Facility Lease Obligations |
3 Months Ended |
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Mar. 31, 2017 | |
Leases [Abstract] | |
Leases | Facility Lease Obligations New Haven Facility Lease Obligation In November 2012, we entered into a lease agreement for office and laboratory space to be constructed in New Haven, Connecticut. The term of the lease commenced in 2015 and will expire in 2030, with a renewal option of ten years. Although we do not legally own the premises, we are deemed to be the owner of the building due to the substantial improvements directly funded by us during the construction period based on applicable accounting guidance for build-to-suit leases. Accordingly, the landlord's costs of constructing the facility during construction period are required to be capitalized, as a non-cash transaction, offset by a corresponding facility lease obligation in our consolidated balance sheet. Construction of the facility was completed and the building was placed into service in the first quarter 2016. As of March 31, 2017 and December 31, 2016, our total facility lease obligation was $135 and $136, respectively, recorded within other current liabilities and facility lease obligation on our condensed consolidated balance sheets. Lonza Facility Lease Obligation During the third quarter 2015, we entered into a new agreement with Lonza Group AG and its affiliates (Lonza) whereby Lonza will construct a new manufacturing facility dedicated to Alexion at one of its existing facilities. The agreement requires us to make certain payments during the construction of the new manufacturing facility and annual payments for ten years thereafter. As a result of our contractual right to full capacity of the new manufacturing facility, a portion of the payments under the agreement are considered to be lease payments and a portion as payment for the supply of inventory. Although we will not legally own the premises, we are deemed to be the owner of the manufacturing facility during the construction period based on applicable accounting guidance for build-to-suit leases due to our involvement during the construction period. As of March 31, 2017 and December 31, 2016, we recorded a construction-in-process asset of $158 and $118, respectively, and an offsetting facility lease obligation of $142 and $107, respectively, associated with the manufacturing facility. Payments to Lonza under the agreement are allocated to the purchases of inventory and the repayment of the facility lease obligation on a relative fair value basis. In 2017, we incurred $29 of payments to Lonza under this agreement, of which $4 was applied against the outstanding facility lease obligation and $25 was recognized as a prepayment of inventory. See Note 16 for minimum fixed payments due under Lonza agreements. |