Leases
The following represents the components of lease cost and other information for both operating and financing leases for the fiscal years 2025, 2024 and 2023:
| | | | | | | | | | | | | | |
| ($ in millions) | | Fiscal Year |
| | 2025 | 2024 | 2023 |
| Lease Cost | | | | |
| Finance Lease Cost: | | | | |
| Amortization of right of use asset | | $ | 17.6 | | $ | 14.1 | | $ | 10.9 | |
| Interest on lease liabilities | | 6.7 | | 6.3 | | 4.6 | |
| Operating lease cost | | 21.3 | | 17.0 | | 17.6 | |
| Short-term lease cost | | 5.8 | | 6.3 | | 4.5 | |
| Variable lease cost | | 0.6 | | 0.7 | | 1.0 | |
| Sublease income | | (1.9) | | (1.2) | | (0.4) | |
| Total lease cost | | $ | 50.1 | | $ | 43.2 | | $ | 38.2 | |
| | | | |
| Other information | | | | |
| Cash paid for amounts included in the measurement of lease liabilities | | | | |
| Operating cash flows from finance leases | | $ | 6.6 | | $ | 6.1 | | $ | 4.6 | |
| Operating cash flows from operating leases | | $ | 22.3 | | $ | 18.8 | | $ | 16.8 | |
| Financing cash flows from finance leases | | $ | 32.3 | | $ | 29.1 | | $ | 24.9 | |
| Right of use assets obtained in exchange for new finance lease liabilities | | $ | 26.7 | | $ | 31.6 | | $ | 54.6 | |
| Right of use assets obtained in exchange for new operating lease liabilities | | $ | 39.7 | | $ | 12.1 | | $ | 25.8 | |
| Weighted average remaining lease term - finance leases | | 4 years | 4 years | 4 years |
| Weighted average remaining lease term - operating leases | | 6 years | 7 years | 7 years |
| Weighted average discount rate - finance leases | | 6.3 | % | 6.3 | % | 5.4 | % |
| Weighted average discount rate - operating leases | | 6.9 | % | 7.0 | % | 7.1 | % |
The following table reconciles future minimum undiscounted rental commitments for operating leases to the operating lease liabilities recorded on the consolidated balance sheet as of December 28, 2025 (in millions):
| | | | | | | | |
| Fiscal Year | | December 28, 2025 |
| 2026 | | $ | 22.3 | |
| 2027 | | 18.9 | |
| 2028 | | 16.5 | |
| 2029 | | 14.4 | |
| 2030 | | 10.2 | |
| 2031 and thereafter | | 28.1 | |
| Total undiscounted lease payments | | $ | 110.4 | |
| Present value adjustment | | (21.4) | |
| Operating lease liabilities | | $ | 89.0 | |
The following table reconciles future minimum undiscounted rental commitments for finance leases to the finance lease liabilities recorded on the consolidated balance sheet as of December 28, 2025 (in millions):
| | | | | | | | |
| Fiscal Year | | December 28, 2025 |
| 2026 | | $ | 36.2 | |
| 2027 | | 32.4 | |
| 2028 | | 25.9 | |
| 2029 | | 19.7 | |
| 2030 | | 8.5 | |
| 2031 and thereafter | | 0.1 | |
| Total undiscounted lease payments | | $ | 122.8 | |
| Present value adjustment | | (12.4) | |
| Finance lease liabilities | | $ | 110.4 | |
The Company has agreed to enter into certain finance lease contracts with lenders for progress payments on machinery and equipment that is being constructed at the request and specification of the Company. As of December 28, 2025, the lenders had made $38.0 million of progress payments on behalf of the Company, and $34.3 million of progress payments are scheduled to be paid. Upon payment of the final progress payments by the lenders, finance leases will commence, and $72.3 million, discounted using the applicable discount rates at lease inceptions, of ROU assets and lease liabilities will be recognized by the Company. The Company received payments payments of $9.7 million and $2.8 million, respectively, as proceeds on the sale of ongoing construction in progress projects that were converted to leases, for the fiscal years ended December 29, 2024 and December 31, 2023. There were no such payments in the fiscal year ended 2025. These payments are presented as investing activities on the consolidated statements of cash flows.
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.