Restructuring Liabilities

6 Months Ended

Jun. 30, 2014

Restructuring and Related Activities [Abstract]

2003 Kendall Restructuring

In 2003, the Company adopted a plan to restructure its operations to coincide with its increasing internal emphasis on advancing drug candidates through clinical development to commercialization. The restructuring liability relates to specialized laboratory and office space that is leased to the Company pursuant to a 15-year lease that terminates in 2018. The Company has not used more than 50% of this space since it adopted the plan to restructure its operations in 2003. This unused laboratory and office space currently is subleased to third parties.

The activities related to the restructuring liability for the three and six months ended June 30, 2014 and 2013 were as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(in thousands)
Liability, beginning of the period	$	18,324		$	22,459		$	19,115		$	23,328
Cash payments	(3,960		)	(3,849		)	(7,822		)	(7,422		)
Cash received from subleases	2,689			2,666			5,378			5,331
Restructuring (income) expense	(2,117		)	776			(1,735		)	815
Liability, end of the period	$	14,936		$	22,052		$	14,936		$	22,052

Fan Pier Move Restructuring

In connection with the relocation of its Massachusetts operations to Fan Pier in Boston, Massachusetts, the Company is incurring restructuring charges related to its remaining lease obligations at its facilities in Cambridge, Massachusetts, which will include lease obligations related to the 120,000 square feet of the Kendall Square facility that the Company continued to use for its operations following its 2003 Kendall Restructuring. The Company started incurring these charges in the fourth quarter of 2013 and expects them to continue through April 2018. The majority of these restructuring charges relate to cease use charges that the Company expects to incur in the third quarter of 2014 once it has vacated the buildings in Cambridge in their entirety. Once the Company completes the relocation, the continuing charges will relate to the difference between the Company’s estimated future cash flows related to its lease obligations and its actual cash flows.

The activities related to the restructuring liability for the three and six months ended June 30, 2014 were as follows:



	Three Months Ended June 30, 2014			Six Months Ended June 30, 2014
	(in thousands)
Liability, beginning of the period	$	3,722		$	797
Cash payments	(2,143		)	(4,377		)
Restructuring expense	1,677			6,836
Liability, end of the period	$	3,256		$	3,256

Strategic Restructuring

In October 2013, the Company adopted a restructuring plan. The restructuring plan included (i) a workforce reduction primarily related to the commercial support of INCIVEK following the continued and rapid decline in the number of patients being treated with INCIVEK as new medicines for the treatment of HCV infection neared approval and (ii) the write-off of certain assets. This action resulted from the Company's decision to focus its investment on future opportunities in cystic fibrosis and other research and development programs.

The activities related to the restructuring liability for the three and six months ended June 30, 2014 were as follows:



	Three Months Ended June 30, 2014			Six Months Ended June 30, 2014
	(in thousands)
Liability, beginning of the period	$	1,821		$	8,441
Cash payments	(1,199		)	(8,466		)
Restructuring expense	170			817
Liability, end of the period	$	792		$	792

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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