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LEASES | 12 Months Ended
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Dec. 31, 2023
Leases [Abstract] |
LEASES | LEASES The Company leases certain office spaces and research and development laboratory facilities, vehicles, and office equipment with remaining lease terms ranging from approximately one to fifteen years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options, which allows the Company to, at its election, renew or extend the lease for a fixed period of time. These optional periods have not been considered in the determination of the ROU assets or lease liabilities associated with these leases as the Company did not consider it reasonably certain it would exercise the options. Due to the increase in remote and hybrid work and the Company's need to ensure its facilities are designed to handle future growth, the Company has been executing on a multi-year strategy to reset its real estate footprint. As part of that strategy, in the first quarter of 2022, the Company entered into a non-cancelable operating lease for approximately 234,000 square feet in west Salt Lake City, Utah. The Company took possession of this leased facility in phases, beginning in the three months ended June 30, 2022. During the twelve months ended December 31, 2023, the Company took possession of the remaining phases of the west Salt Lake City facility and recognized $5.9 million of ROU asset and corresponding lease liability, net of tenant improvement allowance not yet received. The lease has a term of 15 years and total future rent payments under the lease are approximately $79.6 million. Also during the twelve months ended December 31, 2023, the Company assigned the lease for its previous corporate headquarters to a third party and transitioned its headquarters to the west Salt Lake City facility. As a result of the lease assignment, the operating lease ROU asset and operating lease liability associated with the previous headquarters of $33.3 million and $39.6 million, respectively, were removed from the Company's Consolidated Balance Sheets. In connection with the assignment of the lease, the Company recorded an accrual of $8.5 million for future payments under the lease assignment agreement, which is included in Accrued liabilities and Other long-term liabilities in the Company's Consolidated Balance Sheets as of December 31, 2023. The total net loss recognized associated with the assignment of the lease agreement was $7.7 million, which is included in Selling, general, and administrative expense in the Company's Consolidated Statements of Operations. In addition, the Company modified the remaining lease term of certain other Salt Lake City facilities reducing the associated ROU asset and lease liability by $6.4 million. In connection with the Company's multi-year real-estate strategy, the Company also entered into a non-cancelable operating lease for approximately 63,000 square feet in South San Francisco, California with a term of 10 years, which commenced in the second half of fiscal year 2023. The Company took possession of the lease during fiscal year 2022 and recognized the related ROU asset and lease liability, net of tenant improvement allowance not yet received, of $30.7 million. Total future rent payments under the lease are approximately $56.7 million. The Company plans to transition all of the operations from the current South San Francisco facility, which has approximately 49,000 square feet of laboratory space utilized to perform testing for the Women's Health business, to the new South San Francisco facility. During the twelve months ended December 31, 2022, the Company ceased the use of certain of its leased Salt Lake City facilities and one of its South San Francisco facilities. As a result, the Company recorded an impairment charge on ROU assets of $13.0 million and an impairment charge of $3.9 million on the related property, plant and equipment, which consisted primarily of leasehold improvements. The total $16.9 million impairment is included in Goodwill and long-lived asset impairment charges in the Consolidated Statement of Operations. The Company performed evaluations of its contracts and determined the majority of its identified leases are operating leases. For the year ended December 31, 2023, the Company incurred $25.9 million in operating lease costs which are included in operating expenses in the Consolidated Statements of Operations in relation to these operating leases. Of such lease costs, $3.5 million was variable lease expense, which was not included in the measurement of the Company's operating ROU assets and lease liabilities. The variable rent expense is comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company's election to not separate lease and non-lease components. For the year ended December 31, 2022, the Company incurred $22.1 million in lease costs which are included in operating expenses in the Consolidated Statements of Operations in relation to these operating leases. Of such lease costs, $3.2 million was variable lease expense, which was not included in the measurement of the Company's operating ROU assets and lease liabilities. The Company's finance leases are immaterial. As of December 31, 2023, the maturities of the Company’s operating lease liabilities were as follows (in millions):
Year Ended: |
2024 | $ | 22.5 |
2025 | 17.9 |
2026 | 11.6 |
2027 | 11.7 |
2028 | 11.8 |
Thereafter | 85.7 |
Total future lease payments | 161.2 |
Less: amounts representing interest | (47.6) |
Present value of future lease payments | 113.6 |
Less: current maturities of operating lease liabilities | (16.2) |
Noncurrent operating lease liabilities | $ | 97.4 |
As of December 31, 2023, the weighted average remaining lease term is 9.4 years and the weighted average discount rate used to determine the operating lease liability was 6.34%. As the implicit rate in the Company's leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. When calculating the Company’s incremental borrowing rates, the Company gives consideration to its credit risk, term of the lease, total lease payments and adjusts for the impacts of collateral, as necessary. The lease term used may reflect any option to extend or terminate the lease when it is reasonably certain the Company will exercise such options. Lease expenses for the Company's operating leases are recognized on a straight-line basis over the lease term.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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