INNOVATE Corp.
For the period ended Dec 31, 2025. Filed Mar 26, 2026.
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FY2025 · Filed Mar 26, 2026
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(9) Leases
- Leases
The Company has entered into operating leases for land, office space, and certain Company vehicles and equipment and has entered into finance leases for certain Company vehicles and equipment. The leases will expire between 2026 and 2045. Right-of-use lease assets and lease liabilities consisted of the following (in millions):
| Balance Sheet Location · December 31, | |||
|---|---|---|---|
| 2025 · 2024 | |||
| Right-of-use assets: | |||
| Operating lease | Other assets (non-current) | $52.9 | $53.7 |
| Finance lease | Property, plant and equipment, net | 0.1 | 0.5 |
| Total right-of-use assets | $53.0 | $54.2 | |
| Lease liabilities: | |||
| Current portion of operating lease | Other current liabilities | $12.9 | $12.9 |
| Non-current portion of operating lease | Other liabilities | 42.9 | 43.5 |
| Finance lease | Debt obligations | 0.1 | 0.6 |
| Total lease liabilities | $55.9 | $57.0 | |
The following table summarizes the components of lease expense (in millions):
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Finance lease cost: | ||
| Amortization of right-of-use assets | $0.2 | $0.4 |
| Interest on lease liabilities | — | 0.1 |
| Net finance lease cost | 0.2 | 0.5 |
| Operating lease cost | 18.2 | 17.5 |
| Variable lease cost | 0.6 | 0.6 |
| Sublease income | — | (0.7) |
| Total non-current lease cost | 19.0 | 17.9 |
| Short-term lease costs | 27.1 | 30.0 |
| Total lease cost | $46.1 | $47.9 |
Based on the short-term leases executed as of December 31, 2025, the Company expects that it will incur approximately $12.1 million in estimated short-term lease costs for the year ended December 31, 2026.
Cash flow information related to leases is as follows (in millions):
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Cash paid for amounts included in the measurement of lease liabilities: | ||
| Operating cash flows for operating leases(1) | $19.4 | $19.3 |
| Operating cash flows for finance leases | $— | $0.1 |
| Financing cash flows for finance leases | $0.3 | $0.4 |
| Right-of-use assets obtained in exchange for new lease liabilities: | ||
| Operating leases | $15.6 | $18.5 |
| Finance leases | $0.1 | $— |
(1) The above amounts exclude $4.0 million received during the year ended December 31, 2025, and $4.0 million received during the year ended December 31, 2024 for a lease modification incentive. See below for additional information.
On May 1, 2024, a subsidiary of DBMG amended the termination date ofthree property leases that had an original expiry date of March 31, 2031. In exchange, and as an inducement for DBMG to early terminate, the landlord agreed to pay DBMG $12.0 million in surrender fees inthree equal installments, contingent on timely vacate and inspection milestones, of which DBMG received $4.0 million in surrender fees in 2024 and $4.0 million in surrender fees in 2025, with the remaining $4.0 million payment due to DBMG due within five business days of the vacate date in 2027 for the remaining property lease. After final surrender of the properties, DBMG will have no further obligations under these leases. The Company accounted for this transaction as a lease modification and recognized a $8.7 million gain on lease modification, which is included in Other operating income in the Consolidated Statement of Operations for the year ended December 31, 2024.
The weighted-average remaining lease terms and the weighted-average discount rates for the Company's leases were as follows:
| December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Weighted-average remaining lease term (years) - operating leases | 6.6 | 7.4 |
| Weighted-average remaining lease term (years) - finance leases | 2.1 | 2.7 |
| Weighted-average discount rate - operating leases | 6.4% | 6.1% |
| Weighted-average discount rate - finance leases | 5.0% | 5.3% |
Future minimum lease commitments (undiscounted) as of December 31, 2025, were as follows (in millions):
| Operating Leases · Finance Leases | ||
|---|---|---|
| 2026 | $15.5 | $0.1 |
| 2027 | 13.6 | — |
| 2028 | 10.1 | — |
| 2029 | 6.5 | — |
| 2030 | 4.9 | — |
| Thereafter | 17.2 | — |
| Total future minimum lease payments | 67.8 | 0.1 |
| Less: amounts representing interest | (12.0) | — |
| Total lease liability | $55.8 | $0.1 |
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