Balance Sheet Components |
Balance Sheet Components
Inventories
Inventories consist of the following (in thousands): | | | | | | | | | | December 31, | | 2019 | | 2018 | Raw materials | $ | 54,947 |
| | $ | 26,119 |
| Work in process | 30,974 |
| | 13,784 |
| Finished goods | 26,130 |
| | 15,738 |
| Total inventories | $ | 112,051 |
| | $ | 55,641 |
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Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands): | | | | | | | | | | December 31, | | 2019 | | 2018 | Tax related receivables | $ | 41,252 |
| | $ | 36,794 |
| Current promissory note 1 | 25,005 |
| | — |
| Other prepaid expenses and current assets
| 24,637 |
| | 23,227 |
| Prepaid software and maintenance | 7,128 |
| | 5,938 |
| Other current receivables | 4,428 |
| | 6,511 |
| Total prepaid expenses and other current assets | $ | 102,450 |
| | $ | 72,470 |
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| | 1 | Refer to Note 5“Equity Method Investments” of the Notes to Consolidated Financial Statements for more information. |
Property, Plant and Equipment, Net
Property, plant and equipment consist of the following (in thousands): | | | | | | | | | | | | | | December 31, | | Generally Used Estimated Useful Life | | 2019 | | 2018 | Clinical and manufacturing equipment | Up to 10 years | | $ | 309,809 |
| | $ | 236,179 |
| Building | 20 years | | 209,643 |
| | 139,315 |
| Computer software | 3 years | | 61,722 |
| | 59,617 |
| Leasehold improvements
| Lease term 1
| | 53,327 |
| | 77,168 |
| Furniture and fixtures
| 5 years | | 44,373 |
| | 33,436 |
| Computer hardware
| 3 years | | 39,199 |
| | 34,297 |
| Land | — | | 26,422 |
| | 17,630 |
| CIP | — | | 116,751 |
| | 95,414 |
| Total | | | 861,246 |
| | 693,056 |
| Less: Accumulated depreciation and amortization and impairment charges | | | (229,516 | ) | | (171,727 | ) | Total property, plant and equipment, net | | | $ | 631,730 |
| | $ | 521,329 |
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| | 1 | Shorter of the remaining lease term or the estimated useful lives of the assets. |
Depreciation and amortization was $79.0 million, $54.7 million and $37.7 million for the year ended December 31, 2019, 2018 and 2017, respectively. In the first quarter of 2019, we recorded impairment losses of $14.3 million related to leasehold improvements and other fixed assets. Refer to Note 8“Impairments and Other (Gains) Charges” of the Notes to Consolidated Financial Statements for more information.
On September 26, 2019, we entered into a Purchase and Sale Agreement to purchase a building located in San Jose, California for $21.3 million. The remaining and substantial portion of the purchase price will be paid on or before the closing date, which is expected to occur in the first quarter of 2020.
Accrued Liabilities
Accrued liabilities consist of the following (in thousands): | | | | | | | | | | December 31, | | 2019 | | 2018 | Accrued payroll and benefits | $ | 162,486 |
| | $ | 127,109 |
| Accrued expenses | 55,529 |
| | 39,323 |
| Current operating lease liabilities | 15,737 |
| | — |
| Accrued income taxes | 14,130 |
| | 5,752 |
| Accrued sales rebate | 11,393 |
| | 5,668 |
| Others | 60,683 |
| | 56,827 |
| Total accrued liabilities | $ | 319,958 |
| | $ | 234,679 |
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Warranty
We regularly review the balance for accrued warranty and update based on historical warranty trends. Actual warranty costs incurred have not materially differed from those accrued; however, future actual warranty costs could differ from the estimated amounts.
Warranty accrual as of December 31, 2019 and 2018 consists of the following activity (in thousands): | | | | | Accrued warranty as of December 31, 2017 | $ | 5,929 |
| Charged to cost of net revenues | 15,059 |
| Actual warranty expenditures | (12,437 | ) | Accrued warranty as of December 31, 2018 | 8,551 |
| Charged to cost of net revenues | 12,421 |
| Actual warranty expenditures | (9,767 | ) | Accrued warranty as of December 31, 2019 | $ | 11,205 |
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Deferred Revenues
Deferred revenues consist of the following (in thousands): | | | | | | | | | | December 31, | | 2019 | | 2018 | Deferred revenues - current | $ | 563,762 |
| | $ | 393,138 |
| Deferred revenues - long-term 1 | 35,503 |
| | 17,051 |
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| | 1 | Included in other long-term liabilities within our Consolidated Balance Sheet |
During the year ended December 31, 2019 and 2018, we recognized $2.4 billion and $2.0 billion of net revenues, respectively, of which $262.7 million and $180.6 million was included in the deferred revenues balance at December 31, 2018 and December 31, 2017, respectively.
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