Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Leases

Future minimum lease payments under operating leases as of December 31, 2016 are presented below:



(In millions)	Operating leases
2017	$	155.5
2018	117.2
2019	98.7
2020	89.2
2021	82.7
Thereafter	441.9
	$	985.2

The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2032. Lease and rental expense amounted to $100.8 million, $40.7 million and $32.9 million for the year ended December 31, 2016, 2015 and 2014, respectively, which is predominately included in SG&A expenses in the Company’s Consolidated Statement of Operations.

Letters of credit and guarantees

As of December 31, 2016 and 2015, the Company had irrevocable standby letters of credit and guarantees with various banks and insurance companies totaling $139.7 million and $48.0 million (being the contractual amounts), respectively, providing security for the Company’s performance of various obligations. These obligations are primarily in respect of the recoverability of insurance claims, lease obligations and supply commitments.

Commitments


(i)	Clinical testing

As of December 31, 2016, the Company had committed to pay approximately $1,037.4 million (December 31, 2015: $490.0 million) to contract vendors for administering and executing clinical trials. The timing of these payments is dependent upon actual services performed by the organizations as determined by patient enrollment levels and related activities.


(ii)	Contract manufacturing

As of December 31, 2016, the Company had committed to pay approximately $528.9 million (December 31, 2015: $325.0 million) in respect of contract manufacturing. The Company expects to pay $146.4 million of these commitments in 2017.


(iii)	Other purchasing commitments

As of December 31, 2016, the Company had committed to pay approximately $1,745.4 million (December 31, 2015: $485.0 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $436.6 million of these commitments in 2017.


(iv)	Investment commitments

As of December 31, 2016, the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $76.4 million (December 31, 2015: $22.0 million) which may all be payable in 2017, depending on the timing of capital calls. The investment commitments include additional funding to certain VIEs of which Shire is not the primary beneficiary.


(v)	Capital commitments

As of December 31, 2016, the Company had committed to spend $100.5 million (December 31, 2015: $60.0 million) on capital projects.