Variable Interest Entities

12 Months Ended

Dec. 31, 2023

Variable Interest Entity, Measure of Activity [Abstract]

Variable Interest Entities

Variable Interest Entities

A variable interest entity (“VIE”) is an entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the ability to control the entity’s activities. Under existing accounting guidance, a VIE is consolidated by its primary beneficiary, the party that has both the power to direct the activities that most significantly impact the economic performance of the VIE and holds a variable interest that could potentially be significant to the VIE.

The Company evaluates whether an entity is a VIE upon creation and upon the occurrence of significant events, such as a change in an entity’s assets or activities. The determination of whether the Company is the primary beneficiary involves performing a qualitative analysis of the VIE. The analysis includes its design, capital structure, contractual terms, including the rights of each variable interest holder, the activities of the VIE that most significantly impact its economic performance, and whether the Company has the power to direct those activities and the Company’s obligation to absorb losses or right to receive benefits significant to the VIE.

In 2015, the Company created a rabbi trust to support the Company’s Deferred Compensation Plan, under which certain employees may defer their compensation and the Company will contribute the amounts to the rabbi trust. The rabbi trust subsequently invests the deferred compensation into diversified securities, and upon distribution, settles the deferred obligation in cash, which settlement includes the deferred compensation principal and any investment appreciation. The Company selects the investment options available for participants and is the primary beneficiary of the assets upon

insolvency. The Company determined that the rabbi trust is a VIE and it is therefore consolidated. The VIE had investments at fair value of $17,486 and $13,602 as of December 31, 2023 and 2022, respectively, and other long-term liabilities of $17,486 and $13,602 as of December 31, 2023 and 2022, respectively. The VIE had other (income) expense of $2,373, $(2,542) and $1,690 related to the rabbi trust’s unrealized gains (losses) for the years ended December 31, 2023, 2022 and 2021, respectively.