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LEASES | 12 Months Ended
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Dec. 31, 2022
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, 2022 and 2021. Assets acquired under finance leases are included in Property and equipment, net, in the consolidated balance sheets at December 31, 2022 and 2021. 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, 2022 and 2021 and determined no impairment had 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. Certain leased facilities are being partially or fully vacated as part of the 2022 Restructuring Plan and for some of those facilities, the Company has no plans to enter into sublease agreements. Accordingly, the Company accelerated the amortization of those lease assets through the planned cease-use date of each facility, resulting in additional amortization expense of $1.6 million in the year ended December 31, 2022. The Company also recorded expense of $1.0 million in the year ended December 31, 2022 for all estimated future variable lease costs related to those facilities. In connection with the 2020 Restructuring Plan, the Company accelerated amortization totaling $0.8 million in the year ended December 31, 2021 for leased facilities that were vacated in 2021 as part of the consolidation of certain sites following the ECI Acquisition. The Company did not record estimated future variable lease costs in the year ended December 31, 2021 related to the 2020 Restructuring Plan. The Company did not record any accelerated amortization or estimated future variable lease costs in the year ended December 31, 2022 or 2022 related to the 2020 Restructuring Plan. In connection with the 2019 Restructuring Initiative, certain lease assets related to facilities are being 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 accelerated amortization of $3.4 million and $0.6 million in the years ended December 31, 2021 and 2020, respectively, for leased facilities that were vacated in the respective years. The Company also recorded liabilities aggregating $1.4 million in the year ended December 31, 2021 for all future estimated variable lease costs related to these facilities. The Company did not record liabilities for future estimated variable lease costs in the year ended December 31, 2020. The Company did not accelerate amortization or record liabilities for future estimated variable lease costs in the year ended December 31, 2022. All incremental accelerated amortization and accrual for all estimated future variable lease costs are included in Restructuring and related expense in the Company's consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020. At December 31, 2022 and 2021, the Company had accruals of $2.0 million and $1.6 million, respectively, for all future anticipated variable lease costs related to these facilities. The Company may incur additional future expense if it is unable to sublease other locations included in the Facilities Initiative. In addition, in the year ended December 31, 2021, this accelerated amortization and provision for future estimated variable lease costs was partially offset by the recognition of $2.1 million of income in conjunction with lease amendments that modified the Company's obligation and rentable square footage at a site in North Carolina. The Company leases its corporate offices and other facilities under operating leases, which expire at various times through 2032. The Company's right-of-use lease assets and lease liabilities at December 31, 2022 and 2021 were as follows (in thousands):
|  |  | December 31,
| Classification |  | 2022 |  | 2021
Assets: |  |  |  |  |
Operating lease assets | Operating lease right-of-use assets |  | $ | 44,888 |  |  | $ | 53,147 |
Finance lease assets* | Property and equipment, net |  | — |  |  | 287 |
Total leased assets |  |  | $ | 44,888 |  |  | $ | 53,434 |
Liabilities: |  |  |  |  |
Current: |  |  |  |  |
Operating | Operating lease liabilities |  | $ | 15,416 |  |  | $ | 17,403 |
Finance | Accrued expenses and other |  | — |  |  | 503 |
Noncurrent: |  |  |  |  |
Operating | Operating lease liabilities, net of current |  | 46,183 |  |  | 55,196 |
Finance | Other long-term liabilities |  | — |  |  | 64 |
Total lease liabilities |  |  | $ | 61,599 |  |  | $ | 73,166 |
* Finance lease assets were fully depreciated at December 31, 2022 and were recorded net of accumulated depreciation of $1.8 million at December 31, 2021. The components of lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
|  |  | Year ended December 31,
|  |  | 2022 |  | 2021 |  | 2020
Operating lease cost* |  |  | $ | 21,121 |  |  | $ | 21,828 |  |  | $ | 19,582 |
Finance lease cost: |  |  |  |  |  |  |
Amortization of leased assets |  |  | 287 |  |  | 695 |  |  | 1,200 |
Interest on lease liabilities |  |  | 13 |  |  | 67 |  |  | 173 |
Short-term lease cost |  |  | 14,209 |  |  | 13,250 |  |  | 20,687 |
Variable lease costs (costs excluded from minimum fixed lease payments)** |  |  | 4,007 |  |  | 4,030 |  |  | 2,713 |
Sublease income |  |  | (1,647) |  |  | (1,496) |  |  | (1,087) |
Net lease cost |  |  | $ | 37,990 |  |  | $ | 38,374 |  |  | $ | 43,268 |
* Operating lease costs for the years ended December 31, 2022, 2021 and 2020 include $1.6 million, $3.4 million, and $0.6 million, respectively, of accelerated amortization for certain assets partially or fully vacated with no intent or ability to sublease. Operating lease cost for the year ended December 31, 2021 also includes $2.1 million of income related to a lease modification for one of these assets. ** Variable lease costs for the years ended December 31, 2022 and 2021 included accruals of $1.0 million and $1.4 million, respectively, for all future estimated variable expenses related to certain assets partially or fully vacated with no intent or ability to sublease. No such variable costs were accrued in the year ended December 31, 2020. Cash flow information related to the Company's leases for the years ended December 31, 2022 and 2021 was as follows (in thousands):
| Year ended December 31,
| 2022 |  | 2021 |  | 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
Operating cash flows from operating leases | $ | 20,363 |  |  | $ | 22,365 |  |  | 19,161 |
Operating cash flows from finance leases | $ | 13 |  |  | $ | 67 |  |  | 173 |
Financing cash flows from finance leases | $ | 595 |  |  | $ | 903 |  |  | 1,279 |
Other information related to the Company's leases as of December 31, 2022 and 2021 was as follows (in thousands):
| December 31, |
| 2022 |  | 2021 |  |
Weighted average remaining lease term (years): |  |  |  |  |
Operating leases | 5.90 |  | 6.25 |  |
Finance leases | — |  |  | 1.00 |  |
Weighted average discount rate: |  |  |  |  |
Operating leases | 5.79 | % |  | 5.61 | % |  |
Finance leases | — |  |  | 4.15 | % |  |
Future minimum fixed lease payments under noncancelable leases at December 31, 2022 were as follows (in thousands):
| December 31, 2022 |  |
| Operating |  | Finance |  |  |  |
| leases |  | leases |  |  |  |
2023 | $ | 18,384 |  |  | $ | — |  |  |  |  |
2024 | 15,380 |  |  | — |  |  |  |  |
2025 | 8,249 |  |  | — |  |  |  |  |
2026 | 7,110 |  |  | — |  |  |  |  |
2027 | 6,429 |  |  | — |  |  |  |  |
2028 and beyond | 18,210 |  |  | — |  |  |  |  |
Total lease payments | 73,762 |  |  | — |  |  |  |  |
Less: interest | (12,163) |  |  | — |  |  |  |  |
Present value of lease liabilities | $ | 61,599 |  |  | $ | — |  |  |  |  |
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, 2022 and 2021. Assets acquired under finance leases are included in Property and equipment, net, in the consolidated balance sheets at December 31, 2022 and 2021. 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, 2022 and 2021 and determined no impairment had 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. Certain leased facilities are being partially or fully vacated as part of the 2022 Restructuring Plan and for some of those facilities, the Company has no plans to enter into sublease agreements. Accordingly, the Company accelerated the amortization of those lease assets through the planned cease-use date of each facility, resulting in additional amortization expense of $1.6 million in the year ended December 31, 2022. The Company also recorded expense of $1.0 million in the year ended December 31, 2022 for all estimated future variable lease costs related to those facilities. In connection with the 2020 Restructuring Plan, the Company accelerated amortization totaling $0.8 million in the year ended December 31, 2021 for leased facilities that were vacated in 2021 as part of the consolidation of certain sites following the ECI Acquisition. The Company did not record estimated future variable lease costs in the year ended December 31, 2021 related to the 2020 Restructuring Plan. The Company did not record any accelerated amortization or estimated future variable lease costs in the year ended December 31, 2022 or 2022 related to the 2020 Restructuring Plan. In connection with the 2019 Restructuring Initiative, certain lease assets related to facilities are being 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 accelerated amortization of $3.4 million and $0.6 million in the years ended December 31, 2021 and 2020, respectively, for leased facilities that were vacated in the respective years. The Company also recorded liabilities aggregating $1.4 million in the year ended December 31, 2021 for all future estimated variable lease costs related to these facilities. The Company did not record liabilities for future estimated variable lease costs in the year ended December 31, 2020. The Company did not accelerate amortization or record liabilities for future estimated variable lease costs in the year ended December 31, 2022. All incremental accelerated amortization and accrual for all estimated future variable lease costs are included in Restructuring and related expense in the Company's consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020. At December 31, 2022 and 2021, the Company had accruals of $2.0 million and $1.6 million, respectively, for all future anticipated variable lease costs related to these facilities. The Company may incur additional future expense if it is unable to sublease other locations included in the Facilities Initiative. In addition, in the year ended December 31, 2021, this accelerated amortization and provision for future estimated variable lease costs was partially offset by the recognition of $2.1 million of income in conjunction with lease amendments that modified the Company's obligation and rentable square footage at a site in North Carolina. The Company leases its corporate offices and other facilities under operating leases, which expire at various times through 2032. The Company's right-of-use lease assets and lease liabilities at December 31, 2022 and 2021 were as follows (in thousands):
|  |  | December 31,
| Classification |  | 2022 |  | 2021
Assets: |  |  |  |  |
Operating lease assets | Operating lease right-of-use assets |  | $ | 44,888 |  |  | $ | 53,147 |
Finance lease assets* | Property and equipment, net |  | — |  |  | 287 |
Total leased assets |  |  | $ | 44,888 |  |  | $ | 53,434 |
Liabilities: |  |  |  |  |
Current: |  |  |  |  |
Operating | Operating lease liabilities |  | $ | 15,416 |  |  | $ | 17,403 |
Finance | Accrued expenses and other |  | — |  |  | 503 |
Noncurrent: |  |  |  |  |
Operating | Operating lease liabilities, net of current |  | 46,183 |  |  | 55,196 |
Finance | Other long-term liabilities |  | — |  |  | 64 |
Total lease liabilities |  |  | $ | 61,599 |  |  | $ | 73,166 |
* Finance lease assets were fully depreciated at December 31, 2022 and were recorded net of accumulated depreciation of $1.8 million at December 31, 2021. The components of lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
|  |  | Year ended December 31,
|  |  | 2022 |  | 2021 |  | 2020
Operating lease cost* |  |  | $ | 21,121 |  |  | $ | 21,828 |  |  | $ | 19,582 |
Finance lease cost: |  |  |  |  |  |  |
Amortization of leased assets |  |  | 287 |  |  | 695 |  |  | 1,200 |
Interest on lease liabilities |  |  | 13 |  |  | 67 |  |  | 173 |
Short-term lease cost |  |  | 14,209 |  |  | 13,250 |  |  | 20,687 |
Variable lease costs (costs excluded from minimum fixed lease payments)** |  |  | 4,007 |  |  | 4,030 |  |  | 2,713 |
Sublease income |  |  | (1,647) |  |  | (1,496) |  |  | (1,087) |
Net lease cost |  |  | $ | 37,990 |  |  | $ | 38,374 |  |  | $ | 43,268 |
* Operating lease costs for the years ended December 31, 2022, 2021 and 2020 include $1.6 million, $3.4 million, and $0.6 million, respectively, of accelerated amortization for certain assets partially or fully vacated with no intent or ability to sublease. Operating lease cost for the year ended December 31, 2021 also includes $2.1 million of income related to a lease modification for one of these assets. ** Variable lease costs for the years ended December 31, 2022 and 2021 included accruals of $1.0 million and $1.4 million, respectively, for all future estimated variable expenses related to certain assets partially or fully vacated with no intent or ability to sublease. No such variable costs were accrued in the year ended December 31, 2020. Cash flow information related to the Company's leases for the years ended December 31, 2022 and 2021 was as follows (in thousands):
| Year ended December 31,
| 2022 |  | 2021 |  | 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
Operating cash flows from operating leases | $ | 20,363 |  |  | $ | 22,365 |  |  | 19,161 |
Operating cash flows from finance leases | $ | 13 |  |  | $ | 67 |  |  | 173 |
Financing cash flows from finance leases | $ | 595 |  |  | $ | 903 |  |  | 1,279 |
Other information related to the Company's leases as of December 31, 2022 and 2021 was as follows (in thousands):
| December 31, |
| 2022 |  | 2021 |  |
Weighted average remaining lease term (years): |  |  |  |  |
Operating leases | 5.90 |  | 6.25 |  |
Finance leases | — |  |  | 1.00 |  |
Weighted average discount rate: |  |  |  |  |
Operating leases | 5.79 | % |  | 5.61 | % |  |
Finance leases | — |  |  | 4.15 | % |  |
Future minimum fixed lease payments under noncancelable leases at December 31, 2022 were as follows (in thousands):
| December 31, 2022 |  |
| Operating |  | Finance |  |  |  |
| leases |  | leases |  |  |  |
2023 | $ | 18,384 |  |  | $ | — |  |  |  |  |
2024 | 15,380 |  |  | — |  |  |  |  |
2025 | 8,249 |  |  | — |  |  |  |  |
2026 | 7,110 |  |  | — |  |  |  |  |
2027 | 6,429 |  |  | — |  |  |  |  |
2028 and beyond | 18,210 |  |  | — |  |  |  |  |
Total lease payments | 73,762 |  |  | — |  |  |  |  |
Less: interest | (12,163) |  |  | — |  |  |  |  |
Present value of lease liabilities | $ | 61,599 |  |  | $ | — |  |  |  |  |

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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 https://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 https://asc.fasb.org/subtopic&trid=77888251 + Details
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