The Company has operating leases for headquarters and field offices and various equipment. The Company's leases generally have remaining lease terms of one year to 10 years. The Company determines if an arrangement is a lease at inception.
The components of lease expense are recorded in SG&A expenses and were as follows:
| | | | | | | | | | | |
| December Year-to-Date |
| Description | 2025 | 2024 | 2023 |
| Operating: | | | |
| Operating lease cost | $ | 15.2 | | $ | 14.6 | | $ | 21.0 | |
| Short-term lease cost | 0.5 | | 0.6 | | 2.0 | |
| Variable lease cost | 3.5 | | 3.5 | | 6.1 | |
| Financing: | | | |
| Amortization of ROU assets | — | | 0.3 | | 0.6 | |
| Total lease cost | $ | 19.2 | | $ | 19.0 | | $ | 29.7 | |
Supplemental consolidated balance sheet information related to leases is as follows:
| | | | | | | | | | | | | | |
| Description | Balance Sheet Location | As of Year-End 2025 | As of Year-End 2024 | |
| ROU Assets: | | | | |
| Operating | Operating lease right-of-use assets | $ | 42.9 | | $ | 47.0 | | (1) |
| | | | |
| Total lease assets | | $ | 42.9 | | $ | 47.0 | | |
| | | | |
| ROU Liabilities: | | | | |
| Operating - current | Operating lease liabilities, current | $ | 12.3 | | $ | 12.3 | | |
| | | | |
| Operating - noncurrent | Operating lease liabilities, noncurrent | 44.9 | | 50.9 | | |
| | | | |
| Total lease liabilities | | $ | 57.2 | | $ | 63.2 | | |
(1)2024 ROU operating assets reflect an impairment charge of $12.1 million, related to the Company's leased headquarters facility reflecting adjustments as to how the Company is utilizing the building as a part of the Company's transformation efforts. The impairment charges related to the ROU assets are recorded in asset impairment charge in the consolidated statements of earnings (see the Integration, Realignment and Restructuring footnote).
Weighted average remaining lease terms and discount rates for operating leases are as follows:
| | | | | | | | |
| December Year-to-Date |
| 2025 | 2024 |
| | |
| Weighted average remaining lease term (years): | 6.4 | 7.0 |
| | |
| | |
| Weighted average discount rate: | 5.7 | % | 5.8 | % |
| | |
Other information related to leases were as follows:
| | | | | | | | | | | | |
| | December Year-to-Date |
| | 2025 | 2024 | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | |
| Operating cash flows from operating leases | | $ | 16.3 | | $ | 15.0 | | $ | 20.6 | |
| Financing cash flows from financing leases | | — | | — | | 1.2 | |
| | | | |
| ROU assets obtained in exchange for new lease obligations: | | | | |
| Operating leases | | $ | 6.6 | | $ | 10.4 | | $ | 12.6 | |
| | | | |
Maturities of operating lease liabilities as of year-end 2025 are as follows:
| | | | | | | |
| 2026 | $ | 15.1 | | | |
| 2027 | 11.1 | | | |
| 2028 | 9.0 | | | |
| 2029 | 7.9 | | | |
| 2030 | 7.1 | | | |
| Thereafter | 17.5 | | | |
| Total future lease payments | 67.7 | | | |
| Less: Imputed interest | 10.5 | | | |
| Total | $ | 57.2 | | | |
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.