As part of our acquisition of Reata, we assumed responsibility for a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas, with an initial lease term of 16 years. We recorded a lease liability of approximately $151.8 million, with a corresponding right-of-use asset of approximately $121.2 million.

During the fourth quarter of 2025 we performed an impairment assessment for this right-of-use asset. This assessment involved estimating undiscounted future cash flows, including potential sublease income and remaining lease obligations. As a result of this impairment assessment, we recorded an impairment charge of approximately $52.9 million related to this Reata lease, which is included in impairment of ROU asset within our consolidated statements of income for the year ended December 31, 2025.

In September 2026 we entered into a lease termination agreement in exchange for a termination fee of approximately $84.5 million and rent payments for 12 months totaling $16.3 million. We derecognized the right of use assets of approximately $53.4 million and lease liabilities of approximately $143.6 million. The transaction resulted in a pre-tax loss of approximately $10.6 million, which was recorded in selling, general and administrative expense within our condensed consolidated statements of income for the three and nine months ended September 30, 2026.