LEASES
The components of lease expense were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31 |
| (in thousands) | | 2025 | | 2024 | | 2023 | | |
| Operating lease cost | | $ | 84,563 | | | $ | 87,204 | | | $ | 89,994 | | | |
| Finance lease cost: | | | | | | | | |
| Amortization of right-of-use assets | | 9,250 | | | 8,431 | | | 5,687 | | | |
| Interest on lease liabilities | | 1,364 | | | 1,456 | | | 989 | | | |
| Short-term and month-to-month lease cost | | 44,547 | | | 47,048 | | | 44,457 | | | |
| Variable lease cost | | 20,405 | | | 20,626 | | | 23,213 | | | |
| Sublease income | | (619) | | | (9,135) | | | (16,035) | | | |
| Total net lease cost | | $ | 159,510 | | | $ | 155,630 | | | $ | 148,305 | | | |
The Company recorded operating lease impairment charges of $1.6 million, $0.6 million, and $0.8 million in 2025, 2024 and 2023, respectively. The Company estimated the fair value of the ROU assets using an income approach.
Supplemental balance sheet information related to leases were as follows:
| | | | | | | | | | | | | |
| As of December 31 | | |
| (in thousands) | 2025 | | 2024 | | |
| Assets: | | | | | |
| Lease right-of-use assets | $ | 404,818 | | | $ | 388,419 | | | |
| Finance lease assets | 22,695 | | | 21,716 | | | |
| Total lease assets | $ | 427,513 | | | $ | 410,135 | | | |
| | | | | |
| Current liabilities: | | | | | |
| Operating lease liabilities | $ | 64,290 | | | $ | 58,239 | | | |
| Finance lease liabilities | 17,059 | | | 18,028 | | | |
| Noncurrent liabilities: | | | | | |
| Operating lease liabilities | 377,897 | | | 362,885 | | | |
| Finance lease liabilities | 7,062 | | | 5,049 | | | |
| Total lease liabilities | $ | 466,308 | | | $ | 444,201 | | | |
| | | | | | | | | | | | | |
| Weighted average remaining lease term (years): | | | | | |
| Operating leases | 10.0 | | 10.4 | | |
| Finance leases | 1.8 | | 1.5 | | |
| Weighted average discount rate: | | | | | |
| Operating leases | 5.4 | % | | 5.4 | % | | |
| Finance leases | 6.1 | % | | 6.8 | % | | |
At December 31, 2025, maturities of lease liabilities were as follows:
| | | | | | | | | | | |
| (in thousands) | Operating Leases | | Finance Leases |
| 2026 | $ | 81,369 | | | $ | 17,623 | |
| 2027 | 79,378 | | | 4,896 | |
| 2028 | 66,239 | | | 2,319 | |
| 2029 | 57,225 | | | 80 | |
| 2030 | 43,532 | | | 55 | |
| Thereafter | 262,631 | | | — | |
| Total payments | 590,374 | | | 24,973 | |
| Less: Imputed interest | (148,187) | | | (852) | |
| Present value of lease liabilities | $ | 442,187 | | | $ | 24,121 | |
As of December 31, 2025, the Company has entered into operating leases, including healthcare and retail facilities, that have not yet commenced and have minimum lease payments of $8.8 million. These operating leases will commence in fiscal year 2026 with contractual lease terms of 5 to 11 years.
Supplemental cash flow information related to leases were as follows:
| | | | | | | | | | | | | | | | | | | |
| Year Ended December 31 |
| (in thousands) | 2025 | | 2024 | | 2023 | | |
| Cash paid for amounts included in the measurements of lease liabilities: | | | | | | | |
| Operating cash flows from operating leases (payments) | $ | 81,081 | | | $ | 86,210 | | | $ | 94,630 | | | |
| Operating cash flows from finance leases | 1,364 | | | 1,456 | | | 989 | | | |
| Financing cash flows from finance leases (payments) | 17,969 | | | 13,425 | | | 10,376 | | | |
| Right-of-use assets obtained in exchange for new lease liabilities (noncash): | | | | | | | |
| Operating leases | $ | 68,915 | | | $ | 55,283 | | | $ | 38,967 | | | |
| Finance leases | 19,058 | | | 12,569 | | | 20,265 | | | |
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.