XOMA Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Streamlining and Restructuring Charges

Streamlining and Restructuring Charges

12 Months Ended

Dec. 31, 2013

Streamlining and Restructuring Charges [Abstract]

5.	Streamlining and Restructuring Charges

In January 2012, the Company implemented a streamlining of operations, which resulted in a restructuring plan designed to sharpen its focus on value-creating opportunities led by gevokizumab and its unique antibody discovery and development capabilities. The restructuring plan included a reduction of XOMA’s personnel by 84 positions, or 34%. These staff reductions resulted primarily from the Company’s decisions to utilize a contract manufacturing organization for Phase 3 and commercial antibody production, and to eliminate internal research functions that are non-differentiating or that can be obtained cost effectively by contract service providers.

In connection with the streamlining of operations, the Company incurred restructuring charges in 2012 of $2.0 million related to severance, other termination benefits and outplacement services, $2.2 million related to the impairment and accelerated depreciation of various assets and leasehold improvements, and $0.7 million related to moving and other facility costs. In 2013, the Company incurred $0.3 million in restructuring charges related to facility costs and it does not expect to incur additional significant restructuring charges during 2014 related to these streamlining activities.

The current and long-term portions of the outstanding restructuring liabilities are included in accrued and other liabilities and other liabilities – long-term on the consolidated balance sheets and are based upon restructuring charges recognized as of December 31, 2013 and 2012 in connection with the Company’s restructuring plans. As of December 31, 2013 and 2012, the components of these liabilities are shown below (in thousands):

	Employee Severance and Other Benefits			Facility Charges (1)			Asset Impairment and Accelerated Depreciation (2)			Total
Balance at December 31, 2012	$	-		$	75		$	-		$	75
Restructuring charges		-			328			-			328
Cash payments		-			(434	)		-			(434	)
Adjustments		-			52			-			52
Balance at December 31, 2013	$	-		$	21		$	-		$	21

	Employee Severance and Other Benefits			Facility Charges (1)			Asset Impairment and Accelerated Depreciation (2)			Total
Balance at December 31, 2011	$	-		$	162		$	-		$	162
Restructuring charges		2,027			587			2,460			5,074
Cash payments		(2,027	)		(689	)		-			(2,716	)
Proceeds from sale of assets		-			-			461			461
Adjustments		-			15			(2,921	)		(2,906	)
Balance at December 31, 2012	$	-		$	75		$	-		$	75

(1)	Includes moving and relocation costs, and lease payments, net of sublease payments.

(2)	Restructuring charges include non-cash impairments and accelerated depreciation of property and equipment and leasehold improvements; however, these amounts are excluded from the restructuring accrual.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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