Lease Financing Obligation

12 Months Ended

Dec. 31, 2018

Leases [Abstract]

Lease Financing Obligation

Note 15. Lease Financing Obligation

Sale-leaseback of San Diego Office Complex:

In 2015, the Company sold its San Diego office complex consisting of land and buildings with a net book value of $71.0 million, for total consideration of $85.5 million. The Company concurrently entered into a leaseback arrangement for two buildings on the San Diego campus (“Building 1” and “Building 2”) with an initial leaseback term of ten years for Building 1 and a maximum term of one year for Building 2. The Company determined that the sale-leaseback of Building 1 did not qualify for sale-leaseback accounting due to continuing involvement that will exist for the 10-year lease term. Accordingly, the carrying amount of Building 1 will remain on the Company’s balance sheet and will be depreciated over its remaining useful life with the proceeds reflected as a financing obligation.

The Company concluded that Building 2 qualified for sale-leaseback accounting with the subsequent leaseback classified as an operating lease.

At December 31, 2018, the minimum lease payments required on the financing obligation were as follows (in thousands):

2019	$	4,388
2020		4,520
2021		4,655
2022		4,795
2023		4,939
Thereafter through 2025		6,368
Total minimum lease payments	$	29,665