TETRA TECHNOLOGIES INCTTI
TETRA TECHNOLOGIES INC Leases Disclosure
LEASES
Operating and Finance Leases
We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment. We have finance leases for certain facility storage tanks and equipment rentals. Our leases have remaining lease terms ranging from 1 to 13 years. Some of our leases have options to extend for various periods, while some have termination options with prior notice of generally 30 days or six months. The office space, warehouse space, operating location leases, and machinery and equipment leases generally require us to pay all maintenance and insurance costs.
In August 2025, we entered into an operating lease agreement for a new corporate headquarters facility in Spring, Texas. We recognized a right-of-use asset and corresponding long-term lease liability of approximately $10.5 million. The term is thirteen years and includes fixed monthly base rent payments totaling approximately $1.8 million annually beginning in early 2028 and continuing through the lease term, including scheduled annual escalations. We also expect to incur additional costs related to facility management and operations, which will be expensed as incurred as variable lease costs.
Our former corporate operating lease expires in December 2027, a portion of which is subleased. Upon abandonment of our former corporate office in late 2025 that is not subleased, we recorded a non-cash charge of approximately $9.5 million, including a $3.6 million impairment of the right of use asset and accrual of approximately $5.9 million of estimated facility management and operational costs expected to be incurred through the lease expiration in December 2027, which is included in other (income) expense, net in our consolidated statements of operations, and will be offset by concessions from the new lease during 2026 and 2027.
Components of lease expense, included in either cost of revenues or general and administrative expense based on the use of the underlying asset, are as follows (inclusive of lease expense for leases not included on our consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In Thousands) | |||||||||||||||||
| Operating lease expense | $ | 14,275 | $ | 13,030 | $ | 13,053 | |||||||||||
| Short-term lease expense | 40,988 | 50,521 | 46,566 | ||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of right-of-use assets | 4,024 | 2,062 | 232 | ||||||||||||||
| Interest on finance leases | 439 | 385 | 112 | ||||||||||||||
| Total lease expense | $ | 59,726 | $ | 65,998 | $ | 59,963 | |||||||||||
Supplemental cash flow information:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In Thousands) | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows - operating leases | $ | 14,950 | $ | 13,292 | $ | 13,293 | |||||||||||
| Operating cash flows - finance leases | $ | 477 | $ | 373 | $ | 112 | |||||||||||
| Financing cash flows - finance leases | $ | 4,736 | $ | 1,438 | $ | 1,695 | |||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
| Operating leases | $ | 18,815 | $ | 7,422 | $ | 10,058 | |||||||||||
| Finance leases | $ | 1,989 | $ | 6,575 | $ | 2,555 | |||||||||||
Supplemental balance sheet information:
| December 31, 2025 | December 31, 2024 | ||||||||||
| (In Thousands) | |||||||||||
| Operating leases: | |||||||||||
| Operating lease right-of-use assets | $ | 36,999 | $ | 29,797 | |||||||
| Operating lease liabilities, current portion | 11,326 | 8,861 | |||||||||
| Operating lease liabilities | 32,664 | 25,041 | |||||||||
| Total operating lease liabilities | $ | 43,990 | $ | 33,902 | |||||||
| Finance leases: | |||||||||||
| $ | 4,421 | $ | 6,495 | ||||||||
| 4,306 | 4,582 | ||||||||||
| 806 | 3,211 | ||||||||||
| Total finance lease liabilities | $ | 5,112 | $ | 7,793 | |||||||
Additional operating lease information:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted average remaining lease term: | |||||||||||
| Operating leases | 6.1 years | 4.6 years | |||||||||
| Finance leases | 1.2 years | 1.9 years | |||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | 9.8 | % | 9.8 | % | |||||||
| Finance leases | 7.0 | % | 6.4 | % | |||||||
Future minimum lease payments by year and in the aggregate, under non-cancelable operating and finance leases with terms in excess of one year consist of the following at December 31, 2025:
| Operating Leases | Finance Leases | |||||||||||||
| (In Thousands) | ||||||||||||||
| 2026 | $ | 15,081 | $ | 4,508 | ||||||||||
| 2027 | 10,505 | 719 | ||||||||||||
| 2028 | 6,689 | 105 | ||||||||||||
| 2029 | 5,003 | 15 | ||||||||||||
| 2030 | 3,835 | — | ||||||||||||
| Thereafter | 21,292 | — | ||||||||||||
| Total lease payments | 62,405 | 5,347 | ||||||||||||
| Less imputed interest | (18,415) | (235) | ||||||||||||
| Total lease liabilities | $ | 43,990 | $ | 5,112 | ||||||||||
Sales Lease and Sublease Agreements
During the year ended December 31, 2024, in connection with the modification of a revenue contract by our Water & Flowback Services Segment, we entered into an arrangement with a customer including an embedded sales-type lease. Pursuant to this contract settlement, we recognized $7.4 million of revenues included in product sales revenues for the year ended December 31, 2024 including $4.1 million of revenues from the embedded lease. We also recognized $3.0 million of cost included in cost of product sales in our consolidated statements of operations during the year ended December 31, 2024. As of December 31, 2025 and 2024, current lease receivables of $2.2 million and $1.4 million, respectively, are included in trade accounts receivable, and long-term lease receivables of $2.2 million as of December 31, 2024 are included in other assets in our consolidated balance sheets.
The Company has subleases for a portion of its former corporate headquarters facility and a facility in Europe. The leases and subleases are considered operating leases. For the years ended December 31, 2025, 2024, and 2023, we recognized sublease income of $1.4 million, $1.2 million, and $1.2 million, respectively.
Future minimum payments under the embedded sales lease and non-cancelable facility subleases were as follows at December 31, 2025:
Sales Lease | Sublease Payments | |||||||||||||
| (In Thousands) | ||||||||||||||
| 2026 | $ | 2,187 | $ | 1,519 | ||||||||||
| 2027 | — | 1,476 | ||||||||||||
| 2028 | — | 976 | ||||||||||||
| 2029 | — | 976 | ||||||||||||
| 2030 | — | 976 | ||||||||||||
| Thereafter | — | 2,443 | ||||||||||||
Total payments | $ | 2,187 | $ | 8,366 | ||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 5, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Mar 4, 2019 | |
| 2017 | Mar 5, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Mar 4, 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.