Leases

6 Months Ended

Jun. 30, 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.

	For the Three Months Ended				For the Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(In thousands)
Operating lease cost	$	10,263	$	9,410	$	20,216	$	18,775
Short-term lease cost		256		284		521		559
Variable lease cost		2,563		2,373		4,932		4,504
Total lease cost *	$	13,082	$	12,067	$	25,669	$	23,838

*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.

	For the Three Months Ended				For the Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(In thousands)

Cash paid for amounts included in the measurement of operating lease liabilities	$	10,564	$	9,753	$	20,902	$	19,399

Right-of-use assets obtained in exchange for new operating lease liabilities	$	12,901	$	9,938	$	20,628	$	16,219

The aggregate future lease payments for operating leases as of June 30, 2024, were as follows.

	Amount
Fiscal Year	(In thousands)
2024 (excluding the six months ended June 30, 2024)	$	20,564
2025		35,568
2026		27,481
2027		18,994
2028 and thereafter		21,091
Total lease payments	$	123,698
Less: imputed interest		10,126
Total operating lease liabilities	$	113,572

Average lease terms and discount rates were as follows.

June 30, 2024

June 30, 2023

Weighted-average remaining lease term - Operating leases

Weighted-average discount rate - Operating leases