We lease office and retail space, warehouse and distribution facilities, land, vehicles, and equipment. We determine if an agreement is or contains a lease at inception. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet.

Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are based on the estimated present value of lease payments over the lease term and are recognized at the lease commencement date.

As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate in determining the present value of lease payments. The estimated incremental borrowing rate is derived from information available at the lease commencement date.

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. A limited number of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements generally do not contain residual value guarantees or material restrictive covenants.

For real estate, equipment and vehicles that support selling, marketing and general administrative activities, the Company accounts for the lease and non-lease components as a single lease component. These asset categories comprise the majority of our leases. The lease and non-lease components of real estate and equipment leases supporting production activities are not accounted for as a single lease component. Consideration for such contracts are allocated to the lease and non-lease components based upon relative standalone prices either observable or estimated if observable prices are not readily available.

The components of lease expense for the three months ended June 29, 2025 and June 30, 2024 were as follows:


		Three Months Ended
Lease expense	Classification	June 29, 2025		June 30, 2024
Operating lease cost	Cost of sales or SM&A (1)	$	15,815	$	13,266
Finance lease cost:
Amortization of ROU assets	Depreciation and amortization (1)	2,102		2,158
Interest on lease liabilities	Interest expense, net	1,115		1,164
Net lease cost (2)		$	19,032	$	16,588


		Six Months Ended
Lease expense	Classification	June 29, 2025		June 30, 2024
Operating lease cost	Cost of sales or SM&A (1)	$	30,026	$	25,481
Finance lease cost:
Amortization of ROU assets	Depreciation and amortization (1)	4,352		4,371
Interest on lease liabilities	Interest expense, net	2,249		2,349
Net lease cost (2)		$	36,627	$	32,201

Information regarding our lease terms and discount rates were as follows:


	June 29, 2025		December 31, 2024
Weighted-average remaining lease term (years)
Operating leases	11.6		12.4
Finance leases	26.4		25.9

Weighted-average discount rate
Operating leases	3.8	%	3.7	%
Finance leases	6.3	%	6.3	%

Supplemental balance sheet information related to leases were as follows:


Leases	Classification	June 29, 2025		December 31, 2024
Assets
Operating lease ROU assets	Other non-current assets	$	347,694	$	337,739

Finance lease ROU assets, at cost	Property, plant and equipment, gross	85,229		87,999
Accumulated amortization	Accumulated depreciation	(27,720)		(25,515)
Finance lease ROU assets, net	Property, plant and equipment, net	57,509		62,484

Total leased assets		$	405,203	$	400,223

Liabilities
Current
Operating	Accrued liabilities	$	46,540	$	40,636
Finance	Current portion of long-term debt	4,268		5,666
Non-current
Operating	Other long-term liabilities	309,888		304,767
Finance	Long-term debt	66,749		68,136
Total lease liabilities		$	427,445	$	419,205

The maturities of our lease liabilities as of June 29, 2025 were as follows:


	Operating leases		Finance leases		Total
2025 (rest of year)	$	29,989	$	4,578	$	34,567
2026	56,860		6,996		63,856
2027	53,788		4,940		58,728
2028	35,898		4,409		40,307
2029	32,405		4,245		36,650
Thereafter	227,100		133,646		360,746
Total lease payments	436,040		158,814		594,854
Less: Imputed interest	79,612		87,797		167,409
Total lease liabilities	$	356,428	$	71,017	$	427,445

Supplemental cash flow and other information related to leases were as follows:


	Six Months Ended
	June 29, 2025		June 30, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	28,831	$	24,050
Operating cash flows from finance leases	2,249		2,349
Financing cash flows from finance leases	3,286		3,065

ROU assets obtained in exchange for lease liabilities:
Operating leases	$	31,804	$	53,404
Finance leases	62		983