Leases
Our leases are for land, real estate, railcars, vehicles, pipelines, plant equipment, and office equipment. We have leases with remaining terms ranging from less than one year to 45 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The components of lease cost are shown in the table below.
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| | | | Years Ended December 31, |
| (in thousands) | | | | | | 2025 | | 2024 | | 2023 | | |
| Operating lease cost | | | | | | $ | 21,684 | | | $ | 19,574 | | | $ | 19,242 | | | |
| Finance lease cost: | | | | | | | | | | | | |
| Amortization of right-of-use assets | | | | | | 2,735 | | | 2,610 | | | 2,547 | | | |
| Interest on lease liabilities | | | | | | 583 | | | 621 | | | 657 | | | |
| Short-term lease cost | | | | | | 2,179 | | | 2,293 | | | 2,463 | | | |
| Variable lease cost | | | | | | 6,702 | | | 6,755 | | | 5,539 | | | |
| Total lease cost | | | | | | $ | 33,883 | | | $ | 31,853 | | | $ | 30,448 | | | |
Variable lease costs also include leases that do not have a right-of-use asset or lease liability but are capitalized as part of inventory.
Supplemental balance sheet information related to leases follows.
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| | December 31, |
| (in thousands) | Balance Sheet Classification | | 2025 | | 2024 | | |
| Operating leases | | | | | | | |
| Right-of-use assets | Operating lease right-of-use assets, net | | $ | 78,267 | | | $ | 71,253 | | | |
| | | | | | | |
| Current liability | Operating lease liabilities | | $ | 16,205 | | | $ | 15,337 | | | |
| Noncurrent liability | Operating lease liabilities-noncurrent | | 62,045 | | | 54,754 | | | |
| | | $ | 78,250 | | | $ | 70,091 | | | |
| | | | | | | |
| Finance leases | | | | | | | |
| Right-of-use assets | Deferred charges and other assets | | $ | 31,095 | | | $ | 33,142 | | | |
| | | | | | | |
| Current liability | Other current liabilities | | $ | 3,071 | | | $ | 2,938 | | | |
| Noncurrent liability | Other noncurrent liabilities | | 15,054 | | | 17,675 | | | |
| | | $ | 18,125 | | | $ | 20,613 | | | |
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| | December 31, | | |
| | 2025 | | 2024 | | 2023 | | |
| Weighted average remaining lease term (in years) | | | | | | | | |
| Operating leases | | 11 | | 11 | | 12 | | |
| Finance leases | | 12 | | 13 | | 14 | | |
| | | | | | | | |
| Weighted average incremental borrowing rate | | | | | | | | |
| Operating leases | | 4.56 | % | | 4.37 | % | | 4.07 | % | | |
| Finance leases | | 3.02 | % | | 3.01 | % | | 2.92 | % | | |
Supplemental cash flow information related to leases follows.
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| | Years Ended December 31, |
| (in thousands) | | 2025 | | 2024 | | 2023 | | |
| Cash paid for amounts included in the measurement of lease liabilities | | | | | | | | |
| Operating cash flows from operating leases | | $ | 21,696 | | | $ | 19,734 | | | $ | 19,929 | | | |
| Operating cash flows from finance leases | | 578 | | | 617 | | | 656 | | | |
| Financing cash flows from finance leases | | 3,195 | | | 2,797 | | | 3,087 | | | |
| | | | | | | | |
| Right-of-use assets obtained in exchange for new lease obligations | | | | | | | | |
| Operating leases | | $ | 25,523 | | | $ | 20,085 | | | $ | 25,339 | | | |
| Finance leases | | 632 | | | 992 | | | 425 | | | |
Maturities of lease liabilities at December 31, 2025 follow.
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| (in thousands) | | Operating Leases | | Finance Leases |
| 2026 | | $ | 19,308 | | | $ | 3,563 | |
| 2027 | | 16,060 | | | 3,548 | |
| 2028 | | 12,509 | | | 3,529 | |
| 2029 | | 10,235 | | | 3,502 | |
| 2030 | | 7,507 | | | 3,238 | |
| Thereafter | | 35,098 | | | 2,314 | |
| Total lease payments | | 100,717 | | | 19,694 | |
| Less: imputed interest | | 22,467 | | | 1,569 | |
| Total lease obligations | | $ | 78,250 | | | $ | 18,125 | |
Operating lease payments in the table above include approximately $16 million related to options to extend lease terms that are reasonably certain of being exercised. At December 31, 2025, we had operating lease commitments of approximately $0.2 million and finance lease commitments of approximately $8 million, which are not included in the above table. Most of the commitments relate to equipment that is being constructed or procured by the future lessors and office space. These leases are expected to commence in 2026.
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.