Company: SBH
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001193125-25-280122
Chunk: 51

Company: Sally Beauty Holdings, Inc.
Filing Date: 2025-11-13
Form: 10-K
Item: Item 6
Chunk 51
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 incremental borrowing rate. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because we do not generally borrow on a collateralized basis, we derive an appropriate incremental borrowing rate using the interest rate we pay on our non-collateralized borrowings, adjusted for the amount of the lease payments, the lease term and the effect of designating specific collateral with a value equal to the unpaid lease payments for that lease. We apply the incremental borrowing rate on a portfolio basis given the impact of applying it on a lease by lease basis would be immaterial.Operating lease assets are valued based on the initial operating lease liabilities plus any prepaid rent and direct costs from executing the leases, reduced by tenant improvement allowances and any rent abatement. Operating lease assets are tested for impairment in the same manner as our long-lived assets. No material impairment losses were recorded during the fiscal years presented.Property and EquipmentProperty and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the lesser of the estimated useful lives of the assets or the term of the related lease, including renewals considered reasonably assured. Expenditures for maintenance and repairs are included in selling, general and administrative expenses when incurred, while expenditures for major renewals and improvements that substantially extend the useful life of an asset are capitalized.The following table summarizes our property and equipment balances and their estimated useful lives (dollars in thousands):

           Life
            
           September 30,

           (in years)
            
           2025

           2024

           Land
            
           N/A
            
           $
           4,256

           $
           5,672

           Buildings and building improvements
            
           5 – 40

           32,188

           45,564

           Leasehold improvements
            
           1 – 26

           358,051

           317,976

           Furniture, fixtures and equipment
            
           1 – 10

           827,385

           782,478

           Total property and equipment, gross

           1,221,880

           1,151,690

           Accumulated depreciation and amortization

           (937,596
           )

           (881,818
           )

           Total property and equipment, net

           $
           284