v3.26.3
Leases
 9 Months Ended
Sep. 30, 2026
Leases [Abstract]  
Leases Leases
Operating Leases
Description of Leases
We have operating leases for five FORCE® electric-powered hydraulic fracturing equipment fleets (the “Electric Fleet Leases”), facilities and office spaces. The terms and conditions of these leases vary by the type of the underlying asset. We did not account for land separately from buildings under our leases of facilities and office spaces because we concluded that the accounting effect was insignificant. Our operating leases do not include residual value guarantees, covenants or financial restrictions. Further, our operating leases do not contain variability in payments resulting from either an index change or rate change. Our operating leases have remaining lease terms of approximately 0.2 years to 7.0 years as of September 30, 2026. Our operating leases have renewal options ranging from none to three renewal options of up to five years each at the end of their current contractual lease periods. Further, our Electric Fleet Leases have options to purchase the underlying equipment at the end of their initial term of approximately three years or at the end of each renewal period. However, in management's judgment the exercise of either the renewal options or the purchase options were not reasonably assured for any operating lease at lease commencement. In addition to fixed rent payments, the Electric Fleet Leases contain variable payments based on equipment usage. The right-of-use assets and liabilities related to the Electric Fleet Leases are included in our Hydraulic Fracturing reportable segment, related to leases for facilities are included in our Hydraulic Fracturing and Wireline reportable segments, and related to office spaces are included in our Wireline and Power Generation reportable segments and our corporate administrative function.
Our total operating lease right-of-use assets were as follows:
(in thousands)September 30, 2026December 31, 2025
Operating lease right-of-use assets - cost$209,544 $206,518 
Operating lease right-of-use assets - accumulated amortization(152,251)(106,731)
Operating lease right-of-use assets - net$57,293 $99,787 
Finance Leases
Description of Leases
We have an approximately three-year equipment lease contract (the "Power Equipment Lease") for certain power generation equipment. In addition to the contractual lease period, the Power Equipment Lease includes an optional renewal for one year, and in management's judgment, the exercise of the renewal option is not reasonably assured. The Power Equipment Lease does not include a residual value guarantee, covenants or financial restrictions. Further, the Power Equipment Lease does not contain variability in payments resulting from either an index change or rate change. The right-of-use assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment.
We accounted for the Power Equipment Lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term, the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets and the lease term being the major part of the remaining economic life of the underlying assets.
In February 2026, we entered into a lease contract for a facility for a term of 2.8 years and no renewal option at the end of the term. We did not account for land separately from buildings under this facility lease because we concluded that the accounting effect was insignificant. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, this facility lease does not contain variability in payments resulting from either an index change or rate change. The right-of-use assets and liabilities under this contract are included in our Wireline reportable segment. We accounted for this facility lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term and the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets.
Our total finance lease right-of-use assets were as follows:
(in thousands)September 30, 2026December 31, 2025
Finance lease right-of-use assets - cost$57,397 $53,292 
Finance lease right-of-use assets - accumulated amortization(55,504)(42,655)
Finance lease right-of-use assets - net$1,893 $10,637 
Lease Costs
The components of lease costs are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Operating lease cost$16,236 $15,731 $48,680 $46,600 
Finance lease cost:
Amortization of right-of-use assets$3,690 $4,559 $12,850 $13,967 
Interest on lease liabilities44 370 354 1,335 
Total finance lease cost$3,734 $4,929 $13,204 $15,302 
Variable lease cost$1,369 $1,152 $3,403 $3,180 
Short-term lease cost$162 $120 $450 $506 
Short-Term Leases
We elected the practical expedient option, consistent with FASB ASC Topic 842, Leases, to exclude leases with an initial term of twelve months or less ("short-term lease") from our balance sheet and continue to record short-term leases as a period expense.
Initial Direct Costs
We elected to analogize to the measurement guidance of FASB ASC Topic 360, Property, Plant, and Equipment, to capitalize costs incurred to place a leased asset into its intended use and to present such capitalized costs as part of the related lease right-of-use asset cost as initial direct costs. The Company incurred initial direct costs of approximately $0 and $0 during each of the three and nine months ended September 30, 2026, respectively, to place the leased equipment into its intended use, which are included in the right-of-use assets cost related to our Electric Fleet Leases. The Company incurred initial direct costs of approximately $0 and $0.8 million during the three and nine months ended September 30, 2025, respectively.
Supplemental Cash Flow Information
Supplemental cash flow information related to leases are as follows:
Nine Months Ended September 30,
(in thousands)20262025
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows from operating leases$35,861 $34,205 
Operating cash flows from finance lease354 1,335 
Financing cash flows from finance lease14,622 13,829 
Noncash lease obligations arising from obtaining right-of-use assets related to:
Operating leases (1)
3,016 29,184 
Finance lease (2)
4,106 $— 
(1)During the nine months ended September 30, 2026, we recorded noncash operating lease obligations arising from obtaining right-of-use assets related to an office lease for our power generation segment. During the nine months ended September 30, 2025, we recorded noncash operating lease obligations arising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Leases and right-of-use assets related to office leases for our corporate headquarters and power generation services segment.
(2)During the nine months ended September 30, 2026, we recorded noncash finance lease obligations related to additional rent on the Power Equipment Lease and right-of-use assets related to a facility lease.
Lease Terms and Discount Rates
Lease terms and discount rates are as follows:
September 30, 2026December 31, 2025
Weighted average remaining lease term:
Operating leases2.0 years2.2 years
Finance leases0.3 years0.6 years
Weighted average discount rate:
Operating leases6.3 %6.6 %
Finance leases5.2 %7.3 %
The discount rates used for our operating and finance leases are determined based on the weighted average annual interest rate on our ABL Credit Facility effective at the time of inception or modification of each lease.
Maturity Analysis of Lease Liabilities
The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our leases as of September 30, 2026 are as follows:
(in thousands)Operating LeasesFinance Leases
Remainder of 2026$11,566 $1,738 
202723,929 108 
202812,645 99 
20291,688 — 
20301,296 — 
2031 and beyond1,609 — 
Total undiscounted future lease payments52,733 1,945 
Less: amount representing interest(3,236)(20)
Present value of future lease payments (lease obligation)$49,497 $1,925 
Lessor Accounting
We elected to apply the lessor practical expedient for our power generation equipment class of assets, which allows us to choose not to separate nonlease components from lease components and, instead, account for each separate lease component and the nonlease components associated with that lease component as a single component if the nonlease components otherwise would be accounted for under FASB ASC Topic 606, and both (1) the timing and pattern of transfer for the lease component and nonlease components associated with that lease component are the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease in accordance with ASC 842-10-25 paragraphs 2 through 3A. The Company’s power generation service arrangements involve the use of its power generation equipment installed at customers’ sites to provide turnkey power generation services. The lease and nonlease components of these arrangements meet both conditions and the power generation services (nonlease components) represent the predominant component of these arrangements. Accordingly, the Company accounts for the revenue from these arrangements in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers.
Stonebriar Equipment Lease Facility
On December 29, 2025, we entered into an Interim Funding Agreement (the "Interim Funding Agreement") and a Master Lease Agreement (the "Master Lease Agreement," and together with the Interim Funding Agreement, the "Stonebriar Equipment Lease Facility") with Stonebriar Commercial Finance LLC ("Stonebriar") for the right, but not the obligation, to fund up to $350.0 million of purchases of power generator equipment for our PROPWR® business line. Under the Interim Funding Agreement, Stonebriar provides funding to finance down payments and progress payments owing to equipment suppliers. Monthly rent under the Interim Funding Agreement is based on the unpaid balance of the aggregate amounts advanced under
the Interim Funding Agreement and not yet converted to a lease schedule under the Master Lease Agreement, times a per annum lease rate factor equal to the sum of 1-Month SOFR plus 6.25%. Upon delivery and acceptance of a power generator, amounts outstanding under the Interim Funding Agreement with respect to such equipment shall be converted into a lease schedule under the Master Lease Agreement. Stonebriar will hold legal title to such leased equipment. The lease term for each item of equipment will be 84 months, and the rental payment amounts will be based on the equipment cost times a lease rate factor set forth in the applicable lease schedule. With respect to the leased equipment, PROPWR® will have certain early termination and purchase options at various points during the lease, as set forth in the Master Lease Agreement and related lease schedule for such equipment. Upon exercise of such rights and payment of the required amounts, PROPWR® would acquire legal title to such equipment. The Interim Funding Agreement expires on December 31, 2028, or earlier if the full amount of the facility is funded before this date.
The origination costs relating to the Stonebriar Equipment Lease Facility will be classified as an asset in our consolidated balance sheet until leases are executed, at which time the amounts that correspond to the proportion of funding obtained compared to the total funding originally available under the facility will be recognized as initial direct costs for such leases. As of September 30, 2026, we had no leases and no outstanding lease liability amounts under the Stonebriar Equipment Lease Facility.
Leases Leases
Operating Leases
Description of Leases
We have operating leases for five FORCE® electric-powered hydraulic fracturing equipment fleets (the “Electric Fleet Leases”), facilities and office spaces. The terms and conditions of these leases vary by the type of the underlying asset. We did not account for land separately from buildings under our leases of facilities and office spaces because we concluded that the accounting effect was insignificant. Our operating leases do not include residual value guarantees, covenants or financial restrictions. Further, our operating leases do not contain variability in payments resulting from either an index change or rate change. Our operating leases have remaining lease terms of approximately 0.2 years to 7.0 years as of September 30, 2026. Our operating leases have renewal options ranging from none to three renewal options of up to five years each at the end of their current contractual lease periods. Further, our Electric Fleet Leases have options to purchase the underlying equipment at the end of their initial term of approximately three years or at the end of each renewal period. However, in management's judgment the exercise of either the renewal options or the purchase options were not reasonably assured for any operating lease at lease commencement. In addition to fixed rent payments, the Electric Fleet Leases contain variable payments based on equipment usage. The right-of-use assets and liabilities related to the Electric Fleet Leases are included in our Hydraulic Fracturing reportable segment, related to leases for facilities are included in our Hydraulic Fracturing and Wireline reportable segments, and related to office spaces are included in our Wireline and Power Generation reportable segments and our corporate administrative function.
Our total operating lease right-of-use assets were as follows:
(in thousands)September 30, 2026December 31, 2025
Operating lease right-of-use assets - cost$209,544 $206,518 
Operating lease right-of-use assets - accumulated amortization(152,251)(106,731)
Operating lease right-of-use assets - net$57,293 $99,787 
Finance Leases
Description of Leases
We have an approximately three-year equipment lease contract (the "Power Equipment Lease") for certain power generation equipment. In addition to the contractual lease period, the Power Equipment Lease includes an optional renewal for one year, and in management's judgment, the exercise of the renewal option is not reasonably assured. The Power Equipment Lease does not include a residual value guarantee, covenants or financial restrictions. Further, the Power Equipment Lease does not contain variability in payments resulting from either an index change or rate change. The right-of-use assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment.
We accounted for the Power Equipment Lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term, the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets and the lease term being the major part of the remaining economic life of the underlying assets.
In February 2026, we entered into a lease contract for a facility for a term of 2.8 years and no renewal option at the end of the term. We did not account for land separately from buildings under this facility lease because we concluded that the accounting effect was insignificant. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, this facility lease does not contain variability in payments resulting from either an index change or rate change. The right-of-use assets and liabilities under this contract are included in our Wireline reportable segment. We accounted for this facility lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term and the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets.
Our total finance lease right-of-use assets were as follows:
(in thousands)September 30, 2026December 31, 2025
Finance lease right-of-use assets - cost$57,397 $53,292 
Finance lease right-of-use assets - accumulated amortization(55,504)(42,655)
Finance lease right-of-use assets - net$1,893 $10,637 
Lease Costs
The components of lease costs are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Operating lease cost$16,236 $15,731 $48,680 $46,600 
Finance lease cost:
Amortization of right-of-use assets$3,690 $4,559 $12,850 $13,967 
Interest on lease liabilities44 370 354 1,335 
Total finance lease cost$3,734 $4,929 $13,204 $15,302 
Variable lease cost$1,369 $1,152 $3,403 $3,180 
Short-term lease cost$162 $120 $450 $506 
Short-Term Leases
We elected the practical expedient option, consistent with FASB ASC Topic 842, Leases, to exclude leases with an initial term of twelve months or less ("short-term lease") from our balance sheet and continue to record short-term leases as a period expense.
Initial Direct Costs
We elected to analogize to the measurement guidance of FASB ASC Topic 360, Property, Plant, and Equipment, to capitalize costs incurred to place a leased asset into its intended use and to present such capitalized costs as part of the related lease right-of-use asset cost as initial direct costs. The Company incurred initial direct costs of approximately $0 and $0 during each of the three and nine months ended September 30, 2026, respectively, to place the leased equipment into its intended use, which are included in the right-of-use assets cost related to our Electric Fleet Leases. The Company incurred initial direct costs of approximately $0 and $0.8 million during the three and nine months ended September 30, 2025, respectively.
Supplemental Cash Flow Information
Supplemental cash flow information related to leases are as follows:
Nine Months Ended September 30,
(in thousands)20262025
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows from operating leases$35,861 $34,205 
Operating cash flows from finance lease354 1,335 
Financing cash flows from finance lease14,622 13,829 
Noncash lease obligations arising from obtaining right-of-use assets related to:
Operating leases (1)
3,016 29,184 
Finance lease (2)
4,106 $— 
(1)During the nine months ended September 30, 2026, we recorded noncash operating lease obligations arising from obtaining right-of-use assets related to an office lease for our power generation segment. During the nine months ended September 30, 2025, we recorded noncash operating lease obligations arising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Leases and right-of-use assets related to office leases for our corporate headquarters and power generation services segment.
(2)During the nine months ended September 30, 2026, we recorded noncash finance lease obligations related to additional rent on the Power Equipment Lease and right-of-use assets related to a facility lease.
Lease Terms and Discount Rates
Lease terms and discount rates are as follows:
September 30, 2026December 31, 2025
Weighted average remaining lease term:
Operating leases2.0 years2.2 years
Finance leases0.3 years0.6 years
Weighted average discount rate:
Operating leases6.3 %6.6 %
Finance leases5.2 %7.3 %
The discount rates used for our operating and finance leases are determined based on the weighted average annual interest rate on our ABL Credit Facility effective at the time of inception or modification of each lease.
Maturity Analysis of Lease Liabilities
The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our leases as of September 30, 2026 are as follows:
(in thousands)Operating LeasesFinance Leases
Remainder of 2026$11,566 $1,738 
202723,929 108 
202812,645 99 
20291,688 — 
20301,296 — 
2031 and beyond1,609 — 
Total undiscounted future lease payments52,733 1,945 
Less: amount representing interest(3,236)(20)
Present value of future lease payments (lease obligation)$49,497 $1,925 
Lessor Accounting
We elected to apply the lessor practical expedient for our power generation equipment class of assets, which allows us to choose not to separate nonlease components from lease components and, instead, account for each separate lease component and the nonlease components associated with that lease component as a single component if the nonlease components otherwise would be accounted for under FASB ASC Topic 606, and both (1) the timing and pattern of transfer for the lease component and nonlease components associated with that lease component are the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease in accordance with ASC 842-10-25 paragraphs 2 through 3A. The Company’s power generation service arrangements involve the use of its power generation equipment installed at customers’ sites to provide turnkey power generation services. The lease and nonlease components of these arrangements meet both conditions and the power generation services (nonlease components) represent the predominant component of these arrangements. Accordingly, the Company accounts for the revenue from these arrangements in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers.
Stonebriar Equipment Lease Facility
On December 29, 2025, we entered into an Interim Funding Agreement (the "Interim Funding Agreement") and a Master Lease Agreement (the "Master Lease Agreement," and together with the Interim Funding Agreement, the "Stonebriar Equipment Lease Facility") with Stonebriar Commercial Finance LLC ("Stonebriar") for the right, but not the obligation, to fund up to $350.0 million of purchases of power generator equipment for our PROPWR® business line. Under the Interim Funding Agreement, Stonebriar provides funding to finance down payments and progress payments owing to equipment suppliers. Monthly rent under the Interim Funding Agreement is based on the unpaid balance of the aggregate amounts advanced under
the Interim Funding Agreement and not yet converted to a lease schedule under the Master Lease Agreement, times a per annum lease rate factor equal to the sum of 1-Month SOFR plus 6.25%. Upon delivery and acceptance of a power generator, amounts outstanding under the Interim Funding Agreement with respect to such equipment shall be converted into a lease schedule under the Master Lease Agreement. Stonebriar will hold legal title to such leased equipment. The lease term for each item of equipment will be 84 months, and the rental payment amounts will be based on the equipment cost times a lease rate factor set forth in the applicable lease schedule. With respect to the leased equipment, PROPWR® will have certain early termination and purchase options at various points during the lease, as set forth in the Master Lease Agreement and related lease schedule for such equipment. Upon exercise of such rights and payment of the required amounts, PROPWR® would acquire legal title to such equipment. The Interim Funding Agreement expires on December 31, 2028, or earlier if the full amount of the facility is funded before this date.
The origination costs relating to the Stonebriar Equipment Lease Facility will be classified as an asset in our consolidated balance sheet until leases are executed, at which time the amounts that correspond to the proportion of funding obtained compared to the total funding originally available under the facility will be recognized as initial direct costs for such leases. As of September 30, 2026, we had no leases and no outstanding lease liability amounts under the Stonebriar Equipment Lease Facility.
Leases Leases
Operating Leases
Description of Leases
We have operating leases for five FORCE® electric-powered hydraulic fracturing equipment fleets (the “Electric Fleet Leases”), facilities and office spaces. The terms and conditions of these leases vary by the type of the underlying asset. We did not account for land separately from buildings under our leases of facilities and office spaces because we concluded that the accounting effect was insignificant. Our operating leases do not include residual value guarantees, covenants or financial restrictions. Further, our operating leases do not contain variability in payments resulting from either an index change or rate change. Our operating leases have remaining lease terms of approximately 0.2 years to 7.0 years as of September 30, 2026. Our operating leases have renewal options ranging from none to three renewal options of up to five years each at the end of their current contractual lease periods. Further, our Electric Fleet Leases have options to purchase the underlying equipment at the end of their initial term of approximately three years or at the end of each renewal period. However, in management's judgment the exercise of either the renewal options or the purchase options were not reasonably assured for any operating lease at lease commencement. In addition to fixed rent payments, the Electric Fleet Leases contain variable payments based on equipment usage. The right-of-use assets and liabilities related to the Electric Fleet Leases are included in our Hydraulic Fracturing reportable segment, related to leases for facilities are included in our Hydraulic Fracturing and Wireline reportable segments, and related to office spaces are included in our Wireline and Power Generation reportable segments and our corporate administrative function.
Our total operating lease right-of-use assets were as follows:
(in thousands)September 30, 2026December 31, 2025
Operating lease right-of-use assets - cost$209,544 $206,518 
Operating lease right-of-use assets - accumulated amortization(152,251)(106,731)
Operating lease right-of-use assets - net$57,293 $99,787 
Finance Leases
Description of Leases
We have an approximately three-year equipment lease contract (the "Power Equipment Lease") for certain power generation equipment. In addition to the contractual lease period, the Power Equipment Lease includes an optional renewal for one year, and in management's judgment, the exercise of the renewal option is not reasonably assured. The Power Equipment Lease does not include a residual value guarantee, covenants or financial restrictions. Further, the Power Equipment Lease does not contain variability in payments resulting from either an index change or rate change. The right-of-use assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment.
We accounted for the Power Equipment Lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term, the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets and the lease term being the major part of the remaining economic life of the underlying assets.
In February 2026, we entered into a lease contract for a facility for a term of 2.8 years and no renewal option at the end of the term. We did not account for land separately from buildings under this facility lease because we concluded that the accounting effect was insignificant. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, this facility lease does not contain variability in payments resulting from either an index change or rate change. The right-of-use assets and liabilities under this contract are included in our Wireline reportable segment. We accounted for this facility lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term and the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets.
Our total finance lease right-of-use assets were as follows:
(in thousands)September 30, 2026December 31, 2025
Finance lease right-of-use assets - cost$57,397 $53,292 
Finance lease right-of-use assets - accumulated amortization(55,504)(42,655)
Finance lease right-of-use assets - net$1,893 $10,637 
Lease Costs
The components of lease costs are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2026202520262025
Operating lease cost$16,236 $15,731 $48,680 $46,600 
Finance lease cost:
Amortization of right-of-use assets$3,690 $4,559 $12,850 $13,967 
Interest on lease liabilities44 370 354 1,335 
Total finance lease cost$3,734 $4,929 $13,204 $15,302 
Variable lease cost$1,369 $1,152 $3,403 $3,180 
Short-term lease cost$162 $120 $450 $506 
Short-Term Leases
We elected the practical expedient option, consistent with FASB ASC Topic 842, Leases, to exclude leases with an initial term of twelve months or less ("short-term lease") from our balance sheet and continue to record short-term leases as a period expense.
Initial Direct Costs
We elected to analogize to the measurement guidance of FASB ASC Topic 360, Property, Plant, and Equipment, to capitalize costs incurred to place a leased asset into its intended use and to present such capitalized costs as part of the related lease right-of-use asset cost as initial direct costs. The Company incurred initial direct costs of approximately $0 and $0 during each of the three and nine months ended September 30, 2026, respectively, to place the leased equipment into its intended use, which are included in the right-of-use assets cost related to our Electric Fleet Leases. The Company incurred initial direct costs of approximately $0 and $0.8 million during the three and nine months ended September 30, 2025, respectively.
Supplemental Cash Flow Information
Supplemental cash flow information related to leases are as follows:
Nine Months Ended September 30,
(in thousands)20262025
Cash paid for amounts included in the measurements of lease liabilities:
Operating cash flows from operating leases$35,861 $34,205 
Operating cash flows from finance lease354 1,335 
Financing cash flows from finance lease14,622 13,829 
Noncash lease obligations arising from obtaining right-of-use assets related to:
Operating leases (1)
3,016 29,184 
Finance lease (2)
4,106 $— 
(1)During the nine months ended September 30, 2026, we recorded noncash operating lease obligations arising from obtaining right-of-use assets related to an office lease for our power generation segment. During the nine months ended September 30, 2025, we recorded noncash operating lease obligations arising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Leases and right-of-use assets related to office leases for our corporate headquarters and power generation services segment.
(2)During the nine months ended September 30, 2026, we recorded noncash finance lease obligations related to additional rent on the Power Equipment Lease and right-of-use assets related to a facility lease.
Lease Terms and Discount Rates
Lease terms and discount rates are as follows:
September 30, 2026December 31, 2025
Weighted average remaining lease term:
Operating leases2.0 years2.2 years
Finance leases0.3 years0.6 years
Weighted average discount rate:
Operating leases6.3 %6.6 %
Finance leases5.2 %7.3 %
The discount rates used for our operating and finance leases are determined based on the weighted average annual interest rate on our ABL Credit Facility effective at the time of inception or modification of each lease.
Maturity Analysis of Lease Liabilities
The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our leases as of September 30, 2026 are as follows:
(in thousands)Operating LeasesFinance Leases
Remainder of 2026$11,566 $1,738 
202723,929 108 
202812,645 99 
20291,688 — 
20301,296 — 
2031 and beyond1,609 — 
Total undiscounted future lease payments52,733 1,945 
Less: amount representing interest(3,236)(20)
Present value of future lease payments (lease obligation)$49,497 $1,925 
Lessor Accounting
We elected to apply the lessor practical expedient for our power generation equipment class of assets, which allows us to choose not to separate nonlease components from lease components and, instead, account for each separate lease component and the nonlease components associated with that lease component as a single component if the nonlease components otherwise would be accounted for under FASB ASC Topic 606, and both (1) the timing and pattern of transfer for the lease component and nonlease components associated with that lease component are the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease in accordance with ASC 842-10-25 paragraphs 2 through 3A. The Company’s power generation service arrangements involve the use of its power generation equipment installed at customers’ sites to provide turnkey power generation services. The lease and nonlease components of these arrangements meet both conditions and the power generation services (nonlease components) represent the predominant component of these arrangements. Accordingly, the Company accounts for the revenue from these arrangements in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers.
Stonebriar Equipment Lease Facility
On December 29, 2025, we entered into an Interim Funding Agreement (the "Interim Funding Agreement") and a Master Lease Agreement (the "Master Lease Agreement," and together with the Interim Funding Agreement, the "Stonebriar Equipment Lease Facility") with Stonebriar Commercial Finance LLC ("Stonebriar") for the right, but not the obligation, to fund up to $350.0 million of purchases of power generator equipment for our PROPWR® business line. Under the Interim Funding Agreement, Stonebriar provides funding to finance down payments and progress payments owing to equipment suppliers. Monthly rent under the Interim Funding Agreement is based on the unpaid balance of the aggregate amounts advanced under
the Interim Funding Agreement and not yet converted to a lease schedule under the Master Lease Agreement, times a per annum lease rate factor equal to the sum of 1-Month SOFR plus 6.25%. Upon delivery and acceptance of a power generator, amounts outstanding under the Interim Funding Agreement with respect to such equipment shall be converted into a lease schedule under the Master Lease Agreement. Stonebriar will hold legal title to such leased equipment. The lease term for each item of equipment will be 84 months, and the rental payment amounts will be based on the equipment cost times a lease rate factor set forth in the applicable lease schedule. With respect to the leased equipment, PROPWR® will have certain early termination and purchase options at various points during the lease, as set forth in the Master Lease Agreement and related lease schedule for such equipment. Upon exercise of such rights and payment of the required amounts, PROPWR® would acquire legal title to such equipment. The Interim Funding Agreement expires on December 31, 2028, or earlier if the full amount of the facility is funded before this date.
The origination costs relating to the Stonebriar Equipment Lease Facility will be classified as an asset in our consolidated balance sheet until leases are executed, at which time the amounts that correspond to the proportion of funding obtained compared to the total funding originally available under the facility will be recognized as initial direct costs for such leases. As of September 30, 2026, we had no leases and no outstanding lease liability amounts under the Stonebriar Equipment Lease Facility.