Leases

12 Months Ended

Dec. 31, 2023

12. Leases

Most leases held by the Company expire between 2024 and 2036. In the U.K., where longer lease terms are more common, the Company has a land lease that extends through 2078. Certain leases include terms such as one or more options to renew, with renewal terms that can extend the lease term from one to 10 years, and options to terminate the leases within one year. The exercise of lease renewal or termination option is at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use assets and operating lease liabilities as they are not reasonably certain of being exercised. The Company regularly evaluates the renewal options and includes the renewal periods in the lease term when they are reasonably certain of being exercised. The depreciable life of right-of-use assets and leasehold improvements is limited to the expected lease terms.

The following table summarizes the components of lease costs included in the statements of operations for the periods indicated (in thousands):


	Year Ended December 31,
	2023		2022		2021
Operating lease cost	$	10,475	$	10,387	$	8,533
Finance lease cost
Amortization of right-of-use assets		602		602		602
Interest on lease liabilities		274		308		340
Variable lease cost		1,007		1,145		1,074
Total lease cost	$	12,358	$	12,442	$	10,549

The following table provides the details of balance sheet information related to leases as of the dates indicated (in thousands, except lease term and discount rate):


	December 31,
	2023			2022
Operating leases:
Operating lease right-of-use assets	$	38,302		$	43,317

Current portion of operating lease liabilities	$	8,189		$	7,793
Operating lease liabilities		37,345			40,808
Total operating lease liabilities	$	45,534		$	48,601

Finance leases:
Property, plant and equipment, gross	$	9,582		$	9,582
Accumulated depreciation		(6,272	)		(5,670	)
Finance lease assets included in property, plant and equipment, net	$	3,310		$	3,912

Accrued expenses and other current liabilities	$	718		$	668
Other liabilities		3,934			4,652
Total finance lease liabilities	$	4,652		$	5,320

Weighted-average remaining lease term (in years):
Operating leases		7.6			8.2
Finance leases		5.5			6.5
Weighted-average discount rate:
Operating leases		4.84	%		4.64	%
Finance leases		5.54	%		5.54	%

The following table provides the details of cash flow information related to leases for the periods indicated (in thousands):


	Year Ended December 31,
	2023		2022		2021
Cash paid for amounts included in lease liabilities:
Operating cash flows from finance leases	$	274	$	308	$	340
Operating cash flows from operating leases	$	7,826	$	7,876	$	7,818
Financing cash flows from finance leases	$	657	$	599	$	9,310
Supplemental non-cash information:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	4,046	$	4,757	$	22,574
Right-of-use assets obtained in exchange for new finance lease liabilities	$	-	$	-	$	-

During the year ended December 31, 2021, the Company paid $8.7 million upon the exercise of an option to purchase a building under a finance lease agreement in Germany. The cash payment has been presented as a cash outflow from financing activities in the consolidated statement of cash flows for the year ended December 31, 2021.

Future minimum lease payments under operating and finance leases expiring subsequent to December 31, 2023, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands):


Year Ending December 31,	Operating Leases			Finance Leases
2024	$	9,671		$	954
2025		9,647			954
2026		8,105			979
2027		7,135			1,003
2028		4,530			1,003
Thereafter		16,783			501
Total minimum lease payments		55,871			5,394
Less: interest		(10,337	)		(742	)
Present value of lease liabilities	$	45,534		$	4,652