(7) LEASES
The Company leases office space, warehouses, vehicles, and equipment. Leases have remaining lease terms of 1 year to 20 years, some of which have renewal and termination options. Termination options where applicable are exercisable at the Company’s discretion. Lease terms used to recognize right-of-use assets and lease liabilities include periods covered by options to extend the lease where the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. The majority of the Company’s leases are operating leases. Finance leases are immaterial to the Company's Consolidated Financial Statements.
The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other operating leases are recorded on the balance sheet with a corresponding operating lease asset, net, representing the right to use the underlying asset for the lease term and the
operating lease liabilities representing the obligation to make lease payments arising from the lease. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants.
Operating lease assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate, adjusted for lease term and foreign currency, based on the information available at lease commencement date. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term.
Refer to the below table for a summary of operating lease expenses:
| | | | | | | | | | | |
| Year Ended December 31, 2025 | | Year Ended December 31, 2024 |
| Operating lease cost | $ | 83.7 | | | $ | 67.1 | |
| Short-term and variable lease cost | 41.8 | | | 35.8 | |
| Total lease cost | $ | 125.5 | | | $ | 102.9 | |
Supplemental cash flow information related to operating leases is as follows:
| | | | | | | | | | | |
| Year Ended December 31, 2025 | | Year Ended December 31, 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
| Operating cash outflows - payments on operating leases | $ | 83.4 | | | $ | 66.4 | |
| | | |
| | | |
| Right-of-use assets obtained in exchange for new lease obligations: | | | |
| Operating leases | $ | 139.8 | | | $ | 82.5 | |
Supplemental balance sheet information related to operating leases is as follows:
| | | | | | | | | | | | | | | | | |
| Balance Sheet Location | | December 31, 2025 | | December 31, 2024 |
| Operating lease right-of-use assets | Right-of-use assets, net | | $ | 303.0 | | | $ | 202.1 | |
| | | | | |
| Operating lease liabilities | Accrued expenses and other liabilities | | $ | 69.7 | | | $ | 45.7 | |
| Operating lease liabilities | Long-term lease liabilities | | 244.8 | | | 166.7 | |
| Total lease liabilities | | | $ | 314.5 | | | $ | 212.4 | |
Weighted average remaining lease terms and discount rates for operating leases are as follows:
| | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 |
| Weighted average remaining lease term | 5.8 years | | 6.4 years |
| | | |
| Weighted average discount rate | 9.1 | % | | 9.2 | % |
| | | |
Maturities of lease liabilities at December 31, 2025 are as follows:
| | | | | | | |
| December 31, 2025 | | |
| Operating Leases | | |
| 2026 | $ | 92.9 | | | |
| 2027 | 80.6 | | | |
| 2028 | 66.4 | | | |
| 2029 | 50.1 | | | |
| 2030 | 31.2 | | | |
| Thereafter | 82.1 | | | |
| Total lease payments | 403.3 | | | |
| Less: Imputed interest | (88.8) | | | |
| Present value of lease liabilities | $ | 314.5 | | | |