Leases

3 Months Ended

Mar. 31, 2024

10. 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. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent net present value of the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at commencement date based on the net present value of the fixed lease payments over the lease term. 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. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage are not included in the right-of-use assets or operating lease liabilities. These are expensed as incurred and recorded as variable lease expense.

The components of lease expense were as follows.

	Three Months Ended
	March 31, 2024		March 31, 2023
	(In thousands)
Operating lease cost	$	9,953	$	9,365
Short-term lease cost		265		274
Variable lease cost		2,369		2,132
Total lease cost *	$	12,587	$	11,771

* Sublease income was immaterial

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

The supplemental cash flow information related to leases was as follows.

	Three Months Ended
	March 31, 2024		March 31, 2023
	(In thousands)
Cash paid for amounts included in the measurement of operating lease liabilities	$	10,338	$	9,646

Right-of-use assets obtained in exchange for new operating lease liabilities	$	7,727	$	6,281

The aggregate future lease payments for operating leases as of March 31, 2024, were as follows.

Fiscal Year	Amount (In thousands)
2024 (excluding the three months ended March 31, 2024)	$	29,610
2025		32,448
2026		24,492
2027		16,571
2028 and thereafter		16,512
Total lease payments	$	119,633
Less: imputed interest		9,254
Total operating lease liabilities	$	110,379

Average lease terms and discount rates were as follows.

March 31, 2024

March 31, 2023

Weighted-average remaining lease term - Operating leases

Weighted-average discount rate - Operating leases