Annual report pursuant to Section 13 and 15(d)

Leases

v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
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 2022, 2021 and 2020 was $5.9 million, $5.7 million and $4.7 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.
The Company purchased equipment with total gross book value of $4.9 million under capital lease agreements, of which $0.7 million and $0.9 million was purchased during 2022 and 2021, 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 $1.6 million and $1.1 million as of December 31, 2022 and 2021, respectively.
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

December 31, 2022
Operating leases
Assets
Operating lease right-of-use assets $ 25,149 
Liabilities
Operating lease liabilities, current $ 3,710 
Operating lease liabilities, non-current 23,613 
Total operating lease liabilities $ 27,323 
Finance leases
Assets
Financing lease right-of-use assets $ 4,903 
Accumulated amortization (1,638)
Financing lease right-of-use assets, net $ 3,265 
Liabilities
Finance lease liabilities, current $ 522 
Finance lease liabilities, non-current 821 
Total finance lease liabilities $ 1,343 

December 31, 2022
Weighted-average remaining lease term (years)
Operating leases 7.7 years
Finance leases 3.0 years
Weighted-average discount rate
Operating leases 5.6  %
Finance leases 6.9  %
Maturities of lease liabilities as of December 31, 2022 were as follows:
December 31, 2022
Operating Leases Finance Leases
2023 $ 5,028  $ 542 
2024 4,840  473 
2025 4,774  173 
2026 4,714  155 
2027 4,675  50 
2028 and thereafter 10,759  — 
Total undiscounted lease payments $ 34,790  $ 1,393 
Less: imputed interest (7,467) (50)
Total lease liabilities $ 27,323  $ 1,343 
Lease Costs
The table below presents certain information related to the lease costs for the year ended December 31, 2022:
Year Ended December 31,
2022
Operating lease cost $ 5,640 
Finance Leases
Amortization of right-of-use assets 537 
Interest on lease liabilities 66 
Other Lease Costs
Short-term lease cost 1,402 
Variable lease cost(1)
1,235 
Total lease cost $ 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,
2022
Cash paid for amounts included in the measurement of lease liabilities
   Operating cash flows from operating leases $ (5,427)
   Operating cash flows from finance leases $ (66)
   Finance cash flows from finance leases $ (777)
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities $ 29,202 
Finance lease liabilities $ 694 
Prior to the adoption of ASC 842, future minimum payments for noncancellable operating and finance leases as of December 31, 2021 under ASC 840 were as follows:
December 31, 2021
Operating Leases Finance Leases
2022 $ 5,543  $ 771 
2023 4,315  248 
2024 3,517  183 
2025 718  110 
2026 654  98 
2027 and thereafter 3,136  33 
Total minimum future lease payments, operating leases $ 17,883  $ 1,443 
Less current portion (771)
Noncurrent portion $ 672 
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 2022, 2021 and 2020 was $5.9 million, $5.7 million and $4.7 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.
The Company purchased equipment with total gross book value of $4.9 million under capital lease agreements, of which $0.7 million and $0.9 million was purchased during 2022 and 2021, 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 $1.6 million and $1.1 million as of December 31, 2022 and 2021, respectively.
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

December 31, 2022
Operating leases
Assets
Operating lease right-of-use assets $ 25,149 
Liabilities
Operating lease liabilities, current $ 3,710 
Operating lease liabilities, non-current 23,613 
Total operating lease liabilities $ 27,323 
Finance leases
Assets
Financing lease right-of-use assets $ 4,903 
Accumulated amortization (1,638)
Financing lease right-of-use assets, net $ 3,265 
Liabilities
Finance lease liabilities, current $ 522 
Finance lease liabilities, non-current 821 
Total finance lease liabilities $ 1,343 

December 31, 2022
Weighted-average remaining lease term (years)
Operating leases 7.7 years
Finance leases 3.0 years
Weighted-average discount rate
Operating leases 5.6  %
Finance leases 6.9  %
Maturities of lease liabilities as of December 31, 2022 were as follows:
December 31, 2022
Operating Leases Finance Leases
2023 $ 5,028  $ 542 
2024 4,840  473 
2025 4,774  173 
2026 4,714  155 
2027 4,675  50 
2028 and thereafter 10,759  — 
Total undiscounted lease payments $ 34,790  $ 1,393 
Less: imputed interest (7,467) (50)
Total lease liabilities $ 27,323  $ 1,343 
Lease Costs
The table below presents certain information related to the lease costs for the year ended December 31, 2022:
Year Ended December 31,
2022
Operating lease cost $ 5,640 
Finance Leases
Amortization of right-of-use assets 537 
Interest on lease liabilities 66 
Other Lease Costs
Short-term lease cost 1,402 
Variable lease cost(1)
1,235 
Total lease cost $ 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,
2022
Cash paid for amounts included in the measurement of lease liabilities
   Operating cash flows from operating leases $ (5,427)
   Operating cash flows from finance leases $ (66)
   Finance cash flows from finance leases $ (777)
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities $ 29,202 
Finance lease liabilities $ 694 
Prior to the adoption of ASC 842, future minimum payments for noncancellable operating and finance leases as of December 31, 2021 under ASC 840 were as follows:
December 31, 2021
Operating Leases Finance Leases
2022 $ 5,543  $ 771 
2023 4,315  248 
2024 3,517  183 
2025 718  110 
2026 654  98 
2027 and thereafter 3,136  33 
Total minimum future lease payments, operating leases $ 17,883  $ 1,443 
Less current portion (771)
Noncurrent portion $ 672