LEASES

3 Months Ended

Mar. 31, 2023

The Company's lease population of its right-of-use assets 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 global pandemic, the Company expedited restructuring plans and either reduced or fully vacated leased office space. 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. 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, the Company wrote off an immaterial amount of leasehold improvements and other property and equipment related to these locations. The Company did not record any lease-related impairment charges for the three months ended March 31, 2023. 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:	March 31, 2023		December 31, 2022
	(amounts in thousands)
Operating lease right-of-use assets	$	2,506	$	3,254
Operating lease liabilities - current	$	3,584	$	4,132
Operating lease liabilities - non-current	$	3,845	$	4,880


	March 31, 2023		December 31, 2022
Weighted average remaining lease term	2.2 years		2.3 years
Weighted average discount rate	6.33	%	6.31	%

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 March 31, 2023:


	(amounts in thousands)
Years Ending December 31:
2023	$	3,146
2024	2,816
2025	1,895
2026	69
2027	47
Total minimum lease payments	7,973
Less: amount of lease payments representing interest	(544)
Present value of future minimum lease payments	7,429
Less: operating lease liabilities - current	(3,584)
Operating lease liabilities - non-current	$	3,845

Other Information

The table below provides information regarding supplemental cash flows:


	Three Months Ended
	March 31,
	2023		2022
	(amounts in thousands)
Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	1,256	$	1,383
Right-of-use assets acquired under operating lease	$	6	$	—

The components of lease expense are as follows:


	Three Months Ended
	March 31,
	2023		2022
	(amounts in thousands)
Amounts Included in Condensed Consolidated Statements of Operations and Comprehensive Income:
Operating lease expense	$	492	$	802
Short-term lease expense	$	940	$	1,144
Variable and other lease costs	$	(2)	$	757

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 condensed consolidated statements of operations and comprehensive income, depending on the nature of the leased asset. Operating lease expense is reported net of sublease income, which is not material.

As of March 31, 2023, the Company did not have any material operating leases that had not yet commenced. The Company does not have any finance lease contracts related to other equipment rentals which are not included in the above disclosures.