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Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases Leases
The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CMOS to manufacture COVID-19 Vaccine, as well as operating and finance leases for its research and development and manufacturing facilities, corporate headquarters and offices. During the year ended December 31, 2023, the Company continued to align its global manufacturing footprint as a result of its ongoing assessment of manufacturing needs consistent with its contractual obligations related to the supply, and anticipated demand for, its COVID-19 Vaccine.
During the years ended December 31, 2023 and 2022, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications. During the year ended December 31, 2023 and 2022, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, and a corresponding lease liability of $6.8 million and $18.6 million, respectively, for its long-term finance and operating leases embedded in CMO and CDMO manufacturing supply agreements. Also, during the year ended December 31, 2023, the Company recorded an impairment charge of $6.1 million in Cost of sales related to an embedded lease agreement with a CMO for production capacity in excess of production needs.
During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO"). The lease is for approximately 170,000 square feet of space that the Company is using for manufacturing, research and development, and offices. The term of the lease expires in 2035 with options to extend the lease. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $73.2 million as lease commencement for accounting purposes occurred in 2022. During the year ended December 31, 2023, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, the remaining floors located at the premises and recognized a ROU asset and related lease obligation of $96.5 million as the lease commencement dates for accounting purposes had occurred for such remaining floors. The lease obligation was reduced by $73.4 million for prepaid rent and prior costs incurred on behalf of the landlord during 2023.
As of December 31, 2023, facility leases, including the 700QO lease, have expirations that range from approximately two to thirteen years, some of which include options to extend the lease term. The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs.
During the year ended December 31, 2023, the Company recorded an impairment charge of $5.9 million related to ROU facility leases used for research and development, manufacturing and offices space that are impacted by the Restructuring Plan (see Note 17).
Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
December 31,
Lease Assets and LiabilitiesClassification20232022
Assets:
ROU assets, operating, netRight of use asset, net$24,985$36,384
ROU assets, finance, netRight of use asset, net160,23369,857
Total non-current ROU assets$185,218$106,241
Liabilities:
Current portion of operating lease liabilitiesOther current liabilities$22,977$16,867
Current portion of finance lease liabilitiesCurrent portion of finance lease liabilities5,14227,196
Total current lease liabilities$28,119$44,063
Non-current portion of operating lease liabilitiesOther non-current liabilities $28,577$50,085
Non-current portion of finance lease liabilitiesNon-current finance lease liabilities55,92331,238
Total non-current lease liabilities$84,500$81,323
Weighted-average remaining lease term (years):
Operating leases3.94.6
Finance leases11.68.3
Weighted-average discount rate:
Operating leases6.0%6.4%
Finance leases8.9%5.4%
Lease expense for the operating and short-term leases for the years ended December 31, 2023, 2022, and 2021 was as follows (in thousands):
Year Ended December 31,
202320222021
Operating lease expense$6,929 $6,903 $37,027 
Short-term lease expense (benefit(1))
(48,009)94,726 468,210 
Variable lease expense10,292 6,836 116,435 
Finance lease expense:
ROU assets expensed$12,876 $7,759 $112,528 
Interest expense2,605 1,472 7,241 
Total finance lease expense$15,481 $9,231 $119,769 
(1)    During the year ended December 31, 2023, the Company recognized a short-term lease benefit of $48.0 million due to gains on the settlement of manufacturing supply agreements with CMOs and CDMOs that included embedded leases.
Supplemental cash flow information related to leases for the year ended December 31, 2023, 2022, and 2021 was as follows (in thousands):
Year Ended December 31,
202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases$101,297 $190,158 $203,991 
Operating cash flows used in finance leases2,605 1,472 7,241 
Financing cash flows used in finance leases27,345 93,595 127,907 
ROU assets obtained in exchange for operating lease obligations$— $30,675 $66,682 
ROU assets obtained in exchange for finance lease obligations103,299 73,240 112,528 
As of December 31, 2023, maturities of lease liabilities were as follows (in thousands):
YearAmount
2024$34,353 
202517,192 
202613,616 
202714,000 
202814,375 
Thereafter67,296 
Total minimum lease payments160,832 
Less: imputed interest48,213 
Total lease liabilities$112,619 
Leases Leases
The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CMOS to manufacture COVID-19 Vaccine, as well as operating and finance leases for its research and development and manufacturing facilities, corporate headquarters and offices. During the year ended December 31, 2023, the Company continued to align its global manufacturing footprint as a result of its ongoing assessment of manufacturing needs consistent with its contractual obligations related to the supply, and anticipated demand for, its COVID-19 Vaccine.
During the years ended December 31, 2023 and 2022, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications. During the year ended December 31, 2023 and 2022, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, and a corresponding lease liability of $6.8 million and $18.6 million, respectively, for its long-term finance and operating leases embedded in CMO and CDMO manufacturing supply agreements. Also, during the year ended December 31, 2023, the Company recorded an impairment charge of $6.1 million in Cost of sales related to an embedded lease agreement with a CMO for production capacity in excess of production needs.
During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO"). The lease is for approximately 170,000 square feet of space that the Company is using for manufacturing, research and development, and offices. The term of the lease expires in 2035 with options to extend the lease. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $73.2 million as lease commencement for accounting purposes occurred in 2022. During the year ended December 31, 2023, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, the remaining floors located at the premises and recognized a ROU asset and related lease obligation of $96.5 million as the lease commencement dates for accounting purposes had occurred for such remaining floors. The lease obligation was reduced by $73.4 million for prepaid rent and prior costs incurred on behalf of the landlord during 2023.
As of December 31, 2023, facility leases, including the 700QO lease, have expirations that range from approximately two to thirteen years, some of which include options to extend the lease term. The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs.
During the year ended December 31, 2023, the Company recorded an impairment charge of $5.9 million related to ROU facility leases used for research and development, manufacturing and offices space that are impacted by the Restructuring Plan (see Note 17).
Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
December 31,
Lease Assets and LiabilitiesClassification20232022
Assets:
ROU assets, operating, netRight of use asset, net$24,985$36,384
ROU assets, finance, netRight of use asset, net160,23369,857
Total non-current ROU assets$185,218$106,241
Liabilities:
Current portion of operating lease liabilitiesOther current liabilities$22,977$16,867
Current portion of finance lease liabilitiesCurrent portion of finance lease liabilities5,14227,196
Total current lease liabilities$28,119$44,063
Non-current portion of operating lease liabilitiesOther non-current liabilities $28,577$50,085
Non-current portion of finance lease liabilitiesNon-current finance lease liabilities55,92331,238
Total non-current lease liabilities$84,500$81,323
Weighted-average remaining lease term (years):
Operating leases3.94.6
Finance leases11.68.3
Weighted-average discount rate:
Operating leases6.0%6.4%
Finance leases8.9%5.4%
Lease expense for the operating and short-term leases for the years ended December 31, 2023, 2022, and 2021 was as follows (in thousands):
Year Ended December 31,
202320222021
Operating lease expense$6,929 $6,903 $37,027 
Short-term lease expense (benefit(1))
(48,009)94,726 468,210 
Variable lease expense10,292 6,836 116,435 
Finance lease expense:
ROU assets expensed$12,876 $7,759 $112,528 
Interest expense2,605 1,472 7,241 
Total finance lease expense$15,481 $9,231 $119,769 
(1)    During the year ended December 31, 2023, the Company recognized a short-term lease benefit of $48.0 million due to gains on the settlement of manufacturing supply agreements with CMOs and CDMOs that included embedded leases.
Supplemental cash flow information related to leases for the year ended December 31, 2023, 2022, and 2021 was as follows (in thousands):
Year Ended December 31,
202320222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases$101,297 $190,158 $203,991 
Operating cash flows used in finance leases2,605 1,472 7,241 
Financing cash flows used in finance leases27,345 93,595 127,907 
ROU assets obtained in exchange for operating lease obligations$— $30,675 $66,682 
ROU assets obtained in exchange for finance lease obligations103,299 73,240 112,528 
As of December 31, 2023, maturities of lease liabilities were as follows (in thousands):
YearAmount
2024$34,353 
202517,192 
202613,616 
202714,000 
202814,375 
Thereafter67,296 
Total minimum lease payments160,832 
Less: imputed interest48,213 
Total lease liabilities$112,619