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Leases
6 Months Ended
Jun. 30, 2022
Leases [Abstract]  
Leases
8.
LEASES

 

The Company leases real estate, vehicle fleet and some equipment in the U.S. and internationally. The Company's real estate leases, which are responsible for the majority of the Company's aggregate ROU asset and liability balances, include leases for office space and other facilities. As of June 30, 2022, the Company's real estate and non-real estate leases have remaining lease terms ranging from 12 months to 6 years. Some of these leases contain options that allow the Company to extend or terminate the lease agreement. All of the Company's leases are classified as operating leases except for certain immaterial equipment finance leases.

The components of total lease expense related to operating leases are as follows (in thousands):

 

 

 

For the Three Months
Ended June 30, 2022

 

 

For The Six Months Ended June 30, 2022

 

Operating lease cost

 

$

4,313

 

 

$

8,540

 

Variable lease cost

 

 

915

 

 

 

1,807

 

Short-term lease cost

 

 

1,830

 

 

 

3,644

 

Total

 

 

7,058

 

 

 

13,991

 

Less: Discontinued operations

 

 

(1,367

)

 

 

(2,723

)

Continuing operations

 

$

5,691

 

 

$

11,268

 

 

 

Rent expense was $3.0 million and $5.6 million for the three and six months ended June 30, 2021, respectively. The Company has updated the amount of rent expense for the six months ended June 30, 2021 disclosure to include fleet vehicle lease expense that was previously inadvertently omitted.

The short-term lease cost disclosed above reasonably reflects the Company’s ongoing short-term lease commitments.

The following table provides balance sheet information related to the Company's operating leases (in thousands):

 

 

 

June 30,
2022

 

Assets

 

 

 

Operating lease right-of-use assets

 

$

27,157

 

 

 

 

 

Liabilities

 

 

 

Operating lease liabilities, current

 

$

1,255

 

Operating lease liabilities, non-current

 

 

3,718

 

Total operating lease liabilities

 

$

4,973

 

 

Total operating lease liabilities amounting to $30.2 million as of June 30, 2022 were included as liabilities subject to compromise (see Note 3 for further details).

The following table provides supplemental cash flow information related to the Company's operating leases (in thousands):

 

 

 

For The Six Months Ended June 30, 2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

Cash flow from financing activities

 

$

 

Cash flow from operating activities

 

 

3,416

 

Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets:

 

 

 

Lease liabilities arising from obtaining new ROU assets during the period

 

 

3,730

 

Weighted average remaining lease term

 

 

3.18

 

Weighted average discount rate

 

 

3.73

%

 

The maturities of lease liabilities as of June 30, 2022 were as follows (in thousands):

 

For the year

 

Operating leases

 

2022

 

$

6,558

 

2023

 

 

10,356

 

2024

 

 

9,218

 

2025

 

 

7,179

 

2026

 

 

4,163

 

Thereafter

 

 

480

 

Total undiscounted lease payments

 

 

37,954

 

Less: portion representing interest

 

 

(2,755

)

Net

 

 

35,199

 

Operating lease liability presented under liabilities subject to compromise

 

 

(30,226

)

Total lease liability

 

 

4,973

 

 

Operating lease right-of-use assets amounting to $4.7 million and $6.4 million related to continuing operations and discontinued operations, respectively, were fully impaired on June 30, 2022 (see Note 3 for further details).

 

As part of the Chapter 11 Cases and 363 Sale, many of the Debtors’ leases have been assumed and assigned to Asurion or otherwise rejected pursuant to Section 365 of the Bankruptcy Code, which was approved by the Bankruptcy Court.