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Note 19 - Leases

12 Months Ended

Dec. 31, 2024

19. Leases

As of December 31, 2024, the Partnership had two operating leases for office buildings. On January 1, 2019, the Partnership entered into a new lease for the West Virginia office building owned by WPPLP with a five-year base term and five additional five-year renewal options. Upon lease commencement and as of December 31, 2024 and 2023, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheets using the present value of the future lease payments over 30 years. On January 1, 2023, the Partnership entered into a new lease for an office building in Houston with an 11.4 year initial term and two additional five-year renewal options. Upon lease commencement and as of December 31, 2024 and 2023, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheets using the present value of the future lease payments over 21.4 years. The Partnership's right-of-use asset included within other long-term assets, net on its Consolidated Balance Sheets totaled $4.2 million and $4.3 million at December 31, 2024 and 2023, respectively. The Partnership's lease liability included in other non-current liabilities on its Consolidated Balance Sheets totaled $4.4 million and $4.3 million at December 31, 2024 and 2023, respectively. During the years ended December 31, 2024, 2023 and 2022, the Partnership incurred total operating lease expenses of $0.6 million, $0.6 million and $0.5 million included in both operating and maintenance expenses and general and administrative expenses on its Consolidated Statements of Comprehensive Income.

The following table details the maturity analysis of the Partnership's operating lease liability and reconciles the undiscounted cash flows to the operating lease liability included on its Consolidated Balance Sheet:

Remaining Annual Lease Payments (In thousands)	*December 31, 2024*
2025	$	601
2026		604
2027		607
2028		611
2029		614
After 2029		11,425
Total lease payments ⁽¹⁾	$	14,462
Less: present value adjustment ⁽²⁾		(10,095	)
Total operating lease liability	$	4,367

⁽¹⁾	The remaining lease terms of the Partnership's two operating leases are 24 years and 19.4 years.

⁽²⁾

The present value of the operating lease liability on the Partnership's Consolidated Balance Sheets was calculated using a 13.5% discount rate on the 30-year lease and a 13.4% discount rate on the 21.4-year lease. These rates represent the Partnership's estimated incremental borrowing rates under its two operating leases. As the Partnership's leases do not provide an implicit rate, the Partnership estimated the incremental borrowing rates at the time the leases were entered into by utilizing the rate of the Partnership's secured debt and adjusting it for factors that reflect the profile of borrowing over the 30-year and 21.4-year expected lease terms, respectively.