Leases

3 Months Ended

Mar. 31, 2026

14. LEASES

We have operating leases and to a lesser extent finance leases, for buildings, vehicles and equipment. Our leases have remaining lease terms of 1 year to 13 years, which includes our determination to exercise renewal options.

We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) assets, Current operating lease liabilities, and Operating lease liabilities in our condensed consolidated balance sheets. Finance leases are included in Property, plant and equipment, net, Current maturities of long-term debt and notes payable, and Long-term debt, net of current maturities in our condensed consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Operating lease ROU assets also include any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease. For purposes of determining the lease term used in the measurement of operating lease ROU assets and operating lease liabilities, we include the noncancellable period of the lease together with those periods covered by the option to extend the lease if we are reasonably certain to exercise that option, the periods covered by an option to terminate the lease if we are reasonably certain not to exercise that option, and the periods covered by the option to extend (or to not terminate) the lease in which exercise of the option is controlled by the lessor. Lease expense is recognized on a straight-line basis over the lease term. Where we act as lessee, we elected not to separate lease and non-lease components.

The components of lease expense were as follows (in millions):


	Three Months Ended
	March 31,
	2026		2025
Operating lease cost	$	16.8	$	16.0

Finance lease cost:
Amortization of right-of-use assets	$	0.1	$	0.1
Interest on lease liabilities	0.2		0.2
Total finance lease cost	$	0.3	$	0.3

Operating lease cost includes original reduction in the carrying amount of ROU assets, the impact of remeasurements, modifications, impairments and abandonments.

Our short-term leases are expensed as incurred, reflecting leases with a lease term of one year or less, and are not significant for the three months ended March 31, 2026 and 2025. Operating lease variable cost is primarily comprised of reimbursed actual common area maintenance, property taxes and insurance, which are immaterial for the three months ended March 31, 2026 and 2025.

Supplemental cash flow information related to leases was as follows (in millions):


	Three Months Ended
	March 31,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	10.6	$	11.0
Operating cash flows from finance leases	$	0.2	$	0.2
Financing cash flows from finance leases	$	0.1	$	0.1

Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	2.3	$	2.1

Supplemental balance sheet information related to leases was as follows (in millions):



	March 31, 2026		December 31, 2025
Operating Leases
Operating lease right-of-use assets	$	161.9	$	170.0

Current operating lease liabilities	$	36.2	$	36.1
Operating lease liabilities	138.6		145.7
Total operating lease liabilities	$	174.8	$	181.8

Finance leases are included in Property, plant and equipment, net, Current maturities of long-term debt and notes payable, and Long-term debt, net of current maturities.


	March 31, 2026		December 31, 2025
Finance Leases
Property, plant and equipment, gross	$	11.5	$	11.5
Less: accumulated depreciation and amortization	(6.4)		(6.4)
Property, plant and equipment, net	$	5.1	$	5.1

Current maturities of long-term debt and notes payable	$	0.5	$	0.5
Long-term debt, net of current maturities	8.6		8.7
Total finance lease liabilities	$	9.1	$	9.2


	March 31, 2026		December 31, 2025
Weighted Average Remaining Lease Term
Operating leases - in years	7		7
Finance leases - in years	12		13

Weighted Average Discount Rate
Operating leases	4.8	%	4.8	%
Finance leases	6.7	%	6.7	%

Maturities of lease liabilities were as follows (in millions):


Year Ending December 31,	Operating Leases		Finance Leases
2026 (excluding the three months ended March 31, 2026)	$	32.2	$	0.8
2027	36.2		1.1
2028	28.4		1.1
2029	22.7		1.1
2030	17.4		1.1
Thereafter	71.1		8.6
Total lease payments	208.0		13.8
Less imputed interest	(33.2)		(4.7)
Total	$	174.8	$	9.1

Our operating lease portfolio primarily consists of facility leases, which generally have longer terms and represent the majority of its value. The remainder relates to vehicles and other equipment, which typically have shorter lease durations and higher turnover.

As of March 31, 2026, operating leases that have not commenced are not material.