8. Leases
The Company is a lessee in operating and finance leases primarily covering corporate offices, warehouse space, rail cars and equipment. As of December 31, 2025, the Company’s leases have remaining lease terms of less than one year to 10.8 years with standard renewal and termination options available at the Company’s discretion. Certain equipment leases have purchase options at the end of the lease term, which are not included in the ROU assets, as it is not reasonably certain that the Company will exercise such options. Short-term leases, those with an initial term of 12 months or less, are not recorded in the consolidated balance sheets. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants. The Company uses its incremental borrowing rate to determine the present value of lease payments unless the lease provides an implicit or explicit interest rate.
Financial and other information related to the Company’s operating and finance leases follow:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Operating lease cost | | $ | 10,357 | | | $ | 8,584 | | | $ | 7,441 | |
| | | | | | |
| Finance lease cost | | | | | | |
| Amortization of ROU assets | | 465 | | | 434 | | | 405 | |
| Interest | | 50 | | | 81 | | | 110 | |
| Total lease cost | | $ | 10,872 | | | $ | 9,099 | | | $ | 7,956 | |
| | | | | | | | | | | | | | | | | |
| | | December 31, |
| Balance Sheet Location | | 2025 | | 2024 |
| Operating leases | | | | | |
| ROU assets | Other assets | | $ | 25,629 | | | $ | 31,112 | |
| Lease liabilities, current | Accrued and other current liabilities | | $ | 8,224 | | | $ | 7,604 | |
| Lease liabilities, non-current | Other liabilities | | $ | 18,599 | | | $ | 24,035 | |
| | | | | |
| Finance leases | | | | | |
| ROU assets | Property, plant and equipment, net | | $ | 339 | | | $ | 709 | |
| Lease liabilities | Long-term debt | | $ | 456 | | | $ | 921 | |
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities | $ | 10,441 | | | $ | 8,590 | | | $ | 6,996 | |
Operating lease ROU assets obtained in exchange for lease liabilities(a) | $ | 2,090 | | | $ | 20,134 | | | $ | 7,676 | |
(a)During the year ended December 31, 2024, the Company recorded an ROU asset and corresponding lease liability of $14 million related to a new warehouse lease agreement in Canada.
Finance lease cash flows were immaterial during the years ended December 31, 2025, 2024 and 2023.
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Operating leases | | | |
| Weighted average remaining lease term (in years) | 4.0 | | 4.6 |
| Weighted average discount rate | 8.4 | % | | 8.2 | % |
| | | |
| Finance leases | | | |
| Weighted average remaining lease term (in years) | 0.9 | | 1.8 |
| Weighted average discount rate | 7.0 | % | | 7.0 | % |
Operating lease maturities as of December 31, 2025 were as follows:
| | | | | |
| 2026 | $ | 10,081 | |
| 2027 | 8,611 | |
| 2028 | 6,908 | |
| 2029 | 2,772 | |
| 2030 | 696 | |
| Thereafter | 2,915 | |
| Total minimum lease payments | 31,983 | |
| Less: imputed interest | (5,160) | |
| Present value of future minimum lease payments | $ | 26,823 | |
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.