LEASES
We have operating leases for office facilities, gas storage facilities, IT equipment, and right-of-way contracts. Our leases have remaining lease terms of less than one year to four years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within specified time frames. We have not entered into any finance leases.
Our right-of-use asset is $13.3 million and $17.5 million as of December 31, 2025 and 2024, respectively, and is reported within other assets in our consolidated balance sheets. Operating lease liabilities are reported within our accounts payable and other liabilities in our consolidated balance sheets. Total operating lease cost including immaterial amounts attributable to short-term operating leases was $7.8 million, $7.7 million, and $7.7 million in 2025, 2024, and 2023, respectively.
In 2025, we reassessed certain operating leases for office facilities, and IT equipment which were extended or modified, resulting in an increase of $2.3 million in our right-of-use asset and operating lease liability.
| | | | | | | | | | | | | |
| Year Ended December 31, |
| Other information related to operating leases | 2025 | 2024 | 2023 | | |
| (Millions of dollars) | | |
| Weighted-average remaining lease term | 3 years | 4 years | 4 years | | |
| Weighted-average discount rate | 4.25 | % | 4.37 | % | 4.28 | % | | |
| Supplemental cash flows information | | | | | |
| Lease payments | $ | (7.8) | | $ | (7.9) | | $ | (8.3) | | | |
| Right-of-use assets obtained in exchange for lease obligations | 2.3 | | 2.7 | | 3.9 | | | |
| | | | | | | | | | | | | | |
| | December 31, |
| Future minimum lease payments under non-cancellable operating leases | | 2025 | | | | | | |
| | (Millions of dollars) |
| 2026 | | $ | 5.3 | | | | | | | |
| 2027 | | 3.5 | | | | | | | |
| 2028 | | 3.0 | | | | | | | |
| 2029 | | 1.5 | | | | | | | |
| 2030 | | — | | | | | | | |
| Thereafter | | — | | | | | | | |
| Total future minimum lease payments | | 13.3 | | | | | | | |
| Imputed interest | | (0.8) | | | | | | | |
| Total operating lease liability | | $ | 12.5 | | | | | | | |
| | | | | | | | |
| December 31, |
| Consolidated balance sheets | 2025 | 2024 |
| (Millions of dollars) |
| Current operating lease liability | $ | 4.9 | | $ | 5.2 | |
| Long-term operating lease liability | 7.6 | | 11.4 | |
| Total operating lease liability | $ | 12.5 | | $ | 16.6 | |
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.