Lease Arrangements
We lease manufacturing facilities, warehouse space, office space, machinery and equipment, information technology equipment and vehicles under operating leases. We also lease one building and numerous machinery and equipment under finance leases. For operating leases with terms greater than 12 months, we record the operating right-of-use asset and related lease liability at the present value of lease payments over the lease term. In certain real estate leases, we have options to renew
lease terms, generally at our sole discretion. We evaluate renewal options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors.
The discount rate implicit in our operating leases is generally not determinable, and therefore the Company determines the discount rate for each lease based on its incremental borrowing rate. The incremental borrowing rate is calculated based on lease term, currency and collateral adjustments.
During 2025, the Company obtained right-of-use assets in exchange for new operating lease liabilities of $12.2 million.
Balance Sheet as of December 31, 2025 and 2024
| | | | | | | | | | | | | | |
| Classification on the Balance Sheet | December 31, 2025 | | December 31, 2024 |
| Assets | | | | |
| Operating lease assets | Operating lease right-of-use assets | $ | 41.2 | | | $ | 40.3 | |
| Finance lease assets | Property, plant and equipment, net | 20.8 | | | 22.1 | |
| Total lease assets | | $ | 62.0 | | | $ | 62.4 | |
| | | | |
| Liabilities | | | | |
| Current | | | | |
| Operating | Current portion of operating lease liabilities | $ | 10.9 | | | $ | 10.7 | |
| Finance | Current portion of long-term debt and short-term debt | 3.2 | | | 3.3 | |
| Noncurrent | | | | |
| Operating | Long-term operating lease liabilities | 30.4 | | | 29.8 | |
| Finance | Long-term debt | 13.4 | | | 13.7 | |
| Total lease liabilities | | $ | 57.9 | | | $ | 57.5 | |
| | | | |
| Weighted-average remaining lease term (in years) | | | |
| Operating leases | | 4.7 | | 4.9 |
| Finance leases | | 4.1 | | 5.0 |
| Weighted-average discount rate | | | |
| Operating leases | | 5.5 | % | | 5.2 | % |
| Finance leases | | 6.2 | % | | 6.1 | % |
Lease Expense for 2025, 2024 and 2023
Operating lease expense is recognized on a straight-line basis over the lease term, with variable payments recognized in the period those payments are incurred.
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Finance lease expense | | | | | |
| Amortization of right-of-use assets | $ | 1.9 | | | $ | 2.9 | | | $ | 1.7 | |
| Interest on lease liabilities | 0.9 | | | 0.9 | | | 1.0 | |
| Operating lease expense | 15.1 | | | 15.5 | | | 14.8 | |
Other lease expense(1) | 10.4 | | | 7.6 | | | 9.6 | |
| Total lease expense | $ | 28.3 | | | $ | 26.9 | | | $ | 27.1 | |
| | | | | |
| (1) - Other lease expense includes variable lease costs and short-term lease costs. |
Cash Flow Information for 2025, 2024 and 2023
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Amounts included in the Consolidated Statements of Cash Flows: | | | | | |
| Operating cash outflows for operating leases | $ | (14.8) | | | $ | (15.1) | | | $ | (14.3) | |
| Operating cash outflows for finance leases | $ | (0.9) | | | $ | (0.9) | | | $ | (1.0) | |
| Financing cash (outflows) inflows for finance leases | $ | (0.5) | | | $ | 0.7 | | | $ | 0.9 | |
Maturities of Lease Liabilities as of December 31, 2025, were as follows:
| | | | | | | | | | | |
| |
| |
| Operating Leases | | Finance Leases |
| |
| 2026 | $ | 12.8 | | | $ | 3.3 | |
| 2027 | 10.1 | | | 3.1 | |
| 2028 | 8.2 | | | 3.1 | |
| 2029 | 6.2 | | | 5.3 | |
| 2030 | 4.3 | | | 3.2 | |
| Thereafter | 5.2 | | | 0.8 | |
| Total lease payments | 46.8 | | | 18.8 | |
| Less: amount of lease payments representing interest | (5.5) | | | (2.2) | |
| Total present value of future lease payments | $ | 41.3 | | | $ | 16.6 | |
Certain of the Company’s leases are with related parties at an annual rental expense of approximately $5.1 million. Transactions with related parties are not material to the Company’s financial position, results of operations or cash flows.