12. Leases
We enter into lease arrangements for the use of offices, operational facilities, vehicles, vessels, storage tanks and other assets for our operations around the world. Some of these leases are embedded within other arrangements. Some of these arrangements are for periods of twelve months or less, while others are for longer periods, and may include optional renewals, terminations or purchase options, which are considered in our assessments when they are reasonably certain to occur. In addition, certain of these arrangements contain payments based on an index, market-based escalation or volume which may impact future payments. Most of our leases typically contain general covenants, restrictions or requirements such as maintaining minimum insurance coverage.
We recognized the following total lease cost related to our lease arrangements (in millions):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Finance lease cost: | | | | | |
| Amortization of right-of-use assets | $ | 5.9 | | | $ | 10.4 | | | $ | 4.0 | |
| Interest on lease liabilities | 1.2 | | | 2.3 | | | 0.7 | |
| Operating lease cost | 48.0 | | | 46.3 | | | 44.8 | |
| Short-term lease cost | 26.4 | | | 27.9 | | | 27.1 | |
| Variable lease cost | 8.9 | | | 8.3 | | | 8.6 | |
| Sublease income | (14.4) | | | (14.9) | | | (14.5) | |
| Total lease cost | $ | 76.1 | | | $ | 80.4 | | | $ | 70.6 | |
As of December 31, 2025, our remaining lease payments, excluding operating and finance leases classified as held for sale, were as follows (in millions):
| | | | | | | | | | | | | |
| Operating Leases | | Finance Leases |
| 2026 | $ | 36.1 | | | $ | 3.5 | | | |
| 2027 | 29.2 | | | 0.3 | | | |
| 2028 | 26.3 | | | 0.3 | | | |
| 2029 | 23.4 | | | 0.3 | | | |
| 2030 | 22.0 | | | 0.2 | | | |
| Thereafter | 64.3 | | | 0.4 | | | |
| Total remaining lease payments (undiscounted) | 201.3 | | | 5.1 | | | |
| Less: imputed interest | 40.4 | | | 0.6 | | | |
| Present value of lease liabilities | $ | 160.9 | | | $ | 4.4 | | | |
Supplemental balance sheet information related to leases, excluding operating and finance leases classified as held for sale (in millions):
| | | | | | | | | | | | | | | | | | | |
| | | December 31, | | |
| Classification | | 2025 | | 2024 | | |
| Assets: | | | | | | | |
| Operating lease assets | Other non-current assets | | $ | 156.2 | | | $ | 172.5 | | | |
| Finance lease assets | Property and equipment, net | | $ | 1.6 | | | $ | 29.4 | | | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Operating lease liability - current | Accrued expenses and other current liabilities | | $ | 28.2 | | | $ | 32.1 | | | |
| Operating lease liability - long-term | Other long-term liabilities | | $ | 132.7 | | | $ | 144.1 | | | |
| Finance lease liability - current | Current maturities of long-term debt | | $ | 3.4 | | | $ | 7.6 | | | |
| Finance lease liability - long-term | Long-term debt | | $ | 1.0 | | | $ | 22.4 | | | |
We recognized the following cash flows related to our lease arrangements (in millions):
| | | | | | | | | | | | | | | | | |
| For the Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities (in millions): | | | | | |
| Operating cash flows from finance leases | $ | 1.3 | | $ | 2.3 | | $ | 0.7 |
| Operating cash flows from operating leases | $ | 48.4 | | $ | 47.5 | | $ | 46.2 |
| Financing cash flows from finance leases | $ | 5.8 | | $ | 10.0 | | $ | 4.3 |
| Noncash investing and financing lease activities (in millions): | | | | | |
Right of use assets obtained in exchange for new operating lease liability | $ | 38.4 | | $ | 23.9 | | $ | 16.8 |
| Right of use assets obtained in exchange for new finance lease liability | $ | 4.1 | | $ | 24.9 | | $ | 3.7 |
Other information related to leases:
| | | | | | | | | | | | | |
| December 31, | | |
| 2025 | | 2024 | | |
| Weighted average remaining lease term of finance leases (in years) | 3.2 | | 4.3 | | |
| Weighted average remaining lease term of operating leases (in years) | 7.8 | | 7.9 | | |
| Weighted average discount rate of finance leases | 5.9% | | 5.4% | | |
| Weighted average discount rate of operating leases | 5.6% | | 5.4% | | |
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.