Leases

12 Months Ended

Dec. 31, 2022

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 December 31, 2022, the Company recorded impairments of $1.0 million on its operating lease right-of-use assets primarily related to exiting certain lease spaces within Digital Media and Cybersecurity and Martech. During the year ended December 31, 2021, the Company recorded impairments of $12.7 million on its operating lease right of use assets within Digital Media and Cybersecurity and Martech 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 December 31, 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 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.

Operating right-of-use assets are included in ‘Other assets’ on the Consolidated Balance Sheets. Operating lease liabilities are included in ‘Other current liabilities’ and ‘Other noncurrent liabilities’, respectively, on the Consolidated Balance Sheets as follows (in thousands):


	December 31,
	2022		2021
Operating lease right-of-use assets	$	40,640	$	55,617

Operating lease liabilities, current	$	22,153	$	27,156
Operating lease liabilities, noncurrent	33,996		53,708
Total operating lease liabilities	$	56,149	$	80,864

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


	Year ended December 31,
	2022		2021
Operating lease cost	$	17,656	$	31,396
Short-term lease cost (1)	1,127		2,754
Total lease cost	$	18,783	$	34,150

(1)The Company made an election to account for a short-term lease payments on a straight-line basis over the term of the lease.

Other supplemental operating lease information consists of the following:


	December 31,
	2022		2021
Operating leases:
Weighted average remaining lease term	3.3 years		3.9 years
Weighted average discount rate	3.08	%	3.48	%

As of December 31, 2022, maturities of operating lease liabilities were as follows (in thousands):


2023	$	23,000
2024	17,453
2025	8,527
2026	5,470
2027	2,443
Thereafter	2,445
Total lease payments	$	59,338
Less: Imputed interest	3,189
Present value of operating lease liabilities	$	56,149

Sublease

Total sublease income for the years ended December 31, 2022, 2021 and 2020 was $6.8 million $2.0 million, and $2.6 million, respectively. Total estimated aggregate sublease income to be received in the future is $11.9 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.

Finance leases are not material to the Company’s consolidated financial statements.

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 noncancellable 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.

Leases