LEASES
Our operating leases are comprised primarily of facility leases and our finance leases are comprised primarily of vehicle and equipment leases. We determine if an arrangement is a lease at inception and lease assets and liabilities are recognized upon commencement of the lease based on the present value of the future minimum lease payments over the lease term. Lease assets and liabilities are not recorded for leases with an initial term of one year or less. We generally use our incremental borrowing rate as the discount rate for leases, unless an interest rate is implicitly stated in the lease agreement. The lease term will include options to extend the lease when it is reasonably certain that we will exercise that option.
Balance sheet information related to our leases is presented below:
| | | | | | | | | | | | | | | | | |
| Balance Sheet location | | December 31, |
| | 2025 | | 2024 |
| Operating leases: | | | | | |
| Right-of-use lease assets | Right-of-use operating lease assets | | $ | 243,626 | | | $ | 248,013 | |
| Right-of-use lease liability, current | Other current liabilities | | 39,604 | | | 45,091 | |
| Right-of-use lease liability, long-term | Right-of-use operating lease liability | | 250,407 | | | 255,116 | |
| | | | | |
| Finance leases: | | | | | |
| Right-of-use lease assets | Property, plant and equipment | | 124,632 | | | 232,117 | |
| Right-of-use lease liability, current | Current portion of long-term debt | | 24,100 | | | 77,770 | |
| Right-of-use lease liability, long-term | Long-term debt | | 81,519 | | | 67,592 | |
The following provides details of our lease expense: | | | | | | | | | | | |
| Years Ended December 31, |
| 2025 | | 2024 |
| Operating lease expense, net | $ | 60,060 | | | $ | 59,429 | |
| Finance lease expense: | | | |
| Amortization of assets | 41,086 | | | 81,289 | |
| Interest on lease liabilities | 8,479 | | | 15,462 | |
| Total finance lease expense | 49,565 | | | 96,751 | |
| $ | 109,625 | | | $ | 156,180 | |
| | | |
Other information related to our leases is presented below: | | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
| Right-of-use assets acquired in exchange for operating lease obligations | $ | 44,869 | | | $ | 41,002 | |
| Cash Paid For Amounts Included In Measurement of Liabilities: | | | |
| Operating cash flows from finance leases | 8,479 | | | 15,462 | |
| Operating cash flows from operating leases | 72,374 | | | 69,818 | |
| Weighted Average Remaining Lease Term: | | | |
| Operating leases | 7.7 years | | 7.9 years |
| Finance leases | 4.7 years | | 3.1 years |
| Weighted Average Discount Rate: | | | |
| Operating leases | 5.96 | % | | 5.72 | % |
| Finance leases | 7.30 | % | | 8.17 | % |
The minimum future annual payments under non-cancellable leases during the next five years and thereafter, at rates now in force, are as follows: | | | | | | | | | | | |
| Finance leases | | Operating leases |
| 2026 | $ | 30,535 | | | $ | 52,127 | |
| 2027 | 30,315 | | | 53,874 | |
| 2028 | 28,368 | | | 48,407 | |
| 2029 | 17,255 | | | 43,954 | |
| 2030 | 9,150 | | | 41,285 | |
| Thereafter | 2,332 | | | 128,991 | |
| Total future minimum lease payments, undiscounted | 117,955 | | | 368,638 | |
| Less: Imputed interest | (12,336) | | | (78,627) | |
| Present value of future minimum lease payments | $ | 105,619 | | | $ | 290,011 | |
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.