Quarterly report pursuant to Section 13 or 15(d)

Lease Obligations

v2.4.0.8
Lease Obligations
9 Months Ended
Sep. 30, 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 September 30, 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
 
$
677

 
$
1,409

 
$
1,293

 
$

 
$
3,379

Bioscience and Technology Business Center-
Lawrence, KS
 
December 2017
 
55

 
108

 
13

 

 
176

Vacated office and research facility-San Diego, CA
 
July 2015
 
1,912

 

 

 

 
1,912

Vacated office and research facility-
Cranbury, NJ
 
August 2016
 
2,576

 
2,397

 

 

 
4,973

Total operating lease obligations
 
 
 
$
5,220

 
$
3,914

 
$
1,306

 
$

 
$
10,440

 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
$
771

 
$

 
$

 
$

 
$
771

Office and research facility-
Cranbury, NJ
 
August 2014 and 2016
 
492

 
464

 

 

 
956

Net operating lease obligations
 
 
 
$
3,957

 
$
3,450

 
$
1,306

 
$

 
$
8,713



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 September 30, 2014 and December 31, 2013, the Company had lease exit obligations of $3.7 million and $5.9 million, respectively. For the three and nine months ended September 30, 2014, the Company made cash payments, net of sublease payments received of $0.8 million and $2.6 million, respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.2 million and $0.5 million for the three and nine months ended September 30, 2014, respectively. For the three and nine months ended September 30, 2013, the Company made cash payments, net of sublease payments received of $0.9 million and $2.8 million, respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.2 million and $0.4 million for the three and nine months ended September 30, 2013, respectively.
Total rent expense under all office leases for each of the three and nine months ended September 30, 2014 and 2013 was $0.2 million and $0.5 million, respectively. The Company recognizes rent expense on a straight-line basis. Deferred rent at September 30, 2014 and December 31, 2013 was $0.3 million and $0.4 million, respectively, and is included in other long-term liabilities.