NIST SP800-115 Technical Guide to Inf Security Testing and Assessment

The first part of the following table sets forth commitments and obligations that were recorded on our consolidated balance sheet at

December 31, 2012. Certain other obligations and commitments, while not required to be included on the consolidated balance sheet, may have a material effect on our liquidity. We have presented these items in the remaining rows of the table below in order to present a more complete picture of our financial position and liquidity.

Commitments and Obligations Recorded on the Consolidated Balance Sheet at December 31, 2012

In 2010, we issued $400.0 million in aggregate principal amount of 2015 Notes. The principal and interest accrued as of December 31, 2012 under these notes is included on our consolidated balance sheet as of December 31, 2012. The interest that is due for periods after December 31, 2012 is not required under GAAP to be reflected on our consolidated balance sheet and is set forth separately on the table above.

Payments Due by Period

2013 2014-2015 2016-2017 2018 and later Total

(in thousands)

Commitments and Obligations Recorded on the Consolidated

Balance Sheet at December 31, 2012:

Convertible senior subordinated notes (due October 2015)

principal payment $ — $ 400,000 $ — $ — $ 400,000

Convertible senior subordinated notes (due October 2015)

interest payment 3,350 — — — 3,350

Capital lease obligations 13,707 15,170 — — 28,877

Construction financing lease obligation — 912 1,151 138,189 140,252

Research, development and drug supply costs 5,771 — — — 5,771

Additional Commitments and Obligations at December 31,

2012:

Convertible senior subordinated notes (due October 2015)

interest payments 10,050 26,800 — — 36,850

Facility operating leases, excluding Fan Pier Leases 61,503 99,960 55,496 36,723 253,682

Fan Pier Leases 83,304 133,500 133,261 676,215 1,026,280

Research, development and drug supply costs 4,247 — — — 4,247

Other 13,681 2,497 164 — 16,342

In 2012, we entered into various agreements for the lease of equipment and software licenses, expiring in 2015. The leases were accounted for as capital leases. Liabilities assumed under capital leases are recorded within “Capital lease obligations, current portion” and “Capital lease obligations, excluding current portion” on our consolidated balance sheet.

Our construction financing lease obligation relates to two buildings under construction on Fan Pier in Boston, Massachusetts. Although we will lease the space in these buildings, we are deemed for accounting purposes to be the owner of these buildings during the construction period and have recorded a long-term liability under the caption “Construction financing lease obligation” on our consolidated balance sheet.

Commitments set forth under “Research, development and drug supply costs” represent contractual commitments entered into for materials and services in the normal course of business that were reflected in “Accrued expenses” on our consolidated balance sheet as of December 31, 2012.

Additional Commitments and Obligations Not Required to be Recorded on Consolidated Balance Sheet at December 31, 2012

Our future minimum commitments and contractual obligations include interest that will accrue on the 2015 Notes after December 31, 2012, facility operating leases, our leases for the Fan Pier buildings, and contractual commitments related to our research, development and drug supply activities. These items are not required to be recorded on our consolidated balance sheet.

Our future minimum commitments under our Kendall Square lease for the period commencing on January 1, 2013 are $18.3 million for 2013 , $36.7 million for 2014 and 2015 , $36.7 million for 2016 and 2017 , and $6.1 million from January 1, 2018 through the expiration of the lease in April 2018. These amounts are included in the table above as part of our facility operating leases. Rent payments for our Kendall Square lease will be subject to increase in May 2013, based on changes in an inflation factor. We are using approximately 40% of the Kendall Square facility for our operations. We have entered into two subleases for the remaining rentable square footage at the Kendall Square facility to offset our on-going contractual lease obligations. The future minimum committed income from the subleases is $8.5 million for 2013 and $12.5 million for 2014 and 2015 . These amounts are not offset against our obligations set forth in the table above. See Note Q, "Restructuring Expense," to our consolidated financial statements.

“Fan Pier Leases” sets forth the future minimum rental payments that we are obligated to pay after taking occupancy of approximately 1.1 million square feet of office and laboratory space in two buildings under construction in Boston, Massachusetts less certain amounts reflected on the consolidated balance sheet as of December 31, 2012 under the caption “Construction financing lease obligation.” We expect to commence these rental payments in December 2013. The rental payments will extend for 15 years from the commencement date.

Commitments set forth under “Research, development and drug supply costs” represent contractual commitments entered into for materials and services in the normal course of business that were not recorded on our consolidated balance sheet as of December 31, 2012.

A commercial milestone payment we expect to pay to CFFT upon achievement of certain sales levels for KALYDECO is included in “Other” for 2013.

Collaborative Arrangements

We have entered into certain research and development collaboration agreements with third parties that include the funding of certain development, manufacturing and commercialization efforts with the potential for future milestone and royalty payments upon the achievement of pre-established developmental, regulatory and/or commercial targets. Our obligation to fund these efforts is contingent upon continued

involvement in the programs and/or the lack of any adverse events that could cause the discontinuance of the programs. Due to the nature of these arrangements, the future potential payments related to the attainment of specified development and regulatory approval milestones over a period of several years are inherently uncertain, and accordingly, no amounts have been recorded in our consolidated balance sheet as of December 31, 2012. See Note B, "Collaborative Arrangements," to our consolidated financial statements.

Pursuant to our collaboration with Alios, Alios is eligible to receive development milestone payments from us of up to $312.5 million if VX-135 is approved and commercialized. The agreement provides for additional development milestone

payments to Alios if a second HCV nucleotide analogue is approved and commercialized. As of December 31, 2012, Alios had earned $60.0 million of these milestone payments, all of which had been paid as of December 31, 2012. Alios also is eligible to receive commercial milestone payments from us of up to $750.0 million , as well as tiered royalties on net sales of approved drugs. Contingent payments under this agreement become due and payable only upon achievement of certain milestones and are not included in the contractual obligations table above.

Tax-related Obligations

We exclude liabilities pertaining to uncertain tax positions from our summary of contractual obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities. As of December 31, 2012, we have $4.1 million of liabilities associated with uncertain tax positions, $2.7 million of which are directly attributable to Alios. We have no legal obligation associated with Alios’ potential tax liabilities. As of December 31, 2012, we cannot reasonably estimate the amount we expect to pay within the next twelve months in connection with such settlements.

Other Funding Commitments

As of December 31, 2012, we have several ongoing clinical trials. We make our most significant clinical trial payments to clinical research organizations, or CROs. Although our contracts with CROs are cancelable, at our option, with notice, we historically have not cancelled such contracts. We have recorded accrued expenses of approximately $26 million on our consolidated balance sheet for expenditures incurred for clinical trials as of December 31, 2012. We have approximately $170 million in cancelable future commitments based on existing contracts as of December 31, 2012 that are not included in the contractual commitments and obligations table because of our termination rights. These amounts reflect commitments based on existing contracts and do not reflect any future modifications to, or terminations of, existing contracts or

anticipated or potential new contracts.

Our table detailing contractual commitments and obligations does not include severance payment obligations to certain of our executive officers in the event of a not-for-cause employment termination under existing employment contracts.