LEASES
We determine if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and liabilities are included in other assets, net and other current and long-term liabilities, respectively, in our Consolidated Balance Sheets.
Operating lease ROU assets and lease liabilities are recognized based on the present value of the future fixed lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, we use our quarterly incremental borrowing rate based on the information available that corresponds to each lease commencement date and lease term when determining the present value of future payments.
Our operating leases principally involve office space. These operating leases may contain variable non-lease components consisting of common area maintenance, operating expenses, insurance and similar costs of the office space that we occupy. We have adopted the practical expedient to not separate these non-lease components from the lease components and instead account for them as a single lease component for all of our leases. The operating lease ROU assets include future fixed lease payments made as well as any initial direct costs incurred and exclude lease incentives. Variable lease payments are not included within the operating lease ROU assets or lease liabilities and are expensed in the period in which they are incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
Lease expense for operating leases was $51.2 million, $50.0 million and $40.7 million for the twelve months ended December 31, 2025, 2024 and 2023, respectively. Our leases have remaining lease terms of one year to ten years, some of which may include options to extend the lease term up to five years and some of which may include options to terminate leases within one year. We have elected to not record operating lease ROU assets and liabilities for short-term leases that have a term of twelve months or less. Our lease expense includes our short-term lease cost which is not material to our Consolidated Financial Statements.
Other information related to our operating leases was as follows:
| | | | | | | | |
| Twelve Months Ended December 31, 2025 | | Amount |
| (in millions, except lease term and discount rate) | | |
| Supplemental Cash Flows Information | | |
| Cash paid for amounts included in the measurement of lease liabilities: | | |
| Operating cash flows used by operating leases | | $ | 38.5 |
| Right-of-use assets obtained in exchange for lease obligations (non-cash): | | |
| Operating leases | | $ | 24.6 |
| | |
| Weighted Average Remaining Lease Term | | 5.7 |
| Weighted Average Discount Rate | | 5.0 | % |
Estimated future minimum payment obligations for non-cancelable operating leases are as follows as of December 31, 2025:
| | | | | | | | |
| Years ending December 31, | | Amount |
| | (In millions) |
| 2026 | | $ | 36.1 | |
| 2027 | | 30.7 | |
| 2028 | | 21.8 | |
| 2029 | | 16.6 | |
| 2030 | | 14.1 | |
| Thereafter | | 29.6 | |
| | $ | 148.9 | |
We do not have any significant sublease agreements and, as a result, expected sublease income is not reflected as a reduction in the total minimum rental obligations under operating leases in the table above.