Annual report pursuant to Section 13 and 15(d)

Leases

v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases
20. Leases
The table below summarizes the Company's operating lease portfolio (in thousands):
December 31, 2022 December 31, 2021
Right-of-use assets $ 43,203 $ 62,528
Lease liabilities 57,460 65,518
Weighted average remaining lease term (in years) 6.67 6.47
Weighted average discount rate 6.11  % 6.27  %
The Company’s lease portfolio is comprised primarily of real estate and equipment agreements. Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities, included in other assets, net, and payables and other liabilities, respectively, in the Consolidated Statements of Financial Condition as of December 31, 2022 and December 31, 2021. The Company does not currently have any finance leases in which it is the lessee. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.
ASC 842 stipulates that the ROU asset in an operating lease is subject to the impairment guidance in ASC 360, similar to other long-lived assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. As the length and magnitude of the downturn in mortgage demand, including compressed revenue margins, had significantly increased compared to prior periods, the Mortgage Originations reporting unit's current and expected future operating losses triggered an impairment analysis as of September 30, 2022. The Company estimated the fair value using a discounted cash flow model with the discount rate being the significant assumption. Based on the analysis, the Company recognized an impairment charge of $10.9 million for the ROU during 2022, which was recorded in impairment of goodwill, intangibles, and other assets in the Consolidated Statements of Operations.
The table below summarizes the Company's net operating lease cost (in thousands):
For the year ended December 31, 2022 For the nine months ended December 31, 2021 For the three months ended March 31, 2021 For the year ended December 31, 2020
Successor Predecessor
Operating lease cost $ 21,277  $ 17,297  $ 5,490  $ 21,734 
Short-term lease cost 3,078  2,963  1,035  5,167 
  Total operating and short-term lease cost 24,355  20,260  6,525  26,901 
Variable lease cost 3,463  3,960  1,808  3,734 
Sublease income (1,243) (1,252) (464) (2,769)
Net lease cost $ 26,575  $ 22,968  $ 7,869  $ 27,866 

The table below summarizes other information related to the Company’s operating leases (in thousands):
For the year ended December 31, 2022 For the nine months ended December 31, 2021 For the three months ended March 31, 2021 For the year ended December 31, 2020
Successor Predecessor
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 20,163  $ 15,644  $ 5,423  $ 24,042 
Leased assets obtained in exchange for new operating lease liabilities 17,197  31,819  701  7,271 
The following table presents a maturity analysis of operating leases and a reconciliation of the undiscounted cash flows to lease liabilities as of December 31, 2022 (in thousands):
2023 $ 16,434 
2024 12,513 
2025 8,497 
2026 6,422 
2027 5,290 
Thereafter 21,831 
Total undiscounted lease payments 70,987 
Less: amounts representing interest (13,527)
Total lease liabilities $ 57,460