Note 5 - Leases

9 Months Ended

Sep. 30, 2024

Lessee, Operating and Finance Leases [Text Block]

5. Leases:

We have operating and finance leases for corporate offices, data centers, and certain equipment that are accounted for under ASC 842, Leases ("ASC 842").

The following table presents the consolidated lease cost and cash paid for amounts included in the measurement of lease liabilities for finance and operating leases for the three and nine months ended September 30, 2024 and 2023, respectively:

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2024*			*2023*			*2024*			*2023*
Lease cost:
Operating lease cost ⁽¹⁾	$	8.3		$	8.2		$	25.0		$	25.6
Sublease income		(1.1	)		(0.3	)		(3.2	)		(1.0	)
Finance lease costs:
Depreciation of finance lease assets ⁽²⁾		5.0			3.8			14.3			10.6
Interest on finance lease liabilities⁽³⁾		0.5			0.4			1.7			0.7
Total lease cost	$	12.7		$	12.1		$	37.8		$	35.9

Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	(9.0	)	$	(8.2	)	$	(25.6	)	$	(25.9	)
Operating cash outflows from finance leases	$	(0.5	)	$	(0.4	)	$	(1.7	)	$	(0.7	)
Financing cash outflows from finance leases	$	(13.0	)	$	(10.4	)	$	(18.9	)	$	(13.2	)

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⁽¹⁾Included in "Cost of revenues" and "Selling, general and administrative" expenses in our accompanying condensed consolidated statements of operations

⁽²⁾Included in "Depreciation and amortization of fixed assets" in our accompanying condensed consolidated statements of operations

⁽³⁾Included in "Interest expense" in our accompanying condensed consolidated statements of operations

The following table presents weighted-average remaining lease terms and weighted-average discount rates for the consolidated finance and operating leases as of September 30, 2024 and 2023, respectively:

	*September 30,*
	*2024*			*2023*
Weighted-average remaining lease term - operating leases (in years)		7.2			8.4
Weighted-average remaining lease term - finance leases (in years)		3.3			3.4
Weighted-average discount rate - operating leases		4.1	%		3.9	%
Weighted-average discount rate - finance leases		4.2	%		4.1	%

Our right-of-use ('ROU') assets and lease liabilities for finance leases were $52.8 million and $44.0 million, respectively, as of September 30, 2024. Our ROU assets and lease liabilities for finance leases were $41.2 million and $34.5 million, respectively, as of December 31, 2023. Our ROU assets for finance leases were included in "Fixed assets, net" in our accompanying condensed consolidated balance sheets. Our lease liabilities for finance leases were included in the "Short-term debt and current portion of long-term debt" and "Long-term debt" in our accompanying condensed consolidated balance sheets (see Note 10. Debt).

On August 16, 2024, we early vacated two floors within our Jersey City office. This transaction was accounted for as a lease modification in accordance with ASC 842. As a result of the lease modification, we reassessed the accounting for the Jersey City lease, resulting in a reduction of ROU assets and lease liabilities of $11.7 million and $13.6 million, respectively, and recognition of a gain of $1.9 million. Additionally, we recorded an impairment of $7.6 million of the remaining net book value of leasehold improvements.

Maturities of lease liabilities for the remainder of 2024 and the years through 2029 and thereafter are as follows:

	*September 30, 2024*
Years Ending	*Operating Leases*			*Finance Leases*
2024	$	8.4		$	4.3
2025		33.6			21.5
2026		31.7			10.7
2027		31.3			8.9
2028		29.8			4.3
2029 and thereafter		91.4			—
Total lease payments		226.2			49.7
Less: amount representing interest		(30.7	)		(5.7	)
Present value of total lease payments	$	195.5		$	44.0