Leases

12 Months Ended

Dec. 31, 2025

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, 2025 and 2024, the Company recorded non-cash operating lease right-of-use asset impairment charges of $1.0 million and $1.4 million, respectively, 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, 2025 and 2024 on the consolidated balance sheets (in thousands):


		December 31,
Right-of-Use Assets	Balance Sheet Classification	2025		2024
Finance lease right-of-use assets	Property and equipment, net	$	7,054	$	7,872
Operating lease right-of-use assets	Operating lease right-of-use assets		134,005		118,369
Total		$	141,059	$	126,241

		December 31,
Lease Liabilities	Balance Sheet Classification	2025		2024
Current:
Finance lease liabilities	Other accrued liabilities	$	1,089	$	1,089
Operating lease liabilities	Current portion of operating lease liabilities		21,160		25,462
Noncurrent:
Finance lease liabilities	Other liabilities		10,715		10,805
Operating lease liabilities	Operating lease liabilities		121,961		101,828
Total		$	154,925	$	139,184

Weighted-average remaining lease terms and discount rates were as follows at December 31, 2025 and 2024:


	December 31,
	2025			2024
Weighted-average remaining lease term (in years):
Finance		18.9			19.8
Operating		9.0			8.0

Weighted-average discount rate:
Finance		5.1	%		5.1	%
Operating		6.5	%		6.0	%

Lease Costs

The Company recorded the following lease costs for the years ended December 31, 2025, 2024 and 2023 (in thousands):


	Year Ended December 31,
	2025		2024		2023
Finance lease costs:
Depreciation of leased assets	$	375	$	378	$	378
Interest on lease liabilities		999		1,014		1,028
Total finance lease costs	$	1,374	$	1,392	$	1,406

Operating lease costs	$	32,895	$	34,977	$	34,400
Variable lease costs		3,883		3,421		3,319
Short term lease costs		3,982		2,995		3,237
Other lease costs		7,262		6,468		5,596
Total rents and leases	$	48,022	$	47,861	$	46,552

Total lease costs	$	49,396	$	49,253	$	47,958

Other

Undiscounted future cash flows for finance and operating leases recorded on the consolidated balance sheet were as follows at December 31, 2025 (in thousands):


	Finance Leases		Operating Leases
2026	$	1,089	$	28,158
2027		1,089		26,248
2028		1,089		23,270
2029		1,107		20,252
2030		1,198		16,406
Thereafter		18,428		81,936
Total minimum lease payments		24,000		196,270
Less: amount of lease payments representing interest		12,196		53,149
Present value of future minimum lease payments		11,804		143,121
Less: Current portion of lease liabilities		1,089		21,160
Noncurrent lease liabilities	$	10,715	$	121,961

Supplemental data for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):


	Year Ended December 31,
	2025		2024			2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	33,984	$	36,141		$	34,940
Operating cash flows for finance leases	$	999	$	1,014		$	1,028
Financing cash flows for finance leases	$	90	$	(8	)	$	(38	)

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	43,792	$	33,060		$	14,714
Finance leases	$	—	$	—		$	—