |
| Total present value of lease liabilities | $ | 114,864 | | | |
As of December 31, 2025, the weighted average discount rate and remaining term under operating leases was 8.1% and 12.2 years, respectively.
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.