Leases
We lease certain office space, buildings, and land with various lease terms through May 2043. Certain office leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years. The exercise of lease renewal options is at our sole discretion and are assessed whether to factor as part of the lease term at lease inception. Our leases generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs in addition to a base or fixed rent.
The components of lease expense recognized in the consolidated statements of operations were as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 6,479 | | | $ | 5,701 | | | $ | 5,595 | |
| Finance lease cost: | | | | | |
| Amortization of right-of-use assets | 882 | | | 880 | | | 880 | |
| Interest on lease obligations | 754 | | | 783 | | | 811 | |
| Short-term lease cost | 2,358 | | | 2,985 | | | 3,008 | |
| Variable lease cost | 1,024 | | | 927 | | | 971 | |
| $ | 11,497 | | | $ | 11,276 | | | $ | 11,265 | |
Supplemental cash flow information related to leases was as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 6,892 | | | $ | 6,274 | | | $ | 6,215 | |
| Finance cash flows from finance leases | 560 | | | 532 | | | 505 | |
| Right-of-use assets obtained in exchange for lease obligations: | | | | | |
| Operating leases | $ | 7,889 | | | $ | 4,192 | | | $ | 3,563 | |
| Finance leases | 347 | | | — | | | — | |
Other supplemental information related to leases was as follows:
| | | | | | | | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 | | 2023 |
| Weighted Average Remaining Lease Term (in years) | | | | | |
| Operating leases | 4.1 | | 4.9 | | 5.0 |
| Finance leases | 17.4 | | 18.4 | | 19.4 |
| Weighted Average Discount Rate | | | | | |
| Operating leases | 6.0 | % | | 5.9 | % | | 5.7 | % |
| Finance leases | 5.5 | % | | 5.5 | % | | 5.5 | % |
As of December 31, 2025, the aggregate annual lease obligations were as follows (in thousands):
| | | | | | | | | | | |
| Operating Leases | | Finance Leases |
| 2026 | $ | 6,525 | | | $ | 1,353 | |
| 2027 | 5,002 | | | 1,353 | |
| 2028 | 3,794 | | | 1,354 | |
| 2029 | 976 | | | 1,354 | |
| 2030 | 184 | | | 1,354 | |
| Thereafter | 1,903 | | | 13,689 | |
| Total lease obligations | 18,384 | | | 20,457 | |
| Less: Amount representing interest | (2,208) | | | (6,620) | |
| Net lease obligations | $ | 16,176 | | | $ | 13,837 | |
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.