Annual report pursuant to Section 13 and 15(d)

Leases

v3.24.0.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases Leases
The Company leases various office and research and development facilities under operating lease agreements that expire at various dates through October 2050. Under the terms of the agreements, the Company is responsible for certain insurance, property taxes and maintenance expenses. In fiscal year 2022, The Company adopted ASC 842, recognizing operating lease right-of-use asset and liabilities on the consolidated balance sheet and continuing accreting rent expense on a straight-line basis over the term of the operating leases. Rent expense for 2023, 2022 and 2021 was $7.0 million, $5.9 million and $5.7 million, respectively.
As a result of adopting ASC 842 in 2022, the Company recorded lease right-of-use, (ROU) asset of $26.7 million and lease liabilities of $28.7 million as of January 1, 2022, primarily related to ground and building leases based on the present value of future lease payments which were discounted at the Company’s estimated IBR.
The IBR and the remaining lease terms of our facilities as of December 31, 2022 ranged from 2.3% to 9.2% and 3 months to 28 years, respectively. There was no impact to retained earnings upon the adoption of ASC 842.
In 2023, the Company recorded additional ROU assets of $5.7 million and lease liabilities of $5.7 million related to building leases based on the present value of future lease payments which were discounted at the Company’s estimated IBR. The IBR and the remaining lease terms of our facilities as of December 31, 2023 ranged from 3.5% to 9.2% and 2 months to 26 years, respectively.
The Company purchased equipment with total gross book value of $6.5 million under finance lease agreements, of which $1.0 million and $0.7 million was purchased during 2023 and 2022, respectively. Interest rates for the finance leases have ranged from 4.0% to 15.0% per annum. Accumulated depreciation for equipment acquired under the finance leases was $2.7 million and $1.6 million as of December 31, 2023 and 2022, respectively.
In addition to the equipment finance leases, the Company identified an embedded finance lease within the Company’s purchase and sale agreement with Toyota for subassembly components in the amount of $3.8 million as of December 31, 2023.
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

December 31, 2023 December 31, 2022
Operating leases
Assets
Operating lease right-of-use assets $ 28,286  $ 25,149 
Liabilities
Operating lease liabilities, current $ 4,312  3,710 
Operating lease liabilities, non-current 26,349  23,613 
Total operating lease liabilities $ 30,661  $ 27,323 
Finance leases
Assets
Financing lease right-of-use assets $ 10,150  $ 4,903 
Accumulated amortization (2,701) (1,638)
Financing lease right-of-use assets, net $ 7,449  $ 3,265 
Liabilities
Finance lease liabilities, current $ 1,597  $ 522 
Finance lease liabilities, non-current 4,411  821 
Total finance lease liabilities $ 6,008  $ 1,343 

December 31, 2023 December 31, 2022
Weighted-average remaining lease term (years)
Operating leases 6.3 years 7.7 years
Finance leases 4.1 years 3.0 years
Weighted-average discount rate
Operating leases 6.9  % 5.6  %
Finance leases 7.7  % 6.9  %
Maturities of lease liabilities as of December 31, 2023 were as follows:
December 31, 2023
Operating Leases Finance Leases
2024 $ 6,011  $ 1,669 
2025 6,204  1,627 
2026 6,175  1,329 
2027 6,168  1,224 
2028 5,636  1,174 
2029 and thereafter 8,638  166 
Total undiscounted lease payments $ 38,832  $ 7,189 
Less: imputed interest (8,171) (1,181)
Total lease liabilities $ 30,661  $ 6,008 
Lease Costs
The table below presents certain information related to the lease costs for the year ended December 31, 2023:
Year Ended December 31,
2023 2022
Operating lease cost $ 5,760  $ 5,640 
Finance Leases
Amortization of right-of-use assets 1,063  537 
Interest on lease liabilities 243  66 
Other Lease Costs
Short-term lease cost 2,342  1,402 
Variable lease cost(1)
2,414  1,235 
Total lease cost $ 11,822  $ 8,880 
(1) Consist primarily of common-area maintenance, taxes and utilities

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:
Year Ended December 31,
2023 2022
Cash paid for amounts included in the measurement of lease liabilities
   Operating cash flows from operating leases $ (5,559) $ (5,427)
   Operating cash flows from finance leases $ (243) $ (66)
   Finance cash flows from finance leases $ (583) $ (777)
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities $ 5,652  $ 29,202 
Finance lease liabilities $ 5,221  $ 694 
Leases Leases
The Company leases various office and research and development facilities under operating lease agreements that expire at various dates through October 2050. Under the terms of the agreements, the Company is responsible for certain insurance, property taxes and maintenance expenses. In fiscal year 2022, The Company adopted ASC 842, recognizing operating lease right-of-use asset and liabilities on the consolidated balance sheet and continuing accreting rent expense on a straight-line basis over the term of the operating leases. Rent expense for 2023, 2022 and 2021 was $7.0 million, $5.9 million and $5.7 million, respectively.
As a result of adopting ASC 842 in 2022, the Company recorded lease right-of-use, (ROU) asset of $26.7 million and lease liabilities of $28.7 million as of January 1, 2022, primarily related to ground and building leases based on the present value of future lease payments which were discounted at the Company’s estimated IBR.
The IBR and the remaining lease terms of our facilities as of December 31, 2022 ranged from 2.3% to 9.2% and 3 months to 28 years, respectively. There was no impact to retained earnings upon the adoption of ASC 842.
In 2023, the Company recorded additional ROU assets of $5.7 million and lease liabilities of $5.7 million related to building leases based on the present value of future lease payments which were discounted at the Company’s estimated IBR. The IBR and the remaining lease terms of our facilities as of December 31, 2023 ranged from 3.5% to 9.2% and 2 months to 26 years, respectively.
The Company purchased equipment with total gross book value of $6.5 million under finance lease agreements, of which $1.0 million and $0.7 million was purchased during 2023 and 2022, respectively. Interest rates for the finance leases have ranged from 4.0% to 15.0% per annum. Accumulated depreciation for equipment acquired under the finance leases was $2.7 million and $1.6 million as of December 31, 2023 and 2022, respectively.
In addition to the equipment finance leases, the Company identified an embedded finance lease within the Company’s purchase and sale agreement with Toyota for subassembly components in the amount of $3.8 million as of December 31, 2023.
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

December 31, 2023 December 31, 2022
Operating leases
Assets
Operating lease right-of-use assets $ 28,286  $ 25,149 
Liabilities
Operating lease liabilities, current $ 4,312  3,710 
Operating lease liabilities, non-current 26,349  23,613 
Total operating lease liabilities $ 30,661  $ 27,323 
Finance leases
Assets
Financing lease right-of-use assets $ 10,150  $ 4,903 
Accumulated amortization (2,701) (1,638)
Financing lease right-of-use assets, net $ 7,449  $ 3,265 
Liabilities
Finance lease liabilities, current $ 1,597  $ 522 
Finance lease liabilities, non-current 4,411  821 
Total finance lease liabilities $ 6,008  $ 1,343 

December 31, 2023 December 31, 2022
Weighted-average remaining lease term (years)
Operating leases 6.3 years 7.7 years
Finance leases 4.1 years 3.0 years
Weighted-average discount rate
Operating leases 6.9  % 5.6  %
Finance leases 7.7  % 6.9  %
Maturities of lease liabilities as of December 31, 2023 were as follows:
December 31, 2023
Operating Leases Finance Leases
2024 $ 6,011  $ 1,669 
2025 6,204  1,627 
2026 6,175  1,329 
2027 6,168  1,224 
2028 5,636  1,174 
2029 and thereafter 8,638  166 
Total undiscounted lease payments $ 38,832  $ 7,189 
Less: imputed interest (8,171) (1,181)
Total lease liabilities $ 30,661  $ 6,008 
Lease Costs
The table below presents certain information related to the lease costs for the year ended December 31, 2023:
Year Ended December 31,
2023 2022
Operating lease cost $ 5,760  $ 5,640 
Finance Leases
Amortization of right-of-use assets 1,063  537 
Interest on lease liabilities 243  66 
Other Lease Costs
Short-term lease cost 2,342  1,402 
Variable lease cost(1)
2,414  1,235 
Total lease cost $ 11,822  $ 8,880 
(1) Consist primarily of common-area maintenance, taxes and utilities

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:
Year Ended December 31,
2023 2022
Cash paid for amounts included in the measurement of lease liabilities
   Operating cash flows from operating leases $ (5,559) $ (5,427)
   Operating cash flows from finance leases $ (243) $ (66)
   Finance cash flows from finance leases $ (583) $ (777)
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities $ 5,652  $ 29,202 
Finance lease liabilities $ 5,221  $ 694