LEASESThe Company’s leases primarily comprise real estate and vehicles. Real estate leases are largely related to sales and marketing, service, and administrative offices, while vehicle leases are primarily related to the Company’s field sales and service organization. The consolidated balance sheet included the following balances as of December 31:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | Balance Sheet Location |
| Operating right-of-use assets, net | $ | 111,718 | | | $ | 106,830 | | | |
| Finance right-of-use assets, net | 15,637 | | | 5,905 | | | |
| Right-of-use assets, net | $ | 127,355 | | | $ | 112,735 | | | Other non-current assets |
| | | | | |
| Current operating lease liability | $ | 35,108 | | | $ | 29,074 | | | Accrued and other liabilities |
| Current finance lease liability | 2,821 | | 741 | | Short-term borrowings and current maturities of long-term debt |
| Non-current operating lease liability | 78,043 | | 81,956 | | Other non-current liabilities |
| Non-current finance lease liability | 13,509 | | 5,414 | | Long-term debt |
| Total lease liability | $ | 129,481 | | | $ | 117,185 | | | |
As of December 31, 2025, the Company had not entered into any material real estate operating leases expected to commence in 2026.
For the years ended December 31, 2025, 2024 and 2023, the Company had the following recorded in cost of sales, and selling, general, and administrative associated with leasing arrangements:
| | | | | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| Operating lease expense | | $ | 40,288 | | | $ | 39,424 | | | $ | 37,849 | |
| Finance lease expense | | | | | | |
| Amortization of right-of-use assets | | 1,791 | | | 744 | | | 526 | |
| Interest on lease liabilities | | 469 | | | 252 | | | 144 | |
| Variable lease expense | | 11,767 | | | 9,841 | | | 7,022 | |
| Short-term lease expense | | 1,313 | | | 1,228 | | | 1,004 | |
| Total lease expense | | $ | 55,628 | | | $ | 51,489 | | | $ | 46,545 | |
| | | | | | |
| Weighted average remaining lease term | | | | | | |
| Operating leases | | 5.2 years | | 5.9 years | | 6.5 years |
| Finance leases | | 5.5 years | | 7.5 years | | 7.8 years |
| | | | | | |
| Weighted average discount rate | | | | | | |
| Operating leases | | 4.2 | % | | 4.3 | % | | 4.1 | % |
| Finance leases | | 5.0 | % | | 4.6 | % | | 4.4 | % |
Accruals and other on the consolidated statement of cash flows includes the amortization of the lease right-of-use asset of $38.0 million, $33.8 million, and $34.4 million, offset by a change in the lease liability of $37.9 million, $33.7 million, and $33.4 million, for the years ended December 31, 2025, 2024, and 2023, respectively. Lease payments within operating activities were $40.8 million, $36.6 million, and $36.6 million for the years ended December 31, 2025, 2024, and 2023, respectively. Lease payments from finance leases were $1.9 million, $0.8 million, and $0.6 million for the years ended December 31, 2025, 2024, and 2023, respectively. The Company also obtained non-cash lease right-of-use assets in exchange for lease liabilities of $32.8 million, $23.5 million, and $34.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.
The following is a maturity analysis of the annual undiscounted cash flows for the annual periods ended December 31:
| | | | | | | | | | | | | | |
| | Finance Leases | | Operating Leases |
| 2026 | | $ | 3,798 | | | $ | 37,615 | |
| 2027 | | 3,798 | | | 27,074 | |
| 2028 | | 3,790 | | | 18,476 | |
| 2029 | | 3,294 | | | 11,809 | |
| 2030 | | 1,480 | | | 8,906 | |
| Thereafter | | 2,051 | | | 22,735 | |
| Total lease payments | | 18,211 | | | 126,615 | |
| Less imputed interest | | (1,881) | | | (13,464) | |
| Total lease liability | | $ | 16,330 | | | $ | 113,151 | |