RBC Bearings INC Leases Disclosure

8. Leases

 

The Company enters into leases for manufacturing facilities, warehouses, sales offices, information technology equipment, plant equipment, vehicles and certain other equipment with varying end dates from April 2026 to March 2043, including renewal options.

 

The following table represents the impact of leasing on the consolidated balance sheets:

 

Assets:			Balance Sheet Classification		March 28, 2026				March 29, 2025
Operating lease assets			Operating lease assets		$	68.7			$	58.6
Finance lease right of use assets, net			Property, plant and equipment, net			41.4				45.3
Total leased assets, net					$	110.1			$	103.9
Liabilities:
Current operating lease liabilities			Current operating lease liabilities		$	10.7			$	9.2
Current finance lease liabilities			Accrued expenses and other current liabilities			5.6				5.9
Noncurrent operating lease liabilities			Noncurrent operating lease liabilities			59.0				50.3
Noncurrent finance lease liabilities			Other noncurrent liabilities			40.6				43.4
Total lease liabilities					$	115.9			$	108.8

For the year ended March 28, 2026, $51.9 of assets included in buildings and improvements and $9.6 of assets included in machinery and equipment were accounted for as finance leases. For the year ended March 29, 2025, $51.8 of assets included in buildings and improvements and $8.8 of assets included in machinery and equipment were accounted for as finance leases. At March 28, 2026 and March 29, 2025, the Company had accumulated amortization of $20.1 and $15.3 associated with these assets, respectively. Amortization expense associated with these finance leases was $5.4, $5.2 and $4.9 for the years ended March 28, 2026, March 29, 2025 and March 30, 2024, respectively, and is included within depreciation expense within costs of goods sold on the consolidated statements of operations.

 

Cash paid associated with operating lease liabilities was $10.0 and $9.0 for the fiscal years ended March 28, 2026 and March 29, 2025, respectively, all of which were included within the operating cash flow section of the consolidated statements of cash flows. Lease assets obtained in exchange for new operating lease liabilities were $15.9 and $24.4 for the fiscal years ended March 28, 2026 and March 29, 2025, respectively. Lease modifications which resulted in newly obtained lease assets in exchange for new operating lease liabilities were $1.5 and $0.8 for the fiscal years ended March 28, 2026 and March 29, 2025, respectively.

 

Cash paid associated with finance lease liabilities was $6.2 and $6.0 for the fiscal years ended March 28, 2026 and March 29, 2025, respectively. Of these amounts, $4.6 and $4.1 were included within the financing cash flow section of the consolidated statements of cash flows for the fiscal years ended March 28, 2026 and March 29, 2025, respectively. $1.6 and $1.7 of these cash payments were included within the operating cash flow section of the consolidated statements of cash flows for the fiscal years ended March 28, 2026 and March 29, 2025, respectively. Lease assets obtained in exchange for new finance lease liabilities were $1.5 and $1.3 for the fiscal years ended March 28, 2026 and March 29, 2025, respectively. Lease modifications which resulted in reductions of lease assets in exchange for reductions of finance lease liabilities were $0.0 and $0.0 for the fiscal years ended March 28, 2026 and March 29, 2025, respectively.

 

Total operating lease expense was $11.1, $10.4 and $10.1 for the fiscal years ended March 28, 2026, March 29, 2025 and March 30, 2024, respectively. Operating lease expense included within cost of sales totaled $8.5, $8.0, and $7.8 for the fiscal years ended March 28, 2026, March 29, 2025 and March 30, 2024, respectively. The remaining operating lease expense was included within selling, general and administrative expenses on the consolidated statement of operations. Short-term and variable lease expenses were immaterial.

 

Total finance lease expense was $7.0 for the fiscal year ended March 28, 2026, of which, $5.4 was related to amortization expense of finance lease assets. Of the total $5.4 lease amortization expense $2.2 was included within cost of sales and $3.2 was included within selling, general and administrative expenses for the fiscal year ended March 28, 2026. The remaining $1.6 was related to interest expense for the fiscal year ended March 28, 2026. Total finance lease expense was $7.0 for the fiscal year ended March 29, 2025, of which, $5.3 was related to amortization expense of finance lease assets. Of the total $5.3 lease amortization expense $2.2 was included within cost of sales and $3.1 was included within selling, general and administrative expenses for the fiscal year ended March 29, 2025. The remaining $1.7 was related to interest expense. Total finance lease expense was $6.7 for the fiscal year ended March 30, 2024, of which, $5.0 was related to amortization expense of finance lease assets. Of the total $5.0 lease amortization expense $2.2 was included within cost of sales and $2.8 was included within selling, general and administrative expenses for the fiscal year ended March 30, 2024. The remaining $1.7 was related to interest expense. Variable lease expense was immaterial for each of the last three fiscal years.

 

Future undiscounted lease payments for the remaining lease terms as of March 28, 2026, including renewal options reasonably certain of being exercised, are as follows:

 

		Operating Leases				Finance Leases
Within one year		$	11.7			$	5.9
One to two years			10.4				5.1
Two to three years			8.7				4.4
Three to four years			8.4				4.3
Four to five years			7.9				4.2
Thereafter			44.4				33.3
Total future undiscounted lease payments			91.5				57.2
Less: imputed interest			(21.8	)			(11.0	)
Total lease liabilities		$	69.7			$	46.2

The weighted-average remaining lease term on March 28, 2026 for our operating leases is 10.4 years. The weighted-average discount rate on March 28, 2026 for our operating leases is 5.7%.

 

The weighted-average remaining lease term on March 28, 2026 for our finance leases is 12.8 years. The weighted-average discount rate on March 28, 2026 for our finance leases is 3.5%.