Lease Obligations
Substantially all of our operating lease right-of-use assets and operating lease liabilities represent leases for certain operating facilities, warehouses, office space, trucking equipment, and various other assets. Finance lease balances consist of vehicle and certain equipment leases. Our leases have terms that expire at various dates through 2039, some of which include options to extend or terminate the leases at our discretion.
Supplemental balance sheet information related to leases was as follows:
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Operating leases: | | | |
| Operating lease right-of-use assets | $ | 137.9 | | | $ | 175.7 | |
| | | |
| Current portion of operating lease liabilities | $ | 51.5 | | | $ | 53.4 | |
| Operating lease liabilities | 106.7 | | | 131.1 | |
| Total operating lease liabilities | $ | 158.2 | | | $ | 184.5 | |
| | | |
| Finance leases: | | | |
| Other noncurrent assets | $ | 3.9 | | | $ | 3.6 | |
| | | |
| Current maturities of long-term debt | $ | 1.5 | | | $ | 1.3 | |
| Long-term debt | 2.4 | | | 2.4 | |
| Total finance lease liabilities | $ | 3.9 | | | $ | 3.7 | |
The components of lease expense were as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease costs: | | | | | |
| Lease costs | $ | 61.8 | | | $ | 65.6 | | | $ | 65.4 | |
| Variable lease costs | 17.4 | | | 15.0 | | | 18.6 | |
| Total operating lease costs | $ | 79.2 | | | $ | 80.6 | | | $ | 84.0 | |
| | | | | |
| Short-term lease costs | $ | 6.3 | | | $ | 6.6 | | | $ | 6.6 | |
| | | | | |
| Finance lease costs: | | | | | |
| Amortization of right-of-use assets | $ | 1.4 | | | $ | 1.5 | | | $ | 1.8 | |
| Interest on lease liabilities | .1 | | | .1 | | | .1 | |
| Total finance lease costs | $ | 1.5 | | | $ | 1.6 | | | $ | 1.9 | |
| | | | | |
| Total lease costs | $ | 87.0 | | | $ | 88.8 | | | $ | 92.5 | |
Variable lease costs consist primarily of taxes, insurance, and common-area or other maintenance costs for our leased facilities and equipment, which are paid based on actual costs incurred by the lessor.
Supplemental cash flow information related to leases was as follows: | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 64.1 | | | $ | 66.5 | | | $ | 60.4 | |
| Operating cash flows from finance leases | .1 | | | .1 | | | .1 | |
| Financing cash flows from finance leases | 1.4 | | | 1.5 | | | 1.8 | |
| | | | | |
| Right-of-use assets obtained in exchange for new operating lease liabilities | 35.1 | | | 44.6 | | | 59.8 | |
| Right-of-use assets obtained in exchange for new finance lease liabilities | 1.7 | | | 1.1 | | | 1.4 | |
The following table reconciles the undiscounted cash flows for the operating and finance leases at December 31, 2025 to the operating and finance lease liabilities recorded on the Consolidated Balance Sheets:
| | | | | | | | | | | |
| December 31, 2025 |
| Operating Leases | | Finance Leases |
| 2026 | $ | 55.9 | | | $ | 1.6 | |
| 2027 | 44.8 | | | 1.3 | |
| 2028 | 26.7 | | | .9 | |
| 2029 | 18.7 | | | .3 | |
| 2030 | 11.4 | | | — | |
| Thereafter | 10.1 | | | — | |
| Total | 167.6 | | | 4.1 | |
| Less: interest | 9.4 | | | .2 | |
| Lease liability | $ | 158.2 | | | $ | 3.9 | |
| | | |
| Weighted average remaining lease term (years) | 4.0 | | 2.9 |
| Weighted average discount rate | 3.1 | % | | 3.6 | % |
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.