Leases

6 Months Ended

Jun. 30, 2019

We lease real estate, including laboratory and office space, and certain equipment.

Our leases have remaining lease terms ranging from less than one year to nine years. Certain leases include one or more options to renew, exercised at our sole discretion, with renewal terms that can extend the lease term from one year to six years.

In addition, we sublease certain real estate to third parties. Our sublease portfolio consists of operating leases, with remaining lease terms ranging from less than one year to nine years. Our subleases do not include an option to renew as they are coterminous with our operating leases.

All of our leases qualify as operating leases. The following table summarizes the presentation in our condensed consolidated balance sheets of our operating leases:



(In millions)	Balance sheet location	As of June 30, 2019
Assets:
Operating lease assets	Operating lease assets	$	434.4

Liabilities
Current operating lease liabilities	Accrued expenses and other	$	72.3
Non-current operating lease liabilities	Long-term operating lease liabilities	423.0
Total operating lease liabilities		$	495.3

The following table summarizes the effect of lease costs in our condensed consolidated statements of income:



		For the Three Months Ended June 30,			For the Six Months Ended June 30,
(In millions)	Income Statement Location	2019			2019
Operating lease cost	Research and development	$	3.4		$	3.7
	Selling, general and administrative	17.9			41.4
Sublease income	Selling, general and administrative	(6.0		)	(13.1		)
	Other (income) expense, net	(0.9		)	(1.9		)
Net lease cost		$	14.4		$	30.1

The minimum lease payments for the next five years and thereafter is expected to be as follows:



(In millions)	As of June 30, 2019
2019 (remaining six months)	$	50.2
2020	80.5
2021	74.9
2022	70.9
2023	69.4
2024	66.7
Thereafter	147.6
Total lease payments	$	560.2
Less: interest	64.9
Present value of operating lease liabilities	$	495.3

Under the prior lease guidance minimum rental commitments under non-cancelable leases, net of income from subleases, for each of the next five years and total thereafter as of December 31, 2018, were as follows:



(In millions)	2019			2020			2021			2022			2023			Thereafter			Total
Minimum lease payments	$	87.0		$	80.7		$	75.9		$	71.7		$	71.0		$	215.3		$	601.6
Less: income from subleases⁽¹⁾	(26.8		)	(25.6		)	(23.7		)	(24.0		)	(24.3		)	(58.4		)	(182.8		)
Net minimum lease payments	$	60.2		$	55.1		$	52.2		$	47.7		$	46.7		$	156.9		$	418.8


(1)	Represents sublease income expected to be received for the vacated manufacturing facility in Cambridge, MA, the vacated portion of our Weston, MA facility and other facilities throughout the world.

The weighted average remaining lease term and weighted average discount rate of our operating leases are as follows:



	As of June 30, 2019
Weighted average remaining lease term in years	7.4
Weighted average discount rate	3.3	%

Supplemental disclosure of cash flow information related to our operating leases included in cash flows provided by operating activities in our condensed consolidated statements of cash flows is as follows:



	For the Three Months Ended June 30,		For the Six Months Ended June 30,
(In millions)	2019		2019
Cash paid for amounts included in the measurement of lease liabilities	$	27.4	$	46.8
Operating lease assets obtained in exchange for lease obligations	$	7.3	$	12.7

Proposed Divestiture of Hillerød, Denmark Manufacturing Operations

In March 2019 we entered into a share purchase agreement with FUJIFILM under which FUJIFILM will acquire all of the outstanding shares of our subsidiary that owns our biologics manufacturing operations in Hillerød, Denmark. As a result, $2.2 million of operating lease assets and $2.2 million of operating lease liabilities were reclassified to assets and liabilities held for sale in our condensed consolidated balance sheets as of June 30, 2019. For additional information on the proposed divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures, to these condensed consolidated financial statements.