Leases

12 Months Ended

Dec. 31, 2021

The Company leases certain facilities and equipment under non-cancelable operating and finance leases which expire at various dates through 2031. Office and equipment leases are typically for terms of three to five years and generally provide renewal options for terms up to an additional five years. Some of the Company’s leases include options to terminate within one year.

During the year ended 2021, the Company recorded impairments of $12.7 million on its operating lease right of use assets primarily related to exiting certain lease space as the Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. During the year ended 2020, the Company had also decided to exit and seek subleases for certain leased facilities in the Digital Media reportable segment primarily also due to work from home models. The Company recorded a non-cash impairment charge of $12.1 million related to operating lease right-of-use assets for the affected facilities and an impairment charge of $3.6 million for associated property and equipment. The impairments were determined by comparing the fair value of the impacted right-of-use asset to the carrying value of the asset as of the impairment measurement date, as required under ASC Topic 360, Property, Plant, and Equipment. The fair value of the right-of-use asset was based on the estimated sublease income for the affected facilities taking into consideration the time it will take to obtain a sublease tenant, the applicable discount rate and the sublease rate which represent Level 3 unobservable inputs. The impairments are presented in general and administrative expenses on the Consolidated Statements of Operations.

In certain agreements in which the Company leases office space where the Company is the tenant, it subleases the site to various other companies through a sublease agreement.

Finance leases are not material to the Company’s consolidated financial statements and are therefore not included in the disclosures.

The components of lease expense were as follows (in thousands):


	Years ended December 31,
	2021		2020

Operating lease cost	$	31,396	$	38,421
Short-term lease cost	2,754		1,031
Total lease cost	$	34,150	$	39,452

Supplemental balance sheet information related to leases was as follows (in thousands):


	December 31, 2021		December 31, 2020
Operating leases
Operating lease right-of-use assets	$	55,617	$	80,133
Total operating lease right-of-use assets	$	55,617	$	80,133

Operating lease liability, current	$	27,156	$	29,634
Operating lease liabilities, noncurrent	53,708		73,628
Total operating lease liabilities	$	80,864	$	103,262

Supplemental cash flow information related to leases was as follows (in thousands):


	Years ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	27,798	$	27,402
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	9,850	$	31,148

Other supplemental operating lease information consists of the following:


	December 31, 2021		December 31, 2020
Operating leases:
Weighted average remaining lease term	3.9 years		4.0 years
Weighted average discount rate	3.48	%	3.68	%

Maturities of operating lease liabilities as of December 31, 2021 were as follows (in thousands):


	Operating Leases
Fiscal Year:
2022	$	28,163
2023	21,261
2024	17,046
2025	8,563
2026	5,511
Thereafter	5,405
Total lease payments	$	85,949
Less: Imputed interest	(5,085)
Present value of operating lease liabilities	$	80,864

Sublease

Total sublease income for the years ended December 31, 2021, 2020 and 2019 was $2.0 million, $2.6 million, and $3.5 million, respectively. Total estimated aggregate sublease income to be received in the future is $7.0 million.

In 2020, the Company recorded $2.1 million associated with its sublease tenants in default as a result of the economic effects of COVID-19. The impairment is presented in general and administrative expenses on the Consolidated Statement of Operations.

Significant Judgments

Discount Rate

The majority of the Company’s leases are discounted using the Company’s incremental borrowing rate as the rate implicit in the lease is not readily determinable. Rates are obtained from various large banks to determine the appropriate incremental borrowing rate each quarter for collateralized loans with a maturity similar to the lease term.

Options

The lease term is generally the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs.

Lesses

Leases