Debt Obligations

12 Months Ended

Dec. 31, 2013

In April 2004, Lexicon purchased its existing laboratory and office buildings and animal facilities in The Woodlands, Texas with proceeds from a $34.0 million third-party mortgage financing and $20.8 million in cash. The mortgage loan originally had a ten-year term with a 20-year amortization and a fixed interest rate of 8.23%. The mortgage was amended in September 2013 to extend the maturity date from April 2014 to April 2017, with the mortgage loan's monthly payment amount and fixed interest rate each remaining unchanged. The mortgage had a principal balance of $21.9 million as of December 31, 2013. Net proceeds from the sale of the building as discussed in Note 5, "Property and Equipment," were used to pay down the mortgage principal in June 2011 in the amount of $2.4 million. The buildings and land that serve as collateral for the mortgage loan are included in property and equipment at $59.1 million and $2.7 million, respectively, before accumulated depreciation, as of December 31, 2013. The fair value of Lexicon’s mortgage loan approximates its carrying value. The fair value of Lexicon’s mortgage loan is estimated using discounted cash flow analysis, based on the Company’s estimated current incremental borrowing rate.

The following table includes the aggregate future principal payments of the Company’s long-term debt as of December 31, 2013:



	For the Year Ending December 31
	(in thousands)
2014	$	1,710
2015	1,859
2016	2,015
2017	16,293
Total debt	21,877
Less current portion	(1,710		)
Total long-term debt	$	20,167

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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