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Leases | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Leases |
4. | Leases
The Company currently has two building leases treated as finance leases. In 2006, the Company entered into a long-term property lease with Alexandria for its corporate headquarters in San Francisco, California, with an initial term of 15 years, scheduled to expire in 2023. The Company has an option to extend the lease for an additional 10 years through 2033. The lease contract provides for a fixed annual rent, with scheduled increases of two percent that occur on each anniversary of the rent commencement date. This lease requires the Company to pay all costs of ownership, operation, and maintenance of the premises, including without limitation all operating costs, insurance costs, and taxes. In 2013, the Company entered into a long-term property lease with Beijing Economic-Technological Development Area (“BDA”) Management Committee for a pilot plant located in Beijing Yizhuang Biomedical Park (“BYBP”) of BDA. The building is leased for an initial lease term of eight years, scheduled to expire in 2021. Renewal options are not specified within the lease contract. The lease contract provides for fixed quarterly rent payments, with scheduled increases that occur as detailed in the lease contract. This lease requires the Company to pay all operating and maintenance costs, and a fixed amount for property management fees. The Company currently has six additional real estate leases for space within a building, which are treated as operating leases. These leases have lease terms ranging from two to four years. These lease contracts provide for fixed quarterly rent payments, and require the Company to pay operating and maintenance costs, and a fixed amount for property management fees. In addition, the Company has several immaterial lease arrangements for office equipment, scientific devices and automobile leases, with contracted lease terms ranging from two to five years, treated as finance leases or operating leases, respectively. The Company’s lease assets and related lease liabilities were as follows (in thousands):
| Balance Sheet Line Item |  | September 30, 2019 |
Assets |  |  |  |  |
Finance: |  |  |  |  |
Right-of-use assets - cost |  |  | $ | 49,784 |
Accumulated amortization |  |  |  | (7,720 | )
Finance lease right-of-use assets, net | Finance lease right-of-use assets |  |  | 42,064 |
Operating: |  |  |  |  |
Right-of-use assets - cost |  |  |  | 2,723 |
Accumulated amortization |  |  |  | (531 | )
Operating lease right-of-use assets, net | Other assets |  |  | 2,192 |
Total lease assets |  |  | $ | 44,256 |
Liabilities |  |  |  |  |
Current: |  |  |  |  |
Finance lease liabilities | Finance lease liabilities, current |  | $ | 12,149 |
Operating lease liabilities | Accrued and other current liabilities |  |  | 998 |
Non-current: |  |  |  |  |
Finance lease liabilities | Finance lease liabilities, non-current |  |  | 40,713 |
Operating lease liabilities | Other long-term liabilities |  |  | 1,133 |
Total lease liabilities |  |  | $ | 54,993 |
The components of lease expense were as follows (in thousands):
| Statement of Operations Line Item |  | Three Months Ended September 30, 2019 |  |  | Nine Months Ended September 30, 2019 |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets | Selling, general and administrative expenses |  | $ | 2,580 |  |  | $ | 7,720 |
Interest on lease liabilities | Interest expense |  |  | 578 |  |  |  | 1,826 |
Operating lease cost | Research and development, Selling, general and administrative expenses |  |  | 290 |  |  |  | 579 |
Sublease income | Selling, general and administrative expenses |  |  | (310 | ) |  |  | (1,135 | )
Total lease cost |  |  | $ | 3,138 |  |  | $ | 8,990 |
Supplemental cash flow information related to leases were as follows (in thousands):
|  | Nine Months Ended September 30, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 540 |
Operating cash flows from finance leases |  |  | 1,640 |
Financing cash flows from finance leases |  |  | 8,810 |
Right-of-use assets obtained in exchange for new lease liabilities: |  |  |  |
Finance leases |  |  | 49,784 |
Operating leases |  | $ | 2,723 |
Lease term and discount rate were as follows at September 30, 2019:
|  | September 30, 2019 |
Weighted-average remaining lease term (years): |  |  |  |
Finance leases |  |  | 3.8 |
Operating leases |  |  | 2.3 |
Weighted-average discount rate: |  |  |  |
Finance leases |  |  | 4.43 | %
Operating leases |  |  | 4.75 | %
Maturities of lease liabilities are as follows:
Year Ending |  | Finance Leases |  |  | Operating Leases |
2019 (Remaining three month period) |  | $ | 3,466 |  |  | $ | 280 |
2020 |  |  | 14,060 |  |  |  | 1,013 |
2021 |  |  | 13,675 |  |  |  | 651 |
2022 |  |  | 13,878 |  |  |  | 300 |
2023 |  |  | 12,523 |  |  |  | — |
Total future lease payments |  |  | 57,602 |  |  |  | 2,244 |
Less: Interest |  |  | (4,740 | ) |  |  | (113 | )
Present value of lease liabilities |  | $ | 52,862 |  |  | $ | 2,131 |
The following information was previously disclosed under ASC 840 as of December 31, 2018: Future minimum lease payments under all non-cancelable operating lease obligations as of December 31, 2018 were as follows (in thousands):
Year Ending |  | Operating Leases |
2019 |  | $ | 444 |
2020 |  |  | 232 |
2021 |  |  | 25 |
2022 |  |  | 16 |
2023 |  |  | — |
Total minimum payments |  | $ | 717 |
Future minimum lease payments, on a consolidated basis, under the Company’s facility lease financing obligations as of December 31, 2018 were as follows (in thousands):
Year Ending |  | Lease financing obligations |
2019 |  | $ | 14,379 |
2020 |  |  | 14,664 |
2021 |  |  | 14,179 |
2022 |  |  | 14,335 |
2023 |  |  | 12,872 |
Total minimum payments |  | $ | 70,429 |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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