Leases

12 Months Ended

Dec. 31, 2023

Lease Costs

For the years ended December 31, 2023, 2022, and 2021, the Company recorded operating lease costs of corporate offices, excluding subleases, in the consolidated statements of comprehensive loss as follows (in thousands):


Operating lease costs recorded within:	Year Ended December 31, 2023		Year Ended December 31, 2022		Year Ended December 31, 2021
Cost of revenue	$	23	$	12	$	62
Sales and marketing	348		583		1,356
Technology and development	785		1,104		2,082
General and administrative	3,208		3,837		2,793
Total operating lease costs	$	4,364	$	5,536	$	6,293

The Company did not include short term or variable lease costs in the table above as these amounts were immaterial. The Company made cash payments of $7.8 million, $6.7 million and $7.2 million for the years ended December 31, 2023, 2022, and 2021, respectively, which were included in “Cash flows from operating activities” within the consolidated statements of cash flows. The Company’s operating leases have a weighted average remaining lease term of 4.7 years and weighted average discount rate of 6.0%.

For its subleases, the Company recorded contra rent expense of $3.5 million, $3.4 million and $1.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.

The Company recognized ROU asset group impairment charges of $2.4 million and $1.7 million for the years ended December 31, 2023 and 2021, respectively, reducing the carrying value of the related lease assets to its estimated fair value. Fair value was estimated using an income approach based on management’s forecast of future cash flows expected to be derived based on current sublease market rent. The impairment charge is included in general and administrative expenses in the consolidated statements of comprehensive loss.

In July 2023, the Company signed a termination agreement with one of its subtenants to early terminate the sublease agreement, which included the receipt of $1.4 million in early termination fees. As a result, the Company also evaluated the ROU asset on the head lease and concluded the asset was impaired, resulting in total impairment charges of $2.0 million. In November 2023, the Company signed a lease amendment to exit the same floor from the head lease and paid $2.1 million for the early exit. To account for the partial termination on the head lease, the Company remeasured the lease liability, using the incremental borrowing rate in place at the date of modification, resulting in a $1.9 million reduction in the lease liability, a $0.5 million reduction of the ROU asset group, and the recognition of a $1.5 million gain.

In June 2022, TrueCar signed a lease amendment to exit certain floors of a leased office space effective July 31, 2022 and to settle the asset retirement obligation associated with exiting the leased space for a lower amount than previously recognized. To account for the reduction in lease term, TrueCar remeasured the lease liability, using the incremental borrowing rate in place at the date of modification, with a corresponding reduction to the right of use asset. A total gain of $0.8 million was recognized which included the $0.6 million difference in reduction of lease liability of $3.7 million and right-of-use asset of $3.1 million and the $0.2 million gain on settlement of the asset retirement obligation.

The existing operating leases have remaining lease terms ranging from 0.6 to 6.1 years. Certain lease agreements contain options to renew, with renewal terms that generally extend the lease terms by 3 to 5 years for each option.

Lease Commitments

Future undiscounted lease payments for the Company’s operating lease liabilities, a reconciliation of these payments to its operating lease liabilities, and related sublease income at December 31, 2023 are as follows (in thousands):


Years ended December 31,
2024	$	3,956
2025	3,903
2026	2,853
2027	1,985
2028	1,854
Thereafter	2,069
Total lease payments	$	16,620
Less: imputed interest	(2,211)
Total lease liabilities (discounted)	$	14,409


Year ended December 31,	Sublease Income
2024	$	2,089
2025	1,702
2026	819
2027	70
Thereafter	—
Total sublease income	$	4,680