LEASES (Tables)

12 Months Ended

Dec. 31, 2024

The components of lease expense were as follows:


	Year Ended December 31,
	2024		2023		2022
Operating lease expense
Rent - cost of services (1)	$	284,953	$	216,711	$	160,003
General and administrative expense	2,435		941		542
Other variable lease costs (2)	31,480		26,399		21,252
Total operating lease expense	$	318,868	$	244,051	$	181,797
Finance lease expense
Amortization of right-of-use assets	$	3,327	$	1,264	$	1,230
Interest on lease liabilities	7,370		1,113		546
Total financing lease expense	$	10,697	$	2,377	$	1,776
Total lease expense	$	329,565	$	246,428	$	183,573

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(1)Rent - cost of services includes variable lease costs such as Consumer Price Index (CPI) increases and other rent adjustments of $2,383, $2,745 and $964 for the years ended December 31, 2024, 2023, and 2022, respectively.

(2)Other variable lease costs of facilities, including property taxes and insurance, are classified in cost of services in the Company’s combined/consolidated statements of income.

The following table summarizes supplemental cash flow information related to leases:


	Year Ended December 31,
	2024		2023		2022
Operating cash paid for amounts included in the measurement of operating lease liabilities	$	252,742	$	194,925	$	143,683
Operating cash paid for amounts included in the measurement of finance lease liabilities	7,370		1,113		546
Financing cash paid for amounts included in the measurement of finance lease liabilities	811		1,708		2,088
Operating lease right-of-use assets obtained in exchange for lease liabilities	1,326,598		805,866		99,843
Decrease in operating lease right-of-use assets and liabilities due to lease termination/modification	(141,382)		—		—
Finance lease right-of-use assets obtained in exchange for lease liabilities	18,298		5,521		—
Decrease in finance lease right-of-use assets and liabilities due to lease termination/modification	(2,272)		—		—

Information relating to the lease term and discount rate is as follows:


	Year Ended December 31,
	2024		2023		2022
Weighted-average remaining lease term (years)
Operating leases	14		13		13
Finance leases	6		3		1
Weighted-average discount rate
Operating leases	6.4	%	5.7	%	5.1	%
Finance leases	6.1	%	7.2	%	1.4	%

Summary of Supplemental Cash Flow Related to Leases

The components of lease expense were as follows:


	Year Ended December 31,
	2024		2023		2022
Operating lease expense
Rent - cost of services (1)	$	284,953	$	216,711	$	160,003
General and administrative expense	2,435		941		542
Other variable lease costs (2)	31,480		26,399		21,252
Total operating lease expense	$	318,868	$	244,051	$	181,797
Finance lease expense
Amortization of right-of-use assets	$	3,327	$	1,264	$	1,230
Interest on lease liabilities	7,370		1,113		546
Total financing lease expense	$	10,697	$	2,377	$	1,776
Total lease expense	$	329,565	$	246,428	$	183,573

__________________

(2)Other variable lease costs of facilities, including property taxes and insurance, are classified in cost of services in the Company’s combined/consolidated statements of income.

The following table summarizes supplemental cash flow information related to leases:


	Year Ended December 31,
	2024		2023		2022
Operating cash paid for amounts included in the measurement of operating lease liabilities	$	252,742	$	194,925	$	143,683
Operating cash paid for amounts included in the measurement of finance lease liabilities	7,370		1,113		546
Financing cash paid for amounts included in the measurement of finance lease liabilities	811		1,708		2,088
Operating lease right-of-use assets obtained in exchange for lease liabilities	1,326,598		805,866		99,843
Decrease in operating lease right-of-use assets and liabilities due to lease termination/modification	(141,382)		—		—
Finance lease right-of-use assets obtained in exchange for lease liabilities	18,298		5,521		—
Decrease in finance lease right-of-use assets and liabilities due to lease termination/modification	(2,272)		—		—

Information relating to the lease term and discount rate is as follows:


	Year Ended December 31,
	2024		2023		2022
Weighted-average remaining lease term (years)
Operating leases	14		13		13
Finance leases	6		3		1
Weighted-average discount rate
Operating leases	6.4	%	5.7	%	5.1	%
Finance leases	6.1	%	7.2	%	1.4	%

Summary of Operating Lease Maturity

Maturities of lease liabilities as of December 31, 2024 were as follows:


	Finance Leases		Operating Leases		Total
2025	$	29,891	$	321,827	$	351,718
2026	92,513		325,826		418,339
2027	19,132		326,796		345,928
2028	1,949		330,348		332,297
2029	1,588		332,696		334,284
Thereafter	54,734		3,123,492		3,178,226
Total lease payments	$	199,807	$	4,760,985	$	4,960,792
Less: present value discount	(53,160)		(1,688,980)		(1,742,140)
Present value of lease liabilities	$	146,647	$	3,072,005	$	3,218,652

Summary of Finance Lease Maturity

Maturities of lease liabilities as of December 31, 2024 were as follows:


	Finance Leases		Operating Leases		Total
2025	$	29,891	$	321,827	$	351,718
2026	92,513		325,826		418,339
2027	19,132		326,796		345,928
2028	1,949		330,348		332,297
2029	1,588		332,696		334,284
Thereafter	54,734		3,123,492		3,178,226
Total lease payments	$	199,807	$	4,760,985	$	4,960,792
Less: present value discount	(53,160)		(1,688,980)		(1,742,140)
Present value of lease liabilities	$	146,647	$	3,072,005	$	3,218,652

PACS Group, Inc. 10-K