Leases

12 Months Ended

Dec. 31, 2023

We have operating and finance leases for corporate and business offices, service facilities, call centers and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). Our leases have remaining lease terms of one year to seven years, some of which may include options to extend the leases for up to an additional five years.

We sublease our Fullerton (CA), Jacksonville (FL) and Uxbridge (UK) facilities. The lease and sublease for Fullerton (CA) facility expired in April 2023, the lease and sublease for Uxbridge (UK) facility expired in October 2023, and the lease and sublease for Jacksonville (FL) facility will expire at the end of July 2024.

As of December 31, 2023, assets recorded under finance and operating leases were approximately $0.1 million and $25.3 million respectively, and accumulated amortization associated with finance leases was $0.1 million. As of December 31, 2022 assets recorded under finance and operating leases were approximately $0.6 million and $18.6 million respectively, and accumulated depreciation associated with finance leases was $1.0 million. Operating lease right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

The discount rate used to determine the commencement date present value of lease payment is the interest rate implicit in the lease, or when that is not readily determinable, we utilized our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

During the year ended December 31, 2023, we impaired two leases for the facilities we no longer occupied. The resulting impairment and early termination charges are included in our restructuring expenses for the year ended December 31, 2023. There is no impairment of leases in the year ended December 31, 2022.

The following tables present supplemental balance sheet information related to our financing and operating leases:


	As of December 31, 2023						As of December 31, 2022
In thousands	Operating Leases		Finance Leases		Total		Operating Leases		Finance Leases		Total
Right-of-use Assets	$	25,288	$	129	$	25,417	$	18,574	$	595	$	19,169

Liabilities:
Short-term lease liabilities	4,773		42		4,815		5,587		160		5,747
Long-term lease liabilities	23,687		4		23,691		16,523		52		16,575
Total Lease Liabilities	$	28,460	$	46	$	28,506	$	22,110	$	212	$	22,322

For the years ended December 31, 2023 and 2022, the components of lease expense were as follows:


In thousands	Year Ended December 31, 2023		Year Ended December 31, 2022
Operating lease cost	$	5,526	$	5,832
Finance lease cost
Amortization of right-of-use assets	123		166
Interest on lease liabilities	7		16
Total Finance lease cost	130		182
Variable lease cost	2,068		1,899
Sublease income	(834)		(828)
Total lease cost, net	$	6,890	$	7,085

Other information related to leases was as follows:


In thousands	Year Ended December 31, 2023			Year Ended December 31, 2022
Supplemental Cash Flows Information

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,525		$	12,698
Operating cash flows from finance leases	21			15
Financing cash flows from finance leases	160			194

Weighted Average Remaining Lease term (in years)

Operating leases	6.84			5.92
Finance leases	1.04			1.36

Weighted Average Discount Rate
Operating leases	5.65		%	3.55		%
Finance leases	7.76		%	5.70		%

The maturities of the Company’s finance and operating lease liabilities as of December 31, 2023 are as follows:


In thousands	Operating Leases(1)		Finance Leases
Year Ending December 31,
2024	$	6,173	$	44
2025	4,648		3
2026	4,219		1
2027	4,191		—
2028	4,094		—
2028 & Beyond	11,397		—
Total future minimum lease payments	34,722		48
Less: Imputed interest	6,262		2
Total lease liabilities	$	28,460	$	46

(1)Non-cancelable sublease proceeds for the fiscal year ending December 31, 2024 of $0.4 million, is not included in the table above.

As of December 31, 2023, we have no new operating leases that have not yet commenced.