Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

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 10 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.

Our corporate headquarters facility located in The Woodlands, Texas, was sold on December 31, 2012, pursuant to a sale and leaseback transaction. As a condition to the completion of the purchase and sale of the

facility, the parties entered into a lease agreement for the facility having an initial lease term of 15 years, which is classified as an operating lease. Under the terms of the lease agreement, we have the ability to extend the lease for five successive five-year periods at base rental rates to be determined at the time of each extension.

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,
	2024		2023		2022
	(In Thousands)
Operating lease expense	$	13,030	$	13,053	$	12,603
Short-term lease expense	50,521		46,566		39,890
Finance lease cost:
Amortization of right-of-use assets	2,062		232		177
Interest on finance leases	385		112		135
Total lease expense	$	65,998	$	59,963	$	52,805

Supplemental cash flow information:

	Year Ended December 31,
	2024		2023		2022
	(In Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	13,292	$	13,293	$	12,889
Operating cash flows - finance leases	$	373	$	112	$	135
Financing cash flows - finance leases	$	1,438	$	1,695	$	1,302
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	7,422	$	10,058	$	5,524
Finance leases	$	6,575	$	2,555	$	3,261

Supplemental balance sheet information:

	December 31, 2024		December 31, 2023
	(In Thousands)
Operating leases:
Operating lease right-of-use assets	$	29,797	$	31,915
Operating lease liabilities, current portion	8,861		9,101
Operating lease liabilities	25,041		27,538
Total operating lease liabilities	$	33,902	$	36,639
Finance leases:
Finance lease right-of-use assets	$	6,495	$	2,494
Finance lease liabilities, current portion	4,582		828
Finance lease liabilities	3,211		1,828
Total finance lease liabilities	$	7,793	$	2,656

Additional operating lease information:

	December 31, 2024		December 31, 2023
Weighted average remaining lease term:
Operating leases	4.6 years		5.0 years
Finance leases	1.9 years		2.5 years
Weighted average discount rate:
Operating leases	9.8	%	9.7	%
Finance leases	6.4	%	9.3	%

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, 2024:

	Operating Leases		Finance Leases
	(In Thousands)
2025	$	11,633	$	4,941
2026	10,353		2,857
2027	8,987		357
2028	3,212		105
2029	2,204		15
Thereafter	5,779		—
Total lease payments	42,168		8,275
Less imputed interest	(8,266)		(482)
Total lease liabilities	$	33,902	$	7,793

Sales Lease and Sublease Agreements

During the year ended December 31, 2024, in connection with the settlement of a revenue contract by our Water & Flowback Services Division, 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 and including $4.1 million of revenues from the embedded lease. We also recognized $3.0 million of cost, included cost of product sales in our consolidated statements of operations during the year ended December 31, 2024. As of December 31, 2024, current lease receivables of $1.4 million and long-term lease receivables of $2.2 million are included in trade accounts receivable and other assets, respectively, in our consolidated balance sheets.

The Company has subleases for a portion of its corporate headquarters facility and a facility in Europe. The leases and subleases are considered operating leases. For the years ended December 31, 2024, 2023, and 2022, we recognized sublease income of $1.2 million, $1.2 million, and $1.4 million, respectively.

Future minimum payments under the embedded sales lease and non-cancelable facility subleases were as follows at December 31, 2024:

	Sales Lease		Sublease Payments
	(In Thousands)
2025	$	1,378	$	1,650
2026	2,187		1,452
2027	—		1,410
2028	—		909
2029	—		909
Thereafter	—		3,185
Total payments	$	3,565	$	9,515

Leases

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 10 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.

Our corporate headquarters facility located in The Woodlands, Texas, was sold on December 31, 2012, pursuant to a sale and leaseback transaction. As a condition to the completion of the purchase and sale of the

facility, the parties entered into a lease agreement for the facility having an initial lease term of 15 years, which is classified as an operating lease. Under the terms of the lease agreement, we have the ability to extend the lease for five successive five-year periods at base rental rates to be determined at the time of each extension.

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,
	2024		2023		2022
	(In Thousands)
Operating lease expense	$	13,030	$	13,053	$	12,603
Short-term lease expense	50,521		46,566		39,890
Finance lease cost:
Amortization of right-of-use assets	2,062		232		177
Interest on finance leases	385		112		135
Total lease expense	$	65,998	$	59,963	$	52,805

Supplemental cash flow information:

	Year Ended December 31,
	2024		2023		2022
	(In Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	13,292	$	13,293	$	12,889
Operating cash flows - finance leases	$	373	$	112	$	135
Financing cash flows - finance leases	$	1,438	$	1,695	$	1,302
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	7,422	$	10,058	$	5,524
Finance leases	$	6,575	$	2,555	$	3,261

Supplemental balance sheet information:

	December 31, 2024		December 31, 2023
	(In Thousands)
Operating leases:
Operating lease right-of-use assets	$	29,797	$	31,915
Operating lease liabilities, current portion	8,861		9,101
Operating lease liabilities	25,041		27,538
Total operating lease liabilities	$	33,902	$	36,639
Finance leases:
Finance lease right-of-use assets	$	6,495	$	2,494
Finance lease liabilities, current portion	4,582		828
Finance lease liabilities	3,211		1,828
Total finance lease liabilities	$	7,793	$	2,656

Additional operating lease information:

	December 31, 2024		December 31, 2023
Weighted average remaining lease term:
Operating leases	4.6 years		5.0 years
Finance leases	1.9 years		2.5 years
Weighted average discount rate:
Operating leases	9.8	%	9.7	%
Finance leases	6.4	%	9.3	%

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, 2024:

	Operating Leases		Finance Leases
	(In Thousands)
2025	$	11,633	$	4,941
2026	10,353		2,857
2027	8,987		357
2028	3,212		105
2029	2,204		15
Thereafter	5,779		—
Total lease payments	42,168		8,275
Less imputed interest	(8,266)		(482)
Total lease liabilities	$	33,902	$	7,793

Sales Lease and Sublease Agreements

During the year ended December 31, 2024, in connection with the settlement of a revenue contract by our Water & Flowback Services Division, 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 and including $4.1 million of revenues from the embedded lease. We also recognized $3.0 million of cost, included cost of product sales in our consolidated statements of operations during the year ended December 31, 2024. As of December 31, 2024, current lease receivables of $1.4 million and long-term lease receivables of $2.2 million are included in trade accounts receivable and other assets, respectively, in our consolidated balance sheets.

The Company has subleases for a portion of its corporate headquarters facility and a facility in Europe. The leases and subleases are considered operating leases. For the years ended December 31, 2024, 2023, and 2022, we recognized sublease income of $1.2 million, $1.2 million, and $1.4 million, respectively.

Future minimum payments under the embedded sales lease and non-cancelable facility subleases were as follows at December 31, 2024:

	Sales Lease		Sublease Payments
	(In Thousands)
2025	$	1,378	$	1,650
2026	2,187		1,452
2027	—		1,410
2028	—		909
2029	—		909
Thereafter	—		3,185
Total payments	$	3,565	$	9,515