LEASES

12 Months Ended

Dec. 31, 2021

10. LEASES

Corporate headquarters

In February 2021, the Company agreed to accelerate its exit from its previous corporate headquarters to October 1, 2021, in exchange for a one-time payment from its landlord of $18 million, which was amortized over the remaining lease term. The exit accelerated depreciation on the related leasehold improvements and reduced the Company’s future lease liabilities by $21.1 million and right of use assets by $20.3 million. On March 31, 2021 the Company leased office space at One Main Street, Cambridge, Massachusetts, to serve as its corporate headquarters. The 4.5 year lease includes a base rent of $2 million per year.

New Waltham Office

On July 6, 2021, the Company entered into an office space lease for 131 thousand square feet in Waltham, Massachusetts. The lease term of 11 years began on August 1, 2021. The annual rent equals the base rent plus a portion of building operating costs and real estate taxes. Rent first becomes payable on August 1, 2022. Base rent for the first year is approximately $6 million and will increase by 3% annually. In addition, the Company will receive an improvement allowance from the landlord of up to $11.8 million. This lease increased the Company’s lease liabilities and lease-related right of use assets by $42.1 million on August 1, 2021.

Expense


(in thousands)	2021		2020		2019
Fixed lease costs	$	(1,694)	$	20,235	$	18,250
Short-term lease costs	2,244		1,669		1,291
Variable lease costs	4,480		4,470		5,554
	$	5,030	$	26,374	$	25,095

Right of use assets and lease liabilities


(in thousands)	December 31, 2021		December 31, 2020
Right of use assets (1)	$	87,521	$	67,651
Operating lease liabilities (2)	$	6,989	$	18,541
Long-term operating lease liabilities	$	87,818	$	59,053

(1) Represents the Company’s right to use the leased asset during the lease term. Included in other long-term assets.

(2) Included in other current liabilities.

The weighted-average remaining lease term and discount rate for the Company’s leases were:


	December 31, 2021		December 31, 2020
Weighted-average remaining lease term	7.7 years		4.7 years
Weighted-average discount rate (1)	4.4	%	5.4	%

(1) The rates implicit in most of the Company’s leases are not readily determinable. Therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the lease term in a similar economic environment.

Maturities of lease liabilities:


(in thousands)	December 31, 2021
2022	$	8,942
2023	17,705
2024	16,411
2025	13,553
2026	9,840
Thereafter	48,458
Total lease payments	114,909
Less: imputed interest (1)	(20,102)
	$	94,807

(1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement unless the discount rate is updated due to a lease reassessment event.

Cash flow information (1)


(in thousands)	2021		2020
Cash paid for leases	$	18,428	$	20,548
Right of use assets recognized for new leases and amendments (non-cash)	$	55,068	$	24,276

(1) In 2021, the Company received $18 million as a one-time payment for our accelerated exit from our then corporate headquarters in Cambridge, Massachusetts. This payment has been excluded from the above table.