Leases

12 Months Ended

Dec. 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. See Note 2 - Summary of Significant Accounting Policies.

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 $2.8 million and $1.7 million for the years ended December 31, 2022 and 2021, respectively, and an immaterial right-of-use asset impairment charge for the year ended December 31, 2023. These losses were 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 year ended December 31, 2022, the Company wrote off a total of $0.9 million of leasehold improvements and other property and equipment related to these locations, and wrote off an immaterial amount in 2023 and 2021. 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 consolidated balance sheets:


Classification on Consolidated Balance Sheets:	December 31, 2023			December 31, 2022
	(amounts in thousands)
Operating lease right-of-use assets	$	2,599		$	3,254
Operating lease liabilities - current	$	2,604		$	4,132
Operating lease liabilities - non-current	$	2,663		$	4,880

	December 31, 2023			December 31, 2022
Weighted average remaining lease term	2.2 years			2.3 years
Weighted average discount rate	6.36		%	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 consolidated balance sheets as of December 31, 2023:


Years Ending December 31:	(amounts in thousands)
2024	$	2,850
2025	2,185
2026	318
2027	180
2028	114

Total minimum lease payments	5,647
Less: amount of lease payments representing interest	(380)
Present value of future minimum lease payments	5,267
Less: operating lease liabilities - current	(2,604)
Operating lease liabilities - non-current	$	2,663

Other Information

The table below provides information regarding supplemental cash flows:


	Year Ended December 31,
	2023		2022		2021
	(amounts in thousands)
Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,859	$	5,753	$	6,150
Right-of-use assets acquired under operating lease	$	1,040	$	473	$	1,059

The components of lease expense are as follows:


	Year Ended December 31,
	2023		2022		2021
	(amounts in thousands)
Amounts Included in Consolidated Statements of Operations and Comprehensive Income:
Operating lease expense	$	1,681	$	2,550	$	3,538
Short-term lease expense	$	3,209	$	5,114	$	3,695
Variable and other lease costs	$	724	$	2,195	$	1,957

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 and comprehensive income, 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 year ended December 31, 2022 include a benefit associated with the early termination of a lease for one of the Company's corporate offices which was previously restructured.

As of December 31, 2023, the Company did not have any material operating leases which had not yet commenced. The Company had an immaterial amount of finance lease contracts related to other equipment rentals for the years ended December 31, 2022 and 2021, which are not included in the above disclosures, and no finance lease contracts for the year ended December 31, 2023.