Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments

The Company has an operating lease for office and laboratory space located in Bridgewater, NJ for which the initial lease term expires in November 2019. Future minimum rental payments under this lease are $1.0 million. In July 2016, the Company signed an operating lease for additional laboratory space located in Bridgewater, NJ for which the initial lease term expires in September 2021. In October 2018, the Company expanded its lease for additional laboratory space located in Bridgewater, NJ. Future minimum rental payments under this, and the initial lease, are $3.3 million. In September 2018, the Company entered into a new lease for its new corporate headquarters in Bridgewater, NJ for which the initial lease term expires in June 2030. Future minimum rental payments under this lease are $32.3 million.

Rent expense charged to operations was $2.1 million, $1.5 million, and $1.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Rent expense is recorded on a straight-line basis over the term of the applicable leases.

Future minimum lease payments under the Company's lease obligations as of December 31, 2018 are as follows (in thousands):



Year Ending December 31:
2019	$	3,125
2020	4,919
2021	4,568
2022	2,027
2023 and thereafter	24,036
Total future minimum lease payments	$	38,675

In addition to rent, the Company has several firm purchase commitments, primarily related to the manufacturing of ARIKAYCE and annual minimum royalties on global net sales of ARIKAYCE. Future firm purchase commitments under these agreements, the last of which ends in 2034, total $86.4 million. These amounts do not represent our entire anticipated purchases in the future, but instead represent only purchases that are the subject of contractually obligated minimum purchases. The minimum commitments disclosed are determined based on noncancelable minimum spend amounts or termination amounts. Additionally, we purchase products and services as needed with no firm commitment.

Legal Proceedings

From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.