LEASES
The Company has operating leases for corporate offices. The leases have remaining lease terms of less than one year to three years. The leases generally contain options to extend or terminate the lease. However, these were not included in determining the lease terms as the Company is not reasonably certain to exercise those options.
The components of lease cost were as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
| Operating lease cost | $ | 40,429 | | | $ | 36,724 | | | $ | 34,074 | |
| Short-term lease cost | 4,304 | | | 707 | | | 374 | |
| | | | | |
| Total lease cost | $ | 44,733 | | | $ | 37,431 | | | $ | 34,448 | |
Other information related to leases was as follows as of:
| | | | | | | | | | | |
| December 31, |
| 2023 | | 2022 |
| Weighted-average remaining lease term (in years) | 1.5 | | 1.2 |
| Weighted-average discount rate | 4.05 | % | | 3.01 | % |
The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.
Maturities of lease liabilities were as follows (in thousands):
| | | | | |
| 2024 | $ | 11,235 | |
| 2025 | 3,124 | |
| 2026 | 792 | |
| |
| |
| |
| Total lease payments | 15,151 | |
| Less imputed interest | (428) | |
| Total | $ | 14,723 | |
430 California office space
In February 2023, the Company entered into an early termination agreement for its remaining office space lease in San Francisco, California, which terminated on March 31, 2023. The Company paid a termination fee of $25.0 million and committed to spend $2.0 million at the lessor’s other properties by March 31, 2025. These expenses were recognized within the general and administration expenses in the consolidated statements of operations during the year ended December 31, 2023.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.