RESTRUCTURING EXPENSE

12 Months Ended

Dec. 31, 2016

RESTRUCTURING EXPENSE

RESTRUCTURING EXPENSE

(18) RESTRUCTURING EXPENSE

        In December 2016, the Company decided not to occupy the 11,500 square feet of expansion space ("Needham Expansion") at its Needham, Massachusetts facility. The Company agreed to lease the Needham Expansion in August 2015 and the term of the lease expires in July 2020. The Company is actively trying to sublease the lease obligation. The Company recorded restructuring expenses of $1.2 million to general and administrative expense for the twelve months ended December 31, 2016.

        The activity related to restructuring for the twelve months ended December 31, 2016, is presented below (in thousands):

	Charge for the Twelve Months Ended December 31, 2016		Cash Payments in 2016		Accrual as of December 31, 2016
	(In thousands)
Needham Expansion	$	1,154	$	—	$	1,154
Short-term portion of lease accrual						378
Long-term portion of lease accrual					$	776

        In accordance with U.S. GAAP, the Company recorded an initial estimate, at fair value, in the fourth quarter of 2016. The Company will review its assumptions and estimates quarterly and updates the liability as changes in circumstances require. The liability recorded with respect to the potential lease restructuring was calculated using probability weighted discounted cash flows based on the Company's assumptions and estimates regarding the possible outcomes of the potential time to sublease the space and sublease rental rates. The Company used a credit-adjusted risk-free rate of approximately 10% to discount the estimated cash flows.

        The expense and liability related to the potential lease restructuring requires the Company to make significant estimates and assumptions. The Company will review the estimates and assumptions on at least a quarterly basis, until the outcome is finalized, and make whatever modifications management believes to be necessary, based on the Company's best judgment, to reflect any changed circumstances. It is possible that such estimates could change in the future resulting in additional adjustments. Because the Company's estimate of the liability related to the potential lease restructuring includes the application of a discount rate to reflect the time value of money, the estimate of the liability will change as a result of time passing. Any such changes to the Company's estimate of the liability are recorded as additional restructuring and other expense.