Leases

6 Months Ended

Jun. 30, 2025

Leases [Abstract]

Leases

8. Leases

We lease certain facilities, vehicles and equipment primarily under noncancelable operating leases. The most significant portion of these noncancelable operating leases is for the facilities occupied by our corporate office and our operating locations. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheet. We do not separate lease components from their associated non-lease components pursuant to lease accounting guidance. We have certain leases with variable payments based on an index as well as short-term leases on equipment and facilities. Variable lease expense and short-term lease expense aggregated to $27.3 million and $22.8 million for the three months ended June 30, 2025 and 2024, respectively. Variable lease expense and short-term lease expense aggregated to $53.1 million and $40.7 million in the first six months of 2025 and 2024, respectively. These expenses were primarily related to short-term equipment rentals. Lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate for our operating leases as of both June 30, 2025 and December 31, 2024 was 6.1%. We recognize operating lease expense, including escalating lease payments and lease incentives, on a straight-line basis over the lease term. Operating lease expense for the three months ended June 30, 2025 and 2024 was $38.3 million and $33.3 million, respectively. Operating lease expense for the six months ended June 30, 2025 and 2024 was $75.2 million and $61.5 million, respectively.

The lease terms generally range from three to fifteen years. Some leases include one or more options to renew, which may be exercised to extend the lease term. We include the exercise of lease renewal options in the lease term when it is reasonably certain that we will exercise the option and such exercise is at our sole discretion. The weighted average remaining lease term for our operating leases was 11.2 years at June 30, 2025 and 10.9 years at December 31, 2024.

A majority of the Company’s real property leases are with individuals or entities with whom we have no other business relationship. However, in certain instances the Company enters into real property leases with current or former employees. Rent paid to related parties for the three months ended June 30, 2025 and 2024 was approximately $2.5 million and $2.6 million, respectively. Rent paid to related parties for the six months ended June 30, 2025 and 2024 was approximately $5.0 million and $4.7 million, respectively.

If we decide to cancel or terminate a lease before the end of its term, we would typically owe the lessor the remaining lease payments under the term of the lease. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. On rare occasions, we rent or sublease certain real estate assets that we no longer use to third parties.

The following table summarizes the operating lease assets and liabilities included in the Consolidated Balance Sheet as follows (in thousands):

	June 30, 2025		December 31, 2024
Operating lease right-of-use assets	$	226,430	$	229,106
Operating lease liabilities:
Other current liabilities	$	27,770	$	28,158
Long-term operating lease liabilities		210,630		212,107
Total operating lease liabilities	$	238,400	$	240,265

The maturities of operating lease liabilities are as follows (in thousands):

Year ending December 31—
2025 (excluding the six months ended June 30, 2025)	$	21,185
2026		39,001
2027		34,178
2028		30,080
2029		26,328
Thereafter		188,615
Total lease payments		339,387
Less—present value discount		(100,987)
Present value of operating lease liabilities	$	238,400

Supplemental information related to operating leases was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	10,599	$	9,850	$	21,302	$	19,316
Operating lease right-of-use assets obtained in exchange for lease liabilities	$	7,120	$	5,906	$	12,292	$	35,332