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Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases

8. LEASES

The Company enters into leases for real estate and equipment. Real estate leases are for our corporate office space and laboratories around the world. Real estate leases have remaining lease terms of less than one year to 20 years. Many of the Company’s leases include options to extend the leases on a month to month basis or for set periods for up to 20 years. Many leases also include options to terminate the leases within one year or per other contractual terms.

The components of lease expense were as follows (in thousands):

 

 

Year Ended

 

 

December 31, 2019

 

Operating lease cost

$

13,151

 

Variable lease cost

 

2,813

 

 

Supplemental cash flow information related to the leases was as follows (in thousands):

 

 

Year Ended

 

 

December 31, 2019

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

Operating cash flows from operating leases

$

9,773

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

Operating leases

 

10,294

 

 

Supplemental balance sheet information related to the leases was as follows (in thousands):

 

 

As of

 

 

December 31, 2019

 

Operating lease right-of-use assets

$

52,152

 

 

 

 

 

Other current liabilities

$

10,977

 

Operating lease liabilities

 

45,212

 

Total operating lease liabilities

$

56,189

 

 

 

 

 

Weighted Average Remaining Lease Term (years)

 

 

 

Operating leases

 

6.3

 

Weighted Average Discount Rate

 

 

 

Operating leases

 

6.0

%

 

Lease payments due related to lease liabilities as of December 31, 2019 were as follows (in thousands):

 

 

Related Party

 

 

Non-Related Parties

 

 

Total

 

 

Operating Leases

 

 

Operating Leases

 

 

Operating Leases

 

2020

$

5,600

 

 

$

7,644

 

 

$

13,244

 

2021

 

5,600

 

 

 

7,435

 

 

 

13,035

 

2022

 

5,267

 

 

 

4,664

 

 

 

9,931

 

2023

 

3,613

 

 

 

3,916

 

 

 

7,529

 

2024

 

3,613

 

 

 

2,875

 

 

 

6,488

 

Later years

 

9,665

 

 

 

8,644

 

 

 

18,309

 

Total lease payments

 

33,358

 

 

 

35,178

 

 

 

68,536

 

Less: imputed interest

 

(6,162

)

 

 

(6,185

)

 

 

(12,347

)

Total

$

27,196

 

 

$

28,993

 

 

$

56,189

 

 

As of December 31, 2019, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $133.0 million. This includes a lease related to a corporate office under construction in Cincinnati, Ohio, which has not yet commenced, with future payments of $124.0 million. This lease will commence in fiscal year 2020 with an initial lease term of 20 years and a renewal option for two 10-year terms at prevailing market rates.

 

Comparative period disclosures under ASC 840:

 

Rental expense under operating leases totaled $9.2 million and $7.9 million for the years ended December 31, 2018 and 2017, respectively, and is allocated between Total direct costs, and Selling, general and administrative in the consolidated statements of operations.

 

Future minimum rental payments for lease obligations with initial terms in excess of one year as of December 31, 2018 are as follows (in thousands):

 

 

 

 

 

 

 

Non-Related

 

 

Total

 

 

 

Related Party

 

 

Parties Operating

 

 

Operating

 

 

 

Operating Leases

 

 

Leases

 

 

Leases

 

2019

 

$

1,987

 

 

$

6,186

 

 

$

8,173

 

2020

 

 

6,843

 

 

 

6,617

 

 

 

13,460

 

2021

 

 

6,964

 

 

 

5,873

 

 

 

12,837

 

2022

 

 

6,757

 

 

 

3,694

 

 

 

10,451

 

2023

 

 

5,229

 

 

 

3,257

 

 

 

8,486

 

Thereafter

 

 

103,870

 

 

 

5,752

 

 

 

109,622

 

Total minimum lease payments

 

$

131,650

 

 

$

31,379

 

 

$

163,029

 

 

Minimum annual payments required in conjunction with the Deemed landlord liabilities as of December 31, 2018 are as follows (in thousands):

 

 

 

Related Party

 

 

 

 

 

 

Total

 

 

 

Minimum Lease

 

 

Less:

 

 

Principal

 

 

 

Payments

 

 

Interest

 

 

Amounts Due

 

2019

 

$

3,918

 

 

$

1,818

 

 

$

2,100

 

2020

 

 

3,988

 

 

 

1,662

 

 

 

2,326

 

2021

 

 

4,039

 

 

 

1,490

 

 

 

2,549

 

2022

 

 

4,092

 

 

 

1,301

 

 

 

2,791

 

2023

 

 

4,145

 

 

 

1,095

 

 

 

3,050

 

Thereafter

 

 

15,697

 

 

 

1,929

 

 

 

13,768

 

Total

 

$

35,879

 

 

$

9,295

 

 

$

26,584