Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.21.2
Leases
6 Months Ended
Jun. 30, 2021
Leases [Abstract]  
LEASES LEASES
We have operating leases for office space, laboratory operations, research and development facilities, manufacturing locations, warehouses and certain equipment. We determine if a contract contains a lease at inception or modification of a contract. Our leases generally do not provide an implicit interest rate, and we therefore use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. We used the incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. Many of our leases contain rental escalation, renewal options and/or termination options that are factored into our determination of lease payments as appropriate. Variable lease payment amounts that cannot be determined at the commencement of the lease are not included in the right-to-use assets or liabilities.
We elected the use of permitted practical expedients of not recording leases on our Consolidated Balance Sheet when the leases have terms of 12 months or less, and we elected not to separate nonlease components from lease components and instead account for each separate lease component and the nonlease components associated with that lease component as a single lease component.
The following table presents the lease balances within the Condensed Consolidated Balance Sheet as of June 30, 2021 and December 31, 2020:
(in thousands) Classification on the Balance Sheet June 30, 2021 December 31, 2020
Assets
Operating lease assets Operating lease right-of-use assets $ 36,349  $ 37,735 
Finance lease assets Property, plant and equipment, net 4,643  5,258 
Liabilities
Current
Operating lease liabilities Current maturities of operating leases 10,102  9,028 
Accrued expenses Current maturities of finance leases 2,084  2,453 
Long-term
Operating lease liabilities Operating lease liabilities 30,605  29,760 
Other long-term liabilities Finance lease liabilities $ 2,559  $ 2,805 
Weighted average remaining lease term
Operating leases 5.8 years 5.4 years
Finance leases 2.6 years 2.3 years
Weighted average discount rate
Operating leases 5.7  % 5.8  %
Finance leases 5.3  % 3.6  %
The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on our Condensed Consolidated Balance Sheet as of June 30, 2021:
(in thousands) Operating Finance
July 1, 2021 through December 31, 2021 $ 4,535  $ 1,293 
2022 10,995  1,648 
2023 7,722  1,038 
2024 5,700  697 
2025 3,726  215 
Thereafter 16,367  — 
Total undiscounted future minimum lease payments 49,045  4,891 
Less: Difference between lease payments and discounted lease liabilities 8,338  248 
Total lease liabilities $ 40,707  $ 4,643 
Expense under operating leases and finance leases was $9.1 million and $1.1 million, respectively, for the three and six months ended June 30, 2021, which includes $1.4 million of variable lease costs. Expense under operating leases and finance leases was $9.7 million and $1.2 million, respectively, for the three and six months ended June 30, 2020, which includes $1.6 million of variable lease costs. Operating lease costs and finance lease costs are included within Operating loss in the Condensed Consolidated Statement of Operations. Short-term lease costs were not material.
Supplemental cash flow information is as follows:
(in thousands) For the six months ended June 30,
2021 2020
Operating cash out flows from operating leases $ 6,484  $ 9,804 
Operating cash out flows from finance leases 45  86 
Financing cash out flows from finance leases 769  1,026 
Total $ 7,298  $ 10,916 
LEASES LEASES
We have operating leases for office space, laboratory operations, research and development facilities, manufacturing locations, warehouses and certain equipment. We determine if a contract contains a lease at inception or modification of a contract. Our leases generally do not provide an implicit interest rate, and we therefore use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. We used the incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. Many of our leases contain rental escalation, renewal options and/or termination options that are factored into our determination of lease payments as appropriate. Variable lease payment amounts that cannot be determined at the commencement of the lease are not included in the right-to-use assets or liabilities.
We elected the use of permitted practical expedients of not recording leases on our Consolidated Balance Sheet when the leases have terms of 12 months or less, and we elected not to separate nonlease components from lease components and instead account for each separate lease component and the nonlease components associated with that lease component as a single lease component.
The following table presents the lease balances within the Condensed Consolidated Balance Sheet as of June 30, 2021 and December 31, 2020:
(in thousands) Classification on the Balance Sheet June 30, 2021 December 31, 2020
Assets
Operating lease assets Operating lease right-of-use assets $ 36,349  $ 37,735 
Finance lease assets Property, plant and equipment, net 4,643  5,258 
Liabilities
Current
Operating lease liabilities Current maturities of operating leases 10,102  9,028 
Accrued expenses Current maturities of finance leases 2,084  2,453 
Long-term
Operating lease liabilities Operating lease liabilities 30,605  29,760 
Other long-term liabilities Finance lease liabilities $ 2,559  $ 2,805 
Weighted average remaining lease term
Operating leases 5.8 years 5.4 years
Finance leases 2.6 years 2.3 years
Weighted average discount rate
Operating leases 5.7  % 5.8  %
Finance leases 5.3  % 3.6  %
The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on our Condensed Consolidated Balance Sheet as of June 30, 2021:
(in thousands) Operating Finance
July 1, 2021 through December 31, 2021 $ 4,535  $ 1,293 
2022 10,995  1,648 
2023 7,722  1,038 
2024 5,700  697 
2025 3,726  215 
Thereafter 16,367  — 
Total undiscounted future minimum lease payments 49,045  4,891 
Less: Difference between lease payments and discounted lease liabilities 8,338  248 
Total lease liabilities $ 40,707  $ 4,643 
Expense under operating leases and finance leases was $9.1 million and $1.1 million, respectively, for the three and six months ended June 30, 2021, which includes $1.4 million of variable lease costs. Expense under operating leases and finance leases was $9.7 million and $1.2 million, respectively, for the three and six months ended June 30, 2020, which includes $1.6 million of variable lease costs. Operating lease costs and finance lease costs are included within Operating loss in the Condensed Consolidated Statement of Operations. Short-term lease costs were not material.
Supplemental cash flow information is as follows:
(in thousands) For the six months ended June 30,
2021 2020
Operating cash out flows from operating leases $ 6,484  $ 9,804 
Operating cash out flows from finance leases 45  86 
Financing cash out flows from finance leases 769  1,026 
Total $ 7,298  $ 10,916