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LEASES

12 Months Ended

Dec. 31, 2025

7. LEASES

Lessor Arrangements

The Company’s lessor arrangements consist of sales-type and direct financing leases for equipment, including vehicles and machinery, with terms ranging from 17 months to 122 months. At December 31, 2025 and 2024, the carrying value of residual assets covered by residual value guarantees and residual value insurance was $122.4 million and $102.6 million, respectively.

Total net investment in sales-type and direct financing leases consisted of the following as of December 31, (dollars in thousands):


		2025		2024
Sales-type and direct financing leases:
Lease receivables, net of unearned income and deferred selling profit		$	614,543	$	529,657
Unguaranteed residual values, net of unearned income and deferred selling profit			41,570		34,546
Total net investment in sales-type and direct financing leases		$	656,113	$	564,203

Lessee Arrangements

The Company’s lessee arrangements consist of operating and finance leases; however, the majority of the leases have been classified as non-cancellable operating leases and are for real estate leases with remaining lease terms of up to 16 years.

The tables below provide information about the Company’s lessee lease portfolio and other supplemental lease information as of and for the years ended December 31, (dollars in thousands):


		2025						2024
		Operating			Finance			Operating			Finance
ROU assets		$	98,073		$	9,191		$	74,782		$	3,751
Lease liabilities			118,915			10,895			79,642			5,769
Lease Term and Discount Rate of Operating leases:
Weighted-average remaining lease term (years)			8.22			10.35			10.96			4.08
Weighted-average discount rate ⁽¹⁾			5.69	%		3.63	%		6.24	%		1.17	%

⁽¹⁾ A lease implicit rate or an incremental borrowing rate is used based on information available at commencement date of lease or at remeasurement date.


	2025		2024
Cash paid for amounts included in measurement of lease liabilities:
Operating Cash Flows from Finance Leases	$	133	$	74
Operating Cash Flows from Operating Leases		23,194		14,529
Financing Cash Flows from Finance Leases		1,333		1,283
ROU assets obtained in exchange for lease obligations:
Operating leases	$	17,515	$	5,548
Finance leases		6,459		—


		2025		2024
Net Operating Lease Cost	$	21,825	$	13,473
Finance Lease Cost:
Amortization of right-of-use assets		1,019		919
Interest on lease liabilities		133		74
Total Lease Cost	$	22,977	$	14,466

The maturities of lessor and lessee arrangements outstanding as of December 31, 2025 are presented in the table below for the years ending, (dollars in thousands):


	Lessor		Lessee
		Sales-type and Direct Financing	Operating		Finance
2026	$	150,106	$	25,325	$	1,791
2027		146,493		23,034		2,027
2028		135,385		20,304		2,064
2029		102,301		16,007		692
2030		71,930		12,529		567
Thereafter		106,578		58,652		6,721
Total undiscounted cash flows		712,793		155,851		13,862
Less: Adjustments ⁽¹⁾		98,250		36,936		2,967
Total ⁽²⁾	$	614,543	$	118,915	$	10,895

⁽¹⁾ Lessor – unearned income and unearned guaranteed residual value; Lessee – imputed interest.

⁽²⁾ Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.