McGraw Hill, Inc.MH

McGraw Hill, Inc. Leases Disclosure

10-KFiled Jun 11, 20262 min read
15. Leases
The Company leases property under operating leases with expiration dates through 2040 as well as computer systems and office equipment under finance leases with lease terms ranging from 12 to 50 months.
Lease Position as of March 31, 2026 and 2025
The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheets:
March 31,
Balance Sheet Classification20262025
Assets
Operating leasesOperating lease right-of-use assets$44,836 $49,661 
Finance leasesProperty, plant and equipment, net15,978 9,802 
Total lease assets
$60,814 $59,463 
Liabilities
Current:
Operating leasesOperating lease liabilities$8,365 $8,042 
Finance leasesOther current liabilities6,172 4,631 
Non-current:
Operating leasesOperating lease liabilities57,301 64,737 
Finance leasesOther non-current liabilities9,891 5,578 
Total lease liabilities
$81,729 $82,988 
Weighted-average remaining lease term:
Operating leases8.269.21
Finance leases2.912.67
Weighted-average incremental borrowing rate:
Operating leases10.90 %10.96 %
Finance leases7.88 %9.06 %
Lease Costs
The table below presents certain information related to the lease costs for operating and finance leases:
Year Ended March 31,
202620252024
Operating lease cost$13,631 $15,604 $16,990 
Short-term lease cost830 1,073 1,404 
Finance lease cost:
Amortization of assets5,995 4,869 14,583 
Interest on lease liabilities1,145 1,137 1,742 
Sublease income(2,661)(2,792)(2,624)
Total net lease cost
$18,940 $19,891 $32,095 
Other Information
Supplemental cash flow information related to leases was as follows:
Year Ended March 31,
202620252024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases$15,683 $17,821 $19,157 
Operating cash outflows for finance leases1,188 1,087 1,742 
Financing cash outflows for finance leases6,722 9,193 11,496 
Non-cash financing activities: Finance lease obligation12,884 4,266 6,034 
Undiscounted Cash Flows
The table below reconciles the undiscounted cash flows by fiscal year to the operating and finance lease liabilities recorded on the consolidated balance sheets:
March 31, 2026
Operating LeasesFinance Leases
2027$14,951 $7,138 
202811,387 5,646 
202911,019 3,080 
203010,461 1,645 
203110,242 300 
Thereafter43,244 — 
Total lease payments101,304 17,809 
Less: amounts related to interest(35,638)(1,746)
Total lease liabilities65,666 16,063 
Less: current liabilities(8,365)(6,172)
Non-current lease liabilities
$57,301 $9,891 
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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.

Other Available Disclosures

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