LEASES

12 Months Ended

Dec. 31, 2022

LEASES [ABSTRACT]

Leases

(15)LEASES

Operating leases are included in our Consolidated Balance Sheet as Operating lease assets, Current operating lease liabilities and Non-current operating lease liabilities. Finance leases are included in Property, plant and equipment, Other current liabilities and Other long-term liabilities in our Consolidated Balance Sheet. The Company primarily leases real estate and equipment under various arrangements that provide the Company the right-of-use for the underlying asset that require lease payments over the lease term. The Company determines the value of each lease by computing the present value of each lease payment using the interest rate implicit in the lease, if available; otherwise the Company estimates its incremental borrowing rate over the lease term. The Company determines its incremental borrowing rate based on its estimated credit risk with adjustments for each individual leases’ geographical risk and lease term. Operating lease assets also include prepaid rent and initial direct costs less any tenant improvements.

The Company’s real estate portfolio typically includes one or more options to renew, with renewal terms that generally can extend the lease term from one to 10 years. The exercise of these lease renewal options is at the Company’s discretion and is included in the lease term only if the Company is reasonably certain to exercise. The Company also has service arrangements whereby it controls specific space provided by a third-party service provider. These arrangements meet the definition of a lease and are accounted for under ASC 842. Lease expense for operating leases is recognized on a straight-line basis over the lease term and is included in the Consolidated Statements of Comprehensive Income (Loss). The Company’s lease agreements do not contain any material residual value guarantees or restrictive guarantees.

The components of lease expense for the years ended December 31, 2022 and 2021 are as follows (in thousands):

	Location in Statements of	Year Ended December 31,
Description	Comprehensive Income (Loss)	2022		2021		2020
Amortization of ROU assets - finance leases	Depreciation and amortization	$	3,785	$	6,674	$	7,661
Interest on lease liabilities - finance leases	Interest expense		79		136		203
Operating lease cost (cost resulting from lease payments)	Cost of services		34,786		39,087		46,375
Operating lease cost (cost resulting from lease payments)	Selling, general and administrative		2,524		2,770		2,040
Operating lease cost (cost resulting from lease payments)	Restructuring		925		1,614		1,232
Operating lease cost	Impairment		4,821		5,338		5,127
Operating lease cost (cost resulting from lease payments)	Other income (expense), net		1,298		1,240		1,149
Short-term lease cost	Cost of services		3,428		4,529		3,888
Variable lease cost (cost excluded from lease payments	Cost of services		1,320		1,246		(287)
Less: Sublease income	Selling, general and administrative		(710)		(807)		(836)
Less: Sublease income	Other income (expense), net		(2,748)		(2,584)		(2,464)
Total lease cost		$	49,508	$	59,243	$	64,088

Other supplementary information for the years ended December 31, 2022 and 2021 are as follows (dollar values in thousands):

	Year Ended December 31,
	2022		2021		2020
Finance lease - operating cash flows	$	26	$	45	$	68
Finance lease - financing cash flows	$	3,087	$	6,385	$	7,911
Operating lease - operating cash flows (fixed payments)	$	51,693	$	52,358	$	55,862
New ROU assets - operating leases	$	36,040	$	15,280	$	6,834
Modified ROU assets - operating leases	$	10,629	$	736	$	6,485
New ROU assets - finance leases	$	483	$	1,141	$	2,292

	December 31, 2022		December 31, 2021		December 31, 2020
Weighted average remaining lease term - finance leases		1.87 years		2.34 years		2.46 years
Weighted average remaining lease term - operating leases		4.06 years		3.32 years		3.73 years
Weighted average discount rate - finance leases		2.07%		1.85%		1.64%
Weighted average discount rate - operating leases		4.91%		5.38%		6.95%

Operating and financing lease right-of-use assets and lease liabilities within our Consolidated Balance Sheet as of December 31, 2022 and 2021 are as follows (in thousands):

Description	Location in Balance Sheet	December 31, 2022		December 31, 2021
Assets
Operating lease assets	Operating lease assets	$	92,431	$	90,180
Finance lease assets	Property, plant and equipment, net		3,814		7,119
Total leased assets		$	96,245	$	97,299
Liabilities
Current
Operating	Current operating lease liabilities	$	35,271	$	44,460
Finance	Other current liabilities		2,056		3,001
Non-current
Operating	Non-current operating lease liabilities		69,575		64,419
Finance	Other long-term liabilities		1,257		2,866
Total lease liabilities		$	108,159	$	114,746

The future minimum operating lease and finance lease payments required under non-cancelable leases as of December 31, 2022 and 2021 are as follows (in thousands):

December 31, 2022

	Operating		Sub-lease		Finance
	Leases		Income		Leases
Year 1	$	38,783	$	(3,527)	$	2,071
Year 2		26,789		(2,940)		1,020
Year 3		18,229		(2,940)		268
Year 4		12,906		(490)		14
Year 5		9,749		—		—
Thereafter		10,320		—		—
Total minimum lease payments	$	116,776	$	(9,897)	$	3,373
Less imputed interest		(11,930)				(60)
Total lease liability	$	104,846			$	3,313

December 31, 2021

	Operating		Sub-lease		Finance
	Leases		Income		Leases
Year 1	$	48,559	$	(3,465)	$	3,026
Year 2		32,054		(3,112)		1,921
Year 3		18,862		(2,905)		870
Year 4		10,162		(2,940)		164
Year 5		3,508		(490)		—
Thereafter		6,759		—		—
Total minimum lease payments	$	119,904	$	(12,912)	$	5,981
Less imputed interest		(11,025)				(114)
Total lease liability	$	108,879			$	5,867

In 2008, the Company sub-leased one of its customer engagement centers to a third party for the remaining term of the lease. The sub-lease began on January 1, 2009 and rental income is recognized on a straight-line basis over the term of the sub-lease through 2026. In 2017, the Company sub-leased one of its office spaces for the remaining term of the original lease. The sub-lease began on November 6, 2017 and ended on May 31, 2021. In 2019, the Company sub-leased one of its office spaces for the remaining term of the original lease. The sub-lease began on March 1, 2019 and ends July 21, 2023. In 2020, the Company sub-leased one of its office spaces for the remaining term of the original lease. The sub-lease began on February 6, 2020 and ends on June 14, 2023. In 2022, the Company sub-leased one of its office spaces for the majority of the remaining term of the original lease. The sub-lease began on June 29, 2022 and ends January 31, 2024.