California Resources CorpCRC

California Resources Corp Leases Disclosure

10-KFiled Mar 2, 20263 min read
LEASES
We have operating leases primarily for carbon sequestration easements, vehicles, colocation arrangements for servers and commercial office space. We have finance leases primarily for vehicles. ASC 805 Business Combinations, requires lease-related assets and liabilities acquired to be measured as if the lease were new at the acquisition date, using our incremental borrowing rate. The leases acquired in the Aera Merger and the Berry Merger retained the previous lease classification.
We have recorded the following amounts on our balance sheet as of December 31, 2025 and 2024:
Classification20252024
Assets
(in millions)
Operating lease
Other noncurrent assets$83 $105 
Finance lease
PP&E2 3 
Total lease assets
$85 $108 
Liabilities
Current
Operating lease
Accrued liabilities$15 $15 
Finance lease
Accrued liabilities1 1 
Long-term
Operating leaseOther long-term liabilities$61 $76 
Finance leaseOther long-term liabilities1 2 
Total lease liabilities$78 $94 

We combine lease and nonlease components in determining fixed minimum lease payments for our commercial office space. If applicable, fixed minimum lease payments are reduced by lease incentives for our commercial office space. Certain of our lease agreements include options to extend or terminate the lease, which we may exercise at our sole discretion. For our existing leases, we did not include these options in determining our fixed minimum lease payments over the lease term. Our leases do not include options to purchase the leased property. Lease agreements for our fleet vehicles include residual value guarantees, none of which are recognized in our financial statements until the underlying contingency is resolved.

Variable lease costs for commercial office space include utilities and common area maintenance charges. Variable lease costs for our fleet vehicles include other-than-routine maintenance and other various amounts in excess of our fixed minimum rental fee.

Our lease costs, including amounts capitalized to PP&E, shown in the table below are before joint-interest recoveries. Lease payments are reduced by joint interest recoveries on our consolidated statement of operations through our joint-interest billing process.
Year ended December 31,
202520242023
(in millions)
Operating lease costs$30 $26 $23 
Short-term lease costs(a)
112 50 52 
Variable lease costs2 2 2 
Total operating lease costs144 78 77 
Finance lease costs2 1 — 
Sublease income(b)
(1)(2)(2)
Total lease costs$145 $77 $75 
(a)Contracts with terms of less than one month or less are excluded from our disclosure of short-term lease costs.
(b)We sublease certain commercial office space to third parties where we are the primary obligor under the head lease. The lease terms on those subleases never extend past the term of the head lease and the subleases contain no extension options or residual value guarantees. Sublease income is recognized based on the contract terms and included as a reduction of operating lease cost under our head lease.
Other supplemental information related to our operating leases as of December 31, 2025 and 2024 is provided below:
Year ended December 31,
202520242023
(in millions)
Cash paid for lease liabilities
Lease liabilities associated with operating activities$34 $29 $28 
Lease liabilities associated with investing activities$19 $8 $2 
Lease liabilities associated with financing activities$1 $1 $— 
Noncash operating lease assets obtained in exchange for new operating lease liabilities
$37 $52 $32 
Noncash finance lease assets obtained in exchange for new finance lease liabilities
$3 $3 $— 

20252024
Operating Leases
Weighted-average remaining lease term (in years)7.005.95
Weighted-average discount rate8.4 %8.1 %
Finance Leases
Weighted-average remaining lease term (in years)3.013.37
Weighted-average discount rate8.5 %9.0 %

Our operating and finance lease payments as of December 31, 2025 are as follows:
Operating Leases
Finance Leases
(in millions)
2026$18 $2 
202716 1 
202815 1 
202913 — 
Thereafter46 — 
Less: Interest(32)(2)
Present value of lease liabilities$76 $2 

Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Mar 3, 2025
2023Feb 28, 2024
2022Feb 24, 2023
2021Feb 25, 2022
2020Mar 11, 2021
2019Feb 26, 2020
2018Feb 27, 2019
2017Feb 27, 2018
2016Feb 24, 2017
2015Feb 29, 2016

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.

Other Available Disclosures

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