Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

Real Estate Operating Leases

The Company leases real estate property at approximately 71 locations of which all leases have commenced as of December 31, 2022. These leases are classified as operating leases. As of December 31, 2022, the remaining lease terms vary from approximately two months to seven years. For certain leases the Company has options to extend the lease term for periods varying from two months to ten years. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. For leases with an initial term of 12 months or longer, the Company has recorded a right-of-use asset and lease liability representing the fixed component of the lease payment. Any fixed payments related to non-lease components, such as common area maintenance or other services provided by the landlord, are accounted for as a component of the lease payment and therefore, a part of the total lease cost.

Flexdrive Program

The Company operates a fleet of rental vehicles through its independently managed subsidiary, a portion of which are leased from third-party vehicle leasing companies. These leases are classified as finance leases and are included in property and equipment, net on the consolidated balance sheets. As of December 31, 2022, the remaining lease terms vary between one month to four years. These leases generally do not contain any non-lease components and, as such, all payments due under these arrangements are allocated to the respective lease component.

Lease Position as of December 31, 2022

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheets (in thousands, except for remaining lease terms and percentages):

	December 31, 2022			December 31, 2021
Operating Leases
Assets
Operating lease right-of-use assets(1)	$	135,213		$	223,412
Liabilities
Operating lease liabilities, current	$	45,803		$	53,765
Operating lease liabilities, non-current	176,356			210,232
Total operating lease liabilities	$	222,159		$	263,997
Finance Leases
Assets
Finance lease right-of-use assets(2)	$	32,887		$	26,802
Liabilities
Finance lease liabilities, current(3)	15,053			13,556
Finance lease liabilities, non-current(4)	19,921			14,242
Total finance lease liabilities	$	34,974		$	27,798
Weighted-average remaining lease term (years)
Operating leases	5.1			5.6
Finance leases	2.5			2.2
Weighted-average discount rate
Operating leases	6.4		%	6.3		%
Finance leases	5.2		%	2.8		%

_______________

(1)On November 3, 2022, the Company committed to a decision to exit and sublease or cease use of certain facilities to align with the Company’s anticipated operating needs and incurred impairment charges related to real estate operating right-of-use assets of $55.3 million in the fourth quarter of 2022.

(2)This balance is included within property and equipment, net on the consolidated balance sheets and is primarily related to leases acquired in the Flexdrive transaction. Refer to Note 3 "Acquisitions" to the consolidated financial statements for information regarding this transaction.

(3)This balance is included within other current liabilities on the consolidated balance sheets and is primarily related to leases acquired in the Flexdrive transaction. Refer to Note 3 "Acquisitions" to the consolidated financial statements for information regarding this transaction.

(4)This balance is included within other liabilities on the consolidated balance sheets and is primarily related to leases acquired in the Flexdrive transaction. Refer to Note 3 "Acquisitions" to the consolidated financial statements for information regarding this transaction.

Lease Costs

The table below presents certain information related to the costs for operating leases and finance leases for the year ended December 31, 2022 (in thousands):

	Year Ended December 31,
	2022		2021
Operating Leases
Operating lease cost	$	67,283	$	73,973
Finance Leases
Amortization of right-of-use assets	15,124		24,756
Interest on lease liabilities	1,034		1,073
Other Lease Costs
Short-term lease cost	5,355		5,264
Variable lease cost (1)	17,040		13,282
Total lease cost	$	105,836	$	118,348

_______________

(1)Consists primarily of common-area maintenance, taxes and utilities for real estate leases, and certain vehicle related charges under the Flexdrive program.

Sublease income was $11.6 million for the year ended December 31, 2022 and $6.6 million for the year ended December 31, 2021 which was primarily related to subleases from the Company's transaction with Woven Planet in the third quarter of 2021. Sublease income is included within other income, net on the consolidated statement of operations. The related lease expense for these leases is included within operating expenses on the consolidated statement of operations.

On November 3, 2022, the Company committed to a plan of termination which included restructuring charges related to a decision to exit and sublease or cease use of certain facilities to align with the Company’s anticipated operating needs. Refer to Note 16 “Restructuring” to the consolidated financial statements for information regarding this transaction.

The table below presents certain supplemental information related to the cash flows for operating and finance leases recorded on the consolidated statements of cash flows (in thousands):

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	76,188	$	80,329
Operating cash flows from finance leases	1,095		1,102
Financing cash flows from finance leases	34,783		35,547

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the lease liabilities recorded on the consolidated balance sheet as of December 31, 2022 (in thousands):

	Operating Leases		Finance Leases		Total Leases
2023	$	66,458	$	16,511	$	82,969
2024	54,918		13,052		67,970
2025	42,832		5,877		48,709
2026	28,642		770		29,412
2027	25,368		1,400		26,768
Thereafter	43,234		—		43,234
Total minimum lease payments	261,452		37,610		299,062
Less: amount of lease payments representing interest	(39,293)		(2,636)		(41,929)
Present value of future lease payments	222,159		34,974		257,133
Less: current obligations under leases	(45,803)		(15,053)		(60,856)
Long-term lease obligations	$	176,356	$	19,921	$	196,277

Future lease payments receivable in car rental transactions under the Flexdrive Program are not material since the lease term is less than a month.

Leases

Leases

Real Estate Operating Leases

The Company leases real estate property at approximately 71 locations of which all leases have commenced as of December 31, 2022. These leases are classified as operating leases. As of December 31, 2022, the remaining lease terms vary from approximately two months to seven years. For certain leases the Company has options to extend the lease term for periods varying from two months to ten years. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. For leases with an initial term of 12 months or longer, the Company has recorded a right-of-use asset and lease liability representing the fixed component of the lease payment. Any fixed payments related to non-lease components, such as common area maintenance or other services provided by the landlord, are accounted for as a component of the lease payment and therefore, a part of the total lease cost.

Flexdrive Program

The Company operates a fleet of rental vehicles through its independently managed subsidiary, a portion of which are leased from third-party vehicle leasing companies. These leases are classified as finance leases and are included in property and equipment, net on the consolidated balance sheets. As of December 31, 2022, the remaining lease terms vary between one month to four years. These leases generally do not contain any non-lease components and, as such, all payments due under these arrangements are allocated to the respective lease component.

Lease Position as of December 31, 2022

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheets (in thousands, except for remaining lease terms and percentages):

	December 31, 2022			December 31, 2021
Operating Leases
Assets
Operating lease right-of-use assets(1)	$	135,213		$	223,412
Liabilities
Operating lease liabilities, current	$	45,803		$	53,765
Operating lease liabilities, non-current	176,356			210,232
Total operating lease liabilities	$	222,159		$	263,997
Finance Leases
Assets
Finance lease right-of-use assets(2)	$	32,887		$	26,802
Liabilities
Finance lease liabilities, current(3)	15,053			13,556
Finance lease liabilities, non-current(4)	19,921			14,242
Total finance lease liabilities	$	34,974		$	27,798
Weighted-average remaining lease term (years)
Operating leases	5.1			5.6
Finance leases	2.5			2.2
Weighted-average discount rate
Operating leases	6.4		%	6.3		%
Finance leases	5.2		%	2.8		%

_______________

(1)On November 3, 2022, the Company committed to a decision to exit and sublease or cease use of certain facilities to align with the Company’s anticipated operating needs and incurred impairment charges related to real estate operating right-of-use assets of $55.3 million in the fourth quarter of 2022.

(2)This balance is included within property and equipment, net on the consolidated balance sheets and is primarily related to leases acquired in the Flexdrive transaction. Refer to Note 3 "Acquisitions" to the consolidated financial statements for information regarding this transaction.

(3)This balance is included within other current liabilities on the consolidated balance sheets and is primarily related to leases acquired in the Flexdrive transaction. Refer to Note 3 "Acquisitions" to the consolidated financial statements for information regarding this transaction.

(4)This balance is included within other liabilities on the consolidated balance sheets and is primarily related to leases acquired in the Flexdrive transaction. Refer to Note 3 "Acquisitions" to the consolidated financial statements for information regarding this transaction.

Lease Costs

The table below presents certain information related to the costs for operating leases and finance leases for the year ended December 31, 2022 (in thousands):

	Year Ended December 31,
	2022		2021
Operating Leases
Operating lease cost	$	67,283	$	73,973
Finance Leases
Amortization of right-of-use assets	15,124		24,756
Interest on lease liabilities	1,034		1,073
Other Lease Costs
Short-term lease cost	5,355		5,264
Variable lease cost (1)	17,040		13,282
Total lease cost	$	105,836	$	118,348

_______________

(1)Consists primarily of common-area maintenance, taxes and utilities for real estate leases, and certain vehicle related charges under the Flexdrive program.

Sublease income was $11.6 million for the year ended December 31, 2022 and $6.6 million for the year ended December 31, 2021 which was primarily related to subleases from the Company's transaction with Woven Planet in the third quarter of 2021. Sublease income is included within other income, net on the consolidated statement of operations. The related lease expense for these leases is included within operating expenses on the consolidated statement of operations.

On November 3, 2022, the Company committed to a plan of termination which included restructuring charges related to a decision to exit and sublease or cease use of certain facilities to align with the Company’s anticipated operating needs. Refer to Note 16 “Restructuring” to the consolidated financial statements for information regarding this transaction.

The table below presents certain supplemental information related to the cash flows for operating and finance leases recorded on the consolidated statements of cash flows (in thousands):

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	76,188	$	80,329
Operating cash flows from finance leases	1,095		1,102
Financing cash flows from finance leases	34,783		35,547

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the lease liabilities recorded on the consolidated balance sheet as of December 31, 2022 (in thousands):

	Operating Leases		Finance Leases		Total Leases
2023	$	66,458	$	16,511	$	82,969
2024	54,918		13,052		67,970
2025	42,832		5,877		48,709
2026	28,642		770		29,412
2027	25,368		1,400		26,768
Thereafter	43,234		—		43,234
Total minimum lease payments	261,452		37,610		299,062
Less: amount of lease payments representing interest	(39,293)		(2,636)		(41,929)
Present value of future lease payments	222,159		34,974		257,133
Less: current obligations under leases	(45,803)		(15,053)		(60,856)
Long-term lease obligations	$	176,356	$	19,921	$	196,277

Future lease payments receivable in car rental transactions under the Flexdrive Program are not material since the lease term is less than a month.