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Leases

12 Months Ended

Dec. 31, 2023

The Company conducts certain of its research, development, and administrative activities at leased facilities. The Company also leases vehicles and other assets.

Tarrytown, New York Lease

The Company is party to a Third Amended and Restated Lease and Remedies Agreement (the "Third Amended and Restated Lease") with BA Leasing BSC, LLC, an affiliate of Banc of America Leasing & Capital, LLC ("BAL"), as lessor, which relates to the Company’s lease of laboratory and office facilities in Tarrytown, New York (the “Facility”); and a Third Amended and Restated Participation Agreement (the "Third Amended and Restated Participation Agreement") with Bank of America, N.A., as administrative agent (the "Administrative Agent"), and a syndicate of lenders (collectively with BAL, the "Participants"), as rent assignees. The Third Amended and Restated Lease and Third Amended and Restated Participation Agreement provide for a March 2027 maturity date of the $720.0 million lease financing (previously advanced by the Participants in March 2017 in connection with the acquisition by BAL of the Facility and the Company's lease of the Facility from BAL) and the end of the term

of the Company's lease of the Facility from BAL, at which time all amounts outstanding thereunder will become due and payable in full.

In accordance with the terms of the Third Amended and Restated Lease, the Company pays all maintenance, insurance, taxes, and other costs arising out of the use of the Facility. The Company is also required to make monthly payments of basic rent during the remaining term of the Third Amended and Restated Lease to satisfy the yield payable to the Participants on their outstanding advances under the Third Amended and Restated Participation Agreement. Such advances accrue yield at a variable rate per annum based on the one-month forward-looking Secured Overnight Financing Rate ("SOFR") term rate, plus a spread adjustment, plus an applicable margin that varies with the Company's debt rating and total leverage ratio.

The Third Amended and Restated Participation Agreement and Third Amended and Restated Lease include an option for the Company to elect to further extend the maturity date of the Third Amended and Restated Participation Agreement and the term of the Third Amended and Restated Lease for an additional five-year period, subject to the consent of all the Participants and certain other conditions. The Company also has the option prior to the end of the term of the Third Amended and Restated Lease to (a) purchase the Facility by paying an amount equal to the outstanding principal amount of the Participants' advances under the Third Amended and Restated Participation Agreement, all accrued and unpaid yield thereon, and all other outstanding amounts under the Third Amended and Restated Participation Agreement, Third Amended and Restated Lease, and certain related documents or (b) sell the Facility to a third party on behalf of BAL.

The Third Amended and Restated Lease is classified as a finance lease as the Company has the option to purchase the Facility under terms that make it reasonably certain to be exercised. The agreements governing the Third Amended and Restated Lease financing contain financial and operating covenants. Such financial covenants and certain of the operating covenants are substantially similar to the covenants set forth in the 2022 Credit Agreement. The Company was in compliance with all such covenants as of December 31, 2023.

Aggregate Lease Information

Amounts recognized in the Consolidated Balance Sheet related to the Company's leases are included in the table below.


		As of December 31,
(In millions)	Classification	2023		2022
Assets:
Finance lease right-of-use assets	Property, plant, and equipment, net(a)	$	605.7	$	620.3
Operating lease right-of-use assets	Other noncurrent assets(b)	78.0		71.2
		$	683.7	$	691.5

Liabilities:
Finance lease liabilities - noncurrent	Finance lease liabilities	$	720.0	$	720.0
Operating lease liabilities - current	Accrued expenses and other current liabilities	19.0		12.4
Operating lease liabilities - noncurrent	Other noncurrent liabilities	68.7		55.8
		$	807.7	$	788.2

(a) Finance lease right-of-use assets were recorded net of accumulated amortization of $133.9 million and $119.4 million as of December 31, 2023 and 2022, respectively.
(b) Operating lease right-of-use assets were recorded net of accumulated amortization of $44.6 million and $31.0 million as of December 31, 2023 and 2022, respectively.

Lease costs consist of the following:


	Year Ended December 31,
(In millions)	2023		2022		2021
Operating lease costs	$	19.2	$	12.4	$	10.3
Finance lease costs:
Amortization of finance lease right-of-use assets	14.5		14.5		14.4
Interest on finance lease liabilities	45.0		21.6		11.9
Total finance lease costs	59.5		36.1		26.3

Total lease costs	$	78.7	$	48.5	$	36.6

Other information related to the Company's leases includes the following:


	As of December 31,
	2023	2022
Weighted-average remaining lease term (in years):
Finance leases	3.2	4.2
Operating leases	7.4	7.2
Weighted-average discount rate:
Finance leases	5.08%	4.84%
Operating leases	5.38%	5.20%

Supplemental cash flow information related to the Company's leases includes the following:


	Year Ended December 31,
(In millions)	2023		2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities (included within cash flows from operating activities)	$	22.5	$	7.7	$	10.2
Right-of-use assets obtained in exchange for operating lease liabilities	$	31.9	$	35.1	$	0.2

The following is a maturity analysis of the Company's lease liabilities as of December 31, 2023:


(In millions)	Finance Leases		Operating Leases		Total
2024	$	44.8	$	24.1	$	68.9
2025	39.5		20.1		59.6
2026	30.9		15.6		46.5
2027	728.4		12.4		740.8
2028	—		11.0		11.0
Thereafter	—		20.1		20.1
Total undiscounted lease payments	843.6		103.3		946.9
Imputed interest	(123.6)		(15.6)		(139.2)
Total lease liabilities	$	720.0	$	87.7	$	807.7

Leases