Leases

12 Months Ended

Dec. 31, 2024

9. Leases

The Company’s lease portfolio primarily consists of finance and operating real estate leases integral for facility operations. The original terms of the leases typically range from five to thirty years with optional renewal periods. A minimal portion of the Company’s lease portfolio consists of non-real estate leases, including copiers and equipment, which generally have lease terms of one to three years and have insignificant lease obligations.

The Company elected the accounting policy practical expedients by class of underlying asset in ASC 842 “Leases” to: (i) combine associated lease and non-lease components into a single lease component; and (ii) exclude recording short-term leases as right-of-use assets and liabilities on the consolidated balance sheets. Non-lease components, which are not significant overall, are combined with lease components.

Operating lease liabilities are recorded at the present value of remaining lease payments not yet paid for the lease term discounted using the incremental borrowing rate associated with each lease. Operating lease right-of-use assets represent operating lease liabilities adjusted for prepayments, accrued lease payments, lease incentives and initial direct costs. Certain of the Company’s leases include renewal or termination options. Calculation of operating lease right-of-use assets and liabilities include the initial lease term unless it is reasonably certain a renewal or termination option will be exercised. Variable components of lease payments fluctuating with a future index or rate, as well as those related to common area maintenance costs, are not included in determining lease liabilities and are expensed as incurred. Most of the Company’s leases do not contain implicit borrowing rates, and therefore, incremental borrowing rates were calculated based on information available at the lease commencement date. The Company reviews service agreements for embedded leases and records right-of-use assets and liabilities as necessary.

During the year ended December 31, 2024, the Company recorded non-cash operating lease right-of-use asset impairment charges of $1.4 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations. During the year ended December 31, 2023, the Company recorded non-cash operating lease right-of-use asset impairment charges of $2.4 million related to the closure of certain facilities, which is included in loss on impairment in the consolidated statements of operations.

Lease Position

The Company recorded the following at December 31, 2024 and 2023 on the consolidated balance sheets (in thousands):


		December 31,
Right-of-Use Assets	Balance Sheet Classification	2024		2023
Finance lease right-of-use assets	Property and equipment, net	$	7,872	$	7,872
Operating lease right-of-use assets	Operating lease right-of-use assets		118,369		117,780
Total		$	126,241	$	125,652

		December 31,
Lease Liabilities	Balance Sheet Classification	2024		2023
Current:
Finance lease liabilities	Other accrued liabilities	$	1,089	$	990
Operating lease liabilities	Current portion of operating lease liabilities		25,462		26,268
Noncurrent:
Finance lease liabilities	Other liabilities		10,805		10,896
Operating lease liabilities	Operating lease liabilities		101,828		100,808
Total		$	139,184	$	138,962

Weighted-average remaining lease terms and discount rates were as follows at December 31, 2024 and 2023:


	December 31,
	2024			2023
Weighted-average remaining lease term (in years):
Finance		19.8			20.9
Operating		8.0			8.1

Weighted-average discount rate:
Finance		5.1	%		5.1	%
Operating		6.0	%		5.7	%

Lease Costs

The Company recorded the following lease costs for the years ended December 31, 2024, 2023 and 2022 (in thousands):


	Year Ended December 31,
	2024		2023		2022
Finance lease costs:
Depreciation of leased assets		378		378		378
Interest of lease liabilities		1,014		1,028		1,041
Total finance lease costs	$	1,392	$	1,406	$	1,419

Operating lease costs		34,977		34,400		34,349
Variable lease costs		3,421		3,319		3,129
Short term lease costs		2,995		3,237		2,605
Other lease costs		6,468		5,596		5,379
Total rents and leases	$	47,861	$	46,552	$	45,462

Total lease costs	$	49,253	$	47,958	$	46,881

Other

Undiscounted future cash flows for finance and operating leases recorded on the consolidated balance sheet were as follows at December 31, 2024 (in thousands):


	Finance Leases		Operating Leases
2025	$	1,089	$	32,457
2026		1,089		26,261
2027		1,089		20,217
2028		1,089		16,738
2029		1,107		13,589
Thereafter		19,626		57,221
Total minimum lease payments		25,089		166,483
Less: amount of lease payments representing interest		13,195		39,193
Present value of future minimum lease payments		11,894		127,290
Less: Current portion of lease liabilities		1,089		25,462
Noncurrent lease liabilities	$	10,805	$	101,828

Supplemental data for the years ended December 31, 2024, 2023 and 2022 were as follows (in thousands):


	Year Ended December 31,
	2024			2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	36,141		$	34,940		$	33,836
Operating cash flows for finance leases	$	1,014		$	1,028		$	1,041
Financing cash flows for finance leases	$	(8	)	$	(38	)	$	(51	)

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	33,060		$	14,714		$	31,294
Finance leases	$	—		$	—		$	—