Consolidated Water Co. Ltd. Leases Disclosure
10. Leases
The Company’s leases consist principally of leases for office and warehouse space. For leases with terms greater than twelve months, the related asset and obligation are recorded at the present value of the lease payments over the term. Many of these leases contain rental escalation clauses which are factored into the determination of the lease payments when appropriate. When available, the lease payments are discounted using the rate implicit in the lease; however, the Company’s current leases do not provide a readily determinable implicit rate. Therefore, the Company’s incremental borrowing rate is estimated to discount the lease payments based on information available at the lease commencement.
These leases contain both lease and non-lease components, which the Company has elected to treat as a single lease component. The Company elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase obligations, of twelve months or less in its consolidated balance sheets for all classes of underlying assets. Lease costs for such short-term leases are expensed on a straight-line basis over the lease term.
All lease assets denominated in a foreign currency are measured using the exchange rate at the commencement of the lease. All lease liabilities denominated in a foreign currency are remeasured using the exchange rate as of the consolidated balance sheet date.
Lease assets and liabilities
The following table presents the lease-related assets and liabilities and their respective classification on the consolidated balance sheets:
| December 31, | |||||
2025 | 2024 | |||||
ASSETS |
| | ||||
Noncurrent |
|
| ||||
Operating lease right-of-use assets | $ | 2,930,441 | $ | 3,232,786 | ||
Total operating lease right-of-use assets | $ | 2,930,441 | $ | 3,232,786 | ||
LIABILITIES | | |
| | ||
Current |
| | | |||
Current maturities of operating leases | $ | 661,047 | $ | 634,947 | ||
Noncurrent |
|
| ||||
Noncurrent operating leases | 2,297,161 | 2,630,812 | ||||
Total lease liabilities | $ | 2,958,208 | $ | 3,265,759 | ||
Weighted average remaining lease term: |
| |
| | ||
Operating leases |
| 4.2 years |
| 5.0 years | ||
|
| |||||
Weighted average discount rate: |
|
| ||||
Operating leases |
| 6.55% |
|
| 6.56% | |
The components of lease costs were as follows:
| Year Ended December 31, | ||||||||
2025 | 2024 | 2023 | |||||||
Operating lease costs | $ | 854,452 | $ | 847,540 | $ | 751,261 | |||
Short-term lease costs |
| 349,498 |
| 361,176 | 217,640 | ||||
Lease costs - discontinued operations | 7,016 | 31,946 | 45,979 | ||||||
Total lease costs | $ | 1,210,966 | $ | 1,240,662 | $ | 1,014,880 | |||
Supplemental cash flow information related to leases is as follows:
| | Year Ended December 31, | |||||||
2025 | 2024 | 2023 | |||||||
Cash paid for amounts included in measurement of liabilities: |
| | |||||||
Operating cash outflows for operating leases | $ | 899,511 | $ | 924,461 | $ | 760,847 | |||
Operating cash outflows for operating leases - discontinued operations | — | — | 11,337 | ||||||
Future lease payments relating to the Company's operating lease liabilities from continuing operations as of December 31, 2025 are as follows:
Years ending December 31, | | Total | |
2026 | $ | 839,297 | |
2027 |
| 813,538 | |
2028 |
| 833,242 | |
2029 |
| 541,378 | |
2030 | 296,859 | ||
Thereafter |
| 74,159 | |
Total future lease payments |
| 3,398,473 | |
Less: imputed interest |
| (440,265) | |
Total lease obligations |
| 2,958,208 | |
Less: current obligations |
| (661,047) | |
Noncurrent lease obligations | $ | 2,297,161 | |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 27, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 29, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 16, 2020 | |
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.