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LEASES | 12 Months Ended
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Dec. 31, 2019
Leases [Abstract] |
LEASES | LEASES The Company has operating and finance leases for corporate offices, research and development facilities, and certain equipment. Operating leases are reported separately in the Company's consolidated balance sheet at December 31, 2019. Assets acquired under finance leases are included in Property and equipment, net, in the consolidated balance sheets at December 31, 2019 and 2018. The Company determines if an arrangement is a lease at inception. A contract is determined to contain a lease component if the arrangement provides the Company with a right to control the use of an identified asset. Lease agreements may include lease and non-lease components. In such instances for all classes of underlying assets, the Company does not separate lease and non-lease components but rather, accounts for the entire arrangement under leasing guidance. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Right-of-use assets and lease liabilities are initially measured based on the present value of the future minimum fixed lease payments (i.e., fixed payments in the lease contract) over the lease term at the commencement date. As the Company's existing leases do not have a readily determinable implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future minimum fixed lease payments. The Company calculates its incremental borrowing rate to reflect the interest rate that it would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term and considers its historical borrowing activities and market data from entities with comparable credit ratings in this determination. The measurement of the right-of-use asset also includes any lease payments made prior to the commencement date (excluding any lease incentives) and initial direct costs incurred. The Company assessed its right-of-use assets for impairment as of December 31, 2019 and determined no impairment has occurred. Lease terms may include options to extend or terminate the lease and the Company incorporates such options in the lease term when it has the unilateral right to make such an election and it is reasonably certain that the Company will exercise that option. In making this determination, the Company considers its prior renewal and termination history and planned usage of the assets under lease, incorporating expected market conditions. For operating leases, lease expense for minimum fixed lease payments is recognized on a straight-line basis over the lease term. The expense for finance leases includes both interest and amortization expense components, with the interest component calculated based on the effective interest method and the amortization component calculated based on straight-line amortization of the right-of-use asset over the lease term. Lease contracts may contain variable lease costs, such as common area maintenance, utilities and tax reimbursements that vary over the term of the contract. Variable lease costs are not included in minimum fixed lease payments and as a result, are excluded from the measurement of the right-of-use assets and lease liabilities. The Company expenses all variable lease costs as incurred. In connection with the 2019 Restructuring Initiative, certain lease assets related to facilities will be partially or fully vacated as the Company consolidates its facilities. The Company has no plans to enter into sublease agreements for certain facilities. The Company ceased use of these facilities in the third quarter of 2019. Accordingly, the Company accelerated the amortization of the associated lease assets through the planned cease-use date of each facility, resulting in additional amortization expense of $3.7 million in the year ended December 31, 2019. The Company also recorded a liability of $0.9 million in 2019 for all future anticipated variable lease costs related to these facilities. This incremental accelerated amortization and estimated future variable lease costs are included in Restructuring and related expense in the Company's consolidated statements of operations for the year ended December 31, 2019. The Company may incur additional future expense if it is unable to sublease other locations included in the Facilities Initiative. The Company leases its corporate offices and other facilities under operating leases, which expire at various times through 2029. The Company's corporate headquarters is located in a leased facility in Westford, Massachusetts under a lease that expires in August 2028. The Company's finance leases primarily consist of equipment. At December 31, 2019, the Company had 107,800 square feet of building space in North Dallas, Texas under construction as part of its 2019 Restructuring and Facilities Consolidation Initiative. The Company's leased Plano, Texas facility will be vacated upon completion of the construction of the North Dallas, Texas site. At that time, employees will relocate to the new site as part of the 2019 Restructuring Initiative. The construction of the new North Dallas, Texas site is expected to be completed in 2020. The Company's right-of-use lease assets and lease liabilities at December 31, 2019 and December 31, 2018 were as follows (in thousands):
| December 31, 2019 |  | December 31, 2018
Assets |  |  |
Operating lease assets | $ | 36,654 |  |  | $ | — |
Finance lease assets* | 2,420 |  |  | 2,104 |
Total leased assets | $ | 39,074 |  |  | $ | 2,104 |
Liabilities |  |  |
Current |  |  |
Operating | $ | 7,719 |  |  | $ | — |
Finance | 1,005 |  |  | 1,039 |
Noncurrent |  |  |
Operating | 37,202 |  |  | — |
Finance | 2,144 |  |  | 1,324 |
Total lease liabilities | $ | 48,070 |  |  | $ | 2,363 |
* Finance lease assets were recorded net of accumulated depreciation of $2.0 million and $0.9 million at December 31, 2019 and December 31, 2018, respectively, and were reported as capital lease assets prior to the Company's adoption of ASC 842. The components of lease expense for the year ended December 31, 2019 were as follows (in thousands):
Operating lease cost* | $ | 13,865 |
Finance lease cost |
Amortization of leased assets | 1,106 |
Interest on lease liabilities | 265 |
Short-term lease cost | 19,460 |
Variable lease costs (costs excluded from minimum fixed lease payments)** | 3,264 |
Sublease income | (374 | )
Net lease cost | $ | 37,586 |
* Operating lease cost for the year ended December 31, 2019 includes $3.7 million of accelerated amortization for certain assets partially or fully vacated in 2019 with no intent or ability to sublease. ** Variable lease costs for the year ended December 31, 2019 include a $0.9 million accrual for all future estimated variable expenses related to certain assets partially or fully vacated in 2019 with no intent or ability to sublease. The Company elected to use the alternative transition method, which allows entities to initially apply ASC 842 at the adoption date with no subsequent adjustments to prior period lease costs for comparability. As a result, operating leases in periods prior to the Company's adoption of ASC 842 were not recorded on the consolidated balance sheet. Prior to the adoption of ASC 842, rent expense (including any escalation clauses, free rent and other lease concessions) on operating leases was recognized on a straight-line basis over the minimum lease term, and this remains consistent with the Company's application of ASC 842. Rent expense was $11.9 million and $5.9 million for the years ended December 31, 2018 and 2017, respectively. Interest expense for finance leases was approximately $52,000 and $14,000 for the years ended December 31, 2018 and 2017, respectively. Amortization expense for finance leases was $0.6 million and $0.1 million for the years ended December 31, 2018 and 2017, respectively. Other information related to the Company's leases as of and for the year ended December 31, 2019 was as follows (in thousands, except lease terms and percentages):
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows from operating leases | $ | 10,559 |
Operating cash flows from finance leases | $ | 265 |
Financing cash flows from finance leases | $ | 913 |
Weighted average remaining lease term (years): |
Operating leases | 6.73 |
Finance leases | 2.35 |
Weighted average discount rate: |
Operating leases | 6.50 | %
Finance leases | 7.54 | %
Future minimum fixed lease payments under noncancelable leases at December 31, 2019 were as follows (in thousands):
| Operating |  | Finance
| leases |  | leases
2020 | $ | 10,290 |  |  | $ | 1,644 |
2021 | 9,468 |  |  | 1,159 |
2022 | 7,665 |  |  | 581 |
2023 | 7,067 |  |  | — |
2024 | 5,303 |  |  | — |
2025 and beyond | 15,738 |  |  | — |
Total lease payments | 55,531 |  |  | 3,384 |
Less: interest | (10,610 | ) |  | (235 | )
Present value of lease liabilities | $ | 44,921 |  |  | $ | 3,149 |
Future minimum fixed lease payments under noncancelable leases at December 31, 2018 were as follows (in thousands):
| Operating |  | Finance
| leases* |  | leases
2019 | $ | 10,705 |  |  | $ | 1,386 |
2020 | 8,384 |  |  | 1,010 |
2021 | 7,455 |  |  | 288 |
2022 | 5,691 |  |  | — |
2023 | 5,430 |  |  | — |
2024 and beyond | 19,818 |  |  | — |
Total lease payments | $ | 57,483 |  |  | 2,684 |
Less: interest |  |  | (321 | )
Present value of lease liabilities** |  |  | $ | 2,363 |
* The amounts in this column include restructuring payments aggregating approximately $1 million, of which approximately 50% was due in less than one year and the remainder was due in one to three years. These amounts exclude current estimated sublease income aggregating approximately $125,000 over the remaining lease terms for restructured facilities. ** Prior to the Company's adoption of ASC 842 on January 1, 2019, operating leases were not recorded on the consolidated balance sheet and no interest component was calculated.
LEASES | LEASES The Company has operating and finance leases for corporate offices, research and development facilities, and certain equipment. Operating leases are reported separately in the Company's consolidated balance sheet at December 31, 2019. Assets acquired under finance leases are included in Property and equipment, net, in the consolidated balance sheets at December 31, 2019 and 2018. The Company determines if an arrangement is a lease at inception. A contract is determined to contain a lease component if the arrangement provides the Company with a right to control the use of an identified asset. Lease agreements may include lease and non-lease components. In such instances for all classes of underlying assets, the Company does not separate lease and non-lease components but rather, accounts for the entire arrangement under leasing guidance. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Right-of-use assets and lease liabilities are initially measured based on the present value of the future minimum fixed lease payments (i.e., fixed payments in the lease contract) over the lease term at the commencement date. As the Company's existing leases do not have a readily determinable implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future minimum fixed lease payments. The Company calculates its incremental borrowing rate to reflect the interest rate that it would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term and considers its historical borrowing activities and market data from entities with comparable credit ratings in this determination. The measurement of the right-of-use asset also includes any lease payments made prior to the commencement date (excluding any lease incentives) and initial direct costs incurred. The Company assessed its right-of-use assets for impairment as of December 31, 2019 and determined no impairment has occurred. Lease terms may include options to extend or terminate the lease and the Company incorporates such options in the lease term when it has the unilateral right to make such an election and it is reasonably certain that the Company will exercise that option. In making this determination, the Company considers its prior renewal and termination history and planned usage of the assets under lease, incorporating expected market conditions. For operating leases, lease expense for minimum fixed lease payments is recognized on a straight-line basis over the lease term. The expense for finance leases includes both interest and amortization expense components, with the interest component calculated based on the effective interest method and the amortization component calculated based on straight-line amortization of the right-of-use asset over the lease term. Lease contracts may contain variable lease costs, such as common area maintenance, utilities and tax reimbursements that vary over the term of the contract. Variable lease costs are not included in minimum fixed lease payments and as a result, are excluded from the measurement of the right-of-use assets and lease liabilities. The Company expenses all variable lease costs as incurred. In connection with the 2019 Restructuring Initiative, certain lease assets related to facilities will be partially or fully vacated as the Company consolidates its facilities. The Company has no plans to enter into sublease agreements for certain facilities. The Company ceased use of these facilities in the third quarter of 2019. Accordingly, the Company accelerated the amortization of the associated lease assets through the planned cease-use date of each facility, resulting in additional amortization expense of $3.7 million in the year ended December 31, 2019. The Company also recorded a liability of $0.9 million in 2019 for all future anticipated variable lease costs related to these facilities. This incremental accelerated amortization and estimated future variable lease costs are included in Restructuring and related expense in the Company's consolidated statements of operations for the year ended December 31, 2019. The Company may incur additional future expense if it is unable to sublease other locations included in the Facilities Initiative. The Company leases its corporate offices and other facilities under operating leases, which expire at various times through 2029. The Company's corporate headquarters is located in a leased facility in Westford, Massachusetts under a lease that expires in August 2028. The Company's finance leases primarily consist of equipment. At December 31, 2019, the Company had 107,800 square feet of building space in North Dallas, Texas under construction as part of its 2019 Restructuring and Facilities Consolidation Initiative. The Company's leased Plano, Texas facility will be vacated upon completion of the construction of the North Dallas, Texas site. At that time, employees will relocate to the new site as part of the 2019 Restructuring Initiative. The construction of the new North Dallas, Texas site is expected to be completed in 2020. The Company's right-of-use lease assets and lease liabilities at December 31, 2019 and December 31, 2018 were as follows (in thousands):
| December 31, 2019 |  | December 31, 2018
Assets |  |  |
Operating lease assets | $ | 36,654 |  |  | $ | — |
Finance lease assets* | 2,420 |  |  | 2,104 |
Total leased assets | $ | 39,074 |  |  | $ | 2,104 |
Liabilities |  |  |
Current |  |  |
Operating | $ | 7,719 |  |  | $ | — |
Finance | 1,005 |  |  | 1,039 |
Noncurrent |  |  |
Operating | 37,202 |  |  | — |
Finance | 2,144 |  |  | 1,324 |
Total lease liabilities | $ | 48,070 |  |  | $ | 2,363 |
* Finance lease assets were recorded net of accumulated depreciation of $2.0 million and $0.9 million at December 31, 2019 and December 31, 2018, respectively, and were reported as capital lease assets prior to the Company's adoption of ASC 842. The components of lease expense for the year ended December 31, 2019 were as follows (in thousands):
Operating lease cost* | $ | 13,865 |
Finance lease cost |
Amortization of leased assets | 1,106 |
Interest on lease liabilities | 265 |
Short-term lease cost | 19,460 |
Variable lease costs (costs excluded from minimum fixed lease payments)** | 3,264 |
Sublease income | (374 | )
Net lease cost | $ | 37,586 |
* Operating lease cost for the year ended December 31, 2019 includes $3.7 million of accelerated amortization for certain assets partially or fully vacated in 2019 with no intent or ability to sublease. ** Variable lease costs for the year ended December 31, 2019 include a $0.9 million accrual for all future estimated variable expenses related to certain assets partially or fully vacated in 2019 with no intent or ability to sublease. The Company elected to use the alternative transition method, which allows entities to initially apply ASC 842 at the adoption date with no subsequent adjustments to prior period lease costs for comparability. As a result, operating leases in periods prior to the Company's adoption of ASC 842 were not recorded on the consolidated balance sheet. Prior to the adoption of ASC 842, rent expense (including any escalation clauses, free rent and other lease concessions) on operating leases was recognized on a straight-line basis over the minimum lease term, and this remains consistent with the Company's application of ASC 842. Rent expense was $11.9 million and $5.9 million for the years ended December 31, 2018 and 2017, respectively. Interest expense for finance leases was approximately $52,000 and $14,000 for the years ended December 31, 2018 and 2017, respectively. Amortization expense for finance leases was $0.6 million and $0.1 million for the years ended December 31, 2018 and 2017, respectively. Other information related to the Company's leases as of and for the year ended December 31, 2019 was as follows (in thousands, except lease terms and percentages):
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows from operating leases | $ | 10,559 |
Operating cash flows from finance leases | $ | 265 |
Financing cash flows from finance leases | $ | 913 |
Weighted average remaining lease term (years): |
Operating leases | 6.73 |
Finance leases | 2.35 |
Weighted average discount rate: |
Operating leases | 6.50 | %
Finance leases | 7.54 | %
Future minimum fixed lease payments under noncancelable leases at December 31, 2019 were as follows (in thousands):
| Operating |  | Finance
| leases |  | leases
2020 | $ | 10,290 |  |  | $ | 1,644 |
2021 | 9,468 |  |  | 1,159 |
2022 | 7,665 |  |  | 581 |
2023 | 7,067 |  |  | — |
2024 | 5,303 |  |  | — |
2025 and beyond | 15,738 |  |  | — |
Total lease payments | 55,531 |  |  | 3,384 |
Less: interest | (10,610 | ) |  | (235 | )
Present value of lease liabilities | $ | 44,921 |  |  | $ | 3,149 |
Future minimum fixed lease payments under noncancelable leases at December 31, 2018 were as follows (in thousands):
| Operating |  | Finance
| leases* |  | leases
2019 | $ | 10,705 |  |  | $ | 1,386 |
2020 | 8,384 |  |  | 1,010 |
2021 | 7,455 |  |  | 288 |
2022 | 5,691 |  |  | — |
2023 | 5,430 |  |  | — |
2024 and beyond | 19,818 |  |  | — |
Total lease payments | $ | 57,483 |  |  | 2,684 |
Less: interest |  |  | (321 | )
Present value of lease liabilities** |  |  | $ | 2,363 |
* The amounts in this column include restructuring payments aggregating approximately $1 million, of which approximately 50% was due in less than one year and the remainder was due in one to three years. These amounts exclude current estimated sublease income aggregating approximately $125,000 over the remaining lease terms for restructured facilities. ** Prior to the Company's adoption of ASC 842 on January 1, 2019, operating leases were not recorded on the consolidated balance sheet and no interest component was calculated.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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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 -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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