Integration and Acquisition Costs

In the three and nine months ended September 30, 2017, Shire recorded Integration and acquisition costs of $237.0 million and $696.7 million, respectively, primarily due to the acquisition and integration of Baxalta. In the three and nine months ended September 30, 2017, a credit of $3.4 million and a charge of $144.3 million is included in Integration and acquisition costs relating to the change in fair value of contingent consideration payable.

During the second quarter of 2017, Shire entered its second phase of integration activities. The costs associated with this phase will primarily relate to headcount reduction as the Company continues to advance and complete activities related to exiting transition services agreements ("TSA") with Baxter, integrating legal entities and rationalization of the Company's manufacturing facilities. For further details on existing agreements with Baxter, refer to Note 28, Agreements and Transactions with Baxter, of Shire's 2016 Form 10-K. The Company also plans to drive savings through the continued prioritization of its research and development programs and continued consolidation of its commercial operations. The integration of Baxalta is estimated to be completed by mid to late 2019.

The Baxalta integration and acquisition costs include $60.2 million and $177.4 million, respectively, of employee severance and acceleration of stock compensation, $28.4 million and $114.0 million, respectively, of third-party professional fees and $29.7 million and $71.4 million, respectively, of expenses associated with facility consolidations and $114.1 million and $147.8 million, respectively, of asset impairments for the three and nine months ended September 30, 2017. The Company expects the majority of these expenses, except for certain costs related to facility consolidations, to be paid within 12 months from the date the related expenses were incurred.

The following table summarizes the type and amount of integration costs recorded as of September 30, 2017:



(In millions)	Severance and employee benefits			Lease terminations			Total
As of January 1,	$	74.0		$	—		$	74.0
Amount charged to integration costs	157.5			58.3			215.8
Paid/utilized	(140.9		)	(7.5		)	(148.4		)
As of September 30,	$	90.6		$	50.8		$	141.4

For the three and nine months ended September 30, 2016, Shire recorded Integration and acquisition costs of $284.5 million and $738.6 million, respectively, primarily related to the acquisition and integration of Dyax and Baxalta. These costs primarily consist of $43.9 million and $56.6 million, respectively, of contract terminations, $6.8 million and $132.4 million, respectively, of acquisition costs including legal, investment banking and other transaction-related fees, $123.9 million and $389.4 million, respectively, of employee severance and acceleration of stock compensation, $65.8 million and $155.0 million, respectively, of third-party professional fees and $18.2 million and a credit of $26.9 million, respectively, of change in fair value of contingent consideration.