Summit Midstream CorpSMC

Summit Midstream Corp Leases Disclosure

10-KFiled Mar 16, 20263 min read
17. LEASES
The Company leases certain office space and equipment under operating leases. The Company leases office space for terms of between 3 and 10 years. Office space leases limit exposure to risks related to ownership, such as fluctuations in real estate prices. The Company leases equipment primarily to support its operations in response to the needs of its gathering systems for terms of between 3 and 4 years. The Company also leases vehicles under finance leases to support its operations in response to the needs of its gathering systems for a term of 3 years.
Some of the Company’s leases are subject to annual escalations relating to the Consumer Price Index (“CPI”). While lease liabilities are not remeasured as a result of changes to the CPI, changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.
Significant assumptions or judgments include the determination of whether a contract contains a lease and the discount rate used in the lease liabilities. Often, the rates implicit in the lease contracts are not readily determinable. In determining the discount rate used for lease liabilities, the Company analyzed certain factors in its incremental borrowing rate, including collateral assumptions and the term used. As of December 31, 2025 the Company’s weighted average discount rate for it’s operating leases and finance leases was 6% and 7%, respectively.
Right of Use (“ROU”) assets (included in other noncurrent assets on the Company’s consolidated balance sheet) and lease liabilities (included in Other current liabilities and Other noncurrent liabilities on the Company’s consolidated balance sheet) follow:
December 31, 2025December 31, 2024
(In thousands)
ROU assets
Operating
$5,068 $8,513 
Finance
3,514 3,861 
$8,582 $12,374 
Lease liabilities, current
Operating
$1,534 $5,801 
Finance
1,412 1,382 
$2,946 $7,183 
Lease liabilities, noncurrent
Operating
$3,590 $3,390 
Finance
1,414 1,560 
$5,004 $4,950 
Lease cost and other information follow:
Year ended December 31,
202520242023
(In thousands)
Lease cost
Finance lease cost:
Amortization of ROU assets (included in depreciation and amortization)
$1,459 $1,186 $686 
Interest on lease liabilities (included in interest expense)
159 156 62 
Operating lease cost (included in general and administrative expense)643 916 1,999 
$2,261 $2,258 $2,747 
Year ended December 31,
202520242023
(In thousands)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases
$6,607$3,328$3,975
Operating cash outflows from finance leases
15915662
Financing cash outflows from finance leases
1,4121,148610
ROU assets obtained in exchange for new operating lease liabilities
2,3633,8823,516
ROU assets obtained in exchange for new finance lease liabilities
2,3031,7811,238
Weighted-average remaining lease term (years) - operating leases7.32.23.6
Weighted-average remaining lease term (years) - finance leases2.22.32.5
Weighted-average discount rate - operating leases6%7%6%
Weighted-average discount rate - finance leases7%6%5%
The Company recognizes total lease expense incurred or allocated to us in general and administrative expenses. Lease expense related to operating leases, including lease expense incurred on the Company’s behalf and allocated to us, was as follows:
Year ended December 31,
202520242023
(In thousands)
Lease expense$18,469 $6,179 $5,898 
Future minimum lease payments due under noncancelable leases as of December 31, 2025, were as follows:
December 31, 2025
(In thousands)
OperatingFinance
2026$2,000 $1,398 
20271,881 973 
2028389 427 
2029443 34 
2030208 — 
Thereafter1,742 — 
Total future minimum lease payments
$6,663 $2,832 

Historical Timeline

Fiscal YearFiled
2025Mar 16, 2026Showing above
2024Mar 11, 2025

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.

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