CSG SYSTEMS INTERNATIONAL INC Leases Disclosure
7. Leases
We have operating leases for: (i) real estate which includes office space and our design and delivery centers; and (ii) our outsourced data center environment, as discussed further in Note 12. Our leases have remaining terms through 2033, some of which include options to extend the leases for up to an additional ten years. The exercise of lease renewal options is at our sole discretion.
We have made an accounting policy election not to recognize in our Balance Sheets leases with an initial term of twelve months or less, for any class of underlying asset. We have also made an election for real estate leases not to separate the lease and non-lease components, but rather account for the entire arrangement as a single lease component. For our outsourced data center environment agreement, we have concluded that there are lease and non-lease components and have allocated the consideration in the agreement on a relative stand-alone price basis. Due to the significant assumptions and judgments required in accounting for leases (to include whether a contract contains a lease, the allocation of the consideration, and the determination of the discount rate), the judgments and estimates made could have a significant effect on the amount of assets and liabilities recognized.
We sublease certain of our leased real estate to third parties. These subleases have remaining lease terms through 2031.
The components of lease expense for 2025, 2024, and 2023 were as follows (in thousands):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating lease expense |
|
$ |
7,691 |
|
|
$ |
13,222 |
|
|
$ |
16,073 |
|
Finance lease expense: |
|
|
|
|
|
|
|
|
|
|||
Amortization of leased assets |
|
|
1,935 |
|
|
|
- |
|
|
|
- |
|
Interest on leased liabilities |
|
|
271 |
|
|
|
- |
|
|
|
- |
|
Variable lease expense |
|
|
2,344 |
|
|
|
2,847 |
|
|
|
3,299 |
|
Short-term lease expense |
|
|
1,277 |
|
|
|
944 |
|
|
|
1,115 |
|
Sublease income |
|
|
(1,729 |
) |
|
|
(1,746 |
) |
|
|
(2,691 |
) |
Total net lease expense |
|
$ |
11,789 |
|
|
$ |
15,267 |
|
|
$ |
17,796 |
|
The decrease in lease expense is due to our flexible work approach that began in 2022 and has resulted in the consolidation and closure of office space at numerous of our leased real estate locations.
Other information related to leases for 2025, 2024, and 2023 was as follows (in thousands, except term and discount rate):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Supplemental Cash Flows Information: |
|
|
|
|
|
|
|
|
|
|||
Cash paid for amounts included in the |
|
$ |
8,835 |
|
|
$ |
15,285 |
|
|
$ |
20,559 |
|
Cash paid for amounts included in the |
|
|
1,775 |
|
|
|
- |
|
|
|
- |
|
Right-of-use assets obtained in exchange for |
|
|
1,212 |
|
|
|
2,348 |
|
|
|
2,787 |
|
Weighted-average remaining lease term - operating leases |
|
67 months |
|
|
65 months |
|
|
58 months |
|
|||
Weighted-average discount rate - operating leases |
|
|
4.31 |
% |
|
|
4.08 |
% |
|
|
3.95 |
% |
Future minimum lease payments under non-cancelable leases as of December 31, 2025 were as follows (in thousands):
2026 |
|
$ |
5,846 |
|
2027 |
|
|
5,507 |
|
2028 |
|
|
5,342 |
|
2029 |
|
|
4,331 |
|
2030 |
|
|
3,663 |
|
Thereafter |
|
|
4,829 |
|
Total future minimum lease payments |
|
|
29,518 |
|
Less: Interest (1) |
|
|
(3,529 |
) |
Total |
|
$ |
25,989 |
|
|
|
|
|
|
Current operating lease liabilities |
|
$ |
4,837 |
|
Non-current operating lease liabilities |
|
|
21,152 |
|
Total |
|
$ |
25,989 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
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.