Leases

3 Months Ended

Mar. 31, 2025

We lease office space and certain equipment under various operating and finance leases, with most of our lease portfolio consisting of operating leases for office space.

We determine whether an arrangement is, or includes, an embedded lease at contract inception. Operating lease assets and lease liabilities are recognized at the commencement date and are initially measured using the present value of lease payments over the defined lease term. Lease expense is recognized on a straight-line basis over the lease term. For finance leases, we also recognize a finance lease asset and finance lease liability at inception, with lease expense recognized as interest expense and amortization.

A contract is or contains an embedded lease if the contract meets all the below criteria:

•there is an identified asset;

•we obtain substantially all the economic benefits of the asset; and

•we have the right to direct the use of the asset.

For initial measurement of the present value of lease payments and for subsequent measurement of lease modifications, we are required to use the rate implicit in the lease, if available. However, as most of our leases do not provide an implicit rate, we use our incremental borrowing rate, which is a collateralized rate. To apply the incremental borrowing rate, we used a portfolio approach and grouped leases based on similar lease terms in a manner whereby we reasonably expect that the application does not differ materially from a lease-by-lease approach.

Our leases have remaining lease terms of approximately 1 year to 10 years, which may include the option to extend the lease when it is reasonably certain we will exercise that option. We do not have lease agreements with residual value guarantees, sale leaseback terms, or material restrictive covenants.

Leases with an initial term of 12 months or less are not recognized on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Our operating lease expense for the three months ended March 31, 2025 was $11.0 million, compared with $10.4 million for the three months ended March 31, 2024. Charges related to our operating leases that are variable and, therefore, not included in the measurement of the lease liabilities were $2.8 million for the three months ended March 31, 2025, compared with $3.2 million for the three months ended March 31, 2024. We made lease payments of $9.4 million during the three months ended March 31, 2025, compared with $10.7 million during the three months ended March 31, 2024.

The following table shows our minimum future lease commitments due in each of the next five years and thereafter for operating leases:


(in millions)	As of March 31, 2025
Remainder of 2025 (April 1 through December 31)	$	34.1
2026	44.9
2027	38.6
2028	32.4
2029	21.2
Thereafter	60.4
Total minimum lease commitments	231.6
Adjustment for discount to present value	32.2
Present value of lease liabilities	$	199.4

The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates for our operating leases:


	As of March 31, 2025
Weighted-average remaining lease term (in years)	6.1

Weighted-average discount rate	4.5	%