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Leases | 12 Months Ended
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Jun. 30, 2023
Leases [Abstract] |
Leases | Leases Leasing Arrangements as Lessee The Company leases certain property and equipment under various third-party operating and finance lease agreements. The Company determines if an arrangement is or contains a lease at the lease inception date by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all of the economic benefits from and has the ability to direct the use of the asset. The leases are noncancelable and expire on various terms from 2023 through 2032. We determine if an arrangement is a lease upon commencement of the contract. If an arrangement is determined to be a long-term lease (greater than 12 months), we recognize an ROU asset and lease liability based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may also include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have elected to apply the short-term lease exception for contracts that have a lease term of twelve months or less and do not include an option to purchase the underlying asset. Therefore, we do not recognize a ROU asset or lease liability for such contracts. We recognize short-term lease payments as expense on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or rate are recognized as expense. Certain leases include escalations based on inflation indexes and fair market value adjustments. Operating lease liabilities are calculated using the prevailing index or rate at lease commencement for such leases. On March 20, 2023, we consolidated our Germantown center in Pennsylvania with two of our existing centers. Upon consolidation, we terminated our Germantown center lease and recognized lease termination costs of $0.6 million. Lease termination costs are included in other income (expense) on our consolidated statements of operations. The following table presents the components of our ROU assets and their classification in our Balance Sheet at June 30, 2023.
Component of Lease Balances | Balance Sheet Line Items | Year Ended June 30,
|  | in thousands
Assets: |  |
Operating lease assets | Operating lease assets | $ | 21,210 |
Finance lease assets | Property and equipment, net | 16,378 |
Total leased assets |  | $ | 37,588 |
The following table presents the components of our lease cost and the classification of such costs in our Statement of Operations for the year ended June 30, 2023.
Component of Lease Cost | Statement of Operations Line Items | Year Ended June 30,
|  | in thousands
Operating lease cost | Cost of care excluding depreciation and amortization and Corporate, general and administrative | $ | 4,642 |
Finance lease expense: |  |
Amortization of leased assets | Depreciation and amortization | 3,080 |
Interest on lease liabilities | Interest expense, net | 1,255 |
Variable lease cost | Cost of care excluding depreciation and amortization and Corporate, general and administrative | 82 |
Short-term lease cost | Cost of care excluding depreciation and amortization and Corporate, general and administrative | 108 |
Total lease expense: |  | $ | 9,167 |
The following table includes the weighted-average lease terms and discount rates for operating and finance leases as of June 30, 2023.
Weighted average remaining lease term: | June 30, 2023
Operating leases | 7.9 years
Finance leases | 3.9 years
Weighted average discount rate | June 30, 2023
Operating leases | 6.60 | %
Finance leases | 7.80 | %
The following table includes the future maturities of lease payments for operating leases and finance leases for periods subsequent to June 30, 2023.
in thousands | Operating Lease |  | Finance Lease |  | Total
2024 | $ | 4,882 |  |  | $ | 5,970 |  |  | $ | 10,852 |
2025 | 4,356 |  |  | 5,270 |  |  | 9,626 |
2026 | 4,283 |  |  | 4,245 |  |  | 8,528 |
2027 | 3,981 |  |  | 3,549 |  |  | 7,530 |
2028 | 3,140 |  |  | 1,759 |  |  | 4,899 |
Thereafter | 7,033 |  |  | — |  |  | 7,033 |
Total lease payments | 27,675 |  |  | 20,793 |  |  | 48,468 |
Less liability accretion / imputed interest | (5,317) |  |  | (2,957) |  |  | (8,274) |
Total lease liabilities | 22,358 |  |  | 17,836 |  |  | 40,194 |
Less: Current lease liabilities | 3,530 |  |  | 4,722 |  |  | 8,252 |
Total long-term lease liabilities | $ | 18,828 |  |  | $ | 13,114 |  |  | $ | 31,942 |
The following table includes the future maturities of minimum rental payments that are required to be paid under all non-cancelable operating and capital lease obligations, prior to the adoption of ASC 842:
in thousands |  | Operating Lease |  | Capital Lease
2023 |  | $ | 4,873 |  |  | $ | 4,405 |
2024 |  | 4,581 |  |  | 3,909 |
2025 |  | 4,122 |  |  | 3,126 |
2026 |  | 4,061 |  |  | 2,092 |
2027 |  | 3,764 |  |  | 1,393 |
Thereafter |  | 10,265 |  |  | 535 |
Total minimum rental payments |  | 31,666 |  |  | 15,460 |
Less: Amount representing interest |  |  |  | (2,652) |
Subtotal |  |  |  | 12,808 |
Current portion |  |  |  | 3,368 |
Long-term portion |  |  |  | $ | 9,440 |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Topic 840 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//840/tableOfContent + Details
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