Quarterly report pursuant to Section 13 or 15(d)

Lease Obligations

v2.4.0.8
Lease Obligations
3 Months Ended
Mar. 31, 2014
Leases [Abstract]  
Lease Obligations
Lease Obligations

The Company leases office and laboratory facilities in California, Kansas, and New Jersey. These leases expire between 2014 and 2019, some of which are subject to annual rent increases which range from 3.0% to 3.5%. The Company currently subleases office and laboratory space in California and New Jersey. The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of March 31, 2014 (in thousands):

Operating lease obligations:
 
Lease
Termination
Date
 
Less than 1
year
 
1-3 years
 
3-5 years
 
More than
5 years
 
Total
Corporate headquarters-
San Diego, CA
 
July 2019
 
$
669

 
$
1,390

 
$
1,465

 
$
187

 
$
3,711

Bioscience and Technology Business Center-
Lawrence, KS
 
December 2017
 
56

 
108

 
41

 

 
205

Vacated office and research facility-San Diego, CA
 
July 2015
 
2,257

 
761

 

 

 
3,018

Vacated office and research facility-
Cranbury, NJ
 
August 2016
 
2,563

 
3,691

 

 

 
6,254

Total operating lease obligations
 
 
 
$
5,545

 
$
5,950

 
$
1,506

 
$
187

 
$
13,188

 
 
 
 
 
 
 
 
 
 
 
 
 
Sublease payments expected to be received:
 
 
 
Less than 1
year
 
1-3 years
 
3-5 years
 
More than
5 years
 
Total
Office and research facility-
San Diego, CA
 
July 2015
 
$
913

 
$
311

 
$

 
$

 
$
1,224

Office and research facility-
Cranbury, NJ
 
August 2014 and 2016
 
417

 
619

 

 

 
1,036

Net operating lease obligations
 
 
 
$
4,215

 
$
5,020

 
$
1,506

 
$
187

 
$
10,928



In 2010, the Company ceased use of its facility located in New Jersey. As a result, the Company recorded lease exit costs of $9.7 million for costs related to the difference between the remaining lease obligations of the abandoned operating leases, which run through August 2016, and management's estimate of potential future sublease income, discounted to present value. In addition, the Company wrote-off property and equipment with a net book value of approximately $5.4 million related to the facility closure.

As of March 31, 2014 and December 31, 2013, the Company had lease exit obligations of $5.1 million and $5.9 million, respectively. For the three months ended March 31, 2014, the Company made cash payments, net of sublease payments received of $0.9 million. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.2 million for the three months ended March 31, 2014. For the three months ended March 31, 2013, the Company made cash payments, net of sublease payments received of $1.0 million. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.1 million for the three months ended March 31, 2013.
Total rent expense under all office leases for the three months ended March 31, 2014 and 2013 was $0.2 million. The Company recognizes rent expense on a straight-line basis. Deferred rent at March 31, 2014 and 2013 was $0.3 million and $0.4 million, respectively, and is included in other long-term liabilities.