Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Leases

Finance Leases

Our finance lease assets and liabilities primarily relate to our corporate headquarters in Boston and research site in San Diego (the “Buildings”). These Buildings are classified as finance leases because the present value of the sum of the lease payments associated with the Buildings exceeds substantially all of the fair value of the Buildings. We also have outstanding finance leases for equipment and land.

Corporate Headquarters

In 2011, we entered into two lease agreements, pursuant to which we lease approximately 1.1 million square feet of office and laboratory space in two buildings in Boston, Massachusetts for a term of 15 years. Base rent payments commenced in December 2013 and will continue through December 2028. We utilize this initial period as our lease term. We have an option to extend the lease term for an additional ten years.

San Diego Lease

In 2015, we entered into a lease agreement pursuant to which we lease approximately 170,000 square feet of office and laboratory space in San Diego, California for a term of 16 years. Base rent payments commenced in the second quarter of 2019 and will continue through May 2034. We utilize this initial period as our lease term. We have an option to extend the lease term for up to two additional five-year terms.

Operating Leases

Our operating leases relate to our real estate leases that are not classified as finance leases.

Innovation Square Lease

In 2019, we entered into an agreement to lease approximately 269,000 square feet of office and laboratory space near our corporate headquarters in Boston, Massachusetts. The lease agreement includes an initial term of 15 years plus a period to install leasehold improvements, with an option to extend the lease term for up to two additional ten-year periods. Base rent payments commenced in 2021. We have utilized the initial period, which commenced in the third quarter of 2020 upon occupation of the building, as our lease term.

Please refer to our accounting policy, Leases, in Note A, “Nature of Business and Accounting Policies,” for further information on the accounting treatment for our finance and operating leases.

Aggregate Lease Information

The components of lease cost recorded in our consolidated statement of operations were as follows:

	2021		2020		2019
	(in millions)
Operating lease cost	$	33.9	$	23.1	$	12.0
Finance lease cost
Amortization of leased assets	51.9		51.2		49.8
Interest on lease liabilities	47.4		50.2		52.8
Variable lease cost	33.6		30.8		28.0
Sublease income	(0.4)		(4.0)		(6.4)
Net lease cost	$	166.4	$	151.3	$	136.2

Our variable lease cost during 2021, 2020 and 2019 primarily related to operating expenses, taxes and insurance associated with our finance leases.

Our leases are included on our consolidated balance sheets as follows:

	As of December 31,
	2021		2020
	(in millions)
Finance leases
Property and equipment, net	$	400.1	$	431.2
Total finance lease assets	$	400.1	$	431.2
Other current liabilities	$	46.9	$	42.5
Long-term finance lease liabilities	509.8		539.0
Total finance lease liabilities	$	556.7	$	581.5
Operating leases
Operating lease assets	$	330.3	$	325.6
Total operating lease assets	$	330.3	$	325.6
Other current liabilities	$	33.3	$	10.5
Long-term operating lease liabilities	377.4		350.5
Total operating lease liabilities	$	410.7	$	361.0

Maturities of our finance and operating lease liabilities as of December 31, 2021 were as follows:

Year	Finance Leases		Operating Leases		Total
	(in millions)
2022	$	87.9	$	41.9	$	129.8
2023	93.2		42.0		135.2
2024	97.6		38.6		136.2
2025	95.9		35.7		131.6
2026	94.2		33.7		127.9
Thereafter	327.4		290.3		617.7
Total lease payments	796.2		482.2		1,278.4
Less: tenant allowance	—		(6.5)		(6.5)
Less: amount representing interest	(239.5)		(65.0)		(304.5)
Present value of lease liabilities	$	556.7	$	410.7	$	967.4

The weighted-average remaining lease terms and discount rates related to our leases were as follows:

	As of December 31,
	2021		2020
Weighted-average remaining lease term (in years)
Finance leases	10.73		11.58
Operating leases	12.81		14.10
Weighted-average discount rate
Finance leases	8.11	%	8.36	%
Operating leases	2.19	%	2.28	%

Supplemental cash flow information related to our leases was as follows:

	2021		2020		2019
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	21.5	$	16.3	$	10.7
Operating cash flows from finance leases	$	46.2	$	48.9	$	50.5
Financing cash flows from finance leases	$	47.0	$	42.3	$	39.2
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	36.3	$	293.6	$	34.6
Finance leases	$	—	$	33.1	$	—

Leases

Leases

Finance Leases

Our finance lease assets and liabilities primarily relate to our corporate headquarters in Boston and research site in San Diego (the “Buildings”). These Buildings are classified as finance leases because the present value of the sum of the lease payments associated with the Buildings exceeds substantially all of the fair value of the Buildings. We also have outstanding finance leases for equipment and land.

Corporate Headquarters

In 2011, we entered into two lease agreements, pursuant to which we lease approximately 1.1 million square feet of office and laboratory space in two buildings in Boston, Massachusetts for a term of 15 years. Base rent payments commenced in December 2013 and will continue through December 2028. We utilize this initial period as our lease term. We have an option to extend the lease term for an additional ten years.

San Diego Lease

In 2015, we entered into a lease agreement pursuant to which we lease approximately 170,000 square feet of office and laboratory space in San Diego, California for a term of 16 years. Base rent payments commenced in the second quarter of 2019 and will continue through May 2034. We utilize this initial period as our lease term. We have an option to extend the lease term for up to two additional five-year terms.

Operating Leases

Our operating leases relate to our real estate leases that are not classified as finance leases.

Innovation Square Lease

In 2019, we entered into an agreement to lease approximately 269,000 square feet of office and laboratory space near our corporate headquarters in Boston, Massachusetts. The lease agreement includes an initial term of 15 years plus a period to install leasehold improvements, with an option to extend the lease term for up to two additional ten-year periods. Base rent payments commenced in 2021. We have utilized the initial period, which commenced in the third quarter of 2020 upon occupation of the building, as our lease term.

Please refer to our accounting policy, Leases, in Note A, “Nature of Business and Accounting Policies,” for further information on the accounting treatment for our finance and operating leases.

Aggregate Lease Information

The components of lease cost recorded in our consolidated statement of operations were as follows:

	2021		2020		2019
	(in millions)
Operating lease cost	$	33.9	$	23.1	$	12.0
Finance lease cost
Amortization of leased assets	51.9		51.2		49.8
Interest on lease liabilities	47.4		50.2		52.8
Variable lease cost	33.6		30.8		28.0
Sublease income	(0.4)		(4.0)		(6.4)
Net lease cost	$	166.4	$	151.3	$	136.2

Our variable lease cost during 2021, 2020 and 2019 primarily related to operating expenses, taxes and insurance associated with our finance leases.

Our leases are included on our consolidated balance sheets as follows:

	As of December 31,
	2021		2020
	(in millions)
Finance leases
Property and equipment, net	$	400.1	$	431.2
Total finance lease assets	$	400.1	$	431.2
Other current liabilities	$	46.9	$	42.5
Long-term finance lease liabilities	509.8		539.0
Total finance lease liabilities	$	556.7	$	581.5
Operating leases
Operating lease assets	$	330.3	$	325.6
Total operating lease assets	$	330.3	$	325.6
Other current liabilities	$	33.3	$	10.5
Long-term operating lease liabilities	377.4		350.5
Total operating lease liabilities	$	410.7	$	361.0

Maturities of our finance and operating lease liabilities as of December 31, 2021 were as follows:

Year	Finance Leases		Operating Leases		Total
	(in millions)
2022	$	87.9	$	41.9	$	129.8
2023	93.2		42.0		135.2
2024	97.6		38.6		136.2
2025	95.9		35.7		131.6
2026	94.2		33.7		127.9
Thereafter	327.4		290.3		617.7
Total lease payments	796.2		482.2		1,278.4
Less: tenant allowance	—		(6.5)		(6.5)
Less: amount representing interest	(239.5)		(65.0)		(304.5)
Present value of lease liabilities	$	556.7	$	410.7	$	967.4

The weighted-average remaining lease terms and discount rates related to our leases were as follows:

	As of December 31,
	2021		2020
Weighted-average remaining lease term (in years)
Finance leases	10.73		11.58
Operating leases	12.81		14.10
Weighted-average discount rate
Finance leases	8.11	%	8.36	%
Operating leases	2.19	%	2.28	%

Supplemental cash flow information related to our leases was as follows:

	2021		2020		2019
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	21.5	$	16.3	$	10.7
Operating cash flows from finance leases	$	46.2	$	48.9	$	50.5
Financing cash flows from finance leases	$	47.0	$	42.3	$	39.2
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	36.3	$	293.6	$	34.6
Finance leases	$	—	$	33.1	$	—