Solstice Advanced Materials Inc.SOLS

Solstice Advanced Materials Inc. Leases Disclosure

10-KFiled Feb 19, 20262 min read
Leases
The Company’s operating lease portfolio includes corporate offices, Research and development facilities, manufacturing sites, IT equipment, rail cars, automobiles and certain other equipment. The majority of the Company’s leases have remaining lease terms of one year to 10 years. The Company’s finance leases relate to supplier arrangements where certain facilities are used exclusively to fulfill the Company’s long-term supplies.
December 31,
202520242023
Operating lease cost$32 $36 $24 
Short-term lease cost— — 2 
Finance lease cost:
Depreciation of right-of-use assets
23 18 20 
Interest on lease liability4 10 17 
Total finance lease cost
$27 $28 $37 
Total lease cost
$59 $64 $63 
Supplemental cash flow information related to leases was as follows:
December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$31 $34 $23 
Operating cash flows for finance leases4 10 17 
Financing cash flows for finance leases13 39 33 
Right-of-use assets obtained in exchange for lease obligations
Operating leases26 20 47 
Finance leases82 — 1 
Supplemental consolidated balance sheet information related to leases was as follows:
December 31,
20252024
Operating leases:
Other noncurrent assets
$89 $90 
Accrued and other current liabilities
$18 $24 
Other noncurrent liabilities
69 64 
Total operating lease liabilities
$87 $88 
Finance leases:
Property, plant and equipment$275 $196 
Accumulated depreciation(124)(102)
Property, plant and equipment – net
$151 $94 
Finance lease liabilities, current
$14 $22 
Finance lease liabilities, noncurrent
104 37 
Total finance lease liabilities
$118 $59 
Weighted-average remaining lease term (in years):
Operating leases76
Finance leases114
Weighted-average discount rate:
Operating leases2.7 %3.0 %
Finance leases4.4 %8.4 %
As of December 31, 2025, maturities of lease liabilities were as follows:
Operating LeasesFinance Leases
2026$24 $19 
202721 19 
202815 19 
202912 14 
203012 7 
Thereafter31 69 
Total lease payments
114 145 
Less: Interest(27)(28)
Total maturities of lease liabilities
$87 $118 
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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.

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