In June 2021, with an effective adoption date of January 1, 2021, the Company adopted ASU 2016-02 using the modified retrospective approach, which permits application of this guidance at the beginning of the period of adoption.

Leases are classified as either finance leases or operating leases based on criteria in ASC 842. The Company has finance leases for its vehicle and equipment leases and operating leases for its real estate space and office equipment leases. The Company’s operating and finance leases generally have original lease terms between 1 year and 15 years, and in some instances include one or more options to renew. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company currently considers some of its renewal options to be reasonably certain to be exercised. Some leases also include early termination options, which can be exercised under specific conditions. The Company does not have material residual value guarantees or restrictive covenants associated with its leases.

Finance and operating lease assets represent the right to use an underlying asset for the lease term, and finance and operating lease liabilities represent the obligation to make lease payments arising from the lease.

The Company calculates the present value of its finance and operating leases using an estimated incremental borrowing rate (“IBR”), which requires judgment. For real estate operating leases, the Company estimates the IBR based on prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease. For all other leases, the Company estimates the IBR based on the stated interest rate on the contract. Since many of the inputs used to calculate the rate implicit in the leases are not readily determinable from the lessee’s perspective, the Company will not use the implicit interest rate.

Certain leases contain variable payments, these payments are expensed as incurred and not included in the Company’s operating lease right-of-use assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance and are excluded from the present value of the Company’s lease obligations.

Effective January 1, 2021, the Company recognized operating lease right-of-use assets, current operating lease liabilities and operating lease liabilities, net of current portion of $24.6 million, $7.3 million and $17.3 million, respectively. The Company also

recognized finance lease right-of-use assets, current finance lease liabilities and finance lease liabilities, net of current portion of $7.2 million, $2.9 million and $4.6 million, respectively.

The Company does not record operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less. The Company also combines lease and non-lease components on all new or modified operating leases into a single lease component for all classes of assets.

The components of lease expense were as follows:


		For the Three Months Ended June 30,
	Statement of Operations Location	2022		2021
Operating lease cost
Lease cost	Selling, general and administrative expense	$	2,500	$	2,236
Variable lease cost	Selling, general and administrative expense		190		114
Total operating lease cost			2,690		2,350

Finance lease cost
Amortization of right of use assets	Depreciation and amortization		1,012		848
Interest on lease liabilities	Interest expense—net		108		103
Total finance lease cost			1,120		951
Total lease cost		$	3,810	$	3,301

		For the Six Months Ended June 30,
	Statement of Operations Location	2022		2021
Operating lease cost
Lease cost	Selling, general and administrative expense	$	4,951	$	4,336
Variable lease cost	Selling, general and administrative expense		557		215
Total operating lease cost			5,508		4,551

Finance lease cost
Amortization of right of use assets	Depreciation and amortization		1,951		1,643
Interest on lease liabilities	Interest expense—net		220		199
Total finance lease cost			2,171		1,842
Total lease cost		$	7,679	$	6,393

Supplemental cash flows information related to leases was as follows:


	For the Six Months Ended June 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used in operating leases	$	4,741	$	4,249
Operating cash flows used in finance leases		220		199
Financing cash flows used in finance leases		1,911		1,632

Lease liabilities arising from new ROU assets
Operating leases		10,478		5,305
Finance leases		1,273		1,928

Weighted average remaining lease terms and weighted average discount rates were:


	June 30, 2022
	Operating Leases			Finance Leases
Weighted average remaining lease term (years)	4.68				3.00
Weighted average discount rate	2.53%			4.85%

	June 30, 2021
	Operating Leases			Finance Leases
Weighted average remaining lease term (years)	5.11				2.95
Weighted average discount rate		2.57	%		5.10	%

The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year:


	Operating Leases			Finance Leases
Remainder of 2022	$	4,816		$	2,077
2023		7,884			3,191
2024		6,246			2,132
2025		4,445			1,231
2026 and thereafter		8,400			672
Total undiscounted future minimum lease payments		31,791			9,303
Less imputed interest		(1,851	)		(642	)
Total discounted future minimum lease payments	$	29,940		$	8,661