COMPASS MINERALS INTERNATIONAL INCCMP
COMPASS MINERALS INTERNATIONAL INC Leases Disclosure
LEASES
The Company enters into leases for warehouses and depots, rail cars, vehicles, mobile equipment, office space and certain other types of property and equipment. The Company determines whether an arrangement is or contains a lease at the inception of the contract. The right-of-use asset and lease liability are recognized based on the present value of the future minimum lease payments over the estimated lease term. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company estimates its incremental borrowing rate for each lease based upon the estimated lease term, the
type of asset and the location of the leased asset. The most significant judgments in the application of the FASB guidance include whether a contract contains a lease and the lease term.
Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. Many of the Company’s leases include one or more options to renew and extend the initial lease term. The exercise of lease renewal options is generally at the Company’s discretion. The lease term includes renewal periods in only those instances in which the Company determines it is reasonably assured of renewal.
The depreciable lives of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. In these instances, the assets are depreciated over the useful life of the asset.
The Company has elected the practical expedient available under the FASB guidance to not separate lease and non-lease components on all of its lease categories. As a result, many of the Company’s leases include variable payments for services (such as handling or storage) or payments based on the usage of the asset. In addition, certain of the Company’s lease agreements include rental payments that are adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or any material restrictive covenants. The Company’s sublease income is immaterial.
On May 20, 2025, the Company purchased equipment previously leased for Fortress for $2.8 million, resulting in the termination of the related lease. The Company derecognized the right-of-use asset and lease liability. The carrying value of the lease liability was $1.5 million and the right-of-use asset was $1.4 million at the date of purchase. The $1.3 million difference between the purchase price and the lease liability was recorded as an adjustment to the carrying amount of the purchased equipment. Substantially all of the equipment, with a carrying value of $2.7 million included in Property, plant and equipment, net, (“PP&E”) on the Consolidated Balance Sheets, was subsequently disposed of during the fiscal year ended September 30, 2025.
The Company’s Consolidated Balance Sheets includes the following (in millions):
| Consolidated Balance Sheet Location | September 30, 2025 | September 30, 2024 | |||||||||||||||
| Assets | |||||||||||||||||
| Operating lease assets | $ | 52.3 | $ | 50.0 | |||||||||||||
| Finance lease assets | 17.2 | 15.7 | |||||||||||||||
| Total lease assets | $ | 69.5 | $ | 65.7 | |||||||||||||
| Liabilities | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Operating | $ | 14.7 | $ | 13.3 | |||||||||||||
| Finance | Current portion of finance lease liabilities | 7.9 | 5.2 | ||||||||||||||
| Noncurrent liabilities: | |||||||||||||||||
| Operating | 39.2 | 38.6 | |||||||||||||||
| Finance | Finance lease liabilities, net of current portion | 7.6 | 11.2 | ||||||||||||||
| Total lease liabilities | $ | 69.4 | $ | 68.3 | |||||||||||||
The Company’s components of lease cost are as follows (in millions):
| Fiscal Year Ended | ||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of lease assets | $ | 5.3 | $ | 2.8 | $ | 1.5 | ||||||||||||||
| Interest on lease liabilities | 1.1 | 0.5 | 0.2 | |||||||||||||||||
| Operating lease cost | 18.7 | 20.9 | 20.9 | |||||||||||||||||
Variable lease cost(a) | 15.6 | 15.9 | 16.7 | |||||||||||||||||
| Total lease cost | $ | 40.7 | $ | 40.1 | $ | 39.3 | ||||||||||||||
(a)Short-term leases are immaterial and included in variable lease cost.
Minimum annual payments required under existing operating and finance leases and the net present value thereof as of September 30, 2025 (in millions):
Fiscal Years Ending September 30: | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2026 | $ | 17.4 | $ | 8.6 | $ | 26.0 | ||||||||||||||
| 2027 | 12.8 | 3.4 | 16.2 | |||||||||||||||||
| 2028 | 9.9 | 1.6 | 11.5 | |||||||||||||||||
| 2029 | 8.3 | 0.5 | 8.8 | |||||||||||||||||
| 2030 | 6.9 | 0.4 | 7.3 | |||||||||||||||||
After 2030 | 6.5 | 4.5 | 11.0 | |||||||||||||||||
| Total lease payments | 61.8 | 19.0 | 80.8 | |||||||||||||||||
| Less: Interest | (7.9) | (3.5) | (11.4) | |||||||||||||||||
| Present value of lease liabilities | $ | 53.9 | $ | 15.5 | $ | 69.4 | ||||||||||||||
Supplemental lease term and discount rate information related to leases is as follows:
| Fiscal Year Ended | ||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||
| Weighted-average remaining lease term (years) | ||||||||||||||||||||
| Operating leases | 4.8 | 5.1 | 5.1 | |||||||||||||||||
| Finance leases | 7.1 | 7.8 | 13.2 | |||||||||||||||||
| Weighted-average discount rate | ||||||||||||||||||||
| Operating leases | 6.0 | % | 5.2 | % | 4.6 | % | ||||||||||||||
| Finance leases | 6.1 | % | 6.2 | % | 5.0 | % | ||||||||||||||
Supplemental cash flow information related to leases is as follows (in millions):
| Fiscal Year Ended | ||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | September 30, 2023 | ||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||||||
| Operating cash flows from operating leases | $ | 19.1 | $ | 20.9 | $ | 21.1 | ||||||||||||||
| Operating cash flows from finance leases | 1.1 | 0.5 | 0.2 | |||||||||||||||||
| Financing cash flows from finance leases | 10.1 | 2.7 | 1.5 | |||||||||||||||||
| Leased assets obtained in exchange for new operating lease liabilities | 17.9 | 13.0 | 14.5 | |||||||||||||||||
| Leased assets obtained in exchange for new finance lease liabilities | 6.7 | 12.0 | 5.3 | |||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 12, 2025 | Showing above |
| 2024 | Dec 16, 2024 | |
| 2023 | Nov 29, 2023 | |
| 2022 | Dec 14, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 26, 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.