Leases

6 Months Ended

Jun. 30, 2022

Note 14 - Leases

The Company has operating leases for corporate offices under non-cancelable agreements with various expiration dates. Our leases do not have significant rent escalation, holidays, concessions, material residual value guarantees, material restrictive covenants, or contingent rent provisions. Our leases include both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g., common-area or other maintenance costs) which are accounted for as a single lease component. In addition, we have elected the practical expedient to exclude short-term leases, which have an original lease term of one year or less, from our right-of-use assets and lease liabilities as well as the package of practical expedients relating to adoption of Topic 842.

The Company subleases two offices. The subleases have remaining lease terms of less than four years. Sublease income, which is recorded as a reduction of rent expense and allocated to the appropriate financial statement line items to arrive at Income (loss) from operations on our Consolidated Statements of Operations, was immaterial for the three and six months ended June 30, 2022 and 2021.

The following are additional details related to operating leases recorded on our Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021:


	June 30,		December 31,
	2022		2021
(in millions)
Assets
Operating lease right-of-use assets, net	$	60.1	$	59.8

Liabilities
Current portion of operating lease liabilities	$	8.2	$	8.1
Operating lease liabilities, net of current portion	$	61.4	$	61.5

Rent expense was $3.4 million and $2.8 million for the three months ended June 30, 2022 and 2021, respectively. Rent expense was $6.8 million and $5.2 million for the six months ended June 30, 2022 and 2021, respectively.

Other information related to leases was as follows:


(in millions)	Three Months Ended June 30,				Six Months Ended June 30,
Supplemental Cash Flow Information	2022		2021		2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities	$	3.1	$	2.8	$	6.3	$	5.0

Lease liabilities arising from obtaining right-of-use assets
From acquisitions	$	—	$	—	$	—	$	—
From new and existing lease agreements and modifications	$	3.4	$	35.9	$	3.7	$	37.5


	As of
	June 30, 2022		December 31, 2021
Weighted average remaining lease term (in years)	10.9		9.6
Weighted average discount rate	4.6	%	4.4	%

The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases to the total lease liabilities recognized as of June 30, 2022 (in millions):


Year Ending December 31,	Operating Leases
2022 (excluding six months ended June 30, 2022)	$	1.4
2023	11.5
2024	17.0
2025	10.5
2026	4.9
Thereafter	47.1
Total future minimum lease payments	92.4
less effects of discounting	22.8
Total lease liabilities	$	69.6

Reported as of June 30, 2022
Current portion of operating lease liabilities	$	8.2
Operating lease liabilities, net of current portion	61.4
Total lease liabilities	$	69.6

The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced.

Expense associated with short term leases and variable lease costs were immaterial for the three and six months ended June 30, 2022. The expense related to short-term leases reasonably reflected our short-term lease commitments.

Recent Leasing Activity

During the six months ended June 30, 2022, the Company executed a seven year lease for office space in Ra’anana, Israel, with the rent payments for the first phase expected to commence at the earliest in July 2023, and the rent payments for the additional phases expected to commence between August 2023 and January 2024. Upon execution of the lease, the Company paid rent in advance of $1.7 million. The lease contains two options extend for an additional three and five years, respectively, for which the company is not reasonably certain of exercising as of June 30, 2022. The lease is subject to fixed rate rent with the addition of VAT and certain future increases of the Israel Consumer Price Index. The lease provides for $15.4 million in tenant improvements. The Company determined that it is the accounting owner of all tenant improvements. As the commencement of this lease is expected to occur in the future, the Company has not recorded operating lease right-of-use assets or lease liabilities as of June 30, 2022.

Undiscounted lease payments under all leases executed and not yet commenced are anticipated to be $339.7 million, which are not included in the tabular disclosure of undiscounted future minimum lease payments under non-cancelable leases above.