Leases Leases

9 Months Ended

Sep. 30, 2025

Leases

We have entered into lease arrangements for office space, land, equipment, pipeline facilities and warehouses. These lease arrangements enable us to better conduct business operations in the regions in which we operate. Office space is leased to provide adequate workspace for our employees in several locations throughout our service territories. We lease land at various locations throughout our service territories to enable us to inject natural gas into underground

storage and distribution systems, for bulk storage capacity, for our propane operations and for storage of equipment used in repairs and maintenance of our infrastructure. We lease natural gas compressors to ensure timely and reliable transportation of natural gas to our customers. We also lease warehouses to store equipment and materials used in repairs and maintenance for our businesses.

Some of our leases are subject to annual changes in the Consumer Price Index (“CPI”). While lease liabilities are not re-measured 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. A 100-basis-point increase in CPI would not have resulted in material additional annual lease costs. Most of our leases include options to renew, with renewal terms that can extend the lease term from one to 25 years or more. The exercise of lease renewal options is at our sole discretion. The amounts disclosed in our condensed consolidated balance sheet at September 30, 2025, pertaining to the right-of-use assets and lease liabilities, are measured based on our current expectations of exercising our available renewal options. Our existing leases are not subject to any restrictions or covenants that would preclude our ability to pay dividends, obtain financing or enter into additional leases. As of September 30, 2025, we have not entered into any leases, which have not yet commenced, that would entitle us to significant rights or create additional obligations. Total operating lease cost included in our condensed consolidated statements of income were not material for the three and nine months ended September 30, 2025 and 2024. Total cash paid for amounts included in the measurement of lease liabilities included in our condensed consolidated statements of cash flows were not material for the nine months ended September 30, 2025 and 2024.

The following table presents the balance and classifications of our right of use assets and lease liabilities included in our condensed consolidated balance sheets at September 30, 2025 and December 31, 2024:


(in millions)	Balance sheet classification	September 30, 2025		December 31, 2024
Assets
Operating lease assets	Operating lease right-of-use assets	$	9.6	$	10.5
Liabilities
Current
Operating lease liabilities	Other accrued liabilities	$	1.9	$	2.4
Noncurrent
Operating lease liabilities	Operating lease - liabilities	8.0		8.7
Total lease liabilities		$	9.9	$	11.1

The following table presents our weighted-average remaining lease terms and weighted-average discount rates for our operating leases at September 30, 2025 and December 31, 2024:


	September 30, 2025		December 31, 2024
Weighted-average remaining lease term (in years)
Operating leases	7.5		7.7

Weighted-average discount rate
Operating leases	3.5	%	3.5	%

The following table presents the future undiscounted maturities of our operating and financing leases at September 30, 2025 and for each of the next five years and thereafter:


(in millions)	Operating Leases (1)
Remainder of 2025	$	0.6
2026	2.0
2027	1.8
2028	1.4
2029	1.3
2030	1.1
Thereafter	3.0
Total lease payments	11.2
Less: Interest	(1.3)
Present value of lease liabilities	$	9.9

(1) Operating lease payments include $2.0 million related to options to extend lease terms that are reasonably certain of being exercised.