Property, Plant and Equipment

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Components of property, plant and equipment, net are summarized as follows:



(In millions)	As of September 30, 2012			As of December 31, 2011
Land	$	54.0		$	51.9
Buildings	839.7			597.9
Leasehold improvements	105.8			102.7
Machinery and equipment	824.3			570.1
Computer software and hardware	465.9			439.7
Furniture and fixtures	43.1			37.6
Construction in progress	242.1			553.6
Total cost	2,574.9			2,353.5
Less: accumulated depreciation	(898.3		)	(782.1		)
Total property, plant and equipment, net	$	1,676.6		$	1,571.4

For the three and nine months ended September 30, 2012, we capitalized interest costs related to construction in progress totaling approximately $6.6 million and $23.4 million, respectively, as compared to $8.4 million and $24.3 million, respectively, in the prior year comparative periods. Capitalized interest costs are primarily related to the development of our large-scale biologics manufacturing facility in Hillerød, Denmark.

Hillerød, Denmark Facility

As of September 1, 2012, our large-scale biologics manufacturing facility in Hillerød, Denmark was ready for its intended use as we began the process of manufacturing products for use in clinical trials. As a result, we transferred $454.4 million from construction in progress to various fixed asset accounts, all within the category of property, plant and equipment. We ceased capitalizing a majority of the interest expense and began recording depreciation on the various assets during the third quarter of 2012. The average estimated useful life for the facility and its assets is 20 years. The facility is currently not licensed to produce commercial product, a process we expect to be completed in the next twelve months.

Cambridge Leases

In July 2011, we executed leases for two office buildings to be built in Cambridge, Massachusetts with a planned occupancy during the second half of 2013. Construction of these facilities began in late 2011. These buildings will serve as the future location of our corporate headquarters and commercial operations as well as provide additional general and administrative and research and development office space. In accordance with accounting guidance applicable to entities involved with the construction of an asset that will be leased when the construction is completed, we are considered the owner, for accounting purposes, of these properties during the construction period. Accordingly, we record an asset along with a corresponding financing obligation on our condensed consolidated balance sheet for the amount of total project costs incurred related to the construction in progress for these buildings. Upon completion of the buildings, we will assess and determine if the assets and corresponding liabilities should be derecognized. As of September 30, 2012 and December 31, 2011, cost incurred by the developer in relation to the construction of these buildings totaled approximately $56.6 million and $2.2 million, respectively.

As a result of our decision to relocate our corporate headquarters and centralize our campus in Cambridge, Massachusetts, we expect to vacate our Weston, Massachusetts facility in the second half of 2013 upon completion of the new buildings. Based upon our most recent estimates, we expect to incur a charge of approximately $35.0 million upon vacating the Weston facility. This amount represents our remaining Weston lease obligation, net of sublease income expected to be received.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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