LEASES

3 Months Ended

Mar. 31, 2023

11. 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. 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.

For the three months ended March 31, 2023, and 2022, the components of lease expense were as follows (in thousands):

	Three Months Ended
	March 31, 2023		March 31, 2022
Operating lease cost	$	9,365	$	8,404
Short-term lease cost		274		321
Variable lease cost		2,132		1,932
Total lease cost *	$	11,771	$	10,657

* Sublease income was immaterial

Lease cost is reflected in the consolidated statement of net income in the line item – rent, supplies, contract labor and other.

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

	Three Months Ended
	March 31, 2023		March 31, 2022

Cash paid for amounts included in the measurement of operating lease liabilities	$	9,646	$	8,617

Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,281	$	6,011

The aggregate future lease payments for operating leases as of March 31, 2023 were as follows (in thousands):

Fiscal Year	Amount
2023	$	27,967
2024		31,548
2025		23,584
2026		16,065
2027 and therafter		16,836
Total lease payments	$	116,000
Less: imputed interest		6,890
Total operating lease liabilities	$	109,110

Average lease terms and discount rates were as follows:

	Three Months Ended
	March 31, 2023		March 31, 2022
Weighted-average remaining lease term - Operating leases	4.0 Years		4.1 Years

Weighted-average discount rate - Operating leases		3.1%		2.7%