Leases
We have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have entered into finance leases for two of our production facilities and certain plant equipment. Our leases have remaining lease terms of up to 15 years, some of which include options to extend the leases for up to 20 years, and some of which include options to terminate the lease. Operating leases are reported in "Operating lease right-of-use assets" and "Operating lease liabilities" and finance leases are recorded in homebuilding "Property, plant and equipment, net" and "Accrued expenses and other liabilities" on the accompanying consolidated balance sheets. Our finance lease ROU assets and liabilities were $39,080 and $42,474, respectively, as of December 31, 2025 and $37,638 and $40,036, respectively, as of December 31, 2024. See Note 1 herein for additional information regarding leases.
The components of lease expense were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Lease expense | | | | | | |
| Operating lease expense | | $ | 43,099 | | | $ | 39,245 | | | $ | 37,262 | |
| Finance lease expense: | | | | | | |
| Amortization of ROU assets | | 5,727 | | | 3,377 | | | 2,059 | |
| Interest on lease liabilities | | 1,866 | | | 1,071 | | | 421 | |
| Short-term lease expense | | 33,035 | | | 33,108 | | | 30,607 | |
| | | | | | |
| Total lease expense | | $ | 83,727 | | | $ | 76,801 | | | $ | 70,349 | |
| | | | | | |
Other information related to leases was as follows:
| | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 |
| Supplemental Cash Flows Information: | | | | |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | |
| Operating cash flows from operating leases | | $ | 32,930 | | | $ | 31,373 | |
| Operating cash flows from finance leases | | $ | 1,866 | | | $ | 1,071 | |
| Financing cash flows from finance leases | | $ | 4,728 | | | $ | 2,634 | |
| | | | |
| ROU assets obtained in exchange for lease obligations: | | | | |
| Operating leases | | $ | 61,901 | | | $ | 35,993 | |
| Finance leases | | $ | 7,167 | | | $ | 27,705 | |
| | | | |
| Weighted-average remaining lease term (in years): | | | | |
| Operating leases | | 7.2 | | 6.0 |
| Finance leases | | 8.6 | | 9.6 |
| | | | |
| Weighted-average discount rate: | | | | |
| Operating leases | | 4.8 | % | | 4.5 | % |
| Finance leases | | 4.8 | % | | 4.7 | % |
| | | | |
We are committed under multiple non-cancellable operating and finance leases involving office space, model homes, production facilities, automobiles and production equipment. Future lease payments under these operating and finance leases as of December 31, 2025 are as follows:
| | | | | | | | | | | | | | |
| Year Ending December 31, | | Operating Leases | | Finance Leases |
| 2026 | | $ | 42,811 | | | $ | 8,246 | |
| 2027 | | 30,001 | | | 6,692 | |
| 2028 | | 24,561 | | | 6,038 | |
| 2029 | | 20,412 | | | 5,949 | |
| 2030 | | 14,829 | | | 5,807 | |
| Thereafter | | 47,852 | | | 19,210 | |
| Total lease payments | | 180,466 | | | 51,942 | |
| Less: | | | | |
| Imputed interest | | 28,008 | | | 9,468 | |
| Short-term lease payments | | 8,725 | | | — | |
| Total lease liability | | $ | 143,733 | | | $ | 42,474 | |
| | | | |
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.