Leases

12 Months Ended

Dec. 31, 2019

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 seven 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	December 31, 2019
Assets
Finance:
Right-of-use assets - cost		$	49,909
Accumulated amortization			(10,307	)
Finance lease right-of-use assets, net	Finance lease right-of-use assets		39,602
Operating:
Right-of-use assets - cost			2,736
Accumulated amortization			(805	)
Operating lease right-of-use assets, net	Other assets		1,931
Total lease assets		$	41,533

Liabilities
Current:
Finance lease liabilities	Finance lease liabilities, current	$	12,351
Operating lease liabilities	Accrued and other current liabilities		983
Non-current:
Finance lease liabilities	Finance lease liabilities, non-current		37,610
Operating lease liabilities	Other long-term liabilities		942
Total lease liabilities		$	51,886

The components of lease expense were as follows (in thousands):

	Statement of Operations Line Item	Year Ended December 31, 2019
Finance lease cost:
Amortization of right-of-use assets	Research and development, Selling, general and administrative expenses	$	10,307
Interest on lease liabilities	Interest expense		2,373
Operating lease cost	Research and development, Selling, general and administrative expenses		891
Sublease income	Selling, general and administrative expenses		(1,385	)
Total lease cost		$	12,186

Supplemental cash flow information related to leases were as follows (in thousands):

	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	914
Operating cash flows from finance leases		2,196
Financing cash flows from finance leases		11,925
Right-of-use assets obtained in exchange for new lease liabilities:
Finance leases		49,909
Operating leases	$	2,736

Lease term and discount rate were as follows at December 31, 2019:

	December 31, 2019
Weighted-average remaining lease term (years):
Finance leases		3.6
Operating leases		2.1
Weighted-average discount rate:
Finance leases		4.42	%
Operating leases		4.75	%

Maturities of lease liabilities are as follows:

Year Ending	Finance Leases			Operating Leases
2020	$	14,078		$	1,043
2021		13,676			668
2022		13,878			307
2023		12,523			—
Total future lease payments		54,155			2,018
Less: Interest		(4,194	)		(93	)
Present value of lease liabilities	$	49,961		$	1,925

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