£ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
S | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 |
£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
£ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report |
Title of class: Common Shares, par value EUR 0.01 per share | Name of each exchange on which registered: NASDAQ Stock Market LLC |
ý | U.S. GAAP |
o | International Financial Reporting Standards as issued by the International Accounting Standards Board |
o | Other |
o | Item 17 |
o | Item 18 |
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Item 1. | Identity of Directors, Senior Management and Advisors |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
Years ended December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Consolidated Statement of Income Data: (amounts in thousands, except per share data) | |||||||||||||||||||
Net sales | $ | 1,280,986 | $ | 1,344,777 | $ | 1,301,984 | $ | 1,254,456 | $ | 1,169,747 | |||||||||
Cost of sales | 454,611 | 479,839 | 486,494 | 430,432 | 419,938 | ||||||||||||||
Gross profit | 826,375 | 864,938 | 815,490 | 824,024 | 749,809 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development | 147,180 | 163,627 | 146,070 | 122,476 | 130,636 | ||||||||||||||
Sales and marketing | 360,962 | 376,873 | 371,523 | 343,549 | 307,332 | ||||||||||||||
General and administrative, restructuring, integration and other | 103,874 | 126,550 | 199,072 | 152,068 | 185,507 | ||||||||||||||
Acquisition-related intangible amortization | 38,666 | 37,070 | 35,495 | 36,117 | 26,746 | ||||||||||||||
Total operating expenses | 650,682 | 704,120 | 752,160 | 654,210 | 650,221 | ||||||||||||||
Income from operations | 175,693 | 160,818 | 63,330 | 169,814 | 99,588 | ||||||||||||||
Other expense | (43,195 | ) | (42,304 | ) | (25,992 | ) | (24,661 | ) | (3,376 | ) | |||||||||
Income before income taxes | 132,498 | 118,514 | 37,338 | 145,153 | 96,212 | ||||||||||||||
Income taxes | 5,641 | 1,312 | (31,760 | ) | 15,616 | 1,263 | |||||||||||||
Net income | $ | 126,857 | $ | 117,202 | $ | 69,098 | $ | 129,537 | $ | 94,949 | |||||||||
Net (loss) income attributable to noncontrolling interest | (246 | ) | 568 | 25 | 31 | (1,089 | ) | ||||||||||||
Net income attributable to QIAGEN N.V. | $ | 127,103 | $ | 116,634 | $ | 69,073 | $ | 129,506 | $ | 96,038 | |||||||||
Basic net income per common share attributable to the owners of QIAGEN N.V. (1) | $ | 0.54 | $ | 0.50 | $ | 0.30 | $ | 0.55 | $ | 0.41 | |||||||||
Diluted net income per common share attributable to the owners of QIAGEN N.V. (1) | $ | 0.54 | $ | 0.48 | $ | 0.29 | $ | 0.54 | $ | 0.40 | |||||||||
Weighted-average common shares outstanding | |||||||||||||||||||
Basic | 233,483 | 232,644 | 234,000 | 235,582 | 233,850 | ||||||||||||||
Diluted | 237,158 | 241,538 | 242,175 | 240,746 | 239,064 |
(1) | See Note 18 of the “Notes to Consolidated Financial Statements” for the computation of the weighted average number of Common Shares. |
As of December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Consolidated Balance Sheet Data: (amounts in thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 290,011 | $ | 392,667 | $ | 330,303 | $ | 394,037 | $ | 221,133 | |||||||||
Working capital (1) | $ | 693,261 | $ | 717,124 | $ | 583,851 | $ | 725,752 | $ | 293,753 | |||||||||
Total assets | $ | 4,189,678 | $ | 4,454,372 | $ | 4,088,392 | $ | 4,087,631 | $ | 3,729,685 | |||||||||
Total long-term liabilities, including current portion | $ | 1,360,293 | $ | 1,496,991 | $ | 1,032,409 | $ | 1,101,550 | $ | 725,874 | |||||||||
Total equity | $ | 2,561,954 | $ | 2,657,999 | $ | 2,723,871 | $ | 2,724,363 | $ | 2,557,798 | |||||||||
Common shares, par value | $ | 2,812 | $ | 2,812 | $ | 2,812 | $ | 2,769 | $ | 2,739 | |||||||||
Common shares issued | 239,707 | 239,707 | 239,707 | 236,487 | 234,221 | ||||||||||||||
Common shares outstanding | 233,006 | 232,023 | 233,890 | 234,544 | 234,221 |
• | A base business risk is specific to us or our industry and that threatens our current and existing business; |
• | A business growth risk is specific to us or our industry that threatens our future business growth; and |
• | An underlying business risk is not specific to us or our industry, but applies to a larger number of public companies. |
Risk Types | |
Base Business Risk | • Identification and monitoring of competitive business threats • Monitoring complexity of product portfolio• Monitoring dependence on key customers for single product groups• Reviewing dependence on individual production sites or suppliers• Evaluating purchasing initiatives, price controls and changes to reimbursements• Monitoring production risks, including contamination prevention, high-quality product assurance• Ensuring ability to defend against intellectual property infringements and maintain competitive advantage after expiration |
Business Growth Risk | • Managing development and success of key R&D projects• Managing successful integration of acquisitions to achieve anticipated benefits |
Underlying Business Risk | • Evaluating financial risks, including economic risks and currency rate fluctuations • Monitoring financial reporting risks, including multi-jurisdiction tax compliance • Reviewing possible asset impairment events• Assessing compliance and legal risks, including safety in operations and environmental hazard risks, compliance with various regulatory bodies and pending product approvals• Monitoring risks of FCPA (Foreign Corrupt Practices Act) or antitrust concerns arising from a network of subsidiaries and distributors in foreign countries |
• | assimilation of new products, technologies, operations, sites and personnel; |
• | integration and retention of fundamental personnel and technical expertise; |
• | application for and achievement of regulatory approvals or other clearances; |
• | diversion of resources from our existing products, business and technologies; |
• | generation of sales to offset associated acquisition costs; |
• | implementation and maintenance of uniform standards and effective controls and procedures; |
• | maintenance of relationships with employees and customers and integration of new management personnel; |
• | issuance of dilutive equity securities; |
• | incurrence or assumption of debt; |
• | amortization or impairment of acquired intangible assets or potential businesses; and |
• | exposure to liabilities of and claims against acquired entities. |
• | availability, quality and price relative to competitive products; |
• | the timing of introduction of the new product relative to competitive products; |
• | opinions of the new product’s utility; |
• | citation of the new product in published research; |
• | regulatory trends and approvals; and |
• | general trends in life sciences research, applied markets and molecular diagnostics. |
• | severely limited access to financing over an extended period of time, which may limit our ability to fund our growth strategy and could result in delays to capital expenditures, acquisitions or research and development projects; |
• | failures of currently solvent financial institutions, which may cause losses from our short-term cash investments or our hedging transactions due to a counterparty’s inability to fulfill its payment obligations; |
• | inability to refinance existing debt at competitive rates, reasonable terms or sufficient amounts; and |
• | increased volatility or adverse movements in foreign currency exchange rates. |
• | make it difficult for us to make required payments on our debt; |
• | make it difficult for us to obtain any financing in the future necessary for working capital, capital expenditures, debt service requirements or other purposes; |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and |
• | make us more vulnerable in the event of a downturn in our business. |
• | marketing, sales and customer support efforts; |
• | research and development activities; |
• | expansion of our facilities; |
• | consummation of possible future acquisitions of technologies, products or businesses; |
• | demand for our products and services; |
• | repayment or refinancing of debt; and |
• | payments in connection with our hedging activities. |
• | announcements of technological innovations or the introduction of new products by us or our competitors; |
• | developments in our relationships with collaborative partners; |
• | quarterly variations in our operating results or those of our peer companies; |
• | changes in government regulations, tax laws or patent laws; |
• | developments in patent or other intellectual property rights; |
• | developments in government spending budgets for life sciences-related research; |
• | general market conditions relating to the diagnostics, applied testing, pharmaceutical and biotechnology industries; and |
• | impact from foreign exchange rates. |
Item 4. | Information on the Company |
• | Building on our long-standing core strength in sample technologies, which labs around the world rely on to obtain highest-quality DNA and RNA for downstream analysis, we further expanded our offering in 2015 to maximize the value of our portfolio by addressing additional front-end issues for customers. QIAGEN is pioneering “liquid biopsies” to unlock valuable molecular insights from body fluids such as blood rather than surgical biopsies. We also continue to add cutting-edge technologies to address particularly difficult sample challenges in life science research. |
• | In 2015 we expanded our pipeline by acquiring the innovative AdnaGen technology, which enables enrichment and molecular analysis of circulating tumor cells (CTCs) from blood samples. CTCs are pivotal to understanding the biology of cancer, and they hold promise to help guide treatment decisions, evaluate disease burden and monitor tumor progression. |
• | We also partnered with Cell Microsystems for exclusive rights to commercialize the CellRaft Array technology, considered the most cost-efficient, viable technology for isolation and analysis of single cells, a rapidly emerging area of research. The addition complements QIAGEN’s existing single-cell portfolio that includes the REPLI-g product line. |
• | In late 2015 we acquired MO BIO Laboratories, a leader in technologies to analyze the impact of microbial diversity. Studies of the microbiome and metagenomics, enabled by next-generating sequencing, are increasingly important because of the impact microorganisms exert on human health and the environment. MO BIO's proprietary technology for isolating nucleic acids from challenging samples such as soil, water, plants, skin and feces addresses a critical need for laboratories. QIAGEN has launched a range of new products for microbiome analysis, from sample technologies to bioinformatics. |
• | The QuantiFERON-TB Gold (QFT) and QuantiFERON-TB Gold Plus (QFT-Plus) tests for latent tuberculosis infection again delivered rapid growth in 2015. Our novel QuantiFERON-TB technology has become the latent TB test of choice with high market shares around the world - and about 80% market share in Europe. Our modern QuantiFERON-TB technology is displacing the century-old tuberculin skin test (TST) in screening for TB infection. |
• | Active tuberculosis (TB), a severe infectious disease that can be fatal if untreated, often results from “reactivation” of latent TB, an asymptomatic phase of the infection that can lie dormant for years. TB control programs are increasingly screening vulnerable subpopulations and treating those infected with latent TB to prevent the emergence of the active, contagious disease. Using a small blood sample, QFT or QFT-Plus are more reliable than skin tests in detecting latent TB. |
• | In February 2015, groundbreaking clinical data on QuantiFERON-TB Gold was published in The Lancet. Testing more than 21,000 people in China, the study demonstrated that QFT provided more accurate diagnosis than the tuberculin skin test. The authors recommended community-based screening of at-risk populations with a modern blood test such as QFT. |
• | QuantiFERON-TB Gold Plus, the fourth generation of our market-leading test, gained momentum in 2015 after receiving |
• | Adoption of the QuantiFERON technology continues to spread. The National Health System (NHS) in England selected QFT-Plus for use in laboratory testing tenders as part of its TB control initiatives. In Germany, authorities recommended modern blood tests such as QFT and QFT-Plus after a large influx of Middle Eastern refugees, one of the vulnerable subpopulations in need of TB screening, depleted supplies of the only approved source of tuberculin skin tests. The U.S. Occupational Safety and Health Administration cited QFT in a directive on TB testing of healthcare workers. |
• | QuantiFERON Monitor (QFM) was launched in Europe in 2015 for initial use in transplant patients as a standardized, cost-effective measurement of immune system response. |
• | In late 2015 we introduced the GeneReader NGS System, the first complete Sample to Insight next-generation sequencing (NGS) solution designed for any laboratory to deliver actionable results. The platform is the world's first truly end-to-end NGS workflow from primary sample to a final report - providing a simpler, more cost-effective way for clinical testing to take advantage of NGS technology and improve outcomes. |
• | The GeneReader NGS System has gained positive customer feedback. At its rollout during the Association for Molecular Pathology (AMP) 2015 Annual Meeting, the Broad Institute of MIT and Harvard presented an analysis demonstrating the accuracy of the platform through a head-to-head comparison with other molecular testing systems. |
• | With the GeneReader NGS System we introduced our new Actionable Insights Tumor Panel, the first in a family of GeneRead QIAact Panels. The novel gene panel targets 12 clinically actionable genes that are often analyzed in prevalent types of cancer, including breast, ovarian, colorectal, lung and melanoma. The panel can detect up to 1,250 different genetic mutations in a sample. The panel is integrated with QIAGEN Clinical Insight software to access the latest data on relevant variants using the QIAGEN Knowledge Base, the industry's largest collection of human-curated genomic findings and literature. |
• | We integrated the Enzymatics technology and consumables portfolio, which we acquired in December 2014, into our offering of universal NGS products. Enzymatics products are used in an estimated 80% of all next-generation sequencing workflows. |
• | QIAGEN continues to roll out novel companion diagnostics that deliver insights enabling personalized treatment decisions based on patients’ individual genomic information. Our Personalized Healthcare pipeline is gaining momentum through new collaborations with Pharma companies, expanding platform options and the licensing of novel biomarkers. |
• | The therascreen® EGFR RGQ PCR Kit received U.S. regulatory approval in 2015 to guide the use of AstraZeneca’s IRESSA® (gefitinib) in patients with advanced or metastatic non-small cell lung cancer (NSCLC). A U.S. regulatory submission also was completed for this kit, to guide the use of Clovis Oncology’s proposed targeted therapy rociletinib, for the treatment of patients with NSCLC harboring a T790M mutation in the EGFR gene. |
• | In 2015 QIAGEN's therascreen EGFR RGQ Plasma PCR kit received CE-IVD marking as the first-ever liquid biopsy-based companion diagnostic to gain regulatory clearance for use in lung cancer patients. We have other co-development efforts underway to commercialize companion diagnostics based on non-invasive liquid biopsies. |
• | QIAGEN and Biotype Diagnostics GmbH entered into a partnership to develop and commercialize molecular diagnostic workflows, especially for companion diagnostics, based on QIAGEN’s Modaplex platform. The system enables customers to detect, characterize and measure up to 100 parameters simultaneously. |
• | An agreement with Columbia University provided exclusive rights for diagnostics based on fusions of the fibroblast growth factor receptor (FGFR) and transforming acidic coiled-coil (TACC) genes in various cancers. The program is synergistic with our pipeline, including development of companion diagnostics based on the IDH1 and IDH2 biomarkers. |
• | As the world’s leading independent developer of molecular technologies, QIAGEN is the preferred partner for pharmaceutical and biotech companies to develop and commercialize companion diagnostics paired with targeted drugs. In 2015 we initiated a record number of co-development projects with existing and new partners and reached a milestone of 15 master collaboration agreements, each enabling multiple projects. These partnerships add to our pipeline of companion diagnostics to be commercialized in the future, following clinical trials and regulatory approvals along with the drugs. |
• | In 2015, we launched collaborations for co-development of tests based on several cancer-related biomarkers including IDH1/2, FGFR, BRCA, BRAF and PI3K, using a range of different detection technologies including PCR, Modaplex, QuantiFERON and next-generation sequencing (NGS). |
• | Most of these collaborations are undisclosed at the request of the Pharma partners. One recently announced program will commercialize a non-invasive companion diagnostic for a novel Tokai Pharmaceuticals drug compound that is in late-stage trials for treatment of castration-resistant prostate cancer, using our new AdnaGen circulating tumor cell technology. Another new partnership begins with development of a companion diagnostic paired with a targeted compound from Array BioPharma that is currently in Phase III clinical trials for use in patients with NRAS-mutant melanoma. |
• | QIAGEN achieved our 2015 goal of surpassing 1,500 cumulative placements of the flexible modular QIAsymphony platform, up from 1,250 at the end of 2014. The flexible QIAsymphony platform offers customers Sample to Insight automation for medium-throughput molecular testing workflows. The larger installed base and expanding content menus drove our 2015 growth in consumables. |
• | We continue to expand the QIAsymphony content menu to enhance the instruments’ value to customers worldwide. In 2015, we launched seven new diagnostic tests with European approval to run on the Rotor-Gene Q (RGQ) real-time PCR platform, in the QIAsymphony family. The first multiplex assay for the platform, the RespiFast RG Panel, launched with CE-IVD marking for detection and differentiation of 18 viruses and four bacteria in acute upper respiratory tract infections. |
• | We are advancing a pipeline of more than 30 development projects for QIAsymphony, including the growing menu of infectious disease tests in the artus portfolio in Europe and the U.S. We are also expanding our Applied Testing content: investigator tests for human ID / forensics, cador for veterinary medicine and mericon for food safety. In veterinary labs, a mericon test was deployed to help combat the global spread of an H5N8 strain of avian influenza A among poultry. |
• | We entered a collaboration with Seegene Inc. to develop a menu of multiplex assay panels for the QIAsymphony platform, using Seegene technologies that enable real-time PCR analysis of up to 20 target genes per tube in a single reaction. The first project is to develop comprehensive panels to profile infectious diseases. |
• | The QIAsymphony platform serves all of our customer classes: Approximately 60% of current placements are in Molecular Diagnostics, and 40% are in the Life Sciences with Applied Testing, Pharma and Academia customers. |
• | QIAGEN’s Bioinformatics portfolio delivered strong double-digit growth in 2015, enabling users to gain valuable insights from sequencing data with the industry-leading portfolio of information resources and software solutions. Our tools turn vast amounts of genomic data into actionable insights for customers, addressing a critical bottleneck in next-generation sequencing, especially for clinical research and diagnostics. We continue to roll out new solutions to meet specialized needs in research and healthcare and to integrate rich bioinformatics with QIAGEN’s molecular testing workflows. |
• | The global introduction of QIAGEN Clinical Insight (QCI) in 2015 added momentum with a unique evidence-based clinical decision support solution that streamlines the annotation, interpretation and reporting of NGS results for clinical laboratories. QCI is a software and content platform that draws insights on complex genomic variants from the QIAGEN Knowledge Base. Applications of QCI expanded as 2015 progressed, from interpreting NGS data on somatic mutations in solid tumor cancers, to hereditary cancer indications, as well as leukemia and lymphoma testing. |
• | Our bioinformatics solutions gained broader commercial presence through reseller agreements with BGI, the world’s largest genomics organization, and GATC Biotech, a leading provider of DNA and RNA sequencing services worldwide, by providing their clients access to our Ingenuity Variant Analysis solution. This powerful analysis and interpretation platform enables customers to efficiently evaluate complex genomic data in a secure, cloud-based environment. |
• | We co-founded a coalition of 13 leading life science and diagnostics organizations to create and launch the Allele Frequency Community, an extensive, high-quality collection of digitized human genomes. The data is stored on QIAGEN’s secure IT infrastructure, and researchers can explore it using Ingenuity Variant Analysis. |
• | QIAGEN became the exclusive partner to commercialize a new database containing more than 7,000 highly annotated whole genomes from Inova Genomes. Providing researchers with a unique, diverse compendium of sequences, this database is available through Ingenuity Variant Analysis and the CLC Biomedical Genomics Workbench. |
• | The CLC Microbial Genomics Module was launched to enable academic and commercial researchers focused on food production, agricultural biology and infectious diseases to visually explore and analyze microbiomes. |
• | We introduced a new hereditary disease solution to accelerate solve rates in diagnostic odyssey cases by enabling researchers to focus on the right causal candidates. The offering includes QIAGEN’s Biomedical Genomics Workbench, Biomedical Genomics Server Solution, Ingenuity Variant Analysis and HGMD Human Gene Mutation Database. |
• | Molecular Diagnostics - healthcare providers engaged in patient care including Prevention, Profiling of diseases, Personalized Healthcare and Point of Need testing |
• | Applied Testing - government or industry customers using molecular technologies in fields such as forensics, veterinary diagnostics and food safety testing |
• | Pharma - pharmaceutical and biotechnology companies using molecular testing to support drug discovery, translational medicine and clinical development efforts |
• | Academia - researchers exploring the secrets of life such as disease mechanisms and pathways, in some cases translating findings into drug targets or other products |
(in thousands) | 2015 | 2014 | 2013 | ||||||||
Net Sales | |||||||||||
Consumables and related revenues | $ | 1,114,580 | $ | 1,172,728 | $ | 1,140,203 | |||||
Instrumentation | 166,406 | 172,049 | 161,781 | ||||||||
Total | $ | 1,280,986 | $ | 1,344,777 | $ | 1,301,984 |
(in thousands) | 2015 | 2014 | 2013 | ||||||||
Net Sales | |||||||||||
Americas: | |||||||||||
United States | $ | 525,532 | $ | 543,877 | $ | 545,600 | |||||
Other Americas | 79,578 | 75,974 | 80,299 | ||||||||
Total Americas | 605,110 | 619,851 | 625,899 | ||||||||
Europe, Middle East and Africa | 409,955 | 451,092 | 416,334 | ||||||||
Asia Pacific and Rest of World | 265,921 | 273,834 | 259,751 | ||||||||
Total | $ | 1,280,986 | $ | 1,344,777 | $ | 1,301,984 |
1. | Sample Technologies: Our growing portfolio of Sample to Insight solutions leverages QIAGEN's recognized global |
2. | QuantiFERON-TB: The modern standard for detecting latent tuberculosis infection, our QuantiFERON-TB Gold aids tuberculosis control by targeting subpopulations of at-risk patients in the United States, Europe and Asia. In 2015 we introduced QuantiFERON-TB Gold Plus, adding new technology to deliver even higher sensitivity and specificity in patients at greatest risk for TB infection, such as HIV-infected and other immunocompromised individuals. |
3. | Next-generation sequencing: Our strategic initiative to drive NGS adoption in clinical research and diagnostics gained further momentum in 2015 with the introduction of our innovative GeneReader NGS System, providing a simpler, more cost-effective way for any laboratory to take advantage of NGS technology and improve outcomes. We also offer a broad portfolio of “universal” solutions for NGS users. |
4. | Personalized Healthcare: We continue to develop and introduce companion diagnostics to guide the treatment of cancer and other diseases, as well as innovative sample technologies to support the care of patients. We also are a leading partner for pharmaceutical companies in co-developing products for personalized medicine. |
5. | QIAsymphony: We are driving global adoption of the QIAsymphony automation platform, surpassing our target of 1,500 cumulative placements in 2015, and expanding the content menu of test kits for the platform. Growing QIAsymphony placements and offering a broad menu of innovative consumables together drive sales growth. |
6. | Bioinformatics: Our industry-leading bioinformatics portfolio is growing rapidly as users of next-generation sequencing seek solutions for handling huge amounts of genomic data. Following the acquisitions of Ingenuity and CLC bio in 2013 and BIOBASE in 2014, we are expanding their software solutions, adding new applications and content for knowledge bases, and integrating them with QIAGEN products to create Sample to Insight workflows. |
• | Creating new systems for automation of workflows - platforms for laboratories, hospitals and other users of these novel molecular technologies. |
• | Expanding our broad portfolio of novel “content” - including assays to detect and measure biomarkers for disease or genetic identification. |
• | Integrating bioinformatics with the testing process - software and cloud-based resources to interpret and transform raw molecular data into useful insights. |
• | The referral of an individual for a service or product for which payment may be made by Medicare, Medicaid or other government-sponsored healthcare program; or |
• | Purchasing, ordering, arranging for, or recommending the ordering of, any service or product for which payment may be made by a government-sponsored healthcare program. |
Item 4A. | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
• | Molecular Diagnostics - healthcare providers engaged in many aspects of patient care including Prevention, Profiling of diseases, Personalized Healthcare and Point of Need testing |
• | Applied Testing - government or industry customers using molecular technologies in fields such as forensics, veterinary diagnostics and food safety testing |
• | Pharma - pharmaceutical and biotechnology companies using molecular testing to support drug discovery, translational medicine and clinical development efforts |
• | Academia - researchers exploring the secrets of life such as the mechanisms and pathways of diseases, and in some cases translating that research into drug targets or commercial applications |
• | In November 2015, we acquired MO BIO Laboratories, Inc., a privately-held provider of cutting-edge sample technologies for studies of the microbiome and metagenomics, analyzing the impact of microbial diversity on health and the environment. The acquisition adds a complementary portfolio of sample technologies to QIAGEN's universal solutions for next-generation sequencing. MO BIO’s currently marketed kits, based on its proprietary Inhibitor Removal Technology, enable the isolation of pure DNA from challenging samples like soil, water, plants and stool. |
• | In March 2015, we acquired an innovative technology that enables enrichment and molecular analysis of circulating tumor cells (CTCs) from blood samples from AdnaGen GmbH, a subsidiary of Alere Inc. The acquisition added to QIAGEN’s pipeline of technologies under development for molecular testing through less-invasive liquid biopsies as an alternative to costly and risky tissue biopsies. Other assets acquired include two marketed CE-IVD marked products, AdnaTest BreastCancer and AdnaTest Prostate Cancer, which offer improved treatment monitoring and earlier detection of tumor relapse. |
• | In December 2014, we acquired the enzyme solutions business of Enzymatics, a U.S. company whose products are used in an estimated 80% of all next-generation sequencing workflows. The comprehensive Enzymatics portfolio complements QIAGEN’s leading offering of universal NGS products, advancing our strategy to drive the adoption of NGS in clinical healthcare. |
• | In April 2014, we acquired BIOBASE, a provider of expertly curated biological databases, software and services based in Wolfenbüttel, Germany, further expanding our industry-leading bioinformatics solutions. These integrated solutions provide a complete workflow for handling genomic data from biological sample to valuable molecular insights. The content from BIOBASE includes gold-standard data in the fields of inherited diseases and pharmacogenomics. In July, QIAGEN and BGI Tech Solutions Co. announced a distribution and service relationship for the BIOBASE Human Gene Mutation Database (HGMD) in China, Taiwan, Hong Kong and Macao. QIAGEN also has integrated the BIOBASE content into the Ingenuity Knowledge Base, adding value for customers in interpreting genomic data from next-generation sequencing (NGS). |
• | In August 2013, we acquired CLC bio, a global leader in bioinformatics software with a focus on next-generation sequencing. CLC bio, a privately-held company based in Aarhus, Denmark, has created the leading commercial data analysis solutions and workbenches for NGS. CLC bio’s leading products are CLC Genomics Workbench, a comprehensive and user-friendly analysis package for analyzing, comparing and visualizing NGS data; CLC Cancer Research Workbench, focusing on genomic analysis for oncology; and CLC Genomics Server, a flexible enterprise-level infrastructure and analysis backbone for NGS data analysis. |
• | In April 2013, we acquired Ingenuity Systems, Inc., the leading provider of software solutions that efficiently and accurately analyze, interpret and report the biological meaning of genomic data. Ingenuity, a privately-held U.S. company based in California's Silicon Valley, created a market leading, expertly curated knowledge system of biomedical information and analysis solutions for the exploration, interpretation and analysis of complex biological systems. New technologies such as next-generation sequencing (NGS) are now generating more data in a single year |
• | In February 2015, we announced the spin-off of teams and activities of QIAGEN Marseille S.A. (formerly Ipsogen S.A.), a majority-owned and fully consolidated entity. In the divestiture, QIAGEN Marseille agreed to the sale of all its assets and liabilities, with the exception of its intellectual property portfolio, to a stand-alone company. QIAGEN retained rights to commercialize the ipsogen line of products, including companion diagnostics for blood cancers. As part of this initiative, we made a tender offer to acquire the remaining QIAGEN Marseille shares. As of December 31, 2015, we held 97.22% of the shares in QIAGEN Marseille, and we anticipate that we will obtain full ownership during the first quarter of 2016. |
Contractual Obligations (in thousands) | Payments Due by Period | ||||||||||||||||||||||||||
Total | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | |||||||||||||||||||||
Long-term debt (1) | $ | 1,172,972 | $ | 18,869 | $ | 18,869 | $ | 18,869 | $ | 487,317 | $ | 14,928 | $ | 614,120 | |||||||||||||
Purchase obligations | 99,212 | 67,609 | 15,970 | 8,453 | 7,044 | 136 | — | ||||||||||||||||||||
Operating leases | 54,444 | 18,166 | 12,894 | 8,207 | 5,878 | 4,376 | 4,923 | ||||||||||||||||||||
License and royalty payments | 7,794 | 1,333 | 1,277 | 1,221 | 1,151 | 1,151 | 1,661 | ||||||||||||||||||||
Capital lease obligations (2) | 4,024 | 1,307 | 1,212 | 1,505 | — | — | — | ||||||||||||||||||||
Total contractual cash obligations | $ | 1,338,446 | $ | 107,284 | $ | 50,222 | $ | 38,255 | $ | 501,390 | $ | 20,591 | $ | 620,704 |
Item 6. | Directors, Senior Management and Employees |
Name | Age | Position |
Peer M. Schatz | 50 | Managing Director, Chief Executive Officer |
Roland Sackers | 47 | Managing Director, Chief Financial Officer |
Name (1) | Age | Position |
Dr. Werner Brandt | 62 | Chairman of the Supervisory Board, Supervisory Director and Chairman of the Selection and Appointment Committee |
Stéphane Bancel | 43 | Supervisory Director, Member of the Compensation Committee, Audit Committee and Science and Technology Committee |
Dr. Metin Colpan | 61 | Supervisory Director, Chairman of the Science and Technology Committee and Member of the Selection and Appointment Committee |
Prof. Dr. Manfred Karobath | 75 | Vice-Chairman of the Supervisory Board, Supervisory Director, Chairman of the Compensation Committee, Member of the Science and Technology Committee and Member of the Selection and Appointment Committee |
Prof. Dr. Elaine Mardis | 53 | Supervisory Director and Member of the Science and Technology Committee |
Lawrence A. Rosen | 58 | Supervisory Director and Chairman of the Audit Committee |
Elizabeth E. Tallett | 66 | Supervisory Director, Member of the Audit Committee and Compensation Committee |
Annual Compensation | Long-Term Compensation | |||||||||||||||
Name | Fixed Salary | Variable Cash Bonus (1) | Other (2) | Total | Defined Contribution Benefit Plan | Performance Stock Units | ||||||||||
Managing Board | ||||||||||||||||
Peer M. Schatz | $ | 1,149,000 | 90,000 | 10,000 | $ | 1,249,000 | $ | 72,000 | 378,811 | |||||||
Roland Sackers | $ | 500,000 | 49,000 | 50,000 | $ | 599,000 | $ | 74,000 | 105,654 |
(1) | Amount does not include cash bonus amounts which were converted to equity-based compensation. In lieu of cash bonus, each Managing Board member elected to receive the value earned in 2015 in restricted stock units to be granted in 2016 which will vest over two years from the grant date. Mr. Schatz will receive a grant of 21,081 restricted stock units and Mr. Sackers will receive a grant of 7,153 restricted stock units. |
(2) | Amounts include, among others, reimbursed personal expenses such as tax consulting. We also occasionally reimburse our Managing Directors' personal expenses related to attending out-of-town meetings but not directly related to their attendance. Amounts do not include the reimbursement of certain expenses relating to travel incurred at the request of QIAGEN, other reimbursements or payments that in total did not exceed $10,000 or tax amounts paid by the Company to tax authorities in order to avoid double-taxation under multi-tax jurisdiction employment agreements. |
Fee payable to the Chairman of the Supervisory Board | $150,000 |
Fee payable to the Vice Chairman of the Supervisory Board | $90,000 |
Fee payable to each member of the Supervisory Board | $57,500 |
Additional compensation payable to members holding the following positions: | |
Chairman of the Audit Committee | $25,000 |
Chairman of the Compensation Committee | $18,000 |
Chairman of the Selection and Appointment Committee and other board committees | $12,000 |
Fee payable to each member of the Audit Committee | $15,000 |
Fee payable to each member of the Compensation Committee | $11,000 |
Fee payable to each member of the Selection and Appointment Committee and other board committees | $6,000 |
Name | Fixed Remuneration | Chairman/ Vice- Chairman Committee | Committee Membership | Total(2) | Restricted Stock Units | ||||||||||||
Supervisory Board(1) | |||||||||||||||||
Stéphane Bancel | $ | 57,500 | — | 32,000 | $ | 89,500 | 11,241 | ||||||||||
Dr. James E. Bradner | $ | 52,708 | — | 5,500 | $ | 58,208 | — | ||||||||||
Dr. Werner Brandt | $ | 150,000 | 12,000 | — | $ | 162,000 | 11,241 | ||||||||||
Dr. Metin Colpan | $ | 57,500 | 12,000 | 3,000 | $ | 72,500 | 11,241 | ||||||||||
Prof. Dr. Manfred Karobath | $ | 90,000 | 18,000 | 12,000 | $ | 120,000 | 11,241 | ||||||||||
Prof. Dr. Elaine Mardis | $ | 57,500 | — | 6,000 | $ | 63,500 | 11,241 | ||||||||||
Lawrence A. Rosen | $ | 57,500 | 25,000 | — | $ | 82,500 | 11,241 | ||||||||||
Elizabeth E. Tallett | $ | 57,500 | — | 26,000 | $ | 83,500 | 11,241 |
Name (1) | Total Vested Options | Total Unvested Options | Expiration Dates | Exercise Prices | Total Unreleased Restricted and Performance Stock Units | |||||||||
Peer M. Schatz | 799,756 | 45,953 | 2/28/2017 to 2/28/2023 | $15.59 to $22.43 | 2,659,594 | |||||||||
Roland Sackers | 181,661 | 14,460 | 2/28/2018 to 2/28/2023 | $15.59 to $22.43 | 725,218 | |||||||||
Stéphane Bancel | — | — | — | — | 21,241 | |||||||||
Dr. Werner Brandt | 7,893 | — | 4/29/2018 to 2/28/2022 | $15.59 to $22.43 | 41,373 | |||||||||
Dr. Metin Colpan | 9,835 | — | 4/25/2017 to 2/28/2022 | $15.59 to $22.43 | 41,911 | |||||||||
Prof. Dr. Manfred Karobath | 9,835 | — | 4/25/2017 to 2/28/2022 | $15.59 to $22.43 | 41,911 | |||||||||
Prof. Dr. Elaine Mardis | — | — | — | — | 11,241 | |||||||||
Lawrence A. Rosen | — | — | — | — | 21,241 | |||||||||
Elizabeth E. Tallett | 1,563 | — | 2/28/2022 | $15.59 | 37,242 |
Name of Supervisory Director (1) | Member of Audit Committee | Member of Compensation Committee | Member of Selection and Appointment Committee | Member of Science and Technology Committee | ||||
Dr. Werner Brandt | (Chairman) | |||||||
Stéphane Bancel | | | | |||||
Prof. Dr. Elaine Mardis | | |||||||
Dr. Metin Colpan | | (Chairman) | ||||||
Prof. Dr. Manfred Karobath | (Chairman) | | | |||||
Lawrence A. Rosen | (Chairman) | |||||||
Elizabeth E. Tallett | | |
Shares Beneficially Owned (1) | |||||
Name and Country of Residence | Number (2) | Percent Ownership | |||
Peer M. Schatz, Germany | 2,128,664 | (3) | 0.91 | % | |
Roland Sackers, Germany | 20,000 | (4) | * | ||
Stéphane Bancel, United States | — | — | |||
Dr. Werner Brandt, Germany | 22,427 | (5) | * | ||
Dr. Metin Colpan, Germany | 3,655,951 | (6) | 1.57 | % | |
Prof. Dr. Manfred Karobath, Austria | 15,683 | (7) | * | ||
Prof. Dr. Elaine Mardis, United States | — | — | |||
Lawrence A. Rosen, Germany | — | — | |||
Elizabeth Tallett, United States | 2,524 | (8) | * |
(1) | The number of Common Shares outstanding as of January 31, 2016 was 233,049,238. The persons and entities named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them and have the same voting rights as shareholders with respect to Common Shares. |
(2) | Does not include Common Shares subject to options or awards held by such persons at January 31, 2016. See footnotes below for information regarding options now exercisable or that could become exercisable within 60 days of the date of this table. |
(3) | Does not include 845,709 shares issuable upon the exercise of options now exercisable or that could become exercisable within 60 days from the date of this table having exercise prices ranging from $15.59 to $22.43 per share. Options expire in increments during the period between 2/2017 and 2/2023. |
(4) | Does not include 196,121 shares issuable upon the exercise of options now exercisable or that could become exercisable within 60 days from the date of this table having exercise prices ranging from $15.59 to $22.43 per share. Options expire in increments during the period between 2/2018 and 2/2023. Does not include 118,018 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. |
(5) | Does not include 7,893 shares issuable upon the exercise of options now exercisable or that could become exercisable within 60 days from the date of this table having exercise prices ranging from $15.59 to $22.43 per share. Options expire in increments during the period between 4/2018 and 2/2022. Does not include 6,335 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. |
(6) | Does not include 9,835 shares issuable upon the exercise of options now exercisable or that could become exercisable within 60 days from the date of this table having exercise prices ranging from $15.59 to $22.43 per share. Options expire in increments during the period between 4/2017 and 2/2022. Includes 2,847,025 shares held by CC Verwaltungs GmbH, of which Dr. Colpan is the sole stockholder and 800,000 shares held by Colpan GbR. Does not include 6,335 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. |
(7) | Does not include 9,835 shares issuable upon the exercise of options now exercisable or that could become exercisable within 60 days from the date of this table having exercise prices ranging from $15.59 to $22.43 per share. Options expire in increments during the period between 4/2017 and 2/2022. Does not include 6,335 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. |
(8) | Does not include 1,563 shares issuable upon the exercise of options now exercisable or that could become exercisable within 60 days from the date of this table having exercise prices of $15.59 per share. Options expire on 2/2022. Does not include 4,000 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. |
Region | Research & Development | Sales | Production | Marketing | Administration | Total | ||||||||||||
Americas | 235 | 622 | 268 | 79 | 106 | 1,310 | ||||||||||||
Europe, Middle East & Africa | 685 | 634 | 626 | 164 | 294 | 2,403 | ||||||||||||
Asia Pacific & Rest of World | 99 | 506 | 106 | 71 | 64 | 846 | ||||||||||||
December 31, 2015 | 1,019 | 1,762 | 1,000 | 314 | 464 | 4,559 |
Item 7. | Major Shareholders and Related Party Transactions |
Shares Beneficially Owned | ||||||
Name and Country of Residence | Number | Percent Ownership (1) | ||||
PRIMECAP Management Company, United States | 20,532,325 | (2) | 8.81 | % | ||
BlackRock, Inc., United States | 19,333,391 | (3) | 8.30 | % | ||
Franklin Resources, Inc., United States | 26,066,835 | (4) | 11.19 | % |
(1) | The percentage ownership was calculated based on 233,005,776 Common Shares outstanding as of December 31, 2015. |
(2) | Of the 20,532,325 shares attributed to PRIMECAP Management Company, it has sole voting power and sole dispositive power over all 20,532,325 shares. This information is based solely on the Schedule 13G filed by PRIMECAP Management Company with the Securities and Exchange Commission on February 12, 2016, which reported ownership as of December 31, 2015. |
(3) | Of the 19,333,391 shares attributed to BlackRock, Inc., it has sole voting power and sole dispositive power over all 19,333,391 shares. This information is based solely on the Schedule 13G filed by BlackRock, Inc. with the Securities and Exchange Commission on February 10, 2016, which reported ownership as of December 31, 2015. |
(4) | Of the 26,066,835 shares attributed to Franklin Resources, Inc., it has sole voting power and sole dispositive power over all 26,066,835 shares. This information is based solely on the Schedule 13G filed by Franklin Resources Inc. with the Securities and Exchange Commission on February 9, 2016, which reported ownership as of December 31, 2015. |
Item 8. | Financial Information |
Item 9. | The Offer and Listing |
High ($) | Low ($) | ||||
Annual: | |||||
2011 | 22.20 | 12.47 | |||
2012 | 19.41 | 14.05 | |||
2013 | 24.74 | 18.30 | |||
2014 | 25.32 | 19.46 | |||
2015 | 28.53 | 22.11 |
High ($) | Low ($) | ||||
Quarterly 2014: | |||||
First Quarter | 24.82 | 20.33 | |||
Second Quarter | 24.83 | 19.46 | |||
Third Quarter | 25.32 | 22.66 | |||
Fourth Quarter | 24.29 | 20.73 | |||
Quarterly 2015: | |||||
First Quarter | 25.91 | 22.11 | |||
Second Quarter | 25.74 | 23.63 | |||
Third Quarter | 28.53 | 24.38 | |||
Fourth Quarter | 28.04 | 23.80 | |||
Quarterly 2016: | |||||
First Quarter (through February 24, 2016) | 26.89 | 20.10 | |||
High ($) | Low ($) | ||||
Monthly: | |||||
September 2015 | 28.53 | 24.91 | |||
October 2015 | 26.83 | 23.80 | |||
November 2015 | 27.04 | 24.60 | |||
December 2015 | 28.04 | 25.54 | |||
January 2016 | 26.89 | 21.37 | |||
February 2016 | 22.74 | 20.10 |
High (EUR) | Low (EUR) | ||||
Annual: | |||||
2011 | 15.25 | 9.07 | |||
2012 | 15.05 | 10.69 | |||
2013 | 18.15 | 13.67 | |||
2014 | 19.64 | 14.38 | |||
2015 | 26.05 | 18.72 |
High (EUR) | Low (EUR) | ||||
Quarterly 2014: | |||||
First Quarter | 18.20 | 14.76 | |||
Second Quarter | 18.15 | 14.38 | |||
Third Quarter | 18.90 | 17.30 | |||
Fourth Quarter | 19.64 | 16.15 | |||
Quarterly 2015: | |||||
First Quarter | 24.00 | 18.72 | |||
Second Quarter | 24.14 | 20.77 | |||
Third Quarter | 26.05 | 21.19 | |||
Fourth Quarter | 25.54 | 21.73 | |||
Quarterly 2016: | |||||
First Quarter (through February 24, 2016) | 25.12 | 17.76 |
High (EUR) | Low (EUR) | ||||
Monthly: | |||||
September 2015 | 24.83 | 22.24 | |||
October 2015 | 23.90 | 21.73 | |||
November 2015 | 25.53 | 25.53 | |||
December 2015 | 25.54 | 23.27 | |||
January 2016 | 25.12 | 19.41 | |||
February 2016 | 21.02 | 17.76 |
Item 10. | Additional Information |
(i) | the transfer of our enterprise or practically our entire enterprise to a third party; |
(ii) | the entry into or termination of a long-term cooperation by us or one of our subsidiaries (dochtermaatschappijen) with another legal person or partnership or as a fully liable general partner of a limited partnership or a general partnership, if such cooperation or termination is of a far-reaching significance for us; and |
(iii) | the acquisition or divestment by us or one of our subsidiaries (dochtermaatschappijen) of a participating interest in the capital of a company with a value of at least one-third of the sum of our assets according to our consolidated balance sheet and explanatory notes in our last adopted annual accounts. |
• | fails to provide an accurate taxpayer identification number; |
• | is notified by the Internal Revenue Service that the individual has failed to report all interest or dividends required to be shown on the Federal income tax returns; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
Item 11. | Quantitative and Qualitative Disclosures About Market Risk |
Item 12. | Description of Securities Other than Equity Securities |
Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
KPMG | Ernst & Young | ||||||
(in millions) | 2015 | 2014 | |||||
Audit fees | $ | 1.9 | $ | 0.9 | |||
-consolidated financial statements | 1.3 | 0.9 | |||||
-statutory financial statements | 0.6 | — | |||||
Audit-related fees | 0.1 | 0.5 | |||||
Tax fees | — | 0.2 | |||||
All other fees | — | 0.4 | |||||
Total | $ | 2.0 | $ | 2.0 |
Item 16D. | Exemptions From the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Period | (a)Total Number of Shares Purchased | (b)Average Price Paid per Share in $(1) | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans and Programs | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under these Plans and Programs (in millions)(2) |
January 1 to April 30, 2015 | — | — | — | $50.9 |
May 1-31, 2015 | 152,495 | $24.51 | 152,495 | $47.1 |
June 1-30, 2015 | 458,200 | $24.56 | 458,200 | $35.9 |
July 1-31, 2015 | 153,600 | $24.72 | 153,600 | $32.1 |
August 1-31, 2015 | 12,200 | $26.94 | 12,200 | $31.7 |
September 1-30, 2015 | 65,066 | $26.12 | 65,066 | $30.1 |
October 1 to December 31, 2015 | — | — | — | $0.0 |
Total | 841,561 | $24.74 | 841,561 |
Item 16F. | Change in Registrant’s Certifying Accountant |
Item 16G. | Corporate Governance |
1. | Best practice provision II.1.1 recommends that a management board member is appointed for a maximum period of four years. A member may be reappointed for a term of not more than four years at a time. |
2. | Best practice provision II.2.4 recommends that the number of granted options shall be dependent on the achievement of challenging targets specified beforehand. |
3. | Best practice provision II.2.5 recommends that shares granted to management board members without financial consideration shall be retained for a period of at least five years or until at least at the end of the employment, if this period is shorter. The number of shares to be granted shall be dependent on the achievement of clearly quantifiable and challenging targets specified beforehand. |
4. | Best practice provision II.2.8 recommends that the maximum remuneration in the event of dismissal of a management board member may not exceed one year's salary (the ”fixed” remuneration component). If the maximum of one year's salary would be manifestly unreasonable for a management board member who is dismissed during his first term of office, such board member shall be eligible for a severance pay not exceeding twice the annual salary. |
5. | Best practice provision III.3.5 recommends that a person may be appointed to the supervisory board for a maximum of three 4-year terms. |
6. | Best practice provision III.7.1 recommends that a supervisory board member may not be granted any shares and/or rights to shares by way of remuneration. |
7. | Best practice provision IV.1.1 recommends that a general meeting of shareholders is empowered to cancel binding nominations of candidates for the management board and supervisory board, and to dismiss members of either board by a simple majority of votes of those in attendance, although the company may require a quorum of at least one third of the voting rights outstanding for such vote to have force. If such quorum is not represented, but a majority of those |
• | QIAGEN is exempt from NASDAQ’s quorum requirements applicable to meetings of ordinary shareholders. In keeping with the law of The Netherlands and generally accepted business practices in The Netherlands, QIAGEN’s Articles of Association provide that there are no quorum requirements generally applicable to meetings of the General Meeting. |
• | QIAGEN is exempt from NASDAQ’s requirements regarding the solicitation of proxies and provision of proxy statements for meetings of the General Meeting. QIAGEN does furnish proxy statements and solicit proxies for meetings of shareholders. Dutch corporate law sets a mandatory (participation and voting) record date for Dutch listed companies fixed at the twenty-eighth day prior to the day of the shareholders’ meeting. Shareholders registered at such record date are entitled to attend and exercise their rights as shareholders at the General Meeting, regardless of a sale of shares after the record date. |
• | QIAGEN is exempt from NASDAQ’s requirements that shareholder approval be obtained prior to the establishment of, or material amendments to, stock option or purchase plans and other equity compensation arrangements pursuant to which options or stock may be acquired by directors, officers, employees or consultants. QIAGEN is also exempt from NASDAQ’s requirements that shareholder approval be obtained prior to certain issuances of stock resulting in a change of control, occurring in connection with acquisitions of stock or assets of another company or issued at a price less than the greater of book or market value other than in a public offering. QIAGEN’s Articles of Association do not require approval of the General Meeting prior to the establishment of a stock plan. The Articles of Association also permit the General Meeting to grant the Supervisory Board general authority to issue shares without further approval of the General Meeting. QIAGEN’s General Meeting has granted the Supervisory Board general authority to issue up to a maximum of our authorized capital without further approval of the General Meeting. QIAGEN plans to seek approval of the General Meetings for stock plans and stock issuances only where required under the law of The Netherlands or under QIAGEN’s Articles of Association. |
Item 16H. | Mine Safety Disclosure |
Item 17. | Financial Statements |
Item 18. | Financial Statements |
(A) | The following financial statements, together with the reports of KPMG and Ernst & Young thereon, are filed as part of this annual report: |
Item 19. | Exhibits |
1.1 | Articles of Association as confirmed by notorial deed as of June 30, 2011 (English translation) (Filed as Exhibit 4.1) (1) |
2.4 | $400 Million Note Purchase Agreement dated as of October 16, 2012 (filed as Exhibit 2.9) (2) |
2.5 | 2019 Bonds Indenture dated March 19, 2014 (Filed as Exhibit 2.7) (5) |
2.6 | 2021 Bonds Indenture dated March 19, 2014 (Filed as Exhibit 2.8) (5) |
2.7 | 2019 Form of Warrant Confirmation dated March 12, 2014 (Filed as Exhibit 2.9) (5) |
2.8 | 2021 Form of Warrant Confirmation dated March 12, 2014 (Filed as Exhibit 2.10) (5) |
2.9 | 2019 Form of Bond Hedge Confirmation dated March 12, 2014 (Filed as Exhibit 2.11) (5) |
2.10 | 2021 Form of Bond Hedge Confirmation dated March 12, 2014 (Filed as Exhibit 2.12) (5) |
4.1 | Lease Between QIAGEN GmbH and Gisantus Grundstuecksverwaltungsgesellschaft mbH, dated January 13, 1997 (the “Max-Volmer-Strasse 4 Lease”) (Filed as Exhibit 10.3) (3) |
4.2 | The Max-Volmer-Strasse 4 Lease Summary (Filed as Exhibit 10.3(a)) (3) |
4.3 | QIAGEN N.V. Amended and Restated 2005 Stock Plan (Filed as Exhibit 99.1) (1) |
4.4 | Digene Corporation Amended and Restated Stock Option Plan (Filed as Exhibit 99.3) (4) |
4.5 | QIAGEN N.V. 2014 Stock Plan (Filed as Exhibit 99.1) (6) |
*8.1 | List of Subsidiaries |
*12.1 | Certification under Section 302; Peer M. Schatz, Managing Director and Chief Executive Officer |
*12.2 | Certification under Section 302; Roland Sackers, Managing Director and Chief Financial Officer |
*13.1 | Certifications under Section 906; Peer M. Schatz, Managing Director and Chief Executive Officer and Roland Sackers, Managing Director and Chief Financial Officer |
*15.1 | Consent of Independent Registered Public Accounting Firm |
*15.2 | Consent of Independent Registered Public Accounting Firm |
*15.3 | Letter from Ernst & Young Regarding Item 16F |
†*101 | XBRL Interactive Data File |
* | Filed herewith. |
† | Pursuant to Rule 406(T) of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
(1) | Incorporated by reference to Registration Statement of QIAGEN N.V. on Form S-8 filed with the Securities and Exchange Commission on November 17, 2011. |
(2) | Incorporated by reference to Form 20-F Annual Report of QIAGEN N.V. filed with the Securities and Exchange Commission on March 1, 2013. |
(3) | Incorporated by reference to Form 20-F Annual Report of QIAGEN N.V. filed with the Securities and Exchange Commission on March 31, 2000. |
(4) | Incorporated by reference to Registration Statement of QIAGEN N.V. on Form S-8 filed with the Securities and Exchange Commission on August 7, 2007. |
(5) | Incorporated by reference to Form 20-F Annual Report of QIAGEN N.V. filed with the Securities and Exchange Commission on March 2, 2015. |
(6) | Incorporated by reference to Registration Statement of QIAGEN N.V. on Form S-8 filed with the Securities and Exchange Commission on April 2, 2015. |
QIAGEN N.V. | ||||
Dated: February 26, 2016 | ||||
By: | /s/ Peer M. Schatz | |||
Peer M. Schatz, Chief Executive Officer | ||||
/s/ Roland Sackers | ||||
Roland Sackers, Chief Financial Officer |
Page | |
February 27, 2015 | ||||
Ernst & Young GmbH | ||||
Wirtschaftsprüfungsgesellschaft | ||||
Düsseldorf, Germany | ||||
/s/ Hendrik Hollweg | /s/ Tobias Schlebusch | |||
Wirtschaftsprüfer | Wirtschaftsprüfer | |||
[German Public Auditor] | [German Public Auditor] |
As of December 31, | |||||||||
Note | 2015 | 2014 | |||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | (3) | $ | 290,011 | $ | 392,667 | ||||
Short-term investments | (7) | 130,817 | 184,036 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $7,255 and $8,847 in 2015 and 2014, respectively | (3) | 273,853 | 265,231 | ||||||
Income taxes receivable | 26,940 | 29,312 | |||||||
Inventories, net | (3) | 136,586 | 132,276 | ||||||
Prepaid expenses and other current assets | (8) | 70,339 | 113,771 | ||||||
Deferred income taxes | (16) | 33,068 | 31,457 | ||||||
Total current assets | 961,614 | 1,148,750 | |||||||
Long-term assets: | |||||||||
Property, plant and equipment, net of accumulated depreciation of $409,634 and $392,563 in 2015 and 2014, respectively | (9) | 442,944 | 428,093 | ||||||
Goodwill | (11) | 1,875,698 | 1,887,963 | ||||||
Intangible assets, net of accumulated amortization of $827,084 and $726,273 in 2015 and 2014, respectively | (11) | 636,421 | 726,914 | ||||||
Deferred income taxes | (16) | 2,036 | 4,298 | ||||||
Other long-term assets (of which $7,472 in 2015 due from related parties) | (10, 13, 22) | 270,965 | 258,354 | ||||||
Total long-term assets | 3,228,064 | 3,305,622 | |||||||
Total assets | $ | 4,189,678 | $ | 4,454,372 |
As of December 31, | |||||||||
Note | 2015 | 2014 | |||||||
Liabilities and equity | |||||||||
Current liabilities: | |||||||||
Current portion of long-term debt (of which $130,451 in 2014 due to related parties) | (15) | $ | — | $ | 131,119 | ||||
Accounts payable | 52,306 | 46,124 | |||||||
Accrued and other liabilities (of which $3,884 in 2014 due to related parties) | (12, 22) | 192,069 | 224,203 | ||||||
Income taxes payable | 21,515 | 28,935 | |||||||
Deferred income taxes | (16) | 2,463 | 1,245 | ||||||
Total current liabilities | 268,353 | 431,626 | |||||||
Long-term liabilities: | |||||||||
Long-term debt, net of current portion | (15, 22) | 1,059,587 | 1,040,960 | ||||||
Deferred income taxes | (16) | 75,726 | 117,264 | ||||||
Other liabilities | (13) | 224,058 | 206,523 | ||||||
Total long-term liabilities | 1,359,371 | 1,364,747 | |||||||
Commitments and contingencies | (19) | ||||||||
Equity: | |||||||||
Preference shares, 0.01 EUR par value, authorized—450,000 shares, no shares issued and outstanding | — | — | |||||||
Financing preference shares, 0.01 EUR par value, authorized—40,000 shares, no shares issued and outstanding | — | — | |||||||
Common Shares, 0.01 EUR par value, authorized—410,000 shares, issued — 239,707 shares in 2015 and 2014 | 2,812 | 2,812 | |||||||
Additional paid-in capital | 1,741,167 | 1,823,171 | |||||||
Retained earnings | 1,227,509 | 1,125,686 | |||||||
Accumulated other comprehensive loss | (17) | (259,156 | ) | (134,735 | ) | ||||
Less treasury shares, at cost—6,702 and 7,684 shares in 2015 and 2014, respectively | (17) | (152,412 | ) | (167,190 | ) | ||||
Equity attributable to the owners of QIAGEN N.V. | 2,559,920 | 2,649,744 | |||||||
Noncontrolling interest | 2,034 | 8,255 | |||||||
Total equity | 2,561,954 | 2,657,999 | |||||||
Total liabilities and equity | $ | 4,189,678 | $ | 4,454,372 |
Years ended December 31, | |||||||||||||
Note | 2015 | 2014 | 2013 | ||||||||||
Net sales | (3) | $ | 1,280,986 | $ | 1,344,777 | $ | 1,301,984 | ||||||
Cost of sales | 454,611 | 479,839 | 486,494 | ||||||||||
Gross profit | 826,375 | 864,938 | 815,490 | ||||||||||
Operating expenses: | |||||||||||||
Research and development | (3) | 147,180 | 163,627 | 146,070 | |||||||||
Sales and marketing | 360,962 | 376,873 | 371,523 | ||||||||||
General and administrative, restructuring, integration and other | (3, 6) | 103,874 | 126,550 | 199,072 | |||||||||
Acquisition-related intangible amortization | 38,666 | 37,070 | 35,495 | ||||||||||
Total operating expenses | 650,682 | 704,120 | 752,160 | ||||||||||
Income from operations | 175,693 | 160,818 | 63,330 | ||||||||||
Other income (expense): | |||||||||||||
Interest income | 4,753 | 3,964 | 2,299 | ||||||||||
Interest expense | (37,396 | ) | (39,330 | ) | (30,882 | ) | |||||||
Other (expense) income, net | (10,552 | ) | (6,938 | ) | 2,591 | ||||||||
Total other expense, net | (43,195 | ) | (42,304 | ) | (25,992 | ) | |||||||
Income before income taxes | 132,498 | 118,514 | 37,338 | ||||||||||
Income taxes | (3, 16) | 5,641 | 1,312 | (31,760 | ) | ||||||||
Net income | 126,857 | 117,202 | 69,098 | ||||||||||
Net (loss) income attributable to noncontrolling interest | (246 | ) | 568 | 25 | |||||||||
Net income attributable to the owners of QIAGEN N.V. | $ | 127,103 | $ | 116,634 | $ | 69,073 | |||||||
Basic net income per common share attributable to the owners of QIAGEN N.V. | $ | 0.54 | $ | 0.50 | $ | 0.30 | |||||||
Diluted net income per common share attributable to the owners of QIAGEN N.V. | $ | 0.54 | $ | 0.48 | $ | 0.29 | |||||||
Weighted-average common shares outstanding | |||||||||||||
Basic | (18) | 233,483 | 232,644 | 234,000 | |||||||||
Diluted | (18) | 237,158 | 241,538 | 242,175 |
Years ended December 31, | |||||||||||||
Note | 2015 | 2014 | 2013 | ||||||||||
Net income | $ | 126,857 | $ | 117,202 | $ | 69,098 | |||||||
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods: | |||||||||||||
Gains on cash flow hedges, before tax | (13) | 5,337 | — | — | |||||||||
Reclassification adjustments on cash flow hedges, before tax | (13) | (5,273 | ) | — | — | ||||||||
Cash flow hedges, before tax | 64 | — | — | ||||||||||
Gains on marketable securities, before tax | 1,215 | — | — | ||||||||||
(Losses) gains on pensions, before tax | (1,809 | ) | (687 | ) | 117 | ||||||||
Foreign currency translation adjustments, before tax | (124,639 | ) | (131,326 | ) | (45,807 | ) | |||||||
Other comprehensive loss, before tax | (125,169 | ) | (132,013 | ) | (45,690 | ) | |||||||
Income tax relating to components of other comprehensive loss | 1,140 | (57 | ) | (2,151 | ) | ||||||||
Total other comprehensive loss, after tax | (124,029 | ) | (132,070 | ) | (47,841 | ) | |||||||
Comprehensive income (loss) | 2,828 | (14,868 | ) | 21,257 | |||||||||
Comprehensive (income) loss attributable to noncontrolling interest | (146 | ) | 959 | (367 | ) | ||||||||
Comprehensive income (loss) attributable to the owners of QIAGEN N.V. | $ | 2,682 | $ | (13,909 | ) | $ | 20,890 |
Note | Common Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Shares | Equity Attributable to the Owners of QIAGEN N.V. | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2012 | 236,487 | $ | 2,769 | $ | 1,718,163 | $ | 985,434 | $ | 43,991 | (1,943 | ) | $ | (35,653 | ) | $ | 2,714,704 | $ | 9,659 | $ | 2,724,363 | |||||||||||||||||||
Acquisition of QIAGEN Marseille S.A. shares from noncontrolling interests | — | — | — | — | — | — | — | — | (487 | ) | (487 | ) | |||||||||||||||||||||||||||
Net income | — | — | — | 69,073 | — | — | — | 69,073 | 25 | 69,098 | |||||||||||||||||||||||||||||
Unrealized gain, net on pension | (17) | — | — | — | — | 82 | — | — | 82 | — | 82 | ||||||||||||||||||||||||||||
Translation adjustment, net | (17) | — | — | — | — | (48,265 | ) | — | — | (48,265 | ) | 342 | (47,923 | ) | |||||||||||||||||||||||||
Purchase of treasury shares | (17) | — | — | — | — | — | (4,149 | ) | (86,029 | ) | (86,029 | ) | — | (86,029 | ) | ||||||||||||||||||||||||
Common stock issuances under employee stock plans | (20) | 3,220 | 43 | 20,301 | (76 | ) | — | 275 | 5,069 | 25,337 | — | 25,337 | |||||||||||||||||||||||||||
Excess tax benefit of employee stock plans | — | — | 433 | — | — | — | — | 433 | — | 433 | |||||||||||||||||||||||||||||
Share-based compensation | (20) | — | — | 37,935 | — | — | — | — | 37,935 | — | 37,935 | ||||||||||||||||||||||||||||
Proceeds from subscription receivables | — | — | 1,062 | — | — | — | — | 1,062 | — | 1,062 | |||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2013 | 239,707 | $ | 2,812 | $ | 1,777,894 | $ | 1,054,431 | $ | (4,192 | ) | (5,817 | ) | $ | (116,613 | ) | $ | 2,714,332 | $ | 9,539 | $ | 2,723,871 | ||||||||||||||||||
Acquisition of QIAGEN Marseille S.A. shares from noncontrolling interests | — | — | — | — | — | — | — | — | (325 | ) | (325 | ) | |||||||||||||||||||||||||||
Net income | — | — | — | 116,634 | — | — | — | 116,634 | 568 | 117,202 | |||||||||||||||||||||||||||||
Issuance of warrants | (17) | — | — | 68,900 | — | — | — | — | 68,900 | — | 68,900 | ||||||||||||||||||||||||||||
Unrealized loss, net on pension | (17) | — | — | — | — | (481 | ) | — | — | (481 | ) | — | (481 | ) | |||||||||||||||||||||||||
Translation adjustment, net | (17) | — | — | — | — | (130,062 | ) | — | — | (130,062 | ) | (1,527 | ) | (131,589 | ) | ||||||||||||||||||||||||
Purchase of treasury shares | (17) | — | — | — | — | — | (5,558 | ) | (126,889 | ) | (126,889 | ) | — | (126,889 | ) | ||||||||||||||||||||||||
Issuance of common shares in connection with warrant exercise | (15) | — | — | — | (12,115 | ) | — | 1,373 | 30,917 | 18,802 | — | 18,802 | |||||||||||||||||||||||||||
Issuance of common shares in connection with stock plan | (20) | — | — | — | (33,264 | ) | — | 2,318 | 45,395 | 12,131 | — | 12,131 | |||||||||||||||||||||||||||
Excess tax benefit of employee stock plans | — | — | 1,596 | — | — | — | — | 1,596 | — | 1,596 | |||||||||||||||||||||||||||||
Share-based compensation | (20) | — | — | 42,188 | — | — | — | — | 42,188 | — | 42,188 | ||||||||||||||||||||||||||||
Proceeds from subscription receivables | — | — | 536 | — | — | — | — | 536 | — | 536 | |||||||||||||||||||||||||||||
Redemption of subscription receivables | (15) | — | — | (67,943 | ) | — | — | — | — | (67,943 | ) | — | (67,943 | ) | |||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2014 | 239,707 | $ | 2,812 | $ | 1,823,171 | $ | 1,125,686 | $ | (134,735 | ) | (7,684 | ) | $ | (167,190 | ) | $ | 2,649,744 | $ | 8,255 | $ | 2,657,999 | ||||||||||||||||||
Acquisition of QIAGEN Marseille S.A. shares from noncontrolling interests | — | — | — | — | — | — | — | — | (6,367 | ) | (6,367 | ) | |||||||||||||||||||||||||||
Net income | — | — | — | 127,103 | — | — | — | 127,103 | (246 | ) | 126,857 | ||||||||||||||||||||||||||||
Unrealized loss, net on pension | (17) | — | — | — | — | (1,266 | ) | — | — | (1,266 | ) | — | (1,266 | ) | |||||||||||||||||||||||||
Unrealized gain, net on hedging contracts | (13) | — | — | — | — | 4,003 | — | — | 4,003 | — | 4,003 | ||||||||||||||||||||||||||||
Realized gain, net on hedging contracts | (13) | — | — | — | — | (3,955 | ) | — | — | (3,955 | ) | — | (3,955 | ) | |||||||||||||||||||||||||
Unrealized gain, net on marketable securities | (10) | — | — | — | — | 1,215 | — | — | 1,215 | — | 1,215 | ||||||||||||||||||||||||||||
Translation adjustment, net | (17) | — | — | — | — | (124,418 | ) | — | — | (124,418 | ) | 392 | (124,026 | ) | |||||||||||||||||||||||||
Purchase of treasury shares | (17) | — | — | — | — | — | (842 | ) | (20,818 | ) | (20,818 | ) | — | (20,818 | ) | ||||||||||||||||||||||||
Issuance of common shares in connection with stock plan | (20) | — | — | — | (25,280 | ) | — | 1,824 | 35,596 | 10,316 | — | 10,316 | |||||||||||||||||||||||||||
Excess tax benefit of employee stock plans | — | — | 3,328 | — | — | — | — | 3,328 | — | 3,328 | |||||||||||||||||||||||||||||
Share-based compensation | (20) | — | — | 27,566 | — | — | — | — | 27,566 | — | 27,566 | ||||||||||||||||||||||||||||
Proceeds from subscription receivables | — | — | 97 | — | — | — | — | 97 | — | 97 | |||||||||||||||||||||||||||||
Redemption of subscription receivables | (15) | — | — | (112,995 | ) | — | — | — | — | (112,995 | ) | — | (112,995 | ) | |||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2015 | 239,707 | $ | 2,812 | $ | 1,741,167 | $ | 1,227,509 | $ | (259,156 | ) | (6,702 | ) | $ | (152,412 | ) | $ | 2,559,920 | $ | 2,034 | $ | 2,561,954 |
Years ended December 31, | |||||||||||||
(in thousands) | Note | 2015 | 2014 | 2013 | |||||||||
Cash flows from operating activities: | |||||||||||||
Net income | $ | 126,857 | $ | 117,202 | $ | 69,098 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities, net of effects of businesses acquired: | |||||||||||||
Depreciation and amortization | 191,473 | 200,782 | 199,355 | ||||||||||
Non-cash impairments | 5,471 | 34,297 | 42,768 | ||||||||||
Amortization of debt discount and issuance costs | 19,955 | 15,392 | — | ||||||||||
Share-based compensation expense | (20) | 27,565 | 42,188 | 37,935 | |||||||||
Excess tax benefits from share-based compensation | (3,328 | ) | (1,596 | ) | (3,130 | ) | |||||||
Deferred income taxes | (16) | (37,194 | ) | (41,291 | ) | (68,086 | ) | ||||||
Loss on early redemption of debt | (15) | 7,564 | 4,560 | — | |||||||||
Loss on marketable securities | 6,039 | 3,914 | — | ||||||||||
Changes in fair value of contingent consideration | (14) | (5,225 | ) | (1,165 | ) | (11,127 | ) | ||||||
Other items, net including fair value changes in derivatives | 2,609 | (7,509 | ) | (13,611 | ) | ||||||||
Net changes in operating assets and liabilities: | |||||||||||||
Accounts receivable | (3) | (24,764 | ) | (16,561 | ) | (14,921 | ) | ||||||
Inventories | (3) | (33,194 | ) | (41,792 | ) | (17,499 | ) | ||||||
Prepaid expenses and other | (8) | 52,315 | (2,273 | ) | (7,923 | ) | |||||||
Other long-term assets | 2,730 | (13,090 | ) | 257 | |||||||||
Accounts payable | 7,732 | (5,495 | ) | (6,793 | ) | ||||||||
Accrued and other liabilities | (12) | (25,570 | ) | (21,482 | ) | 24,655 | |||||||
Income taxes | (16) | (88 | ) | 16,034 | 23,829 | ||||||||
Other long-term liabilities | (3,450 | ) | 5,850 | 4,150 | |||||||||
Net cash provided by operating activities | 317,497 | 287,965 | 258,957 | ||||||||||
Cash flows from investing activities: | |||||||||||||
Purchases of property, plant and equipment | (97,778 | ) | (86,591 | ) | (84,468 | ) | |||||||
Proceeds from sale of equipment | 103 | 35 | 44 | ||||||||||
Purchases of intangible assets | (19,703 | ) | (10,412 | ) | (34,225 | ) | |||||||
Purchases of investments | (6,053 | ) | (9,426 | ) | (4,319 | ) | |||||||
Purchases of short-term investments | (7) | (317,570 | ) | (420,158 | ) | (20,346 | ) | ||||||
Proceeds from sales of short-term investments | (7) | 367,714 | 275,779 | 63,146 | |||||||||
Cash paid for acquisitions, net of cash acquired | (5) | (66,930 | ) | (160,436 | ) | (170,546 | ) | ||||||
Other investing activities | (5,983 | ) | 3,608 | (1,021 | ) | ||||||||
Net cash used in investing activities | (146,200 | ) | (407,601 | ) | (251,735 | ) | |||||||
Cash flows from financing activities: | |||||||||||||
Purchase of call option related to cash convertible notes | (15) | — | (105,170 | ) | — | ||||||||
Proceeds from issuance of warrants, net of issuance costs | (17) | — | 68,900 | — | |||||||||
Net repayment/proceeds from short-term debt | (15) | — | — | (1,451 | ) | ||||||||
Net proceeds from issuance of cash convertible notes and cash paid for issuance costs | (15) | (86 | ) | 716,967 | 13 | ||||||||
Repayment of long-term debt | (15) | (251,868 | ) | (387,050 | ) | (2,285 | ) | ||||||
Principal payments on capital leases | (1,079 | ) | (4,579 | ) | (4,215 | ) | |||||||
Proceeds from subscription receivables | 97 | 536 | 1,062 | ||||||||||
Excess tax benefits from share-based compensation | 3,328 | 1,596 | 3,130 | ||||||||||
Proceeds from issuance of common shares | 10,316 | 12,131 | 25,337 | ||||||||||
Purchase of treasury shares | (17) | (20,818 | ) | (126,889 | ) | (86,029 | ) | ||||||
Other financing activities | 1,497 | 16,401 | (4,321 | ) | |||||||||
Net cash (used in) provided by financing activities | (258,613 | ) | 192,843 | (68,759 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (15,340 | ) | (10,843 | ) | (2,197 | ) | |||||||
Net (decrease) increase in cash and cash equivalents | (102,656 | ) | 62,364 | (63,734 | ) | ||||||||
Cash and cash equivalents, beginning of period | 392,667 | 330,303 | 394,037 | ||||||||||
Cash and cash equivalents, end of period | $ | 290,011 | $ | 392,667 | $ | 330,303 | |||||||
Supplemental cash flow disclosures: | |||||||||||||
Cash paid for interest | $ | 20,799 | $ | 24,052 | $ | 31,000 | |||||||
Cash paid for income taxes | $ | 34,441 | $ | 12,539 | $ | 14,518 | |||||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||||||||
Equipment purchased through capital lease | $ | 231 | $ | 342 | $ | 449 | |||||||
Intangible assets acquired in non-monetary exchange | $ | 5,900 | $ | — | $ | — |
• | Requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; |
• | Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; |
• | Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; |
• | Eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities; |
• | Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and |
• | Requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. |
Closing rate at December 31, | Annual average rate | |||||||||
(US$ equivalent for one) | 2015 | 2014 | 2015 | 2014 | 2013 | |||||
Euro (EUR) | 1.0887 | 1.2141 | 1.1100 | 1.3287 | 1.3281 | |||||
Pound Sterling (GBP) | 1.4833 | 1.5587 | 1.5286 | 1.6474 | 1.5642 | |||||
Swiss Franc (CHF) | 1.0048 | 1.0097 | 1.0406 | 1.0938 | 1.0791 | |||||
Australian Dollar (AUD) | 0.7308 | 0.8187 | 0.7522 | 0.9025 | 0.9683 | |||||
Canadian Dollar (CAD) | 0.7202 | 0.8633 | 0.7836 | 0.9059 | 0.9710 | |||||
Japanese Yen (JPY) | 0.0083 | 0.0084 | 0.0083 | 0.0095 | 0.0103 | |||||
Chinese Yuan (CNY) | 0.1542 | 0.1611 | 0.1592 | 0.1623 | 0.1626 |
• | The delivered items have value to the client on a stand-alone basis; |
• | If the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the Company. |
(in thousands) | Total | ||
BALANCE AT DECEMBER 31, 2013 | $ | 4,936 | |
Provision charged to cost of sales | 2,766 | ||
Usage | (3,504 | ) | |
Adjustments to previously provided warranties, net | (695 | ) | |
Currency translation | (224 | ) | |
BALANCE AT DECEMBER 31, 2014 | $ | 3,279 | |
Provision charged to cost of sales | 2,202 | ||
Usage | (2,569 | ) | |
Adjustments to previously provided warranties, net | (91 | ) | |
Currency translation | (184 | ) | |
BALANCE AT DECEMBER 31, 2015 | $ | 2,637 |
(in thousands) | 2015 | 2014 | ||||||
Cash at bank and on hand | $ | 217,644 | $ | 260,830 | ||||
Short-term bank deposits | 72,367 | 131,837 | ||||||
Cash and Cash Equivalents | $ | 290,011 | $ | 392,667 |
(in thousands) | 2015 | 2014 | |||||
Raw materials | $ | 27,051 | $ | 24,781 | |||
Work in process | 21,066 | 22,489 | |||||
Finished goods | 88,469 | 85,006 | |||||
Total inventories, net | $ | 136,586 | $ | 132,276 |
• | adverse financial conditions of a specific issuer, segment, industry, region or other variables; |
• | the length of time and the extent to which the fair value has been less than cost; and |
• | the financial condition and near-term prospects of the issuer. |
(in thousands) | 2015 | 2014 | 2013 | ||||||||
Net Sales | |||||||||||
Consumables and related revenues | $ | 1,114,580 | $ | 1,172,728 | $ | 1,140,203 | |||||
Instrumentation | 166,406 | 172,049 | 161,781 | ||||||||
Total | $ | 1,280,986 | $ | 1,344,777 | $ | 1,301,984 |
(in thousands) | 2015 | 2014 | 2013 | ||||||||
Net Sales | |||||||||||
Americas: | |||||||||||
United States | $ | 525,532 | $ | 543,877 | $ | 545,600 | |||||
Other Americas | 79,578 | 75,974 | 80,299 | ||||||||
Total Americas | 605,110 | 619,851 | 625,899 | ||||||||
Europe, Middle East and Africa | 409,955 | 451,092 | 416,334 | ||||||||
Asia Pacific and Rest of World | 265,921 | 273,834 | 259,751 | ||||||||
Total | $ | 1,280,986 | $ | 1,344,777 | $ | 1,301,984 |
(in thousands) | 2015 | 2014 | |||||
Long-lived assets | |||||||
Americas: | |||||||
United States | $ | 148,748 | $ | 136,461 | |||
Other Americas | 2,691 | 2,863 | |||||
Total Americas | 151,439 | 139,324 | |||||
Germany | 243,120 | 241,475 | |||||
Other Europe | 35,573 | 35,362 | |||||
Asia Pacific and Rest of World | 12,812 | 11,932 | |||||
Total | $ | 442,944 | $ | 428,093 |
(in thousands) | Enzymatics acquisition | |||
Purchase Price: | ||||
Cash consideration | $ | 114,224 | ||
Fair value of contingent consideration | 13,600 | |||
$ | 127,824 | |||
Final Allocation: | ||||
Cash and cash equivalents | $ | 1,178 | ||
Accounts receivable | 2,813 | |||
Prepaid and other current assets | 1,330 | |||
Fixed and other long-term assets | 1,414 | |||
Accounts payable | (3,090 | ) | ||
Accruals and other current liabilities | (1,940 | ) | ||
Long term deferred tax liability | (21,558 | ) | ||
Developed technology, licenses and know-how | 28,600 | |||
Tradenames | 6,600 | |||
Customer relationships | 22,300 | |||
Goodwill | 90,177 | |||
$ | 127,824 |
(in thousands) | Ingenuity acquisition | |||
Purchase Price: | ||||
Cash consideration | $ | 106,932 | ||
$ | 106,932 | |||
Final Allocation: | ||||
Cash and cash equivalents | $ | 4,449 | ||
Accounts receivable | 2,018 | |||
Prepaid and other current assets | 1,834 | |||
Current deferred tax asset | 3,126 | |||
Fixed and other long-term assets | 2,648 | |||
Long-term deferred tax asset | 13,203 | |||
Accounts payable | (2,662 | ) | ||
Accruals and other current liabilities | (14,558 | ) | ||
Liabilities assumed | (557 | ) | ||
Developed technology, licenses and know-how | 37,903 | |||
Tradenames | 3,359 | |||
In-process research and development | 2,069 | |||
Customer relationships | 1,023 | |||
Goodwill | 69,479 | |||
Deferred tax liability on fair value of identifiable intangible assets acquired | (16,402 | ) | ||
$ | 106,932 |
(in thousands) | Personnel Related | Facility Related | Contract and Other Costs | Total | |||||||||||
Balance at December 31, 2014 | $ | 6,341 | $ | 7,627 | $ | 652 | $ | 14,620 | |||||||
Payments | (4,789 | ) | (4,199 | ) | (418 | ) | (9,406 | ) | |||||||
Release of excess accrual | (453 | ) | — | (20 | ) | (473 | ) | ||||||||
Foreign currency translation adjustment | (630 | ) | — | — | (630 | ) | |||||||||
Balance at December 31, 2015 | $ | 469 | $ | 3,428 | $ | 214 | $ | 4,111 |
(in thousands) | Personnel Related | Facility Related | Contract and Other Costs | Total | |||||||||||
Balance at December 31, 2013 | $ | 9,782 | $ | 313 | $ | 511 | $ | 10,606 | |||||||
Payments | (8,071 | ) | (313 | ) | (511 | ) | (8,895 | ) | |||||||
Release of excess accrual | (775 | ) | — | — | (775 | ) | |||||||||
Foreign currency translation adjustment | (210 | ) | — | — | (210 | ) | |||||||||
Balance at December 31, 2014 | $ | 726 | $ | — | $ | — | $ | 726 | |||||||
Payments | (381 | ) | — | — | (381 | ) | |||||||||
Release of excess accrual | (340 | ) | — | — | (340 | ) | |||||||||
Foreign currency translation adjustment | (5 | ) | — | — | (5 | ) | |||||||||
Balance at December 31, 2015 | $ | — | $ | — | $ | — | $ | — |
(in thousands) | 2015 | 2014 | |||||
Prepaid expenses | $ | 38,986 | $ | 40,359 | |||
Value added tax | 15,219 | 13,332 | |||||
Other receivables | 9,876 | 10,778 | |||||
Fair value of derivative instruments | 3,758 | 46,802 | |||||
Amounts held in escrow in connection with acquisitions | 2,500 | 2,500 | |||||
$ | 70,339 | $ | 113,771 |
(in thousands) | Estimated useful life (in years) | 2015 | 2014 | |||||||
Land | — | $ | 15,452 | $ | 15,653 | |||||
Buildings and improvements | 5-40 | 302,068 | 300,131 | |||||||
Machinery and equipment | 3-10 | 253,556 | 244,906 | |||||||
Computer software | 3-7 | 125,396 | 102,835 | |||||||
Furniture and office equipment | 3-10 | 92,281 | 86,556 | |||||||
Construction in progress | — | 63,825 | 70,575 | |||||||
852,578 | 820,656 | |||||||||
Less: Accumulated depreciation and amortization | (409,634 | ) | (392,563 | ) | ||||||
Property, plant and equipment, net | $ | 442,944 | $ | 428,093 |
Equity investments as of December 31, | Share of income (loss) for the years ended December 31, | |||||||||||||||||||||
($ in thousands) | Ownership Percentage | 2015 | 2014 | 2015 | 2014 | 2013 | ||||||||||||||||
PreAnalytiX GmbH | 50.00 | % | $ | 10,627 | $ | 18,954 | $ | 1,878 | $ | 3,557 | $ | 2,044 | ||||||||||
Biotype Innovation GmbH | 24.90 | % | 3,775 | — | (595 | ) | — | — | ||||||||||||||
Pyrobett | 19.00 | % | 2,111 | 2,711 | (600 | ) | (539 | ) | (265 | ) | ||||||||||||
QIAGEN (Suzhou) Institute of Translation Research Co., Ltd. | 30.00 | % | 203 | 216 | (107 | ) | (409 | ) | (112 | ) | ||||||||||||
QIAGEN Finance | 100.00 | % | — | 414 | 85 | 147 | 93 | |||||||||||||||
QBM Cell Science | 19.50 | % | — | 398 | — | (2 | ) | (6 | ) | |||||||||||||
Dx Assays Pte Ltd | 33.30 | % | — | — | — | 710 | — | |||||||||||||||
$ | 16,716 | $ | 22,693 | $ | 661 | $ | 3,464 | $ | 1,754 |
2015 | 2014 | ||||||||||||||||
(in thousands) | Weighted Average Life (in years) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Amortized Intangible Assets: | |||||||||||||||||
Patent and license rights | 10.57 | $ | 338,175 | $ | (205,880 | ) | $ | 312,224 | $ | (185,132 | ) | ||||||
Developed technology | 10.41 | 693,294 | (409,374 | ) | 708,509 | (361,825 | ) | ||||||||||
Customer base, trademarks, and non-compete agreements | 10.52 | 432,036 | (211,830 | ) | 423,685 | (179,316 | ) | ||||||||||
10.48 | $ | 1,463,505 | $ | (827,084 | ) | $ | 1,444,418 | $ | (726,273 | ) | |||||||
Unamortized Intangible Assets: | |||||||||||||||||
In-process research and development | $ | — | $ | 8,769 | |||||||||||||
Goodwill | 1,875,698 | 1,887,963 | |||||||||||||||
$ | 1,875,698 | $ | 1,896,732 |
(in thousands) | Intangibles | Goodwill | |||||
BALANCE AT DECEMBER 31, 2013 | $ | 790,405 | $ | 1,855,691 | |||
Additions | 9,677 | — | |||||
Acquisitions | 103,130 | 99,846 | |||||
Amortization | (132,890 | ) | — | ||||
Impairment losses | (8,711 | ) | — | ||||
Foreign currency translation adjustments | (34,697 | ) | (67,574 | ) | |||
BALANCE AT DECEMBER 31, 2014 | $ | 726,914 | $ | 1,887,963 | |||
Additions | 45,575 | — | |||||
Purchase adjustments | (8,200 | ) | 1,656 | ||||
Acquisitions | 31,412 | 37,084 | |||||
Amortization | (131,953 | ) | — | ||||
Impairment losses | (205 | ) | — | ||||
Foreign currency translation adjustments | (27,122 | ) | (51,005 | ) | |||
BALANCE AT DECEMBER 31, 2015 | $ | 636,421 | $ | 1,875,698 |
(in thousands) | Amortization | ||
Years ended December 31: | |||
2016 | $ | 132,640 | |
2017 | $ | 114,512 | |
2018 | $ | 92,591 | |
2019 | $ | 74,479 | |
2020 | $ | 50,069 |
(in thousands) | 2015 | 2014 | |||||
Accrued expenses | $ | 55,928 | $ | 79,120 | |||
Payroll and related accruals | 52,036 | 54,768 | |||||
Deferred revenue | 49,812 | 49,190 | |||||
Accrued royalties | 13,786 | 13,855 | |||||
Cash collateral | 7,826 | — | |||||
Accrued contingent consideration and milestone payments | 6,995 | 7,477 | |||||
Accrued interest on long-term debt | 4,239 | 8,121 | |||||
Current portion of capital lease obligations | 922 | 1,125 | |||||
Fair value of derivative instruments | 525 | 10,547 | |||||
Total accrued and other liabilities | $ | 192,069 | $ | 224,203 |
Derivatives in Asset Positions Fair value | Derivatives in Liability Positions Fair value | ||||||||||||||
(in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Derivative instruments designated as hedges | |||||||||||||||
Interest rate contracts (1) | $ | 12,687 | $ | 3,294 | $ | — | $ | — | |||||||
Total derivative instruments designated as hedges | $ | 12,687 | $ | 3,294 | $ | — | $ | — | |||||||
Undesignated derivative instruments | |||||||||||||||
Call spread overlay | $ | 169,037 | $ | 147,707 | $ | (170,951 | ) | $ | (149,450 | ) | |||||
Foreign exchange contracts | 1,393 | 46,802 | (525 | ) | (10,547 | ) | |||||||||
Total derivative instruments | $ | 170,430 | $ | 194,509 | $ | (171,476 | ) | $ | (159,997 | ) |
Year-Ended December 31, 2015 (in thousands) | Gain/(loss) recognized in AOCI | Location of gain/loss in income statement | (Gain) loss reclassified from AOCI into income | Gain (loss) recognized in income | ||||||||||
Cash flow hedges | ||||||||||||||
Interest rate contracts | $ | 5,337 | Other (expense) income, net | $ | (5,273 | ) | n/a | |||||||
Fair value hedges | ||||||||||||||
Interest rate contracts | $ | — | Other (expense) income, net | $ | — | $ | 1,691 | |||||||
Undesignated derivative instruments | ||||||||||||||
Call spread overlay | n/a | Other (expense) income, net | n/a | $ | (171 | ) | ||||||||
Foreign exchange contracts | n/a | Other (expense) income, net | n/a | 21,434 | ||||||||||
$ | 21,263 |
Year-Ended December 31, 2014 (in thousands) | Gain/(loss) recognized in AOCI | Location of (gain) loss in income statement | (Gain) loss reclassified from AOCI into income | Gain (loss) recognized in income | ||||||||||
Fair value hedges | ||||||||||||||
Interest rate contracts | $ | — | Other (expense) income, net | $ | — | $ | 3,294 | |||||||
Undesignated derivative instruments | ||||||||||||||
Call spread overlay | n/a | Other (expense) income, net | n/a | $ | (1,743 | ) | ||||||||
Foreign exchange contracts | n/a | Other (expense) income, net | n/a | 61,713 | ||||||||||
$ | 59,970 |
Year-Ended December 31, 2013 (in thousands) | Gain/(loss) recognized in AOCI | Location of (gain) loss in income statement | (Gain) loss reclassified from AOCI into income | Gain (loss) recognized in income | ||||||
Undesignated derivative instruments | ||||||||||
Foreign exchange contracts | n/a | Other (expense) income, net | n/a | $ | (19,409 | ) |
As of December 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Short-term investments | $ | 3,674 | $ | 127,143 | $ | — | $ | 130,817 | $ | 3,885 | $ | 180,151 | $ | — | $ | 184,036 | |||||||||||||||
Marketable securities | 3,485 | — | — | 3,485 | — | — | — | — | |||||||||||||||||||||||
Call option | — | 169,037 | — | 169,037 | — | 147,707 | — | 147,707 | |||||||||||||||||||||||
Foreign exchange contracts | — | 1,393 | — | 1,393 | — | 46,802 | — | 46,802 | |||||||||||||||||||||||
Interest rate contracts | — | 12,687 | — | 12,687 | — | 3,294 | — | 3,294 | |||||||||||||||||||||||
$ | 7,159 | $ | 310,260 | $ | — | $ | 317,419 | $ | 3,885 | $ | 377,954 | $ | — | $ | 381,839 | ||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | — | $ | (525 | ) | $ | — | $ | (525 | ) | $ | — | $ | (10,547 | ) | $ | — | $ | (10,547 | ) | |||||||||||
Cash conversion option | — | (170,951 | ) | — | (170,951 | ) | — | (149,450 | ) | — | (149,450 | ) | |||||||||||||||||||
Contingent consideration | — | — | (17,678 | ) | (17,678 | ) | — | — | (17,477 | ) | (17,477 | ) | |||||||||||||||||||
$ | — | $ | (171,476 | ) | $ | (17,678 | ) | $ | (189,154 | ) | $ | — | $ | (159,997 | ) | $ | (17,477 | ) | $ | (177,474 | ) |
(in thousands) | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent Consideration | |||
BALANCE AT DECEMBER 31, 2013 | $ | (6,127 | ) | |
Additions from acquisitions | (13,057 | ) | ||
Payments | 457 | |||
Gain included in earnings | 1,162 | |||
Foreign currency translation adjustments | 88 | |||
BALANCE AT DECEMBER 31, 2014 | $ | (17,477 | ) | |
Additions | (5,476 | ) | ||
Gain included in earnings | 5,225 | |||
Foreign currency translation adjustments | 50 | |||
BALANCE AT DECEMBER 31, 2015 | $ | (17,678 | ) |
(in thousands) | 2015 | 2014 | |||||
Notes payable to QIAGEN Finance bearing interest at an effective rate of 1.8% due in February 2024 | $ | — | $ | 130,451 | |||
3.19% Series A Senior Notes due October 16, 2019 | 73,994 | 73,645 | |||||
3.75% Series B Senior Notes due October 16, 2022 | 303,991 | 302,648 | |||||
3.90% Series C Senior Notes due October 16, 2024 | 27,000 | 27,000 | |||||
0.375% Senior Unsecured Cash Convertible Notes due 2019 | 396,198 | 386,332 | |||||
0.875% Senior Unsecured Cash Convertible Notes due 2021 | 258,404 | 251,335 | |||||
Other notes payable bearing interest up to 6.28% | — | 668 | |||||
Total long-term debt | 1,059,587 | 1,172,079 | |||||
Less current portion | — | 131,119 | |||||
Long-term portion | $ | 1,059,587 | $ | 1,040,960 |
Year ending December 31, | (in thousands) | ||
2016 | $ | — | |
2017 | — | ||
2018 | — | ||
2019 | 470,192 | ||
2020 | — | ||
thereafter | 589,395 | ||
$ | 1,059,587 |
• | during any calendar quarter commencing after the calendar quarter ending on March 31, 2014 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; |
• | if we undergo certain fundamental changes as defined in the agreement; |
• | during the five business day period immediately after any ten consecutive trading day period in which the quoted price for the 2019 Notes or the 2021 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; |
• | if we elect to distribute assets or property to all or substantially all of the holders of our common stock and those assets or other property have a value of more than 25% of the average daily volume-weighted average trading price of our common stock for the prior 20 consecutive trading days; |
• | if we elect to redeem the Cash Convertible Notes; or |
• | if we experience certain customary events of default, including defaults under certain other indebtedness. |
Year-Ended December 31 | ||||||||
(in thousands) | 2015 | 2014 | ||||||
Coupon interest | $ | 4,238 | $ | 3,307 | ||||
Amortization of original issuance discount | 16,935 | 12,836 | ||||||
Amortization of debt issuance costs | 2,220 | 1,693 | ||||||
Total interest expense related to the Cash Convertible Notes | $ | 23,393 | $ | 17,836 |
(in thousands) | 2015 | 2014 | 2013 | ||||||||
Pretax income in The Netherlands | $ | (2,495 | ) | $ | (5,806 | ) | $ | 24,135 | |||
Pretax income from foreign operations | 134,993 | 124,320 | 13,203 | ||||||||
$ | 132,498 | $ | 118,514 | $ | 37,338 |
(in thousands) | 2015 | 2014 | 2013 | ||||||||
Current—The Netherlands | $ | 973 | $ | 936 | $ | 2,874 | |||||
—Foreign | 41,862 | 41,667 | 33,452 | ||||||||
42,835 | 42,603 | 36,326 | |||||||||
Deferred—The Netherlands | 250 | 317 | — | ||||||||
—Foreign | (37,444 | ) | (41,608 | ) | (68,086 | ) | |||||
(37,194 | ) | (41,291 | ) | (68,086 | ) | ||||||
Total provision for income taxes | $ | 5,641 | $ | 1,312 | $ | (31,760 | ) |
2015 | 2014 | 2013 | ||||||||||||||||||
(in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||
Income taxes at The Netherlands statutory rate | $ | 33,124 | 25.0 | % | $ | 29,628 | 25.0 | % | $ | 9,334 | 25.0 | % | ||||||||
Taxation of foreign operations, net(1) | (36,407 | ) | (27.5 | ) | (29,959 | ) | (25.3 | ) | (31,826 | ) | (85.2 | ) | ||||||||
Tax impact from non-deductible items | 14,411 | 10.9 | 9,339 | 7.9 | 6,219 | 16.7 | ||||||||||||||
Tax impact from tax exempt income(2) | (5,810 | ) | (4.4 | ) | (2,589 | ) | (2.1 | ) | (8,557 | ) | (23.0 | ) | ||||||||
Tax contingencies, net | 1,163 | 0.9 | 4,409 | 3.7 | 1,986 | 5.3 | ||||||||||||||
Taxes due to changes in tax rates | (836 | ) | (0.6 | ) | 330 | 0.3 | (1,640 | ) | (4.4 | ) | ||||||||||
Government incentives and other deductions(3) | (2,754 | ) | (2.1 | ) | (8,617 | ) | (7.3 | ) | (5,931 | ) | (15.9 | ) | ||||||||
Restructuring | — | — | — | — | (872 | ) | (2.3 | ) | ||||||||||||
Prior year taxes | (1,201 | ) | (0.9 | ) | (1,950 | ) | (1.7 | ) | (888 | ) | (2.4 | ) | ||||||||
Valuation allowance | 3,450 | 2.6 | — | — | — | — | ||||||||||||||
Other items, net | 501 | 0.4 | 721 | 0.6 | 415 | 1.1 | ||||||||||||||
Total provision for income taxes | $ | 5,641 | 4.3 | % | $ | 1,312 | 1.1 | % | $ | (31,760 | ) | (85.1 | )% |
(in thousands) | Unrecognized Tax Benefits | ||
Balance at December 31, 2013 | $ | 11,585 | |
Additions based on tax positions related to the current year | 4,448 | ||
Decrease from currency translation | (31 | ) | |
Balance at December 31, 2014 | $ | 16,002 | |
Additions based on tax positions related to the current year | 2,018 | ||
Additions for tax positions of prior years | 2,640 | ||
Settlements with taxing authorities | (2,988 | ) | |
Reductions due to lapse of statute of limitations | (747 | ) | |
Decrease from currency translation | (190 | ) | |
Balance at December 31, 2015 | $ | 16,735 |
2015 | 2014 | ||||||||||||||
(in thousands) | Deferred Tax Assets | Deferred Tax Liability | Deferred Tax Assets | Deferred Tax Liability | |||||||||||
Net operating loss carry forwards | $ | 25,771 | $ | — | $ | 33,208 | $ | — | |||||||
Accrued and other liabilities | 22,648 | — | 20,425 | — | |||||||||||
Inventories | 2,394 | (1,060 | ) | 4,798 | (1,358 | ) | |||||||||
Allowance for bad debts | 1,121 | (465 | ) | 1,155 | (483 | ) | |||||||||
Currency revaluation | 934 | (132 | ) | 510 | (211 | ) | |||||||||
Depreciation and amortization | 1,859 | (27,854 | ) | 3,616 | (10,645 | ) | |||||||||
Capital lease | 1,793 | — | 1,128 | — | |||||||||||
Tax credit carryforwards | 1,110 | — | 3,347 | — | |||||||||||
Unremitted profits and earnings | — | (902 | ) | — | (1,064 | ) | |||||||||
Intangibles | 272 | (150,594 | ) | 1,030 | (199,677 | ) | |||||||||
Share-based compensation | 14,726 | — | 14,209 | — | |||||||||||
Interest | 54,307 | — | 38,013 | — | |||||||||||
Convertible debt | 13,765 | — | 10,055 | — | |||||||||||
Other | 2,080 | (1,154 | ) | 1,901 | (2,108 | ) | |||||||||
142,780 | (182,161 | ) | 133,395 | (215,546 | ) | ||||||||||
Valuation allowance | (3,703 | ) | — | (602 | ) | — | |||||||||
$ | 139,077 | $ | (182,161 | ) | $ | 132,793 | $ | (215,546 | ) | ||||||
Net deferred tax liabilities | $ | (43,084 | ) | $ | (82,753 | ) |
(in thousands) | 2015 | 2014 | |||||
Net unrealized gain on hedging contracts, net of tax | $ | 48 | $ | — | |||
Net unrealized gain on marketable securities, net of tax | 1,215 | — | |||||
Net unrealized loss on pension, net of tax | (2,148 | ) | (882 | ) | |||
Foreign currency effects from intercompany long-term investment transactions, net of tax of $7.4 million and $6.8 million in 2015 and 2014, respectively | (15,497 | ) | (12,933 | ) | |||
Foreign currency translation adjustments | (242,774 | ) | (120,920 | ) | |||
Accumulated other comprehensive loss | $ | (259,156 | ) | $ | (134,735 | ) |
Years ended December 31, | |||||||||||
(in thousands, except per share data) | 2015 | 2014 | 2013 | ||||||||
Net income attributable to the owners of QIAGEN N.V. | $ | 127,103 | $ | 116,634 | $ | 69,073 | |||||
Weighted average number of common shares used to compute basic net income per common share | 233,483 | 232,644 | 234,000 | ||||||||
Dilutive effect of stock options and restrictive stock units | 3,539 | 3,573 | 3,023 | ||||||||
Dilutive effect of outstanding warrants | 136 | 5,321 | 5,152 | ||||||||
Weighted average number of common shares used to compute diluted net income per common share | 237,158 | 241,538 | 242,175 | ||||||||
Outstanding options and awards having no dilutive effect, not included in above calculation | 37 | 422 | 1,616 | ||||||||
Outstanding warrants having no dilutive effect, not included in above calculation | 26,071 | 32,505 | 21,315 | ||||||||
Basic earnings per common share attributable to the owners of QIAGEN N.V. | $ | 0.54 | $ | 0.50 | $ | 0.30 | |||||
Diluted earnings per common share attributable to the owners of QIAGEN N.V. | $ | 0.54 | $ | 0.48 | $ | 0.29 |
(in thousands) | Capital Leases | Operating Leases | |||||
2016 | $ | 1,307 | $ | 18,166 | |||
2017 | 1,212 | 12,894 | |||||
2018 | 1,505 | 8,207 | |||||
2019 | — | 5,878 | |||||
2020 | — | 4,376 | |||||
Thereafter | — | 4,923 | |||||
4,024 | $ | 54,444 | |||||
Less: Amount representing interest | (682 | ) | |||||
3,342 | |||||||
Less: Current portion | (922 | ) | |||||
Long-term portion | $ | 2,420 |
(in thousands) | Purchase Commitments | License & Royalty Commitments | |||||
2016 | $ | 67,609 | $ | 1,333 | |||
2017 | 15,970 | 1,277 | |||||
2018 | 8,453 | 1,221 | |||||
2019 | 7,044 | 1,151 | |||||
2020 | 136 | 1,151 | |||||
Thereafter | — | 1,661 | |||||
$ | 99,212 | $ | 7,794 |
2013 | |||
Stock price volatility | 27 | % | |
Risk-free interest rate | 0.88 | % | |
Expected life (in years) | 4.93 | ||
Dividend rate | 0 | % | |
Forfeiture rate | 4.1 | % |
All Employee Options | Number of Shares (in thousands) | Weighted Average Exercise Price | Weighted Average Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||
Outstanding at January 1, 2015 | 2,531 | $ | 18.23 | |||||||||
Exercised | (669 | ) | $ | 15.30 | ||||||||
Forfeited | (22 | ) | $ | 17.01 | ||||||||
Expired | (19 | ) | $ | 12.80 | ||||||||
Outstanding at December 31, 2015 | 1,821 | $ | 19.37 | 4.59 | $ | 15,080 | ||||||
Vested at December 31, 2015 | 1,670 | $ | 19.27 | 4.36 | $ | 14,001 | ||||||
Vested and expected to vest at December 31, 2015 | 1,817 | $ | 19.37 | 4.59 | $ | 15,048 |
Stock Units | Stock Units (in thousands) | Weighted Average Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||
Outstanding at January 1, 2015 | 9,160 | |||||||
Granted | 1,691 | |||||||
Vested | (1,153 | ) | ||||||
Forfeited | (742 | ) | ||||||
Outstanding at December 31, 2015 | 8,956 | 2.46 | $ | 247,757 | ||||
Vested and expected to vest at December 31, 2015 | 7,298 | 2.27 | $ | 189,560 |
Compensation Expense (in thousands) | 2015 | 2014 | 2013 | ||||||||
Cost of sales | $ | 2,460 | $ | 2,726 | $ | 3,337 | |||||
Research and development | 6,037 | 6,650 | 7,632 | ||||||||
Sales and marketing | 6,180 | 8,290 | 10,412 | ||||||||
General and administrative | 12,890 | 24,522 | 16,554 | ||||||||
Share-based compensation expense | 27,567 | 42,188 | 37,935 | ||||||||
Less: income tax benefit | 6,511 | 9,685 | 8,832 | ||||||||
Net share-based compensation expense | $ | 21,056 | $ | 32,503 | $ | 29,103 |
As of December 31, | For the years ended December 31, | ||||||||||||||||||
(in thousands) | 2015 | 2014 | 2015 | 2014 | 2013 | ||||||||||||||
Net sales | — | — | $ | 418 | $ | 1,567 | $ | 6,193 | |||||||||||
Reimbursements against research and development costs | — | — | $ | 2,032 | — | — | |||||||||||||
Accounts receivable | $ | 1,209 | $ | 1,797 | — | — | — | ||||||||||||
Accounts payable | $ | 471 | $ | 1,397 | — | — | — | ||||||||||||
Loans receivable, including interest | $ | 7,472 | — | — | — | — |
(in thousands) | Balance at Beginning of Year | Provision Charged to Expense | Write-Offs | Foreign Exchange and Other | Balance at End of Year | ||||||||||||||
Year Ended December 31, 2013: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 5,221 | $ | 6,901 | $ | (1,527 | ) | $ | 88 | $ | 10,683 | ||||||||
Year Ended December 31, 2014: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 10,683 | $ | 1,363 | $ | (2,263 | ) | $ | (936 | ) | $ | 8,847 | |||||||
Year Ended December 31, 2015: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 8,847 | $ | 2,093 | $ | (2,022 | ) | $ | (1,663 | ) | $ | 7,255 |
Company Name | Jurisdiction of Incorporation |
Amnisure International, LLC | USA |
Cellestis, LLC | USA |
Cellestis Ltd. | Australia |
Intelligent Bio-Systems, Inc. | USA |
MO BIO Laboratories, Inc. | USA |
QIAGEN Aarhus A/S | Denmark |
QIAGEN AB | Sweden |
QIAGEN AG | Switzerland |
QIAGEN Australia Holding Pty. Ltd. | Australia |
QIAGEN Benelux BV | Netherlands |
QIAGEN Beverly, Inc. | USA |
QIAGEN Deutschland Holding GmbH | Germany |
QIAGEN Finance (Ireland) Ltd. | Ireland |
QIAGEN Finance (Malta) Ltd. | Malta |
QIAGEN France S.A.S. | France |
QIAGEN Gaithersburg, Inc. | USA |
QIAGEN GmbH | Germany |
QIAGEN Hamburg GmbH | Germany |
QIAGEN Inc. (Canada) | Canada |
QIAGEN Inc. (USA) | USA |
QIAGEN Instruments AG | Switzerland |
QIAGEN K.K. | Japan |
QIAGEN Lake Constance GmbH | Germany |
QIAGEN Ltd. | UK |
QIAGEN Manchester Ltd. | UK |
QIAGEN Marseille SA | France |
QIAGEN Mexico, S. de R.L. de C.V. | Mexico |
QIAGEN North American Holdings Inc. | USA |
QIAGEN Pty. Ltd. | Australia |
QIAGEN Redwood City, Inc. | USA |
QIAGEN Sciences, LLC | USA |
QIAGEN Shenzhen Co. Ltd. | China |
QIAGEN S.r.l. | Italy |
QIAGEN U.S. Finance Holdings (Luxembourg) S.a.r.l. | Luxembourg |
Quanta BioSciences, Inc. | USA |
SA Biosciences, LLC | USA |
1. | I have reviewed this annual report on Form 20-F of QIAGEN N.V; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
/s/ Peer M. Schatz |
Peer M. Schatz |
Managing Director and Chief Executive Officer |
1. | I have reviewed this annual report on Form 20-F of QIAGEN N.V; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
/s/ Roland Sackers |
Roland Sackers |
Managing Director and Chief Financial Officer |
Dated: | February 26, 2016 | /s/ Peer M. Schatz | ||||
Peer M. Schatz | ||||||
Managing Director and Chief Executive Officer | ||||||
Dated: | February 26, 2016 | /s/ Roland Sackers | ||||
Roland Sackers | ||||||
Managing Director and Chief Financial Officer |
(1) | Registration Statement (Form F-3 No. 333-162052) of QIAGEN N.V.; and |
(2) | Registration Statements (Form S-8 Nos. 333-07166, 333-178035, 333-107491, 333-12372, 333-127393, 333-145171 and 333-203220) pertaining to the QIAGEN N.V. 1996 Employee, Director and Consultant Stock Option Plan, the QIAGEN N.V. Amended and Restated 2005 Stock Plan, the Digene Corporation Amended and Restated Equity Incentive Plan, the Digene Corporation Amended and Restated Omnibus Plan, the Digene Corporation Amended and Restated 1997 Stock Option Plan and the QIAGEN N.V. 2014 Stock Plan; |
February 26, 2016 | ||
Ernst & Young GmbH | ||
Wirtschaftsprüfungsgesellschaft | ||
Düsseldorf, Germany | ||
/s/Hendrik Hollweg | /s/Tobias Schlebusch | |
Wirtschaftsprüfer | Wirtschaftsprüfer | |
[German Public Auditor] | [German Public Auditor] |
Ernst & Young GmbH | ||||
Wirtschaftsprüfungsgesellschaft | ||||
Düsseldorf, Germany | ||||
/s/ Hendrik Hollweg | /s/ Tobias Schlebusch | |||
Wirtschaftsprüfer | Wirtschaftsprüfer | |||
[German Public Auditor] | [German Public Auditor] |
Document and Entity Information |
12 Months Ended |
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Dec. 31, 2015
shares
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Document and Entity Information [Abstract] | |
Entity Registrant Name | QIAGEN NV |
Entity Central Index Key | 0001015820 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2015 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 233,005,776 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Corporate Information and Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Corporate Information and Basis of Presentation | Corporate Information and Basis of Presentation QIAGEN N.V. is a public limited liability company ('naamloze vennootschap') under Dutch law with registered office at Hulsterweg 82, Venlo, The Netherlands. QIAGEN N.V., a Netherlands holding company, and subsidiaries (we, our or the Company) is the leading global provider of Sample to Insight solutions to transform biological materials into valuable molecular insights. Our sample technologies isolate and process DNA, RNA and proteins from blood, tissue and other materials. Assay technologies make these biomolecules visible and ready for analysis. Bioinformatics software and knowledge bases interpret data to report relevant, actionable insights. Automation solutions tie these together in seamless and cost-effective molecular testing workflows. We provide these workflows to four major customer classes: Molecular Diagnostics (human healthcare), Applied Testing (forensics, veterinary testing and food safety), Pharma (pharmaceutical and biotechnology companies) and Academia (life sciences research). We market our products in more than 130 countries. The accompanying consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and all amounts are presented in U.S. dollars rounded to the nearest thousand, unless otherwise indicated. The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments, contingent consideration and available-for-sale financial instruments that have been measured at fair value. Certain reclassifications of prior year amounts have been made to conform to the current year presentation in Note 16 "Income Taxes." Additionally, for the year ended December 31, 2014, the amounts related to the amortization of debt issuance costs and loss on marketable securities have been reclassed from other items, net and are now stated separately in the consolidated statements of cash flows. These reclassifications had no effect on cash provided by operating activities or total cash flows. On November 20, 2015, we acquired MO BIO Laboratories, located in Carlsbad, California. On December 16, 2014 we acquired Enzymatics, located in Beverly, Massachusetts and on April 3, 2014, we acquired BIOBASE, located in Wolfenbüttel, Germany. On August 22, 2013 we acquired CLC bio located in Aarhus, Denmark and on April 29, 2013, we acquired Ingenuity Systems, Inc. (Ingenuity), located in Redwood City, California. Accordingly, at the acquisition dates, all of the assets acquired and liabilities assumed were recorded at their respective fair values and our consolidated results of operations include the operating results from the acquired companies from the acquisition dates. |
Effects of New Accounting Pronouncements |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||
Effects of New Accounting Pronouncements | Effects of New Accounting Pronouncements Adoption of New Accounting Standards In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The ASU is aimed at reducing the frequency of disposals reported as discontinued operations by focusing on strategic shifts that have or will have a major impact on an entity's operations and financial results. For public entities, the amendments are effective on a prospective basis for all disposals of components of an entity and all businesses that, on acquisition, are classified as held for sale that occur within annual periods beginning on or after December 15, 2014 and interim period within those years. ASU 2014-08 became effective for us in the period beginning January 1, 2015 and its adoption did not have an effect on our financial position, results of operations or cash flows. New Accounting Standards Not Yet Adopted In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01), Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance is intended to improve the recognition and measurement of financial instruments. The new guidance makes targeted improvements to existing U.S. GAAP by:
The amendments are effective for our financial statements beginning in the first quarter of 2018. We are currently evaluating the impact of ASU 2016-01 on our consolidated financial statements. In November 2015, the FASB issued Accounting Standard Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which changes how deferred taxes are classified on organizations’ balance sheets. The ASU eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments are effective for our financial statements and we will adopt beginning in the first quarter of 2017. As of December 31, 2015, we have current deferred tax assets of $33.1 million and current deferred tax liabilities of $2.5 million. We do not expect the adoption to have a material impact on our consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments eliminate the requirement to retrospectively account for those adjustments. The amendments require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments are effective for our financial statements beginning in the first quarter of 2016. We do not expect the adoption to have a material impact on our consolidated financial statements. In July 2015, the FASB issued Accounting Standards Update No. 2015-11 (ASU 2015-11), Inventory: (Topic 330): Simplifying the Measurement of Inventory requiring in scope inventory, including inventory measured using first-in, first out (FIFO) or average cost, to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for us beginning in the first quarter of 2017. We are currently evaluating the impact of ASU 2015-11 on our consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update No. 2015-05 (ASU 2015-05), Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This amendment provides guidance to help entities determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for our financial statements beginning in the first quarter of 2016. We do not expect the adoption to have a material impact on our consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update No. 2015-03 (ASU 2015-03) Interest: Imputation of Interest (Subtopic 835-30) requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. The FASB has issued Accounting Standards Update No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This ASU adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015, Emerging Issues Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-03 will be effective for us beginning in the first quarter of 2016 and shall be applied on a retrospective basis wherein the balance sheet of each individual period presented shall be adjusted to reflect the period-specific effects of applying the new guidance. As of December 31, 2015, we have deferred debt issuance costs of $0.7 million and $12.2 million recorded in other current and other long-term assets, respectively. We do not expect the adoption to have a material impact on our consolidated financial statements. In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02) Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard modifies current guidance on consolidation under the variable interest model and the voting model. ASU 2015-02 will be effective for us beginning in the first quarter of 2016. We are currently evaluating the impact of ASU 2015-02 on our consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers: (Topic 606) which affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles-Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. An entity should apply the amendments in this ASU either retrospectively to each prior reporting period presented and the entity may elect certain practical expedients; or, retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers: (Topic 606): Deferral of the Effective Date which defers the effective date of ASU 2014-09 to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted only as of interim and annual reporting periods beginning after December 15, 2016. We are currently evaluating the impact its adoption would have on our financial position, results of operations or cash flows. |
Summary of Significant Accounting Policies and Critical Accounting Estimates |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies and Critical Accounting Estimates | Summary of Significant Accounting Policies and Critical Accounting Estimates Principles of Consolidation The consolidated financial statements include the accounts of QIAGEN N.V. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Investments in either common stock or in-substance common stock of companies where we exercise significant influence over the operations but do not have control, and where we are not the primary beneficiary, are accounted for using the equity method. All other investments are accounted for under the cost method. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the Company, we record the fair value of the noncontrolling interests at the acquisition date and classify the amounts attributable to noncontrolling interests separately in equity in the consolidated financial statements. Any subsequent changes in the Company's ownership interest while the Company retains its controlling financial interest in its subsidiary are accounted for as equity transactions. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Concentrations of Risk We buy materials for products from many suppliers, and are not dependent on any one supplier or group of suppliers for the business as a whole. However, key components of certain products, including certain instrumentation components and chemicals, are available only from a single source. If supplies from these vendors were delayed or interrupted for any reason, we may not be able to obtain these materials timely or in sufficient quantities in order to produce certain products and sales levels could be negatively affected. Additionally, our customers include researchers at pharmaceutical and biotechnology companies, academic institutions, and government and private laboratories. Fluctuations in the research and development budgets of these researchers and their organizations for applications in which our products are used could have a significant effect on the demand for our products. The financial instruments used in managing our foreign currency, equity and interest rate exposures have an element of risk in that the counterparties may be unable to meet the terms of the agreements. We attempt to minimize this risk by limiting the counterparties to a diverse group of highly-rated international financial institutions. The carrying values of our financial instruments incorporate the non-performance risk by using market pricing for credit risk. However, we have no reason to believe that any counterparties will default on their obligations and therefore do not expect to record any losses as a result of counterparty default. In order to minimize our exposure with any single counterparty, we have entered into master agreements which allow us to manage the exposure with the respective counterparty on a net basis. Other financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents, short-term investments, and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and diverse range of financial instruments. We have established guidelines related to credit quality and maturities of investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances are maintained for potential credit losses and such losses have historically been within expected ranges. Foreign Currency Translation Our reporting currency is the U.S. dollar and our subsidiaries’ functional currencies are generally the local currency of the respective countries in which they are headquartered. All amounts in the financial statements of entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and transaction gains and losses are reflected in net income as a component of other income (expense), net. Realized gains or losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and payables are also included in net income as a component of other income (expense), net. The net (loss) gain on foreign currency transactions in 2015, 2014 and 2013 was $(0.5) million, $1.9 million, and $5.6 million, respectively, and is included in other income (expense), net. The exchange rates of key currencies were as follows:
Segment Information We determined that we operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of organization and types of products and services which derive revenues and consistent product margins. Accordingly, we operate and make decisions as one reporting unit. Revenue Recognition Our revenues are reported net of sales and value added taxes, discounts and sales allowances, and are derived primarily from the sale of consumable and instrumentation products, and to a much lesser extent, from the sale of services, intellectual property and technology. We recognize revenue when four basic criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Consumable and Related Products: In the last three years, revenue from consumable product sales has accounted for approximately 79%-83% of our net sales and is generally recognized upon transfer of title consistent with the shipping terms. We maintain a small amount, on average less than $3.0 million in total, of consignment inventory at certain customer locations. Revenues for the consumable products which are consigned in this manner are recognized upon consumption. We generally allow returns of consumable products if the product is returned in a timely manner and in good condition. Allowances for returns are provided for based upon the historical pattern of returns and management’s evaluation of specific factors that impact the risk of returns. Revenues from related products include software-as-a-service (SaaS), license fees, intellectual property and patent sales, royalties and milestone payments and over the last three years has accounted for approximately 4%-8% of our net sales. Revenue from SaaS arrangements has increased following our 2013 acquisition of Ingenuity discussed in Note 5, and is recognized ratably over the duration of the agreement unless the terms of the agreement indicate that revenue should be recognized in a different pattern, for example based on usage. License fees from research collaborations include payments for technology transfer and access rights. Non-refundable, up-front payments received in connection with collaborative research and development agreements are generally deferred and recognized on a straight-line basis over the contract period during which there is any continuing obligation. Revenue from intellectual property and patent sales is recognized when earned, either at the time of sale, or over the contract period when licensed. Payments for milestones, generally based on the achievement of substantive and at-risk performance criteria, are recognized in full at such time as the specified milestone has been achieved according to the terms of the agreement. Royalties from licensees are based on reported sales of licensed products and revenues are calculated based on contract terms when reported sales are reliably measurable, fees are fixed or determinable and collectability is reasonably assured. Instrumentation: Revenue from instrumentation includes the instrumentation equipment, installation, training and other instrumentation services, such as extended warranty services or product maintenance contracts and over the last three years has accounted for approximately 12%-13% of net sales. Revenue from instrumentation equipment is recognized when title passes to the customer, upon either shipment or written customer acceptance after satisfying any installation and training requirements. We offer our customers access to our instrumentation via reagent rental agreements which place instrumentation with customers without requiring them to purchase the equipment. Instead, we recover the cost of providing the instrumentation in the amount charged for consumable products. The instruments placed with customers under a reagent rental agreement are depreciated and charged to cost of sales on a straight-line basis over the estimated life of the instrument, typically 3 to 5 years. The costs to maintain these instruments in the field are charged to cost of sales as incurred. Revenue from these reagent rental agreements is allocated to the elements within the arrangement (the lease, the sale of consumables and/or services) in accordance with ASC 605-25, Revenue Recognition—Multiple-Element Arrangements and recognized for each unit of accounting as appropriate. We have contracts with multiple elements which include instrumentation equipment, either leased under a reagent rental agreement or sold directly, together with other elements such as installation, training, extended warranty services or product maintenance contracts or consumable products. These contracts are accounted for under ASC 605-25, Revenue Recognition—Multiple-Element Arrangements. Multiple-element arrangements are assessed to determine whether there is more than one unit of accounting. In order for a deliverable to qualify as a separate unit of accounting, both of the following criteria must be met:
Arrangement consideration is allocated at the inception of the arrangement to all deliverables on the basis of their relative selling price. When applying the relative selling price method, the selling price for each deliverable is determined using (a) vendor-specific objective evidence (VSOE) of selling price, if it exists; or otherwise (b) third-party evidence of selling price. If neither VSOE nor third-party evidence of selling price exists for a deliverable, then the best estimated selling price for the deliverable is used. The arrangement consideration is allocated to the separate units of accounting based on each unit’s relative fair value. If these criteria are not met, deliverables included in an arrangement are accounted for as a single unit of accounting and revenues and costs are deferred until the period or periods in which the final deliverable is provided. Deliverables in our multiple-element arrangements include instrumentation equipment, installation, training, extended warranty services or product maintenance contracts or consumable products. We have evaluated the deliverables in our multiple-element arrangements and concluded that they are separate units of accounting because the delivered item or items have value to the customer on a standalone basis and for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. Revenues from installation and training are recognized as services are completed, based on VSOE, which is determined by reference to the price customers pay when the services are sold separately. Revenues from extended warranty services or product maintenance contracts are recognized on a straight-line basis over the term of the contract, typically one year. VSOE of fair value of extended warranty services or product maintenance is determined based on the price charged for the maintenance and support when sold separately. Revenues from the instrumentation equipment and consumable products are recognized when the products are delivered and there are no further performance obligations. VSOE of fair value of instrumentation equipment and consumable products is determined based on the price charged for the instrument and consumables when sold separately. Certain of our reagent rental arrangements include termination provisions for breach of contract. However, these termination provisions would not impact recognized revenues. Our other arrangements do not include any provisions for cancellation or refunds. Warranty We provide warranties on our products against defects in materials and workmanship for a period of one year. A provision for estimated future warranty costs is recorded in cost of sales at the time product revenue is recognized. Product warranty obligations are included in accrued and other liabilities in the accompanying consolidated balance sheets. The changes in the carrying amount of warranty obligations are as follows:
Research and Development Research and product development costs are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses, facility costs and amounts paid to contract research organizations, and laboratories for the provision of services and materials as well as costs for internal use or clinical trials. Government Grants We recognize government grants when there is reasonable assurance that all conditions will be complied with and the grant will be received. Our government grants generally represent subsidies for specified activities and are therefore recognized when earned as a reduction of the expenses recorded for the activity that the grants are intended to compensate. Thus, when the grant relates to research and development expense, the grant is recognized over the same period that the related costs are incurred. Otherwise, amounts received under government grants are recorded as liabilities in the balance sheet. When the grant relates to an asset, the nominal amount of the grant is deducted from the carrying amount of the asset and recognized over the same period that the related asset is depreciated. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets (qualifying asset) when such borrowing costs are significant. All other borrowing costs are expensed in the period they occur. Shipping and Handling Income and Costs Shipping and handling costs charged to customers are recorded as revenue in the period that the related product sale revenue is recorded. Associated costs of shipping and handling are included in sales and marketing expenses. For the years ended December 31, 2015, 2014 and 2013, shipping and handling costs totaled $26.2 million, $26.8 million and $23.3 million, respectively. Advertising Costs The costs of advertising are expensed as incurred and are included as a component of sales and marketing expense. Advertising costs for the years ended December 31, 2015, 2014 and 2013 were $7.2 million, $7.0 million and $7.6 million, respectively. General and Administrative, Restructuring, Integration and Other General and administrative expenses primarily represent the costs required to support administrative infrastructure. In addition, we incur indirect acquisition and business integration costs in connection with business combinations. These costs represent incremental costs that we believe would not have been incurred absent the business combinations. Major components of these costs include payroll and related costs for employees remaining with the Company on a transitional basis; public relations, advertising and media costs for re-branding of the combined organization; and, consulting and related fees incurred to integrate or restructure the acquired operations. Restructuring costs include personnel costs (principally termination benefits), facility closure and contract termination costs. Termination benefits are accounted for in accordance with FASB ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, and are recorded when it is probable that employees will be entitled to benefits and the amounts can be reasonably estimated. Estimates of termination benefits are based on the frequency of past termination benefits, the similarity of benefits under the current plan and prior plans, and the existence of statutory required minimum benefits. Facility closure, some termination benefits and other costs are accounted for in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations and are recorded when the liability is incurred. The specific restructuring measures and associated estimated costs are based on management's best business judgment under the existing circumstances at the time the estimates are made. If future events require changes to these estimates, such adjustments will be reflected in the period of the revised estimate. Income Taxes We account for income taxes under the liability method. Under this method, total income tax expense is the amount of income taxes expected to be payable for the current year plus the change from the beginning of the year for deferred income tax assets and liabilities established for the expected further tax consequences resulting from differences in the financial reporting and tax basis of assets and liabilities. Deferred tax assets and/or liabilities are determined by multiplying the differences between the financial reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Tax benefits are initially recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the taxing authority using the cumulative probability method, assuming the tax authority has full knowledge of the position and all relevant facts. Our policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties within the income tax provision. Derivative Instruments We enter into derivative financial instrument contracts to minimize the variability of cash flows or income statement impact associated with the anticipated transactions being hedged or to hedge fluctuating interest rates. As changes in foreign currency or interest rate impact the value of anticipated transactions, the fair value of the forward or swap contracts also changes, offsetting foreign currency or interest rate fluctuations. Derivative instruments are recorded on the balance sheet at fair value. Changes in fair value of derivatives are recorded in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction. Share-Based Payments Compensation cost for all share-based payments is recorded based on the grant date fair value, less an estimate for pre-vesting forfeitures, recognized in expense over the service period. Stock Options: We utilize the Black-Scholes-Merton valuation model for estimating the fair value of our stock options granted. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, expected life of the award and forfeiture rate. Risk-Free Interest Rate—This is the average U.S. Treasury rate (having a term that most closely resembles the expected life of the option) at the date the option was granted. Dividend Yield—We have never declared or paid dividends on our common stock and do not anticipate declaring or paying any dividends in the foreseeable future. Expected Volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. We use a combination of the historical volatility of our stock price and the implied volatility of market-traded options of our stock to estimate the expected volatility assumption input to the Black-Scholes-Merton model. Our decision to use a combination of historical and implied volatility is based upon the availability of actively traded options of our stock and our assessment that such a combination is more representative of future expected stock price trends. Expected Life of the Option—This is the period of time that the options granted are expected to remain outstanding. We estimated the expected life by considering the historical exercise behavior. We use an even exercise methodology, which assumes that all vested, outstanding options are exercised uniformly over the balance of their contractual life. Forfeiture Rate—This is the estimated percentage of options granted that are expected to be forfeited or cancelled on an annual basis before becoming fully vested. We estimated the forfeiture rate based on historical forfeiture experience. Restricted Stock Units and Performance Stock Units: Restricted stock units and performance stock units represent rights to receive Common Shares at a future date. The fair market value of restricted and performance stock units is determined based on the number of stock units granted and the fair market value of our shares on the grant date. The fair market value at the time of the grant, less an estimate for pre-vesting forfeitures, is recognized in expense over the vesting period. Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit in banks and other cash invested temporarily in various instruments that are short-term and highly liquid, and having an original maturity of less than 90 days at the date of purchase.
Short-Term Investments Short-term investments are classified as “available for sale” and stated at fair value in the accompanying balance sheet. Interest income is accrued when earned and changes in fair market values are reflected as unrealized gains and losses, calculated on the specific identification method, as a component of accumulated other comprehensive income. The amortization of premiums and accretion of discounts to maturity arising from acquisition is included in interest income. A decline in fair value that is judged to be other-than-temporary is accounted for as a realized loss and the write-down is included in the consolidated statements of income. Realized gains and losses, determined on a specific identification basis, on the sale of short-term investments are included in income. Fair Value of Financial Instruments The carrying amount of cash and cash equivalents, notes receivable, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying value of our variable rate debt and capital leases approximates their fair values because of the short maturities and/or interest rates which are comparable to those available to us on similar terms. The fair values of the Cash Convertible Notes are based on an estimation using available over-the-counter market information. The fair values of the Private Placement Senior Notes totaling $400.0 million issued in October 2012 and further described in Note 15 were estimated using the changes in the U.S. Treasury rates. The fair values of the notes payable to QIAGEN Finance, further discussed in Note 15, were estimated by using available over-the-counter market information on the convertible bonds which were issued by QIAGEN Finance, the values of which correlate to the fair value of the loan arrangements we had with QIAGEN Finance which include the notes payable, the guarantee and the warrant agreement (further discussed in Note 10). Accounts Receivable Our accounts receivable are unsecured and we are at risk to the extent such amounts become uncollectible. We continually monitor accounts receivable balances, and provide for an allowance for doubtful accounts at the time collection becomes questionable based on payment history or age of the receivable. Amounts determined to be uncollectible are written off against the reserve. For the years ended December 31, 2015, 2014 and 2013, write-offs of accounts receivable totaled $2.0 million, $2.3 million and $1.5 million, respectively, while provisions for doubtful accounts which were charged to expense totaled $2.1 million, $1.4 million and $6.9 million, respectively. For all years presented, no single customer represented more than ten percent of accounts receivable or consolidated net sales. Inventories Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or market and include material, capitalized labor and overhead costs. Inventories consisted of the following as of December 31, 2015 and 2014:
Property, Plant and Equipment Property, plant and equipment, including equipment acquired under capital lease obligations, are stated at cost less accumulated amortization. Capitalized internal-use software costs include only those direct costs associated with the actual development or acquisition of computer software for internal use, including costs associated with the design, coding, installation and testing of the system. Costs associated with preliminary development, such as the evaluation and selection of alternatives, as well as training, maintenance and support are expensed as incurred. Costs for software to be sold, leased or otherwise marketed that are related to the conceptual formulation and design are expensed as incurred. Costs incurred to produce the product after technological feasibility is established are capitalized and amortized in accordance with the accounting standards for the costs of software to be sold, leased, or otherwise marketed. All other depreciation is computed using the straight-line method over the estimated useful lives of the assets (3 to 40 years). Amortization of leasehold improvements is computed on a straight-line basis over the lesser of the remaining life of the lease or the estimated useful life of the improvement asset. We have a policy of capitalizing expenditures that materially increase assets’ useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in earnings. Acquired Intangibles and Goodwill Acquired intangibles with alternative future uses are carried at cost less accumulated amortization and consist of licenses to technology held by third parties and other acquired intangible assets. Amortization is computed over the estimated useful life of the underlying patents, which has historically ranged from one to twenty years. Purchased intangible assets acquired in business combinations, other than goodwill, are amortized over their estimated useful lives unless these lives are determined to be indefinite. Intangibles are assessed for recoverability considering the contract life and the period of time over which the intangible will contribute to future cash flow. The unamortized cost of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount has occurred. In 2015, we recorded intangible asset impairment of $0.2 million related to the abandonment of certain projects. For the years ended December 31, 2014 and 2013, we recorded intangible asset impairments of $8.7 million and $19.7 million, respectively, as discussed in Note 6. Amortization expense related to developed technology and patent and license rights which have been acquired in a business combination is included in cost of sales. Amortization of trademarks, customer base and non-compete agreements which have been acquired in a business combination is recorded in operating expense under the caption 'acquisition-related intangible amortization'. Amortization expenses of intangible assets not acquired in a business combination are recorded within either the cost of sales, research and development or sales and marketing line items based on the use of the asset. The estimated fair values of acquired in-process research and development projects which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested for impairment through completion of the development process, at which point the capitalized amounts are amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts are written-off immediately. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired arising from business combinations. Goodwill is subject to impairment tests annually or earlier if indicators of potential impairment exist, using a fair-value-based approach. We have elected to perform our annual test for indications of impairment as of October 1st of each year. Following the annual impairment tests for the years ended December 31, 2015, 2014 and 2013, goodwill has not been impaired. Investments We have investments in non-marketable securities issued by privately held companies. These investments are included in other long-term assets in the accompanying consolidated balance sheets and are accounted for using the equity or cost method of accounting. Investments are evaluated periodically, or when impairment indicators are noted, to determine if declines in value are other-than-temporary. In making that determination, we consider all available evidence relating to the realizable value of a security. This evidence includes, but is not limited to, the following:
We consider whether the fair values of any of our cost or equity method investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If any such decline is considered to be other than temporary (based on various factors, including historical financial results, product development activities and the overall health of the affiliate’s industry), then a write-down of the investment would be recorded in operating expense to its estimated fair value. In 2015, we recorded total impairments to a cost method investment of $2.2 million, in other income (expense), net. For the year ended December 31, 2014 we recorded total impairments to a cost method investment of $6.0 million, of which $4.8 million was recorded in other expense, net and $1.2 million was recorded in research and development expense. For the year ended December 31, 2013, we recorded an impairment of cost method investment of $3.4 million in other income (expense), net. Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. We consider, amongst other indicators, a history of operating losses or a change in expected sales levels to be indicators of potential impairment. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. If an asset is determined to be impaired, the loss is measured as the amount by which the carrying amount of the asset exceeds fair value which is determined by applicable market prices, when available. When market prices are not available, we generally measure fair value by discounting projected future cash flows of the asset. Considerable judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could differ from such estimates. In 2015, we recorded asset impairment charges of $3.1 million in general and administrative, restructuring, integration and other expenses in the accompanying consolidated statements of income related to the abandonment of certain software projects following the acquisition of MO BIO. During the year ended December 31, 2014, in connection with our internal and acquisition related restructuring, we recorded asset impairment charges of $19.6 million, of which $15.5 million is recorded in cost of sales, $2.4 million is recorded in sales and marketing expense, and $1.7 million in general and administrative, restructuring, integration and other expenses in the accompanying consolidated statements of income. During the year ended December 31, 2013 we recorded asset impairment charges of $16.2 million in general and administrative, restructuring, integration and other expenses in the accompanying consolidated statements of income related to the abandonment of certain projects. |
Segment Information |
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Segment Reporting Information, Additional Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Considering the acquisitions made during 2015, we determined that we still operate as one business segment in accordance with FASB ASC Topic 280, Segment Reporting. As a result of our continued restructuring and streamlining of the growing organization, our chief operating decision maker (CODM) makes decisions with regards to business operations and resource allocation based on evaluations of QIAGEN as a whole. Accordingly, we operate as one business segment. Summarized product category and geographic information is shown in the tables below. Product Category Information Net sales for the product categories are attributed based on those revenues related to sample and assay products and similarly related revenues including bioinformatics solutions, and revenues derived from instrumentation sales.
Geographical Information Net sales are attributed to countries based on the location of the customer. QIAGEN operates manufacturing facilities in Germany, China, the United Kingdom, and the United States that supply products to customers as well as QIAGEN subsidiaries in other countries. The sales from these manufacturing operations to other countries are included in the Net Sales of the countries in which the manufacturing locations are based. The intersegment portions of such net sales are excluded to derive consolidated net sales. No single customer represents more than ten percent of consolidated net sales. Our country of domicile is the Netherlands, which reported net sales of $11.3 million, $13.7 million and $14.4 million for the years ended 2015, 2014 and 2013, respectively, and these amounts are included in the line item Europe, Middle East and Africa as shown in the table below.
Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Europe, reported long-lived assets of $0.3 million and $1.0 million as of December 31, 2015 and 2014, respectively.
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Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Acquisitions have been accounted for as business combinations, and the acquired companies’ results have been included in the accompanying consolidated statements of income from their respective dates of acquisition. Our acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to expectations of synergies of combining the businesses. These synergies include use of our existing infrastructure, such as sales force, shared service centers, distribution channels and customer relations, to expand sales of the acquired businesses’ products; use of the infrastructure of the acquired businesses to cost-effectively expand sales of our products; and elimination of duplicative facilities, functions and staffing. 2015 Acquisitions During 2015, we completed three acquisitions, including the acquisition of MO BIO Laboratories Inc., a privately-held U.S. company, that is considered a leader in sample technologies for metagenomics and microbiome analysis. Purchase consideration for these acquisitions totaled $66.9 million in cash, net of cash acquired, and as of December 31, 2015, the purchase price allocations are preliminary. Each of these acquisitions did not have a material impact to net sales, net income or earnings per share and therefore no pro forma information has been provided herein. Other Acquisition During 2011, we acquired a majority shareholding in QIAGEN Marseille S.A., formerly Ipsogen S.A. (Marseille), a publicly listed company founded and based in Marseille, France. During 2014, we acquired additional Marseille shares for a total of $0.3 million and held 90.27% of the Marseille shares as of December 31, 2014. In February 2015, QIAGEN Marseille, a fully consolidated entity, agreed to the sale of all its assets and liabilities, with the exception of its intellectual property portfolio. In addition, we made a tender offer to acquire the remaining Marseille shares. Per the terms of the tender offer, $2.5 million is set aside as of December 31, 2015 in restricted cash for the remaining shares which were finally acquired early in 2016. During 2015, we acquired additional Marseille shares for a total of $8.0 million and held 97.22% of the Marseille shares as of December 31, 2015. 2014 Acquisition In December 2014, we acquired the enzyme solutions business of Enzymatics Inc. (Enzymatics), a U.S. company whose products are used in an estimated 80% of all next-generation sequencing (NGS) workflows. The comprehensive Enzymatics portfolio complements QIAGEN’s leading offering of universal NGS products, advancing our strategy to drive the adoption of NGS in clinical healthcare. The cash consideration totaled $114.2 million of which $5.8 million was retained in an escrow account as of December 31, 2015 to cover any claims for breach of any representations, warranties or indemnities. The acquisition of Enzymatics did not have a material business impact to net sales, net income or earnings per share, and therefore no pro forma financial information has been provided herein. The final purchase price allocation of Enzymatics did not differ from the preliminary estimates other than an increase of $2.1 million in fair value of contingent consideration, a $0.4 million increase of long-term deferred tax liability and an additional $0.1 million increase of other opening balance sheet adjustments. The corresponding impact for these adjustments was an increase to goodwill of $2.4 million. These changes to arrive at the final purchase price allocation were not material to the consolidated financial statements. The final purchase price allocation for Enzymatics was as follows:
The weighted-average amortization period for the intangible assets is 11.1 years. The goodwill acquired is not deductible for tax purposes. Certain acquisitions may include contingent consideration which is recorded as part of the purchase consideration based on the acquisition date fair value. The total fair value of the contingent consideration for Enzymatics of $13.6 million was recorded as purchase price using a probability-weighted analysis of the future milestones using discount rates between 0.70% and 2.20%. Under the purchase agreement, we could be required to make additional contingent cash payments totaling $17.0 million through 2017. This is discussed further in Note 14, "Fair Value Measurements," where we assess and adjust the fair value of the contingent consideration liabilities, if necessary, until the settlement or expiration of the contingency occurs. Other 2014 Acquisitions During 2014, we completed other acquisitions which individually were not significant to the overall consolidated financial statements. The cash paid for these acquisitions, net of cash acquired, totaled $47.4 million. Each of these acquisitions individually did not have a material impact to net sales, net income or earnings per share and therefore no pro forma information has been provided herein. 2013 Acquisition On April 29, 2013, we acquired 100% of the outstanding common shares of Ingenuity Systems, Inc. (Ingenuity), a leading provider of software solutions that efficiently and accurately analyze and interpret the biological meaning of genomic data. The cash consideration totaled $106.9 million. The acquisition of Ingenuity did not have a material impact to net sales, net income or earnings per share and therefore no pro forma information has been provided herein. The final purchase price allocation for Ingenuity was as follows:
The weighted-average amortization period for the intangible assets is 14.1 years. The goodwill acquired is not deductible for tax purposes. Since the acquisition date, the results of Ingenuity have been included in our consolidated results through December 31, 2013. Net sales totaled $14.7 million and net loss attributable to the owners of QIAGEN N.V. was $6.3 million for 2013. Acquisition-related costs for Ingenuity for 2013 amounted to $1.2 million. Other 2013 Acquisitions During 2013, we completed the acquisition of CLC bio, a privately-held company located in Aarhus, Denmark that has created the leading commercial data analysis solutions and workbenches for next-generation sequencing, used by top academic and pharmaceutical research as well as clinical institutions. Purchase consideration totaled $68.2 million in cash, net of cash acquired, and as of December 31, 2014, the purchase price allocation is final. The final purchase price allocation for CLC bio did not differ from the preliminary estimates. This acquisition was not significant to the overall consolidated financial statements. |
Restructuring |
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Restructuring | Restructuring 2014 Restructuring During the fourth quarter of 2014, we recorded pretax charges of $37.1 million in restructuring charges in connection with the acquisition of Enzymatics discussed in Note 5 "Acquisitions" and from the implementation of headcount reductions and facility consolidations to further streamline operations and various measures as part of a commitment to continuous improvement and related to QIAGEN's new strategic focus on its five growth drivers. Of these charges, $26.4 million is recorded in cost of sales, $2.4 million is recorded in sales and marketing, and $8.3 million is recorded in general, administrative, integration and other. The pretax charge consists of $6.4 million for workforce reductions, $19.6 million for fixed asset abandonment charges, $8.7 million for intangible asset abandonment charges in line with strategic initiatives to keep our activities technologically and competitively current. Additionally, we incurred contract termination and consulting costs of $2.4 million. No additional costs were incurred in 2015. The following table summarizes the components of the 2014 restructuring costs. At December 31, 2015, a restructuring accrual of $4.1 million was included in accrued and other liabilities. At December 31, 2014, a restructuring accrual of $12.1 million was included in accrued and other liabilities and $2.6 million was included in other long term liabilities in the accompanying consolidated balance sheet.
2011 Restructuring Late in 2011, we began a project to enhance productivity by streamlining the organization and reallocating resources to strategic initiatives to help drive growth and innovation, strengthen our industry leadership position and improve longer-term profitability. This project eliminated organizational layers and overlapping structures, actions to enhance our processes, speed and productivity. The last group of initiatives included actions to focus research and development activities on higher-growth areas in all customer classes, concentrate operations at fewer sites, and realign sales and regional marketing teams in the U.S. and Europe to better address customer needs in a more streamlined manner across the continuum from basic research to translational medicine and clinical diagnostics. Restructuring charges were recorded in 2013 as part of this transformational project. The following table summarizes the cash components of the restructuring costs. At December 31, 2015, no restructuring accrual remained for this program. At December 31, 2014, a restructuring accrual of $0.7 million was included in accrued and other liabilities in the accompanying consolidated balance sheets.
The costs in the above table do not include consulting costs associated with third-party service providers that assisted with execution of the restructuring. We accrue for consulting costs as the services are provided. Since 2011, we have incurred cumulative restructuring costs totaling $234.6 million which include $56.4 million for personnel related costs, $97.7 million of impairments, and $80.5 million of contract, consulting and other related costs. Of the $234.6 million cumulative restructuring costs since 2011, $188.5 million were recorded in general and administrative, restructuring, integration and other and $46.1 million were recorded in cost of sales. We did not record additional restructuring charges in 2015 or 2014 related to this program. |
Short-Term Investments |
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Dec. 31, 2015 | |
Short-term Investments [Abstract] | |
Short-Term Investments | Short-Term Investments At December 31, 2015 and 2014, we had $127.1 million and $180.2 million, respectively, of loan receivables and commercial paper due from financial institutions. These loan receivables and commercial paper are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market value, which is equal to the cost. At December 31, 2015, these loans consist of $94.4 million and €30.0 million ($32.7 million as of December 31, 2015) which mature at various dates through December 2018. All instruments that have an original tenor of more than 12 months include redemption rights on at least a quarterly basis. Interest income is determined using the effective interest rate method. These loans are classified as current assets in the accompanying consolidated balance sheets since we may redeem the loans at our discretion. At December 31, 2015 and 2014, we also had €3.4 million ($3.7 million) and €3.2 million ($3.9 million), respectively in term deposits with final maturities in August 2017. The deposits can be withdrawn at the end of each quarter without penalty and are therefore classified as current assets in the accompanying consolidated balance sheets. For the year ended December 31, 2015 and 2014, proceeds from sales of short term investments totaled $367.7 million and $275.8 million, respectively. During the years ended December 31, 2015 and 2014, realized losses totaled $6.0 million and $3.9 million, respectively. There were no realized gains or losses during 2013. |
Prepaid Expenses and Other Current Assets |
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Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are summarized as follows as of December 31, 2015 and 2014:
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as follows as of December 31, 2015 and 2014:
Amortization of assets acquired under capital lease obligations is included within accumulated depreciation and amortization above for the years ended December 31, 2015 and 2014, respectively. For the years ended December 31, 2015, 2014 and 2013 depreciation and amortization expense totaled $59.5 million, $67.9 million and $72.5 million, respectively. For the years ended December 31, 2015, 2014 and 2013 amortization related to computer software to be sold, leased or marketed totaled $5.1 million, $6.2 million and $4.8 million, respectively. In 2015, we recorded asset impairment charges of $3.1 million, of which $1.0 million related to computer software to be sold, leased or marketed related to the abandonment of certain projects following the acquisition of MO BIO. In connection with the restructuring discussed more fully in Note 6, impairment charges of $19.6 million, of which $8.8 million related to computer software to be sold, leased or marketed, and $16.2 million were recorded related to discontinued projects in the years ended December 31, 2014 and 2013, respectively. Repairs and maintenance expense was $15.4 million, $15.9 million and $14.0 million in 2015, 2014 and 2013, respectively. For the year ended December 31, 2015 and 2014, construction in progress primarily includes amounts related to ongoing software development projects. For the years ended December 31, 2015, 2014 and 2013, interest capitalized in connection with construction projects was not significant. |
Investments |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments We have made strategic investments in certain companies that are accounted for using the equity or cost method of accounting. The method of accounting for an investment depends on the level of influence. We monitor changes in circumstances that may require a reassessment of the level of influence. We periodically review the carrying value of these investments for impairment, considering factors such as the most recent stock transactions and book values from the recent financial statements. The fair value of cost and equity-method investments is estimated when there are identified events or changes in circumstances that may have an impact on the fair value of the investment. A summary of these equity method investments, which are included in other long-term assets in the consolidated balance sheets, is as follows:
We had a 100% interest in QIAGEN Finance (Luxembourg) S.A. (QIAGEN Finance) which was established for the purpose of issuing convertible debt in 2004. The proceeds of the 2004 Notes were loaned to subsidiaries within the consolidated QIAGEN N.V. group. QIAGEN N.V. had guaranteed the 2004 Notes, and had agreements with QIAGEN Finance to issue common shares to the investors in the event of conversion of the 2004 Notes. QIAGEN Finance was a variable interest entity. We did not hold any variable interests in QIAGEN Finance, and we were not the primary beneficiary, therefore QIAGEN Finance was not consolidated. Accordingly, the 2004 convertible debt was not included in the consolidated statements of QIAGEN N.V., though QIAGEN N.V. did report the full obligation of the debt through its liabilities to QIAGEN Finance. QIAGEN N.V. accounted for its investment in QIAGEN Finance as an equity investment until the first quarter of 2015 and accordingly recorded 100% of the profit or loss of QIAGEN Finance in the gain or loss from equity method investees. During the first quarter of 2015, we repaid the $250.9 million loan to QIAGEN Finance and repurchased the warrant agreement with QIAGEN Finance. At December 31, 2015 and 2014, we had a total of cost-method investments in non-publicly traded companies with carrying amounts of $17.2 million and $18.6 million, respectively, which are included in other long-term assets in the consolidated balance sheets. The fair-value of these cost-method investments are not estimated unless there are identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. During the years ended December 31, 2015, and 2014, we made cost-method investments totaling $4.4 million, and $9.4 million, respectively. In 2015, we recorded impairments to cost method investments of $2.2 million in other income (expense), net. In 2014, we recorded total impairments to a cost method investment of $6.0 million, of which $4.8 million was recorded in other income (expense), net and $1.2 million was recorded in research and development expense. In the first quarter of 2016 we entered into a short-term agreement with one of the cost-method investees where they may receive up to $0.6 million. During 2015, our former cost-method investment in Curetis AG was reclassified as a long-term marketable security upon the completed IPO of its Dutch holding company, Curetis N.V. At December 31, 2015, we held 320,712 shares with a fair market value of $3.5 million and a cost of $2.3 million. We are restricted from selling our shares until May 2016. Long-term marketable securities are included in other long-term assets in the accompanying consolidated balance sheets. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following sets forth the intangible assets by major asset class as of December 31, 2015 and 2014:
The changes in intangible assets for the years ended December 31, 2015 and 2014 are as follows:
Amortization expense on intangible assets totaled approximately $132.0 million, $132.9 million and $126.9 million, respectively, for the years ended December 31, 2015, 2014 and 2013. In 2015, we recorded intangible asset impairment of $0.2 million related to the abandonment of certain projects. In connection with the restructuring discussed more fully in Note 6, impairment charges of $8.7 million and $19.7 million related to discontinued projects were recorded in the years ended December 31, 2014 and 2013, respectively. Cash paid for purchases of intangible assets during the years ended December 31, 2015 and 2014 totaled $19.7 million and $10.4 million of which $6.4 million and $0.7 million, respectively, were not yet in service and are included in other long-term assets in the consolidated balance sheet. Intangible asset additions of $45.6 million includes $13.3 million of cash paid during the year ended December 31, 2015, together with $12.1 million of additions which were previously recorded as prepayments, $10.0 million of additions which were previously included in other long-term assets, $5.9 million of non-cash additions and $4.4 million of additions which were accrued as of December 31, 2015. The changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 resulted primarily from changes in foreign currency translation together with acquired goodwill from 2015 acquisitions and adjustments made in connection with 2014 purchase price allocation for the acquisition of Enzymatics discussed in Note 5. Accumulated goodwill impairment totaled $1.6 million as of December 31, 2015 and 2014. The estimated fair values of acquired in-process research and development projects which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested for impairment through completion of the development process, at which point the capitalized amounts are amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts are written-off immediately. During 2015, two development projects were completed and $8.8 million of in-process research and development costs were reclassified into developed technology. Amortization of intangibles for the next five years is expected to be approximately:
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Accrued and Other Liabilities |
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Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and Other Liabilities | Accrued and Other Liabilities Accrued and other liabilities at December 31, 2015 and 2014 consist of the following:
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Derivatives and Hedging |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging | Derivatives and Hedging In the ordinary course of business, we use derivative instruments, including swaps, forwards and/or options, to manage potential losses from foreign currency exposures and interest bearing assets or liabilities. The principal objective of such derivative instruments is to minimize the risks and/or costs associated with our global financial and operating activities. We do not utilize derivative or other financial instruments for trading or other speculative purposes. We recognize all derivatives as either assets or liabilities on the balance sheet on a gross basis, measure those instruments at fair value and recognize the change in fair value in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures. We do not offset any amounts under any master netting arrangements. During 2015, we have agreed with almost all of our counterparties with whom we enter into cross-currency swaps, interest rate swaps or foreign exchange contracts, to enter into bilateral collateralization contracts under which we receive or provide cash collateral, as the case may be, for the net position with each of these counterparties. As of December 31, 2015, we had a net liability position of $7.8 million recorded in accrued and other liabilities in the accompanying balance sheet, and we did not post any collateral to any of our counterparties. We do not offset the fair value of derivative instruments with cash collateral held or received from the same counterparty under a master netting arrangement. During 2015, we held derivative instruments that are designated and qualify as cash flow hedges where the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. In 2015, we did not record any hedge ineffectiveness related to any cash-flow hedges in earnings. Based on their valuation as of December 31, 2015, we expect that no significant amount of derivative gains included in accumulated other comprehensive income will be reclassified into income during the next 12 months. The cash flows derived from derivatives are classified in the consolidated statements of cash flows in the same category as the consolidated balance sheet account of the underlying item. As of December 31, 2014, all derivatives that qualify for hedge accounting are fair value hedges. For derivative instruments that are designated and qualify as a fair value hedge, the effective portion of the gain or loss on the derivative is reflected in earnings. This earnings effect is offset by the change in the fair value of the hedged item attributable to the risk being hedged that is also recorded in earnings. In 2015 and 2014, there is no ineffectiveness. The cash flows derived from derivatives are classified in the consolidated statements of cash flows in the same category as the condensed consolidated balance sheet account of the underlying item. Interest Rate Derivatives We use interest rate derivative contracts to align our portfolio of interest bearing assets and liabilities with our risk management objectives. We have entered into interest rate swaps in which we have agreed to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. During 2015, we entered into five cross currency interest rate swaps through 2025 for a total notional amount of €180.0 million which qualify for hedge accounting as cash flow hedges. We determined that no ineffectiveness exists related to these swaps. As of December 31, 2015, the €180.0 million notional swap amount had an aggregate fair value of $6.9 million, which is recorded in other long-term assets in the accompanying balance sheet. During 2014, we entered into interest rate swaps, which effectively fixed the fair value of $200.0 million of our fixed rate private placement debt and qualify for hedge accounting as fair value hedges. We determined that no ineffectiveness exists related to these swaps. As of December 31, 2015 and 2014, the $200.0 million notional swap amount had an aggregate fair value of $5.8 million and $3.3 million, respectively, which is recorded in other long-term assets in the accompanying balance sheet. Call Options We entered into Call Options during 2014 which, along with the sale of the Warrants, represent the Call Spread Overlay entered into in connection with the Cash Convertible Notes and which are more fully described in Note 15. We used $105.2 million of the proceeds from the issuance of the Cash Convertible Notes to pay the premium for the Call Options, and simultaneously received $68.9 million (net of issuance costs) from the sale of the Warrants, for a net cash outlay of $36.3 million for the Call Spread Overlay. The Call Options are intended to address the equity price risk inherent in the cash conversion feature by offsetting cash payments in excess of the principal amount due upon any conversion of the Cash Convertible Notes. Aside from the initial payment of a premium of $105.2 million for the Call Options, we will not be required to make any cash payments under the Call Options. We will, however, be entitled to receive under the terms of the Call Options an amount of cash generally equal to the amount by which the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant valuation period. The exercise price under the Call Options is equal to the conversion price of the Cash Convertible Notes. The Call Options, for which our common stock is the underlying security, are a derivative asset that requires mark-to-market accounting treatment due to the cash settlement features until the Call Options settle or expire. The Call Options are measured and reported at fair value on a recurring basis, within Level 2 of the fair value hierarchy. For further discussion of the inputs used to determine the fair value of the Call Options, refer to Note 14. The fair value of the Call Options at December 31, 2015 and 2014 was approximately $169.0 million and $147.7 million, respectively which is recorded in other long-term assets in the accompanying balance sheet. The Call Options do not qualify for hedge accounting treatment. Therefore, the change in fair value of these instruments is recognized immediately in our consolidated statements of income in other (expense) income, net. For the years ended December 31, 2015 and 2014, the change in the fair value of the Call Options resulted in gains of $21.3 million and $42.5 million, respectively. Because the terms of the Call Options are substantially similar to those of the Cash Convertible Notes' embedded cash conversion option, discussed below, we expect the effect on earnings from those two derivative instruments to mostly offset each other. Cash Convertible Notes Embedded Cash Conversion Option The embedded cash conversion option within the Cash Convertible Notes is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income in other (expense) income, net until the cash conversion option settles or expires. For further discussion of the Cash Convertible Notes, refer to Note 15. The initial fair value liability of the embedded cash conversion option was $105.2 million, which simultaneously reduced the carrying value of the Cash Convertible Notes (effectively an original issuance discount). The embedded cash conversion option is measured and reported at fair value on a recurring basis, within Level 2 of the fair value hierarchy. For further discussion of the inputs used to determine the fair value of the embedded cash conversion option, refer to Note 14. The fair value of the embedded cash conversion option at December 31, 2015 and 2014 was approximately $171.0 million and $149.5 million which is recorded in other long-term liabilities in the accompanying balance sheet. For the years ended December 31, 2015 and 2014 the change in the fair value of the embedded cash conversion option resulted in losses of $21.5 million and $44.3 million, respectively. Foreign Currency Derivatives As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis using foreign exchange forward contracts, foreign exchange options and cross-currency swaps. Undesignated Derivative Instruments We are party to various foreign exchange forward, option and swap arrangements which had, at December 31, 2015, an aggregate notional value of $264.2 million and fair value of $1.4 million included in prepaid and other assets and $0.5 million included in accrued and other liabilities, respectively, which expire at various dates through March 2016. We were party to various foreign exchange forward and swap arrangements which had, at December 31, 2014, an aggregate notional value of $1.3 billion and fair values of $46.8 million included in prepaid and other assets and $10.5 million included in accrued and other liabilities, respectively, which expired at various dates through December 2015. The transactions have been entered into to offset the effects from short-term balance sheet exposure to foreign currency exchange risk. Changes in the fair value of these arrangements have been recognized in other (expense) income, net. Fair Values of Derivative Instruments The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance sheets as of December 31, 2015 and 2014:
_________________ (1) The fair value amounts for the interest rate contracts include accrued interest. Gains and Losses on Derivative Instruments The following tables summarize the classification and gains and losses on derivative instruments for the years ended December 31, 2015, 2014 and 2013:
The amounts noted in the table above for accumulated other comprehensive income (AOCI) do not include any adjustment for the impact of deferred income taxes. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1. Observable inputs, such as quoted prices in active markets; Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Our assets and liabilities measured at fair value on a recurring basis consist of short-term investments, which are classified in Level 1 and Level 2 of the fair value hierarchy, marketable securities discussed in Note 10, which are classified in Level 1, derivative contracts used to hedge currency and interest rate risk and derivative financial instruments entered into in connection with the Cash Convertible Notes discussed in Note 15, which are classified in Level 2 of the fair value hierarchy, and contingent consideration accruals which are classified in Level 3 of the fair value hierarchy, and are shown in the tables below. In determining fair value for Level 2 instruments, we apply a market approach, using quoted active market prices relevant to the particular instrument under valuation, giving consideration to the credit risk of both the respective counterparty to the contract and the Company. To determine our credit risk we estimated our credit rating by benchmarking the price of outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, our credit risk was quantified by reference to publicly-traded debt with a corresponding rating. The Level 2 derivative financial instruments include the Call Options asset and the embedded conversion option liability. See Note 15, "Lines of Credit and Debt", and Note 13, "Derivatives and Hedging", for further information. The derivatives are not actively traded and are valued based on an option pricing model that uses observable market data for inputs. Significant market data inputs used to determine fair values as of December 31, 2015 included our common stock price, the risk-free interest rate, and the implied volatility of our common stock. The Call Options asset and the embedded cash conversion option liability were designed with the intent that changes in their fair values would substantially offset, with limited net impact to our earnings. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is substantially mitigated. Our Level 3 instruments include contingent consideration liabilities. We value contingent consideration liabilities using unobservable inputs, applying the income approach, such as the discounted cash flow technique, or the probability-weighted scenario method. Contingent consideration arrangements obligate us to pay the sellers of an acquired entity if specified future events occur or conditions are met such as the achievement of technological or revenue milestones. We use various key assumptions, such as the probability of achievement of the milestones (0% to 100%) and the discount rate (between 0.70% and 2.20%), to represent the non-performing risk factors and time value when applying the income approach. We regularly review the fair value of the contingent consideration, and reflect any change in the accrual in the consolidated statements of income in the line items commensurate with the underlying nature of milestone arrangements. The following table presents our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis:
Activity for liabilities with Level 3 inputs is summarized in the following table:
For the year ended December 31, 2015, $10.7 million is included in other long-term liabilities and $7.0 million is included in accrued liabilities. During 2015, gains for the reduction in the fair value of contingent consideration totaling $5.2 million were recognized in general and administrative, restructuring, integration and other. For the year ended December 31, 2014, the gains of $1.2 million were recognized in cost of sales. The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated fair value of long-term debt as disclosed in Note 15 was based on current interest rates for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value adjustments in the years ended December 31, 2015 and 2014 for nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis other than the impairment of cost-method investments as discussed in Note 10. |
Lines of Credit and Debt |
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Lines of Credit and Debt | Lines of Credit and Debt Our credit facilities available at December 31, 2015 total €436.6 million (approximately $475.3 million). This includes a €400.0 million syndicated multi-currency revolving credit facility expiring December 2020 of which no amounts were utilized at December 31, 2015, and four other lines of credit amounting to €36.6 million with no expiration date, none of which were utilized as of December 31, 2015. The €400.0 million facility can be utilized in euro, U.K. pound or U.S. dollar and bears interest of 0.4% to 1.2% above three months EURIBOR, or LIBOR in relation to any loan not in euro, and is offered with interest periods of one, two, three, six or twelve months. The commitment fee is calculated based on 35% of the applicable margin. In 2015 and 2014, $0.9 million and $1.8 million of commitment fees were paid, respectively. The revolving facility agreement contains certain financial and non-financial covenants, including but not limited to, restrictions on the encumbrance of assets and the maintenance of certain financial ratios. We were in compliance with these covenants at December 31, 2015. The credit facilities are for general corporate purposes. At December 31, 2015, total long-term debt was approximately $1.1 billion. Total long-term debt consists of the following as of December 31, 2015 and 2014:
Interest expense on long-term debt was $34.5 million, $36.4 million and $28.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. Future maturities of long-term debt as of December 31, 2015 are as follows:
Cash Convertible Notes due 2019 and 2021 On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes of which $430.0 million is due in 2019 (2019 Notes) and $300.0 million is due in 2021 (2021 Notes). We refer to the 2019 Notes and 2021 Notes, collectively as the “Cash Convertible Notes”. The aggregate net proceeds of the Cash Convertible Notes were $680.7 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 million of the net proceeds to repay the 2006 Notes and related subscription right described below. Interest on the Cash Convertible Notes is payable semiannually in arrears on March 19 and September 19 of each year, at rates of 0.375% and 0.875% per annum for the 2019 Notes and 2021 Notes, respectively, commencing September 19, 2014. The 2019 Notes will mature on March 19, 2019 and the 2021 Notes will mature on March 19, 2021, unless repurchased or converted in accordance with their terms prior to such date. The Cash Convertible Notes are convertible into cash in whole, but not in part, at the option of noteholders in the following circumstances: (a) from April 29, 2014 through September 18, 2018 for the 2019 Notes, and September 18, 2020 for the 2021 Notes (Contingent Conversion Period), under any of the Contingent Conversion Conditions and (b) at any time following the Contingent Conversion Period through the fifth business day immediately preceding the applicable maturity Date. Upon conversion, noteholders will receive an amount in cash equal to the Cash Settlement Amount, calculated as described below. The Cash Convertible Notes are not convertible into shares of our common stock or any other securities. Noteholders may convert their Cash Convertible Notes into cash at their option at any time during the Contingent Conversion Period only under the following circumstances (Contingent Conversion Conditions):
The initial conversion rate is 7,056.7273 shares of our common stock per $200,000 principal amount of Cash Convertible Notes (reflecting an initial conversion price of approximately $28.34 per share of common stock). Upon conversion, holders are entitled to a cash payment (Cash Settlement Amount) equal to the average of the conversion rate multiplied by the daily volume-weighted average trading price for our common stock over a 50-day period. The conversion rate is subject to adjustment in certain instances but will not be adjusted for any accrued and unpaid interest. In addition, following the occurrence of certain corporate events that may occur prior to the applicable maturity date, we may be required to pay a cash make-whole premium by increasing the conversion rate for any holder who elects to convert Cash Convertible Notes in connection with the occurrence of such a corporate event. We may redeem the 2019 Notes or 2021 Notes in their entirety at a price equal to 100% of the principal amount of the applicable Cash Convertible Notes plus accrued interest at any time when 20% or less of the aggregate principal amount of the applicable Cash Convertible Notes originally issued remain outstanding. The Cash Convertible Notes are senior unsecured obligations, and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Cash Convertible Notes; equal in right of payment to any of our unsecured indebtedness that is unsubordinated; junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. Because the Cash Convertible Notes contain an embedded cash conversion option, we have determined that the embedded cash conversion option is a derivative financial instrument, which is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income until the cash conversion option transaction settles or expires. The initial fair value liability of the embedded cash conversion option was $105.2 million, which simultaneously reduced the carrying value of the Cash Convertible Notes (effectively an original issuance discount). For further discussion of the derivative financial instruments relating to the Cash Convertible Notes, refer to Note 13. As noted above, the reduced carrying value on the Cash Convertible Notes resulted in a debt discount that is amortized to the principal amount through the recognition of non-cash interest expense over the expected life of the debt, which is five and seven years for the 2019 Notes and 2021 Notes, respectively. This resulted in our recognition of interest expense on the Cash Convertible Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise similar terms been issued. The effective interest rate of the 2019 and 2021 Notes is 2.937% and 3.809%, respectively, which is imputed based on the amortization of the fair value of the embedded cash conversion option over the remaining term of the Cash Convertible Notes. As of December 31, 2015, we expect the 2019 Notes to be outstanding until their 2019 maturity date and the 2021 Notes to be outstanding until their 2021 maturity date, for remaining amortization periods of approximately five and seven years, respectively. Based on an estimation using available over-the-counter market information on the Cash Convertible Notes, the fair value of the 2019 Notes was $495.5 million and $452.0 million and the fair value of the 2021 Notes was $356.1 million and $318.1 million, at December 31, 2015 and 2014, respectively. In connection with the issuance of the Cash Convertible Notes, we incurred approximately $13.1 million in transaction costs. Such costs have been allocated to the Cash Convertible Notes and deferred as a long-term asset and are being amortized over the terms of the Cash Convertible Notes. Interest expense related to the Cash Convertible Notes was comprised of the following:
Cash Convertible Notes Call Spread Overlay Concurrent with the issuance of the Cash Convertible Notes, we entered into privately negotiated hedge transactions (Call Options) with, and issued warrants to purchase shares of our common stock (Warrants) to, certain financial institutions. We refer to the Call Options and Warrants collectively as the “Call Spread Overlay”. The Call Options are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion of the Cash Convertible Notes. We used $105.2 million of the proceeds from the issuance of the Cash Convertible Notes to pay for the Call Options, and simultaneously received $69.4 million from the sale of the Warrants, for a net cash outlay of $35.8 million for the Call Spread Overlay. The Call Options are derivative financial instruments and are discussed further in Note 13. The Warrants are equity instruments and are further discussed in Note 17. Aside from the initial payment of a premium of $105.2 million for the Call Option, we will not be required to make any cash payments under the Call Options, and will be entitled to receive an amount of cash, generally equal to the amount by which the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant valuation period. The exercise price under the Call Options is initially equal to the conversion price of the Cash Convertible Notes. The Warrants cover an aggregate of 25.8 million shares of our common stock (subject to anti-dilution adjustments under certain circumstances) and have an initial exercise price of $32.085 per share, subject to customary adjustments. The Warrants expire as follows: Warrants to purchase 15.2 million shares expire over a period of 50 trading days beginning on December 27, 2018 and Warrants to purchase 10.6 million shares expire over a period of 50 trading days beginning on December 29, 2020. The Warrants are European-style (exercisable only upon expiration). The Warrants could have a dilutive effect to the extent that the price of our common stock exceeds the applicable strike price of the Warrants. For each Warrant that is exercised, we will deliver to the holder a number of shares of our common stock equal to the amount by which the settlement price exceeds the exercise price, divided by the settlement price, plus cash in lieu of any fractional shares. We will not receive any proceeds if the Warrants are exercised. Private Placement In October 2012, we completed a private placement through the issuance of new senior unsecured notes at a total amount of $400.0 million with a weighted average interest rate of 3.66% (settled on October 16, 2012). The notes were issued in three series: (1) $73.0 million 7-year term due in 2019 (3.19%); (2) $300.0 million 10-year term due in 2022 (3.75%); and (3) $27.0 million 12-year term due in 2024 (3.90%). We paid $2.1 million in debt issue costs which will be amortized through interest expense over the lifetime of the notes. Approximately €170.0 million (approximately $220 million) of proceeds from the notes were used to repay amounts outstanding under our short-term revolving credit facility in 2012. The remainder of the proceeds provides additional resources to support our longer-term business expansion. The note purchase agreement contains certain financial and non-financial covenants, including but not limited to, restrictions on priority indebtedness and the maintenance of certain financial ratios. We were in compliance with these covenants at December 31, 2015. Based on an estimation using the changes in the U.S. Treasury rates, the fair value of these senior notes as of December 31, 2015 and December 31, 2014 was approximately $399.3 million and $394.3 million, respectively, taking into account that $200.0 million of such notes are the hedged item in the fair value transaction described in Note 13. The fair value of such hedges was $5.8 million and $3.3 million at December 31, 2015 and December 31, 2014, respectively. 2006 Notes In May 2006, we completed the offering of $300 million of 3.25% Senior Convertible Notes due in 2026 (2006 Notes) through an unconsolidated subsidiary, QIAGEN Euro Finance (Euro Finance). The net proceeds of the 2006 Notes were loaned by Euro Finance to consolidated subsidiaries. These long-term notes payable to Euro Finance had an effective interest rate of 3.7% and were due in May 2026. Interest was payable semi-annually in May and November. The 2006 Notes were issued at 100% of principal value, and were convertible into 15.0 million common shares at the option of the holders upon the occurrence of certain events, at a price of $20.00 per share, subject to adjustment. QIAGEN N.V. had an agreement with QIAGEN Euro Finance to issue shares to the investors in the event of conversion. This subscription right, along with the related receivable, was recorded at fair value in the equity of QIAGEN N.V. as paid-in capital. In March 2014, we redeemed the $300.0 million loan payable to Euro Finance and approximately 98% of the subscription right with QIAGEN Euro Finance for $372.5 million, and recognized a loss on the redemption of $4.6 million in other (expense) income, net. The repayment amount was allocated to the loan and warrants on a relative fair value basis with $67.9 million recorded against additional paid in capital for the redemption of the warrant subscription receivable. Contemporaneously, QIAGEN Euro Finance redeemed the 2006 Notes. During 2014, we issued 0.2 million common shares in exchange for $3.9 million upon the exercise of the remaining subscription rights and subsequently Euro Finance was liquidated. 2004 Notes In August 2004, we completed the sale of $150 million of 1.5% Senior Convertible Notes due in 2024 (2004 Notes), through our unconsolidated subsidiary QIAGEN Finance. The net proceeds of the 2004 Notes were loaned by QIAGEN Finance to consolidated subsidiaries with an effective interest rate of 1.8% were due in February 2024. Interest was payable semi-annually in February and August. The 2004 Notes were issued at 100% of principal value, and were convertible into 11.5 million common shares at the option of the holders upon the occurrence of certain events at a price of $12.6449 per share, subject to adjustment. QIAGEN N.V. had an agreement with QIAGEN Finance to issue shares to the investors in the event of conversion. The subscription right, along with the related receivable, was recorded at fair value in the equity of QIAGEN N.V. as paid-in capital. In 2014, 1.2 million common shares were issued in connection with the conversions. During 2015, we repaid the loan to QIAGEN Finance and repurchased the warrant agreement with QIAGEN Finance for $250.9 million and recognized a loss of $7.6 million in other (expense) income, net. The repayment amount was allocated to the loan and warrants on a relative fair value basis with $113.0 million recorded against additional paid in capital for the redemption of the warrant subscription receivable. Subsequent to these transactions QIAGEN Finance was liquidated. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income before income taxes for the years ended December 31, 2015, 2014 and 2013 consisted of:
Income taxes for the years ended December 31, 2015, 2014 and 2013 are as follows:
The Netherlands statutory income tax rate was 25% for the years ended December 31, 2015, 2014 and 2013. Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective countries of domicile. The principal items comprising the differences between income taxes computed at The Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, 2015, 2014 and 2013 are as follows:
____________________ (1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher or lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from income taxes due to various intercompany operating and financing activities. The most significant tax benefits from these foreign operations and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, rules, rulings, and exemptions in these jurisdictions. Additionally, in 2014 and 2013, in certain foreign jurisdictions (primarily Germany and the United States), we recorded acquisition related and impairment charges which reduced pretax income in these higher tax jurisdictions. (2) The tax impact from tax exempt income primarily reflects The Netherlands’ benefit of the 2006 and 2004 Notes discussed in Note 15 “Lines of Credit and Debt.” These notes were redeemed in 2014 and 2015, respectively, and accordingly the related income tax benefit of $2.6 million in 2014 and $4.6 million in 2013, did not and will not impact our effective tax rate in 2015 and beyond. In 2015, tax exempt income includes non-taxable income in The Netherlands related to the repurchase of the 2004 Notes, non-taxable income in the U.S. from the release of contingent consideration accruals and non-taxable dividend income in Switzerland. (3) Government incentives include favorable tax regulations primarily in France (in 2014 and 2013) and the United States relating to research and development expense as well as the United States Internal Revenue Code Section 199 domestic production activities deduction. We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The Netherlands, Germany, Switzerland and the U.S. federal jurisdiction, as well as in various other state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. Tax years in The Netherlands are open since 2003 for income tax examinations by tax authorities. Our subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities for years before 2011. The U.S. consolidated group is subject to federal and most state income tax examinations by tax authorities beginning the year ending December 31, 2011 through the current period. Starting in February 2014, the U.S. tax authorities (Internal Revenue Service) have been auditing our U.S. federal tax returns for 2011 and 2012. The audit is currently in process and we expect to close the audit in 2016. Additionally, in February 2016 German tax authorities began the audit of the German tax returns for the 2010-2013 tax years. In 2012, we established a reserve related to withholding tax on a specific intercompany transaction for $3.9 million including penalties. During 2013, we settled on this issue with the relevant tax authorities, which resulted in a release of the remaining $1.9 million reserve in the fourth quarter of 2013. In 2014, we established reserve related to cash convertible notes as discussed in Note 15 for $3.0 million. In early 2015, we received a confirmation from the relevant tax authorities, which resulted in a release of $3.0 million reserve in the first quarter of 2015. Changes in the gross amount of unrecognized tax benefits are as follows:
At December 31, 2015 and 2014, our net unrecognized tax benefits totaled approximately $16.7 million and $16.0 million, respectively, of which $16.7 million and $14.0 million in benefits, if recognized, would favorably affect our effective tax rate in any future period. It is reasonably possible that approximately $6.8 million of the unrecognized tax benefits may be released during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various events could cause our current expectations to change in the future. The majority of these uncertain tax positions, if ever recognized in the financial statements, would be recorded in the statement of income as part of the income tax provision. Our policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties within income tax expense. For the years ended December 31, 2015, 2014 and 2013, we have net interest (income) expense and penalties of $0.3 million, $(0.3) million and $(1.7) million, respectively. At December 31, 2015 and 2014, we have accrued interest of $1.4 million and $1.1 million, respectively, which are not included in the table above. We have recorded net deferred tax liabilities of $43.1 million and $82.8 million at December 31, 2015 and 2014, respectively. The components of the net deferred tax liability at December 31, 2015 and 2014 are as follows:
At December 31, 2015 and 2014, we had $264.2 million and $270.1 million in total foreign net operating loss (NOL) carryforwards. At December 31, 2015 and 2014, we had $110.3 million and $120.8 million of U.S. federal (NOL) carryforwards. At December 31, 2015, the entire NOL in the U.S. is subject to limitations under Section 382 of the Internal Revenue Code. The NOLs in the U.S. will expire beginning December 31, 2022 through December 31, 2032. As of December 31, 2015 and 2014, we had other foreign NOL carryforwards totaling approximately $153.9 million and $149.3 million, respectively, with $9.3 million added in 2014 due to acquisitions. As of December 31, 2015, we had trade tax NOL carryforwards in Germany of $103.5 million. Of the total $153.9 million NOL carryforward, a portion of the foreign NOLs will be expiring beginning December 2016. The valuation allowance amounts for the years ended December 31, 2015 and December 31, 2014 are $3.7 million and $0.6 million. In 2015, we recorded a valuation allowance of $3.4 million related to NOLs and released $0.3 million of valuation allowance related to the expiration of statute of limitations. As of December 31, 2015, a deferred tax liability has not been recognized for residual Netherlands income taxes on the undistributed earnings of the majority of our foreign subsidiaries as these earnings are considered to be either permanently reinvested or can be repatriated tax free. These earnings retained by subsidiaries and equity accounted investments amounted to $333.6 million at December 31, 2015. We have $20.1 million of undistributed earnings that we do not consider permanently reinvested and have recorded deferred income taxes or withholding taxes at December 31, 2015 and December 31, 2014, of approximately $0.9 million and $1.1 million respectively. There are no income tax consequences regarding payment of dividends to our shareholders. To date, we have never paid dividends. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Issuance of Warrants In March 2014, in connection with the issuance of our Cash Convertible Notes, we issued warrants (as described in Note 15) for approximately 25.8 million shares of our common stock (subject to antidilution adjustments under certain circumstances) with an initial exercise price of $32.085 per share, subject to customary adjustments. The proceeds, net of issuance costs, from the sale of the Warrants of approximately $68.9 million are included as additional paid in capital in the accompanying consolidated balance sheets. The Warrants expire as follows: Warrants to purchase 15.2 million shares expire over a period of 50 trading days beginning on December 27, 2018 and Warrants to purchase 10.6 million shares expire over a period of 50 trading days beginning on December 29, 2020. The Warrants are exercisable only upon expiration. For each Warrant that is exercised, we will deliver to the holder a number of shares of our common stock equal to the amount by which the settlement price exceeds the exercise price, divided by the settlement price, plus cash in lieu of any fractional shares. The Warrants could separately have a dilutive effect on shares of our common stock to the extent that the market value per share of our common stock exceeds the applicable exercise price of the Warrants (as measured under the terms of the Warrants). Share Repurchase Program In 2012, the Supervisory Board approved a program authorizing management to purchase up to a total of $100 million of our common shares (excluding transaction costs). We completed this share repurchase program in April 2013 having repurchased, between October 2012 and April 2013, a total of 5.1 million QIAGEN shares for an aggregate cost of $99.0 million. In 2013, we announced a second share buyback program, to purchase another $100 million of our common shares (excluding transaction costs). We completed the share repurchase program in June 2014 having repurchased between September 2013 and June 2014 a total of approximately 4.4 million QIAGEN shares were repurchased for a total aggregate cost of $100.4 million (including performance fees), under this program. In July 2014, we announced the launch of our third share repurchase program to purchase up to another $100 million of our common shares (excluding transaction costs). In 2014, 2.1 million QIAGEN shares were repurchased for $49.1 million (excluding transaction costs) and in 2015 0.8 million QIAGEN shares were repurchased for $20.8 million. The cost of repurchased shares is included in treasury stock and reported as a reduction in total equity when a repurchase occurs. Repurchased shares will be held in treasury in order to satisfy various obligations, which include the warrants issued in connection with the issuance of our Cash Convertible Notes discussed above and employee share-based remuneration plans. Accumulated Other Comprehensive Income (Loss) The following table is a summary of the components of accumulated other comprehensive income (loss) as of December 31, 2015 and 2014:
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Earnings per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share | Earnings per Common Share We present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net income attributable to the owners of QIAGEN N.V. by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that would occur if all “in the money” options and warrants to issue common shares were exercised. The following schedule summarizes the information used to compute earnings per common share:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Lease Commitments We lease facilities and equipment under operating lease arrangements expiring in various years through 2022. Certain rental commitments provide for escalating rental payments or have renewal options extending through various years. Certain facility and equipment leases constitute capital leases expiring in various years through 2018. The accompanying consolidated balance sheets include the assets and liabilities arising from these capital lease obligations. Rent expense under operating lease agreements was $23.2 million, $25.6 million and $26.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. Minimum future obligations under capital and operating leases at December 31, 2015 are as follows:
Licensing and Purchase Commitments We have licensing agreements with companies, universities and individuals, some of which require certain up-front payments. Royalty payments are required on net product sales ranging from one to 25 percent of covered products or based on quantities sold. Several of these agreements have minimum royalty requirements. The accompanying consolidated balance sheets include accrued royalties relating to these agreements in the amount of $13.8 million and $13.9 million at December 31, 2015 and 2014, respectively. Royalty expense relating to these agreements amounted to $43.2 million, $48.8 million, and $53.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Royalty expense is primarily recorded in cost of sales, with a small portion recorded as research and development expense depending on the use of the technology under license. Some of these agreements also have minimum raw material purchase requirements and requirements to perform specific types of research. At December 31, 2015, we had commitments to purchase goods or services, and for future minimum guaranteed royalties. They are as follows:
Contingent Consideration Commitments Pursuant to the purchase agreements for certain acquisitions, as discussed more fully in Note 5, we could be required to make additional contingent cash payments totaling up to $67.8 million based on the achievement of certain revenue and operating results milestones as follows: $40.2 million in 2016, $15.5 million in 2017, $5.1 million in 2019, and $7.0 million, payable in any 12-month period from now until 2029 based on the accomplishment of certain revenue targets. Of the $67.8 million total contingent obligation, we have assessed the fair value at December 31, 2015, to be $17.7 million, of which $10.7 million is included in other long-term liabilities and $7.0 million is included in accrued liabilities in the accompanying consolidated balance sheet. Employment Agreements Certain of our employment contracts contain provisions which guarantee the payments of certain amounts in the event of a change in control, as defined in the agreements, or if the executive is terminated for reasons other than cause, as defined in the agreements. At December 31, 2015, the commitment under these agreements totaled $15.3 million. Contingencies In the ordinary course of business, we provide a warranty to customers that our products are free of defects and will conform to published specifications. Generally, the applicable product warranty period is one year from the date of delivery of the product to the customer or of site acceptance, if required. Additionally, we typically provide limited warranties with respect to our services. From time to time, we also make other warranties to customers, including warranties that our products are manufactured in accordance with applicable laws and not in violation of third-party rights. We provide for estimated warranty costs at the time of the product sale. We believe our warranty reserves as of December 31, 2015 and 2014 appropriately reflect the estimated cost of such warranty obligations. Preacquisition Contingencies In connection with certain acquisitions, amounts were paid into escrow accounts to cover preacquisition contingencies assumed in the acquisition. The escrow amounts expected to be claimed by QIAGEN are recorded as an asset in prepaid and other current assets and amount to $2.5 million as of December 31, 2015 and 2014. In addition, we have recorded $0.1 million for preacquisition contingencies as a liability under accrued and other liabilities as of December 31, 2014. Litigation From time to time, we may be party to legal proceedings incidental to our business. As of December 31, 2015, certain claims, suits or legal proceedings arising out of the normal course of business have been filed or were pending against QIAGEN or its subsidiaries. These matters have arisen in the ordinary course and conduct of business, as well as through acquisition. Although it is not possible to predict the outcome of such litigation, we assess the degree of probability and evaluate the reasonably possible losses that we could incur as a result of these matters. We accrue for any estimated loss when it is probable that a liability has been incurred and that the amount of the probable loss can be estimated. Based on the facts known to QIAGEN and after consultation with legal counsel, management believes that such litigation will not have a material adverse effect on QIAGEN’s financial position or results of operations. |
Share-Based Compensation |
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Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN N.V. 2014 Stock Plan (the 2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no further awards will be able to be granted under the 2005 Plan. The plans allow for the granting of stock rights and incentive stock options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 10 years, subject to earlier termination in certain situations. Generally, options vest over a three-year period. The vesting and exercisability of certain stock rights will be accelerated in the event of a Change of Control, as defined in the plans. To date, all option grants have been at the market value on the grant date or at a premium above the closing market price on the grant date. We issue Treasury Shares to satisfy option exercises and had approximately 19.7 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at December 31, 2015. Stock Options No stock options were granted in 2015 or 2014. During the year ended December 31, 2013, we granted 543,903 stock options. The following are the weighted-average assumptions used in valuing the stock options granted to employees for the year ended December 31, 2013:
A summary of the status of employee stock options as of December 31, 2015 and changes during the year then ended is presented below:
Generally, stock option grants are valued as a single award with a single average expected term and are amortized over the vesting period. The weighted-average grant-date fair value of options granted during the years ended December 31, 2013 was $4.94. The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was $7.0 million, $6.3 million and $25.3 million, respectively. At December 31, 2015, the unrecognized share-based compensation expense related to employee stock option awards including estimated forfeitures is approximately $0.2 million and will be recognized over a weighted average period of approximately 0.27 years. At December 31, 2015, 2014 and 2013, 1.7 million, 2.1 million and 2.3 million options were exercisable at a weighted average price of $19.27, $18.10 and $16.99 per share, respectively. The options outstanding at December 31, 2015 expire in various years through 2023. Stock Units Stock units represent rights to receive Common Shares at a future date and include restricted stock units which are subject to time-vesting only and performance stock units which include performance conditions in addition to time-vesting. There is no exercise price and the fair market value at the time of the grant is recognized over the requisite vesting period, generally 3 to 5 years, and in certain grants 10 years. The fair market value is determined based on the number of restricted stock units granted and the market value of our shares on the grant date. Pre-vesting forfeitures were estimated to be approximately 7.2%. At December 31, 2015, there was $77.5 million remaining in unrecognized compensation cost including estimated forfeitures related to these awards, which is expected to be recognized over a weighted average period of 4.49 years. The weighted average grant date fair value of stock units granted during the years ended December 31, 2015, 2014 and 2013 was $24.91, $22.73 and $21.30, respectively. The total fair value of stock units that vested during the years ended December 31, 2015, 2014 and 2013 was $28.7 million, $34.1 million and $22.6 million, respectively. A summary of stock units as of December 31, 2015 and changes during the year are presented below:
Compensation Expense Share-based compensation expense before taxes for the years ended December 31, 2015, 2014 and 2013 totaled approximately $27.6 million, $42.2 million and $37.9 million, respectively, as shown in the table below. The excess tax benefit realized for the tax deductions of the share-based payment arrangements totaled $3.3 million, $1.6 million and $3.1 million, respectively, for the years ended December 31, 2015, 2014 and 2013.
Total share-based compensation expense in 2015 was lower compared to 2014 following a reassessment on stock units with performance criteria. Total share-based compensation expense in 2014 was higher compared to 2013 due to incremental expense of $1.4 million recognized in connection with retirement provisions for Supervisory Board members. No share-based compensation cost was capitalized in inventory in 2015, 2014 or 2013 as the amounts were not material. |
Employee Benefits |
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General Discussion of Pension and Other Postretirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined contribution plan is qualified under Section 401(k) of the Internal Revenue Code, and covers substantially all U.S. employees. Participants may contribute a portion of their compensation not exceeding a limit set annually by the Internal Revenue Service. This plan includes a provision for us to match a portion of employee contributions. Total expense under the 401(k) plans, including the plans acquired via business acquisitions, was $2.4 million, $2.1 million and $1.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. In 2013, the total expense was lower partially due to matching amounts which were funded from forfeited amounts. We also have a defined contribution plan which covers certain executives. We make matching contributions up to an established maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.3 million in each year ended December 31, 2015, 2014 and 2013. We have four defined benefit, non-contributory retirement or termination plans that cover certain employees in Germany, France, Japan and Italy. These defined benefit plans provide benefits to covered individuals satisfying certain age and service requirements. For certain plans, we calculate the vested benefits to which employees are entitled if they separate immediately. The benefits accrued on a pro-rata basis during the employees’ employment period are based on the individuals’ salaries, adjusted for inflation. The liability under the defined benefit plans was $6.6 million at December 31, 2015 and $5.0 million at December 31, 2014, and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. |
Related Party Transactions |
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Related Party Transactions | Related Party Transactions We had a 100% interest in QIAGEN Finance (Luxembourg) S.A. (QIAGEN Finance) which was established for the purpose of issuing convertible debt. As discussed in Note 10, QIAGEN Finance was a variable interest entity for which we did not hold any variable interests and were not the primary beneficiary, thus it was not consolidated. Accordingly, the convertible debt was not included in the consolidated statements of QIAGEN N.V., though QIAGEN N.V. did report the full obligation of the debt through its liabilities to QIAGEN Finance. As of December 31, 2014, we had loans payable to QIAGEN Finance of $130.5 million, accrued interest due to QIAGEN Finance of $3.9 million, and amounts receivable from QIAGEN Finance of $3.0 million. The amounts receivable were related to subscription rights which were recorded net in the equity of QIAGEN N.V. as paid-in capital. As discussed in Note 15, during 2015 we repaid the loan to QIAGEN Finance and repurchased the warrant agreement with QIAGEN Finance. From time to time, we have transactions with other companies in which we hold an interest all of which are individually and in the aggregate immaterial, as summarized in the table below.
During 2015, we entered into two loan agreements with companies in which we also hold an interest for $5.0 million and €2.0 million ($2.4 million), bearing interest at 6% and 7% and are due in January 2020 and June 2019, respectively. The loans were made for general business purposes and no amounts were repaid in 2015. In the first quarter of 2016 we entered into a short-term $0.6 million loan arrangement with another cost-method investee. |
Schedule II - Valuation and Qualifying Accounts |
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Schedule II - Valuation and Qualifying Accounts | SCHEDULE II QIAGEN N.V. AND SUBSIDIARIES SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013
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Summary of Significant Accounting Policies and Critical Accounting Estimates (Policy) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||
Adoption of New Accounting Standards and New Accounting Standards Not Yet Adopted | Adoption of New Accounting Standards In April 2014, the FASB issued Accounting Standards Update No. 2014-08 (ASU 2014-08), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The ASU is aimed at reducing the frequency of disposals reported as discontinued operations by focusing on strategic shifts that have or will have a major impact on an entity's operations and financial results. For public entities, the amendments are effective on a prospective basis for all disposals of components of an entity and all businesses that, on acquisition, are classified as held for sale that occur within annual periods beginning on or after December 15, 2014 and interim period within those years. ASU 2014-08 became effective for us in the period beginning January 1, 2015 and its adoption did not have an effect on our financial position, results of operations or cash flows. New Accounting Standards Not Yet Adopted In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01), Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance is intended to improve the recognition and measurement of financial instruments. The new guidance makes targeted improvements to existing U.S. GAAP by:
The amendments are effective for our financial statements beginning in the first quarter of 2018. We are currently evaluating the impact of ASU 2016-01 on our consolidated financial statements. In November 2015, the FASB issued Accounting Standard Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which changes how deferred taxes are classified on organizations’ balance sheets. The ASU eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments are effective for our financial statements and we will adopt beginning in the first quarter of 2017. As of December 31, 2015, we have current deferred tax assets of $33.1 million and current deferred tax liabilities of $2.5 million. We do not expect the adoption to have a material impact on our consolidated financial statements. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments eliminate the requirement to retrospectively account for those adjustments. The amendments require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments are effective for our financial statements beginning in the first quarter of 2016. We do not expect the adoption to have a material impact on our consolidated financial statements. In July 2015, the FASB issued Accounting Standards Update No. 2015-11 (ASU 2015-11), Inventory: (Topic 330): Simplifying the Measurement of Inventory requiring in scope inventory, including inventory measured using first-in, first out (FIFO) or average cost, to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for us beginning in the first quarter of 2017. We are currently evaluating the impact of ASU 2015-11 on our consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update No. 2015-05 (ASU 2015-05), Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This amendment provides guidance to help entities determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for our financial statements beginning in the first quarter of 2016. We do not expect the adoption to have a material impact on our consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update No. 2015-03 (ASU 2015-03) Interest: Imputation of Interest (Subtopic 835-30) requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. The FASB has issued Accounting Standards Update No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This ASU adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015, Emerging Issues Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-03 will be effective for us beginning in the first quarter of 2016 and shall be applied on a retrospective basis wherein the balance sheet of each individual period presented shall be adjusted to reflect the period-specific effects of applying the new guidance. As of December 31, 2015, we have deferred debt issuance costs of $0.7 million and $12.2 million recorded in other current and other long-term assets, respectively. We do not expect the adoption to have a material impact on our consolidated financial statements. In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02) Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard modifies current guidance on consolidation under the variable interest model and the voting model. ASU 2015-02 will be effective for us beginning in the first quarter of 2016. We are currently evaluating the impact of ASU 2015-02 on our consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers: (Topic 606) which affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles-Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. An entity should apply the amendments in this ASU either retrospectively to each prior reporting period presented and the entity may elect certain practical expedients; or, retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers: (Topic 606): Deferral of the Effective Date which defers the effective date of ASU 2014-09 to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted only as of interim and annual reporting periods beginning after December 15, 2016. We are currently evaluating the impact its adoption would have on our financial position, results of operations or cash flows. |
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of QIAGEN N.V. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Investments in either common stock or in-substance common stock of companies where we exercise significant influence over the operations but do not have control, and where we are not the primary beneficiary, are accounted for using the equity method. All other investments are accounted for under the cost method. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the Company, we record the fair value of the noncontrolling interests at the acquisition date and classify the amounts attributable to noncontrolling interests separately in equity in the consolidated financial statements. Any subsequent changes in the Company's ownership interest while the Company retains its controlling financial interest in its subsidiary are accounted for as equity transactions. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Concentrations of Risk | Concentrations of Risk We buy materials for products from many suppliers, and are not dependent on any one supplier or group of suppliers for the business as a whole. However, key components of certain products, including certain instrumentation components and chemicals, are available only from a single source. If supplies from these vendors were delayed or interrupted for any reason, we may not be able to obtain these materials timely or in sufficient quantities in order to produce certain products and sales levels could be negatively affected. Additionally, our customers include researchers at pharmaceutical and biotechnology companies, academic institutions, and government and private laboratories. Fluctuations in the research and development budgets of these researchers and their organizations for applications in which our products are used could have a significant effect on the demand for our products. The financial instruments used in managing our foreign currency, equity and interest rate exposures have an element of risk in that the counterparties may be unable to meet the terms of the agreements. We attempt to minimize this risk by limiting the counterparties to a diverse group of highly-rated international financial institutions. The carrying values of our financial instruments incorporate the non-performance risk by using market pricing for credit risk. However, we have no reason to believe that any counterparties will default on their obligations and therefore do not expect to record any losses as a result of counterparty default. In order to minimize our exposure with any single counterparty, we have entered into master agreements which allow us to manage the exposure with the respective counterparty on a net basis. Other financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents, short-term investments, and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and diverse range of financial instruments. We have established guidelines related to credit quality and maturities of investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances are maintained for potential credit losses and such losses have historically been within expected ranges. |
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Foreign Currency Translation | Foreign Currency Translation Our reporting currency is the U.S. dollar and our subsidiaries’ functional currencies are generally the local currency of the respective countries in which they are headquartered. All amounts in the financial statements of entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and transaction gains and losses are reflected in net income as a component of other income (expense), net. Realized gains or losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and payables are also included in net income as a component of other income (expense), net. |
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Segment Information | Segment Information We determined that we operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of organization and types of products and services which derive revenues and consistent product margins. Accordingly, we operate and make decisions as one reporting unit. |
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Revenue Recognition | Revenue Recognition Our revenues are reported net of sales and value added taxes, discounts and sales allowances, and are derived primarily from the sale of consumable and instrumentation products, and to a much lesser extent, from the sale of services, intellectual property and technology. We recognize revenue when four basic criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Consumable and Related Products: In the last three years, revenue from consumable product sales has accounted for approximately 79%-83% of our net sales and is generally recognized upon transfer of title consistent with the shipping terms. We maintain a small amount, on average less than $3.0 million in total, of consignment inventory at certain customer locations. Revenues for the consumable products which are consigned in this manner are recognized upon consumption. We generally allow returns of consumable products if the product is returned in a timely manner and in good condition. Allowances for returns are provided for based upon the historical pattern of returns and management’s evaluation of specific factors that impact the risk of returns. Revenues from related products include software-as-a-service (SaaS), license fees, intellectual property and patent sales, royalties and milestone payments and over the last three years has accounted for approximately 4%-8% of our net sales. Revenue from SaaS arrangements has increased following our 2013 acquisition of Ingenuity discussed in Note 5, and is recognized ratably over the duration of the agreement unless the terms of the agreement indicate that revenue should be recognized in a different pattern, for example based on usage. License fees from research collaborations include payments for technology transfer and access rights. Non-refundable, up-front payments received in connection with collaborative research and development agreements are generally deferred and recognized on a straight-line basis over the contract period during which there is any continuing obligation. Revenue from intellectual property and patent sales is recognized when earned, either at the time of sale, or over the contract period when licensed. Payments for milestones, generally based on the achievement of substantive and at-risk performance criteria, are recognized in full at such time as the specified milestone has been achieved according to the terms of the agreement. Royalties from licensees are based on reported sales of licensed products and revenues are calculated based on contract terms when reported sales are reliably measurable, fees are fixed or determinable and collectability is reasonably assured. Instrumentation: Revenue from instrumentation includes the instrumentation equipment, installation, training and other instrumentation services, such as extended warranty services or product maintenance contracts and over the last three years has accounted for approximately 12%-13% of net sales. Revenue from instrumentation equipment is recognized when title passes to the customer, upon either shipment or written customer acceptance after satisfying any installation and training requirements. We offer our customers access to our instrumentation via reagent rental agreements which place instrumentation with customers without requiring them to purchase the equipment. Instead, we recover the cost of providing the instrumentation in the amount charged for consumable products. The instruments placed with customers under a reagent rental agreement are depreciated and charged to cost of sales on a straight-line basis over the estimated life of the instrument, typically 3 to 5 years. The costs to maintain these instruments in the field are charged to cost of sales as incurred. Revenue from these reagent rental agreements is allocated to the elements within the arrangement (the lease, the sale of consumables and/or services) in accordance with ASC 605-25, Revenue Recognition—Multiple-Element Arrangements and recognized for each unit of accounting as appropriate. We have contracts with multiple elements which include instrumentation equipment, either leased under a reagent rental agreement or sold directly, together with other elements such as installation, training, extended warranty services or product maintenance contracts or consumable products. These contracts are accounted for under ASC 605-25, Revenue Recognition—Multiple-Element Arrangements. Multiple-element arrangements are assessed to determine whether there is more than one unit of accounting. In order for a deliverable to qualify as a separate unit of accounting, both of the following criteria must be met:
Arrangement consideration is allocated at the inception of the arrangement to all deliverables on the basis of their relative selling price. When applying the relative selling price method, the selling price for each deliverable is determined using (a) vendor-specific objective evidence (VSOE) of selling price, if it exists; or otherwise (b) third-party evidence of selling price. If neither VSOE nor third-party evidence of selling price exists for a deliverable, then the best estimated selling price for the deliverable is used. The arrangement consideration is allocated to the separate units of accounting based on each unit’s relative fair value. If these criteria are not met, deliverables included in an arrangement are accounted for as a single unit of accounting and revenues and costs are deferred until the period or periods in which the final deliverable is provided. Deliverables in our multiple-element arrangements include instrumentation equipment, installation, training, extended warranty services or product maintenance contracts or consumable products. We have evaluated the deliverables in our multiple-element arrangements and concluded that they are separate units of accounting because the delivered item or items have value to the customer on a standalone basis and for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. Revenues from installation and training are recognized as services are completed, based on VSOE, which is determined by reference to the price customers pay when the services are sold separately. Revenues from extended warranty services or product maintenance contracts are recognized on a straight-line basis over the term of the contract, typically one year. VSOE of fair value of extended warranty services or product maintenance is determined based on the price charged for the maintenance and support when sold separately. Revenues from the instrumentation equipment and consumable products are recognized when the products are delivered and there are no further performance obligations. VSOE of fair value of instrumentation equipment and consumable products is determined based on the price charged for the instrument and consumables when sold separately. Certain of our reagent rental arrangements include termination provisions for breach of contract. However, these termination provisions would not impact recognized revenues. Our other arrangements do not include any provisions for cancellation or refunds. |
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Warranty | Warranty We provide warranties on our products against defects in materials and workmanship for a period of one year. A provision for estimated future warranty costs is recorded in cost of sales at the time product revenue is recognized. Product warranty obligations are included in accrued and other liabilities in the accompanying consolidated balance sheets. |
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Research and Development | Research and Development Research and product development costs are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses, facility costs and amounts paid to contract research organizations, and laboratories for the provision of services and materials as well as costs for internal use or clinical trials. |
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Government Grants | Government Grants We recognize government grants when there is reasonable assurance that all conditions will be complied with and the grant will be received. Our government grants generally represent subsidies for specified activities and are therefore recognized when earned as a reduction of the expenses recorded for the activity that the grants are intended to compensate. Thus, when the grant relates to research and development expense, the grant is recognized over the same period that the related costs are incurred. Otherwise, amounts received under government grants are recorded as liabilities in the balance sheet. When the grant relates to an asset, the nominal amount of the grant is deducted from the carrying amount of the asset and recognized over the same period that the related asset is depreciated. |
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Borrowing Costs | Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets (qualifying asset) when such borrowing costs are significant. All other borrowing costs are expensed in the period they occur. |
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Shipping and Handling Income and Costs | Shipping and Handling Income and Costs Shipping and handling costs charged to customers are recorded as revenue in the period that the related product sale revenue is recorded. Associated costs of shipping and handling are included in sales and marketing expenses. |
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Advertising Costs | Advertising Costs The costs of advertising are expensed as incurred and are included as a component of sales and marketing expense. |
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General and Administrative, Restructuring, Integration and Other | General and Administrative, Restructuring, Integration and Other General and administrative expenses primarily represent the costs required to support administrative infrastructure. In addition, we incur indirect acquisition and business integration costs in connection with business combinations. These costs represent incremental costs that we believe would not have been incurred absent the business combinations. Major components of these costs include payroll and related costs for employees remaining with the Company on a transitional basis; public relations, advertising and media costs for re-branding of the combined organization; and, consulting and related fees incurred to integrate or restructure the acquired operations. Restructuring costs include personnel costs (principally termination benefits), facility closure and contract termination costs. Termination benefits are accounted for in accordance with FASB ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, and are recorded when it is probable that employees will be entitled to benefits and the amounts can be reasonably estimated. Estimates of termination benefits are based on the frequency of past termination benefits, the similarity of benefits under the current plan and prior plans, and the existence of statutory required minimum benefits. Facility closure, some termination benefits and other costs are accounted for in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations and are recorded when the liability is incurred. The specific restructuring measures and associated estimated costs are based on management's best business judgment under the existing circumstances at the time the estimates are made. If future events require changes to these estimates, such adjustments will be reflected in the period of the revised estimate. |
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Income Taxes | Income Taxes We account for income taxes under the liability method. Under this method, total income tax expense is the amount of income taxes expected to be payable for the current year plus the change from the beginning of the year for deferred income tax assets and liabilities established for the expected further tax consequences resulting from differences in the financial reporting and tax basis of assets and liabilities. Deferred tax assets and/or liabilities are determined by multiplying the differences between the financial reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Tax benefits are initially recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the taxing authority using the cumulative probability method, assuming the tax authority has full knowledge of the position and all relevant facts. Our policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties within the income tax provision. |
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Derivative Instruments | Derivative Instruments We enter into derivative financial instrument contracts to minimize the variability of cash flows or income statement impact associated with the anticipated transactions being hedged or to hedge fluctuating interest rates. As changes in foreign currency or interest rate impact the value of anticipated transactions, the fair value of the forward or swap contracts also changes, offsetting foreign currency or interest rate fluctuations. Derivative instruments are recorded on the balance sheet at fair value. Changes in fair value of derivatives are recorded in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction. |
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Share-Based Payments | Share-Based Payments Compensation cost for all share-based payments is recorded based on the grant date fair value, less an estimate for pre-vesting forfeitures, recognized in expense over the service period. Stock Options: We utilize the Black-Scholes-Merton valuation model for estimating the fair value of our stock options granted. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, expected life of the award and forfeiture rate. Risk-Free Interest Rate—This is the average U.S. Treasury rate (having a term that most closely resembles the expected life of the option) at the date the option was granted. Dividend Yield—We have never declared or paid dividends on our common stock and do not anticipate declaring or paying any dividends in the foreseeable future. Expected Volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. We use a combination of the historical volatility of our stock price and the implied volatility of market-traded options of our stock to estimate the expected volatility assumption input to the Black-Scholes-Merton model. Our decision to use a combination of historical and implied volatility is based upon the availability of actively traded options of our stock and our assessment that such a combination is more representative of future expected stock price trends. Expected Life of the Option—This is the period of time that the options granted are expected to remain outstanding. We estimated the expected life by considering the historical exercise behavior. We use an even exercise methodology, which assumes that all vested, outstanding options are exercised uniformly over the balance of their contractual life. Forfeiture Rate—This is the estimated percentage of options granted that are expected to be forfeited or cancelled on an annual basis before becoming fully vested. We estimated the forfeiture rate based on historical forfeiture experience. Restricted Stock Units and Performance Stock Units: Restricted stock units and performance stock units represent rights to receive Common Shares at a future date. The fair market value of restricted and performance stock units is determined based on the number of stock units granted and the fair market value of our shares on the grant date. The fair market value at the time of the grant, less an estimate for pre-vesting forfeitures, is recognized in expense over the vesting period. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit in banks and other cash invested temporarily in various instruments that are short-term and highly liquid, and having an original maturity of less than 90 days at the date of purchase. |
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Short Term Investments | Short-Term Investments Short-term investments are classified as “available for sale” and stated at fair value in the accompanying balance sheet. Interest income is accrued when earned and changes in fair market values are reflected as unrealized gains and losses, calculated on the specific identification method, as a component of accumulated other comprehensive income. The amortization of premiums and accretion of discounts to maturity arising from acquisition is included in interest income. A decline in fair value that is judged to be other-than-temporary is accounted for as a realized loss and the write-down is included in the consolidated statements of income. Realized gains and losses, determined on a specific identification basis, on the sale of short-term investments are included in income. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amount of cash and cash equivalents, notes receivable, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying value of our variable rate debt and capital leases approximates their fair values because of the short maturities and/or interest rates which are comparable to those available to us on similar terms. The fair values of the Cash Convertible Notes are based on an estimation using available over-the-counter market information. The fair values of the Private Placement Senior Notes totaling $400.0 million issued in October 2012 and further described in Note 15 were estimated using the changes in the U.S. Treasury rates. The fair values of the notes payable to QIAGEN Finance, further discussed in Note 15, were estimated by using available over-the-counter market information on the convertible bonds which were issued by QIAGEN Finance, the values of which correlate to the fair value of the loan arrangements we had with QIAGEN Finance which include the notes payable, the guarantee and the warrant agreement (further discussed in Note 10). |
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Accounts Receivable | Accounts Receivable Our accounts receivable are unsecured and we are at risk to the extent such amounts become uncollectible. We continually monitor accounts receivable balances, and provide for an allowance for doubtful accounts at the time collection becomes questionable based on payment history or age of the receivable. Amounts determined to be uncollectible are written off against the reserve. |
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Inventories | Inventories Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or market and include material, capitalized labor and overhead costs. |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, including equipment acquired under capital lease obligations, are stated at cost less accumulated amortization. Capitalized internal-use software costs include only those direct costs associated with the actual development or acquisition of computer software for internal use, including costs associated with the design, coding, installation and testing of the system. Costs associated with preliminary development, such as the evaluation and selection of alternatives, as well as training, maintenance and support are expensed as incurred. Costs for software to be sold, leased or otherwise marketed that are related to the conceptual formulation and design are expensed as incurred. Costs incurred to produce the product after technological feasibility is established are capitalized and amortized in accordance with the accounting standards for the costs of software to be sold, leased, or otherwise marketed. All other depreciation is computed using the straight-line method over the estimated useful lives of the assets (3 to 40 years). Amortization of leasehold improvements is computed on a straight-line basis over the lesser of the remaining life of the lease or the estimated useful life of the improvement asset. We have a policy of capitalizing expenditures that materially increase assets’ useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in earnings. |
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Acquired Intangibles and Goodwill | Acquired Intangibles and Goodwill Acquired intangibles with alternative future uses are carried at cost less accumulated amortization and consist of licenses to technology held by third parties and other acquired intangible assets. Amortization is computed over the estimated useful life of the underlying patents, which has historically ranged from one to twenty years. Purchased intangible assets acquired in business combinations, other than goodwill, are amortized over their estimated useful lives unless these lives are determined to be indefinite. Intangibles are assessed for recoverability considering the contract life and the period of time over which the intangible will contribute to future cash flow. The unamortized cost of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount has occurred. In 2015, we recorded intangible asset impairment of $0.2 million related to the abandonment of certain projects. For the years ended December 31, 2014 and 2013, we recorded intangible asset impairments of $8.7 million and $19.7 million, respectively, as discussed in Note 6. Amortization expense related to developed technology and patent and license rights which have been acquired in a business combination is included in cost of sales. Amortization of trademarks, customer base and non-compete agreements which have been acquired in a business combination is recorded in operating expense under the caption 'acquisition-related intangible amortization'. Amortization expenses of intangible assets not acquired in a business combination are recorded within either the cost of sales, research and development or sales and marketing line items based on the use of the asset. The estimated fair values of acquired in-process research and development projects which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested for impairment through completion of the development process, at which point the capitalized amounts are amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts are written-off immediately. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired arising from business combinations. Goodwill is subject to impairment tests annually or earlier if indicators of potential impairment exist, using a fair-value-based approach. We have elected to perform our annual test for indications of impairment as of October 1st of each year. Following the annual impairment tests for the years ended December 31, 2015, 2014 and 2013, goodwill has not been impaired. |
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Investments | Investments We have investments in non-marketable securities issued by privately held companies. These investments are included in other long-term assets in the accompanying consolidated balance sheets and are accounted for using the equity or cost method of accounting. Investments are evaluated periodically, or when impairment indicators are noted, to determine if declines in value are other-than-temporary. In making that determination, we consider all available evidence relating to the realizable value of a security. This evidence includes, but is not limited to, the following:
We consider whether the fair values of any of our cost or equity method investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If any such decline is considered to be other than temporary (based on various factors, including historical financial results, product development activities and the overall health of the affiliate’s industry), then a write-down of the investment would be recorded in operating expense to its estimated fair value. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. We consider, amongst other indicators, a history of operating losses or a change in expected sales levels to be indicators of potential impairment. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. If an asset is determined to be impaired, the loss is measured as the amount by which the carrying amount of the asset exceeds fair value which is determined by applicable market prices, when available. When market prices are not available, we generally measure fair value by discounting projected future cash flows of the asset. Considerable judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could differ from such estimates. |
Summary of Significant Accounting Policies and Critical Accounting Estimates (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Exchange Rates of Key Currencies | The exchange rates of key currencies were as follows:
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Changes in the Carrying Amount of Warranty Obligations | The changes in the carrying amount of warranty obligations are as follows:
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Schedule of Cash and Cash Equivalents |
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Inventories | Inventories consisted of the following as of December 31, 2015 and 2014:
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Segment Information (Tables) |
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Segment Reporting Information, Additional Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Category Information | Net sales for the product categories are attributed based on those revenues related to sample and assay products and similarly related revenues including bioinformatics solutions, and revenues derived from instrumentation sales.
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Schedule of Geographical Information | Our country of domicile is the Netherlands, which reported net sales of $11.3 million, $13.7 million and $14.4 million for the years ended 2015, 2014 and 2013, respectively, and these amounts are included in the line item Europe, Middle East and Africa as shown in the table below.
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Schedule of Long Lived Assets | The Netherlands, which is included in the balances for Europe, reported long-lived assets of $0.3 million and $1.0 million as of December 31, 2015 and 2014, respectively.
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Acquisitions (Tables) |
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Schedule of Purchase Price Allocation |
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Schedule of Purchase Price Allocation | he final purchase price allocation for Ingenuity was as follows:
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Restructuring (Tables) |
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2014 Restructuring | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Restructuring Reserve by Type of Cost | At December 31, 2014, a restructuring accrual of $12.1 million was included in accrued and other liabilities and $2.6 million was included in other long term liabilities in the accompanying consolidated balance sheet.
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Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the cash components of the restructuring costs. At December 31, 2015, no restructuring accrual remained for this program. At December 31, 2014, a restructuring accrual of $0.7 million was included in accrued and other liabilities in the accompanying consolidated balance sheets.
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Prepaid Expenses and Other Current Assets (Tables) |
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Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets are summarized as follows as of December 31, 2015 and 2014:
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Property, Plant and Equipment (Tables) |
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Property, Plant and Equipment, Including Equipment Under Capital Lease Obligations | Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as follows as of December 31, 2015 and 2014:
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Investments (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments Included in Other Assets | A summary of these equity method investments, which are included in other long-term assets in the consolidated balance sheets, is as follows:
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Goodwill and Intangible Assets (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The following sets forth the intangible assets by major asset class as of December 31, 2015 and 2014:
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Schedule of Intangible Assets and Goodwill | The changes in intangible assets for the years ended December 31, 2015 and 2014 are as follows:
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Schedule of Amortization of Intangibles for the Next Five Years | Amortization of intangibles for the next five years is expected to be approximately:
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Accrued and Other Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued and Other Liabilities | Accrued and other liabilities at December 31, 2015 and 2014 consist of the following:
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Derivatives and Hedging (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Amounts of Derivative Instruments | The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance sheets as of December 31, 2015 and 2014:
_________________ (1) The fair value amounts for the interest rate contracts include accrued interest. |
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Schedule of Gains on Derivative Instruments | The following tables summarize the classification and gains and losses on derivative instruments for the years ended December 31, 2015, 2014 and 2013:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Hierarchy for Financial Assets and Liabilities | The following table presents our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis:
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Summary of Activity for Liabilities with Level 3 Inputs | Activity for liabilities with Level 3 inputs is summarized in the following table:
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Lines of Credit and Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Total Debt Instruments | Total long-term debt consists of the following as of December 31, 2015 and 2014:
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Schedule of Maturities of Long-term Debt | Future maturities of long-term debt as of December 31, 2015 are as follows:
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Schedule of Debt Conversions | Interest expense related to the Cash Convertible Notes was comprised of the following:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Before Income Taxes | Income before income taxes for the years ended December 31, 2015, 2014 and 2013 consisted of:
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Provision for Income Taxes | ncome taxes for the years ended December 31, 2015, 2014 and 2013 are as follows:
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Schedule of Statutory Rate and Effective Tax Rate | The principal items comprising the differences between income taxes computed at The Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, 2015, 2014 and 2013 are as follows:
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Changes in Gross Amounts of Unrecognized Tax Benefits | Changes in the gross amount of unrecognized tax benefits are as follows:
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Components of Net Deferred Tax Liabilities | The components of the net deferred tax liability at December 31, 2015 and 2014 are as follows:
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Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table is a summary of the components of accumulated other comprehensive income (loss) as of December 31, 2015 and 2014:
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Earnings per Common Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings per Common Share | The following schedule summarizes the information used to compute earnings per common share:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Minimum Future Obligations Under Capital And Operating Leases | Minimum future obligations under capital and operating leases at December 31, 2015 are as follows:
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Schedule of Commitments To Purchase Goods or Services And For Future Minimum Guaranteed Royalties | At December 31, 2015, we had commitments to purchase goods or services, and for future minimum guaranteed royalties. They are as follows:
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Share-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted-Average Assumptions Used in Valuing Stock Options Granted to Employees | The following are the weighted-average assumptions used in valuing the stock options granted to employees for the year ended December 31, 2013:
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Schedule of Share-based Compensation, Stock Options, Activity | A summary of the status of employee stock options as of December 31, 2015 and changes during the year then ended is presented below:
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Schedule of Employee Stock Options and Restricted Stock Units | A summary of stock units as of December 31, 2015 and changes during the year are presented below:
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Schedule of Employee Service Share Based Compensation Allocation of Recognized Period Costs | Share-based compensation expense before taxes for the years ended December 31, 2015, 2014 and 2013 totaled approximately $27.6 million, $42.2 million and $37.9 million, respectively, as shown in the table below. The excess tax benefit realized for the tax deductions of the share-based payment arrangements totaled $3.3 million, $1.6 million and $3.1 million, respectively, for the years ended December 31, 2015, 2014 and 2013.
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Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | From time to time, we have transactions with other companies in which we hold an interest all of which are individually and in the aggregate immaterial, as summarized in the table below.
During 2015, we entered into two loan agreements with companies in which we also hold an interest for $5.0 million and €2.0 million ($2.4 million), bearing interest at 6% and 7% and are due in January 2020 and June 2019, respectively. The loans were made for general business purposes and no amounts were repaid in 2015. In the first quarter of 2016 we entered into a short-term $0.6 million loan arrangement with another cost-method investee. |
Corporate Information and Basis of Presentation (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015
customer_classes
country
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Major customer classes | customer_classes | 4 |
Number of countries products are marketed in (more than) | country | 130 |
Effects of New Accounting Pronouncements Effects of New Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred tax assets, current | $ 33,068 | $ 31,457 |
Deferred tax liabilities, current | 2,463 | $ 1,245 |
Other Current Assets | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred Finance Costs, Net | 700 | |
Other noncurrent assets | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred Finance Costs, Net | $ 12,200 |
Summary of Significant Accounting Policies and Critical Accounting Estimates (Changes in the Carrying Amount of Warranty Obligations) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 3,279 | $ 4,936 |
Provision charged to cost of sales | 2,202 | 2,766 |
Usage | (2,569) | (3,504) |
Adjustments to previously provided warranties, net | (91) | (695) |
Currency translation | (184) | (224) |
Ending balance | $ 2,637 | $ 3,279 |
Summary of Significant Accounting Policies and Critical Accounting Estimates (Cash and Cash Equivalents) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash at bank and on hand | $ 217,644 | $ 260,830 | ||
Short-term bank deposits | 72,367 | 131,837 | ||
Cash and Cash Equivalents | $ 290,011 | $ 392,667 | $ 330,303 | $ 394,037 |
Summary of Significant Accounting Policies and Critical Accounting Estimates (Inventories) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accounting Policies [Abstract] | ||
Raw materials | $ 27,051 | $ 24,781 |
Work in process | 21,066 | 22,489 |
Finished goods | 88,469 | 85,006 |
Total inventories, net | $ 136,586 | $ 132,276 |
Segment Information (Product Category Information) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenue from External Customer [Line Items] | |||
Net sales | $ 1,280,986 | $ 1,344,777 | $ 1,301,984 |
Consumables and related revenues | |||
Revenue from External Customer [Line Items] | |||
Net sales | 1,114,580 | 1,172,728 | 1,140,203 |
Instrumentation | |||
Revenue from External Customer [Line Items] | |||
Net sales | $ 166,406 | $ 172,049 | $ 161,781 |
Segment Information (Geographical Information) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 1,280,986 | $ 1,344,777 | $ 1,301,984 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 525,532 | 543,877 | 545,600 |
Other Americas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 79,578 | 75,974 | 80,299 |
Total Americas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 605,110 | 619,851 | 625,899 |
Europe, Middle East and Africa | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 409,955 | 451,092 | 416,334 |
Asia Pacific and Rest of World | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 265,921 | $ 273,834 | $ 259,751 |
Segment Information (Long-Lived Asset Information) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 442,944 | $ 428,093 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 148,748 | 136,461 |
Other Americas | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 2,691 | 2,863 |
Total Americas | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 151,439 | 139,324 |
Germany | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 243,120 | 241,475 |
Other Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 35,573 | 35,362 |
Asia Pacific and Rest of World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 12,812 | $ 11,932 |
Segment Information (Narrative) (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
segment
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of operating segments | segment | 1 | ||
Net sales | $ 1,280,986 | $ 1,344,777 | $ 1,301,984 |
Long-lived assets | 442,944 | 428,093 | |
Netherlands | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 11,300 | 13,700 | $ 14,400 |
Long-lived assets | $ 300 | $ 1,000 |
Short-Term Investments (Details) € in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
Dec. 31, 2015
EUR (€)
|
Dec. 31, 2014
EUR (€)
|
|
Investment [Line Items] | |||||
Short-term investments | $ 130,817,000 | $ 184,036,000 | |||
Proceeds from sales of short-term investments | 367,714,000 | 275,779,000 | $ 63,146,000 | ||
Realized gains or (losses) | (6,000,000) | (3,900,000) | $ 0 | ||
Loan note receivables due from financial institutions | |||||
Investment [Line Items] | |||||
Short-term investments | 127,100,000 | 180,200,000 | |||
Loan note receivables due from financial institutions, US dollar denominated | |||||
Investment [Line Items] | |||||
Short-term investments | 94,400,000 | ||||
Loan note receivables due from financial institutions, Euro denominated | |||||
Investment [Line Items] | |||||
Short-term investments | 32,700,000 | € 30.0 | |||
Term deposits | |||||
Investment [Line Items] | |||||
Short-term investments | $ 3,700,000 | $ 3,900,000 | € 3.4 | € 3.2 |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 38,986 | $ 40,359 |
Value added tax | 15,219 | 13,332 |
Other receivables | 9,876 | 10,778 |
Amounts held in escrow in connection with acquisitions | 3,758 | 46,802 |
Amounts held in escrow in connection with acquisitions | 2,500 | 2,500 |
Prepaid expenses and other current assets | $ 70,339 | $ 113,771 |
Property, Plant and Equipment (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 59.5 | $ 67.9 | $ 72.5 |
Amortization expense related to computer software costs | 5.1 | 6.2 | 4.8 |
Asset impairment charges | 19.6 | 16.2 | |
Repairs and maintenance expense | 15.4 | 15.9 | $ 14.0 |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairment charges | 1.0 | $ 8.8 | |
Fixed Asset Abandonment Charges | |||
Property, Plant and Equipment [Line Items] | |||
Asset impairment charges | $ 3.1 |
Investments (Narrative) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Feb. 26, 2016 |
|
Investment [Line Items] | |||||
Investment made in company | $ 17,200,000 | $ 18,600,000 | |||
New cost method investments | $ 4,400,000 | 9,400,000 | |||
Impairment of a cost method investment | 6,000,000 | ||||
Curetis AG | |||||
Investment [Line Items] | |||||
Investment shares owned | 320,712 | ||||
Fair value of investment | $ 3,500,000 | ||||
Investment owned, at cost | 2,300,000 | ||||
Subsequent event | |||||
Investment [Line Items] | |||||
Face amount of debt instrument | $ 600,000 | ||||
Other Income (Expense) | |||||
Investment [Line Items] | |||||
Impairment of a cost method investment | $ 2,200,000 | 4,800,000 | $ 3,400,000 | ||
Research and Development Expense | |||||
Investment [Line Items] | |||||
Impairment of a cost method investment | $ 1,200,000 | ||||
QIAGEN Finance | |||||
Investment [Line Items] | |||||
Ownership Percentage | 100.00% | ||||
QIAGEN Finance | |||||
Investment [Line Items] | |||||
Repayments of convertible debt | $ 250,900,000 |
Goodwill and Intangible Assets (Changes in Intangible Assets) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Intangible Assets [Roll Forward] | |||
Beginning balance | $ 726,914 | $ 790,405 | |
Additions | 45,575 | 9,677 | |
Purchase adjustments | (8,200) | ||
Acquisitions | 31,412 | 103,130 | |
Amortization | (131,953) | (132,890) | $ (126,900) |
Impairment losses | (205) | (8,711) | |
Foreign currency translation adjustments | (27,122) | (34,697) | |
Ending balance | 636,421 | 726,914 | 790,405 |
Goodwill [Roll Forward] | |||
Beginning balance | 1,887,963 | 1,855,691 | |
Additions | 0 | 0 | |
Purchase adjustments | 1,656 | ||
Acquisitions | 37,084 | 99,846 | |
Amortization | 0 | 0 | |
Impairment losses | 0 | 0 | |
Foreign currency translation adjustments | (51,005) | (67,574) | |
Ending balance | $ 1,875,698 | $ 1,887,963 | $ 1,855,691 |
Goodwill and Intangible Assets (Schedule of Amortization of Intangibles for the Next Five Years) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2016 | $ 132,640 |
2017 | 114,512 |
2018 | 92,591 |
2019 | 74,479 |
2020 | $ 50,069 |
Accrued and Other Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Accrued expenses | $ 55,928 | $ 79,120 |
Payroll and related accruals | 52,036 | 54,768 |
Deferred revenue | 49,812 | 49,190 |
Accrued royalties | 13,786 | 13,855 |
Cash collateral | 7,826 | 0 |
Accrued contingent consideration and milestone payments | 6,995 | 7,477 |
Accrued interest on long-term debt | 4,239 | 8,121 |
Current portion of capital lease obligations | 922 | 1,125 |
Fair value of derivative instruments | 525 | 10,547 |
Total accrued and other liabilities | $ 192,069 | $ 224,203 |
Fair Value Measurements - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Minimum | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Rate of Achievement of Milestones, percentage | 0.00% |
Discount rate used for analysis of future milestones | 0.70% |
Maximum | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Rate of Achievement of Milestones, percentage | 100.00% |
Discount rate used for analysis of future milestones | 2.20% |
Lines of Credit and Debt (Schedule of Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Instruments [Abstract] | ||
2016 | $ 0 | |
2017 | 0 | |
2018 | 0 | |
2019 | 470,192 | |
2020 | 0 | |
thereafter | 589,395 | |
Total long-term debt | $ 1,059,587 | $ 1,172,079 |
Lines of Credit and Debt (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Debt Instrument [Line Items] | |||
Amortization of debt issuance costs | $ 19,955 | $ 15,392 | $ 0 |
Cash convertible notes | |||
Debt Instrument [Line Items] | |||
Coupon interest | 4,238 | 3,307 | |
Amortization of original issuance discount | 16,935 | 12,836 | |
Amortization of debt issuance costs | 2,220 | 1,693 | |
Total interest expense related to the Cash Convertible Notes | $ 23,393 | $ 17,836 |
Income Taxes (Income before Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Pretax income in The Netherlands | $ (2,495) | $ (5,806) | $ 24,135 |
Pretax income from foreign operations | 134,993 | 124,320 | 13,203 |
Income before income taxes | $ 132,498 | $ 118,514 | $ 37,338 |
Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Current—The Netherlands | $ 973 | $ 936 | $ 2,874 |
—Foreign | 41,862 | 41,667 | 33,452 |
Provision for income tax current, total | 42,835 | 42,603 | 36,326 |
Deferred—The Netherlands | 250 | 317 | 0 |
—Foreign | (37,444) | (41,608) | (68,086) |
Provision for income tax deferred, total | (37,194) | (41,291) | (68,086) |
Total provision for income taxes | $ 5,641 | $ 1,312 | $ (31,760) |
Income Taxes (Changes in Gross Amounts of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 16,002 | $ 11,585 |
Additions based on tax positions related to the current year | 2,018 | 4,448 |
Additions for tax positions of prior years | 2,640 | |
Settlements with taxing authorities | (2,988) | |
Reductions due to lapse of statute of limitations | (747) | |
Decrease from currency translation | (190) | (31) |
Ending balance | $ 16,735 | $ 16,002 |
Equity (Accumulated Other Comprehensive Income) (Loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Equity [Abstract] | ||
Net unrealized gain on hedging contracts, net of tax | $ 48 | $ 0 |
Net unrealized gain on marketable securities, net of tax | 1,215 | 0 |
Net unrealized loss on pension, net of tax | (2,148) | (882) |
Foreign currency effects from intercompany long-term investment transactions, net of tax of $7.4 million and $6.8 million in 2015 and 2014, respectively | (15,497) | (12,933) |
Foreign currency translation adjustments | (242,774) | (120,920) |
Accumulated other comprehensive loss | (259,156) | (134,735) |
Foreign currency effects from intercompany long-term investment transactions, tax | $ 7,400 | $ 6,800 |
Commitments and Contingencies (Schedule of Commitments to Purchase Goods or Services and for Future Minimum Guaranteed Royalties) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Purchase commitments due in 2016 | $ 67,609 |
Purchase commitments due in 2017 | 15,970 |
Purchase commitments due in 2018 | 8,453 |
Purchase commitments due in 2019 | 7,044 |
Purchase commitments due in 2020 | 136 |
Purchase commitments due, thereafter | 0 |
Purchase commitments due, total | 99,212 |
License & royalty commitments due in 2016 | 1,333 |
License & royalty commitments due in 2017 | 1,277 |
License & royalty commitments due in 2018 | 1,221 |
License & royalty commitments due in 2019 | 1,151 |
License & royalty commitments due in 2020 | 1,151 |
License & royalty commitments due, thereafter | 1,661 |
License & royalty commitments due, total | $ 7,794 |
Share-Based Compensation (Schedule of Weighted Average Assumptions Used in Valuing Stock Options Granted to Employees) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2013 | |
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | |
Stock price volatility | 27.00% |
Risk-free interest rate | 0.88% |
Expected life (in years) | 4 years 11 months 6 days |
Dividend rate | 0.00% |
Forfeiture rate | 4.10% |
Employee Benefits (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
plan
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
General Discussion of Pension and Other Postretirement Benefits [Abstract] | |||
Total expense under employee benefit plans | $ 2.4 | $ 2.1 | $ 1.7 |
Company matching contributions (approximately) | $ 0.3 | 0.3 | $ 0.3 |
Number of defined benefit plans | plan | 4 | ||
Liability under the defined benefit plans | $ 6.6 | $ 5.0 |
Related Party Transactions (Narrative) (Details) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015
USD ($)
loan
|
Feb. 26, 2016
USD ($)
|
Dec. 31, 2015
EUR (€)
|
Dec. 31, 2014
USD ($)
|
|
Related Party Transaction [Line Items] | ||||
Accounts receivable from related parties | $ 1,209,000 | $ 1,797,000 | ||
Number of loans | loan | 2 | |||
Extinguishment of debt, amount | $ 0 | |||
Subsequent event | ||||
Related Party Transaction [Line Items] | ||||
Face amount of debt instrument | $ 600,000 | |||
Loan 1 | ||||
Related Party Transaction [Line Items] | ||||
Face amount of debt instrument | $ 5,000,000.0 | |||
Interest rate (percentage) | 6.00% | 6.00% | ||
Loan 2 | ||||
Related Party Transaction [Line Items] | ||||
Face amount of debt instrument | $ 2,400,000.0 | € 2,000,000.0 | ||
Interest rate (percentage) | 7.00% | 7.00% | ||
QIAGEN Finance | ||||
Related Party Transaction [Line Items] | ||||
Percentage of interest in a joint venture company | 100.00% | 100.00% | ||
Notes payable to related parties | 130,500,000 | |||
Accrued interest on loans payable to related parties | 3,900,000 | |||
Accounts receivable from related parties | $ 3,000,000 |
Related Party Transactions (Schedule of Related Party Transactions) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Related Party Transactions [Abstract] | |||
Net sales | $ 418 | $ 1,567 | $ 6,193 |
Reimbursements against research and development costs | 2,032 | 0 | $ 0 |
Accounts receivable | 1,209 | 1,797 | |
Accounts payable | 471 | 1,397 | |
Loans receivable, including interest | $ 7,472 | $ 0 |
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 8,847 | $ 10,683 | $ 5,221 |
Provision Charged to Expense | 2,093 | 1,363 | 6,901 |
Write-Offs | (2,022) | (2,263) | (1,527) |
Foreign Exchange and Other | (1,663) | (936) | 88 |
Balance at End of Year | $ 7,255 | $ 8,847 | $ 10,683 |
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