LEASES

6 Months Ended

Jun. 30, 2022

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.

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 Company did not record any lease-related impairment charges for the three months ended June 30, 2022. The decision and change in the use of space resulted in a right-of-use asset impairment charge of $1.5 million for the three months ended March 31, 2022 and $1.7 million for the three months ended June 30, 2021. 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. For the three months ended March 31, 2022 and June 30, 2021, the Company wrote off an immaterial amount 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 10 - Fair Value Measurements for a description of Level 3 inputs.

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


Classification on Condensed Consolidated Balance Sheets:	June 30, 2022		December 31, 2021
	(amounts in thousands)
Operating lease right-of-use assets	$	5,058	$	7,488
Operating lease liabilities - current	$	4,145	$	4,090
Operating lease liabilities - non-current	$	7,017	$	10,853


	June 30, 2022		December 31, 2021
Weighted-average remaining lease term	2.6 years		3.4 years
Weighted average discount rate	6.29	%	6.39	%

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 condensed consolidated balance sheets as of June 30, 2022:


	(amounts in thousands)
Years Ending December 31:
2022	$	2,174
2023	5,114
2024	3,020
2025	1,868

Total minimum lease payments	12,176
Less: amount of lease payments representing interest	(1,014)
Present value of future minimum lease payments	11,162
Less: operating lease liabilities - current	(4,145)
Operating lease liabilities - non-current	$	7,017

Other Information

The table below provides information regarding supplemental cash flows:


	Six Months Ended
	June 30,
	2022		2021
	(amounts in thousands)
Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,135	$	3,189
Right-of-use assets acquired under operating lease	$	60	$	1,078

The components of lease expense are as follows:


	Three Months Ended
	June 30,
	2022		2021
	(amounts in thousands)
Amounts Included in Condensed Consolidated Statements of Operations:
Operating lease expense	$	645	$	938
Short-term lease expense	$	1,241	$	641
Variable and other lease costs	$	(1,110)	$	751

	Six Months Ended
	June 30,
	2022		2021
	(amounts in thousands)
Amounts Included in Condensed Consolidated Statements of Operations:
Operating lease expense	$	1,447	$	1,852
Short-term lease expense	$	2,385	$	1,490
Variable and other lease costs	$	(353)	$	1,220

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 (benefits) costs in the condensed 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. Variable and other lease costs for the three and six months ended June 30, 2022 include a benefit associated with the early termination of one of the Company's corporate offices which was previously restructured.

As of June 30, 2022, 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.