9.
Leases

 

The Company leases certain manufacturing facilities, warehouses, office space, railcars and equipment. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet. All recorded leases are classified as operating leases and lease expense is recognized on a straight-line basis over the lease term. For leases beginning in 2019, lease components (base rental costs) are accounted for separately from the nonlease components (e.g., common-area maintenance costs). For leases that do not provide an implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

 

 

A summary of the Company’s lease information is as follows:

 

 

December 31,

 

 

December 31,

 

 

Classification

2025

 

 

2024

 

Assets

 

 

 

 

 

 

Right of use assets

Other Assets

$

166.0

 

 

$

182.3

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Current lease liabilities

Accrued Expenses and Other Liabilities

$

23.9

 

 

$

32.4

 

Long-term lease liabilities

Deferred and Other Long-term Liabilities

 

153.0

 

 

 

168.5

 

Total lease liabilities

 

$

176.9

 

 

$

200.9

 

 

 

 

 

 

 

 

Other information

 

 

 

 

 

 

Weighted-average remaining lease term (years)

 

 

7.4

 

 

 

7.4

 

Weighted-average discount rate

 

 

5.2

%

 

 

4.6

%

 

 

 

Twelve Months

 

 

 

Twelve Months

 

 

Twelve Months

 

 

 

 

Ended

 

 

 

Ended

 

 

Ended

 

 

 

 

December 31, 2025

 

 

 

December 31, 2024

 

 

December 31, 2023

 

 

Statement of Income

 

 

 

 

 

 

 

 

 

 

 

Lease cost(1)

 

$

42.2

 

 

 

$

40.2

 

 

$

31.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months

 

 

 

Twelve Months

 

 

 

 

 

 

 

Ended

 

 

 

Ended

 

 

 

 

 

 

 

December 31, 2025

 

 

 

December 31, 2024

 

 

 

 

 

Other information

 

 

 

 

 

 

 

 

 

 

 

Leased assets obtained in exchange for new lease liabilities(2)

 

$

15.4

 

 

 

$

28.0

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

$

42.5

 

 

 

$

35.3

 

 

 

 

 

(1)
Lease expense is included in cost of sales or SG&A expenses based on the nature of the leased item. Short-term lease expense is excluded from this amount and is not material. The Company also has certain variable leases which are not material. The noncash component of lease expense for the twelve months ended December 31, 2025, 2024 and 2023 was $32.7, $30.9 and $24.3, respectively, is included in the amortization caption in the consolidated statement of cash flows.
(2)
Leased assets obtained in exchange for new lease liabilities in 2025 consisted of $48.6 of real estate lease additions and $3.7 of equipment lease additions, net of modifications, offset by $36.9 in lease terminations resulting from the sale of the VMS business. The additions include an increase to the Company's right of use asset and corresponding lease liabilities of $31.7 for an agreement between the Company and a third-party warehouse provider for new warehouse space in December 2025. In April 2025, the Company extended the lease term at one of its leased warehouse facilities. This resulted in an increase to the Company’s right of use assets and corresponding lease liabilities of approximately $11.0 recorded in the second quarter of 2025. Leased assets obtained in exchange for new lease liabilities in 2024 consisted of $16.8 of real estate lease additions and $11.2 of equipment lease additions, net of modifications. These additions included expanded space at one of the Company's leased manufacturing
facilities. This resulted in an increase to the Company’s right of use assets and corresponding lease liabilities of approximately $15.4 recorded in the first quarter of 2024.

The Company’s minimum annual rentals including reasonably assured renewal options under lease agreements are as follows:

 

 

 

Operating

 

 

 

Leases

 

2026

 

$

32.4

 

2027

 

 

30.7

 

2028

 

 

26.6

 

2029

 

 

26.0

 

2030

 

 

25.9

 

2031 and thereafter

 

 

73.6

 

Total future minimum lease commitments

 

 

215.2

 

Less: Imputed interest

 

 

(38.3

)

Present value of lease liabilities

 

$

176.9

 

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Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 13, 2025
2023Feb 15, 2024
2022Feb 16, 2023
2021Feb 17, 2022
2020Feb 18, 2021
2019Feb 18, 2020

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.