26. Off-balance sheet arrangements

Notes to the consolidated financial statements

Contractual obligations and commitments

We entered into lease agreements for offices, laboratories and cars. As a consequence of the adoption of IFRS 16 Leases, on 1 January 2019, lease obligations in the scope of the new standard are presented as lease liabilities in the statements of financial position and no longer disclosed separately as off-balance sheet commitments. We refer to note 22 for a breakdown of our lease liabilities.

On 31 December 2019, we had outstanding obligations for future purchase commitments, which become due as follows:

(thousands of €)

Total

Less than
1 year

1 – 3 years

3 – 5 years

More than
5 years

Purchase commitments

251,670

175,006

70,675

5,989

At 31 December 2019 we were committed to two leases which have not yet started. The total future cash outflows for leases that had not yet commenced were as follows:

(thousands of €)

Total

Less than
1 year

1 – 3 years

3 – 5 years

More than
5 years

Lease commitments not commenced

8,986

5,793

1,502

1,502

188

In addition we have engaged a property developer for the construction of the new building in Leiden.

On 31 December 2018, we had outstanding obligations for future minimum rent payments and purchase commitments, which become due as follows:

(thousands of €)

Total

Less than
1 year

1 – 3 years

3 – 5 years

More than
5 years

*

Subsequent to the issuance of our consolidated financial statements for the year ended 31 December 2018, we noted that the total of our purchase commitments as disclosed in note 25 to our consolidated financial statements for the year ended 31 December 2018 was understated by €22.5 million. In addition, the split based on the expected due date was not presented correctly. Management assessed the materiality of the errors from a quantitative and qualitative perspective and concluded that the correction was not material to our previously issued consolidated financial statements. We elected to adjust the historical consolidated financial information presented in this disclosure note to reflect the correction of this error. Since the revisions were not material, no amendments to previously filed reports were required. The total purchase commitments due within 1 year were understated by €14.6 million, those due within 1-3 year were understated by €29.2 million and the ones becoming due within 3-5 years were overstated by €21.3 million. Each affected item within this line relating to this correction has been adjusted.

Operating lease obligations

27,704

4,722

10,024

6,234

6,724

Purchase commitments*

222,033

121,139

81,879

19,014

Total contractual obligations & commitments

249,737

125,862

91,903

25,248

6,724

In addition to the tables above, we have a contractual cost sharing obligation related to our collaboration agreement with Gilead for filgotinib. The contractual cost sharing commitment amounted to €614.1 million at 31 December 2019 (€74.0 million at 31 December 2018), for which we have direct purchase commitments of €27.5 million at 31 December 2019 (€20.3 million at 31 December 2018) reflected in the tables above.