LSB INDUSTRIES, INC. Leases Disclosure
14. Leases
Our leasing activity primarily consists of leasing railcars and office space, which includes leasing the office space housing our headquarters in Oklahoma City, Oklahoma. We have in excess of 1,200 railcars under lease. Typically, the initial term of our railcar leases ranges from 2 years to 10 years, and the majority do not include any renewal options. Most of our railcar leases are operating leases with a limited number classified as finance leases.
From time to time, when we have excess freight capacity, we may sublease a portion of our railcars fleet on a short term basis to other parties. The income for these subleases is recorded as a component of “Other (income) expense, net” in our consolidated statements of operations.
|
|
|
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(Dollars In Thousands) |
|
|||||||||
Components of lease expense: |
|
|
|
|
|
|
|
|
|
|||
Operating lease cost |
|
$ |
11,807 |
|
|
$ |
12,056 |
|
|
$ |
11,071 |
|
Short-term lease cost |
|
|
5,926 |
|
|
|
7,537 |
|
|
|
3,399 |
|
Other cost (1) |
|
|
1,363 |
|
|
|
836 |
|
|
|
391 |
|
Sublease income |
|
|
(154 |
) |
|
|
(853 |
) |
|
|
(5,632 |
) |
Total lease cost |
|
$ |
18,942 |
|
|
$ |
19,576 |
|
|
$ |
9,229 |
|
Supplemental cash flow information related to leases: |
|
|
|
|
|
|
|
|
|
|||
Operating cash flows from operating leases |
|
$ |
11,430 |
|
|
$ |
11,878 |
|
|
$ |
10,948 |
|
Operating cash flows from finance leases |
|
|
420 |
|
|
|
213 |
|
|
|
78 |
|
Financing cash flows from finance leases |
|
|
758 |
|
|
|
429 |
|
|
|
231 |
|
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
12,608 |
|
|
$ |
12,520 |
|
|
$ |
11,257 |
|
|
|
|
|
|
|
|
|
|
|
|||
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
$ |
25,492 |
|
|
$ |
13,636 |
|
|
$ |
11,969 |
|
|
|
|
|
|
|
|
|
|
|
|||
Right-of-use assets obtained in exchange for new finance lease liabilities |
|
$ |
3,097 |
|
|
$ |
3,371 |
|
|
$ |
46 |
|
|
|
|
|
|
|
|
|
|
|
|||
Other lease-related information: |
|
|
|
|
|
|
|
|
|
|||
Weighted-average remaining lease term - operating leases (in years) |
|
|
6.5 |
|
|
|
4.9 |
|
|
|
4.3 |
|
Weighted-average remaining lease term - finance leases (in years) |
|
|
7.9 |
|
|
|
7.3 |
|
|
|
4.0 |
|
Weighted-average discount rate - operating leases |
|
|
7.60 |
% |
|
|
7.94 |
% |
|
|
8.26 |
% |
Weighted-average discount rate - finance leases |
|
|
7.48 |
% |
|
|
7.54 |
% |
|
|
7.53 |
% |
_____________________________
As of December 31, 2025, future minimum lease payments due under Accounting Standards Codification 842, Leases, are summarized by fiscal year in the table below:
|
|
Operating Leases |
|
|
Finance Leases |
|
||
|
|
(In Thousands) |
|
|||||
2026 |
|
$ |
11,073 |
|
|
$ |
1,193 |
|
2027 |
|
|
9,850 |
|
|
|
1,126 |
|
2028 |
|
|
8,515 |
|
|
|
1,049 |
|
2029 |
|
|
7,359 |
|
|
|
1,014 |
|
2030 |
|
|
6,704 |
|
|
|
961 |
|
Thereafter |
|
|
13,925 |
|
|
|
2,879 |
|
Total lease payments |
|
|
57,426 |
|
|
|
8,222 |
|
Less imputed interest |
|
|
(11,782 |
) |
|
|
(1,989 |
) |
Present value of lease liabilities |
|
$ |
45,644 |
|
|
$ |
6,233 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
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.