Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Leases

We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements with original maturities between one to 12 years. Some of these leases include options to extend for up to six years. We have no finance leases and no related party lease agreements as of March 31, 2023. Right-of-use lease assets and lease liabilities for our operating leases are recorded in the condensed consolidated balance sheets. During the three months ended March 31, 2023, we incurred lease restructuring costs, resulting in an additional $1.4 million of operating lease costs.

The components of operating lease expense were as follows:

Lease Costs	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	4,391	$	3,422
Short-term lease cost	523		506
Variable lease cost	320		370
Net lease cost	$	5,234	$	4,298

Supplemental information related to leases is as follows:

Other Information	Three Months Ended March 31,
	2023			2022
Cash flows:
Cash paid amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	2,510		$	3,613
Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases	$	1,406		$	4,980
Lease term and discount rate:
Weighted average remaining lease term (years)	7.1			5.4
Weighted average discount rate	1.59		%	1.72		%

Rental Income from third parties

We own office buildings in Bangor, Falmouth, and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2023 and 2027, and some have options to extend the lease for up to 10 years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset.

Rental income from third-party tenants for the three months ended March 31, 2023 totaled $466,000 and for the three months ended March 31, 2022 totaled $305,000. Rental income is included in hardware and other revenue in the condensed consolidated statements of income. As of March 31, 2023, future minimum operating rental income based on contractual agreements is as follows:

Year ending December 31,	Amount
2023 (Remaining)	$	1,412
2024	1,906
2025	1,363
2026	408
2027	131
Thereafter	—
Total	$	5,220

Leases

Leases

We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements with original maturities between one to 12 years. Some of these leases include options to extend for up to six years. We have no finance leases and no related party lease agreements as of March 31, 2023. Right-of-use lease assets and lease liabilities for our operating leases are recorded in the condensed consolidated balance sheets. During the three months ended March 31, 2023, we incurred lease restructuring costs, resulting in an additional $1.4 million of operating lease costs.

The components of operating lease expense were as follows:

Lease Costs	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	4,391	$	3,422
Short-term lease cost	523		506
Variable lease cost	320		370
Net lease cost	$	5,234	$	4,298

Supplemental information related to leases is as follows:

Other Information	Three Months Ended March 31,
	2023			2022
Cash flows:
Cash paid amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	2,510		$	3,613
Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases	$	1,406		$	4,980
Lease term and discount rate:
Weighted average remaining lease term (years)	7.1			5.4
Weighted average discount rate	1.59		%	1.72		%

Rental Income from third parties

We own office buildings in Bangor, Falmouth, and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2023 and 2027, and some have options to extend the lease for up to 10 years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset.

Rental income from third-party tenants for the three months ended March 31, 2023 totaled $466,000 and for the three months ended March 31, 2022 totaled $305,000. Rental income is included in hardware and other revenue in the condensed consolidated statements of income. As of March 31, 2023, future minimum operating rental income based on contractual agreements is as follows:

Year ending December 31,	Amount
2023 (Remaining)	$	1,412
2024	1,906
2025	1,363
2026	408
2027	131
Thereafter	—
Total	$	5,220