Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

6. Leases

The Company leases office space in North America, Europe, Asia, South America, Africa, and Australia. This space is primarily used for office and administrative purposes by the Company’s employees in performing professional services. These leases are classified as operating leases and expire between years 2023 through 2034. The Company’s finance leases are immaterial.

Lease costs are recognized in the Unaudited Consolidated Statements of Operations over the lease term on a straight-line basis. Leasehold improvements are depreciated on a straight-line basis over the lesser of the term of the related lease or the estimated useful life of the asset. 

Some of the Company’s leases include options to extend or renew the leases through 2044. The renewal and extension options are not included in the lease term as the Company is not reasonably certain that it will exercise its option.

From time to time, the Company enters into sublease arrangements with unrelated third parties. These leases are classified as operating leases and expire between years 2023 through 2032. Sublease income is recognized over the lease term on a straight-line basis. Currently, the Company subleases office space in North America and Europe.

As of March 31, 2023, the Company entered into two operating leases for which the commencement date has not yet occurred primarily because of the premises being prepared for occupancy by the landlord. Accordingly, these two leases represent an obligation of the Company that is not reflected within the Unaudited Consolidated Balance Sheets as of March 31, 2023. The aggregate future liability related to these leases is approximately $5.1 million.

The discount rate used for leases accounted for under ASC 842 is the Company’s collateralized credit adjusted borrowing rate.

The following table presents lease costs and other quantitative information for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Lease Cost:	(dollars in thousands)
Operating lease cost	$	19,578	$	14,016
Variable lease cost	4,561		5,160
Sublease rental income	(3,052)		(3,276)
Total lease cost	$	21,087	$	15,900
Additional information:
Cash paid for amounts included in the measurement of lease liabilities for operating leases
Operating cash flows	$	22,347	$	22,781
Right-of-use lease assets obtained in exchange for operating lease liabilities and other non-cash adjustments	$	2,135	$	14,162

As of March 31, 2023, the weighted average remaining lease term (in years) and weighted average discount rate were 6.3 and 4.6%, respectively.

Operating lease expense is included in Office and general expenses in the Unaudited Consolidated Statements of Operations. The Company’s lease expense for leases with a term of 12 months or less is immaterial.

The following table presents minimum future rental payments under the Company’s leases as of March 31, 2023 and their reconciliation to the corresponding lease liabilities:

	Maturity Analysis
	(dollars in thousands)
Remaining 2023	$	68,803
2024	78,098
2025	60,457
2026	45,148
2027	40,652
Thereafter	120,424
Total	413,582
Less: Present value discount	(58,665)
Lease liability	$	354,917