GRAPHIC PACKAGING HOLDING COGPK

GRAPHIC PACKAGING HOLDING CO Leases Disclosure

10-KFiled Mar 2, 20262 min read
Leases
The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for warehouses, corporate and regional offices, and machinery and equipment. The Company enters into lease contracts ranging from one to 25 years with the majority of leases having terms of three to seven years, many of which include options to extend in various increments. Variable lease costs consist primarily of variable warehousing costs, common area maintenance, taxes, and insurance. The Company's leases do not have any significant residual value guarantees or restrictive covenants.

As the implicit rate is not readily determinable for most of the Company's leases agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company's credit spread adjusted for current market factors, including fixed rate swaps, EURIBOR, and foreign currency rates.
The components of lease costs are as follows:

Year Ended December 31,
In millions20252024
Finance lease costs:
Amortization of right-of-use assets$10 $8 
Interest on lease liabilities8 8 
Operating lease costs80 78 
Short-term lease costs32 39 
Variable lease costs37 23 
Total lease costs, net$167 $156 

Supplemental cash flow information related to leases was as follows:

Year Ended December 31,
In millions20252024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$76 $74 
Operating cash flows from finance leases8 8 
Financing cash flows from finance leases7 7 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases86 104 
Finance leases— 1 
Supplemental balance sheet information related to leases was as follows:

December 31,
In millions, except lease term and discount rateBalance Sheet Classification20252024
Operating Leases:
Operating lease right-of-use assetsOther Assets$279 $256 
Current operating lease liabilitiesOther Accrued Liabilities$67 $63 
Noncurrent operating lease liabilitiesOther Noncurrent Liabilities228 209 
Total operating lease liabilities$295 $272 
Finance Leases:
Property, Plant and Equipment$182 $182 
Accumulated depreciation(66)(57)
Property, Plant and Equipment, net$116 $125 
Current finance lease liabilitiesShort-Term Debt and Current Portion of Long-Term Debt$7 $7 
Noncurrent finance lease liabilitiesLong-Term Debt134 138 
Total finance lease liabilities$141 $145 
Weighted-Average Remaining Lease Term (Years):
Operating leases77
Finance leases1415
Weighted-Average Discount Rate:
Operating leases4.60 %4.60 %
Finance leases5.21 %5.28 %

Maturities of lease liabilities are as follows:

In millions
Year ending December 31,
Operating LeasesFinance Leases
2026$80 $14 
202768 15 
202852 15 
202939 15 
203027 15 
Thereafter95 130 
Total lease payments$361 $204 
Less imputed interest(66)(63)
Total$295 $141 

Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Feb 12, 2025
2023Feb 21, 2024
2022Feb 9, 2023
2021Feb 22, 2022
2020Feb 16, 2021
2019Feb 11, 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.

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