Operating Leases
Operating Lease Assets
The following table presents the carry value of operating lease assets in the Company’s consolidated balance sheets as of December 31, 2024 and 2023 (in thousands):
| | | | | | | | | | | |
| 2024 | | 2023 |
| Operating lease assets, net | $ | 19,537 | | | $ | 21,970 | |
Operating lease asset additions are offset by a corresponding increase to operating lease liabilities and do not impact the consolidated statement of cash flows at commencement. The non-cash effect of operating lease additions in 2024, 2023 and 2022 totaled $1.1 million, $1.3 million and $0.4 million, respectively.
The following table provides details regarding the components of operating lease expense based on the initial term of underlying agreements for the years ended December 31, 2024, 2023 and 2022 (in thousands):
| | | | | | | | | | | | | | | | | |
| 2024 | | 2023 | | 2022 |
| Operating lease expense components: | | | | | |
| Leases with initial term of greater than 12 months | $ | 8,588 | | | $ | 8,481 | | | $ | 8,325 | |
| Leases with initial term of 12 months or less | 4,159 | | | 4,852 | | | 4,718 | |
| Total operating lease expense | $ | 12,747 | | | $ | 13,333 | | | $ | 13,043 | |
During 2024, the Completion and Production Services and Downhole Technologies segments recognized non-cash operating lease asset impairment charges of $3.3 million and $0.5 million, respectively, associated with the closure of certain leased facilities. For further discussion, see Note 4, “Asset Impairments and Other Charges and Credits.”
Operating Lease Liabilities
The following table provides the scheduled maturities of operating lease liabilities as of December 31, 2024 (in thousands):
| | | | | |
| 2025 | $ | 8,797 | |
| 2026 | 6,807 | |
| 2027 | 5,712 | |
| 2028 | 4,248 | |
| 2029 | 2,459 | |
| Thereafter | 1,329 | |
| Total lease payments | 29,352 | |
| Less: Imputed interest | (4,079) | |
| Present value of operating lease liabilities | 25,273 | |
| Less: Current portion | (7,284) | |
| Total long-term operating lease liabilities | $ | 17,989 | |
| | | | | |
| Weighted-average remaining lease term (years) | 4.0 |
| Weighted-average discount rate | 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.