Commitments

The Company leases its facilities and certain equipment and software. The Company’s facility leases have terms through 2028. The leases of the Company’s current primary facilities in Cambridge were extended in 2009 through December 2015. In 2011, the Company entered into leases for buildings being constructed at Fan Pier in Boston, Massachusetts, which will become the Company's new corporate headquarters. The Company expects to commence lease payments in December 2013 and to make payments for the period ending 15 years from the commencement date. The Company has an option to extend the term of the Fan Pier Leases for an additional ten years. Please refer to Note H, "Fan Pier Leases," for additional information regarding this commitment.

The term of the Kendall Square Lease began on January 1, 2003. The Company occupies and uses for its operations approximately 120,000 square feet of the Kendall Square Facility. The Company has sublease arrangements in place for the remaining rentable square footage of the Kendall Square Facility, with terms that expire in April 2015 and August 2015. Rent payments pursuant to the Kendall Square Lease will be subject to increase in May 2013, based on changes in an inflation index. These increases are treated as contingent rentals. The Kendall Square Lease will expire in 2018, and the Company has the option to extend the term for two consecutive terms of 10 years each. Please refer to Note Q, "Restructuring Expense," for further information.

As of December 31, 2012, future minimum commitments under the Fan Pier Leases, facility operating leases with terms of more than one year and expected sublease income under the Company’s subleases for the Kendall Square Facility were as follows:



Year	Fan Pier Leases		Kendall Square Lease		Kendall Sublease Income			Other Operating Leases		Total Lease Commitments (Net of Sublease Income)
	(in thousands)
2013	$	83,304	$	18,338	$	(8,495	)	$	43,165	$	136,312
2014	67,206		18,338		(8,495		)	35,375		112,424
2015	67,206		18,338		(3,976		)	27,909		109,477
2016	67,206		18,338		—			9,916		95,460
2017	67,206		18,338		—			8,904		94,448
Thereafter	814,404		6,113		—			30,610		851,127
Total minimum lease payments	$	1,166,532	$	97,803	$	(20,966	)	$	155,879	$	1,399,248

During 2012, 2011 and 2010, rental expense was $57.1 million, $49.4 million and $46.6 million, respectively, of which $11.6 million, $11.2 million and $11.6 million, respectively, related to the Kendall Square Facility and $6.6 million, $3.9 million and $0, respectively, related to the Fan Pier land lease. Please refer to Note H, "Fan Pier Leases," for further information.

In 2012, the Company entered into various agreements for the lease of equipment and software licenses, expiring in 2015. The leases were accounted for as capital leases. The capital leases bear interest at rates of approximately 4% per year. The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2012:



Year	(in thousands)
2013	$	14,502
2014	9,005
2015	6,537
Total payments	30,044
Less: amount representing interest	(1,167		)
Present value of payments	$	28,877

In addition, the Company has committed to make potential future milestone and royalty payments pursuant to the Alios Agreement. Payments generally become due and payable upon the achievement of certain developmental, regulatory and/or commercial milestones. Please refer to Note B, "Collaborative Arrangements," for further information.

In September 2010, the Company issued $400.0 million in aggregate principal of 2015 Notes. Please refer to Note K, "Convertible Senior Subordinated Notes," for further information.