UPBOUND GROUP, INC.UPBD
UPBOUND GROUP, INC. Leases Disclosure
Leases
We lease space for all of our Rent-A-Center and Mexico stores under operating leases expiring at various times through 2036. In addition, we lease space for certain support facilities under operating leases expiring at various times through 2032. Most of our store leases are -year leases and contain renewal options for additional periods ranging from three years to five years at rental rates adjusted according to agreed upon formulas. We evaluate all leases to determine if it is likely that we will exercise future renewal options and in most cases we are not reasonably certain of exercise due to competing market rental rates and lack of significant penalty, or business disruption incurred by not exercising the renewal options.
In certain situations involving the sale of a Rent-A-Center corporate store to a franchisee, we enter into a lease assignment agreement with the buyer, but we remain the primary obligor under the original lease for the remaining active term. These assignments are therefore classified as subleases and the original lease is included in our operating lease right-of-use assets and operating lease liabilities in our Consolidated Balance Sheets.
We lease vehicles for all of our Rent-A-Center stores under operating leases with lease terms expiring twelve months after the start date of the lease. We classify these leases as short-term and have elected the short-term lease exemption for our vehicle leases, and have therefore excluded them from our operating lease right-of-use assets within our Consolidated Balance Sheets. We also lease vehicles for all of our Mexico stores which have terms expiring at various times through 2030 with rental rates adjusted periodically for inflation, which are included in our operating lease right-of-use assets and operating lease liabilities in our Consolidated Balance Sheets. Finally, we have a minimal number of equipment leases, primarily related to temporary storage containers and certain back office technology hardware assets, which are included in our operating lease right-of-use assets and operating lease liabilities in our Consolidated Balance Sheets, or classified as short-term leases and excluded under the short term lease exemption.
In our calculation of operating lease right-of-use assets and operating lease liabilities we do not separate the lease and non-lease components. Furthermore, operating lease right-of-use assets and operating lease liabilities are discounted using our incremental borrowing rate, since the implicit rate is not readily determinable. We do not currently have any financing leases.
Operating lease costs are recorded on a straight-line basis within non-labor operating expenses in our Consolidated Statements of Operations.
Total operating lease costs by expense type:
| Year Ended | |||||||||||||||||
| (in thousands) | December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||
Operating lease cost included in non-labor operating expenses(1) | $ | 133,150 | $ | 129,667 | $ | 124,593 | |||||||||||
| Operating lease cost included in general and administrative expenses | 5,520 | 5,567 | 5,725 | ||||||||||||||
| Operating lease cost included in other gains and charges | 12,465 | 5,308 | — | ||||||||||||||
| Variable lease expense | 35,482 | 37,540 | 37,660 | ||||||||||||||
| Sublease receipts | (3,917) | (6,637) | (3,913) | ||||||||||||||
| Total operating lease charges | $ | 182,700 | $ | 171,445 | $ | 164,065 | |||||||||||
(1) Includes short-term lease costs, which are not significant.
Supplemental cash flow information related to leases:
| Year Ended | |||||||||||||||||
| (in thousands) | December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||
| Cash paid for amounts included in measurement of operating lease liabilities | $ | 99,797 | $ | 102,013 | $ | 105,438 | |||||||||||
| Cash paid for short-term operating leases not included in operating lease liabilities | 36,159 | 25,105 | 19,306 | ||||||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | 101,251 | 63,874 | 68,707 | ||||||||||||||
Weighted-average discount rate and weighted-average remaining lease term:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
Weighted-average discount rate(1) | 8.1 | % | 8.0 | % | 7.8 | % | |||||||||||
| Weighted-average remaining lease term (in years) | 4 | 4 | 4 | ||||||||||||||
(1) January 1, 2019 incremental borrowing rate was used for leases in existence at the time of adoption of ASU 2016-02.
Reconciliation of undiscounted operating lease liabilities to the present value operating lease liabilities at December 31, 2025:
| (in thousands) | Operating Leases | ||||
| 2026 | $ | 100,065 | |||
| 2027 | 81,759 | ||||
| 2028 | 59,809 | ||||
| 2029 | 45,136 | ||||
| 2030 | 30,787 | ||||
| Thereafter | 20,956 | ||||
| Total undiscounted operating lease liabilities | 338,512 | ||||
| Less: Interest | (51,714) | ||||
| Total present value of operating lease liabilities | $ | 286,798 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
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.