The Company’s operating leases are primarily comprised of real estate, railcar, storage tank, warehouse, auto, trailer and manufacturing/office equipment leases. Real estate and railcars comprise approximately 39 percent and 46 percent, respectively, of the Company’s consolidated right of use (ROU) asset balance. Except for real estate, typical lease terms range from one to ten years. Real estate lease terms typically range from one to fifty years. As of December 31, 2025, the Company’s two principal real estate leases consist of the office lease for the corporate headquarters in Northbrook, Illinois and land leases in Singapore. During the fourth quarter of 2025, the Company exited from land leases in the Philippines and Lake Providence, Louisiana as part of its asset sale transactions (see Note 20, Sales of Assets, of the notes to the Company’s consolidated financial statements included in Item 8 of this Form 10-K). As of December 31, 2025, the Company had no leases that had not commenced.

As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate (IBR) based on the information available at the commencement date in determining the present value of lease payments. IBRs were specifically determined for the United States, Philippines, Singapore, Brazil and China, typically for five-year increments. The U.S. IBR was used for all other countries as the leases in these countries are not material. The total value of leases that reside in the five countries identified above represents approximately 97 percent of the Company’s consolidated ROU asset balance. Lease cost is recognized in both the Cost of Sales and Operating Expenses sections of the Consolidated Statements of Income.

The following table outlines maturities of lease liabilities as of December 31, 2025:


(In thousands)
Undiscounted Cash Flows:
2026	$	17,072
2027		12,269
2028		9,354
2029		8,353
2030		7,164
Subsequent to 2030		17,638
Total Undiscounted Cash Flows	$	71,850
Less: Imputed interest		(7,518	)
Present value	$	64,332
Current operating lease liabilities (1)		14,992
Non-current operating lease liabilities		49,340
Total lease liabilities	$	64,332

(1)

This item is included in the Accrued liabilities line on the Company’s Consolidated Balance Sheet.