Donnelley Financial Solutions, Inc. Leases Disclosure
Note 5. Leases
The Company has operating leases for certain service centers, office space and equipment as well as finance leases, substantially all related to information technology equipment. The Company determines if an arrangement is a lease at inception. The Company must consider whether the contract conveys the right to control the use of an identified asset. Certain arrangements require significant judgment to determine if an asset is specified in the contract and if the Company directs how and for what purpose the asset is used during the term of the contract.
All real estate leases are recorded on the audited Consolidated Balance Sheets. Equipment and other non-real estate leases with an initial term of twelve months or less are not recorded on the audited Consolidated Balance Sheets. Lease agreements for some locations provide for rent escalations and renewal options. Lease terms include the option to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain real estate leases require payment for taxes, insurance and maintenance which are considered non-lease components. The Company accounts for real estate leases and the related fixed non-lease components together as a single component.
The Company has non-cancelable sublease rental arrangements which did not reduce the future maturities of the operating lease liabilities at December 31, 2025 and 2024. The Company’s future rental commitments for leases with subleases were approximately $1.4 million and $4.7 million for the years ended December 31, 2025 and 2024, respectively. The Company remains secondarily liable under these leases in the event that the sub-lessee defaults under the sublease terms. The Company does not believe that material payments will be required as a result of the secondary liability provisions of the primary lease agreements.
The components of lease expense for the years ended December 31, 2025, 2024 and 2023 were as follows:
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Year Ended December 31, |
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2025 |
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2024 |
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2023 |
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Operating lease expense: |
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Operating lease expense |
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$ |
7.3 |
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$ |
9.8 |
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$ |
16.3 |
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Sublease income |
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(3.6 |
) |
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(4.4 |
) |
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(4.2 |
) |
Net operating lease expense |
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$ |
3.7 |
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$ |
5.4 |
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$ |
12.1 |
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Finance lease expense: |
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Amortization of ROU assets |
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$ |
2.1 |
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$ |
2.9 |
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$ |
2.4 |
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Interest on lease liabilities |
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0.2 |
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0.2 |
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0.3 |
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Total finance lease expense |
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$ |
2.3 |
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$ |
3.1 |
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$ |
2.7 |
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The Company’s finance leases as of December 31, 2025 and 2024 are presented on the Company’s audited Consolidated Balance Sheets as follows:
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December 31, |
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2025 |
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2024 |
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$ |
3.9 |
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$ |
2.9 |
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$ |
0.9 |
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$ |
2.8 |
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2.2 |
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0.2 |
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Total |
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$ |
3.1 |
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$ |
3.0 |
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Other information related to operating and finance leases for the years ended December 31, 2025, 2024 and 2023 and as of December 31, 2025 and 2024 was as follows:
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Year Ended December 31, |
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2025 |
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2024 |
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2023 |
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Supplemental cash flow information: |
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Cash paid related to operating leases |
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$ |
10.1 |
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$ |
14.7 |
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$ |
17.5 |
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Cash paid related to principal payments on finance leases |
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3.2 |
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2.9 |
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2.4 |
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Non-cash disclosure: |
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Increase in operating lease liabilities due to new ROU assets |
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$ |
0.2 |
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$ |
— |
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$ |
0.5 |
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(Decrease) increase in operating lease liabilities due to lease modifications and remeasurements |
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(0.9 |
) |
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5.0 |
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(3.2 |
) |
Increase in finance lease liabilities due to new ROU assets |
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2.9 |
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0.9 |
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2.5 |
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December 31, |
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2025 |
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2024 |
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Weighted-average remaining lease term: |
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Operating leases |
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2.0 years |
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1.9 years |
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Finance leases |
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3.8 years |
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1.9 years |
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Weighted-average discount rate: |
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Operating leases |
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7.1 |
% |
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5.3 |
% |
Finance leases |
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6.6 |
% |
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7.5 |
% |
As of December 31, 2025, future maturities of lease liabilities were as follows:
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Operating Leases |
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Finance Leases |
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2026 |
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$ |
4.1 |
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$ |
0.9 |
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2027 |
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2.8 |
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0.9 |
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2028 |
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0.7 |
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0.8 |
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2029 |
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— |
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0.8 |
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2030 |
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— |
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— |
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2031 and thereafter |
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— |
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— |
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Total lease payments |
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7.6 |
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3.4 |
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Less: Interest |
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(0.4 |
) |
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(0.3 |
) |
Present value of lease liabilities |
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$ |
7.2 |
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$ |
3.1 |
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The Company recorded a benefit of $1.6 million during the year ended December 31, 2025 related to the acceleration of rent expense associated with termination and modification of certain operating leases. The Company recorded a charge of $3.7 million for the acceleration of rent expense associated with abandoned leases during the year ended December 31, 2023. Accelerated rent (benefit) expense was recorded in either cost of sales or SG&A expenses on the Company’s audited Consolidated Statements of Operations, depending on the nature of the property.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 25, 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.