HAVERTY FURNITURE COMPANIES INCHVT

HAVERTY FURNITURE COMPANIES INC Leases Disclosure

10-KFiled Feb 26, 20263 min read
Leases:
We have operating leases for retail stores, offices, warehouses, and certain equipment. Our leases have remaining lease terms of between 1 year and 15 years, some of which include options to extend the leases for up to 20 years. We determine if an arrangement is or contains a lease at lease inception. Our leases do not have any residual value guarantees or any restrictions or covenants imposed by lessors. We have lease agreements for real estate with lease and non-lease components, which are accounted for separately.
As of December 31, 2025, there were three leases for retail locations which had not yet commenced.
The table below presents the operating lease assets and liabilities recognized on the consolidated balance sheets as of December 31:
(in thousands)20252024
Operating Lease Assets:
Right-of use lease assets$190,586 $194,411 
Operating Lease Liabilities:
Current lease liabilities$35,967 $36,283 
Non-current lease liabilities180,450 182,096 
Total operating lease liabilities
$216,417 $218,379 
Our leases generally do not provide an implicit rate, and therefore we use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease.
The weighted-average remaining lease term and weighted-average discount rate for operating leases as of December 31 are:
20252024
Weighted-average remaining lease term6.9 years7.1 years
Weighted-average discount rate6.24%6.16%
The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total lease liabilities recognized on the consolidated balance sheet as of December 31, 2025:
(in thousands)
Operating Leases
2026$48,115 
202744,241 
202838,971 
202932,224 
203026,753 
Thereafter79,053 
Total undiscounted future minimum lease payments269,357 
Less: difference between undiscounted lease payments and discounted operating lease liabilities(52,940)
Total operating lease liabilities$216,417 
Certain of our lease agreements for retail stores include variable lease payments, generally based on sales volume. The variable portion of payments are not included in the initial measurement of the right‑of-use asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain of our equipment lease agreements include variable lease costs, generally based on usage of the underlying asset (mileage, fuel, etc.). The variable portion of payments are not included in the initial measurement of the right-of-use asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred.
Components of lease expense which are included in selling, general, and administrative expenses within our consolidated statements of comprehensive income were as follows:
Year Ended December 31,
(in thousands)202520242023
Operating lease cost$48,954 $48,805 $49,148 
Variable lease cost5,636 5,393 6,170 
Total lease expense$54,590 $54,198 $55,318 
Supplemental cash flow information related to leases is as follows:
Year Ended December 31,
(In thousands)20252024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$47,061 $40,271 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$36,052 $31,875 

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.

Other Available Disclosures

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