LEASES

The Company has operating leases for office space, warehouses, distribution centers, research and development facilities, manufacturing locations and certain equipment, primarily automobiles. Many leases include one or more

options to renew, some of which include options to extend the leases for up to 15 years, and some leases include options to terminate the leases within 30 days. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for common area maintenance, utilities, inflation and/or changes in other indexes. The Company’s finance leases were not material as of December 31, 2025 and 2024. Right-of-use (“ROU”) assets arising from finance leases are included in property, plant and equipment, net and the liabilities are included in accrued expenses and other liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets.

The Consolidated and Combined Financial Statements include the following amounts related to operating leases where the Company is the lessee:


($ in millions)		2025		2024			2023
Consolidated and Combined Statements of Earnings
Fixed operating lease expense (a)		$	59	$	51		$	43
Variable operating lease expense		20		18			12
Total operating lease expense		$	79	$	69		$	55

Consolidated and Combined Statements of Cash Flows
Cash paid for amounts included in the measurement of operating lease liabilities		$	57	$	49		$	41
ROU assets obtained in exchange for operating lease obligations		52		47			52

Consolidated Balance Sheets				December 31, 2025			December 31, 2024
Lease Assets and Liabilities	Classification
Operating lease ROU assets	Other long-term assets			$	195		$	159

Operating lease liabilities - current	Accrued expenses and other liabilities			$	48		$	39
Operating lease liabilities - long-term	Other long-term liabilities			158			129
Total operating lease liabilities				$	206		$	168

Weighted average remaining lease term				7 years			7 years
Weighted average discount rate				4.6		%	4.6		%

(a) Includes short-term leases and sublease income, both of which were immaterial.

The following table presents the maturity of the Company’s operating lease liabilities as of December 31, 2025 ($ in millions):


2026	$	55
2027	43
2028	32
2029	25
2030	19
Thereafter	64
Total operating lease payments	238
Less: imputed interest	(32)
Total operating lease liabilities	$	206

As of December 31, 2025, the Company had no additional significant operating or finance leases that had not yet commenced.

Historical Timeline

Fiscal Year	Filed
2025	Feb 20, 2026	Showing above
2024	Feb 25, 2025

2023	Feb 28, 2024

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.

Veralto Corp Leases Disclosure

Historical Timeline

About Leases Disclosures

Other Available Disclosures