Leases

12 Months Ended

Dec. 31, 2023

The Company's lease portfolio is comprised primarily of operating leases for office space and equipment. The majority of the Company's leases include both lease and non-lease components, which the Company accounts for differently depending on the underlying class of asset. Certain of the Company's leases include one or more options to renew or terminate the lease at the Company's discretion. Generally, the renewal and termination options are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in the lease term.

As most of the Company's leases do not provide an implicit interest rate, the Company utilizes an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company has a centrally managed treasury function and therefore, a portfolio approach is applied in determining the incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a fully collateralized basis over a similar term in an amount equal to the total lease payments in a similar economic environment.

Office leases have remaining lease terms that range from less than one year to 11.8 years, some of which also include options to extend or terminate the lease. Most office leases contain both fixed and variable lease payments. Variable lease costs consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to not separate lease and non-lease components for office leases.

As part of the Company's 2020 Plan (as defined below), a lease component related to one of the Company's offices was

abandoned and the useful life of the associated right-of-use asset was shortened to correspond with the cease-use date. As a result of the change in useful life, approximately $8.7 million of right-of-use asset amortization was accelerated and recorded in Restructuring charges in the Consolidated Statements of Comprehensive Income and Depreciation and amortization in the Consolidated Statements of Cash Flows during the year ended December 31, 2021. In September 2021, the Company entered into a termination and surrender agreement for this lease component. Under the terms of the agreement, the Company made a one-time payment of $11.7 million to release the Company from all remaining obligations under the lease. At the time of payment, the Company had accrued approximately $17.4 million of lease liabilities related to future payments under the remaining lease term. Upon making the one-time payment, the lease liabilities were relieved, resulting in a gain on termination of approximately $5.7 million, which is recorded in Restructuring charges in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2021.

Equipment leases, which are comprised of vehicle and office equipment leases, have remaining terms that range from less than one year to 4.9 years, some of which also include options to extend or terminate the lease. The Company's equipment leases do not contain variable lease payments. The Company separates the lease and non-lease components for its equipment leases. Equipment leases do not comprise a significant portion of the Company's lease portfolio.

Lease cost components included within General and Administrative Expenses in our Consolidated Statements of Comprehensive Income for the year ended December 31, were as follows:


	December 31,
	2023		2022
Operating lease cost	$	19,587	$	17,408
Variable lease cost	9,225		6,116
Total lease cost	$	28,812	$	23,524

Supplemental cash flow information related to the Company's operating leases for the year ended December 31, is as follows:


	December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	20,856	$	18,865
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	34,982	$	18,055

The weighted average remaining lease term and weighted average discount rate for our operating leases as of December 31, is as follows:


	December 31,
	2023		2022
Weighted Average Remaining Lease Term
Operating leases	7.3 years		6.3 years
Weighted Average Discount Rate
Operating leases	4.82	%	3.48	%

The future maturities of the Company's operating lease liabilities for the years ended December 31, is as follows:


	Operating Lease Maturity
2024	$	21,095
2025	16,384
2026	14,997
2027	14,698
2028	11,225
Thereafter	43,008
Total lease payments	121,407
Less: Interest	21,705
Present value of lease liabilities	$	99,702

The Company has an obligation at the end of the lease term to return certain offices to the landlord in its original condition, which is recorded at fair value at the time the liability is incurred. The Company had $3.3 million and $2.8 million of asset retirement obligations as of December 31, 2023, and 2022, respectively, which are recorded within Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets.