LEASES

9 Months Ended

Sep. 30, 2023

11. LEASES

The Company has operating leases for its corporate offices and operating facilities. The Company determines if an arrangement is a lease at the inception of a contract. The Company’s operating lease terms are generally five years or less. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Operating fixed lease expense is recognized on a straight-line basis over the lease term.

The components of lease expense were as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
	(In thousands)
Operating lease cost	$	9,725	$	8,870	$	28,500	$	25,974
Short-term lease cost		292		210		851		790
Variable lease cost		2,281		1,913		6,785		5,839
Total lease cost *	$	12,298	$	10,993	$	36,136	$	32,603

*Sublease income was immaterial.

Lease cost is reflected in the consolidated statement of net income in the line item – rent, supplies, contract labor and other.

Supplemental information related to leases was as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
	(In thousands)

Cash paid for amounts included in the measurement of operating lease liabilities	$	10,007	$	9,139	$	29,418	$	26,697

Right-of-use assets obtained in exchange for new operating lease liabilities	$	10,188	$	8,011	$	26,407	$	29,618

The aggregate future lease payments for operating leases as of September 30, 2023 were as follows:

Fiscal Year	Amount
	(In thousands)
2023 (excluding the nine months ended September 30, 2023)	$	9,946
2024		36,216
2025		28,184
2026		20,552
2027 and therafter		24,877
Total lease payments	$	119,775
Less: imputed interest		8,445
Total operating lease liabilities	$	111,330

Average lease terms and discount rates were as follows:

The weighted-average remaining operating lease term was 3.9 years and 4.2 years as of September 30, 2023 and September 30, 2022, respectively, while the average discount rate for operating leases was 3.8% and 2.7% over the same periods, respectively.