Leases

12 Months Ended

Dec. 31, 2021

The Company's lease population of its right-of-use asset and lease liabilities is substantially related to the rental of office space. The Company enters into lease agreements as a lessee that may include options to extend or terminate early. Some of these real estate leases require variable payments of property taxes, insurance, and common area maintenance, in addition to base rent. Certain of the leases have provisions for free rent months during the lease term and/or escalating rent payments and, particularly for the Company’s longer-term leases for its corporate offices, it has received incentives to enter into the leases, such as receiving up to a specified dollar amount to construct tenant improvements. These leases do not include residual value guarantees, covenants, or other restrictions. See Note 2 - Summary of Significant Accounting Policies.

Beginning in the second quarter of 2020, in connection with the continuing developments from COVID, the Company expedited restructuring plans and either reduced or fully vacated leased office space. The Company is in the process of seeking to sublet some of the space where possible. The decision and change in the use of space resulted in a right-of-use asset impairment charge of $1.7 million and $4.5 million for the years ended December 31, 2021 and 2020, respectively. This loss

was determined by comparing the fair value of the impacted right-of-use assets to the carrying value of the assets as of the impairment measurement date. The fair value of the right-of-use assets was based on the estimated sublease income for the space taking into consideration the time period it will take to obtain a subtenant, the applicable discount rate, and the sublease rate. Similarly, in the third quarter of 2019, the Company ceased use of several facilities which resulted in a right-of-use asset impairment charge of $1.2 million, included in impairment charges in the consolidated statements of operations. For the years ended December 31, 2021, 2020, and 2019 respectively, the Company wrote off a total of $0.3 million, $1.0 million, and $0.6 million of leasehold improvements and other property and equipment related to these locations. The measurement of the right-of-use asset impairments, using the assumptions described, is a Level 3 fair value measurement. See Note 11 - Fair Value Measurements for a description of Level 3 inputs.

The table below presents the lease-related assets and liabilities included on the consolidated balance sheets:


Classification on Consolidated Balance Sheets:	December 31, 2021			December 31, 2020
	(amounts in thousands)
Operating lease right-of-use assets (a)	$	7,488		$	10,447
Operating lease liabilities - current (a)	$	4,090		$	4,509
Operating lease liabilities - non-current (a)	$	10,853		$	15,234

	December 31, 2021			December 31, 2020
Weighted-average remaining lease term	3.4 years			4.1 years
Weighted average discount rate	6.39		%	6.32		%

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(a) Amounts include lease assets and liabilities related to the eight locations added as part of the acquisition of WSG: operating lease right-of-use assets of $0.9 million, operating lease current liabilities of $0.3 million, and operating lease non-current liabilities of $0.6 million.

The table below reconciles the undiscounted cash flows for each of, and total of, the remaining years to the operating lease liabilities (which do not include short-term leases) recorded on the consolidated balance sheets as of December 31, 2021:


Years Ending December 31:	(amounts in thousands)
2022	$	4,913
2023	5,027
2024	3,959
2025	2,762


Total minimum lease payments	16,661
Less: amount of lease payments representing interest	(1,718)
Present value of future minimum lease payments	14,943
Less: operating lease liabilities - current	(4,090)
Operating lease liabilities - non-current	$	10,853

Other Information

The table below provides information regarding supplemental cash flows:


	Year Ended December 31,
	2021		2020		2019
	(amounts in thousands)
Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	6,150	$	7,111	$	7,477
Right-of-use assets acquired under operating lease	$	1,059	$	1,587	$	1,229

The components of lease expense are as follows:


	Year Ended December 31,
	2021		2020		2019
	(amounts in thousands)
Amounts Included in Consolidated Statements of Operations:
Operating lease expense	$	3,538	$	4,874	$	6,592
Short-term lease expense	$	3,695	$	5,217	$	8,042
Variable and other lease costs	$	1,957	$	1,919	$	2,446

Operating lease expense, short-term lease expense, and variable and other lease costs are included in selling, general and administrative expenses, direct operating expenses, and restructuring costs in the consolidated statements of operations, depending on the nature of the leased asset. Operating lease expense is reported net of sublease income, which is not material.

As of December 31, 2021, the Company does not have any material operating leases which have not yet commenced. The Company has an immaterial amount of finance lease contracts related to other equipment rentals which are not included in the above disclosures.