VSE CORPVSEC

VSE CORP Leases Disclosure

10-KFiled Feb 27, 20262 min read
Leases
The Company's operating lease cost was as follows for the years ended December 31, (in thousands):
202520242023
Operating lease cost (a)
$8,169 $6,627 $3,781 
(a) Excludes short-term lease expense, which is not material.
The table below summarizes future minimum lease payments under operating leases as of December 31, 2025 (in thousands):
Year ending December 31,
2026$9,229 
202710,173 
20288,676 
20296,830 
20305,609 
Thereafter25,109 
   Total future minimum lease payments
65,626 
Less: imputed interest(15,627)
      Present value of minimum lease payments
49,999 
Less: current portion of lease liabilities (a)
(6,306)
Long-term lease liabilities$43,693 
(a) The current portion of lease liabilities are presented within accrued expenses and other current liabilities on the Company's consolidated balance sheets. Refer to Note (9) "Accrued Expenses and Other Current Liabilities."
Other supplemental operating lease information for the year ended December 31, was as follows (in thousands):
202520242023
Cash paid for amounts included in the measurement of operating lease liabilities$7,608 $7,171 $2,719 
Right-of-use assets obtained in exchange for new operating lease liabilities$9,484 $30,314 $11,812 

The weighted-average discount rate was 6.3% and 6.5% and the weighted-average remaining lease term was 8.2 years and 9.5 years as of December 31, 2025, and 2024, respectively.

Lease Abandonment and Termination

In connection with the FDS sale as described in Note (3) "Discontinued Operations," the Company implemented post-sale changes, including the abandonment and termination of its former headquarters office space. The Company ceased use of the office space and formally terminated the related lease in 2024. These actions resulted in net lease abandonment and termination charges of $12.2 million during the year ended December 31, 2024. As of December 31, 2025, the Company had a remaining lease termination obligation of $6.0 million, due in January 2026, which is included within accrued expenses and other current liabilities on the consolidated balance sheets.

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Mar 3, 2025
2023Mar 8, 2024
2022Mar 10, 2023

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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