Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

The Company is party to various non-cancelable lease agreements, all of which are operating leases as of December 31, 2023. The majority of the Company's leases relate to office space dedicated to the Company's operations in various locations (primarily New York City, San Francisco, Bermuda, London and Paris) with expiration dates ranging from 2024 to 2032. The Company subleases certain properties that are not used in its operations.

Accounting Policy

    The Company determines if an arrangement is a lease at inception. For operating leases with an original term of more than 12 months, where the Company is the lessee, it recognizes a right-of-use (ROU) asset in “other assets” and a lease liability in “other liabilities” on the consolidated balance sheets. An ROU asset represents the Company’s right to use an underlying asset for the lease term, and a lease liability represents the Company’s obligation to make lease payments arising from the lease. At the inception of a lease, the total fixed payments under a lease agreement are discounted utilizing an incremental borrowing rate that represents the Company’s collateralized borrowing rate. The rate is determined based on the lease term as of the lease commencement date. Some of the Company’s leases include renewal options, which are not included in the lease terms unless the Company is reasonably certain it will exercise the option.

    The Company elected the practical expedient to account for all lease components and their associated non-lease components (i.e., common area maintenance, real estate taxes, building insurance, etc.) as a single lease component and include all fixed payments in the measurement of ROU assets and lease liabilities. Operating lease expense is recognized on a straight-line basis over the lease term. Costs related to variable lease and non-lease components for the Company’s leases are expensed in the period incurred. Sublease income is earned on a straight-line basis over the term of the lease.

The Company assesses ROU assets for impairment when certain events occur or when there are changes in circumstances including potential alternative uses. If circumstances require an ROU asset to be tested for possible impairment, and the carrying value of the ROU asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Any impairment is reported in “other operating expenses” in the consolidated statement of operations.

Lease Assets and Liabilities

As of December 31, 2023, the ROU asset and lease liability was $71 million and $97 million, respectively. As of December 31, 2022, the ROU asset and lease liability was $87 million and $116 million, respectively. The weighted average

remaining lease term as of December 31, 2023 and December 31, 2022 was 7.8 years and 8.2 years, respectively. The Company used a weighted average discount rate of 2.60% and 2.49% as of December 31, 2023 and December 31, 2022, respectively.

Lease Expense and Other Information

	Year Ended December 31,
	2023		2022		2021
	(in millions)
Operating lease cost	$	20	$	16	$	16
Other lease costs (1)	2		3		3
Sublease income	(7)		(7)		(5)
Total lease cost	$	15	$	12	$	14
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows for operating leases	$	24	$	23	$	20
ROU assets obtained in exchange for new operating lease liabilities (2)	1		1		35

 ____________________

(1)    Primarily includes variable and short-term lease costs.

(2)    The amounts in 2021 relate primarily to additional office space leased in New York City.

    During the fourth quarter of 2023, the Company made the decision to sublease office space that was previously occupied by the Company in support of its operations. The Company concluded that the associated ROU asset was not recoverable. Accordingly, the Company recognized an ROU asset impairment of $3 million as of December 31, 2023, reducing the carrying value of the associated ROU asset to its estimated fair value.

Future Minimum Rental Payments

Operating Leases

	As of December 31, 2023
Year	(in millions)
2024	$	16
2025	13
2026	12
2027	12
2028	13
Thereafter	41
Total lease payments	107
Less: Imputed interest	10
Total lease liabilities	$	97

Leases

Leases

The Company is party to various non-cancelable lease agreements, all of which are operating leases as of December 31, 2023. The majority of the Company's leases relate to office space dedicated to the Company's operations in various locations (primarily New York City, San Francisco, Bermuda, London and Paris) with expiration dates ranging from 2024 to 2032. The Company subleases certain properties that are not used in its operations.

Accounting Policy

    The Company determines if an arrangement is a lease at inception. For operating leases with an original term of more than 12 months, where the Company is the lessee, it recognizes a right-of-use (ROU) asset in “other assets” and a lease liability in “other liabilities” on the consolidated balance sheets. An ROU asset represents the Company’s right to use an underlying asset for the lease term, and a lease liability represents the Company’s obligation to make lease payments arising from the lease. At the inception of a lease, the total fixed payments under a lease agreement are discounted utilizing an incremental borrowing rate that represents the Company’s collateralized borrowing rate. The rate is determined based on the lease term as of the lease commencement date. Some of the Company’s leases include renewal options, which are not included in the lease terms unless the Company is reasonably certain it will exercise the option.

    The Company elected the practical expedient to account for all lease components and their associated non-lease components (i.e., common area maintenance, real estate taxes, building insurance, etc.) as a single lease component and include all fixed payments in the measurement of ROU assets and lease liabilities. Operating lease expense is recognized on a straight-line basis over the lease term. Costs related to variable lease and non-lease components for the Company’s leases are expensed in the period incurred. Sublease income is earned on a straight-line basis over the term of the lease.

The Company assesses ROU assets for impairment when certain events occur or when there are changes in circumstances including potential alternative uses. If circumstances require an ROU asset to be tested for possible impairment, and the carrying value of the ROU asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Any impairment is reported in “other operating expenses” in the consolidated statement of operations.

Lease Assets and Liabilities

As of December 31, 2023, the ROU asset and lease liability was $71 million and $97 million, respectively. As of December 31, 2022, the ROU asset and lease liability was $87 million and $116 million, respectively. The weighted average

remaining lease term as of December 31, 2023 and December 31, 2022 was 7.8 years and 8.2 years, respectively. The Company used a weighted average discount rate of 2.60% and 2.49% as of December 31, 2023 and December 31, 2022, respectively.

Lease Expense and Other Information

	Year Ended December 31,
	2023		2022		2021
	(in millions)
Operating lease cost	$	20	$	16	$	16
Other lease costs (1)	2		3		3
Sublease income	(7)		(7)		(5)
Total lease cost	$	15	$	12	$	14
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows for operating leases	$	24	$	23	$	20
ROU assets obtained in exchange for new operating lease liabilities (2)	1		1		35

 ____________________

(1)    Primarily includes variable and short-term lease costs.

(2)    The amounts in 2021 relate primarily to additional office space leased in New York City.

    During the fourth quarter of 2023, the Company made the decision to sublease office space that was previously occupied by the Company in support of its operations. The Company concluded that the associated ROU asset was not recoverable. Accordingly, the Company recognized an ROU asset impairment of $3 million as of December 31, 2023, reducing the carrying value of the associated ROU asset to its estimated fair value.

Future Minimum Rental Payments

Operating Leases

	As of December 31, 2023
Year	(in millions)
2024	$	16
2025	13
2026	12
2027	12
2028	13
Thereafter	41
Total lease payments	107
Less: Imputed interest	10
Total lease liabilities	$	97