10. Leases

The Company enters into lease arrangements primarily for office space, yard facilities, and equipment, and vehicles used in construction operations. The Company’s lease portfolio consists of both operating and finance leases with varying terms, generally ranging from one to ten years. Lease agreements for office space and yard facilities are typically operating leases, while equipment and vehicle leases are generally classified as finance leases.

Operating lease costs included variable lease costs of less than $0.1 million for the period from May 7, 2026 through June 30, 2026 (Successor), $0.1 million for the period from January 1, 2026 through May 6, 2026 (Predecessor) and less than $0.1 million for the period from April 1, 2026 through May 6, 2026 (Predecessor). Operating lease costs included variable lease costs of less than $0.1 million and $0.1 million for the three- and six-months ended June 30, 2025 (Predecessor), respectively.

Short-term leases (those with terms of 12 months or less) are not recorded on the balance sheets but are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used on construction projects or temporary office spaces. These leases are entered into at periodic rental rates for an unspecified duration and typically have a termination for convenience provision. Short-term lease costs totaled $0.2 million for the period from May 7, 2026 through June 30, 2026 (Successor), $0 for the period from January 1, 2026 through May 6, 2026 (Predecessor), and $0 for the period from April 1, 2026 through May 6, 2026 (Predecessor). Short term leases costs were $0 and $0 for the three- and six-months ended June 30, 2025 (Predecessor), respectively.