XML 35 R17.htm IDEA: XBRL DOCUMENT v3.25.0.1
Leases
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Leases Leases
Most of the leases the Company enters into are for equipment, buildings and vehicles as part of its ongoing operations. The Company also leases certain equipment to third parties.
Lessee Accounting
The leases the Company has entered into as part of its ongoing operations are considered operating leases. The corresponding lease costs are included in Cost of sales and Selling, general and administrative expenses on the consolidated statements of income.
Generally, leases for vehicles and equipment have a term of five years or less and buildings have a longer term of up to 35 years or more. For certain leases, lease terms may include the options to extend or terminate the lease. Similarly, building or property leases could include one or more options to renew, with renewal terms that could extend the lease term one to five years or more.
The Company also has guaranteed the residual value under certain of its equipment operating leases, agreeing to pay any difference between the residual value and the fair market value of the underlying asset at the date of lease termination. Historically, the fair value of the asset at the time of lease termination generally has approximated or exceeded the residual value guarantee. To date, the Company does not have any residual value guarantee amounts probable of being owed to a lessor, financing leases or material agreements with related parties.
In March 2024, in anticipation of the Separation, the Company entered into a 60 month lease for a new corporate headquarters, with a lease term of August 1, 2024 through July 31, 2029. The new corporate headquarters, which is located in Bismarck, North Dakota, is for 16,188 square feet with average annual rent payments and average annual common area maintenance charges totaling approximately $303 thousand and $102 thousand, respectively, for the duration of the lease.
The following table provides information on the Company’s lease costs for operating leases:
Years Ended December 31,
202420232022
(In thousands)
Lease costs:
Operating lease cost
$31,274 $26,386 $24,518 
Variable lease cost(1)
1,232 1,215 1,228 
Short-term lease cost(1)
107,421 99,964 103,075 
Total lease costs
$139,927 $127,565 $128,821 
__________________
(1)Subsequent to the filing of the audited consolidated financial statements for the year ended December 31, 2023 in the Form 10, the Company’s management determined that the Company incorrectly presented variable lease cost and short-term lease cost due to a clerical error when preparing the financial statements, including the related footnotes. The amount in the preceding table has been revised to correct the impact of this classification error for the year ended December 31, 2023. The reclassification error had no impact to results of operations, the balance sheet, or cash flows for the period described.
The following is summary information of lease terms and discount rates for operating leases as of December 31:
20242023
Weighted average remaining lease term (in years)
1.38 years1.34 years
Weighted average discount rate (in percentages)
5.50 %4.94 %
The following is a summary of other information and supplemental cash flow information related to operating leases:
Years Ended December 31,
202420232022
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:



Operating cash flows used for operating lease liabilities
$31,156 $26,810 $24,071 
Right-of-use assets obtained in exchange for new operating lease liabilities$44,214 $43,917 $37,834 
The reconciliation of future undiscounted cash flows to operating lease liabilities, including current portion of operating lease liabilities, presented on the consolidated balance sheets, was as follows:
As of December 31, 2024
(In thousands)
2025$29,239 
202620,086 
202712,391 
20286,088 
20292,953 
Thereafter
3,091 
Total 73,848 
Less: discount
6,294 
Total operating lease liabilities
$67,554 
The Company entered into a $4.2 million operating lease that had not yet commenced as of December 31, 2024. The operating lease has a lease term of three years and will commence in March 2025.
Lessor Accounting
The Company leases certain equipment to third parties. These leases are considered short-term operating leases with terms of less than 12 months. The Company recognizes revenue from operating leases in Operating revenues in the consolidated statements of income on a straight-line basis over the respective operating lease terms.
The Company recognized revenue from operating leases of $41.4 million, $45.3 million and $47.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2024 and 2023, the Company had $11.3 million and $9.3 million, respectively, of lease receivables in Receivables, net on the consolidated balance sheets with a majority due within 12 months or less from the respective balance sheet dates.
The Company leases components of certain equipment to third parties under operating leases, which are included within Property, plant and equipment, net. Refer to Note 4 – Property, Plant and Equipment, Net for additional information.
Leases Leases
Most of the leases the Company enters into are for equipment, buildings and vehicles as part of its ongoing operations. The Company also leases certain equipment to third parties.
Lessee Accounting
The leases the Company has entered into as part of its ongoing operations are considered operating leases. The corresponding lease costs are included in Cost of sales and Selling, general and administrative expenses on the consolidated statements of income.
Generally, leases for vehicles and equipment have a term of five years or less and buildings have a longer term of up to 35 years or more. For certain leases, lease terms may include the options to extend or terminate the lease. Similarly, building or property leases could include one or more options to renew, with renewal terms that could extend the lease term one to five years or more.
The Company also has guaranteed the residual value under certain of its equipment operating leases, agreeing to pay any difference between the residual value and the fair market value of the underlying asset at the date of lease termination. Historically, the fair value of the asset at the time of lease termination generally has approximated or exceeded the residual value guarantee. To date, the Company does not have any residual value guarantee amounts probable of being owed to a lessor, financing leases or material agreements with related parties.
In March 2024, in anticipation of the Separation, the Company entered into a 60 month lease for a new corporate headquarters, with a lease term of August 1, 2024 through July 31, 2029. The new corporate headquarters, which is located in Bismarck, North Dakota, is for 16,188 square feet with average annual rent payments and average annual common area maintenance charges totaling approximately $303 thousand and $102 thousand, respectively, for the duration of the lease.
The following table provides information on the Company’s lease costs for operating leases:
Years Ended December 31,
202420232022
(In thousands)
Lease costs:
Operating lease cost
$31,274 $26,386 $24,518 
Variable lease cost(1)
1,232 1,215 1,228 
Short-term lease cost(1)
107,421 99,964 103,075 
Total lease costs
$139,927 $127,565 $128,821 
__________________
(1)Subsequent to the filing of the audited consolidated financial statements for the year ended December 31, 2023 in the Form 10, the Company’s management determined that the Company incorrectly presented variable lease cost and short-term lease cost due to a clerical error when preparing the financial statements, including the related footnotes. The amount in the preceding table has been revised to correct the impact of this classification error for the year ended December 31, 2023. The reclassification error had no impact to results of operations, the balance sheet, or cash flows for the period described.
The following is summary information of lease terms and discount rates for operating leases as of December 31:
20242023
Weighted average remaining lease term (in years)
1.38 years1.34 years
Weighted average discount rate (in percentages)
5.50 %4.94 %
The following is a summary of other information and supplemental cash flow information related to operating leases:
Years Ended December 31,
202420232022
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:



Operating cash flows used for operating lease liabilities
$31,156 $26,810 $24,071 
Right-of-use assets obtained in exchange for new operating lease liabilities$44,214 $43,917 $37,834 
The reconciliation of future undiscounted cash flows to operating lease liabilities, including current portion of operating lease liabilities, presented on the consolidated balance sheets, was as follows:
As of December 31, 2024
(In thousands)
2025$29,239 
202620,086 
202712,391 
20286,088 
20292,953 
Thereafter
3,091 
Total 73,848 
Less: discount
6,294 
Total operating lease liabilities
$67,554 
The Company entered into a $4.2 million operating lease that had not yet commenced as of December 31, 2024. The operating lease has a lease term of three years and will commence in March 2025.
Lessor Accounting
The Company leases certain equipment to third parties. These leases are considered short-term operating leases with terms of less than 12 months. The Company recognizes revenue from operating leases in Operating revenues in the consolidated statements of income on a straight-line basis over the respective operating lease terms.
The Company recognized revenue from operating leases of $41.4 million, $45.3 million and $47.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2024 and 2023, the Company had $11.3 million and $9.3 million, respectively, of lease receivables in Receivables, net on the consolidated balance sheets with a majority due within 12 months or less from the respective balance sheet dates.
The Company leases components of certain equipment to third parties under operating leases, which are included within Property, plant and equipment, net. Refer to Note 4 – Property, Plant and Equipment, Net for additional information.