XML 28 R16.htm IDEA: XBRL DOCUMENT

Property and Equipment, net

12 Months Ended

Dec. 31, 2021

Property and Equipment, net

Property and Equipment, net

Note 7. Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


		December 31,
		2021			2020
Office equipment		$	22,554		$	17,880
Laboratory equipment			105,040			86,021
Computer equipment			79,871			66,640
Land			10,494			10,671
Building and leasehold improvements			434,321			238,042
Operating lease right-of-use assets			27,308			26,816
Construction in progress			220,052			257,929
			899,640			703,999
Less accumulated depreciation and amortization			(175,720)			(144,374)
Property and equipment, net		$	723,920		$	559,625

Depreciation expense, including amortization expense of leasehold improvements, was $36.3 million, $29.6 million and $32.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

In March 2017, we acquired additional adjacent buildings to our global headquarters in Wilmington, Delaware and in 2019, began demolition of these buildings and construction of a new laboratory and office building totaling approximately 200,000 square feet. The certificate of occupancy was received in December 2021 and we capitalized approximately $158.2 million in building and office equipment that was previously included in construction in progress as of December 31, 2021.

In February 2018, we signed an agreement to rent a building in Morges, Switzerland for an initial term of 15 years plus one year of free rent, with multiple options to extend for an additional 20 years. The building serves as our new European headquarters and consists of approximately 100,000 square feet of office space. This building allowed for consolidation of our European operations that were located in Geneva and Lausanne, Switzerland. In June 2019, we obtained control of the Morges building to begin our construction activity, which was completed in 2020. At that time, we determined the lease to be a finance lease and recorded a lease liability of $31.1 million and a finance lease right-of-use asset of $29.1 million, net of a lease incentive from our landlord of $2.0 million. We have capitalized approximately $19.5 million in leasehold improvements as of December 31, 2021 relating to Morges.

In July 2018, we signed an agreement to purchase land located in Yverdon, Switzerland. The land was purchased, in cash, for approximately $4.8 million. Upon this parcel, we are constructing a large molecule production facility. Construction activity commenced in July 2018, and as of December 31, 2021, we have capitalized approximately $197.4 million in costs for construction, ground preparation and architectural and engineering studies. We currently expect the facility will be operational in the second half of 2022.

We are the lessee of several contracts, including those to secure fleet vehicles, buildings and equipment. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. Some of our building leases include options to renew and the exercise of these options is at our discretion.

Our current operating lease liabilities are reflected in accrued and other current liabilities and our noncurrent operating lease liabilities are reflected in other liabilities on the consolidated balance sheets and are as follows (in thousands):


		December 31,
		2021			2020
Current
Operating lease liabilities		$	10,554		$	12,674
Finance lease liabilities			2,635			2,284
Noncurrent
Operating lease liabilities			15,608			14,188
Finance lease liabilities			31,632			32,573
Total lease liabilities		$	60,429		$	61,719

The maturity of our lease liabilities are as follows (in thousands):


		Operating			Finance
2022		$	11,887		$	4,020
2023			8,664			3,908
2024			4,599			3,291
2025			1,418			3,020
2026			953			2,828
After 2026			5,814			26,492
Total lease cash payments		$	33,335		$	43,559
Less: discount			7,173			9,292
Present value of lease liabilities		$	26,162		$	34,267

The cash paid for amounts included in the measurement of our operating lease liabilities for the years ended December 31, 2021 and 2020 was $14.3 million and $12.1 million, respectively, in operating cash flows. The cash paid for amounts included in the measurement of our finance lease liabilities for the years ended December 31, 2021 and 2020 was $2.4 million and $0.8 million, respectively, in financing cash flows.

As of December 31, 2021, our finance and operating leases had a weighted average lease term of approximately 13.4 and 4.9 years, respectively. The discount rate of our leases is an approximation of an estimated incremental borrowing rate and is dependent upon the term and economics of each agreement. The weighted average discount rate of our finance and operating leases is approximately 4.1% and 4.8%, respectively. As of December 31, 2020, our finance and operating leases had a weighted average lease term of approximately 14.2 and 4.7 years, respectively. The weighted average discount rate of our finance and operating leases is approximately 3.7% and 4.7%, respectively.

For the year ended December 31, 2021, we incurred approximately $14.2 million of expense related to our operating leases, approximately $2.7 million of amortization on our finance lease right-of-use assets and approximately $1.3 million of interest expense on our finance lease liabilities. For the year ended December 31, 2020, we incurred approximately $12.5 million of expense related to our operating leases, approximately $2.6 million of amortization on our finance lease right-of-use assets and approximately $1.2 million of interest expense on our finance lease liabilities. For the years ended December 31, 2021 and 2020, the cost of our short term leases with a term less than 12 months was approximately $0.8 million and $1.9 million, respectively.