Lineage Inc

(13)Leases

The Company leases real estate, most significantly warehouses for use in operations, as well as equipment for use within owned and leased warehouses. The Company also leases vehicles, trailers and other equipment. The Company has not pledged any assets as collateral related to the Company’s existing leases as of September 30, 2024 and December 31, 2023.

Right-of-use asset balances are as follows:

Lease liabilities are presented in the following line items in the condensed consolidated balance sheets:

Future minimum lease payments for each of the next five years and thereafter as of September 30, 2024 are as follows (in millions):

Supplemental condensed consolidated balance sheet information related to leases is as follows:

The components of lease expense are as follows:

Supplemental cash flow information related to leases is as follows:

Houston, Texas purchase option

On September 27, 2024, the Company provided notice to the lessor of its intention to exercise a purchase option contained in the lease agreement, which consequently became reasonably certain of exercise. This resulted in a reclassification from operating lease obligations to finance lease obligations of $44 million and an additional finance lease obligation of $45 million, for a total finance lease obligation of $89 million. The reassessment of the purchase option also resulted in a reclassification of $45 million of Operating lease right-of-use assets to Finance lease right-of-use-assets and an additional recording of $45 million of Finance lease right-of-use-assets for a total $90 million Finance lease right-of-use-assets. The purchase option is expected to be executed in April 2025 for $90 million, of which $1 million is expected to be paid in 2024 as an earnest money deposit.