PATTERSON UTI ENERGY INCPTEN

PATTERSON UTI ENERGY INC Leases Disclosure

10-KFiled Feb 10, 20262 min read
Leases
ASC Topic 842 Leases
We have operating and finance leases primarily for office locations, including for both field locations and corporate offices, certain operating equipment, and light duty vehicles. The terms and conditions for these leases vary by the type of underlying asset.
Operating leases have remaining lease terms of approximately one month to eight years as of December 31, 2025, and finance leases have remaining lease terms of approximately one month to four years as of December 31, 2025.
Lease expense consisted of the following for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,
202520242023
Operating lease cost$21,022 $18,147 $10,073 
Finance lease cost:
Amortization of right-of-use assets7,364 21,394 6,360 
Interest on lease liabilities1,542 2,255 1,395 
Total finance lease cost8,906 23,649 7,755 
Short-term lease expense (1)
234 360 2,278 
Total lease expense (2)
$30,162 $42,156 $20,106 
(1)Short-term lease expense represents expense related to leases with a contract term of one year or less.
(2)Operating lease expense is recorded in operating costs for the respective segments and within “selling, general and administrative”, amortization of right-of-use assets is recorded within “depreciation, depletion, amortization and impairment”, and interest on lease liabilities is recorded within “interest expense” in our consolidated statements of operations.
Supplemental cash flow information related to leases for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):
 Year Ended December 31,
 202520242023
Cash paid for amounts included in the measurement of lease liabilities:   
Operating cash flows from operating leases$18,298 $14,838 $8,935 
Operating cash flows from finance leases1,549 2,220 1,380 
Financing cash flows from finance leases7,823 45,484 15,915 
 
Right of use assets obtained in exchange for lease obligations:
Operating leases (1)
$16,719 $12,541 $34,802 
Finance leases (1)
3,247 21,234 73,245 
(1)Includes right of use assets acquired in business combinations in 2023.
Lease terms and discount rates related to leases as of December 31, 2025 and 2024 is as follows:
Year Ended December 31,
20252024
Weighted Average Remaining Lease Term:
Operating leases3.8 years4.8 years
Finance leases2.4 years2.3 years
Weighted Average Discount Rate:
Operating leases6.0%6.5%
Finance leases7.8%7.4 %
Maturities of operating and finance lease liabilities as of December 31, 2025 are as follows (in thousands):
Year ending December 31,Operating Finance
2026$20,578 $8,423 
20279,850 2,470 
20287,971 1,485 
20296,258 1,485 
20304,288 595 
Thereafter2,837 — 
Total lease payments51,782 14,458 
Less imputed interest(5,523)(1,285)
Total$46,259 $13,173 

Historical Timeline

Fiscal YearFiled
2025Feb 10, 2026Showing above
2024Feb 11, 2025
2023Feb 27, 2024
2022Feb 13, 2023
2021Feb 16, 2022
2020Feb 9, 2021
2019Feb 13, 2020
2018Feb 13, 2019
2017Feb 20, 2018
2016Feb 13, 2017
2015Feb 10, 2016

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.

Other Available Disclosures

Income TaxesRevenueEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsNew StandardsPay vs Performance