Qiagen

QIAGEN N.V.

TABLE OF CONTENTS

Annual Report 2018

Report of the Supervisory Board

Management Report

Corporate Governance Report

Corporate Governance Statement

Responsibility Statement of the Management Board

Consolidated Financial Statements QIAGEN N.V. and Subsidiaries

Consolidated Balance Sheets

Consolidated Income Statements

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Equity

Notes to the Consolidated Financial Statements

Company Financial Statements of QIAGEN N.V.

Company Balance Sheets

Company Income Statements

Company Statements of Changes in Equity

Notes to the Company Financial Statements

Independent Auditor's Report

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Report of the Supervisory Board

The 5,000 employees of QIAGEN - known as QIAGENers - are the reason for our success. The members of the Supervisory 
Board wish to thank all QIAGENers for their contributions during 2018 toward achieving our vision of making improvements 
in life possible. We would also like to thank our shareholders, customers, business partners and other stakeholders for honoring 
QIAGEN with their continued collaboration and trust. 

2018 performance achieves full-year goals

A key role of the Supervisory Board is to monitor the performance and progress of QIAGEN’s business on a regular basis, and 
this was done during the course of 2018 with detailed written and oral reports from the Managing Directors, members of the 
Executive Committee and other senior leaders. 

We were pleased with the achievements of QIAGEN in 2018, delivering a performance in line with our outlook for net sales 
growth and exceeding our target for adjusted earnings per share. Our teams made outstanding progress on creating what we 
believe is one of the most dynamic and disruptive portfolios of Sample to Insight solutions for molecular testing. QIAGEN’s 
growth initiatives are moving ahead well, and the efforts of our employees in 2018 have created a solid foundation for further 
growth in 2019 and the coming years. We support the strategy of QIAGEN to deliver on growth plans and expand the 
leadership position in molecular testing across the continuum from life sciences research to clinical healthcare.

Composition of the Supervisory Board and Managing Board 

The composition of the Supervisory Board changed during 2018 with the retirement of Prof. Dr. Manfred Karobath. As 
announced in early 2018, Dr. Håkan Björklund was chosen by the Supervisory Board as the new Chairman after the Annual 
General Meeting in June 2018. 

The members of the Supervisory Board would like to express their deepest appreciation for the contributions of Prof. Karobath 
to QIAGEN during his 18 years on the Supervisory Board, having served as a source of wisdom and insight, as well as 
contributing his extensive experience in the pharmaceuticals and life sciences industries. He was an essential contributor in 
helping QIAGEN to develop truly innovative products and solutions that have helped QIAGEN make progress toward 
achieving its vision of making improvements in life possible.

All current members of the Supervisory Board are expected to stand for re-election at the upcoming Annual General Meeting in 
June 2019. All members, with the exception of Dr. Metin Colpan and Ms. Elizabeth E. Tallett have served in the Supervisory 
Board for less than eight years as recommended by the Dutch Corporate Governance Code. QIAGEN values the profound 
industry experience of Dr. Colpan and Ms. Tallett for their in-depth knowledge, and supports their reappointments.  

The target profile of the Supervisory Board can be found on QIAGEN’s website, and the current composition fully complies 
with this profile. Further information on the individual members of the Supervisory Board, such as gender, age, nationality and 
other positions relevant to the performance of its duties as Supervisor Board member, date of initial appointment and current 
term of office is set forth in the Corporate Governance and Compensation overview. 

QIAGEN has a commitment to developing a diverse leadership team, with a broad range of backgrounds, experience, skills and 
capabilities. In nominating candidates, QIAGEN is committed to increasing diversity while pursuing individuals to join 
QIAGEN with a unique blend of scientific and commercial expertise and experience that will contribute to our future business 
success. Management development programs support the career advancement of leaders regardless of gender and other factors. 
As a result, a number of women are in key leadership roles around the world, and QIAGEN currently has 28% of management 
roles held by women. In line with this commitment, the Supervisory Board continues to take diversity into account when 
proposing members for election or re-election without compromising QIAGEN’s commitment to hiring the best individuals for 
positions without any discrimination. The current governance structure has led to the size of the Managing Board of two 
members, so achieving a diversity goal as measured solely by a percentage of overall membership is difficult to achieve. At the 
same time, QIAGEN has significantly increased the diversity of its senior leadership team and will continue to do so in the 
future. 

Principal topics discussed by the Supervisory Board 

As empowered by the Dutch Corporate Governance Code, the Supervisory Board devoted considerable time during 2018 to 
discussing and assessing QIAGEN’s corporate strategy, main risks and opportunities, and an annual assessment by the 
Managing Board of the design and effectiveness of internal risk management and control systems as well as any significant 
changes in them. In addition, the Supervisory Board discussed and reviewed the functioning of its committees and individual 
members, its current composition, competence, succession schedule and desired profile in various meetings and through written 
surveys. 

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The Supervisory Board met five times during 2018 with attendance of all Supervisory Board members in all meetings and 
regular attendance of the members of the Managing Board for certain agenda items. The Supervisory Board also met to review 
and discuss agenda items in the absence of the Managing Board members, such as performance and strategy as well as to 
discuss compensation matters. Information about the Supervisory Board members, including positions held on other boards, is 
included in the Corporate Governance and Compensation overview. All members of the Supervisory Board had adequate time 
available to give sufficient attention to the concerns of the company. The Supervisory Board further discussed the performance 
of the Managing Board and concluded that it and the Managing Board were functioning properly. 

Committees of the Supervisory Board 

The Supervisory Board has established an Audit Committee (Chair Mr. Lawrence Rosen), a Compensation Committee (Chair 
Ms. Elizabeth Tallett), a Selection and Appointment Committee (Chair Dr. Björklund), and a Science and Technology 
Committee (Chair Dr. Metin Colpan) from among its members. The Supervisory Board reserves the right to establish other 
committees as deemed beneficial, and has approved charters under which each of these committees operates (charters are 
available on our website at www.QIAGEN.com). The deliberations and findings of the committees were reported by the 
committee chairs to the Supervisory Board in its meetings on a regular basis. All committee members attended all committee 
meetings in 2018 physically or by phone. Further detailed information on the composition of the Supervisory Board and its 
committees, the number of committee meetings held in 2018 and the main topics of discussion, the remuneration of its 
members, as well as other information on the Supervisory Board, can be found in the Corporate Governance and Compensation 
overview, which is an integral part of this Annual Report. 

Through its Compensation Committee, the Supervisory Board executed and monitored compliance with the Remuneration 
Policy approved at the Annual General Meeting held on June 25, 2014. Compensation of Managing Board members consists of 
a fixed salary and variable components. Variable compensation includes one-time and annual payments linked to business 
performance (bonuses) as well as long-term incentives, such as share-based compensation, and pension plans. The 
Remuneration Policy and the various aspects of compensation, including the detailed remuneration of individual Managing 
Board members, are described in the Remuneration Report, which is available on QIAGEN’s website. Information on 
QIAGEN’s activities was communicated by the Managing Board to the Supervisory Board through regular meetings and 
business reports. 

Corporate governance 

All members of the Supervisory Board fulfill the independence criteria as defined by the Dutch Corporate Governance Code. 
The Supervisory Board follows the principle of increasing shareholder value as the members represent the interests of all 
stakeholders, including shareholders, and has always pursued the highest standards in Corporate Governance. 

QIAGEN is committed to a corporate governance structure that best suits its business and stakeholders, and that complies with 
relevant rules and regulations. QIAGEN has endorsed since 1997 the recommendations made in the report of the Netherlands 
Committee on Corporate Governance, which was replaced by the Dutch Corporate Governance Code effective January 1, 2004. 
The Dutch Code was last amended on December 8, 2016 and is applicable as from January 1, 2017. Our policy is to follow the 
guidelines of Good Practice of Corporate Governance as described in the Dutch Corporate Governance Code, although some 
minor deviations may result from the impact of factors such as legal requirements imposed on QIAGEN or industry standards. 

QIAGEN’s common shares are registered and traded in the U.S. on the New York Stock Exchange as of January 2018 (formerly 
on the NASDAQ Global Select Market) and in Germany on the Frankfurt Stock Exchange in the Prime Standard segment. 
Shareholders in Europe and the U.S. hold the majority of common shares. As a result of these listings for its Global Shares, 
QIAGEN is subject to the rules regarding Corporate Governance set by the NYSE. Additionally, QIAGEN provides detailed 
disclosure in the Corporate Governance and Compensation overview regarding compliance with the Dutch Corporate 
Governance Code.

QIAGEN believes all of its operations are carried out in accordance with legal frameworks, including Dutch Corporate Law, 
U.S. laws and regulations, EU regulations and laws of the German capital market. 

Financial statements and audits

In this Annual Report, the financial statements for 2018 are presented as prepared by the Managing Board, audited by KPMG 
(Independent Registered Public Accounting Firm). We examined the financial statements, the proposal for the use of the 
distributable profit, the consolidated financial statements and the management report. We have no objections, thus we concur 
with the results of the audit, and it has been approved by the Supervisory Board. In closing, the Supervisory Board would like 
to again thank all QIAGEN employees for the outstanding performance and commitment during 2018. 

Venlo, the Netherlands, March 2019

The Supervisory Board: 

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Dr. Håkan Björklund 

Chairman of the Supervisory Board

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Management Report

Operations and Business Environment

Company overview 

QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular insights. 
Our mission is to enable our customers in four broad classes - Molecular Diagnostics, Applied Testing, Pharma and Academia - 
to achieve outstanding success and breakthroughs, all in keeping with our goal of making improvements in life possible.

QIAGEN's solutions integrate sample and assay technologies, bioinformatics and automation systems into workflows that 
support more than 500,000 customers worldwide in generating insights into the molecular building blocks of life. Our proven 
solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the increasing 
volumes and complexity of biological information.

As we move deeper into “the Century of Biology,” knowledge of the molecular basis of life has been growing exponentially, 
along with greater understanding of diseases and biological mechanisms. Dramatic acceleration in the speed of analyzing DNA 
- and reduction in cost - is generating new discoveries and vast quantities of genomic data. This revolution in the life sciences is 
transforming healthcare and influencing other areas of everyday life. QIAGEN’s innovative technologies enable and accelerate 
this ongoing wave of discovery and its wide-ranging applications.

QIAGEN began operations in 1986 as a pioneer in the emerging biotechnology sector, introducing a novel method that 
standardized and accelerated extraction and purification of nucleic acids from biological samples. As molecular biology has 
grown to influence many areas of life, QIAGEN has expanded to serve the full spectrum of market needs. We believe our 
sample technologies are unmatched in quality for isolating and preparing DNA (deoxyribonucleic acid), RNA (ribonucleic acid) 
and proteins from blood or other liquids, tissue, plants or other materials. Our assay technologies amplify, enrich and make 
these biomolecules accessible for analysis, such as identifying the genetic information of a pathogen or a gene mutation in a 
tumor. QIAGEN’s industry-leading bioinformatics solutions allows users to analyze and interpret data to provide relevant, 
actionable insights. Our automation systems for polymerase chain reaction (PCR), next-generation sequencing (NGS) and other 
technologies tie these together in seamless and cost-effective molecular testing workflows - from Sample to Insight.

Net sales of $1.50 billion in 2018 consisted of consumable kits and other revenues (88% of sales) and automation systems and 
instruments (12% of sales). Approximately 49% of net sales in 2018 were in Molecular Diagnostics, and 51% in Life Sciences 
customer classes in the Academia, Pharma and Applied Testing markets.

QIAGEN has grown by developing new platforms, consumables and bioinformatics to meet growing needs in the market, 
partnering with researchers and Pharma companies, and acquiring companies or technologies to complement our portfolio. We 
believe the addressable global market for QIAGEN's portfolio of molecular testing products for customers across the continuum 
of life science research and molecular diagnostics totals more than $8 billion.

We have funded our growth through internally generated funds, debt offerings, and private and public sales of equity securities. 
QIAGEN has global shares that are listed on the New York Stock Exchange under the ticker symbol “QGEN” and on the 
Frankfurt Prime Standard as “QIA.”

The company is registered under its commercial and legal name QIAGEN N.V. with the trade register (kamer van koophandel) 
of the Dutch region Limburg Noord under file number 12036979. QIAGEN N.V. is a public limited liability company 
(naamloze vennootschap) under Dutch law as a holding company. Our principal executive office is located at Hulsterweg 82, 
5912 PL Venlo, The Netherlands, and our telephone number is +31-77-355-6600.

As a holding company, QIAGEN conducts business through subsidiaries located throughout the world. Further information 
about QIAGEN can be found at www.qiagen.com. By referring to our website, we do not incorporate the website or any portion 
of the website by reference into this Annual Report.

Recent Developments

QIAGEN has recently achieved a number of milestones by continuing to focus on strategic growth initiatives:

Driving the rapid growth of our QuantiFERON-TB franchise: 

•  QIAGEN’s QuantiFERON-TB tests play an increasingly central role in the global fight against tuberculosis (TB), a 

contagious bacterial infection that strikes more than 10 million new patients and kills about 1.7 million annually. As many 
as one out of three people worldwide have latent TB infection, in which the bacterium infects the body but produces no 
symptoms. About 5-10% of those individuals, if untreated, will progress to active TB disease, so screening high-risk 
individuals and treating the infected ones to prevent active disease is critical to TB control. 

• 

Sales of the QuantiFERON-TB franchise, including the fourth-generation QuantiFERON-TB Gold Plus (QFT-Plus) and 

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third-generation QuantiFERON-TB Gold (QFT), grew 21% in 2018 to $223 million. QIAGEN continues to innovate, and 
the franchise is on track toward a target of $300 million in sales by 2020.

•  QuantiFERON-TB Gold Plus, now adopted in more than 75 countries, continues to ramp up after launching in the United 
States in October 2017 and Japan in February 2018. The fourth-generation test adds clinical insights by measuring cell-
mediated immune response to TB infection from both CD4+ and CD8+ T cells, a feature cited by experts for its potential to 
identify adults at greater risk of progressing to active TB.

• 

In October 2018, QIAGEN and DiaSorin introduced a state-of-the-art automation option for QuantiFERON-TB Gold Plus 
customers, embedding QFT-Plus in DiaSorin's broad assay menu for LIAISON-family analyzers. More than 7,000 
LIAISON analyzers are in use worldwide. Laboratories in Europe and other markets can now use this CE-marked solution 
to process QFT-Plus tests with DiaSorin’s flexible, efficient automation. Availability is planned for the United States in 
2019 and China in 2020.

•  QIAGEN also partnered with Hamilton Robotics beginning in July 2018 to improve the automation of sample processing 

for QFT-Plus with Hamilton's best-in-class liquid handling technology.

• 

In January 2019, QIAGEN announced plans to develop QuantiFERON-TB Access, a simplified, low-cost test tailored to 
the needs of low-resource regions with a high burden of tuberculosis, including parts of Asia, Africa and South America. 
The new product will advance global TB control efforts with ultrasensitive digital detection in a workflow designed for 
cost-efficiency and ease of use in areas lacking laboratory infrastructure. QIAGEN is developing QuantiFERON-TB 
Access in a new partnership with Ellume, an Australian developer of high-performance digitally-enabled 
diagnostics. Clinical trials are planned to start in 2019, and commercialization is expected to begin in 2020.

•  Support is growing for latent TB testing and treatment of high-risk individuals as a preventive component of global TB 
control programs. In 2018, world leaders at the first-ever high-level United Nations meeting on tuberculosis agreed to 
provide $13 billion a year by 2022 for preventive testing and treatment, targeting 30 million people. New guidelines from 
the World Health Organization (WHO) recommended scale-up of latent TB testing in countries with a high disease burden, 
as well as low-burden countries. Also in 2018 the UN International Organization for Migration adopted QFT-Plus for use in 
screening immigrants, and the International Panel Physicians Association endorsed QFT-Plus over skin tests. The U.S. 
Centers for Disease Control required use of FDA-approved blood tests such as ours for testing immigrants, and guidelines 
from the American Academy of Pediatrics also supported the tests.

• 

In addition to tuberculosis control, QIAGEN continues to expand its immune-monitoring pipeline for the future, 
developing new applications and content for QuantiFERON technology and other emerging platforms.

Extending QIAGEN's reach in next-generation sequencing:

•  QIAGEN continues to expand our global presence in the fast-growing market for next-generation sequencing (NGS). We 

are a leader in "universal" technologies for preparing samples, analyzing genomic variations and interpreting data with any 
NGS system. The GeneReader NGS System, the world’s first Sample to Insight NGS solution enabling any laboratory to 
deliver actionable sequencing results, is growing in placements and establishing a broad content menu. Our diversified 
NGS franchise produced more than $140 million in sales in 2018. 

• 

In 2018, QIAGEN continued to partner with customers to add universal solutions to deliver faster, better NGS insights. In 
immuno-oncology, the new QIAseq TMB Panel offers in-depth analysis of biomarkers such as tumor mutational burden, 
with potential to predict responses to immunotherapy in advanced cancers. In the growing RNA sequencing field, the new 
QIAseq FastSelect RNA Removal Kit addresses a major bottleneck for researchers. Our industry-leading solutions for 
preparation of liquid biopsy samples, along with a diverse offering of off-the-shelf and customized QIAseq panels, 
continued to expand to new applications across research fields.

•  Adding value to the GeneReader system, we continue to expand the Sample to Insight content menu. In June 2018, we 

launched customizable QIAact panels for research in hereditary diseases, including inherited cancers, cystic fibrosis, 
inherited cardiovascular diseases, universal carrier screening and other conditions. In October 2018, we introduced 
the GeneRead QIAact Actionable Insights Tumor DNA UMI panel, targeting 30 genes influencing the most widespread 
cancers including lung, melanoma, prostate and other solid tumors, and the GeneRead QIAact BRCA Advanced UMI 
panel, for deep-dive analysis in breast, ovarian and other cancers. In December 2018, we launched the QIAact Myeloid 
DNA UMI Panel covering 25 highly relevant genes for onco-hematology research. The panels run with the GeneReader 
system and integrate seamlessly with our QCI software for analysis and interpretation. 

•  We have actively incorporated the GeneReader NGS System into collaborations with pharmaceutical companies for co-

development of companion diagnostics, aiming to build a pipeline of future content for the platform. 

• 

In March 2018, QIAGEN launched a partnership with Natera Inc., a leader in cell-free DNA genetic testing, to develop 

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NGS assays for non-invasive prenatal testing for use on our GeneReader NGS System, which will expand the future 
offering beyond the current focus on oncology.

•  QIAGEN solutions, including both platform-agnostic technologies and integrated solutions for the GeneReader, featured in 

numerous studies presented at scientific meetings in 2018, including the American Association for Cancer Research 
(AACR), American Society of Clinical Oncology (ASCO), American Society of Human Genetics (ASHG), Association for 
Molecular Pathology (AMP) and American Society for Hematology (ASH). QIAGEN executives and customer-focused 
teams meet with many customers at these meetings, including academic researchers, pharmaceutical R&D experts and 
clinicians, to build relationships and demonstrate our Sample to Insight offering of NGS solutions.

Reaping the value of genomic insights for Precision Medicine:

• 

In 2018, QIAGEN continued to build its leading position in Precision Medicine (formerly referred to as Personalized 
Healthcare), collaborating with more than 25 pharmaceutical and biotech companies to develop companion and 
complementary diagnostics to guide clinical decision-making. These partnerships feed a deep pipeline of molecular tests 
for use in clinical trials and, following regulatory approval, in patient care. QIAGEN offers a full range of Sample to 
Insight technologies in these programs, including our PCR and NGS platforms and universal solutions. We employ 
established and newly discovered biomarkers in our Pharma partnerships and have robust relationships in emerging 
therapeutic approaches such as immuno-oncology. 

•  QIAGEN received the second and third FDA approvals in 2018 for our therascreen EGFR RGQ PCR Kit in lung cancer, 
for use as a companion diagnostic to guide selection of patients for targeted therapies being launched by Pfizer and 
Boehringer Ingelheim. The test is registered in more than 40 countries globally. 

• 

In February 2018 we launched the CE-IVD marked therascreen PITX2 RGQ PCR Kit as the first clinically validated DNA 
methylation assay to help predict the response of high-risk breast cancer patients to anthracycline-based chemotherapy. The 
assay is QIAGEN's first epigenetic test in breast cancer.

•  Our ipsogen JAK2 RGQ PCR Kit also received FDA clearance in early 2018 for two additional uses. The test now covers 

the diagnosis of all myeloproliferative neoplasms, a group of cancers in which immature blood cells in the bone marrow do 
not mature and become healthy blood cells.

• 

In 2018, we created a Day-One Lab Readiness initiative, a network of collaborations with CLIA-certified laboratories to 
ensure immediate patient access to QIAGEN companion diagnostics upon regulatory approval of new oncology drugs. 
Based on the FDA’s modernized approach to advanced diagnostics, we are partnering with labs to allow pre-approval 
validation and setup of tests. An agreement with NeoGenomics, a leading U.S. provider of cancer-related genetic testing, 
will ensure immediate availability of QIAGEN companion diagnostics upon FDA approval of drugs and tests. A 
collaboration with SRL, Inc., Japan’s largest clinical testing company, will enable rapid availability there. The initiative 
will support synchronized launches with Pharma partners and benefit patients in need of new therapies. 

•  A collaboration with Novartis, announced in December 2018, aims to bring to market a QIAGEN companion diagnostic to 
guide the use of the Novartis compound BYL719 (alpelisib) as a combination therapy for certain patients with PIK3CA-
mutated, hormone receptor-positive, human epidermal growth factor receptor-2 negative (HR+/HER2-) advanced or 
metastatic breast cancer. The drug candidate is in late-stage development, and QIAGEN expects to provide its PIK3CA test 
to partners who will be ready to offer immediate access to the test upon potential regulatory approvals of BYL719 and 
QIAGEN’s test.

•  As one of the world’s leading independent developers of molecular tests, with a diverse portfolio of platforms and 
solutions, QIAGEN is a preferred partner for creating and commercializing diagnostics in Precision Medicine. 

Expanding QIAGEN automation solutions to serve growing market needs: 

•  QIAGEN has strategically expanded our offering of automation solutions to enter emerging segments of the life science 

and molecular diagnostics markets, as well as to meet rapidly evolving needs of customers in a variety of applications. 
Diversifying the automation portfolio offers opportunities for QIAGEN to leverage our molecular content on multiple 
platforms in growing markets.

•  The flagship QIAsymphony automation solution, a cost-effective modular system that integrates PCR molecular testing 

workflows from initial sample processing to final insights, surpassed QIAGEN’s 2018 goal of 2,300 cumulative 
placements. The platform’s rapid dissemination and growing content menu fueled solid single-digit growth in consumables 
for QIAsymphony. The system serves laboratories around the world, with the broadest test menu of any platform in its 
category in Europe and other markets, plus the unique ability to handle laboratory-developed tests. Nearly 30 diagnostic 
tests in infectious disease, oncology and transplant care are marketed for use on the Rotor-Gene Q, a component of the 
modular QIAsymphony workflow. In the United States, eight FDA-approved diagnostic tests, including three companion 

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diagnostics to guide treatment decisions in cancer, are marketed for this detection platform. The sample processing module, 
QIAsymphony SP, is a market-leading "front end" solution for reliable automated handling of samples, including liquid 
biopsies, for molecular testing such as next-generation sequencing. 

•  The GeneReader NGS System, initially launched in 2015, continued to gain acceptance worldwide in 2018. QIAGEN 

again expanded the content menu of commercial and customized DNA panels to meet changing needs in clinical research 
and fields such as forensics. (See section on next-generation sequencing.)

• 

• 

• 

In April 2018, QIAGEN entered the rapidly growing syndromic testing market by launching QIAstat-Dx for one-step, fully 
integrated molecular analysis of hard-to-diagnose syndromes. The European launch followed acquisition of STAT-Dx, 
developer of the unique cartridge-based PCR technology for multiplex molecular testing. QIAstat-Dx enables fast, cost-
effective and easy-to-use syndromic testing with novel Sample to Insight solutions. QIAGEN expects a U.S. launch for 
QIAstat-Dx, following regulatory approvals, in 2019. QIAstat-Dx was launched initially with two CE-IVD marked 
syndromic tests, enabling clinicians to differentiate among pathogens that cause respiratory and gastrointestinal infections. 
In 2019, QIAGEN is launching CE-marked panels for hepatitis B and hepatitis C. The pipeline of planned assays for 
QIAstat-Dx spans infectious diseases, oncology, companion diagnostics and other areas.

In September 2018, QIAGEN partnered with NeuMoDx Molecular, Inc. to commercialize two new fully integrated 
automation systems for higher-throughput PCR testing in clinical laboratories that are processing increasing molecular test 
volumes. In late 2018 QIAGEN began distributing the high-throughput NeuMoDx 288 and mid-throughput NeuMoDx 96 
in Europe and other major non-U.S. markets. NeuMoDx will distribute these instruments within the United States. An 
initial assay menu offers CE-IVD marked assays for Group B Streptococcus (GBS) and Chlamydia trachomatis/Neisseria 
gonorrhoeae (CT/NG) infections. Additional diagnostic tests are under development, and the NeuMoDx platforms also 
offer the ability to efficiently process laboratory-developed tests. The companies also entered into an agreement under 
which QIAGEN can acquire all NeuMoDx shares not currently owned at a predetermined price (see Item 5).

In January 2019, we announced plans to develop next-generation systems for digital PCR, combining QIAGEN 
technologies with assets acquired from Formulatrix, Inc. QIAGEN expects to leverage our worldwide presence in labs 
using our quantitative PCR solutions to enter the emerging market for digital PCR. We are targeting a 2020 launch with 
fully-integrated solutions that simplify workflows compared to current digital PCR systems, offer higher throughput and 
multiplexing, and provide customers with favorable costs for instruments and consumables. We are developing a broad 
content menu of QIAGEN assays for use in digital PCR.

Using bioinformatics to transform raw data into valuable insights: 

•  QIAGEN’s broad offering of content-enabled bioinformatics continues to drive growth, turning vast amounts of genomic 
data into actionable insights for customers. Our bioinformatics, marketed both as standalone products and integrated into 
Sample to Insight QIAGEN workflows, address critical bottlenecks in next-generation sequencing, especially for clinical 
research and diagnostics. 

•  We continually seek opportunities to upgrade QIAGEN solutions for analysis and interpretation, and we pursue 

collaborations across the genomics and bioinformatics community to offer customers the richest possible insights for 
research and diagnostics in support of Precision Medicine. We launched major enhancements to QIAGEN Clinical Insight 
(QCI) in October 2018 to deliver expanded Sample to Insight workflows for clinical NGS. QIAGEN introduced QCI 
Analyze Universal for full end-to-end workflow support of all major clinical sequencing platforms and assay types, along 
with expanded QCI capabilities for interpretation of biomarkers in immuno-oncology.

• 

• 

• 

In February 2019, we announced an agreement with Ares Genetics to develop innovative bioinformatics and assay 
solutions to accelerate research targeting the global health challenges posed by antibiotic-resistant bacteria. QIAGEN 
acquired an exclusive license to leverage the industry-leading ARESdb antimicrobial resistance database, as well as Ares 
bioinformatics tools and workflows, in QIAGEN bioinformatics products and services. QIAGEN also obtained a non-
exclusive worldwide license to develop and commercialize NGS and PCR assays using the Ares content. 

In January 2019, QIAGEN acquired N-of-One, Inc., a pioneer in molecular oncology decision support services, to 
strengthen our leadership in clinical NGS interpretation. N-of-One’s services and proprietary database will be integrated 
into QCI, adding medical interpretation and real-world evidence insights and offering robust decision support. N-of-One’s 
somatic cancer database, with more than 125,000 anonymized patient samples, will expand our already industry-leading 
genomics knowledge base.

In November 2018, we introduced a new QCI Interpret solution for blood cancers, to provide actionable information for 
sub-classification and prognostic assessment of hematological malignancies such as leukemia, Non-Hodgkin lymphoma, 
Hodgkin lymphoma and multiple myeloma. QCI Interpret is a web-based decision support platform that draws on the 
industry-leading QIAGEN Knowledge Base to evaluate genomic variants in the context of published biomedical literature, 

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professional guidelines, publicly and privately available databases, drug labels and clinical trials.

•  Also in November 2018, QIAGEN launched new CLC Genomics Workbench software to serve more customers, 
reinforcing a strategic push to expand the utility of QIAGEN’s analysis tools beyond the current core market of 
bioinformaticians. The new tool combines the best of two previous products, CLC Biomedical Genomics Workbench and 
CLC Genomics Workbench. Improvements include a streamlined, easy-to-use interface useful for scientists with any 
bioinformatics skill level, a dramatically reduced data footprint to accommodate computing resources in virtually any lab, 
and in-depth reference tools to get users started quickly for many species and genomic panels.

Pioneering liquid biopsy solutions and other differentiated sample technologies:

•  As a world leader in sample technologies enabling laboratories to obtain highest-quality DNA and RNA for molecular 
testing, QIAGEN’s differentiated solutions for front-end challenges continued to drive growth in 2018. QIAGEN 
technologies process an estimated 50,000 biological samples a day. Our strategic focus is on rapidly growing applications 
in research and clinical diagnostics, such as "liquid biopsies" for efficient, and less-invasive diagnosis and soil, liquid and 
plant samples for analyzing microbiomes.

• 

• 

In January 2019, QIAGEN launched QIAcube Connect, a next-generation solution for automated sample processing. 
Building on over 8,000 placements of the first-generation QIAcube instrument, QIAcube Connect delivers a new level of 
digitization and ease of use to process samples with thousands of protocols, while assuring full standardization and freeing 
researchers from repetitive manual processing.

Innovative liquid biopsy technologies increasingly enable QIAGEN customers to unlock molecular insights from blood or 
other fluids as alternatives to surgical biopsies and tissue samples. In April 2018 we launched two novel liquid biopsy 
panels to evaluate circulating tumor cells (CTCs): The AdnaTest ProstateCancerPanel AR-V7 Kit and the AdnaTest 
LungCancer Kit both deliver unique insights for the growing field of research into molecular mechanisms. QIAGEN 
solutions based on several different technologies for isolation and stabilization of nucleic acids are used in an estimated 
80% of liquid biopsy testing.

•  As a pioneer in sample technologies, QIAGEN partners with leading microbiome researchers to provide cutting-edge tools 
for the study of microbial communities in the body and the environment. In 2018, QIAGEN launched the new DNeasy 
PowerSoil Pro Kit and DNeasy Plant Pro Kit as innovative tools for extracting fungal and bacterial DNA from a variety of 
soil and plant samples. We also introduced QIAseq 16S/ITS Panels and UCP Multiplex PCR Kit for next-generation 
sequencing to enable the most accurate microbial community profiling from complex samples. QIAGEN supports research 
initiatives worldwide, and our solutions are used and recommended by international consortia like the Human Microbiome 
Project, the Earth Microbiome Project and the MetaSUB Consortium.

• 

In Applied Testing, QIAGEN’s efficient, highly accurate sample and assay technologies for forensics and human 
identification helped drive our growth again in 2018. QIAGEN partners with public agencies and international 
organizations in a variety of initiatives for investigation of crimes, identification of missing persons and forensic research. 
For example, QIAGEN won a tender in 2018 from one government to manage creation of a national DNA database, scaling 
up over three years to process and load 500,000 DNA samples, and to provide Sample to Insight forensic capabilities to aid 
in law enforcement, disaster relief and other public safety applications.

•  QIAGEN’s Custom Solutions business, started in 2017, serves life science and molecular diagnostics customers with the 
tools and expertise to quickly build and commercialize products that meet unique workflow requirements. The unit offers 
custom and OEM sample technologies, oligo and enzyme product options for PCR, qPCR and NGS product development, 
as well as a range of other platform technologies. 

Our Products 

QIAGEN's leadership in Sample to Insight solutions for molecular testing leverages our position across a wide range of 
applications and customer classes. We provide more than 500 core consumable products (sample and assay “kits”), as well as 
instruments and automation systems. Our bioinformatics solutions connect laboratory workflows and process genomic data, 
reporting relevant insights to enable scientists or clinicians to decide on further action. 

These diverse revenue streams can be seen in two main categories: consumables and related revenue, and automation platforms 
and instruments. 

Consumables and related revenues

Consumable products, accounting for approximately 78-80% of net sales, typically include sample technologies to extract and 
purify molecules of interest from biological samples and assay technologies that make information from these samples 
available for analysis and interpretation. To maximize customer convenience and reduce user error, these kits contain all 
necessary reagents and a manual of protocols and background information. Reliability, standardization, ease of use and cost-

8

effectiveness are keys to the success of molecular testing products. 

QIAGEN’s sample technologies ensure that each biological sample is processed in a highly reproducible, standardized method 
with the highest quality. A broad range of kits support applications such as plasmid DNA purification, RNA purification and 
stabilization, genomic and viral nucleic acid purification, DNA cleanup after PCR and sequencing, target enrichment, and 
library preparation for sequencing. We continue to expand our portfolio for applications such as preparing DNA and RNA from 
minimally-invasive liquid biopsies for cancer and processing difficult samples for research into the microbiome and 
metagenomics. 

Our assay technologies contain all the needed reagents to enable customers to target molecules of interest for detection on 
platforms supporting PCR, NGS or multimodal analysis. Each assay kit is sufficient to support a number of applications, 
varying from a single application to kits containing more than 1,000 applications each. Applications include open, general-
purpose PCR reagents, as well as kits and panels for detection of viral or bacterial pathogens and parasites, pharmacogenomic 
testing and genotyping. In PCR, examples are our therascreen family of companion diagnostics, artus line for profiling 
infectious diseases, and investigator assays for forensics and human identification. A growing portfolio of Digital NGS panels 
enable sequencing to target DNA or RNA variants for clinical research in cancer or other diseases.

Related revenues, accounting for approximately 7-9% of our net sales, include bioinformatics solutions, sold as freestanding 
software or cloud-based solutions and also integrated into many QIAGEN consumables and instruments for seamless Sample to 
Insight workflows.

Related revenues also include royalties, milestone payments from co-development agreements with pharmaceutical companies, 
payments from technology licenses and patent sales, and custom services, such as whole genome amplification services, DNA 
sequencing, and non-cGMP DNA production on a contract basis.

Automation platforms and instruments

Our instrumentation systems, contributing approximately 12-13% of net sales together with related services and contracts, 
automate the use of consumables into efficient workflows for a broad range of laboratory needs. QIAGEN platforms are 
designed to carry our customers from Sample to Insight - handling and preparation of biological samples, analysis using 
sequencing technologies, and interpretation that delivers valuable insights. These instruments enable laboratories to perform 
reliable and reproducible processes, including nucleic acid sample preparation, assay setup, target detection, and interpretation 
of genomic information. Often several of these instruments are integrated into end-to-end workflows.

Among the automation platforms that contribute to QIAGEN’s business: 

QIAsymphony is a user-friendly automation system that drives integrated workflows for molecular testing, making 
laboratories more efficient and helping disseminate standardized, clinically proven molecular diagnostics. The platform 
includes three modules - QIAsymphony SP for sample preparation, QIAsymphony AS for assay setup, and Rotor-Gene 
Q, our rotary real-time PCR cycler system, which makes sequences of DNA and RNA visible through amplification and 
quantifiable. The fully integrated system with all three modules is QIAsymphony RGQ. In 2018, our installed base 
surpassed 2,300 QIAsymphony systems in a wide variety of applications and laboratories worldwide. The platform 
enhances workflows through continuous loading, random access and the ability to process an almost unlimited range of 
sample types. QIAsymphony has the broadest content menu in its category in Europe and other markets, and QIAGEN is 
developing more regulator-approved assays to add value for customers. 

GeneReader NGS System, introduced in late 2015, continues to gain acceptance as the first complete Sample to Insight 
next-generation sequencing (NGS) solution designed for any laboratory to deliver actionable results. This end-to-end 
platform provides a simpler, more cost-effective way for basic and translational research to take advantage of NGS 
technology for improved outcomes. The benchtop GeneReader workflow offers the flexibility of scalable batch sizes and 
continuous loading of multiple flow cells, and customers can achieve relevant insights using QIAGEN's proven gene 
panels and bioinformatics. In 2018, we continued to add new content, including QIAact panels covering the most 
widespread cancers and deep-dive panels for myeloid malignancies and breast and ovarian cancers, as well as customizable 
panels for research in inherited diseases. GeneReader's digital sequencing integrates seamlessly with QIAGEN 
bioinformatics solutions for interpretation.

QIAstat-Dx enables fast, cost-effective and easy-to-use syndromic testing with novel Sample to Insight solutions. 
Launched in Europe in April 2018, QIAstat-Dx provides a one-step, fully integrated molecular analysis of common 
syndromes with a small laboratory footprint. The first two tests differentiate hard-to-diagnose respiratory and 
gastrointestinal infections, and QIAGEN is developing an extensive pipeline of additional content. QIAGEN expects a 
2019 U.S. launch of QIAstat-Dx following regulatory approvals.

NeuMoDx 288 and NeuMoDx 96 are fully integrated systems for automation of higher-throughput PCR testing in clinical 
laboratories with increasing molecular test volumes. QIAGEN began distributing the systems in Europe and other major 

9

non-U.S. markets in late 2018, with an initial test menu in infectious diseases and a broad pipeline under development. The 
platforms’ developer, NeuMoDx Molecular, Inc., is distributing these instruments within the United States. Under a merger 
agreement, QIAGEN can acquire all NeuMoDx shares not currently owned at a predetermined price. 

QIAcube workstations provide highly versatile solutions for automated sample processing, and we are now launching the 
next-generation QIAcube Connect with advanced digital capabilities and full connectivity. These solutions assure 
standardization of sample preparation and save laboratory staff time by eliminating repetitive manual procedures. 

Customers

With a growing portfolio of innovative products for molecular testing, QIAGEN has built deep customer relationships across 
the entire value chain of the life sciences. Discoveries often surface in universities and research institutes and are published, 
then are licensed for development by pharmaceutical and biotech companies, and finally move into widespread commercial use 
in healthcare and other areas of life. We serve the needs of four major customer classes:

•  Molecular Diagnostics - healthcare providers engaged in patient care including hospitals, public health organizations, 

reference laboratories and physician practices 

•  Applied Testing - government or industry customers using molecular technologies in non-healthcare fields such as 

forensics and human identification 

•  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 

Molecular Diagnostics 

The ability of advanced diagnostic technologies to unlock molecular information for patients is changing the practice of 
medicine, creating a large and growing market for sample preparation, assay kits and bioinformatics in clinical care. 
Dissemination of PCR and other amplification technologies has brought molecular diagnostics into routine use in healthcare 
around the world, and next-generation sequencing is disseminating rapidly to further transform healthcare. Technologies for 
molecular diagnostics enable clinicians and labs to identify and profile microorganisms, cancer cells, bacteria and viruses by 
detecting specific nucleic acid sequences or characterizing newly discovered genomic sequences related to diseases. 
Commercial applications are multiplying as researchers identify new biological markers for disease and develop novel 
technologies to decipher these diagnostic clues.

The molecular diagnostics market generates total sales estimated by industry experts at approximately $7 billion in 2018, 
including about $4-5 billion potentially addressable with QIAGEN's product portfolio. Molecular diagnostics is the most 
dynamic segment of the global in vitro diagnostics market and is growing at a compound annual rate estimated in the high 
single-digits or low double-digits. Given the advantages of precise genetic information over traditional tests, QIAGEN expects 
the healthcare market to continue to provide significant growth opportunities. 

In QIAGEN’s robustly growing Molecular Diagnostics business we focus on three priorities for fighting disease: 

•  Oncology - accurately diagnosing cancer, enabling prevention or early detection, and guiding selection of therapies with 
individualized molecular insights. QIAGEN offers a broad portfolio of companion diagnostic kits and panels to detect 
mutations of genes such as KRAS, EGFR, BRAF, BRCA1/2 and others that influence the development of cancers and the 
efficacy and safety of medicines. We also provide industry-leading tests to screen for human papillomavirus (HPV) and 
protect women from cervical cancer.

• 

• 

Infectious diseases - detecting and differentiating a broad range of viral and bacterial infections, including diseases such as 
HIV, hepatitis, influenza and healthcare-associated infections, as well as common respiratory and gastrointestinal 
syndromes. Use of molecular testing to differentiate among pathogens can be useful in guiding treatment, such as selection 
of antibiotic or antiviral therapies.

Immune monitoring - using advanced technologies that detect immune-system markers as a preventive strategy, such as 
screening patients for latent TB infection to guard against active TB disease, as well as for monitoring immune function, 
such as in transplantation patients.

QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare. Success in Molecular Diagnostics 
depends on the ability to accurately analyze purified nucleic acid samples from sources such as blood, tissue, body fluids and 
stool, on automated systems that process these samples reliably and efficiently, often handling hundreds of samples 
concurrently. Other success factors are the range of assays for diseases and biomarkers, convenience and ease of laboratory 
workflow, and reliability and standardization of lab procedures. 

10

The immune monitoring portfolio, using sensitive QuantiFERON technology, accurately detects infection and measures 
immune response in patients. Our lead products in this field, QuantiFERON-TB Gold and QuantiFERON-TB Gold Plus, are 
used in tuberculosis (TB) control efforts worldwide to detect latent TB infection (LTBI) by screening vulnerable populations, 
such as close contacts of patients with active TB disease, immunocompromised persons or patients on immunosuppressive 
drugs. Individuals with LTBI can then be treated, preventing the infection from becoming active and contagious. As modern 
blood tests analyzed in a laboratory, the QuantiFERON-TB assays are faster, less labor-intensive and more accurate than the 
century-old tuberculin skin test. The potential global market for latent TB infection testing is estimated at up to $1 billion.

QIAGEN's oncology test portfolio includes a broad range of technologies and biomarkers for Precision Medicine, including 
regulator-approved companion diagnostics for oncogenes such as KRAS, EGFR and JAK2, as well as comprehensive gene 
panels for research applications in next-generation sequencing. In 2018, we broadened the use of our therascreen EGFR RGQ 
PCR Kit with its second and third FDA approvals as a companion diagnostic in lung cancer, launched the therascreen PITX2 
RGQ PCR Kit as the first clinically validated DNA methylation assay to help predict the response of high-risk breast cancer 
patients to chemotherapy, and added two new FDA-cleared uses for our ipsogen JAK2 RGQ PCR Kit. We have a deep pipeline 
of oncology tests for PCR and NGS analysis under development. In addition to our broad portfolio of molecular technologies 
and automation systems, QIAGEN offers Pharma partners a full infrastructure for co-development programs, intellectual 
property on platforms and content, regulatory experience, global marketing reach, and independence as a company focusing 
exclusively on these types of technologies. 

QIAGEN also offers an extensive range of kits for diagnosing infectious diseases, including a broad menu of reliable tests on 
the QIAsymphony platform, plus the new QIAstat-Dx panels for respiratory and gastrointestinal syndromes. We are expanding 
this portfolio by seeking regulatory approvals of new tests in additional markets. 

QIAGEN is one of the global leaders in screening technologies for HPV, a viral infection that is the primary cause of cervical 
cancer, which kills about 270,000 women a year. Our “gold standard” digene HC2 HPV Test and our careHPV Test for use in low-
resource regions lead the market in HPV screening around the world. In the United States, QIAGEN vigorous price competition 
has reduced that business to about 1% of total sales.

Applied Testing

Use of molecular technologies is expanding in more areas of life as industry and government organizations apply standardized 
Sample to Insight solutions to diverse needs. Applied Testing is our term for applications outside of human healthcare and 
research. The value of genetic “fingerprinting” has been shown for criminal investigations or clarification of paternity or 
ancestry, as well as for food safety and veterinary diagnostics. In 2018, we took steps to streamline QIAGEN’s Applied Testing 
business by divesting our portfolio of veterinary assays to a new animal health company funded by a private capital firm. 

QIAGEN’s forensics franchise delivered solid growth in 2018. We are a leader in standardizing solutions for reliable forensic 
testing, and we have built strong relationships with law enforcement and other organizations engaged in human identification. 
QIAGEN also provides industry-leading solutions for studies of microbiomes and their effect on health and the environment.

Pharma

QIAGEN has deep relationships with pharmaceutical and biotechnology companies. Drug discovery and translational research 
efforts increasingly employ genomic information, both to guide research in diseases and to differentiate patient populations 
most likely to respond to particular therapies. We estimate that about half of QIAGEN sales in this customer class support 
research, while the other half supports clinical development, including stratification of patient populations based on genetic 
information. QIAGEN's bioinformatics solutions also are widely used to guide pharmaceutical research. 

We have built a position as the preferred partner for pharmaceutical and biotech companies to co-develop companion 
diagnostics paired with targeted drugs. A wave of newly discovered biomarkers and molecular tests indicating the likely 
efficacy and safety of associated drugs is now transforming the treatment of cancer and other diseases. Our more than 25 master 
collaboration agreements with Pharma, some with multiple co-development projects, have created a rich pipeline of molecular 
tests that can move, along with the drugs, through clinical trials and regulatory approvals for marketing to healthcare providers. 
Several new companion diagnostics are currently in the registration process.

Academia

QIAGEN provides Sample to Insight solutions to leading research institutions around the world. While many academic 
laboratories continue to use manual, labor-intensive methods or create their own in-house technologies, QIAGEN has focused 
on enabling labs to replace time-consuming traditional methods and internal development efforts with reliable, fast, highly 
reproducible, and high-quality technologies. QIAGEN often partners with leading institutions in research projects and develops 
customized solutions such as NGS panels for digital sequencing of multiple gene targets needed for a researcher's study.

As academic institutions increasingly embrace translational research, bridging from discoveries to practical applications in 

11

medicine, our relationships in Academia also support our presence in the Molecular Diagnostics, Pharma and Applied Testing 
customer classes. Research in university settings often helps in development of technologies for targeted biomolecules, and 
academic research also can result in scientific publications that validate the usefulness of QIAGEN solutions.

Global Presence by Category of Activity and Geographic Market

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.

(in thousands)
Net Sales
Consumables and related revenues

Instrumentation

Total

Geographical Information

2018

2017

2016

$

$

1,315,459

186,389

1,501,848

$

$

1,242,715

174,821

1,417,536

$

$

1,166,131

171,860

1,337,991

QIAGEN currently markets products in more than 130 countries. The following table shows total revenue by geographic 
market for the past three years (net sales are attributed to countries based on the location of the customer, as certain subsidiaries 
have international distribution): 

(in thousands)
Net Sales
Americas:

United States

Other Americas

Total Americas

Europe, Middle East and Africa

Asia Pacific and Rest of World

Total

2018

2017

2016

$

632,660

$

579,906

$

60,359

693,019

490,301

318,528

73,478

653,384

462,980

301,172

555,676

71,797

627,473

428,055

282,463

$

1,501,848

$

1,417,536

$

1,337,991

QIAGEN has built an increasing presence in key emerging markets as a growth strategy. In 2018, the top seven emerging 
markets - Brazil, Russia, India, China, South Korea, Mexico and Turkey - contributed approximately 16% of net sales. 

Research and Development

We are committed to expanding our global leadership in Sample to Insight solutions for molecular testing in healthcare and the 
life sciences. Our strategy for managing innovation focuses on addressing the most significant unmet medical and scientific 
needs. We target our resources to develop promising technologies for use by our customers in Molecular Diagnostics, Applied 
Testing, Pharma and Academia - and to meet the needs of clinicians and scientists in key geographic markets.

Innovation at QIAGEN follows parallel paths:

•  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.

As a percentage of sales, our research and development investments are among the highest in our industry. Almost 1,100 
employees in research and development work in QIAGEN centers of excellence on three continents. 

Strengthening our leadership in automation is a key to driving dissemination of molecular testing in healthcare and other 
laboratories, as well as generating increased demand for our consumable products. We continue to expand the applications of all 
of our automation systems. QIAGEN is developing and commercializing a deep pipeline of assays for preventive screening and 
diagnostic profiling of diseases, detection of biomarkers to guide Precision Medicine in cancer and other diseases, and other 
molecular targets. Our assay development program aims to commercialize tests that will add value to our QIAsymphony, 

12

QIAstat-Dx, NeuMoDx and GeneReader NGS automation systems in the coming years. In 2018, we launched novel diagnostic 
tests running on the QIAsymphony platform for lung, breast and blood cancers, as well as Trichomonas vaginalis and human 
papillomavirus. In early 2019, we added tests for hepatitis B and hepatitis C to the menu of diagnostics for QIAstat-Dx. 

Our bioinformatics teams are also developing new software solutions and adding proprietary cloud-based content to support the 
latest research and clinical trends in molecular testing, especially the interpretation of large volumes of data from next-
generation sequencing. In addition, we are integrating these digital technologies with instruments and molecular content to 
provide our customers seamless Sample to Insight workflows. 

Sales and Marketing

We market our products in more than 130 countries, mainly through subsidiaries in markets that we believe have the greatest 
sales potential in the Americas, Europe, Australia and Asia. Experienced marketing and sales staff, many of them scientists with 
academic degrees in molecular biology or related areas, sell our products and provide direct support to customers. Key accounts 
are overseen by business managers to ensure that we serve customers’ commercial needs, such as procurement processes, 
financing, data on costs and value of our systems, and collaborative relationships. In many markets, we have specialized 
independent distributors and importers.

Our marketing strategy focuses on providing differentiated, high-quality products across the value chain from Sample to 
Insight, integrating components into end-to-end solutions when possible, and enhancing relationships with commitment to 
technical excellence and customer service. Our “omni-channel” approach seeks to engage customers through their preferred 
channels - online, by phone, in person, etc. – and to optimize investment in different customer types. 

QIAGEN has initiated actions to drive the growth of our digital marketing channels - including our website (www.qiagen.com), 
product-specific sites and social media. Our eCommerce team works with clients to provide automated processes supporting a 
variety of electronic transactions and all major eProcurement systems. Information contained on our website, or accessed 
through it, is not part of this Annual Report. 

Our GeneGlobe web portal (www.geneglobe.com) is a valuable outreach to scientists in Pharma and Academia, enabling 
researchers to search and order from approximately 25 million pre-designed and custom PCR assay kits, NGS assay panels and 
other products. We have integrated GeneGlobe with our bioinformatics solutions, linking biological interpretation with ordering 
of relevant assays to accelerate research.

QIAGEN uses a range of tools to provide customers with direct access to technical support, inform them of new product 
offerings, and enhance our reputation for technical excellence, high-quality products and commitment to service. For example, 
our technical service hotline allows existing or potential customers to discuss a wide range of questions about our products and 
molecular biology procedures, online or via phone, with Ph.D. and M.Sc. scientists at QIAGEN. Frequent communication with 
customers enables us to identify market needs, learn of new developments and opportunities, and respond with new products.

We also distribute publications, including our catalog, to existing and potential customers worldwide, providing new product 
information, updates, and articles about existing and new applications. In addition, we hold numerous scientific seminars at 
clinical, academic and industrial research institutes worldwide and at major scientific and clinical meetings. We conduct direct 
marketing campaigns to announce new products and special promotions, and we offer personalized electronic newsletters 
highlighting molecular biology applications.

For laboratories that frequently rely on our consumables, the QIAstock program maintains inventory on-site to keep up with 
their requirements. QIAGEN representatives make regular visits to replenish the stock and help with other needs, and we are 
automating this process with digital technologies. Easy-to-use online ordering, inventory monitoring and customer-driven 
changes make QIAstock an efficient system for providing ready access to our products for the hundreds of customers 
worldwide who use this program.

Seasonality

Our business does not experience significant, predictable seasonality. Historically, a significant portion of our sales have been to 
researchers, universities, government laboratories and private foundations whose funding is dependent upon grants from 
government agencies, such as the National Institutes of Health and similar bodies. To the extent that our customers experience 
increases, decreases or delays in funding arrangements and budget approvals, and to the extent that any of our customers' 
activities are slowed, such as during times of higher unemployment, vacation periods or delays in the approval of government 
budgets, we may experience fluctuations in sales volumes during the year or delays from one period to the next in the 
recognition of sales.

13

Intellectual Property, Proprietary Rights and Licenses 

We have made and expect to continue to make investments in intellectual property. In 2018, our purchases of intangible assets 
totaled 95.0 million. While we do not depend solely on any individual patent or technology, we are significantly dependent in 
the aggregate on technology that we own or license. Therefore, we consider protection of proprietary technologies and products 
one of the major keys to our business success. We rely on a combination of patents, licenses and trademarks to establish and 
protect proprietary rights. As of December 31, 2018, we owned 340 issued patents in the United States, 277 issued patents in 
Germany and 1,786 issued patents in other major industrialized countries. We had 576 pending patent applications. Our policy 
is to file patent applications in Western Europe, the United States and Japan. U.S. patents have a term of 17 years from the date 
of issue (for patents issued from applications submitted prior to June 8, 1995), or 20 years from the date of filing (in the case of 
patents issued from applications submitted on or after June 8, 1995). Patents in most other countries have a term of 20 years 
from the date of filing the patent application. We intend to aggressively prosecute and enforce patents and to otherwise protect 
our proprietary technologies. We also rely on trade secrets, know-how, continuing technological innovation and licensing 
opportunities to develop and maintain our competitive position. 

Our practice is to require employees, consultants, outside scientific collaborators, sponsored researchers and other advisers to 
execute confidentiality agreements upon commencement of their relationships with us. These agreements provide that all 
confidential information developed by or made known to the individual during the course of the relationship is to be kept 
confidential and not disclosed to third parties, subject to a right to publish certain information in scientific literature in certain 
circumstances and to other specific exceptions. In the case of our employees, the agreements provide that all inventions 
conceived by individuals in the course of their employment will be our exclusive property. 

See "Principle of Risks and Uncertainties" included below for details regarding risks related to our reliance on patents and 
proprietary rights.

Competition 

In the Academic and Pharma markets, we believe our primary competition in sample technology products involves traditional 
separation and purification methods, such as phenol extraction, cesium chloride density gradient centrifugation, and 
precipitation. These methods utilize widely available reagents and other chemicals supplied by companies in these markets. We 
compete with these methods through innovative technologies and products, offering a comprehensive solution for nucleic acid 
collection, pre-treatment, separation and purification needs and providing significant advantages in speed, reliability, 
convenience, reproducibility and ease of use. 

We also experience competition in various markets from other companies providing sample preparation products in kit form 
and assay solutions. These competitors include, but are not limited to, companies with a focus on nucleic acid separation and 
purification, assay solutions and for transfection reagents and protein fractionation products. We believe our proprietary 
technologies and products offer significant advantages over competitors' products with regard to purity, speed, reliability and 
ease-of-use. 

Some of our other products within our molecular diagnostics customer class, such as tests for Chlamydia, Gonorrhea, hepatitis 
B virus, herpes simplex virus and CMV, compete against existing screening, monitoring and diagnostic technologies, including 
tissue culture and antigen-based diagnostic methodologies. We believe the primary competitive factors in the market for gene-
based probe diagnostics and other screening devices are clinical validation, performance and reliability, ease of use, 
standardization, cost, proprietary position, competitors' market shares, access to distribution channels, regulatory approvals and 
reimbursement. 

We do not believe our competitors typically have the same comprehensive approach to sample to insight solutions as we do or 
the ability to provide the broad range of technologies and depth of products and services that we offer. With our complete range 
of manual and fully automated solutions, we believe we offer the value of standardization of procedures and, therefore, more 
reliable results. We also believe our integrated strategic approach gives us a competitive advantage. The quality of sample 
technologies-an area in which we have a unique market and leadership position-is a key prerequisite for reliable molecular 
assay solutions, which increasingly are being applied in emerging markets such as Molecular Diagnostics and Applied Testing. 

Current and potential competitors may be in the process of seeking FDA or foreign regulatory approvals for their respective 
products. Our continued future success will depend in large part on our ability to maintain our technological advantage over 
competing products, expand our market presence and preserve customer loyalty. There can be no assurance that we will be able 
to compete effectively in the future or that development by others will not render our technologies or products non-competitive. 

Suppliers 

As part of our supplier assessment procedures, we evaluate on a monthly basis the performance of our raw material and 
component suppliers, potential new alternative sources of such materials and components, and the risks and benefits of reliance 
on our existing suppliers. We buy materials for our products from many suppliers, and are not dependent on any one supplier or 

14

group of suppliers for our business as a whole. Raw materials generally include chemicals, raw separation media, biologics, 
plastics, electronics and packaging. Raw materials are generally readily available at competitive, stable prices from a number of 
suppliers. Certain raw materials are produced under our specifications, so we closely monitor stock levels to maintain adequate 
supplies. We believe we maintain inventories at a sufficient level to ensure reasonable customer service levels and to guard 
against normal volatility in availability. 

Government Regulations

We are subject to a variety of laws and regulations in the European Union, the United States and other countries. The level and 
scope of the regulation varies depending on the country or defined economic region, but may include, among other things, the 
research, development, testing, clinical trials, manufacture, storage, recordkeeping, approval, labeling, promotion and 
commercial sales and distribution, of many of our products. 

European Union Regulations

In the European Union, in vitro diagnostic medical devices (IVDs) have been regulated under EU-Directive 98/79/EC (IVD 
Directive) and corresponding national provisions, however, this Directive will be replaced by the In Vitro Diagnostic Device 
Regulation (IVDR) in May 2022. The IVD Directive requires that medical devices meet the essential requirements set out in an 
annex of the directive. These requirements include the safety and efficacy of the devices. According to the IVD Directive, the 
Member States presume compliance with these essential requirements in respect of devices which are in conformity with the 
relevant national standards transposing the harmonized standards of which the reference numbers have been published in the 
Official Journal of the European Communities. These harmonized standards include ISO 13485:2003, the quality standard for 
medical device manufacturers.

IVD medical devices, other than devices for performance evaluation, must bear the CE marking of conformity when they are 
placed on the market. The CE mark is a declaration by the manufacturer that the product meets all the appropriate provisions of 
the relevant legislation implementing the relevant European Directive. As a general rule, the manufacturer must follow the 
procedure of the EC Declaration of conformity to obtain this CE marking.

Each European country must adopt its own laws, regulations and administrative provisions necessary to comply with the IVD 
Directive. Member States may not create any obstacle to the placing on the market or the putting into service within their 
territory of devices bearing the CE marking according to the conformity assessment procedures. 

Under the IVDR, which was enacted by the European Commission (EC) on May 25, 2017, in vitro diagnostics will be subject 
to additional legal regulatory requirements after the IVDR comes into full effect on May 26, 2022. Once implemented, the 
entire EU IVD industry will have to comply with these new requirements, which will bring the EU regulatory landscape on par 
with other highly regulated markets such as the US. Many Guidance Documents and other regulatory mechanisms will need to 
be established during this transition period and it is anticipated that it will be late in 2019 before the infrastructure is established 
to begin the new approvals process. 

U.S. Regulations

In the United States, in vitro diagnostic products are subject to regulation by the FDA as medical devices to the extent that they 
are intended for use in the diagnosis, treatment, mitigation or prevention of disease or other conditions. They are subject to 
premarket review and postmarket controls which will differ depending on how the FDA classifies a specific IVD. Certain types 
of tests like some that we manufacture and sell for research use only in the United States have not been subject to FDA’s 
premarket review and controls because we do not promote these tests for clinical diagnostic use, and they are labeled “For 
Research Use Only,” or RUO, as required by the FDA. Other tests, known as laboratory developed tests (LDTs) which are in 
vitro diagnostic tests that are designed, manufactured and used within a single laboratory, have been subject to enforcement 
discretion, which means that FDA generally has not enforced premarket review and other applicable FDA requirements.  
However, as LDTs have increased in complexity, the FDA has begun to take a risk-based approach to their regulation. Failure to 
comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as 
FDA refusal to approve pending PMAs, warning letters, product recalls, product seizures, total or partial suspension of 
production or distribution, injunctions, fines, civil penalties and criminal prosecution.

In Vitro Diagnostics

The FDA regulates the sale or distribution of medical devices, including in vitro diagnostic test kits and some LDTs. The 
information that must be submitted to the FDA in order to obtain clearance or approval to market a new medical device varies 
depending on how the medical device is classified by the FDA. Medical devices are classified into one of three classes on the 
basis of the controls deemed by the FDA to be necessary to reasonably ensure their safety and effectiveness. Class I devices are 
subject to general controls, including labeling, pre-market notification and adherence to the FDA’s quality system regulations, 
which are device-specific good manufacturing practices. Class II devices are subject to premarket notification, general controls 
and sometimes special controls, including performance standards and post-market surveillance. Class III devices are subject to 

15

most of the previously identified requirements as well as to pre-market approval. All Class I devices are exempt from premarket 
review; most Class II devices require 510(k) clearance, and all Class III devices must receive premarket approval before they 
can be sold in the United States. The payment of a fee, that is typically adjusted annually, to the FDA is usually required when a 
510(k) notice or premarket approval application is submitted.

510(k) Premarket Notification. A 510(k) notification requires the sponsor to demonstrate that a medical device is substantially 
equivalent to another marketed device, termed a “predicate device”, that is legally marketed in the United States and for which 
a premarket approval application (PMA) was not required. A device is substantially equivalent to a predicate device if it has the 
same intended use and technological characteristics as the predicate; or has the same intended use but different technological 
characteristics, where the information submitted to the FDA does not raise new questions of safety and effectiveness and 
demonstrates that the device is at least as safe and effective as the legally marketed device.

The FDA generally issues a decision letter within 90 days of receipt of the 510(k) if it has no additional questions or sends a 
first action letter requesting additional information within 75 days. Most 510(k)s do not require clinical data for clearance, but a 
minority will. Requests for additional data, including clinical data, will increase the time necessary to review the notice. If the 
FDA believes that the device is not substantially equivalent to a predicate device, it will issue a “Not Substantially Equivalent” 
letter and designate the device as a Class III device, which will require the submission and approval of a PMA before the new 
device may be marketed. Under certain circumstances, the sponsor may request the FDA to make a risk-based determination of 
the new device and reclassify the new device as a Class I or Class II device. The FDA continues to reevaluate the 510(k) 
pathway and process and the de novo process, and has taken what it describes as a risk-based approach to develop innovative 
regulatory policy to propose a more "contemporary" approach. We cannot predict what if any changes will occur or how they 
will affect our current or future products. 

Premarket Approval. The PMA process is more complex, costly and time consuming than the 510(k) process. A PMA must be 
supported by more detailed and comprehensive scientific evidence, including clinical data, to demonstrate the safety and 
efficacy of the medical device for its intended purpose. If the device is determined to present a “significant risk,” the sponsor 
may not begin a clinical trial until it submits an investigational device exemption (IDE) to the FDA and obtains approval to 
begin the trial.

After the PMA is submitted, the FDA has 45 days to make a threshold determination that the PMA is sufficiently complete to 
permit a substantive review. If the PMA is complete, the FDA will file the PMA. The FDA is subject to a performance goal 
review time for a PMA that is 180 days from the date of filing, although in practice this review time is longer. Questions from 
the FDA, requests for additional data and referrals to advisory committees may delay the process considerably. The total 
process may take several years and there is no guarantee that the PMA will ever be approved. Even if approved, the FDA may 
limit the indications for which the device may be marketed. The FDA may also request additional clinical data as a condition of 
approval or after the PMA is approved. Any changes to the medical device may require a supplemental PMA to be submitted 
and approved before changed medical device may be marketed.

Any products sold by us pursuant to FDA clearances or approvals will be subject to pervasive and continuing regulation by the 
FDA, including record keeping requirements, reporting of adverse experiences with the use of the device and restrictions on the 
advertising and promotion of our products. Device manufacturers are required to register their establishments and list their 
devices with the FDA and are subject to periodic inspections by the FDA and certain state agencies. Noncompliance with 
applicable FDA requirements can result in, among other things, warning letters, fines, injunctions, civil penalties, recalls or 
seizures of products, total or partial suspension of production, refusal of the FDA to grant 510(k) clearance or PMA approval 
for new devices, withdrawal of 510(k) clearances and/or PMA approvals and criminal prosecution.

Regulation of Companion Diagnostic Devices

If a sponsor or the FDA believes that a diagnostic test is essential for the safe and effective use of a corresponding therapeutic 
product, the sponsor of the therapeutic product will typically work with a collaborator to develop an in vitro companion 
diagnostic device, or IVD. IVDs are regulated by the FDA as medical devices. The FDA issued a final guidance document in 
2014, entitled “In Vitro Companion Diagnostic Devices” that is intended to assist companies developing in vitro companion 
diagnostic devices and companies developing therapeutic products that depend on the use of a specific in vitro companion 
diagnostic for the safe and effective use of the product. The FDA defined an IVD companion diagnostic device as a device that 
provides information that is essential for the safe and effective use of a corresponding therapeutic product. The FDA expects 
that the therapeutic sponsor will address the need for an approved or cleared IVD companion diagnostic device in its 
therapeutic product development plan and that, in most cases, the therapeutic product and its corresponding IVD companion 
diagnostic will be developed contemporaneously. 

It also issued a draft guidance on July 15, 2016, entitled, “Principles for Codevelopment of an In Vitro Companion Diagnostic 
Device with a Therapeutic Product” to serve as a practical guide to assist therapeutic product sponsors and IVD sponsors in 
developing a therapeutic product and an accompanying IVD companion diagnostic.

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The FDA indicated that it will apply a risk-based approach to determine the regulatory pathway for IVD companion diagnostic 
devices, as it does with all medical devices. This means that the regulatory pathway will depend on the level of risk to patients, 
based on the intended use of the IVD companion diagnostic device and the controls necessary to provide a reasonable assurance 
of safety and effectiveness. The two primary types of marketing pathways for medical devices are clearance of a premarket 
notification under Section 510(k) of the Federal Food, Drug, and Cosmetic Act, or 510(k), and approval of a premarket 
approval application, or PMA. We expect that any IVD companion diagnostic device developed for use with our drug 
candidates will utilize the PMA pathway and that a clinical trial performed under an investigational device exemption, or IDE, 
will have to be completed before the PMA may be submitted.

The FDA expects that the therapeutic sponsor will address the need for an IVD companion diagnostic device in its therapeutic 
product development plan and that, in most cases, the therapeutic product and its corresponding IVD companion diagnostic 
device will be developed contemporaneously. If the companion diagnostic test will be used to make critical treatment decisions 
such as patient selection, treatment assignment, or treatment arm, it will likely be considered a significant risk device for which 
a clinical trial will be required.

The sponsor of the IVD companion diagnostic device will be required to comply with the FDA’s IDE requirements that apply to 
clinical trials of significant risk devices. If the diagnostic test and the therapeutic drug are studied together to support their 
respective approvals, the clinical trial must meet both the IDE and IND requirements.

PMAs must be supported by valid scientific evidence, which typically requires extensive data, including technical, preclinical, 
clinical and manufacturing data, to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device. For 
diagnostic tests, a PMA typically includes data regarding analytical and clinical validation studies. As part of its review of the 
PMA, the FDA will conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the 
Quality System Regulation, or QSR, which requires manufacturers to follow design, testing, control, documentation and other 
quality assurance procedures. FDA review of an initial PMA may require several years to complete.

If the FDA evaluations of both the PMA and the manufacturing facilities are favorable, the FDA will either issue an approval 
order or an approvable letter, which usually contains a number of conditions that must be met in order to secure the final 
approval of the PMA. If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will send the 
applicant a not approvable letter or an order denying approval. A not approvable letter will outline the deficiencies in the 
application and, where practical, will identify what is necessary to make the PMA approvable. The FDA may also determine 
that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while 
the trials are conducted and then the data submitted in an amendment to the PMA. Once granted, PMA approval may be 
withdrawn by the FDA if compliance with post approval requirements, conditions of approval or other regulatory standards is 
not maintained or problems are identified following initial marketing.

After approval, the use of an IVD companion diagnostic device with a therapeutic product will be stipulated in the instructions 
for use in the labeling of both the diagnostic device and the corresponding therapeutic product. In addition, a diagnostic test that 
was approved through the PMA process or one that was cleared through the 510(k) process and placed on the market will be 
subject to many of the same regulatory requirements that apply to approved drugs. The FDA has approved a number of drug/
diagnostic device companions in accordance with the Guidance.

Unique Device Identifier Requirements

In September 2013, the FDA issued its final rule on the Unique Device Identifier. This rule now requires an additional 
registered identifier, including a special barcode, on all FDA regulated medical devices. The rule is implemented in phases with 
the first deadline of September 24, 2014 being established for all Class III medical devices. For QIAGEN, this impacted the 
HC2, QuantiFERON, artus, and therascreen products. We established a task force to ensure that the deadline was met but there 
is additional administrative and regulatory burden on us related to the annual reporting of compliance of these products to the 
new regulation. Class II and Class I products were required to have this same labeling as of September 24, 2016 and 2018, 
respectively. QIAGEN was fully compliant with the new rule by September 2018. The new rule will also require additional 
compliance oversight now that it has been implemented. The requirements are now confirmed as part of our annual reporting 
and PMA submissions. They are also assessed during site inspections by the U.S. FDA.

Regulation of Research Use Only Products

Some of our products are sold for research purposes in the U.S., and labeled “For Research Use Only” (RUO) or “for molecular 
biology applications.” In November 2013, the FDA issued a final Guidance for Industry and Food and Drug Administration 
Staff entitled, “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only.” In the 
Guidance, RUO refers to devices that are in the laboratory phase of development, and investigational use only, or IUO, refers to 
devices that are in the product testing phase of development. These types of devices are exempt from most regulatory controls. 
Because we do not promote our RUOs for clinical diagnostic use or provide technical assistance to clinical laboratories with 
respect to these tests, we believe that these tests are exempt from FDA’s premarket review and other requirements. If the FDA 

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were to disagree with our designation of any of these products, we could be forced to stop selling the product until we obtain 
appropriate regulatory clearance or approval. Further, it is possible that some of our RUOs may be used by some customers 
without our knowledge in their LDTs, which they develop, validate and promote for clinical use. However, as previously noted, 
we do not promote these products for use in LDTs or assist in the development of the LDTs for clinical diagnostic use. 

The 21st Century Cures Act (Cures Act) was enacted into law on December 13, 2016, after a bipartisan, multi-year effort. The 
Cures Act primarily affects activities of the Department of Health and Human Services (HHS) and its agencies, including the 
Food and Drug Administration (FDA or the Agency). On June 6, 2017, Scott Gottlieb, M.D., Commissioner of Food and Drugs, 
reported to Congress as required by the Cures Act. This report included the Food & Drug Administration Work Plan and 
Proposed Funding Allocations of FDA Innovation Account (Required by Section 1002 of the 21st Century Cures Act (Public 
Law 114-255). This is now being implemented with a broad spectrum of initiatives within the FDA with the goal to support 
patients with improved and timely access to safe and efficacious medical products. For industry, it is anticipated that some 
processes will become less burdensome with more rapid approval/clearance cycles while others will continue to require 
significant investment. 

HIPAA and Other Privacy and Security Laws

Numerous privacy and data security laws apply to personal information, including health information. These laws vary in their 
application. For example, the Health Insurance Portability and Accountability Act of 1996, as amended by the Health 
Information Technology for Economic and Clinical Health Act, and their implementing regulations (collectively, HIPAA), 
regulate the uses, disclosures and security of identifiable health information (protected health information or PHI) in the hands 
of certain health care providers, health plans or health care clearing houses (covered entities). HIPAA regulates and limits 
covered entities’ uses and disclosures of PHI and requires the implementation of administrative, physical and technical 
safeguards to keep PHI secure. HIPAA also applies to organizations that create, receive, maintain or transmit PHI to provide 
services to or for or on behalf of covered entities (business associates). Business associates and certain of their subcontractors 
are required to comply with certain privacy and all of the security standards of HIPAA. Business associates and covered entities 
must also comply with breach notification standards established by HIPAA. The HIPAA breach notification standards require 
covered entities to notify affected individuals, the government, and in some cases, local and national media in the event of a 
breach of PHI that has not been secured in accordance with HIPAA standards, such as by encryption. The breach notification 
standards require business associates to notify covered entity customers of their own breaches of unsecured PHI so that the 
relevant covered entity may make required notifications. In the ordinary course, HIPAA does not apply to us directly, but if we 
were to act as a HIPAA covered entity or business associate, we would be subject to these obligations. Most of our institutional 
and physician customers are covered entities under HIPAA and must obtain proper authorization, de-identify information or 
take some other step so that we may provide services involving PHI. When PHI is de-identified in accordance with HIPAA or 
when the disclosure of PHI is authorized by a patient, HIPAA does not impose any compliance obligations on the recipient, but 
our use and disclosure of the information may be limited by contract or the terms of the authorization. 

All 50 states have adopted data breach notification laws relating to the “personal information” of their residents. Personal 
information typically includes an individual’s name or initials coupled with social security, financial account, debit, credit or 
state-issued identification number or other information that could lead to identity theft. An increasing number of states are 
broadly including "health information" as personal information protected under the law. There is significant variability under 
these laws, but most require notification to affected individuals and to the government in the event of breach. Other laws of 
some states require that that we comply with data security obligations. These laws may apply to us when we receive or maintain 
personal information regarding individuals, including our employees. 

We are subject to enforcement by state attorneys general who have authority to enforce state data privacy or security laws. 
Accordingly, we maintain an active privacy and data security program designed to address applicable regulatory compliance 
requirements. 

The Genetic Information Nondiscrimination Act of 2008, also referred to as GINA, is a federal law that protects individuals 
from discrimination in the health insurance and employment contexts because of DNA characteristics that may affect their 
health. GINA prohibits covered employers from requesting, obtaining, or using employees’ genetic information (subject to 
limited exceptions), and prohibits covered health insurers from requesting genetic information or using any such information 
they may already have for purposes of making eligibility, premium, or coverage-related decisions.

Many states have also adopted genetic testing and privacy laws. These laws typically require a specific, written consent for 
genetic testing as well as consent for the disclosure of genetic test results and otherwise limit uses and disclosures of genetic 
testing results. A few states have adopted laws that give their residents property rights in their genetic information. 

Privacy and data security laws, including those relating to health information, are complex, overlapping and rapidly evolving. 
As our activities evolve and expand, additional laws may be implicated. For example, the California Consumer Privacy Act of 
2018, set to take effect on January 1, 2020, imposes expansive new requirements and protections upon the processing of 

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personal data, aimed at giving California consumers more visibility and control over their personal information. There are also 
non-U.S. privacy laws, such as the General Data Protection Regulation (GDPR) of the European Union, that impose restrictions 
on the transfer, access, use, and disclosure of health and other personal information. We have implemented the requirements set 
forth by the GDPR, which took effect on May 25, 2018. All of these laws impact our business either directly or indirectly. Our 
failure to comply with applicable privacy or security laws or significant changes in these laws could significantly impact our 
business and future business plans. For example, we may be subject to regulatory action or lawsuits in the event we fail to 
comply with applicable privacy laws. We may face significant liability in the event any of the personal information we maintain 
is lost or otherwise subject to misuse or other wrongful use, access or disclosure. 

Compliance with Fraud and Abuse Laws

We have to comply with various U.S. federal and state laws, rules and regulations pertaining to healthcare fraud and abuse, 
including anti-kickback laws and physician self-referral laws, rules and regulations. Violations of the fraud and abuse laws are 
punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in federal and state 
healthcare programs, including Medicare and Medicaid.

Anti-Kickback Statute

The federal Anti-Kickback Statute prohibits persons from knowingly or willfully soliciting, receiving, offering or paying 
remuneration, directly or indirectly, in exchange for or to induce:

•  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.

The definition of “remuneration” has been broadly interpreted to include anything of value, including such items as gifts, 
certain discounts, waiver of payments, and providing anything at less than its fair market value. In addition, several courts have 
interpreted the law to mean that if “one purpose” of an arrangement is intended to induce referrals, the statute is violated.

The Anti-Kickback Statue is broad and prohibits many arrangements and practices that are lawful in businesses outside of the 
healthcare industry. Recognizing that the Anti-Kickback Statute is broad and may technically prohibit many innocuous or 
beneficial arrangements, the Office of Inspector General of the Department of Health and Human Services (OIG) has issued 
regulations, commonly known as "safe harbors." These safe harbors set forth certain requirements that, if fully met, will 
insulate healthcare providers, medical device manufacturers, and others, from prosecution under the Anti-Kickback Statute. 
Although full compliance with these safe harbor provisions ensures against prosecution under the Anti-Kickback Statute, full 
compliance is often difficult and the failure of a transaction or arrangement to fit within a specific safe harbor does not 
necessarily mean that the transaction or arrangement is illegal or that prosecution under the Anti-Kickback Statute will be 
pursued. However, conduct and business arrangements that do not fully satisfy each applicable safe harbor may result in 
increased scrutiny by government enforcement authorities such as the OIG. The statutory penalties for violating the Anti-
Kickback Statute include imprisonment for up to five years and criminal fines of up to $25,000 per violation. In addition, 
through application of other laws, conduct that violates the Anti-Kickback Statute can also give rise to False Claims Act 
lawsuits, civil monetary penalties and possible exclusion from Medicare and Medicaid and other federal healthcare programs. 
In addition to the Federal Anti-Kickback Statute, many states have their own kickback laws. Often, these laws closely follow 
the language of the federal law, although they do not always have the same scope, exceptions, safe harbors or sanctions. In 
some states, these anti-kickback laws apply not only to payment made by a government health care program but also with 
respect to other payors, including commercial insurance companies.

We have and may in the future, enter into various agreements with health care providers who perform services for us, including 
some who make clinical decisions to use our products. All such arrangements have been structured with the intention of 
complying with all applicable fraud and abuse laws, including the Anti-Kickback Statute.

Other Fraud and Abuse Laws

The federal False Claims Act (FCA) prohibits any person from knowingly presenting, or causing to be presented, a false claim 
or knowingly making, or causing to be made, a false statement to obtain payment from the federal government. Those found in 
violation of the FCA can be subject to fines and penalties of three times the damages sustained by the government, plus 
mandatory civil penalties of between $5,500 and $11,000 for each separate false claim. Actions filed under the FCA can be 
brought by any individual on behalf of the government, a "qui tam" action, and such individual, known as a "relator" or, more 
commonly, as a "whistleblower," who may share in any amounts paid by the entity to the government in damages and penalties 
or by way of settlement. In addition, certain states have enacted laws modeled after the FCA, and this legislative activity is 
expected to increase. Qui tam actions have increased significantly in recent years, causing greater numbers of healthcare 
companies, including medical device manufacturers, to defend false claim actions, pay damages and penalties or be excluded 

19

from Medicare, Medicaid or other federal or state healthcare programs as a result of investigations arising out of such actions.

The federal ban on physician self-referrals, commonly known as the Stark Law, prohibits, subject to certain exceptions, 
physician referrals of Medicare and Medicaid patients to an entity providing certain “designated health services” if the 
physician or an immediate family member of the physician has any financial relationship with the entity. Penalties for violating 
the Stark Law include fines, civil monetary penalties and possible exclusion from federal healthcare programs. In addition to 
the Stark Law, many states have their own self-referral laws. Often, these laws closely follow the language of the federal law, 
although they do not always have the same scope, exceptions or safe harbors.

The anti-inducement law (Section 1128A(a)(5) of the Social Security Act), prohibits providers from offering anything of value 
to a Medicare or Medicaid beneficiary to induce the beneficiary to use items or services covered by either program. 
Additionally, the Civil Monetary Penalties Law (Section 1128A of the Social Security Act), authorizes the United States 
Department of Health and Human Services to impose civil penalties administratively for various fraudulent or abusive acts.

The OIG also has authority to bring administrative actions against entities for alleged violations of a number of prohibitions, 
including the Anti-Kickback Statute and the Stark Law. The OIG may seek to impose civil monetary penalties or exclusion 
from the Medicare, Medicaid and other federal healthcare programs. Civil monetary penalties can range from $2,000 to $50,000 
for each violation or failure plus, in certain circumstances, three times the amounts claimed in reimbursement or illegal 
remuneration. Typically, exclusions last for five years.

In addition, we must comply with a variety of other laws, such as laws prohibiting false claims for reimbursement under 
Medicare and Medicaid, all of which can also be triggered by violations of federal anti-kickback laws; the Health Insurance 
Portability and Accounting Act of 1996, which makes it a federal crime to commit healthcare fraud and make false statements; 
and the Federal Trade Commission Act and similar laws regulating advertisement and consumer protections.

There are also an increasing number of state “sunshine” laws that require manufacturers to provide reports to state governments 
on pricing and marketing information. Several states have enacted legislation requiring manufacturers, including medical 
device companies to, among other things, establish marketing compliance programs, file periodic reports with the state, make 
periodic public disclosures on sales and marketing activities, and to prohibit or limit certain other sales and marketing practices. 
In addition, a federal law known as the Physician Payments Sunshine Act, requires manufacturers, including medical device 
manufacturers, to track and report to the federal government certain payments and other transfers of value made to physicians 
and teaching hospitals and ownership or investment interests held by physicians and their immediate family members. The 
federal government discloses the reported information on a publicly available website. If we fail to track and report as required 
by these laws or to otherwise comply with these laws, we could be subject to the penalty provisions of the pertinent state and 
federal authorities.

Despite extensive procedures to ensure compliance, we may also be exposed to liabilities under the U.S. Foreign Corrupt 
Practices Act, or FCPA, which generally prohibits companies and their intermediaries from making corrupt payments to foreign 
officials for the purpose of obtaining or maintaining business or otherwise obtaining favorable treatment, and requires 
companies to maintain adequate record-keeping and internal accounting practices to accurately reflect the transactions of the 
company. We are also subject to a number of other laws and regulations relating to money laundering, international money 
transfers and electronic fund transfers. These laws apply to companies, individual directors, officers, employees and agents.

Environment, Health and Safety

We are subject to laws and regulations related to the protection of the environment, the health and safety of employees and the 
handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials. For 
example, the U.S. Occupational Safety and Health Administration (OSHA) has established extensive requirements relating 
specifically to workplace safety for healthcare employers in the U.S. This includes requirements to develop and implement 
multi-faceted programs to protect workers from exposure to blood-borne pathogens, such as HIV and hepatitis B and C, 
including preventing or minimizing any exposure through needle stick injuries. For purposes of transportation, some biological 
materials and laboratory supplies are classified as hazardous materials and are subject to regulation by one or more of the 
following agencies: the U.S. Department of Transportation, the U.S. Public Health Service, the United States Postal Service and 
the International Air Transport Association.

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Other Country Specific Requirements

In many countries outside of the United States and the EU, coverage, pricing and reimbursement approvals are also required. 
Additionally, many of the major markets are adopting regulations and requirements similar to U.S. Food and Drug 
Administration (FDA) which require additional submission activities and management of country specific regulatory 
requirements. This is being led by the International Medical Device Regulators Forum (IMDRF). This Forum consists of 
regulators from around the world that have signed governmental agreements to align global regulations, especially around 
submissions and approvals. In the long term this holds the promise of reducing volatility and complexity in the regulatory 
landscape.  

Reimbursement

United States

In the United States, payments for diagnostic tests come from several sources, including third party payors such as health 
maintenance organizations and preferred provider organizations; government health programs such as Medicare and Medicaid; 
and, in certain circumstances, hospitals, referring laboratories or the patients themselves. For many years, federal and state 
governments in the United States have pursued methods to reduce the cost of these programs. For example, in 2010, the United 
States enacted major healthcare reform legislation known as the Patient Protection and Affordable Care Act (ACA). Such 
changes have had, and are expected to continue to have, an impact on our business. At present, Medicare payment rates are 
affected by across-the-board federal budget cuts commonly referred to as “sequestration.” Under sequestration, the Centers for 
Medicare & Medicaid Services (CMS), the federal agency responsible for administering Medicare and Medicaid, reduced 
Medicare payments to providers by 2% annually beginning in 2013 and through 2023. 

We frequently identify value propositions on our products and communicate them to payors, providers, and patient stakeholders 
and attempt to positively impact coverage, coding and payment pathways. However, we have no direct control over payor 
decisions with respect to coverage and payment levels for our products. The manner and level of reimbursement may depend on 
the site of care, the procedure(s) performed, the final patient diagnosis, the device(s) and/or drug(s) utilized, the available 
budget, or a combination of these factors, and coverage and payment levels are determined at each payor’s discretion. Changes 
in reimbursement levels or methods may positively or negatively affect sales of our products in any given country for any given 
product. At QIAGEN, we work with several specialized reimbursement consulting companies and maintain regular contact with 
payers.

As government programs seek to expand healthcare coverage for their citizens, they have at the same time sought to control 
costs by limiting the amount of reimbursement they will pay for particular procedures, products or services. Many third-party 
payors have developed payment and delivery mechanisms to support cost control efforts and to focus on paying for quality. 
Such mechanisms include payment reductions, pay for performance metrics, quality-based performance payments, restrictive 
coverage policies, studies to compare effectiveness and patient outcomes, and technology assessments. These changes have 
increased emphasis on the delivery of more cost-effective and quality-driven healthcare.

Code Assignment. In the United States, a third-party payor's decisions regarding coverage and payment are impacted, in large 
part, by the specific Current Procedural Terminology, or CPT, code used to identify a test. The American Medical Association, 
or AMA, publishes the CPT, which is a listing of descriptive terms and identifying codes for reporting medical services and 
procedures. The purpose of the CPT is to provide a uniform language that accurately describes medical, surgical, and diagnostic 
services and therefore to ensure reliable nationwide communication among healthcare providers, patients, and third-party 
payors. CMS uses its own HCPCS codes for medical billing and reimbursement purposes. Level I HCPCS codes reflect current 
CPT codes, while Level II codes primarily represent non-physician services and Level III codes are local codes developed by 
Medicaid agencies, Medicare contractors and private insurers.

A manufacturer of in vitro diagnostic kits or a provider of laboratory services may request establishment of a Category I CPT 
code for a new product. Assignment of a specific CPT code ensures routine processing and payment for a diagnostic test by 
both private and government third-party payors.

The AMA has specific procedures for establishing a new CPT code and, if appropriate, for modifying existing nomenclature to 
incorporate a new test into an existing code. If the AMA concludes that a new code or modification of nomenclature is 
unnecessary, the AMA will inform the requestor how to use one or more existing codes to report the test.

While the AMA's decision is pending, billing and collection may be sought under an existing, non-specific CPT code. A 
manufacturer or provider may decide not to request assignment of a CPT code and instead use an existing, non-specific code for 
reimbursement purposes. However, use of such codes may result in more frequent denials and/or requests for supporting 
clinical documentation from the third-party payor and in lower reimbursement rates, which may vary based on geographical 
location.

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CMS reimbursement rates for clinical diagnostic tests are defined by HCPS code in the Clinical Laboratory Fee Schedule 
(CLFS). In 2012, the AMA added 127 new CPT codes for molecular pathology services that became effective on January 1, 
2013. These new CPT codes are biomarker specific and were designed to replace the previous methodology of billing for 
molecular pathology testing, which involved “stacking” a series of non-biomarker specific CPT codes together to describe the 
testing performed. CMS issued final national reimbursement prices for the new CPT codes in November 2013. These federal 
reimbursement amounts are widely acknowledged to be lower than the reimbursement obtained by the now outdated “stacking” 
method, but commercial payors and Medicare contractors are still in the process of solidifying their coverage and 
reimbursement policies for the testing described by these new CPT codes. As of January 1, 2018, in accordance with the 
Protecting Access to Medicare Act of 2014 (PAMA), CMS began calculating Medicare reimbursement rates for certain clinical 
diagnostic tests using weighted median private payor rates, which are based on rate information reported by applicable 
laboratories. This new rate methodology means the lower reimbursement rates previously experienced in the field of molecular 
pathology testing now extends to additional diagnostic testing codes on the CLFS.

Coverage Decisions. When deciding whether to cover a particular diagnostic test, private and government third-party payors 
generally consider whether the test is a contractual benefit and, if so, whether it is reasonable and necessary for the diagnosis or 
treatment of an illness or injury. However, most third-party payors do not cover experimental services. Coverage determinations 
are often influenced by current standards of practice and clinical data, particularly at the local level. CMS, the government 
agency responsible for overseeing the Medicare program, has the authority to make coverage determinations on a national 
basis, but most Medicare coverage decisions are made at the local level by contractors that administer the Medicare program in 
specified geographic areas. Private and government third-party payors have separate processes for making coverage 
determinations, and private third-party payors may or may not follow Medicare's coverage decisions. If a third-party payor has 
a coverage determination in place for a particular diagnostic test, billing for that test must comply with the established policy. 
Otherwise, the third-party payor makes reimbursement decisions on a case-by-case basis.

Payment. Payment for covered diagnostic tests is determined based on various methodologies, including prospective payment 
systems and fee schedules. In addition, private third-party payors may negotiate contractual rates with participating providers or 
set rates as a percentage of the billed charge. Diagnostic tests furnished to Medicare inpatients generally are included in the 
bundled payment made to the hospital under Medicare's Inpatient Prospective Payment System, utilizing Diagnosis Related 
Groups (DRGs) depending on the patient’s condition. Payment for diagnostic tests furnished to Medicare beneficiaries in 
outpatient settings is based on the CLF, under which a payment amount is assigned to each covered CPT code, or through the 
Outpatient Prospective Payment System (OPPS), which is the outpatient equivalent of the DRG model. The law technically 
requires fee schedule amounts to be adjusted annually by the percentage increase in the consumer price index (CPI) for the 
prior year, but Congress has frozen payment rates in certain years. Medicaid programs generally pay for diagnostic tests based 
on a fee schedule, but reimbursement varies by state.

European Union

In the European Union, the reimbursement mechanisms used by private and public health insurers vary by country. For the 
public systems, reimbursement is determined by guidelines established by the legislator or responsible national authority. As 
elsewhere, inclusion in reimbursement catalogues focuses on the medical usefulness, need, quality and economic benefits to 
patients and the healthcare system. Acceptance for reimbursement comes with cost, use, and often volume restrictions, which 
again can vary by country.

Conflict Minerals

U.S. legislation has been enacted to improve transparency and accountability concerning the sourcing of conflict minerals from 
mines located in the conflict zones of the Democratic Republic of Congo (DRC) and its adjoining countries. The term conflict 
minerals currently encompasses tantalum, tin, tungsten (or their ores) and gold. Certain of our instrumentation product 
components which we purchase from third party suppliers contain gold. This U.S. legislation requires manufacturers, such as 
us, to investigate our supply chain and disclose if there is any use of conflict minerals originating in the DRC or adjoining 
countries. We conduct due diligence measures annually to determine the presence of conflict minerals in our products and the 
source of any such conflict minerals. Because we do not purchase conflict minerals directly from smelters or refineries, we rely 
on our suppliers to specify to us their Conflict Minerals sources and declare their conflict minerals status. We disclosed our 
most recent Conflict Minerals findings to the Securities Exchange Commission for the calendar year ending December 31, 2017 
on Form SD on May 17, 2018 and will provide updated disclosure to the Securities Exchange Commission as required. 

Organizational Structure 

QIAGEN N.V. is the holding company for more than 50 consolidated subsidiaries, many of which have the primary function of 
distributing our products and services on a regional basis. Certain subsidiaries also have research and development or 
production activities. A listing of our significant subsidiaries and their jurisdictions of incorporation is included in Note 29 
"Consolidated Companies" of the Consolidated Financial Statements.  

22

Description of Property

Our production and manufacturing facilities for consumable products are located in Germany, the United States and China. Our 
facilities for software development are located in the United States, Germany, Poland, Denmark and Romania. In recent years, 
we have made investments in automated and interchangeable production equipment to increase our production capacity and 
improve efficiency. Our production and manufacturing operations are highly integrated and benefit from sophisticated 
inventory control. Production management personnel are highly qualified, and many have advanced degrees in engineering, 
business and science. We also have installed and continue to expand production-planning systems that are included in our 
integrated information and control system based on the SAP R/3 business software package from SAP AG. Worldwide, we use 
SAP software to integrate most of our operating subsidiaries. Capital expenditures for property, plant and equipment and 
software totaled $109.8 million, $90.1 million and 2018 and 2017, respectively. 

We have an established quality system, including standard manufacturing and documentation procedures, intended to ensure 
that products are produced and tested in accordance with the FDA's Quality System Regulations, which impose current Good 
Manufacturing Practice (cGMP) requirements. For cGMP production, special areas were built in our facilities in Hilden, 
Germany, Germantown, Maryland and Shenzhen, China. These facilities operate in accordance with cGMP requirements. 

The consumable products manufactured at QIAGEN GmbH in Germany, and QIAGEN Sciences LLC in Maryland, are 
produced under ISO 9001: 2008, ISO 13485:2012, ISO 13485:2003 CMDCAS. Our certifications form part of our ongoing 
commitment to provide our customers with high-quality, state-of-the-art sample and assay technologies under our Total Quality 
Management system. 

Our facilities in Hilden, Germany, currently occupy a total of approximately 786,000 square feet. Our most recent expansion to 
these facilities was in 2018 and included approximately 6,400 square feet of clean room space for Stat-DX integration. Our 
production capacity is increased through our manufacturing and research facilities in the United States. QIAGEN Sciences, 
LLC owns a 24-acre site in Germantown, Maryland. The 285,000 square foot Germantown facility consists of several buildings 
in a campus-like arrangement and can accommodate over 500 employees. There is room for future expansion of up to 300,000 
square feet of facility space. In 2015, we completed expansion of our research and production facilities in Hilden, Germany and 
renovations of administrative facilities in Germantown, Maryland.

We lease a facility in Frederick, Maryland comprising 42,000 square feet for manufacturing, warehousing, distribution and 
research operations. We also lease facilities in Massachusetts with 24,860 square feet in Waltham for NGS system development 
and 44,000 square feet in Beverly for enzyme manufacturing. Additionally, we have leased facilities in Redwood City, 
California with 12,700 square feet and Cary, North Carolina with 10,900 square feet focused on bioinformatics and 19,000 
square feet in Minden, Nevada for Service Solutions. We have shared service centers which lease facilities in Wroclaw, Poland 
(42,100 square feet) and Manila, Philippines (20,200 square feet). Additionally, we lease facilities in Shenzhen, China and 
Manchester, United Kingdom for research operations. Other subsidiaries throughout the world lease smaller amounts of space. 
Our corporate headquarters are located in leased office space in Venlo, The Netherlands.

 We believe our existing production and distribution facilities can support anticipated production needs for the next 36 months. 
Our production and manufacturing operations are subject to various federal, state, and local laws and regulations including 
environmental regulations. We do not believe we have any material issues relating to these laws and regulations. 

Operating and Financial Review and Prospects for the Period from January 1, 2018 to December 31, 2018 

Results of Operations, Financial Position

Results of Operations

Overview

We are a leading global provider of Sample to Insight solutions to transform biological materials into valuable molecular 
insights. QIAGEN sample technologies isolate and process DNA, RNA and proteins from any biological sample, such as blood 
or tissue. Assay technologies make these biomolecules visible and ready for analysis, such as identifying the DNA of a virus or 
a mutation of a gene. Bioinformatics solutions integrate software and cloud-based resources to interpret increasing volumes of 
biological data and report relevant, actionable insights. Our automation solutions tie these together in seamless and cost-
effective molecular testing workflows.

We sell our products - consumables, automated instrumentation systems using those technologies, and bioinformatics to analyze 
and interpret the data - to four major customer classes:

• 

Molecular Diagnostics - healthcare providers engaged in many aspects of patient care requiring accurate diagnosis 
and insights to guide treatment decisions in oncology, infectious diseases and immune monitoring

23

• 

• 

• 

Applied Testing - government or industry customers using molecular technologies in non-healthcare fields, such as 
forensics and human identification 
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 

We market products in more than 130 countries, mainly through subsidiaries in markets we believe have the greatest sales 
potential in Europe, Asia, the Americas and Australia. We also work with specialized independent distributors and importers. As 
of December 31, 2018, we employed approximately 5,000 people in more than 35 locations worldwide. 

Recent Acquisitions

We have made a number of strategic acquisitions and implemented other strategic transactions since 2016, aiming to achieve 
market-leading positions with innovative technologies in high-growth areas of molecular diagnostics and research. These 
transactions have enhanced our product offerings and technology platforms, as well as our geographic footprint. They include:

• 

• 

• 

In April 2018, QIAGEN acquired STAT-Dx, a privately held company with a next-generation multiplex PCR system 
that enables fast, cost-effective and flexible syndromic testing. Following the acquisition, we launched the novel 
Sample to Insight system, known as QIAstat-Dx, in Europe, delivering one-step, fully integrated molecular analysis of 
widespread syndromes based on QIAGEN chemistries. The first two CE-IVD marked assays provide differential 
diagnosis of serious respiratory and gastrointestinal infections. FDA submission was completed in late 2018, and U.S. 
launch is expected in 2019. A broad menu of tests is under development for syndromes in infectious disease, oncology 
and other areas. QIAGEN acquired STAT-Dx for approximately $149 million in cash and additional future payments 
of up to about $44 million based on the achievement of regulatory and commercial milestones. 

In September 2018, QIAGEN announced a strategic partnership with NeuMoDx Molecular, Inc. to commercialize two 
next-generation, fully integrated automation systems for PCR testing. The NeuMoDx 288 (high-throughput version) 
and NeuMoDx 96 (mid-throughput version) systems help clinical laboratories process increasing molecular test 
volumes and deliver more rapid diagnostic insights. QIAGEN is initially distributing the systems and related 
consumables in Europe and other major markets outside the United States, while NeuMoDx is currently distributing 
these instruments within the United States. The two companies entered into a merger agreement under which QIAGEN 
can acquire all NeuMoDx shares that it does not currently own at a price of approximately $234 million (QIAGEN 
currently owns 19.9% of NeuMoDx), subject to regulatory and operational milestones. The systems offer a growing 
menu of in vitro diagnostic tests and the ability to flexibly and efficiently process both commercial and laboratory-
developed tests. 

In January 2019, QIAGEN announced plans to develop next-generation systems for digital PCR, one of the fastest-
growing molecular testing applications in the life sciences industry, and acquired the digital PCR assets of 
Formulatrix, Inc., a developer of laboratory automation solutions. Combining the Formulatrix assets with QIAGEN 
technologies and automation, we expect to bring to market a fully integrated digital PCR solution with a targeted 
launch in 2020. The system will offer highly automated workflows, quicker time-to-result, and higher multiplexing 
and throughput flexibility than current digital PCR platforms. QIAGEN paid Formulatrix $125 million in cash upon 
closing and agreed to future milestone payments of approximately $136 million in 2020.

•  Also in January 2019, QIAGEN acquired N-of-One, Inc., a pioneer in molecular oncology decision support services, 

to strengthen our bioinformatics leadership in clinical NGS interpretation. The acquisition enables us to offer a broader 
range of software, content and service-based solutions. N-of-One’s services and proprietary database will be integrated 
into QIAGEN Clinical Insight (QCI), adding medical interpretation and real-world evidence insights and offering 
robust decision support in oncology. N-of-One’s somatic cancer database with more than 125,000 anonymized patient 
samples will further increase QIAGEN’s lead as provider of the industry’s largest genomics knowledge base.

• 

In April 2018, QIAGEN took steps to streamline our presence in veterinary testing through a strategic partnership with 
Fidelio Capital, a Swedish firm with significant investments in animal health. QIAGEN transferred our portfolio of 
veterinary assays and the Leipzig site to INDICAL BIOSCIENCE GmbH, a new company created by Fidelio. Under 
the agreement, QIAGEN manufactures and supplies sample processing solutions for INDICAL.

•  QIAGEN entered into a joint venture in May 2017 with Sichuan Maccura Biotechnology Co., Ltd., a leading in vitro 

diagnostics company in China, to accelerate the growth of QIAGEN’s GeneReader NGS System. Known as 
MAQGEN China and based in Chengdu, Sichuan Province, the venture will develop local adaptations, pursue 
regulatory paths for the GeneReader and leverage Maccura’s broad customer network to expand the system’s adoption 
in laboratories across China. Maccura owns 60% of the joint venture and QIAGEN owns 40%. QIAGEN’s own 

24

operations in China continue as a stand-alone company, focusing on our other products and services for customers 
such as QuantiFERON-TB and the Life Sciences portfolio.

•  QIAGEN took steps in late 2017 to streamline its product portfolio in China and focus on growth areas by 

discontinuing commercialization of some non-core PCR tests and externalizing the HPV test franchise for cervical 
cancer screening in China to a third-party company. In January 2018, a partnership became effective with a Chinese 
company that has taken over R&D, commercial distribution, and the related QIAGEN employees and infrastructure of 
the HPV test franchise in China. QIAGEN is a minority shareholder of this company. 

• 

• 

In January 2017, QIAGEN acquired OmicSoft Corporation, a privately held company based in the Research Triangle 
area of North Carolina, to expand our industry-leading bioinformatics offering with complementary solutions enabling 
scientists to visualize and mine large institutional and publicly available “omics” datasets. The OmicSoft software 
solutions meet a growing need in discovery and translational research to access and manage huge amounts of data on 
DNA, RNA and other biological variables generated by next-generation sequencing studies.

In 2016, QIAGEN acquired Exiqon A/S, a publicly traded company based in Vedbaek, Denmark, expanding our 
leadership position in Sample to Insight solutions for RNA analysis. Exiqon’s RNA analysis solutions, with proprietary 
Locked Nucleic Acid (LNA) technology, are used by academic, biotech and pharmaceutical researchers worldwide to 
explore correlations between gene activity and the development of cancer and other diseases. In two steps during 2016, 
we paid a total of $100.7 million for 100% of the shares of Exiqon. In 2017, Exiqon’s product offering was fully 
integrated into QIAGEN, providing customers of both companies ready access to the combined portfolio of solutions. 

Our financial results include the contributions of recent acquisitions and divestitures from their effective dates, as well as costs 
related to the transactions and integration of the acquired companies, such as the relocation and closure of certain facilities. 

We determined that we operate as one business segment in accordance with IFRS 8 Operating Segments. Our chief operating 
decision maker (CODM) makes decisions on business operations and resource allocation based on evaluations of the QIAGEN 
Group as a whole. Considering the acquisitions made during 2018, we determined that we still operate as one business segment. 
We provide certain revenue information by customer class to allow better insight into our operations. This information is 
estimated using certain assumptions to allocate revenue among the customer classes.

Year Ended December 31, 2018, Compared to 2017 

In 2018, net sales grew 6% to $1.50 billion compared to $1.42 billion in 2017 reflecting our organic business expansion in both 
consumables and related revenues and instruments as well as growth due to the April 2018 acquisition of STAT-Dx Life, S.L. 
(STAT-Dx), a privately-held company developing the next generation of multiplex diagnostics for one-step, fully integrated 
molecular analysis of common syndromes using a novel system based on real-time PCR technology and proven QIAGEN 
chemistries. We experienced good volume gains across the consumables and related revenues portfolio (+6% / 88% of sales), 
while instrument sales (+7% / 12% of sales) were supported by solid placements of the QIAsymphony automation system.

Customer classes: An overview of performance in QIAGEN's four customer classes:

Net sales by product category and customer class

Consumables and related revenues

Instruments

Molecular Diagnostics(1)

Applied Testing

Pharma

Academia

Sales
(In $ m)

$1,315

$186

$732

$137

$291

$342

Full-year 2018

% 
change

+6%

+7%

+7%

—%

+6%

+6%

% of
sales

88%

12%

49%

9%

19%

23%

(1)  Includes companion diagnostic co-development revenues ($58 million, +36%) and U.S. HPV sales ($19 million, -33%, 1% of sales). 

Molecular Diagnostics grew at a 7% rate due, in part, to the QuantiFERON-TB test delivering 21% growth and a record year 
in Precision Medicine supported by the expansion in revenues from companion diagnostic co-development projects. This more 
than offset the decline in U.S. HPV sales ($19 million in 2018 as compared to $28 million in 2017), the divestment of the HPV 
test franchise in China to a third party in January 2018, and the accelerated reduction of low-margin, third-party instrument 
service contracts during the final months of 2018 to ensure service capacity for several new instrument launches.

25

 
Applied Testing was impacted by the April 2018 divestment of the veterinary assays portfolio in addition to changes made 
during the later portion of 2018 to a third-party research and development project linked to this divestment. Excluding the 
impact of this divestment, Applied Testing grew due to expansion of the forensics portfolio in the Americas.

Pharma experienced 6% sales growth 2018 as a result of solid gains in both instruments and consumables during the course of 
the year with gains in the Americas and Europe, Middle East and Africa regions. 

Academia was led by a strong performance in the Asia Pacific / Japan region during 2018 with overall robust growth in 
instrument revenues along with more modest growth for consumables.  

Net sales by geographic region

Americas

Europe / Middle East / Africa

Asia-Pacific / Japan

Sales
(In $ m)

$693

$490

$315

Full-year 2018

%
change

+6%

+6%

+6%

% of
sales

46%

33%

21%

Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey ($246 million, +5%, 16% of sales)
Rest of world represented less than 1% of net sales. 

Geographic regions: All geographic regions grew at solid single-digit rates in 2018. The Europe / Middle East / Africa region 
experienced improving trends in Italy, Switzerland and Turkey during the year in addition to benefits from the geographic 
expansion in the Middle East. The Asia-Pacific / Japan advanced due partially to improving performance in Japan and China 
during the second half of 2018 despite a weaker performance in South Korea in part due to a 2017 QuantiFERON-TB tender in 
the country. The Americas advanced at a 6% rate due to gains in Latin America and Canada and the strong underlying U.S. 
performance after considering the decline in instrument service revenues in the Molecular Diagnostics customer class. 

Gross Profit

Gross profit was $992.8 million, or 66% of net sales, in 2018, compared with $912.6 million, or 64% of net sales, in 2017. 
Generally, our consumables and related products have a higher gross margin than our instrumentation products and service 
arrangements. Fluctuations in the sales levels of these products and services can result in fluctuations in gross margin between 
periods. The 2018 growth in consumables contributed to the higher margin in 2018. Further, gross profit in 2018 was impacted 
by $1.6 million in restructuring charges while 2017 was impacted by restructuring charges of $4.4 million. 

Amortization expense related to developed technology and patent and license rights, which have been acquired in business 
combinations, is included in cost of sales. The amortization expense on acquisition-related intangibles within cost of sales 
decreased to $56.7 million in 2018 from $72.7 million in 2017 reflecting the end of the amortization period of intangibles 
acquired in 2007. Acquisition-related intangible amortization may increase in the future should we make further acquisitions.

Research and Development

Research and development expenses increased by 8% to $157.9 million (11% of net sales) in 2018, compared to $146.0 million 
(10% of net sales) in 2017. The increase in research and development costs during 2018  reflects our ongoing investments in 
NGS and our life sciences portfolio, together with regulatory activity in support of new products. Research and development 
costs during 2018 also reflect incremental costs due to the acquisition of STAT-Dx in January 2018. Lower expense in 2017 
includes a $0.7 million reduction in costs as a result of forfeitures of share-based compensation. As we continue to discover, 
develop and acquire new products and technologies, we expect to incur additional expenses related to facilities, licenses and 
employees engaged in research and development. Overall, research and development costs are expected to increase as a result 
of seeking regulatory approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE 
approval of certain assays or instruments. Further, business combinations, along with the acquisition of new technologies, may 
increase our research and development costs in the future. We have a strong commitment to innovation and expect to continue 
to make investments in our research and development efforts.

Sales and Marketing

Sales and marketing expenses were $431.3 million (29% of net sales) in 2018 from $415.0 million (29% of net sales) in 2017. 
Sales and marketing expenses are primarily associated with personnel, commissions, advertising, trade shows, publications, 
freight and logistics expenses, and other promotional expenses. During 2018, amortization expense on acquisition-related 
intangibles within operating expense decreased to $39.0 million, compared to $39.4 million in 2017. We expect acquisition-
related intangible amortization will increase as a result of our future acquisitions. We experienced efficiencies due to a lower 

26

cost base following the realignment of marketing activities as part of restructuring projects which were offset by higher 
personnel costs, including the expansion into China and external services, as well as initiatives for new product launches. Sales 
and marketing expenses are primarily associated with personnel, commissions, advertising, trade shows, publications, freight 
and logistics expenses, and other promotional expenses. We anticipate that absolute sales and marketing costs will increase 
along with new product introductions and growth in sales of our products, but decrease as a percentage of sales.

General and Administrative, Restructuring, Integration and Other

General and administrative, restructuring, integration and other costs decreased by 24% to $147.7 million (10% of net sales) in 
2018 from $193.6 million (14% of net sales) in 2017. The decrease in 2018 reflects lower litigation related charges which 
totaled $10.5 million in 2018 as compared to $45.3 million in 2017. Additionally, 2018 includes a $4.8 million revaluation gain 
of a minority interest investment in connection with the acquisition as discussed in Note 5 "Acquisitions and Divestitures", and 
overall lower acquisition and integration costs which were partially offset higher compensation costs. As we further integrate 
the acquired companies and pursue other opportunities to gain efficiencies, we expect to continue to incur additional 
restructuring and business integration costs in 2019. Over time, we believe the restructuring and integration activities will 
reduce expenses as we improve efficiency in operations.

Financial Income (Expense)

For the year ended December 31, 2018, financial income increased to $20.9 million from $10.6 million in 2017. Financial 
income includes interest earned on cash, cash equivalents and short term investments, income related to certain interest rate 
derivatives as discussed in Note 25 "Financial Risk Factors and Use of Derivative Financial Instruments" in the accompanying 
consolidated financial statements and other components including the interest portion of operating lease transactions. 

Financial expense increased to $67.3 million in 2018, compared to $49.7 million in 2017. Financial expense primarily relates to 
debt, discussed in Note 15 "Financial Debts" in the accompanying consolidated financial statements. 

QIAGEN N.V.'s presentation currency is the U.S. dollar, and most of our subsidiaries' functional currencies are the local 
currencies of the 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 shareholders' 
equity at historical rates. Translation gains or losses are recorded in shareholders' equity, and transaction gains and losses are 
reflected in net income. For the year ended December 31, 2018, we recorded net losses on foreign currency of $12.3 million 
compared to $3.3 million in 2017 due to foreign currency rate fluctuations.

Gains from investments accounted for by the equity method in 2018, was $2.6 million compared to $3.2 million during the year 
December 31, 2017 as discussed further in Note 11 "Equity Accounted Investments" .

Other Financial Income (Expense), net

Other financial expense, net was $69.5 million for the year ended December 31, 2018 and includes losses of $65.7 million 
related to the fair value change in the Warrants, $76.5 million related to the embedded cash conversion option, and a loss $2.1 
million related to the change in fair value of interest rate derivatives partially offset by gains of $74.7 million related to the 
change in the fair value of the Call Options, all discussed in Note 25 "Financial Risk Factors and Use of Derivative Financial 
Instruments". Other financial income, net was 39.4 million for the year ended 2017 and includes gains of $40.8 million related 
to the change in the fair value change in the Warrants, gains of $37.4 million related to the change in the fair value of the call 
option mostly offset by $36.7 million loss related to the embedded cash conversion option, and loss of $2.2 million related to 
the change in fair value of interest rate derivatives, all discussed in Note 25 .

Provision for Income Taxes 

Our effective tax rates differ from The Netherlands statutory tax rate of 25% due in part to our operating subsidiaries being 
exposed to effective tax rates ranging from zero to more than 40%. In 2018 and 2017, our effective tax rates were 23.0% and 
57.1%, respectively. During 2017, the 57.1% reflects the impacts of the U.S. tax reform. Because of the tax reform, we revalued 
our U.S. deferred tax assets and liabilities to reflect the corporate income tax rate change from 35% to 21%. The deferred tax 
asset related to U.S. interest carry forwards has been reduced from $60.8milion to zero. During 2017, we increased accruals for 
tax contingencies by $22.1 million, primarily related to ongoing income tax audits.

In 2018 and 2017, tax expense on foreign operations was favorably impacted by lower income tax rates and partial tax 
exemptions on foreign income primarily derived from operations in Germany, Singapore, Luxembourg, Ireland and 
Switzerland. These foreign tax benefits are due to a combination of favorable tax laws, rules, rulings, and exemptions in these 
jurisdictions. In particular, we have pre-tax income in Germany which is statutorily exempt from trade tax on intercompany 
foreign royalty income. Further, we have intercompany financing arrangements through Luxembourg and Ireland in which the 
intercompany income is partially exempt. See Note 16 "Income Taxes" to the consolidated financial statements for a full 

27

reconciliation of the effective tax rate to The Netherlands statutory rate. See Note 16 "Income Taxes" to the consolidated 
financial statements for a full reconciliation of the effective tax rate to The Netherlands statutory rate.

In future periods, our effective tax rate may fluctuate from similar or other factors as discussed in “Changes in tax laws or their 
application could adversely affect our results of operations or financial flexibility” in Principle Risks and Uncertainties.

Liquidity and Capital Resources

To date, we have funded our business primarily through internally generated funds, debt, and private and public sales of equity. 
Our primary use of cash has been to support continuing operations and our investing activities including capital expenditure 
requirements and acquisitions. As of December 31, 2018 and 2017, we had cash and cash equivalents of $1.16 billion and 
$657.7 million, respectively. We also had current financial assets of $214.6 million at December 31, 2018. Cash and cash 
equivalents are primarily held in U.S. dollars and euros, other than those cash balances maintained in the local currency of 
subsidiaries to meet local working capital needs. At December 31, 2018, cash and cash equivalents had increased by $501.4 
million from December 31, 2017, primarily as a result of cash provided by operating activities of $363.5 million and cash 
provided by financing activities of $360.4 million, partially offset cash used in investing activities of $215.3 million. As of 
December 31, 2018 and 2017, we had working capital of $1.143 billion and $1.304 billion, respectively.

Operating Activities. For the years ended December 31, 2018 and 2017, we generated net cash from operating activities of 
$363.5 million and $294.8 million, respectively. While net income was $104.9 million in 2018, non-cash components in income 
included $214.5 million of depreciation and amortization and $17.0 million of non-cash impairments due to the impairment of 
cost-method investments as further discussed in Note 7 "Financial Assets" and impairments of software as discussed in Note 12 
"Goodwill and Intangible Assets". Operating cash flows include a net increase in working capital of $78.3 million excluding 
changes in fair value of derivative instruments. The current period change in working capital is primarily due to increased 
inventories, accounts receivable and taxes payable, and decreased in accrued and other current liabilities. Because we rely 
heavily on cash generated from operating activities to fund our business, a decrease in demand for our products, longer 
collection cycles or significant technological advances of competitors would have a negative impact on our liquidity.

Investing Activities. Approximately $215.3 million of cash was used in investing activities during 2018, compared to $472.3 
million during 2017. Investing activities during 2018 consisted principally of $568.0 million for purchases of short-term 
investments, $55.8 million in cash paid for purchases of property and equipment, $3.5 million paid in connection with 
derivative collateral arrangements as well as $95.0 million paid for intangible assets and $9.4 million paid for strategic 
investments in privately held companies, partially offset by $691.8 million from the sale of short-term investments. 
Additionally, during 2018 cash paid for acquisitions, net of cash acquired, totaled $172.8 million. 

Financing Activities. For the year ended December 31, 2018, cash provided by financing activities was $360.4 million 
compared to cash used in financing activities of $387.2 million in 2017. Financing activities during 2018 consisted primarily of 
$494.9 million net cash proceeds from the 2018 cash convertible offering. We used $97.3 million of the proceeds from the cash 
convertible offering to pay the premium for a call option related to the cash convertible notes, and simultaneously received 
$72.4 million from the sale of Warrants, for a net cash outlay of $24.9 million for the call spread overlay. Additionally in 2018, 
we repurchased QIAGEN shares of $104.7 million in connection with the fifth share repurchase program discussed in Note 17 
"Equity". Cash used in other financing activities during the year ended December 31, 2018, consisted primarily of $5.5 million 
paid for contingent consideration, together with $2.0 million paid in connection with derivative collateral arrangements.

Other Factors Affecting Liquidity and Capital Resources

In November 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 
2024 (2024 Notes). The net proceeds of the 2024 Notes were $470.0 million, after payment of the net cost of the Call Spread 
Overlay and transaction costs paid through December 31, 2018 as described more fully in Note 15 "Financial Debts". Interest 
on the 2024 Notes is payable semiannually in arrears at a rate of 1.000% per annum. The 2024 Notes will mature on November 
13, 2024 unless repurchased or converted in accordance with their terms prior to such date.

In September 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes which are due in 
2023 (2023 Notes), which are discussed fully in Note 15 "Financial Debts".  Interest on the 2023 Notes is payable semiannually 
in arrears at a rate of 0.500% per annum. The 2023 Notes will mature on September 13, 2023 unless repurchased or converted 
in accordance with their terms prior to such date.

Additionally in 2017, we completed a German private placement of $329.9 million, net of issuance costs, consisting of several 
tranches denominated in either U.S. dollars or Euro at either floating or fixed rates and due at various dates through June 2027 
as described in Note 15.

In October 2016, we extended the maturity of our €400 million syndicated revolving credit facility , which now has a contractual 
lifetime until December 2021 of which no amounts were utilized at December 31, 2018. The facility can be utilized in Euro, 

28

British pounds sterling, Swiss franc or U.S. dollar and bears interest of 0.40% to 1.20% above three months EURIBOR, or 
LIBOR in relation to any loan not in euro, and is offered with interest periods of one, two, three or six months. We have 
additional credit lines totaling €26.6 million  with no expiration date, none of which were utilized as of December 31, 2018. We 
also have capital lease obligations, including interest, in the aggregate amount of $0.1 million, and carry $2.2 billion of long-
term debt, of which $503.6 million is current as of December 31, 2018. 

In March 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 the 2021 
Notes, collectively as the “Cash Convertible Notes” which are discussed fully in Note 15 of the consolidated financial 
statements. 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 on 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.

In October 2012, we completed a U.S. private placement through the issuance of new senior unsecured notes at a total amount 
of $400 million with a weighted average interest rate of 3.66% (settled on October 16, 2012). The notes were issued in three 
series: (1) $73 million 7-year term due in 2019 (3.19%); (2) $300 million 10-year term due in 2022 (3.75%); and (3) $27 
million 12-year term due in 2024 (3.90%).

In connection with certain acquisitions, we could be required to make additional contingent cash payments totaling up to $57.3 
million based on the achievement of certain revenue and operating results milestones as further discussed in Note 19 
"Commitments and Contingencies".

In January 2018, we announced our fifth share repurchase program of up to $200 million of our common shares. During 2018, 
we repurchased 2.9 million QIAGEN shares for $104.7 million (including transaction costs). In April 2016, we announced the 
launch of our fourth $100 million share repurchase program. During 2017, 1.9 million QIAGEN shares were repurchased for 
$61.0 million (including transaction costs). Repurchased shares will be held in treasury in order to satisfy various obligations, 
which include employee share-based remuneration plans. 

In January 2017, we completed a synthetic share repurchase that combined a direct capital repayment with a consolidation of 
shares. The transaction was announced in August 2016 and involved an approach used by various large, multinational Dutch 
companies to provide returns to shareholders in a faster and more efficient manner than traditional open-market purchases. 
$243.9 million was repaid to shareholders through the transaction and the outstanding number of common shares was reduced 
by 8.9 million, or 3.7%. As discussed further in Note 17 "Equity", the capital repayment program was completed in January 
2017. 

We expect that cash from financing activities will continue to be impacted by issuances of our common shares in connection 
with our equity compensation plans and that the market performance of our stock will impact the timing and volume of the 
issuances. Additionally, we may make future acquisitions or investments requiring cash payments, the issuance of additional 
equity or debt financing.

We believe that funds from operations, existing cash and cash equivalents, together with the proceeds from our public and 
private sales of equity, and availability of financing facilities, will be sufficient to fund our planned operations and expansion 
during the coming year. However, any global economic downturn may have a greater impact on our business than currently 
expected, and we may experience a decrease in the sales of our products, which could impact our ability to generate cash. If our 
future cash flows from operations and other capital resources are not adequate to fund our liquidity needs, we may be required 
to obtain additional debt or equity financing or to reduce or delay our capital expenditures, acquisitions or research and 
development projects. If we could not obtain financing on a timely basis or at satisfactory terms, or implement timely 
reductions in our expenditures, our business could be adversely affected.

Quantitative and Qualitative Disclosures About Market Risk

Our market risk relates primarily to interest rate exposures on cash, short-term investments and borrowings and foreign 
currency exposures. Financial risk is centrally managed and is regulated by internal guidelines which require a continuous 
internal risk analysis. The overall objective of our risk management is to reduce the potential negative earnings effects from 
changes in interest and foreign exchange rates. Exposures are managed through operational methods and financial instruments 
relating to interest rate and foreign exchange risks. 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 rates. The principal 
objective of such derivative instruments is to minimize the risks and/or costs associated with global financial and operating 
activities. We do not utilize derivative or other financial instruments for trading or other speculative purposes. All derivatives 
are recognized as either assets or liabilities in the balance sheet and are measured at fair value with any change in fair value 
recognized in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain 

29

exposures. In determining fair value, we consider both the counterparty credit risk and our own creditworthiness, to the extent 
that the derivatives are not covered by collateral agreements with the respective counterparties.

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. We manage our balance sheet exposure on a group-wide basis primarily using foreign exchange 
forward contracts, options and cross-currency swaps.

Interest Rate Derivatives. We are using interest rate derivatives 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 agreed to exchange, at specified 
intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional 
principal amount. 

Further details of our derivative and hedging activities can be found in Note 25 "Financial Risk Factors and Use of Derivative 
Financial Instruments" to the accompanying consolidated financial statements.

Interest Rate Risk

At December 31, 2018, we had $1.16 billion in cash and cash equivalents as well as of $214.6 million of current financial 
assets. Interest income earned on our cash investments is affected by changes in the relative levels of market interest rates. We 
only invest in high-grade investment instruments. A hypothetical adverse 10% movement in market interest rates would not 
have materially impacted our financial statements.

Borrowings against lines of credit are at variable interest rates. We had no amounts outstanding against our lines of credit at 
December 31, 2018. A hypothetical adverse 10% movement in market interest rates would not have materially impacted our 
financial statements. 

At December 31, 2018, we had $2.2 billion of financial debt, of which $206.9 million is at a variable rate. Through the use of 
interest rate derivatives we have swapped $200 million of our fixed rate debt into a variable interest rate based on the 3-months 
LIBOR. A hypothetical adverse 10% movement in market interest rates would not have materially impacted our financial 
statements, as the increased interest expense would have been off-set by increased interest income from our variable rate 
financial assets. 

Foreign Currency Exchange Rate Risk

As a global enterprise, we are subject to risks associated with fluctuations in foreign currencies with regard to our ordinary 
operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions as well as 
future cash flows resulting from anticipated transactions including intra-group transactions.

A significant portion of our revenues and expenses are earned and incurred in currencies other than the U.S. dollar. The euro is 
the most significant such currency, with others including the British pound, Japanese yen, Chinese renminbi, Swiss franc, and 
Canadian and Australian dollars. Fluctuations in the value of the currencies in which we conduct our business relative to the 
U.S. dollar have caused and will continue to cause U.S. dollar translations of such currencies to vary from one period to 
another. Due to the number of currencies involved, the constantly changing currency exposures, and the potential substantial 
volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations upon future operating results. In 
general terms, depreciation of the U.S. dollar against our other foreign currencies will increase reported net sales. However, this 
effect is, at least partially, offset by the fact that we also incur substantial expenses in foreign currencies.

We have significant production and manufacturing facilities located in Germany and intercompany sales of inventory also 
expose us to foreign currency exchange rate risk. Intercompany sales of inventory are generally denominated in the local 
currency of the subsidiary purchasing the inventory in order to centralize foreign currency risk with the manufacturing 
subsidiary. We use an in-house bank approach to net and settle intercompany payables and receivables as well as intercompany 
foreign exchanged swaps and forward contracts in order to centralize the foreign exchange rate risk to the extent possible. We 
have entered in the past and may enter in the future into foreign exchange derivatives including forwards, swaps and options to 
manage the remaining foreign exchange exposure.

Our Culture

QIAGEN’s culture is based on the “3I” framework that expresses the Company’s culture, leadership principles and how 
employees are expected to act. The 3I principles are (1) Identity - reflecting our culture and the core values of passion, quality, 
integrity, engagement and innovation; (2) Inspire - reflecting our leadership style that transmits our values and inspires our 
employees, with particular focus on influence, motivation, stimulation and development; and (3) Impact - reflecting how we 
manage the Company and how our value-based actions make the difference, with particular focus on entrepreneurial decision-
making, accountability and focus.

30

QIAGEN is committed to conducting business lawfully, ethically, and with high integrity. These fundamental values and 
principles are the undisputed key to the long-term success of our company. Our Corporate Code of Conduct and Ethics, which 
is available in 11 languages and which is accompanied by a number of specific corporate compliance policies, translates the 
legal, regulatory and ethical requirements which apply to our business into clear, precise and understandable guidelines for our 
employees. These policies, as the QIAGEN Anti-Corruption Policy, are collected in a Global Policy Manual which is physically 
provided to all employees worldwide. Each employee must acknowledge the acceptance and understanding of the policies 
included in the Global Policy Manual. Compliance awareness of our employees in all areas of the world is further increased by 
a global training program.

Employees

As of December 31, 2018, we employed 4,952 individuals, of which 21% worked in research and development, 40% in sales, 
22% in production/logistics, 6% in marketing and 11% in administration 

Region

Americas

Europe, Middle East &
Africa

Asia Pacific & Rest of
World
December 31, 2018

Research &
Development

231

775

50
1,056

Sales

Production

Marketing

Administration

Total

559

762

669
1,990

277

656

134
1,067

77

155

76
308

86

322

123
531

1,230

2,670

1,052
4,952

At December 31, 2017, we employed 4,688 individuals. Management believes that its relations with regional labor unions and 
employees are good.

Our success depends, to a significant extent, on key members of our management and our scientific staff. The loss of such 
employees could have a material adverse effect on QIAGEN. Our ability to recruit and retain qualified skilled personnel to 
perform future research and development work will also be critical to our success. Due to the intense competition for 
experienced scientists from numerous Pharmaceutical and biotechnology companies and academic and other research 
institutions, there can be no assurance that we will be able to attract and retain such personnel on acceptable terms. Our planned 
activities will also require additional personnel, including management, with expertise in areas such as manufacturing and 
marketing, and the development of such expertise by existing management personnel. The inability to acquire such personnel or 
develop such expertise could have a material adverse impact on our operations. 

Workforce Diversity

We have a long-standing commitment to developing a diverse leadership team, including the Managing Board and the 
Supervisory Board, with a broad range of experience, skills and capabilities. In nominating candidates for these boards, we 
support the trend toward higher participation of women. We are committed to expanding diversity while pursuing individuals 
for these boards with a unique blend of scientific and commercial expertise and experience that will contribute to the future 
success of its business. Internally, management development programs support the career advancement of leaders regardless of 
gender and other factors. As a result, a number of women are in key leadership roles, particularly in commercial and operational 
positions around the world. In line with this long-standing commitment, the Supervisory Board will take this into account in the 
future when proposing members for election or re-election to its Board without compromising QIAGEN's commitment to hiring 
the best individuals for positions without any discrimination. The current size of the Managing Board is two members, so 
achieving a diversity goal as measured solely by a percentage of overall membership is difficult to achieve. At the same time, 
QIAGEN has increased the diversity of its senior leadership team and will continue to do so in the future.

Compensation of Managing Board Members and Supervisory Directors

Remuneration policy 

The objective of our remuneration policy is to attract and retain the talented, highly qualified international leaders and skilled 
individuals, who enable QIAGEN to achieve its short and long-term strategic initiatives and operational excellence. Our 
remuneration policy aligns remuneration with individual performance, corporate performance and fosters sustainable growth 
and long-term value creation in the context of QIAGEN’s social responsibility and stakeholders’ interest. 

The remuneration policy and overall remuneration levels are benchmarked regularly, against a selected group of companies and 
key markets in which QIAGEN operates, to ensure overall competitiveness. QIAGEN participates in various compensation 
benchmarking surveys that provide information on the level, as well as the structure, of compensation awarded by various 
companies and industries for a broad range of positions around the world. The companies in the peer group are selected on the 

31

basis of market capitalization, competitors for talent, similar complexity and international spread, operating in similar 
industries.

The performance of the Managing Board members is measured annually against a written set of goals. The remuneration of the 
Managing Board members is linked to the achievement of QIAGEN’s strategic and financial goals. To ensure that remuneration 
is linked to performance, a significant proportion of the remuneration package is variable and contingent on performance of the 
individual and the company. These goals are set at ambitious levels each year to motivate and drive performance, with a focus 
on achieving both long-term strategic initiatives and short-term objectives based on the annual operative planning. Performance 
metrics used for these goals include the achievement of financial and non-financial targets.

The remuneration package of the Managing Board members consists of a combination of base salary, short term variable cash 
award and several elements of long term incentives (together, ‘total direct compensation’). In addition, the members of the 
Managing Board receive a pension arrangement and other benefits that are standard in our industry, such as a company car. 

The total target remuneration package of the Managing Board members is appropriately set against a variety of factors which 
includes external and internal equity, experience, complexity of the position, scope and responsibilities. We aim to provide the 
members of the Managing Board a total direct compensation at market median level. 

The structure of the remuneration package for the Managing Board is designed to balance short-term operational excellence 
with long-term sustainable value creation while taking into account the interests of its stakeholders. As such a significant part of 
the total remuneration of the Managing Board members consist of variable remuneration which can differ substantially from 
year to year depending on our corporate results and individual performance and may include equity-based compensation which 
may be subject to vesting conditions over a period of up to 10 years.

Reference is made to the additional disclosures in the Corporate Governance Report.

Risk Management:

Our risk management approach embodies the key elements of a sound risk management system including (1) active 
Supervisory Board and senior management involvement; (2) adequate policies and procedures; (3) adequate risk management; 
monitoring and information systems; and (4) comprehensive internal controls.

QIAGEN is managed by a Managing Board and an independent Supervisory Board appointed by the General Meeting of 
Shareholders. One of the Managing Board's responsibilities is the oversight of the risk management system. The Managing 
Board has developed and implemented strategies, controls and mitigation measures to identify current and developing risks as 
part of the risk management system. Risk management policies and procedures are embodied in our corporate governance, code 
of ethics and financial reporting controls and procedures. A variety of functional experts evaluate these business risks, 
attempting to mitigate and manage these risks on an ongoing basis. 

Identified risks are subdivided into three types: 

•  A base business risk that is specific to us or our industry and threatens our existing business;

•  A business growth risk that is specific to us or our industry and threatens our future business growth; and 

•  An underlying business risk that is not specific to us or our industry, but applies to a larger number of public 

companies. 

All identified risks are evaluated based on their likelihood of occurring and their potential impact (estimated in monetary terms) 
in disrupting our progress in achieving our business objectives. The overall risk management goal is to identify risks that could 
significantly threaten our success and to allow management on a timely basis the opportunity to successfully implement 
mitigation actions. The results of the risk assessment, and any updates, are reported to the Audit Committee of the Supervisory 
Board on a regular basis. A detailed risk reporting update is provided each quarter to the Audit Committee for specific risks that 
have been newly identified or have changed since the previous assessment. At least once on an annual basis, the Supervisory 
Board discusses the corporate strategy and business risks as well as the results of an assessment by the Managing Board and the 
Audit Committee of the structure and operations of the internal risk management and control systems, including any significant 
changes. 

Our corporate governance structure is based on a strong framework that outlines the responsibilities of our Managing and 
Supervisory Boards and the function of the Audit Committee of the Supervisory Board (discussed in more detail in the 
Corporate Governance Report of this Annual Report). We maintain adequate internal controls over financial reporting to ensure 
the integrity of financial reporting. Additionally, we have a Compliance Committee that consists of senior executives from 
various functional areas who are responsible for ensuring compliance with legal and regulatory requirements, as well as 
overseeing the communication of corporate policies, including our Code of Ethics.

32

Base Business Risk

Risk Types

•  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 

The risks described below are listed in the order of our current view of their expected significance. Describing the risk factors 
in order of significance does not imply that a lower listed risk factor may not have a material adverse impact on our results of 
operations, liquidity or capital resources. 

Our continued growth is dependent on the development and success of new products. 

Rapid technological change and frequent new product introductions are typical in the markets we serve. Our success will 
depend in part on continuous, timely development and introduction of new products that address evolving market requirements. 
We believe successful new product introductions provide a significant competitive advantage because customers make an 
investment of time in selecting and learning to use a new product and are reluctant to switch thereafter. To the extent that we 
fail to introduce new and innovative products, or such products suffer significant delays in development or are not accepted in 
the market, we may lose market share to our competitors, which will be difficult or impossible to regain. An inability to 
successfully develop and introduce new products, for technological or other reasons, could reduce our growth rate or otherwise 
have an adverse effect on our business. In the past, we have experienced delays in the development and introduction of 
products, including regulatory approvals, and we may experience delays in the future. 

As a result, we cannot assure you that we will keep pace with the rapid rate of change in our markets or that our new products 
will adequately meet the requirements of the marketplace, achieve market acceptance or regulatory approval, or compete 
successfully with competitive technologies. Some of the factors affecting market acceptance of new products include: 

• 

• 

• 

• 

• 

• 

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. 

In the development of new products we may make significant investments in intellectual property and software. These 
investments increase our fixed costs, resulting in higher operational costs in the short term that will negatively impact our gross 
profit and operating income until products reach a minimum level of market acceptance. The expenses or losses associated with 
unsuccessful product development activities or lack of market acceptance of our new products could materially adversely affect 
our business, financial condition and results of operations.

Our continued growth depends significantly on the success of new products in the molecular testing markets we serve. 
Important new product programs underway include our modular medium-throughput QIAsymphony automation platform, 
GeneReader NGS System for next-generation sequencing (NGS), QIAstat-Dx system for one-step, fully integrated molecular 
analysis of hard-to-diagnose syndromes, the high-throughput NeuMoDx 288 and mid-throughput NeuMoDx 96 fully integrated 
automation systems for higher-throughput PCR testing, sample and assay technologies designed either for QIAGEN 

33

instruments or for "universal" use on other platforms, and bioinformatics solutions to analyze and interpret genomic data. In 
addition, we are now developing next-generation systems for digital PCR, an emerging analytical technique in the life sciences, 
targeting a 2020 launch with fully-integrated solutions that simplify workflows and offer other advantages.

The speed and level of adoption of our new automation platforms will affect sales not only of instrumentation but also of 
consumables, sample and assay kits, designed to run on the systems. The rollouts of new automation platforms are intended to 
drive the dissemination and increasing sales of consumables for these systems. We are developing or co-developing new kits for 
each of these platforms and seeking regulatory approvals for a number of these new products. In turn, the availability and 
regulatory approval of more tests to run on QIAsymphony, GeneReader NGS System, QIAstat-Dx and NeuMoDx systems, as 
well as the planned digital PCR systems, especially molecular assays for specific diseases or companion diagnostics paired with 
new drugs, will influence the value of the instruments to prospective buyers. Slower adoption of QIAsymphony, including the 
complete QIAsymphony RGQ system, the GeneReader NGS System, the QIAstat-Dx and NeuMoDx systems, and the planned 
digital PCR workflows, could significantly affect sales of products designed to run on these platforms.

Our strategic initiative in NGS, including rollout of the GeneReader NGS System and related consumables, aims to drive the 
adoption of this technology in clinical research and diagnostics. This involves development and commercialization of universal 
pre-analytic and bioinformatics products for NGS, as well as commercialization of our proprietary GeneReader NGS workflow 
and related consumables. The market for next-generation sequencing instruments is very competitive, and the speed and level 
of adoption of our universal solutions and the GeneReader workflow will affect sales of our Sample to Insight solutions.

An inability to manage our growth, manage the expansion of our operations, or successfully integrate acquired 
businesses could adversely affect our business. 

Our business has grown, with total net sales increasing to $1.50 billion in 2018 from $1.34 billion in 2014. We have made a 
series of acquisitions in recent years, including the acquisitions of STAT-Dx Life, S.L. in 2018, OmicSoft Corporation in 2017, 
Exiqon A/S in 2016, MO BIO Laboratories in 2015, and Enzymatics and BIOBASE in 2014. We intend to identify and acquire 
other businesses in the future, including the acquisition of N-of-One announced in January 2019, that support our strategy to 
build on our global leadership position in Sample to Insight solutions. The successful integration of acquired businesses 
requires a significant effort and expense across all operational areas. 

We continue to make investments to expand our business operations. These projects increase our fixed costs, resulting in higher 
operational costs in the short term that will negatively impact our gross profit and operating income until we more fully utilize 
the additional capacity of these facilities. In addition, we have invested in establishing and expanding shared service centers in 
Poland and the Philippines, opening new commercial operations in emerging markets to expand our geographic footprint, and 
implementing digitization of business processes to increase efficiency and improve customer experiences. The expansion of our 
business and the addition of new personnel may place a strain on our management and operational systems. As we continue to 
upgrade our operating and financial systems and expand the geographic presence of our operations, we intend to continue to 
assess the need for reallocation of existing resources or the hiring of new employees as well as increased responsibilities for 
both existing and new management personnel. 

Our future operating results will depend on our ability to continue to implement and improve our research, product 
development, manufacturing, sales and marketing and customer support programs, enhance our operational and financial 
control systems, expand, train and manage our employee base, integrate acquired businesses, and effectively address new issues 
related to our growth as they arise. There can be no assurance that we will be able to manage our recent or any future expansion 
or acquisitions successfully, and any inability to do so could have a material adverse effect on our results of operations. 

Our acquisitions expose us to new risks, and we may not achieve the anticipated benefits of acquisitions of technologies 
and businesses. 

During the past several years, we have acquired and integrated a number of companies through which we have gained access to 
new technologies, products and businesses that complement our internally developed product lines. In the future, we expect to 
acquire additional technologies, products or businesses to expand our operations. Acquisitions expose us to new operating and 
other risks, including risks associated with the: 

• 

• 

• 

• 

• 

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; 

implementation and maintenance of uniform standards and effective controls and procedures; 

• 
•  maintenance of relationships with employees, customers and suppliers, and integration of new management 

personnel; 

34

• 

• 

• 

• 

issuance of dilutive equity securities; 

incurrence or assumption of debt and contingent liabilities; 

amortization or impairment of acquired intangible assets or potential businesses; and 

exposure to liabilities of and claims against acquired entities or personnel. 

Our failure to address the above risks successfully in the future may prevent us from achieving the anticipated benefits from 
any acquisition in a reasonable time frame, or at all. 

Global economic conditions could adversely affect our business, results of operations and financial condition. 

Our results of operations could be materially affected by adverse general conditions in the global economy and financial 
markets. Potentially adverse changes that may come from the United Kingdom's exit from the European Union ("Brexit") are 
not well understood as the actual impact from Brexit will depend on many factors including the ability of both the United 
Kingdom and European Union authorities to provide a path forward with minimal disruption. In the near term we anticipate the 
largest potential exposures to be on supply chain with our United Kingdom based suppliers and the local operations for our 
domestic United Kingdom business and pharma development activities. There also is risk of loss of revenue, penalties due to 
delayed deliveries and currency losses, or other unforeseen costs which would negatively impact margins.

During challenging economic times, access to financing in the global financial markets has also been adversely affected for 
many businesses. The uncertainty surrounding the resolution of the economic and sovereign debt crisis in Europe continues to 
have a negative impact on financial markets and economic conditions more generally. Our customers may face internal 
financing pressures that adversely impact spending decisions or the ability to purchase our products, or that lead to a delay in 
collection of receivables and thus negatively impact our cash flow. A severe or prolonged economic downturn could result in a 
variety of risks to our business that would adversely impact our results of operations, including the reduction or delay in 
planned improvements to healthcare systems in various countries, the reduction of funding for life sciences research, and 
intensified efforts by governments and healthcare payors regarding cost-containment efforts. 

Our results of operations could also be negatively impacted by any governmental actions or inaction resulting in automatic 
government spending cuts (sequestration) that may take effect. These conditions may add uncertainty to the timing and budget 
for investment decisions by our customers, particularly researchers, universities, government laboratories and private 
foundations whose funding is dependent upon grants from government agencies, such as the U.S. National Institutes of Health 
(NIH) and similar bodies. 

As is the case for many businesses, we face the following risks in regard to financial markets: 

• 

• 

• 

• 

severely limited access to financing over an extended period of time, which may affect 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. 

We may encounter delays in receipt, or limits in the amount, of reimbursement approvals and public health funding, 
which will impact our ability to grow revenues in the healthcare market or may negatively impact our profitability. 

Changes in the availability or reimbursement of our diagnostic testing products by insurance providers and health maintenance 
organizations could also have a significant adverse impact on our results of operations. Third-party payors are often reluctant to 
reimburse healthcare providers for the use of medical tests that involve new technologies or provide novel diagnostic 
information. In addition, third-party payors are increasingly limiting reimbursement coverage for medical diagnostic products 
and, in many instances, are exerting pressure on suppliers to reduce their prices. Since each third-party payor often makes 
reimbursement decisions on an individual patient basis, obtaining such approvals is a time-consuming and costly process that 
requires us to provide scientific and clinical data supporting the clinical benefits of each of our products. As a result, there can 
be no assurance that reimbursement approvals will be obtained, and the process can delay the broad market introduction of new 
products. If third-party reimbursement is not consistent or financially adequate to cover the cost of our products, this could limit 
our ability to sell our products or cause us to reduce prices, which would adversely affect our results of operations. 

Further, the ability of many of our customers to successfully market their products depends in part on the extent to which 
reimbursement for the costs of these products is available from governmental health administrations, private health insurers and 
other organizations. Governmental and other third-party payors are increasingly seeking to contain healthcare costs and to 
reduce the price of medical products and services. For example, in 2010, the Patient Protection and Affordable Care Act, or 
ACA, was enacted with the goal of expanding coverage, increasing quality of care and reducing costs through payment 

35

innovation, among other things. With evolving political realities in the United States, including divergent efforts by the Trump 
Administration and members of Congress, certain sections of the ACA have not been fully implemented and the direction of 
healthcare policy is unpredictable. Uncertainty around the future of the ACA, and in particular the impact to reimbursement 
levels, may lead to uncertainty or delay in the purchasing decisions of our customers, which may in turn negatively impact our 
product sales. As of January 1, 2018, in accordance with the Protecting Access to Medicare Act of 2014 (PAMA), the Centers 
for Medicare & Medicaid Services began calculating Medicare reimbursement rates for certain clinical diagnostic tests using 
weighted median private payor rates, which are based on rate information reported by applicable laboratories. This new rate 
methodology means the lower reimbursement rates previously experienced in the field of molecular pathology testing now 
extends to additional diagnostic testing codes on the Clinical Laboratory Fee Schedule. If there are not adequate reimbursement 
levels, our business and results of operations could be adversely affected.

Reduction in research and development budgets and government funding may result in reduced sales. 

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 organizations could have a significant 
adverse effect on demand for our products. Research and development budgets are affected by changes in available resources, 
the mergers of pharmaceutical and biotechnology companies, changes in spending priorities and institutional budgetary 
policies. Our results of operations could be adversely affected by any significant decrease in expenditures for life sciences 
research and development by pharmaceutical and biotechnology companies, academic institutions, and government and private 
laboratories. In addition, short-term changes in administrative, regulatory or purchasing-related procedures can create 
uncertainties or other impediments that can have an adverse impact on our results of operations. 

In recent years, the pharmaceutical and biotechnology industries have undergone substantial restructuring and consolidation. 
Additional mergers or consolidation within the pharmaceutical and biotechnology industries could cause us to lose existing 
customers and potential future customers, which could have a material adverse impact on our results of operations. 

Approximately 23% of our sales are generated from demand for our products used in the Academia customer class by 
researchers at universities, government laboratories and private foundations, and whose funding is dependent upon grants from 
government agencies, such as the NIH. Although the level of research funding has been increasing in recent years, we cannot 
assure you that this trend will continue given federal and state budget constraints. Government funding of research and 
development is subject to the political process, which is inherently unpredictable. Future sales may be adversely affected if our 
customers delay purchases as a result of uncertainties regarding the approval of government or industrial budget proposals. 
Also, government proposals to reduce or eliminate budgetary deficits have sometimes included reduced allocations to the NIH 
and government agencies in other countries that fund life sciences research and development activities. A reduction in 
government funding for the NIH or government research agencies in other countries could have a serious adverse impact on our 
results of operations. 

Competition could reduce our sales. 

The markets for most of our pre-analytical solutions and other products are very competitive. Competitors may have 
significant advantages in financial, operational, sales and marketing resources as well as experience in research and 
development. These competitors may have developed, or could develop in the future, new technologies that compete with our 
products or even render our products obsolete. Some competitors may obtain regulatory approval from the FDA or similar non-
U.S. authorities and market approved products. Our competitors’ development of alternative products offering superior 
technology, greater cost-effectiveness or regulatory approval could have a material adverse effect on our sales and results of 
operations. 

The growth of our business depends in part on the continued conversion of users from competitive products to our sample and 
assay technologies and other solutions. Lack of conversion could have a material adverse effect on our sales and results of 
operations. 

It can be difficult for users of sample and assay technologies to switch from their current supplier of a particular product, 
primarily due to the time and expense required to properly integrate new products into their operations. As a result, if we are 
unable to be the first to develop and supply new products, our competitive position may suffer, resulting in a material adverse 
effect on our sales and results of operations.

For our commercial clinical assays, we often compete with solutions developed by our laboratory customers, and driving 
conversion from such laboratory-developed tests to commercial diagnostics assays can be challenging.

The time and expense needed to obtain regulatory approval and respond to changes in regulatory requirements could 
adversely affect our ability to commercially distribute our products and generate sales. 

We and our customers operate in a highly regulated environment characterized by frequent changes in the governing 
regulatory framework. Genetic research activities and products commonly referred to as “genetically engineered” (such as 

36

certain food and therapeutic products) are subject to extensive governmental regulation in most developed countries, 
especially in the major markets for pharmaceutical and diagnostic products such as the European Union, the U.S., China and 
Japan. In recent years, several highly publicized scientific events (notably in genomic research, gene editing and cloning) 
have prompted intense public debates on the ethical, philosophical and religious implications of an unlimited expansion in 
genetic research and the use of products emerging from this research. As a result of this debate, some key countries may 
increase or establish regulatory barriers, which could adversely affect demand for our products and prevent us from fulfilling 
our growth expectations. Furthermore, there can be no assurance that any future changes in applicable regulations will not 
require further expenditures or an alteration, suspension or liquidation of our operations in certain areas, or even in their 
entirety. 

Changes in the existing regulations or adoption of new requirements or policies could adversely affect our ability to sell our 
approved or cleared products or to seek approvals for new products in other countries around the world. Sales of certain 
products now in development may be dependent upon us successfully conducting pre-clinical studies, clinical trials and other 
tasks required to gain regulatory approvals and meet other requirements from the FDA in the U.S., and regulatory agencies in 
other countries. If we are not able to meet the applicable requirements, we will not be able to commercialize our products and 
tests, which will have a material adverse effect on our business. 

Several of our key products and programs are medical devices that are subject to extensive regulation by the FDA under the 
U.S. Food, Drug and Cosmetic Act. We plan to apply for FDA clearance or approval of additional products in the future. 
Regulatory agencies in other countries also have medical device and IVD approval requirements that are becoming more 
extensive. These regulations govern most commercial activities associated with medical devices, including indications for the 
use of these products as well as other aspects that include product development, testing, manufacturing, labeling, storage, 
record-keeping, advertising and promotion. Compliance with these regulations is expensive and time-consuming.

Our cleared or approved devices, including diagnostic tests and related equipment, are subject to numerous post-approval 
requirements. We are subject to inspection and marketing surveillance by the FDA to determine our compliance with 
regulatory requirements. If the FDA determines that we have failed to comply, it can institute a wide variety of enforcement 
actions, ranging from warning letters to more severe sanctions such as fines, injunctions and civil penalties, recalls or 
seizures of our products, operating restrictions, partial suspension or total shutdown of production, denial of our requests for 
510(k) clearance or pre-market approval of product candidates, withdrawal of 510(k) clearance or pre-market approval 
already granted and civil or criminal prosecution. Any enforcement action by the FDA may affect our ability to commercially 
distribute these products in the U.S. 

Some of our products are sold for research purposes in the U.S. We do not promote these products for clinical diagnostic use, 
and they are labeled “For Research Use Only” (RUO) or “for molecular biology applications.” If the FDA were to disagree 
with our designation of a product as an RUO product, we could be forced to stop selling it until appropriate regulatory 
clearance or approval has been obtained. 

Changes in tax laws or their application or the termination or reduction of certain government tax incentives, could 
adversely impact our overall effective tax rate, results of operations or financial flexibility. 

Our effective tax rate reflects the benefit of some income being partially exempt from income taxes due to various 
intercompany operating and financing activities. The benefit also derives from our global operations, where certain income or 
loss is taxed at rates higher or lower than The Netherlands’ statutory rate of 25%. Changes in tax laws or their application with 
respect to matters such as changes in tax rates, transfer pricing and income allocation, utilization of tax loss carryforwards, 
intercompany dividends, controlled corporations, and limitations on the deductibility of interest and foreign related-party 
expenses, and changes to tax credit mechanisms, could increase our effective tax rate and adversely affect our results of 
operations and limit our ability to repurchase our Common Shares without experiencing adverse tax consequences. The 
increased tax burden as a result of changes in law may adversely affect our results of operations. Additionally, if our tax 
positions are challenged by tax authorities or other governmental bodies, such as the European Commission, we could incur 
additional tax liabilities, which could have an adverse effect on our results of operations or financial flexibility.

We are subject to risks associated with patent litigation. 

The biotechnology industry has been characterized by extensive litigation regarding patents and other intellectual property 
rights, particularly since industry competitors gravitate around common technology platforms. We are aware that patents have 
been applied for and/or issued to third parties claiming technologies for sample and assay technologies that are closely related 
to those we use. From time to time, we receive inquiries requesting confirmation that we do not infringe patents of third parties. 
We endeavor to follow developments in this field, and we do not believe that our technologies or products infringe any 
proprietary rights of third parties. However, there can be no assurance that third parties will not challenge our activities or, if so 
challenged, that we will prevail. In addition, the patent and proprietary rights of others could require that we alter our products 
or processes, pay licensing fees or cease certain activities, and there can be no assurance that we will be able to license any 

37

technologies that we may require on acceptable terms. In addition, litigation, including proceedings that may be declared by the 
U.S. Patent and Trademark Office or the International Trade Commission, may be necessary to respond to any assertions of 
infringement, enforce our patent rights and/or determine the scope and validity of our proprietary rights or those of third parties. 
Litigation, or threatened litigation, could involve substantial cost, and there can be no assurance that we would prevail in any 
proceedings. 

We rely on collaborative commercial relationships to develop and/or market some of our products. 

Our long-term business strategy involves entering into strategic alliances as well as marketing and distribution arrangements 
with academic, corporate and other partners relating to the development, commercialization, marketing and distribution of 
certain of our existing and potential products. In 2017, we entered a new joint venture with Sichuan Maccura Biotechnology 
Co., Ltd. (Maccura) for the distribution of our GeneReader NGS System in China and entered a new partnership with a Chinese 
company in 2018 that took over the commercial distribution and infrastructure of the HPV test franchise in China. We may be 
unable to continue to negotiate these collaborative arrangements on acceptable terms, and these relationships also may not be 
scientifically or commercially successful. In addition, we may be unable to maintain these relationships, and our collaborative 
partners may pursue or develop competing products or technologies, either on their own or in collaboration with others. 

Our Precision Medicine business includes projects with pharmaceutical and biotechnology companies to co-develop companion 
diagnostics paired with drugs that those companies either market currently or are developing for future use. The success of 
these co-development programs, including regulatory approvals for the companion diagnostics, depends upon the continued 
commitment of our partners to development of their drugs, the outcome of clinical trials for the drugs and diagnostics, and 
regulatory approvals of the tests and drugs. In addition, the future level of sales for companion diagnostics depends to a high 
degree on the commercial success of the related medicines for which the tests have been designed. More companion diagnostics 
would be sold in combination with a widely prescribed drug than one with limited use.

The successful marketing of QIAGEN products, in some cases, depends on commercial relationships such as joint ventures or 
distributorships, particularly in emerging markets where we partner with local companies to augment our less-established 
commercial relationships and infrastructure. The continued commitment of our partners to these ventures, as well as the 
management of the commercial efforts, will influence QIAGEN's sales and profitability in these markets.

We have made investments in and are expanding our business into emerging markets, which exposes us to risks. 

Our top seven emerging markets are Brazil, Russia, India, China, South Korea, Mexico and Turkey, which together accounted 
for approximately 16% of total sales in 2018, and we expect to continue to focus on expanding our business in these or other 
fast-growing markets, including those in the Middle East and Asia. In addition to the currency and operating risks described 
above, our international operations are subject to a variety of risks that include those arising out of the economy, political 
outlook, language and cultural barriers in countries where we have operations or do business. In many of these emerging 
markets, we may be faced with several risks that are more significant than in other countries in which we have a history of 
doing business. These risks include economies that may be dependent on only a few products and are therefore subject to 
significant fluctuations, weak legal systems which may affect our ability to enforce contractual rights, exchange controls, 
unstable governments, and privatization or other government actions affecting the flow of goods and currency. In conducting 
our business, we move products from one country to another and may provide services in one country from a subsidiary located 
in another country. Accordingly, we are vulnerable to abrupt changes in customs and tax regimes that could have significant 
negative impacts on our results of operations. 

Some of our customers are requiring us to change our sales arrangements to lower their costs, and this may limit our 
pricing flexibility and harm our business. 

Some of our customers have developed purchasing initiatives to reduce the number of vendors from which they purchase 
products to lower their supply costs. In some cases, these customers have established agreements with large distributors, which 
include discounts and direct involvement in the distributor’s purchasing process. These activities may force us to supply large 
distributors with our products at discounts in order to continue providing products to some customers. For similar reasons, 
many larger customers, including the U.S. government, have requested, and may request in the future, special pricing 
arrangements, which can include blanket purchase agreements. These agreements may limit our pricing flexibility, which could 
harm our business and affect our results of operations. For a limited number of customers, and at the customers' request, we 
have conducted sales transactions through distribution and other value-added partners. If sales grow through these 
intermediaries, it could have an adverse impact on our results of operations, particularly a negative impact on our gross profit.

We are subject to privacy and data security laws and rely on secure communication and information systems which, in 
the event of a breach or failure, expose us to risks. 

We rely heavily on communications and information systems to conduct our business. In the ordinary course of business, we 
collect and store sensitive data, including our intellectual property and other proprietary business information and that of our 

38

customers, suppliers and business partners, and personally identifiable information of our customers and employees, in our data 
centers and on our networks. Our operations rely on the secure processing, storage and transmission of confidential and other 
information on our computer systems and networks. We are transforming to a digital, cloud-leveraging organization, which 
places our assets, customer data, and personally identifiable data at a higher risk than in previous years. We have made 
significant investments to ensure our employees are aware of cybersecurity risks facing our company and how to prevent data 
breaches, including but not limited to, mandatory yearly trainings that are continually updated. We have modernized our cyber 
security tools, and are continually modernizing our cybersecurity processes, in an attempt to keep pace with evolving 
cybersecurity risks. In spite of our efforts, we are unable to completely eliminate these risks and occasionally experience minor 
cybersecurity incidents. External phishing emails (occurring outside of our computer services) are a growing threat that our 
customers are facing. These emails could lead to the disclosing of intellectual property or personally identifiable information, 
which could lead to financial harm or reputational damage. While our cybersecurity team works diligently with our customers 
to mitigate these threats by helping to identify and analyze phishing emails, we cannot guarantee that sensitive data will not be 
lost or stolen. 

A breach in cybersecurity due to unauthorized access to our computer systems or misuse could include the misappropriation of 
assets or sensitive information, the corruption data or other operational disruption. Failures to our computer systems and 
networks could be caused by internal or external events, such as incursions by intruders or hackers, computer viruses, failures 
in hardware or software, or cyberterrorists. If we do experience a breach or failure of our systems, we could experience 
operational delays resulting from the disruption of systems, loss due to theft or misappropriation of assets or data, or negative 
impacts from the loss of confidential data or intellectual property. We may face significant liability in the event any of the 
personal information we maintain is lost or otherwise subject to misuse or other wrongful use, access or disclosure. Further, we 
could experience negative publicity resulting in reputation or brand damage with customers or partners.

Additionally, we are subject to privacy and data security laws across multiple jurisdictions, including those relating to the 
storage of health information, which are complex, overlapping and rapidly evolving. For example, the California Consumer 
Privacy Act of 2018, set to take effect on January 1, 2020, imposes expansive new requirements and protections upon the 
processing of personal data, aimed at giving California consumers more visibility and control over their personal information 
There are also non-U.S. privacy laws, such as the General Data Protection Regulation (GDPR) of the European Union, that 
impose restrictions on the transfer, access, use, and disclosure of health and other personal information. We implemented the 
requirements set forth by the European Union General Data Protection Regulation (GDPR), which took effect on May 25, 2018. 
As our activities continue to evolve and expand, we may be subject to additional laws which impose further restrictions on the 
transfer, access, use, and disclosure of health and other personal information which may impact our business either directly or 
indirectly. A failure to comply with applicable privacy or security laws or significant changes in these laws could significantly 
impact our business and future business plans. For example, we may be subject to regulatory action or lawsuits in the event we 
fail to comply with applicable privacy laws.

Exchange rate fluctuations may adversely affect our business and operating results. 

Because we currently market our products throughout the world, a significant portion of our business is conducted in currencies 
other than the U.S. dollar, our reporting currency. As a result, fluctuations in value relative to the U.S. dollar of the currencies in 
which we conduct our business have caused and will continue to cause foreign currency transaction gains and losses. Foreign 
currency transaction gains and losses arising from normal business operations are charged against earnings in the period when 
incurred. Due to the number of currencies involved, the variability of currency exposures and the potential volatility of currency 
exchange rates, we cannot predict the effects of future exchange rate fluctuations. While we may engage in foreign exchange 
hedging transactions to manage our foreign currency exposure, there can be no assurance that our hedging strategy will 
adequately protect our operating results from the effects of future exchange rate fluctuations. 

Our global operations may be affected by actions of governments, global or regional economic developments, weather or 
transportation delays, natural disasters or other force majeure events (collectively, unforeseen events) which may 
negatively impact our suppliers, our customers or us. 

Our business involves operations around the world. Our consumable manufacturing facilities are located in Germany, the U.S. 
and China. We have established sales subsidiaries in numerous countries and our products are sold through independent 
distributors serving more than 40 additional countries. Our facilities may be harmed by unforeseen events, and in the event that 
we or our customers are affected by a disaster, we may experience delays or reductions in sales or production, increased costs, 
or may be required to identify alternate suppliers and/or rely on third-party manufacturers. 

To the extent that our suppliers are impacted by a natural disaster or other disruption, we may experience periods of reduced 
production. Any unexpected interruptions in our production capabilities may lead to delayed or lost sales and may adversely 
affect our results of operations for the affected period. 

39

In addition, to the extent we temporarily shut down any facility following such an unforeseen event, we may experience 
disruptions in our ability to manufacture or ship products to customers or otherwise operate our business. Many of our products 
are manufactured in a single location and we may experience adverse effects to the extent these manufacturing operations are 
disrupted. While our global operations give us the ability to ship product from alternative sites, we may not be able to do so 
because our customers’ facilities are shut down or the local logistics infrastructure is not functioning, and our sales will suffer. 

Damage to our property due to unforeseen events and the disruption of our business from casualties may be covered by 
insurance, but this insurance may not be sufficient to cover all of our potential losses, and such insurance may not continue to 
be available to us on acceptable terms, or at all. In addition, we may incur incremental costs following an unforeseen event, 
which will reduce profits and adversely affect our results of operations. 

We depend on suppliers for materials used to manufacture our products, and if shipments from these suppliers are 
delayed or interrupted, we may be unable to manufacture our products. 

We buy materials to create our products from a number of suppliers and are not dependent on any one supplier or group of 
suppliers for our business as a whole. However, key components of certain products, including certain instrumentation and 
chemicals, are available only from a single source. If supplies from these vendors are delayed or interrupted for any reason, we 
may not be able to obtain these materials timely or in sufficient quantities or qualities to produce certain products, and this 
could have an adverse impact on our results of operations. 

We heavily rely on air cargo carriers and other overnight logistics services, and shipping delays or interruptions could 
harm our business. 

Our customers in the scientific research markets typically keep only a modest inventory of our products on hand, and 
consequently require overnight delivery of purchases. As a result, we heavily rely on air cargo carriers and logistic suppliers. If 
overnight services are suspended or delayed, and other delivery carriers and logistic suppliers cannot provide satisfactory 
services, customers may suspend a significant amount of their work. The lack of adequate delivery alternatives would have a 
serious adverse impact on our results of operations. 

Our success depends on the continued employment of qualified personnel, any of whom we may lose at any time. 

Although we have not experienced any difficulties attracting or retaining management and scientific staff, our ability to recruit 
and retain qualified, skilled employees will continue to be critical to our success. Given the intense competition for experienced 
scientists and managers among pharmaceutical and biotechnology companies, as well as academic and other research 
institutions, there can be no assurance that we will be able to attract and retain employees critical to our success on acceptable 
terms. Initiatives to expand QIAGEN will also require additional employees, including management with expertise in areas 
such as research and development, manufacturing, digitization, sales and marketing, and the development of existing managers 
to lead a growing organization. The failure to recruit and retain qualified employees, or develop existing employees, could have 
a material adverse impact on our results of operations.

Our ability to accurately forecast our results during each quarter may be negatively impacted by the fact that a 
substantial percentage of our sales may be recorded in the final weeks or days of the quarter. 

The markets we serve are typically characterized by a high percentage of purchase orders being received in the final few weeks 
or days of each quarter. Although this varies from quarter to quarter, many customers make a large portion of their purchase 
decisions late in each quarter, in particular because they receive new information during this period on their budgets and 
requirements. Additionally, volatility in the timing of milestones from companion diagnostic partnerships can be difficult to 
predict. As a result, even late in each quarter, we cannot predict with certainty whether our sales forecasts for the quarter will be 
achieved.  

Historically, we have been able to rely on the overall pattern of customer purchase orders during prior periods to project with 
reasonable accuracy our anticipated sales for the current or coming quarters. However, if customer purchasing trends during a 
quarter vary from historical patterns as may occur with changes in market conditions, our quarterly financial results could 
deviate significantly from our projections. As a result, our sales forecasts for any given quarter may prove not to have been 
accurate. We also may not have sufficient, timely information to confirm or revise our sales projections for a specific quarter. If 
we fail to achieve our forecasted sales for a particular quarter, the value of our Common Shares could be adversely affected.

We have a significant amount of debt that may adversely affect our financial condition and flexibility. 

We have a significant amount of debt and debt service obligations as well as restrictive covenants imposed by our lenders. A 
high level of indebtedness increases the risk that we may default on our debt obligations and restrictive covenants may prevent 
us from borrowing additional funds. There is no assurance that we will be able to generate sufficient cash flow to pay the 
interest on our debt and comply with our debt covenants or that future working capital, borrowings or equity financing will be 
available to repay or refinance our debt. If we are unable to generate sufficient cash flow to pay the interest on our debt and 

40

comply with our debt covenants, we may have to delay or curtail our research and development programs. The level of our 
indebtedness could, among other things: 

•  make it difficult for us to make required payments on our debt; 

•  make it difficult for us to obtain 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. 

The Financial Conduct Authority of the United Kingdom plans to phase out the London Interbank Offered Rate (LIBOR) by the 
end of 2021. Presently, we do hold debt and derivative instruments which use LIBOR. While certain of these agreements do 
contain language for the determination of interest rates in the event the LIBOR rate is not available, changes to these 
agreements may be required and we could be negatively impacted by any newly determined alternative benchmark.

Our business may require substantial additional capital, which we may not be able to obtain on terms acceptable to us, 
if at all. 

Our future capital requirements and level of expenses will depend upon numerous factors, including the costs associated with: 

•  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 and/or taxes. 

We currently anticipate that our short-term capital requirements will be satisfied by cash flow from our operations and/or cash 
on hand. As of December 31, 2018, we had outstanding long-term debt of approximately $2.2 billion, of which 503.6 million 
was current. Furthermore, as of December 31, 2018, we had capital lease obligations, including the current portion, of $0.1 
million, that expire in various years through 2020. We may need to refinance all or part of these liabilities before or at their 
contractual maturities. 

If at some point in time our existing resources should be insufficient to fund our activities, we may need to raise funds through 
public or private debt or equity financings. The funds for the refinancing of existing liabilities or for the ongoing funding of our 
business may not be available or, if available, not on terms acceptable to us. If adequate funds are not available, we may be 
required to reduce or delay expenditures for research and development, production, marketing, capital expenditures and/or 
acquisitions, which could have a material adverse effect on our business and results of operations. To the extent that additional 
capital is raised through the sale of equity or convertible securities, the issuance of any securities could result in dilution to our 
shareholders. 

The accounting for the cash convertible notes we have issued will result in recognition of interest expense significantly 
greater than the stated interest rate of the notes and may result in volatility to our Consolidated Statements of Income.

We will settle any conversions of the Cash Convertible Notes described under the heading “Other Factors Affecting Liquidity 
and Capital Resources” elsewhere in this report, entirely in cash. Accordingly, the conversion option that is part of the Cash 
Convertible Notes will be accounted for as a derivative pursuant to accounting standards relating to derivative instruments and 
hedging activities. Refer to Note 25 "Financial Risk Factors and Use of Derivative Financial Instruments" and Note 15 
"Financial Debts", of the Notes to Consolidated Financial Statements. In general, this resulted in an initial valuation of the 
conversion option separate from the debt component of the Cash Convertible Notes, resulting in an original issue discount. The 
original issue discount will be accreted to interest expense over the term of the Cash Convertible Notes, which will result in an 
effective interest rate reported in our financial statements significantly in excess of the stated coupon rates of the Cash 
Convertible Notes. This accounting treatment will reduce our earnings. For each financial statement period after the issuance of 
the Cash Convertible Notes, a gain (or loss) will be reported in our financial statements to the extent the valuation of the 
conversion option changes from the previous period. The Call Options issued in connection with the Cash Convertible Notes 
will also be accounted for as derivative instruments, substantially offsetting the gain (or loss) associated with changes to the 
valuation of the conversion option. This may result in increased volatility to our results of operations.

The cash convertible note hedge and warrant transactions we entered into in connection with the issuance of our Cash 
Convertible Notes may not provide the benefits we anticipate, and may have a dilutive effect on our common stock. 

41

Concurrently with the issuance of the Cash Convertible Notes, we entered into Call Options and issued Warrants. We entered 
into the Call Options with the expectation that they would offset potential cash payments by us in excess of the principal 
amount of the Cash Convertible Notes upon conversion of the Cash Convertible Notes. In the event that the hedge 
counterparties fail to deliver potential cash payments to us, as required under the Call Options, we would not receive the benefit 
of such transaction. Separately, we also issued Warrants. The Warrants could separately have a dilutive effect to the extent that 
the market price per share of our common stock, as measured under the terms of the Warrants, exceeds the strike price of the 
Warrants. 

An impairment of goodwill and intangible assets could reduce our earnings. 

At December 31, 2018, our consolidated balance sheet reflected approximately $2.1 billion of goodwill and approximately 
$675.0 million of intangible assets. Goodwill is recorded when the purchase price of a business exceeds the fair value of the 
tangible and separately measurable intangible net assets. International Financial Reporting Standards (IFRS) require us to test 
goodwill for impairment on an annual basis or when events or circumstances occur indicating that goodwill might be impaired. 
Long-lived assets, such as intangible assets with finite useful lives, are reviewed for impairment whenever events or changes in 
circumstances indicate that the carrying amount may not be recoverable. The impairment review often cannot be done at the 
level of the individual asset and it must instead be applied to a group of assets. For the purpose of our annual goodwill 
impairment testing based on the current circumstances of how we manage our business, this group of assets is the Company as 
a whole. If we determine that any of our goodwill or intangible assets were impaired, we will be required to take an immediate 
charge to earnings and our results of operations could be adversely affected. 

Our strategic equity investments may result in losses. 

We have made, and may continue to make, strategic investments in businesses as opportunities arise. We periodically review 
the carrying value of these investments for impairment, considering factors that include the most recent stock transactions, book 
values from the most recent financial statements, and forecasts and expectations of the investee. The results of these valuations 
may fluctuate due to market conditions and other conditions over which we have no control. 

Estimating the fair value of non-marketable equity investments in life science companies is inherently subjective. If actual 
events differ from our assumptions and unfavorable fluctuations in the valuations of the investments are indicated, we could be 
required to write down the investment. This could result in future charges on our earnings that could materially adversely affect 
our results of operations. It is uncertain whether or not we will realize any long-term benefits from these strategic investments. 

Doing business internationally creates certain risks. 

Our business involves operations in several countries outside of the U.S. Our consumable manufacturing facilities are located in 
Germany, China and the U.S. We source raw materials and subcomponents to manufacture our products from different 
countries. We have established sales subsidiaries in many countries. In addition, our products are sold through independent 
distributors serving more than 40 other countries. Conducting and launching operations on an international scale requires close 
coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. We 
have invested heavily in computerized information systems in order to manage more efficiently the widely dispersed 
components of our operations. If we fail to coordinate and manage these activities effectively, our business and results of 
operations will be adversely affected. 

Our operations are subject to other risks inherent in international business activities, such as general economic conditions in the 
countries in which we operate, trade restrictions and changes in tariffs, longer accounts receivable payment cycles in certain 
countries, overlap of different tax structures, unexpected changes in regulatory requirements, and compliance with a variety of 
foreign laws and regulations. Other risks associated with international operations include import and export licensing 
requirements, exchange controls and changes in freight rates, as may occur as a result of rising energy costs. As a result of these 
conditions, an inability to successfully manage our international operations could have a material adverse impact on our 
business and results of operations. 

Unethical behavior and non-compliance with laws by our sales agents, consultants, distributors or employees could 
seriously harm our business. 

Our business in countries with a history of corruption and transactions with foreign governments increases the risks associated 
with our international activities. Based on our international operations, we are subject to the U.S. Foreign Corrupt Practices Act 
(FCPA), the U.K. Bribery Act and other laws that prohibit improper payments or offers of payments to foreign governments and 
their officials and political parties by business entities for the purpose of obtaining or retaining business. We have operations, 
agreements with third parties and sales in countries known to experience corruption. Further international expansion may 
involve increased exposure to such practices. Our activities in these countries and others create risks of unauthorized payments 
or offers of payments, non-compliance with laws, or other unethical behavior by any of our employees, consultants, sales 
agents or distributors, that could be in violation of various laws, including the FCPA, even though these parties are not always 

42

subject to our control. Our policy is to implement safeguards to discourage these or other unethical practices by our employees 
and distributors including online and in-person employee trainings, periodic internal audits and standard reviews of our 
distributors. However, our existing safeguards and any future improvements may not prove to be effective, and our employees, 
consultants, sales agents or distributors may engage in conduct for which we might be held responsible. Violations of the FCPA 
and other laws may result in criminal or civil sanctions, which could be severe, and we may be subject to other liabilities, which 
could negatively affect our business, results of operations and financial condition. 

We depend on patents and proprietary rights that may fail to protect our business. 

Our success depends to a large extent on our ability to develop proprietary products and technologies and to establish and 
protect our patent and trademark rights in these products and technologies. As of December 31, 2018, we owned 340 issued 
patents in the United States, 277 issued patents in Germany and 1,786 issued patents in other major industrialized countries. In 
addition, at December 31, 2018, we had 576 pending patent applications, and we intend to file applications for additional 
patents as our products and technologies are developed. The patent positions of technology-based companies involve complex 
legal and factual questions and may be uncertain, and the laws governing the scope of patent coverage and the periods of 
enforceability of patent protection are subject to change. In addition, patent applications in the United States are maintained in 
secrecy until patents issue, and publication of discoveries in the scientific or patent literature tends to lag behind actual 
discoveries by several months. Therefore, no assurance can be given that patents will issue from any patent applications that we 
own or license, or if patents do issue, that the claims allowed will be sufficiently broad to protect our technology. In addition, no 
assurance can be given that any issued patents that we own or license will not be challenged, invalidated or circumvented, or 
that the rights granted thereunder will provide us competitive advantages. Further, as issued patents expire, we may lose some 
competitive advantage as others develop competing products and as a result, we may lose revenue. 

Certain of our products incorporate patents and technologies that are licensed from third parties and for certain products, these 
in-licensed patents together with other patents provide us with a competitive advantage. These licenses impose various 
commercialization, sublicensing and other obligations on us. Our failure to comply with these requirements could result in the 
conversion of the applicable license from being exclusive to non-exclusive or, in some cases, termination of the license, and as 
a result, we may lose some competitive advantage and experience a loss of revenue. 

We also rely on trade secrets and proprietary know-how, which we seek to protect through confidentiality agreements with our 
employees and consultants. There can be no assurance that any confidentiality agreements that we have with our employees, 
consultants, outside scientific collaborators and sponsored researchers and other advisors will provide meaningful protection for 
our trade secrets or adequate remedies in the event of unauthorized use or disclosure of such information. There also can be no 
assurance that our trade secrets will not otherwise become known or be independently developed by competitors. 

We currently engage in, and may continue to engage in, collaborations with academic researchers and institutions. There can be 
no assurance that under the terms of such collaborations, third parties will not acquire rights in certain inventions developed 
during the course of these collaborations. 

Our business exposes us to potential product liability. 

The marketing and sale of our products and services for certain applications entail a potential risk of product liability. Although 
we are not currently subject to any material product liability claims, product liability claims may be brought against us in the 
future. Further, there can be no assurance that our products will not be included in unethical, illegal or inappropriate research or 
applications, which may in turn put us at risk of litigation. We carry product liability insurance coverage, which is limited in 
scope and amount. There can be no assurance that we will be able to maintain this insurance at a reasonable cost and on 
reasonable terms, or that this insurance will be adequate to protect us against any or all potential claims or losses. 

We are subject to various laws and regulations generally applicable to businesses in the different jurisdictions in which we 
operate, including laws and regulations applicable to the handling and disposal of hazardous substances. The risk of accidental 
contamination or injury from these materials cannot be completely eliminated. In the event of such an accident, we could be 
held liable for any damages that result, and any such liability could have a material adverse impact on us. 

Our operating results may vary significantly from period to period and this may affect the market price of our Common 
Shares. 

Our operating results may vary significantly from quarter to quarter, and also year to year, since they are dependent upon a 
broad range of factors that include demand for our products, the level and timing of customer research budgets and 
commercialization efforts, the timing of government funding budgets of our customers, the timing of our research and 
development activities and related regulatory approvals, the impact of sales and marketing expenses, restructuring activities, 
introduction of new products by us or our competitors, competitive market conditions, exchange rate fluctuations and general 
economic conditions. Our expense levels are based in part on our expectations as to future sales trends. As a result, sales and 
earnings may vary significantly from quarter to quarter or from year to year, and actual sales and earnings results in any one 

43

period will not necessarily be indicative of results to be anticipated in subsequent periods. Our results may also fail to meet or 
exceed the expectations of securities analysts or investors, which could cause a decline in the market price of our Common 
Shares. 

Our holding company structure makes us dependent on the operations of our subsidiaries. 

QIAGEN N.V. is incorporated under Dutch law as a public limited liability company (naamloze vennootschap), and is 
organized as a holding company. Currently, the material assets are the outstanding shares of the QIAGEN subsidiaries, 
intercompany receivables and other financial assets such as cash, short-term investments and derivative instruments. As a result, 
QIAGEN N.V. is dependent upon payments, dividends and distributions from the subsidiaries for funds to pay operating and 
other expenses as well as to pay future cash dividends or distributions, if any, to holders of our Common Shares. Dividends or 
distributions by subsidiaries in a currency other than the U.S. dollar may result in a loss upon a subsequent conversion into U.S. 
dollars. 

Our Common Shares may have a volatile public trading price. 

The market price of our Common Shares since our initial public offering in September 1996 has increased significantly and 
been highly volatile. In the last two years, the price of our Common Shares has ranged from a high of $39.45 to a low of $27.40 
on NASDAQ to January 9, 2018 and the New York Stock Exchange (NYSE) from January 10, 2018, and a high of €34.05  to a 
low of €25.22  on the Frankfurt Stock Exchange. In addition to overall stock market fluctuations, factors that may have a 
significant impact on the price of our Common Shares include: 

• 
• 

• 

• 

• 

• 

• 

• 

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. 

The stock market has from time to time experienced extreme price and trading volume fluctuations that have particularly 
affected the market for technology-based companies. These fluctuations have not necessarily been related to the operating 
performance of these companies. These broad market fluctuations may adversely affect the market price of our Common 
Shares. 

Holders of our Common Shares should not expect to receive dividend income. 

In January 2017 we completed a synthetic share repurchase that combined a direct capital repayment with a reverse stock split, 
and in early 2018 we announced plans to return up to an additional $200.0 million through open-market purchases. We do not 
anticipate paying any cash dividends on our Common Shares for the foreseeable future, and until the January 2017 distribution 
in connection with a synthetic share repurchase, we have not paid cash dividends since our inception. Although we do not 
anticipate paying any cash dividends on a regular basis, the distribution of any cash dividends in a currency other than the U.S. 
dollar will be subject to the risk of foreign currency transaction losses. Investors should not invest in our Common Shares if 
they are seeking dividend income; the only return that may be realized through investing in our Common Shares would be 
through an appreciation in the share price. 

Holders of our Common Shares may not benefit from continued stock repurchase programs.

In January 2017, we completed a synthetic share repurchase that combined a direct capital repayment with a reverse stock split. 
The transaction was announced in August 2016 and involved an approach used by various large, multinational Dutch 
companies to provide returns to all shareholders in a faster and more efficient manner than traditional open-market purchases. 
$243.9 million was returned to shareholders through the transaction, which reduced the total number of issued common shares 
by approximately 3.7% or 8.9 million shares as of January 31, 2017. 

The purpose of our share repurchases has been to hold the shares in treasury in order to satisfy obligations from exchangeable 
debt instruments, warrants and/or employee share-based remuneration plans and thus to reduce dilution to existing holders of 
our Common Shares. We may decide not to continue such programs in the future, our covenants with lenders may limit our 
ability to use available cash to do so, or the market price of our Common Shares may make such repurchases less desirable. In 
any of these cases, holders of our Common Shares may suffer dilution from conversion of our indebtedness or issuance of 
shares pursuant to employee remuneration plans that would otherwise be at least partially offset by repurchased shares.

44

Future sales and issuances of our Common Shares could adversely affect our stock price. 

Any future sale or issuance of a substantial number of our Common Shares in the public market, or any perception that a sale 
may occur, could adversely affect the market price of our Common Shares. Under Dutch law, a company can issue shares up to 
its authorized share capital provided for in its Articles of Association. Pursuant to our Articles of Association, our authorized 
share capital amounts to EUR 9.0 million, which is divided into 410.0 million common shares, 40.0 million financing 
preference shares and 450.0 million preference shares, with all shares having a EUR 0.01 par value. As of December 31, 2018, 
a total of approximately 225.5 million Common Shares were outstanding along with approximately 9.2 million additional 
shares reserved for issuance upon exercise or release of outstanding stock options and awards, of which 0.9 million were 
vested. A total of approximately 19.9 million Common Shares are reserved and available for issuances under our stock plans as 
of December 31, 2018, including the shares subject to outstanding stock options and awards. The majority of our outstanding 
Common Shares may be sold without restriction, except shares held by our affiliates, which are subject to certain limitations on 
resale. Additionally, the Warrants issued in connection with the Cash Convertible Notes Call Spread Overlays cover an 
aggregate of 46.3 million shares of our common stock (subject to customary adjustments under certain circumstances).

Shareholders who are United States residents could be subject to unfavorable tax treatment. 

We may be classified as a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes if certain 
tests are met. Our treatment as a PFIC could result in a reduction in the after-tax return to holders of Common Shares and 
would likely cause a reduction in the value of these shares. If we were determined to be a PFIC for U.S. federal income tax 
purposes, highly complex rules would apply to our U.S. shareholders. We would be considered a PFIC with respect to a U.S. 
shareholder if for any taxable year in which the U.S. shareholder held the Common Shares, either (i) 75% or more of our gross 
income for the taxable year is passive income; or (ii) the average value of our assets (during the taxable year) which produce or 
are held for the production of passive income is at least 50% of the average value of all assets for such year. Based on our 
income, assets and activities, we do not believe that we were a PFIC for U.S. federal income tax purposes for our taxable year 
ended December 31, 2018, and do not expect to be a PFIC for the current taxable year or any future taxable year. No assurances 
can be made, however, that the Internal Revenue Service will not challenge this position or that we will not subsequently 
become a PFIC. 

Provisions of our Articles of Association and Dutch law and an option we have granted may make it difficult to replace 
or remove management and may inhibit or delay a takeover. 

Our Articles of Association (Articles) provide that our shareholders may only suspend or dismiss our Managing Directors and 
Supervisory Directors against their wishes with a vote of two-thirds of the votes cast if such votes represent more than 50% of 
our issued share capital. If the proposal was made by the joint meeting of the Supervisory Board and the Managing Board, a 
simple majority is sufficient. The Articles also provide that if the members of our Supervisory Board and our Managing Board 
have been nominated by the joint meeting of the Supervisory Board and Managing Board, shareholders may only overrule this 
nomination with a vote of two-thirds of the votes cast if such votes represent more than 50% of our issued share capital. 

Certain other provisions of our Articles allow us, under certain circumstances, to prevent a third party from obtaining a majority 
of the voting control of our Common Shares through the issuance of Preference Shares. Pursuant to our Articles and the 
resolution adopted by our General Meeting of Shareholders, our Supervisory Board is entitled to issue Preference Shares in case 
of an intended takeover of our company by (i) any person who alone or with one or more other persons, directly or indirectly, 
have acquired or given notice of an intent to acquire (beneficial) ownership of an equity stake which in aggregate equals 20% or 
more of our share capital then outstanding or (ii) an “adverse person” as determined by the Supervisory Board. If the 
Supervisory Board opposes an intended takeover and authorizes the issuance of Preference Shares, the bidder may withdraw its 
bid or enter into negotiations with the Managing Board and/or Supervisory Board and agree on a higher bid price for our 
Shares. 

In 2004, we granted an option to the Stichting Preferente Aandelen QIAGEN, or the Foundation (Stichting), subject to the 
conditions described in the paragraph above, which allows the Foundation to acquire Preference Shares from us. The option 
enables the Foundation to acquire such number of Preference Shares as equals the number of our outstanding Common Shares 
at the time of the relevant exercise of the option, less one Preference Share. When exercising the option and exercising its 
voting rights on these Preference Shares, the Foundation must act in our interest and the interests of our stakeholders. The 
purpose of the Foundation option is to prevent or delay a change of control that would not be in the best interests of our 
stakeholders. An important restriction on the Foundation’s ability to prevent or delay a change of control is that a public offer 
must be announced by a third party before it can issue (preference or other) protective shares that would enable the Foundation 
to exercise rights to 30% or more of the voting rights without an obligation to make a mandatory offer for all shares held by the 
remaining shareholders. In addition, the holding period for these shares by the Foundation is restricted to two years, and this 
protective stake must fall below the 30% voting rights threshold before the two-year period ends. 

45

Note Regarding Forward-Looking Statements and Risk Factors

Our future operating results may be affected by various risk factors, many of which are beyond our control. Certain statements 
included in this Annual Report and the documents incorporated herein by reference may be forward-looking statements within 
the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange 
Act of 1934, as amended, including statements regarding potential future net sales, gross profit, net income and liquidity. These 
statements can be identified by the use of forward-looking terminology such as “believe,” “hope,” “plan,” “intend,” “seek,” 
“may,” “will,” “could,” “should,” “would,” “expect,” “anticipate,” “estimate,” “continue” or other similar words. Reference is 
made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and 
objectives, and other forward-looking statements. Such statements are based on management’s current expectations and are 
subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the 
forward-looking statements. We caution investors that there can be no assurance that actual results or business conditions will 
not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Factors 
which could cause such results to differ materially from those described in the forward-looking statements include those set 
forth in the risk factors below. As a result, our future success involves a high degree of risk. When considering forward-looking 
statements, you should keep in mind that the risk factors could cause our actual results to differ significantly from those 
contained in any forward-looking statement.

Significant direct and indirect shareholdings

The following table sets forth certain information as of December 31, 2018, concerning the ownership of Common Shares of 
each holder of greater than 5% ownership. None of these holders have any different voting rights than other holders of our 
Common Shares.

Name and Country of Residence
BlackRock, Inc., United States

PRIMECAP Management Company, United States

Massachusetts Financial Services Company, United States

 ____________________

Shares Beneficially Owned

Number

21,835,286 (2)

15,905,399 (3)

13,110,410 (4)

Percent 
Ownership (1)

9.68%

7.05%

5.81%

(1)  The percentage ownership was calculated based on 225,509,286 Common Shares outstanding as of December 31, 2018.

(2)  Of the 21,835,286 shares attributed to BlackRock, Inc., it has sole voting power over 20,049,694 and sole dispositive 

power over all 21,835,286 shares. This information is based solely on the Schedule 13G filed by BlackRock, Inc. with the 
Securities and Exchange Commission on February 6, 2019, which reported ownership as of December 31, 2018.

(3)  Of the 15,905,399 shares attributed to PRIMECAP Management Company, it has sole voting power over 7,478,790 and 

sole dispositive power over all 15,905,399 shares. This information is based solely on the Schedule 13G filed by 
PRIMECAP Management Company with the Securities and Exchange Commission on February 8, 2019, which reported 
ownership as of December 31, 2018.

(4)  Of the 13,110,410 shares attributed to Massachusetts Financial Services Company, it has sole voting power over 

10,185,707 and sole dispositive power over all 13,110,410 shares. This information is based solely on the Schedule 13G 
filed by Massachusetts Financial Services Company with the Securities and Exchange Commission on February 13, 2019, 
which reported ownership as of December 31, 2018.

Our common stock is traded on the New York Stock Exchange in the United States and on the Prime Standard Segment of the 
Frankfurt Stock Exchange in Germany. A significant portion of our shares are held electronically in the account of a 
stockbroker, therefore we generally have no way of determining who our shareholders are, their geographical location or how 
many shares a particular shareholder owns. As of January 31, 2019, there were 119 shareholders of record of our Common 
Shares.

Holders of any securities with special control rights

Not applicable.

System of control of any employee share scheme where the control rights are not exercised directly by the employees

Not applicable.

Restrictions on voting rights

46

 
At the General Meeting, each share shall confer the right to cast one vote, unless otherwise provided by law or our Articles. No 
votes may be cast in respect of shares that we or our subsidiaries hold, or by usufructuaries and pledgees. All shareholders and 
other persons entitled to vote at General Meetings are entitled to attend General Meetings, to address the meeting and to vote. 
They must notify the Managing Board in writing of their intention to be present or represented not later than on the third day 
prior to the day of the meeting, unless the Managing Board permits notification within a shorter period of time prior to any such 
meeting. Subject to certain exceptions, resolutions may be passed by a simple majority of the votes cast.

Agreements between shareholders which are known to the Company and may result in restrictions on the transfer of 
securities and/or voting rights

Not applicable.

Rules governing the appointment and replacement of board members and the amendment of the articles of association

Supervisory Directors and Managing Directors are appointed annually for the period beginning on the date following the Annual 
General Meeting up to and including the date of the Annual General Meeting held in the following fiscal year.

Managing Directors shall be appointed by the General Meeting upon the joint meeting of the Supervisory Board and the 
Managing Board (Joint Meeting), having made a binding nomination for each vacancy. However, the General Meeting may at 
all times overrule the binding nature of such a nomination by a resolution adopted by at least a two-thirds majority of the votes 
cast, if such majority represents more than half the issued share capital. This is different from the provisions of many American 
corporate statutes, including the Delaware General Corporation Law, which give the directors of a corporation greater authority 
in choosing the executive officers of a corporation. Under our Articles, the General Meeting may suspend or dismiss a 
managing director at any time. The Supervisory Board shall also at all times be entitled to suspend (but not to dismiss) a 
Managing Director. The Articles provide that the Supervisory Board may adopt management rules governing the internal 
organization of the Managing Board.

The Supervisory Directors shall be appointed by the General Meeting upon the Joint Meeting having made a binding 
nomination for each vacancy. If during a financial year a vacancy occurs in the Supervisory Board, the Supervisory Board may 
appoint a Supervisory Director who will cease to hold office at the next Annual General Meeting. Under Dutch law, in the event 
that there is a conflict of interest between a Supervisory Director and us and our business on a certain matter, that Supervisory 
Director shall not participate in the discussions and voting on that matter.  Under the Dutch Code, a Supervisory Director 
should report any conflict of interest or potential conflict of interest in a transaction that is of material significance to the 
Company and/or to such Supervisory Director to the Chairman of the Supervisory Board without delay. The Supervisory Board 
should decide, outside the presence of the Supervisory Director concerned, whether there is a conflict of interest. If all 
Supervisory Directors have a conflict of interest, the relevant resolution shall be adopted by the General Meeting. Decisions to 
enter into transactions under which a Supervisory Director would have a conflict of interest that are of material significance to 
QIAGEN and/or to the Supervisory Director concerned, require the approval of the Supervisory Board.

The Selection and Appointment (Nomination) Committee is primarily responsible for the preparation of selection criteria and 
appointment procedures for members of the Supervisory Board and Managing Board as well as the periodic evaluation of the 
scope and composition of the Managing Board and the Supervisory Board, including the profile of the Supervisory Board. 
Additionally, the Selection and Appointment Committee periodically evaluates the functioning of individual members of the 
Managing Board and Supervisory Board, reporting these results to our Supervisory Board. It also proposes the 
(re-)appointments of members of our Managing Board and Supervisory Board and supervises the policy of our Managing Board 
in relation to selection and appointment criteria for senior management.

A resolution of the General Meeting to amend our Articles, dissolve QIAGEN, issue shares or grant rights to subscribe for 
shares or limit or exclude any pre-emptive rights to which shareholders shall be entitled is valid only if proposed to the General 
Meeting by the Supervisory Board.

A resolution of the General Meeting to amend our Articles is further only valid if the complete proposal has been made 
available for inspection by the shareholders and the other persons entitled to attend General Meetings at our offices as from the 
day of notice convening such meeting until the end of the meeting. A resolution to amend our Articles to change the rights 
attached to the shares of a specific class requires the approval of the relevant class meeting.

Powers of board members and in particular the power to issue or buy back shares

The Managing Board manages QIAGEN and is responsible for defining and achieving QIAGEN’s aims, strategy, policies and 
results. The Managing Board is also responsible for complying with all relevant legislation and regulations as well as for 
managing the risks associated with the business activities and the financing of QIAGEN. It reports related developments to and 
discusses the internal risk management and control systems with the Supervisory Board and the Audit Committee. The 
Managing Board is accountable for the performance of its duties to the Supervisory Board and the General Meeting of 
Shareholders (General Meeting). The Managing Board provides the Supervisory Board with timely information necessary for 

47

the exercise of the duties of the Supervisory Board. In discharging its duties, the Managing Board takes into account the 
interests of QIAGEN, its enterprises and all parties involved in QIAGEN, including shareholders and other stakeholders. 

The members of our Supervisory Board have the powers assigned to them by Dutch law and the Articles. The Supervisory 
Board assists the Managing Board by providing advice relating to the business activities of QIAGEN. In discharging its duties, 
the Supervisory Board takes into account the interests of QIAGEN, its enterprise and all parties involved in QIAGEN, 
including shareholders and other stakeholders. In particular, the Supervisory Board has the authority to (i) issue common shares 
up to its presently authorized capital of 410 million, (ii) issue Financing Preference Shares up to its presently authorized capital 
of 40 million (iii) grant rights to subscribe for such common shares and Financing Preference Shares and (iv) exclude or limit 
the pre-emptive rights of existing shareholders relating to up to 50% of the number of common shares to be issued or rights to 
subscribe for common shares. 

We may acquire our own shares, subject to certain provisions of Dutch law and our Articles, if (i) shareholders’ equity less the 
payment required to make the acquisition does not fall below the sum of paid-up and called-up capital and any reserves 
required by Dutch law or the Articles and (ii) we and our subsidiaries would not thereafter hold shares with an aggregate 
nominal value exceeding half of our issued share capital. Shares that we hold in our own capital or shares held by one of our 
subsidiaries may not be voted. The Managing Board, subject to the approval of the Supervisory Board, may affect our 
acquisition of shares in our own capital. Our acquisitions of shares in our own capital may only take place if the General 
Meeting has granted to the Managing Board the authority to effect such acquisitions. Such authority may apply for a maximum 
period of 5 years and must specify the number of shares that may be acquired, the manner in which shares may be acquired and 
the price limits within which shares may be acquired. Dutch corporate law allows for the authorization of the Managing Board 
to purchase a number of shares equal to up to 50% of the Company’s issued share capital on the date of the acquisition. On 
June 19, 2018, the General Meeting resolved to extend the authorization of the Managing Board in such manner that the 
Managing Board may cause us to acquire shares in our own share capital, for an 18-month period beginning June 19, 2018 until 
December 21, 2019, without limitation at a price between one Euro cent (Euro 0.01) and one hundred ten percent (110%) of the 
price for such shares on the New York Stock Exchange or, as applicable, the Frankfurt Stock Exchange, for the five trading 
days prior to the day of purchase, or, with respect to Preference and Finance Preference shares, against a price between one 
Euro cent (Euro 0.01) and three times the issuance price and in accordance with applicable provisions of Dutch law and our 
Articles.

Significant agreements to which the Company is a party and which take effect after or terminate upon a change of 
control of the Company following a takeover bid

Certain other provisions of our Articles allow us, under certain circumstances, to prevent a third party from obtaining a majority 
of the voting control of our Common Shares through the issuance of Preference Shares. Pursuant to our Articles and the 
resolution adopted by our General Meeting of Shareholders, our Supervisory Board is entitled to issue Preference Shares in case 
of an intended takeover of our company by (i) any person who alone or with one or more other persons, directly or indirectly, 
have acquired or given notice of an intent to acquire (beneficial) ownership of an equity stake which in aggregate equals 20% or 
more of our share capital then outstanding or (ii) an “adverse person” as determined by the Supervisory Board. If the 
Supervisory Board opposes an intended takeover and authorizes the issuance of Preference Shares, the bidder may withdraw its 
bid or enter into negotiations with the Managing Board and/or Supervisory Board and agree on a higher bid price for our 
Shares.

 In 2004 (as amended in 2008), we granted an option to the Stichting Preferente Aandelen QIAGEN (the 
“Foundation” (Stichting)), whereby the exercise of the option by the Foundation is subject to the conditions described in the 
paragraph above and which option allows the Foundation to acquire preference shares from us. The option enables the 
Foundation to acquire such number of preference shares as equals the number of our outstanding common shares at the time of 
the relevant exercise of the right less one share. When exercising the option and exercising its voting rights on such shares, the 
Foundation must act in our interest and the interests of our stakeholders. The purpose of the Foundation option is to prevent or 
delay a change of control that would not be in the best interests of us and our stakeholders. An important restriction on the 
Foundation’s ability to prevent or delay a change of control is that issuing (preference or other) protective shares enabling the 
Foundation to exercise 30% or more of the voting rights without the obligation to make a mandatory offer for all shares held by 
the remaining shareholders, is only allowed after a public offer has been announced by a third party. In addition, the holding of 
such a block of shares by the Foundation is restricted to two years and as a consequence, the size of the protective stake will 
need to be decreased below the 30% voting rights threshold before the two year period lapses. 

We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) which was approved by our 
shareholders on June 14, 2005. It expired by its terms in April 2015, at which time no further awards will be able to be granted 
under the 2005 Plan. On June 25, 2014, our shareholders approved the QIAGEN N.V. 2014 Stock Plan (the 2014 Plan), which 
replaced the 2005 Plan in April 2015. An aggregate of 16.7 million Common Shares were reserved for issuance pursuant to the 
2014 Stock Plan, subject to certain antidilution adjustments. 

48

Pursuant to the 2014 Plan, stock rights, which include options to purchase our Common Shares, stock grants and stock-based 
awards, may be granted to employees and consultants of QIAGEN and its subsidiaries and to Supervisory Directors. The 
vesting and exercisability of certain stock rights will be accelerated in the event of a Change of Control, as defined in the 
agreements under the 2014 Plan. A “Change of Control” means the occurrence of a merger or consolidation of QIAGEN, 
whether or not approved by the Board of Directors, other than a merger or consolidation which would result in the voting 
securities of QIAGEN outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by 
being converted into voting securities of the surviving entity or the parent of such corporation) at least 50% of the total voting 
power represented by the voting securities of QIAGEN or such surviving entity or parent of such corporation, as the case may 
be, outstanding immediately after such merger or consolidation, or the stockholders of QIAGEN approve an agreement for the 
sale or disposition by QIAGEN of all or substantially all of QIAGEN’s assets. 

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, 2018, the commitment under these agreements totaled $16.9 million (2017: 16.8 million). 

Agreements between the Company and its board members or employees providing for compensation if they resign or 
are made redundant without valid reason or if their employment ceases because of a takeover bid

The members of the Managing Board are appointed annually by the General Meeting of Shareholders based on the nomination 
of the Joint Meeting. Further, the members of the Managing Board have entered into employment agreements with QIAGEN 
N.V. and other QIAGEN affiliates. The term of these agreements varies for each Managing Board member due to individual 
arrangements and goes beyond the one year term of appointment by the General Meeting of Shareholders. These agreements 
cannot be terminated without cause and, absent such cause, have to be fulfilled during their stated term. These agreements 
contain provisions which guarantee the payments of certain amounts in the event of a change in control, as defined in the 
agreements. There are no arrangements for any extra compensation in case of resignation or redundancy. 

The members of the Supervisory Board are also appointed annually by the General Meeting of Shareholders based on the 
nomination of the Joint Meeting. There are no additional employments in place and there are no arrangements for any extra 
compensation in case of resignation or redundancy. The General Meeting determines the remuneration of the members of the 
Supervisory Board.

Reporting in accordance with Directive 2004/25/EC of the European Parliament and of the Council of April 21. 2004, on 
takeover bids

Not applicable.

Structure of our capital, including securities which are not admitted to trading on a regulated market in a Member State 
of the European Union

The authorized classes of our shares consist of common shares, Financing Preference Shares and Preference Shares. No Financing 
Preference Shares or Preference Shares have been issued.

As of December 31, 2018, a total of approximately 225.5 Common Shares were outstanding along with approximately 9.2 
million additional shares reserved for issuance upon exercise or release of outstanding stock options and awards, of which 0.9 
million were vested. A total of approximately 19.9 million Common Shares are reserved and available for issuances under our 
stock plans as of December 31, 2018, including the shares subject to outstanding stock options and awards. Additionally, 
holders of the Warrants issued as part of the Call Spread Overlays discussed further in Note 15 "Financial Debts", cover an 
aggregate of 46.3 million shares of our Common Stock (subject to adjustments under certain circumstances).

Common Shares - Restrictions on the transfer of securities

Common Shares are issued in registered form only. Until January 24, 2017, Common Shares were available either without issue 
of a share certificate, or Type I shares, or with issue of a share certificate, or Type II shares, in either case in the form of an entry 
in the share register. At the discretion of the Supervisory Board, Type I shares may be issued and the holders of such Type I 
shares will be registered in either our shareholders register with American Stock Transfer & Trust Company, or New York 
Transfer Agent, our transfer agent and registrar in New York, or our shareholder register with TMF FundServices B.V., 
Westblaak 89, NL-3012 KG Rotterdam, The Netherlands. The Type II shares were registered with our New York Transfer 
Agent.

The transfer of registered shares requires that we issue a written instrument of transfer and the written acknowledgment of such 
transfer by us or the New York Transfer Agent (in our name). Until January 24, 2017 the corresponding share certificates of 
Type II Shares had to be delivered to us or to the New York Transfer Agent (in our name). Acknowledgement of the transfer of 
Type II shares took place by us or the New York Transfer Agent (in our name) by endorsement on the share certificate or by 
issuance of a new share certificate to the transferee, at the discretion of the Managing Board.

49

Non-Financial Statement

Our approach to sustainability

For QIAGEN, sustainability means long-term economic success combined with respect for the natural environment and healthy, 
high-performance workplaces, with the aim to make improvements in life possible as a good corporate citizen.

Our commitment to sustainability goes beyond formal regulations. As a market and innovation leader in life sciences and 
molecular diagnostics, we believe there is room for innovation in driving sustainable development in our industry, and we are 
resolved to continue moving forward.

To achieve this, QIAGEN has integrated sustainability throughout its value chain. We pledge to continually evaluate the 
potential environmental impact of our business, saving energy and reducing negative environmental impacts of our operations. 
We look after the welfare of our employees, taking care of their developmental needs and supporting them in every way to 
become and remain committed and responsible. We extend our commitment to sustainability into the supply chain, committing 
our business partners to sign up to our environmental, social and human-rights related standards.

We recognize that ongoing success for QIAGEN also depends on the sustainability of society’s resources. This is why we 
engage in dialogue with our various stakeholders - employees, customers, patients, suppliers, shareholders, non-governmental 
organizations (NGOs) and communities - in order to gain a better understanding of our operating environment, including 
market developments and cultural dynamics. Depending on the subject matter, we use different approaches ranging from 
standardized questionnaires to one-to-one conversations.

Please find information about our business model, organizational structure, products, customers, business strategy, as well as 
main trends and issues pertaining to the reporting year, in our Management Report.

Material non-financial information

For guidance on materiality and non-financial disclosure, we base our non-financial reporting on the Sustainability Reporting 
Standards (SRS) of the Global Reporting Initiative (GRI Standards 2016) as well as on the sustainability accounting standards 
for Medical Equipment and Supplies and Biotechnology of the Sustainability Accounting Standards Board (SASB).

To identify the relevant information, we have conducted a systematic materiality analysis. For each thematic aspect prescribed 
in the European Commission’s CSR Directive 2014/95/EU (environmental, social and employee matters, respect for human 
rights, anti-corruption and bribery) we identified a series of topics, which possess high business relevance, strongly influence 
the decisions of our stakeholders, and where QIAGEN’s activities have significant impact on the thematic aspects. In a joint 
workshop with representatives from our different departments, the various perspectives had been assessed and discussed. The 
final list had been validated by our senior management and resulted in the following material topics:

•  Environmental matters: energy consumption, emissions
•  Employee matters: training, diversity, employee satisfaction, employee retention
• 
•  Respect for human rights: conflict minerals
•  Anti-corruption and bribery matters: antitrust, anti-corruption

Social matters: quality and product safety, customer satisfaction, access to healthcare

Business ethics

For QIAGEN, conducting business in a responsible way includes looking beyond our day-to-day business operations into the 
ethical foundations of our company. This means, in particular, the respect for human rights and legally compliant business 
behavior.

Human rights

QIAGEN believes that the respect for human rights is an essential component of promoting sustainability in our global 
business. As a publicly listed company with international operations, we regard ourselves as a responsible corporate citizen in 
all the countries and regions where we do business. This role includes rights and obligations governed by international and 
national law, with human rights as one of the foundations of international law.

In this sense, we acknowledge and endorse the UN Universal Declaration of Human Rights, the European Convention on 
Human Rights, and the business-related OECD Guidelines for Multinational Enterprises, the ILO Declaration on Fundamental 
Principles and Rights at Work, and the UN Guiding Principles on Business and Human Rights and its application in National 
Actions Plans of our relevant jurisdictions.

In 2018, QIAGEN began developing a Human Rights Policy, which is expected to be adopted during 2019 and become part of 
our Global Policy Manual. It is designed to provide guidance to all human rights issues in our sphere of influence, such as in 

50

our relationship with customers, on the employee level, and in our supply chain. The policy is available in the sustainability 
section of our corporate website. 

Compliance

As a publicly listed company with international operations, QIAGEN is subject to regulation in various jurisdictions. Unethical 
behavior and non-compliance with laws and regulations have the potential to seriously harm our business, our reputation and 
our shareholders and to expose our employees to personal liability. QIAGEN has established a comprehensive Compliance 
Program which translates legal and regulatory requirements as well as our fundamental values into clear, precise and 
understandable guidelines as our Corporate Code of Conduct and Ethics and supplementing specific policies for our employees. 
The policies include, but are not limited to aspects as conflicts of interest, insider trading, revenue recognition, interactions with 
healthcare professionals, confidentiality and social media.

Special attention is paid to antitrust and anti-corruption laws (see “Opportunities and Risks” section in the Management 
Report). Our specific antitrust and anti-corruption policies set forth our commitment to ensure that QIAGEN and its 
subsidiaries abide by the antitrust and anti-corruption laws of the countries in which we operate.

We extend our Compliance Program not only to our management and employees, but also to third-party intermediaries as 
distributors or agents. Third-party due diligence lies in the remit of the Sales Compliance Manager. This contains the following 
five elements:

1. 

2. 

3. 

4. 

5. 

Anti-corruption questionnaire and certification for new distributors, resellers and agents;

Risk assessment based on a calculated risk score, which factors location of business (Transparency International Index 
Score, TIIS) and annual sales revenue for distributing QIAGEN products by multiplying total revenues of the prior 
calendar year with the inverse of the TIIS;

Training;

Contractual obligations;

Due diligence;

also including payment monitoring.

All our policies are provided to all employees worldwide. Online training reaches all employees in local language, supported by 
multiple communication resources. All new employees are required to take online training on our Corporate Code of Conduct 
and Ethics at a minimum. Additional trainings which are customized to the specific area of responsibility are mandatory. All 
employees in Sales and Marketing as well as Upper Management are required to take training on anti-corruption and antitrust 
laws. Such basic trainings are followed by refresher courses on a regular basis. In addition, employees are informed through the 
company’s Compliance@QIAGEN intranet page and regular updates on compliance topics via the company’s internal 
communication platform Yammer.

We have established a hotline for reporting accounting-related concerns on an anonymous basis in good faith. We also offer a 
direct email and telephone hotline for employees to address questions or make suggestions for our Compliance Program.

Our Compliance Program is overseen by the Compliance Committee under the leadership of the Head of Global Legal Affairs 
and Compliance, who reports in this function directly to the Audit Committee of the Supervisory Board. The Compliance 
Committee consists  of managers from Legal, Internal Audit, Human Resources, Commercial Operations, Trade Compliance 
and Regulatory functions.

In the reporting period QIAGEN had no legal actions pending or completed with regard to antitrust or corruption.

Environment

Environmental protection is an issue of continued and committed concern for QIAGEN. As an international pioneer in our 
industry when it comes to eliminating harmful substances and waste products in laboratories, we have seen the value of 
environmentally responsible solutions as a source of competitive advantage, as well as an act of corporate citizenship. 

We strive to reduce the consumption of energy and water and to impose limits on packaging, waste, and transportation. With 
these efforts, we aim to operate in the most cost-efficient and environmentally friendly way possible. To support these aims, our 
key production facility in Hilden, Germany, is currently being recertified according to the international energy management 
norm ISO 50001. To best cater to the specific nature of our industry, at other sites we work according to our own environmental 
guidelines.

As concerns about climate change and effects of dwindling natural resources continue to impact pricing, we will be exposed to 
fluctuations in costs of these key inputs. By being able to improve our manufacturing efficiencies and limit our dependence on 
finite resources, we are engaging in active risk management, serving our customers and enhancing the value of our company.

51

For QIAGEN, the commitment to safe and environmentally sound practices comes with a culture of operational excellence - 
reinforced by training, decision-making and standard procedures. Operations employ a concept we called QIAzen, derived from 
the Japanese word “kaizen” (continuous improvement). Key employees in Operations have received QIAzen training to identify 
and prioritize avenues to improve our manufacturing organization, initiate projects, and monitor implementation with cross-
functional teams. This includes issues of environmental concern such as transportation and the consumption of energy and 
natural resources. This applies, in particular, to our sites in Hilden (Germany), Köping (Sweden), Germantown (USA), as well 
as Shenzhen and Beijing (China).

QIAGEN is acting proactively to minimize its contribution to climate change. We recognize consumer and customer awareness 
of our corporate environmental stewardship as an opportunity and a way to differentiate from our competitors. Investments in 
renewable energies serve to maintain our competitive advantage by protecting against the rising costs of conventional energy.

QIAGEN recognizes material climate change risks such as intensified weather events, e.g. severe rainstorms or power outages 
that might impact our manufacturing operations. Operations also could be negatively impacted by volatility in the cost of raw 
materials, components, freight and energy. New laws or regulations adopted in response to climate change could increase 
energy costs, the costs of certain raw materials, components, packaging and transportation. In line with the development of a 
<2°C climate target (limiting global warming to less than 2 degrees Celsius), QIAGEN will develop a company strategy for the 
reduction of climate risks, covering both physical and transitional risks.

Environmental performance

To increase transparency regarding our own global energy consumption and greenhouse gas emissions, QIAGEN has extended 
the coverage of the energy consumption data in 2018 by the integration of a centralized data collection process management for 
all production sites, research centers and major offices. As a result, our global data collection coverage was increased from 30% 
in 2017 to more than 95% in 2018. The consideration of additional sites led to an increase in our total energy consumption of 
91.3 GWh in 2018 compared to an energy consumption in the reporting year 2017 of 35.3 GWh as shown in the table below.

In addition to our energy and climate management activities, we have started to collect data regarding fresh water consumption 
and waste for the two largest production sites in the USA and Germany. The table below lists figures for the 2017 and 2018 
reporting years and puts our consolidated environmental data in relation to our production volume sold to establish a basis for a 
long-term monitoring system. With the help of these key performance indicators (KPIs), we will be able to target reduction 
potential for energy, climate emissions, fresh water as well as waste. We are in the process of implementing additional 
procedures, including dashboards and other tools, to enable improvements in measurement and monitoring of these metrics 
during 2019.

Energy (in MWh)

GHG (in tCO2)

Fresh Water (in t)

Waste (in kg)

Haz. Waste (in kg)

2018

91,300

30,587

119,621

632,530

249,990

KPI 2018

0.02622  MWh/ Unit

0.00878

 tCO2/ Unit

0.03435

0.18162

0.07178

m3/Unit

kg/ Unit

kg/ Unit

2017

35,300

12,512

n/a

569,720

183,170

KPI 2017

0.01198 MWh/ Unit

0.00425

tCO2/ Unit

n/a

m3/ Unit

0.19341

0.06218

kg/ Unit

kg/ Unit

The expansion in the collection of our energy data enabled us to calculate our corporate carbon footprint (CCF) more accurately 
in the reporting year according to ISO 14064. As of 2018, all relevant scope 1+2 emissions are included in the CCF. Scope 1 
covers direct greenhouse gas emissions (GHG emissions) from combustion of fossil fuels on our own premises; scope 2 are 
indirect emissions originating from external generation of electricity for our operations. In 2018, QIAGEN emitted 13,150 
tCO2 in scope 1, corresponding to 43% of the total GHG emissions (2017: 3,661 tCO2). For the scope 2 emissions, 17,430 
tCO2 occurred, representing 57% of the total GHG emissions (2017: 8,851 tCO2). Our total carbon footprint amounted to 
30,587 in 2018 (2017: 12,512 tCO2). This increase is again attributable to the expansion of our data scope.

The now almost complete coverage of our scope 1 and 2 emissions offers a good starting point for the development of a <2°C 
compatible climate target in 2019 together with the identification of climate-related risks and opportunities. In addition, we 
have started to collect data for calculating GHG emissions in scope 3. These emissions occur along our value chain, for 
example through transport services, suppliers or the use of our products. We are currently collecting the relevant data and will 
integrate the first scope 3 categories into our CCF in 2019.

At our Hilden site, action plans have already been drawn up to achieve reduction targets. On the basis of this experience, we 
can now develop concrete action plans for other sites, research centers and offices. They will be developed simultaneously with 
the establishment of the <2°C climate target, since we will be investigating long-term mitigation reduction potential as well as 
interim solutions, e.g. purchase of green electricity.

52

To limit the footprint of our business on the environment, we have already introduced a broad panel of activities and programs. 
We run simulations to reduce energy consumption and have installed energy recovery and control systems to provide only the 
minimum power required for operations. Improvements encompass energy extraction from co-generators, better insulation, heat 
recovery and installation of intelligent building systems.

As a significant part of the energy consumption associated with our business occurs beyond our own premises, transportation of 
people and cargo is an additional focus. In 2018, we have started to change our transports from air to sea freight wherever it is 
reasonable and possible. We have currently been able to convert around 150 tonnes per year to sea freight. In the next phase, 
which we will start in 2019, we expect to convert 100 additional tonnes per year.

At QIAGEN’s headquarters, discounted train and bus tickets encourage employees to use public transportation, and we have 
installed charging stations for electric cars and bikes. The pool of company cars has been changed to ecological and CO2-
efficient models in a continuous adjustment process. Low emissions play a critical role in the decision process for new 
company cars. At most sites, video conferencing systems have been installed to encourage virtual team meetings and reduce 
travel between sites.

Plastic Footprint Reduction

The use of plastic materials is increasingly being questioned in public debates. QIAGEN currently uses plastics in many our 
products and production support materials, as well as for transport and packaging purposes. We are aware of our responsibility 
in this respect and are working intensively with a special internal team focusing on solutions to avoid and reduce the usage of 
plastic, or at least improve the recyclability of the plastic used.

The reduction of plastic materials presents us and our industry with a number of challenges: Due to the use of our products in 
laboratory or medical applications, these products are subject to strict functional and legal requirements so in many cases other 
materials cannot simply be substituted for plastics. In the case of packaging materials, we must ensure that appropriate safety 
and hygiene standards are met.

In 2018 we set up a global, cross-departmental “Plastic Footprint Reduction” focus team to analyze the use of plastics and 
specifically identify reduction potential for QIAGEN. Our approach is to completely avoid unnecessary materials, develop 
more environmentally friendly alternatives or, where possible, optimize recyclability. As a first step, we have targeted 
polystyrene foam boxes that are used within the cold chain packaging of our products and are currently working on reducing 
the size of the boxes while optimizing the way the contents are structured. Our ultimate goal is to replace polystyrene foam 
boxes to a more environmentally friendly alternatives wherever possible.

In order to also identify starting points within our supply chain, we have initiated a query with suppliers about the use of plastic 
materials. We are currently exploring ways to establish a “box cycle” where supplies are packaged directly by our suppliers and 
the packaging material is returned to them. In addition, we are in discussions with suppliers in order to achieve a better 
recyclability of their products.

As a medium-term objective we will investigate our product kits with regards to the plastic materials used and evaluate 
potential alternatives for material components, e.g. bioplastics or biodegradable plastics, that are not in direct contact with the 
product. At the same time, we are working on establishing a material identification system that will make recycling of 
unavoidable plastics easier worldwide. 

Employees

QIAGEN’s long-term success and growth are shaped decisively by the knowledge, skill and passion of our employees. 
Focusing on human capital therefore drives our economic performance and considerably influences the sustainability of our 
operations. We are convinced that the professional and personal development of our employees is an integral factor in creating 
value for our customers, patients, colleagues, partners and shareholders. Being the industry’s employer of choice by attracting 
and developing top talent is one of our global goals. To achieve that, QIAGEN creates a work environment that empowers and 
involves employees at all levels.

As a company headquartered in the European Union, freedom of association and collective bargaining are cornerstones of the 
good relationship between management and representatives of employees. We don’t have significant operations in countries 
with severe legal limitations to freedom of association and collective bargaining. In all regions where we operate we respect 
local laws and regulations concerning labor relations.

Among all QIAGEN guidelines, the following policies aim to incorporate QIAGEN’s culture and values into all of our internal 
and external relationships. These are available internally for all employees.

Our Ethical Standards Policy: QIAGEN’s cultural norms and values are defined in the “3I’s: Identity, Inspire, Impact.” Our 
values form the basis of our business success and every employee is expected to treat everyone in an open, honest, and 
respectful manner.

53

Our Diversity & Inclusion Philosophy: At QIAGEN, we are committed to the richness of diversity. Diverse teams strengthen 
our organization through the variety of ideas of opinions. In addition, teams outperform and succeed when they are composed 
of individuals with the widest possible range of personalities, backgrounds and traits. Therefore, we are committed to 
maintaining an environment where all individuals have the opportunity to grow and contribute to our progress.

All our employees in the various regions of the world are covered by the relevant local laws or by our voluntary corporate 
guidelines to the greatest possible extent, which guarantee freedom of association and/or collective bargaining mechanisms.

Depending on local law and custom, there are different types of employment ranging from long-term fixed contracts to 
temporary positions, also including flexible time and programs for parents returning from childcare. In 2018, we employed 
5.57% part-time employees and 1.26% temporary employees (with QIAGEN contract / fixed-term work contract).

Employee training

As a fast-growing technology and knowledge-based company, we consider high-quality training and career development to be 
an integral part of our success. The QIAGEN Academy provides the possibility to either take part in e-learning sessions 
globally or to participate in personal trainings. The focus is on job-specific skills, competencies and leadership development.

In 2018, 87% of all QIAGEN employees completed internal training. In addition 87 employees participated in our advanced 
leadership development programs.

In 2018, we ran a mix of instructor-led, virtual instructor-led and e-learning courses attended by 4,892 employees. The 
company also organized 20 development centers with almost 150 participants designed to assesses leaders and future leaders' 
competencies and identify development opportunities.

As part of our talent and succession management, we have established transparent career paths with the QIAGEN Profile 
Navigator (QPN). It defines jobs, core competencies and approaches to advancement across the global organization.

In addition, QIAGEN’s global Performance Enhancement System (PES) creates a clear framework of regular, one-on-one 
review sessions for each employee and their manager to discuss career development. These include discussions of goals and 
achievement levels, assessment of relevant competencies, as well as training needs and career planning steps.

The supervisor feedback process provides the opportunity for employees to provide anonymized feedback to their supervisors. 
For 2018 as in previous years employees provided overall very positive feedback.

QIAGEN has implemented a program to develop promising specialists and managers to prepare for senior positions in 
cooperation with the University of Wu?rzburg, Germany (QIAGEN Executive MBA Business Integration Program). Participants
not only benefit from a curriculum providing a wide range of management skills and knowledge, but they also experience an 
international environment, learning with colleagues from around the world. In 2018 another class of 16 participants graduated.

Diversity

We are committed to create a working environment where all individuals have the opportunity to grow and contribute to our 
progress, regardless of age, educational background, gender, nationality, physical abilities, racial and ethnic background, 
religion, or sexual orientation. Strategic consideration of diversity not only makes QIAGEN a better place to work. We also 
consider it to be a key success factor on the path to achieving our mission and goals.

In 2018, the gender split across the whole company was at 51% men and 49% women. The participation of women in 
leadership roles was at 28%. Specific information about the diversity policy for the composition of the Managing Board and the 
Supervisory Board can be found in the Corporate Governance Report.

In 2018, QIAGEN introduced the Diversity Ambassador program, selecting more than 20 QIAGEN employees from across the 
world to champion diversity in the sites and countries they are based in. Training has been developed to help address 
unconscious bias, including an online assessment, and is aimed at all managers of people, including all individuals involved in 
Recruiting & Hiring. Our recruitment team members have all undertaken training aimed at helping to identify unconscious bias 
and eliminate it from the hiring process. QIAGEN remains committed to diversity, and we continue to develop and implement 
additional programs to promote awareness and are working to implement additional procedures to enable improvements in 
measurement and monitoring of diversity in future periods.

Employee satisfaction and retention

Recognizing that QIAGEN’s employees are the key to our success, we seek to be a great place to work. QIAGEN offers 
opportunities to work on exciting tasks and projects in an engaging work environment. Employees join QIAGEN and stay with 
QIAGEN because they can see how their work makes a difference to people`s life everywhere in the world. Internal and 
external ratings have improved significantly and show QIAGEN’s reputation and preferred position in the global working 
environment.

54

A prudent work-life balance is an important measure to create and maintain employee satisfaction. We provide services to help 
employees balance their personal lives with the company’s dynamic work environment, including in-house childcare, sabbatical 
programs, and flexible working hours.

QIAGEN has implemented frameworks for performance-based compensation, equity-based compensation, and incentive 
programs for new ideas and innovation. These programs aim to ensure fair and attractive compensation and to encourage each 
employee to work for the company’s long-term benefit.

An essential component of QIAGEN’s efforts to maintain a high level of satisfaction at work is our corporate health and safety 
management. We offer a wide range of measures and tools, from annual “health days” with free counseling, screening and 
medical check-ups to sports opportunities in the form of in-house gyms, on-site soccer fields and beach volleyball courts.

QIAGEN’s commitment to being an employer of choice is also reflected in the high number of applications for open positions, 
which exceeded 40,000 applications in 2018. At the same time, the average voluntary annual turnover rate remained largely 
unchanged.

Occupational safety and health protection

QIAGEN recognizes its responsibilities with respect to health and occupational safety in all our operations and meets all 
applicable governmental requirements. We prepare hazard analyses and risk assessments, carry out occupational safety and 
health audits and implement improvement measures in which all our divisions are involved. All employees of the company are 
obliged to actively work for occupational safety and to follow relevant instructions and regulations. Safety, orderliness and 
cleanliness are demanded by management as a key success factor.

The figures in the below table are based on our production sites and major non-production sites in the regions and countries 
indicated for the year ended December 31, 2018. Recordable accidents includes the following incidents: lost workdays; 
restricted work; and medical treatment beyond first aid. 

Recordable Accidents

Germany

United States of America

Japan

China

Sweden

United Kingdom

Total

2018

29.0

10.0

4.0

—

—

—

43.0

Information from the comparable year is not included as our process for of implementing additional procedures to enable 
improvements in measurement and monitoring is currently underwear. We expect to provide recordable accidents and additional  
metrics for current and future periods.  

Customers and products

QIAGEN’s mission is to make improvements in life possible by enabling our customers to achieve outstanding success and 
breakthroughs in life sciences, applied testing, pharma and molecular diagnostics. We are committed to customers and their 
patients to deliver innovative solutions that unlock new insights for scientific research, forensics, food safety or better treatment 
decisions. We understand and live up to our responsibility to customers and patients who depend on us for reliable, efficient and 
safe workflows.

Customer satisfaction

Customer satisfaction is an integral part of the QIAGEN mission of making improvements in life possible which is therefore the 
direct responsibility of the Chief Executive Officer. Our customers have high expectations on reliability, safety and the 
environment-friendly manufacturing of our products. We develop our products and services in close contact with our customers 
and incorporate their feedback into our processes.

Our commitment is to continually improve the customer experience, taking into account their evolving needs and expectations. 
QIAGEN has established a global systematic approach to measure customer experience in the form of an aggregated Customer 
Experience Indicator (CEI). The CEI is measured on a monthly basis through a set of internal KPIs (product and delivery 
performance, phone support, etc.) that are directly linked to customer experience in our transactions. Thus, we are able to 
identify quickly and systematically areas for improvement while staying closely connected with our customers. Employee 

55

performance in relation to the CEI is embedded into our annual goal setting process. With an average CEI of 1,515 of possible 
2,000 points in 2018, we have managed to further increase our strong performance compared to the previous year.

Quality and product safety

QIAGEN stands for quality. Since QIAGEN’s founding 30 years ago, we have always been committed to the highest quality, 
and we always strive to exceed our customers’ expectations. QIAGEN’s reputation as a quality supplier is best-in-class in our 
industry and the foundation of our loyal global customer base.

To achieve and maintain our quality standards, we established Total Quality Management (TQM) systems in all of our 
manufacturing facilities around the globe. These assure constant high quality as well as safe and effective medical devices. 
QIAGEN’s TQM systems are certified according ISO 9001, ISO 13485, ISO 18385, as well as 21 CFR 820 and all other 
applicable medical device standards around the globe (see “Government Regulations” section in the Management Report).

QIAGEN products and their components are safe to use by customers, as well by our employees in Research and Development 
(R&D). We use a list of qualified substances (the “MDx Toolbox”), specifically excluding any substances of concern. Our 
transparent and responsible product and development policy also includes the communication and marketing of products. As 
with all companies in the medical device/in vitro diagnostics industry, product claims and product properties are verified and 
validated during development and approved by regulatory bodies around the world as part of the product submission process.

QIAGEN, like other companies, is exposed to the financial implications of potential recalls and other adverse events due to 
equipment failures, manufacturing defects, design flaws, or inadequate disclosure of product-related risks. In the event of a 
recall, QIAGEN has established global procedures applicable to all QIAGEN sites. Processes, responsibilities and 
improvements programs are defined as required by regulating authorities to avoid the reoccurrence of recalls. There is full 
traceability of each product to the final customer; therefore, any recalls are executed by direct customer notifications. Due to 
QIAGEN’s stringent quality management, recalls rarely occur: 2018 (4), 2017 (0), 2016 (3), 2015 (1). The percentage of 
affected product is low as well: 2018 (0.09%), 2017 (0%), 2016 (0.21%), 2015 (0.022%). In past recalls, 90% to 100% of 
customers have been reached and confirmed recall notification.

The safe use of our electronic devices in terms of cybersecurity is another high-priority area at QIAGEN. All relevant 
employees are regularly trained in the latest technology and applications to ensure that our customers do not face any risks 
related to cybercrimes.

Access to healthcare

QIAGEN is aware of the importance of providing access to healthcare and research products around the world. In developing 
countries with scarce resources, new ways are needed to ensure access to affordable diagnostics that play a critical role in 
helping to prevent and treat diseases. In particular, infectious diseases and various malignancies can be treated much more cost-
effectively through early and precise detection - and with improved patient outcomes. However, many emerging countries lack 
properly trained lab personnel and technical infrastructure to utilize the latest molecular testing technologies.

For QIAGEN, a strategic approach to providing access to diagnostic technologies can yield opportunities for growth, 
innovation and unique public-private partnerships. To support our growth strategy in emerging markets, we are expanding our 
presence in these markets and adapting our products to local needs, where necessary. An example is the development of 
careHPV as an adaptation of our gold standard digene HC2 test for detection of high-risk human papillomavirus (HPV), which 
has been shown to be the primary cause of cervical cancer. In cooperation with PATH, an NGO, and support from the Bill & 
Melinda Gates Foundation, QIAGEN developed this dedicated testing system for use in regions with limited healthcare 
resources. The main advantages of decentralized HPV testing are:

immediate analysis at the point of care
instant treatment decisions
higher compliance of patients

• 
• 
• 
Our careHPV Test is currently available in more than 25 countries worldwide.  Since its launch through the end of 2018, more 
than 3 million tests have been distributed.

Another example is our effort to advance diagnostics for tuberculosis (TB) in low-resource, high disease burden countries. 
Based on a five-year memorandum of understanding signed in 2015, QIAGEN is cooperating with FIND, an NGO, to develop 
innovative and affordable tests to detect people with latent TB infections who are at risk of developing active TB.

Furthermore, we are providing financial support to several organizations and initiatives focused on global health projects. In 
2018, among the projects that we continued to support were the International Agency for Research on Cancer in Tanzania, 
Basic Health International in El Salvador, and the Pink Ribbon Red Ribbon initiative in different countries.

56

Sustainable supply chain management

QIAGEN strives to ensure that its quality standards, compliance with laws and regulations, as well as ecological and social 
standards, are maintained along the entire value chain of suppliers and partners. For us, organic growth is the goal, not 
maximum profit. We demand the same from our business partners. In 2018, we revised our procurement policy to include 
specific requirements for corporate governance, environmental and social standards, which we expect from our suppliers as 
minimum standards. The policy is publicly available on the QIAGEN Website.

In alignment with QIAGEN’s Compliance Program (especially QIAGEN’s Corporate Code of Conduct and Ethics), every 
QIAGEN employee must conduct themselves honestly, fairly, and objectively in all business relationships with suppliers and all 
others with whom QIAGEN maintains business relationships. Employees in the Procurement organization, especially, must 
understand our revised procurement guidelines and comply with them.

Structure of our supply chain

QIAGEN operates in over 35 locations worldwide. Our sites are supported by a global supplier network that includes 
approximately 9,000 suppliers in over 60 countries, supplying resources such as chemicals and bioreagents, plastics, packaging 
materials, as well as other materials and services essential to our business. In 2018, 89.7% of our overall purchasing volume 
came from OECD countries.

Region of origin of suppliers

Region of origin
Europe
North America
Asia
South America
Australia
Africa

Due diligence process

%
47%
24%
23%
3%
2%
0.4%

In order to minimize compliance, environmental and social risks in our supply chain, we introduced a multi-stage vendor 
selection process in 2018. As a first step, existing suppliers were subjected to a risk analysis with regard to ecological and social 
criteria based on their geographic location. These criteria were supported by information from the MVO Nederlands platform 
financed by the Dutch Foreign Ministry, as well as the Bertelsmann Stiftung foundation's Sustainable Development Goals 
Index. As a result, 70 suppliers were identified for whom potential risks exist due to geographic location and sales to QIAGEN.

The revised procurement policy was then sent to these suppliers with the request to sign. All new suppliers must also sign this 
policy in order to be approved as QIAGEN suppliers. In detail, the policy contains requirements with regard to legal 
compliance, bribery and corruption, labor rights, non-discrimination and fair treatment, health and safety as well as 
environmental protection and conservation. In addition, first-tier suppliers must confirm REACH, RoHS and SEC compliance 
as appropriate.

As part of our supplier selection process, we additionally assess the suppliers’ policy with a perspective on QIAGEN's 
requirements. Supplier audits are conducted if non-compliance is suspected. To our knowledge, there were no violations 
regarding corporate governance, environmental and social standards in the reporting period.

Conflict minerals

The sourcing of certain minerals (known as “conflict minerals”) has been linked with human rights abuses in the Democratic 
Republic of Congo ("DRC") and other conflict zones. QIAGEN has performed an extensive inquiry into the company’s supply 
chain to confirm that the products supplied to us are either DRC conflict-free or that the suppliers are not aware of any non-
compliance in their supply base. QIAGEN has no indication that any conflict minerals from the Democratic Republic of Congo 
or adjoining countries are used in the company’s laboratory instruments.

Our products consist of sample and assay kits, known as consumables, and automated instrumentation systems. We do not 
believe that any Conflict Minerals are necessary to the production or functionality of any of our consumable products. We 
conduct due diligence measures annually to determine the presence of Conflict Minerals in our instrumentation products and 
the source of any such Conflict Minerals. Because we do not purchase Conflict Minerals directly from smelters or refineries, we 
rely on our suppliers to specify to us their Conflict Minerals sources and declare their Conflict Minerals status. We disclosed 
our Conflict Minerals findings to the U.S. Securities and Exchange Commission ("SEC") for the calendar year ending 
December 31, 2017, on Form SD on May 17, 2018, and will provide updated disclosure to the SEC annually.

57

Outlook

QIAGEN Perspectives for 2019

With a dynamic and disruptive portfolio of Sample to Insight solutions for molecular testing, QIAGEN expects to sustain its 
growth in sales and earnings in 2019 and beyond. QIAGEN serves more than 500,000 customers across the value chain, from 
researchers in Academia and the pharmaceutical industry to healthcare providers using molecular diagnostics to bring state-of-
the-art care to patients. QIAGEN is executing on mid-term strategic plans to enhance financial performance and returns to 
shareholders from 2016 through 2020. Investments in innovation and commercial support are paying off in a faster sales 
trajectory for growth drivers, while efficiency and capital allocation initiatives enhance operating leverage and profitability.

QIAGEN continues its focus on differentiated solutions in fast-growing markets and made significant progress in enlarging and 
transforming its portfolio in 2018. Growth engines in 2019 include expanding the market for QuantiFERON-TB technology; 
driving the adoption of novel solutions in next-generation sequencing (NGS); enabling precision medicine with insights to 
guide treatment decisions; delivering valuable insights through automation systems; integrating bioinformatics to analyze and 
interpret genomic data; and deepening QIAGEN’s leadership in core technologies for sample processing. QIAGEN continues to 
build its innovative portfolio through research and development, external partnerships and targeted acquisitions.

Sales of QuantiFERON-TB, the gold-standard blood test for latent tuberculosis (TB) infection, grew 21% in 2018 - tracking 
toward a target of $300 million by 2020. As global efforts to control tuberculosis continue to intensify, QuantiFERON-TB Gold 
Plus (QFT-Plus) is gaining adoption worldwide to replace the time-consuming, unreliable 120-year-old tuberculin skin test. 
QIAGEN is adding automation options for QFT-Plus through partnerships with DiaSorin, Hamilton and Tecan to enhance the 
efficiency of screening, particularly for large TB programs. The company also is developing QuantiFERON-TB Access to make 
blood-based latent TB detection accessible to low-resource regions with a high disease burden (launch expected in 2020).  

With next-generation sequencing emerging from elite research labs into clinical research and diagnostics, QIAGEN’s portfolio 
of NGS solutions grew rapidly to over $140 million in 2018 sales, about 10% of total revenues. A new target of $190 million 
was set for 2019. QIAGEN continues to add to its “universal solutions,” industry-leading sample technologies, “Digital NGS” 
assays and bioinformatics, reaching into nearly every NGS lab around the world. The GeneReader NGS System, a complete 
Sample to Insight solution for benchtop sequencing, is benefiting from new placements and growing consumable sales. After 
adding new GeneRead QIAact gene panels in 2018, QIAGEN continues to develop innovative content for the platform.

QIAGEN’s Precision Medicine franchise, marshaling genomic insights to enable personalized treatment decisions for patients 
with cancer and other diseases, exceeded $100 million in sales in 2018 and offers dynamic growth potential. More than 25 
partnerships with Pharma and biotech companies make QIAGEN the global leader in creating companion diagnostics for 
selection of the most appropriate therapies based on genetic variations. In 2019, QIAGEN expects a stream of companion 
diagnostic launches in oncology and hematology. 

QIAGEN is commercializing disruptive new automation systems to expand its reach in large, growing markets - and is 
leveraging a rich pipeline of molecular content through assay development efforts. The focus in 2019 is on execution across 
these platforms:

•  QIAsymphony, the flagship modular system for Sample to Insight analysis with polymerase chain reaction (PCR), 

surpassed its target of 2,300 cumulative placements around the world in 2018, and a new target of over 2,500 was set 
for 2019. The QIAsymphony SP module is the market-leading “front end” solution for automated processing of 
samples - a critical need as laboratories handle growing volumes for NGS and PCR testing.

•  The GeneReader NGS System continues to gain share in the benchtop NGS market with a full menu of cancer gene 

panels for clinical research, plus selected forensics applications. New panels for immuno-oncology and liquid biopsy 
monitoring of lung cancer are expected to launch in 2019, as well as custom panels and improvements in automation.

•  QIAstat-Dx, a one-step, fully integrated system for syndromic testing, is gaining momentum after its April 2018 
launch in Europe. A U.S. launch and additional diagnostic panels are expected in 2019. QIAstat-Dx delivers cost-
efficient diagnosis in about an hour, with less than one minute of hands-on time. The addressable market is estimated 
at $800 million.

•  The NeuMoDx 288 and 96 systems, launched in Europe in late 2018, offer a disruptive new platform in the fully 

integrated PCR market for higher-throughput diagnostics, estimated at $2.7 billion. The Sample to Insight NeuMoDx 

58

systems automate the otherwise expensive, time-consuming liquid handling process and speed up analysis for labs. 
QIAGEN plans to expand the assay menu in 2019 and begin to drive NeuMoDx adoption globally.

• 

In 2019, QIAGEN is investing to develop disruptive new solutions for digital PCR, a fast-growing molecular 
technology among Life Sciences customers. QIAGEN is targeting a 2020 launch with fully integrated systems that 
simplify digital PCR workflows, offer higher throughput and multiplexing, and provide favorable economics for 
customers.

Bioinformatics solutions are growing rapidly as QIAGEN software and knowledge bases deliver the real value of molecular 
testing: actionable insights. In 2018, launches included major enhancements to QIAGEN Clinical Insight (QCI); easy-to-use 
new CLC Genomics Workbench software; and other solutions. So far in 2019, QIAGEN has acquired N-of-One, adding 
powerful real-world evidence in oncology to QCI, and partnered with Ares Genetics to advance the fight against antibiotic-
resistant infections. Bioinformatics is a key strategic advantage for QIAGEN.

QIAGEN’s differentiated core technologies for sample processing continue to drive growth, with a focus on emerging 
applications such as liquid biopsies and microbiome research. In 2019, QIAGEN is launching QIAcube Connect, a next-
generation solution for automated sample processing that delivers digitization and ease of use to help labs process increasing 
volumes.

Ongoing actions to improve efficiency are expected to continue to benefit results in 2019. Key actions include consolidating 
activities into shared service centers and global centers of excellence, and embracing digital tools across the business. Digital 
channels account for a growing portion of sales, exceeding 40% in 2018 and moving toward a goal of 50% in 2020.

Global Economic Perspectives for 2019

Global economic growth slowed in 2018 and is expected to decelerate further in 2019, as well as facing downside risks from 
geopolitical and financial uncertainties. The World Bank forecasts global GDP growth of 2.9% in 2019, down from 3.0% in 
2018, easing further to 2.8% in 2020 and 2021. Although no recession is predicted near-term, risks include increasing tariffs 
and other trade barriers, a chill in emerging-market economies, the United Kingdom’s move to leave the European Union, shifts 
toward normalizing monetary policy and the chance of a financial market disruption. U.S. growth remains solid but slower in 
2019, after the 2018 surge triggered by tax reform. Growth in Europe has slowed as exports soften in an uncertain trade climate. 
China’s rapid growth is expected to continue to moderate amid weaker exports, though supported by domestic consumption. 
Japan remains in a slow-growth mode. Economic momentum tends to benefit the business environment for QIAGEN, while a 
downturn could hurt customer funding budgets. Currency exchange rates also affect results reported in U.S. dollars.

Industry Perspectives for 2019

Genomic insights today are moving rapidly from basic research laboratories into applications in medicine and other fields, 
delivering ever-greater value for patients and other users. Multiple segments of molecular testing are growing at double-digit 
rates. As innovation drives market expansion, QIAGEN has a fertile environment to sustain its growth in 2019 and beyond. 

Molecular diagnostics, in particular, is growing briskly as healthcare providers adopt genomic testing to evaluate and monitor 
patients for cancer, infectious diseases and other conditions. Molecular medicine is migrating from research-based institutions 
into hospitals and reference laboratories in need of quick, accurate results, increasing the demand for standardized tests and 
automated workflows. Customers, meanwhile, embrace diverse technologies based on different needs - from low-throughput to 
high-throughput, and from single-target or multiplex PCR analysis to in-depth next-generation sequencing. Common themes 
across different customer types are need for easy-to-use technologies and decision-support software.

Life science researchers in Academia and the Pharma industry rely on novel sample and sequencing technologies to explore 
disease pathways and biomarkers, and increasingly to guide drug development and clinical trials as well. Developments in the 
science presage a wave of new therapies based on genomic insights. Applications of molecular testing also are expanding for 
public safety needs such as forensics and environmental monitoring.

QIAGEN is executing on a strategy to engage customers across the continuum, from discovery to routine molecular testing, and 
to create value with differentiated solutions and automation systems that make improvements in life possible.

59

Subsequent Events

On January 7, 2019, we announced the acquisition of N-of-One, Inc, a privately-held U.S. molecular decision support company 
and pioneer in clinical interpretation services for complex genomic data. The cash consideration totaled approximately $26.0 
million. The acquisition included contingent consideration which is recorded as part of the purchase price based on the 
acquisition date fair value. The addition of N-of-One will enable QIAGEN to significantly expand its decision-support solutions 
while offering a broader range of software, content and service-based solutions. It will also enable QIAGEN to provide 
customers with greater access to valuable genomic data assets and service offerings. N-of-One is not expected to provide a 
significant contribution to our results in 2019.

On January 31, 2019, we acquired the digital PCR assets of Formulatrix, Inc., a developer of laboratory automation solutions. 
Combining the Formulatrix assets with QIAGEN technologies and automation, we expect to bring to market a fully integrated 
digital PCR solution with a targeted launch in 2020. We agreed to pay Formulatrix $125.0 million in cash upon closing and 
future milestone payments of $135.9 million in 2020.

Venlo, the Netherlands, April 29, 2019 

QIAGEN N.V.

Peer M. Schatz  
Chief Executive Officer  

Roland Sackers 
Chief Financial Officer

60

 
 
 
 
 
Corporate Governance Report

We recognize the importance of clear and straightforward rules on corporate governance and, where appropriate, have adapted 
our internal organization and processes to these rules. This section provides an overview of QIAGEN’s corporate governance 
structure and includes details of the information required under the Dutch Corporate Governance Code (the Dutch Code). The 
Dutch Code is applicable to QIAGEN N.V. (in the following also referred to as the “Company”), as it is a publicly listed 
company incorporated under the laws of The Netherlands with a registered seat in Venlo, The Netherlands. The Dutch Code 
contains the principles and concrete provisions which the persons involved in a listed company (including Managing Board 
members and Supervisory Board members) and stakeholders should observe in relation to one another.

Our corporate governance practices generally derive from the provisions of the Dutch Civil Code and the Dutch Corporate 
Governance Code. Further, due to our listing on the New York Stock Exchange in the U.S., the Managing Board and the 
Supervisory Board of QIAGEN N.V. declared their intention to disclose in QIAGEN’s Annual Reports the Company’s 
compliance with the corporate governance practices followed by U.S. companies under the New York Stock Exchange listing 
standards or state the deviations recorded in the period. 

A brief summary of the principal differences follows.

Corporate Structure

QIAGEN is a ‘Naamloze Vennootschap,’ or N.V., a Dutch public limited liability company similar to a corporation in the 
United States. QIAGEN has a two-tier board structure. QIAGEN is managed by a Managing Board consisting of executive 
management acting under the supervision of a Supervisory Board (non-executives), similar to a Board of Directors in a U.S. 
corporation. It is in the interest of QIAGEN and all its stakeholders that each Board performs its functions appropriately and 
that there is a clear division of responsibilities between the Managing Board, the Supervisory Board, the general meeting of 
shareholders (General Meeting) and the external auditor in a well-functioning system of checks and balances.

Managing Board

General

The Managing Board manages QIAGEN and is responsible for defining and achieving QIAGEN’s aims, strategy, policies and 
results and is expected to act in a sustainable manner by focusing on long-term value creation in the performance of their work. 
The Managing Board is also responsible for complying with all relevant legislation and regulations as well as for managing the 
risks associated with the business activities and the financing of QIAGEN. It reports related developments to and discusses the 
internal risk management and control systems with the Supervisory Board and the Audit Committee. Under Dutch Law, 
QIAGEN's Managing Board, which has two members, has chosen to work with an Executive Committee and is accountable for 
the actions and decisions of the Executive Committee, which is comprised of the CEO, the CFO and certain experienced 
leaders who have responsibilities for the operational management of the Company and the achievement of its objectives and 
results. The Managing Board has ultimate responsibility for the Company’s external reporting and is answerable to shareholders 
of the Company at the Annual General Meeting of Shareholders. Pursuant to the two-tier corporate structure, the Managing 
Board is required to render account for the performance of its duties to the Supervisory Board and the General Meeting of 
Shareholders (General Meeting). The Managing Board provides the Supervisory Board with timely information necessary for 
the exercise of the duties of the Supervisory Board. In discharging its duties, the Managing Board takes into account the 
interests of QIAGEN, its enterprises and all parties involved in QIAGEN, including shareholders and other stakeholders. 

Composition and Appointment

The Managing Board consists of one or more members as determined by the Supervisory Board. The members of the Managing 
Board are appointed by the General Meeting upon the joint meeting of the Supervisory Board and the Managing Board (the 
Joint Meeting) having made a binding nomination for each vacancy. However, the General Meeting may at all times overrule 
the binding nature of such a nomination by a resolution adopted by at least a two-thirds majority of the votes cast, if such 
majority represents more than half the issued share capital. Managing Directors are appointed annually for the period beginning 
on the date following the Annual General Meeting up to and including the date of the Annual General Meeting held in the 
following year. 

Members of the Managing Board may be suspended and dismissed by the General Meeting by a resolution adopted by a two-
thirds majority of the votes cast, if such majority represents more than half of the issued share capital, unless the proposal was 
made by the Joint Meeting, in which case a simple majority of votes cast is sufficient. Furthermore, the Supervisory Board may 
at any time suspend (but not dismiss) a member of the Managing Board.

Our Managing Directors for the year ended December 31, 2018 and their ages as of January 31, 2019, are as follows:

61

Managing Directors:

Name

Peer M. Schatz

Roland Sackers

Age Position

53 Managing Director, Chief Executive Officer

50 Managing Director, Chief Financial Officer

The following is a brief summary of the background of each of the Managing Directors. References to “QIAGEN” and the 
“Company” in relation to periods prior to April 29, 1996 mean QIAGEN GmbH and its consolidated subsidiaries:

Peer M. Schatz, 53, joined QIAGEN in 1993, when the Company had just 30 employees and revenues of approximately $2 
million, and has been Chief Executive Officer since January 1, 2004. He was Chief Financial Officer between 1993 and 2003 
and became a member of the Managing Board in 1998. Mr. Schatz was previously a partner in a private management buyout 
group in Switzerland, worked in finance and systems positions in Sandoz, Ltd. and Computerland AG, and participated in the 
founding of start-up companies in the computer and software trading industry in Europe and the United States. Mr. Schatz 
graduated from the University of St. Gallen, Switzerland, with a Master's degree in Finance in 1989 and obtained an M.B.A. in 
Finance from the University of Chicago Graduate School of Business in 1991. Mr. Schatz served as a member of the German 
Corporate Governance Commission from 2002 to 2012. He is Managing Director of PS Capital Management GmbH. He is a 
board member of AdvaMedDx, an advocacy dedicated to issues facing the in vitro diagnostics industry in the United States and 
Europe, and ALDA (the Analytical, Life Science and Diagnostics Association), a trade association of developers and suppliers 
in these fields. 

Roland Sackers, 50, joined the Company in 1999 as Vice President Finance and has been Chief Financial Officer since 2004. 
In 2006, Mr. Sackers became a member of the Managing Board. Between 1995 and 1999, he served as an auditor with Arthur 
Andersen Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft. Mr. Sackers earned his Diplom-Kaufmann from 
University of Münster, Germany. He is a former member of the Supervisory Board and Audit Committee of IBS AG and a 
former member of the board of directors of Operon Biotechnologies, Inc. Mr. Sackers is a board member of the industry 
association BIO Deutschland. He was previously a non-executive director and chair of the audit committee from 2011 to 2018 
of Immunodiagnostic Systems Holding PLC (IDS), a leading producer of immunological tests for research and diagnostic 
applications publicly listed in the United Kingdom.

Conflicts of Interest, Loans or Similar Benefits

Resolutions to enter into transactions under which members of the Managing Board could have a conflict of interest with 
QIAGEN, and which are of material significance to QIAGEN and/or the relevant member of the Managing Board, require the 
approval of the Supervisory Board. A Managing Director that has a personal conflict of interest will not participate in the 
decision making process regarding such item. QIAGEN has not entered into any such transactions in 2018. No credit, loans or 
similar benefits were granted to members of the Managing Board. Additionally, the Managing Board Members did not receive 
any benefits from third parties that were either promised or granted in view of their position as members of the Managing 
Board.

Supervisory Board

General

The Supervisory Board supervises the policies of the Managing Board, the general course of QIAGEN’s affairs and the manner 
in which the Management Board implements the long-term value creation strategy and the business enterprises which we 
operate. The Supervisory Board assists the Managing Board by providing advice relating to the business activities of QIAGEN. 
In 2018, the Supervisory Board had five regular meetings that were held with the attendance of the Managing Board, while 
certain agenda items were discussed exclusively between the Supervisory Board members. In discharging its duties, the 
Supervisory Board takes into account the interests of QIAGEN, its enterprise and all parties involved in QIAGEN, including 
shareholders and other stakeholders. The Supervisory Board is responsible for the quality of its own performance. In this 
respect, the Supervisory Board conducts a self-evaluation on an annual basis. Our Supervisory Board has specified matters 
requiring its approval, including decisions and actions which would fundamentally change the company’s assets, financial 
position or results of operations. The Supervisory Board has appointed an Audit Committee, a Compensation Committee, a 
Selection and Appointment (Nomination) Committee and a Science and Technology Committee from among its members and 
can appoint other committees as deemed beneficial. The Supervisory Board has approved charters pursuant to which each of 
the committees operates.

Composition and Appointment

The Supervisory Board consists of at least three members, or a larger number as determined by the Joint Meeting. Members of 
the Supervisory Board are appointed by the General Meeting upon the Joint Meeting having made a binding nomination for 

62

each vacancy. However, the General Meeting may at all times overrule the binding nature of such a nomination by a resolution 
adopted by at least a two-thirds majority of the votes cast, if such majority represents more than half the issued share capital. 

The Supervisory Board shall be composed in a way that enables it to carry out its duties properly and enables its members to act 
critically and independently of one another and of the Managing Board and any particular interests. To that effect, the 
Supervisory Board has adopted a profile of its size and composition that takes into account the nature of our business, our 
activities and the desired diversity, expertise and background of the members of the Supervisory Board. The current profile of 
the Supervisory Board can be found on our website. The Supervisory Board has appointed a chairman from its members who 
has the duties assigned to him by the Articles of Association and the Dutch Code. 

Members of the Supervisory Board are appointed annually for the period beginning on the date following the General Meeting 
up to and including the date of the General Meeting held in the following year. Members of the Supervisory Board may be 
suspended and dismissed by the General Meeting by a resolution adopted by a two-thirds majority of the votes cast, if such 
majority represents more than half of the issued share capital, unless the proposal was made by the Managing Board and the 
Supervisory Board in which case a simple majority of votes cast is sufficient.

Our Supervisory Directors for the year ended December 31, 2018 and their ages as of January 31, 2019, are as follows:

Supervisory Directors:

Name

Age Nationality Gender Position

Stéphane Bancel

46

French

Male

Dr. Håkan Björklund

62

Swedish

Male

Supervisory Director, Member of the Compensation Committee,
Audit Committee and Science and Technology Committee

Chairman of the Supervisory Board, Member of the
Compensation Committee and Selection and Appointment
Committee

Dr. Metin Colpan

Dr. Ross L. Levine

Dr. Elaine Mardis

Lawrence A. Rosen

Elizabeth E. Tallett

German

Male

Supervisory Director, Chairman of the Science and Technology
Committee and Member of the Selection and Appointment
Committee

U.S.

U.S.

U.S.

Male

Supervisory Director and Member of the Science and Technology
Committee

Female

Supervisory Director and Member of the Science and Technology
Committee

Male

Supervisory Director and Chairman of the Audit Committee

U.S.

Female

Supervisory Director, Chairwoman of the Compensation
Committee, Member of the Audit Committee and Member of the
Selection and Appointment Committee

64

47

56

61

69

The following is a brief summary of the background of each of the Supervisory Directors. References to “QIAGEN” and the 
“Company” in relation to periods prior to April 29, 1996 mean QIAGEN GmbH and its consolidated subsidiaries:

Stéphane Bancel, 46, joined the Company's Supervisory Board as well as the Compensation Committee in 2013 and joined the 
Audit Committee and Science and Technology Committee in 2014. He is Chief Executive Officer of Moderna Therapeutics, 
Inc., a clinical-stage biotechnology company based in Cambridge, Massachusetts, which is advancing multiple drug 
development programs involving messenger RNA therapeutics. Before joining Moderna, Mr. Bancel served for five years as 
Chief Executive Officer of the French diagnostics company bioMérieux SA. Prior to bioMérieux, he was Managing Director of 
Eli Lilly in Belgium and Executive Director of Global Manufacturing Strategy and Supply Chain at Eli Lilly in Indianapolis, 
Indiana, after having started at Lilly in Great Britain. Before joining Eli Lilly, Mr. Bancel served as Asia-Pacific Sales and 
Marketing Director for bioMérieux while based in Tokyo, Japan. He holds a Master of Engineering degree from École Centrale 
Paris (ECP), a Master of Science in Chemical Engineering from the University of Minnesota and an M.B.A. from Harvard 
Business School. 

Dr. Håkan Björklund, 62, was appointed as a new Supervisory Board Member in March 2017 and as Chairman of the 
Supervisory Board in June 2018. He is a member of the Compensation Committee and the Selection and Appointment 
Committee. Dr. Björklund brings an extensive international background in the life science industry to QIAGEN, in particular 
through his current role as Operating Executive at Avista Capital Partners, as well as through previous roles as CEO of the 
global pharmaceutical company Nycomed, Regional Director at Astra (now AstraZeneca) and President of Astra Draco. Under 
Mr. Björklund’s leadership, Nycomed grew from a predominantly Scandinavian business into a global pharmaceutical 
company. In addition to QIAGEN, he currently serves as Chairman of the Board of Directors at Acino International AG, 
Swedish Orphan Biovitrum AB (Sobi), BONESUPPORT AB and Trimb Healthcare AB. Dr. Björklund earlier served as 

63

Chairman of the Board of Directors of Lundbeck A/S, and was also a Member of the Board of Directors of several international 
life science companies, including Alere, Atos, Coloplast and Danisco. Dr. Björklund has a Ph.D. in Neuroscience from 
Karolinska Institutet in Sweden. 

Dr. Metin Colpan, 64, is a co-founder of QIAGEN and was the Company's Chief Executive Officer and a Managing Director 
from 1985 through 2003. Dr. Colpan has been a member of the Supervisory Board since 2004 and has served as Chairman of 
the Science and Technology Committee since 2014. He has been a member of the Selection and Appointment Committee since 
2015. Dr. Colpan obtained his Ph.D. and M.S. in Organic Chemistry and Chemical Engineering from the Darmstadt Institute of 
Technology in 1983. Prior to founding QIAGEN, Dr. Colpan was an Assistant Investigator at the Institute for Biophysics at the 
University of Düsseldorf. Dr. Colpan has had wide experience in separation techniques and in the separation and purification of 
nucleic acids in particular, and has filed many patents in the field. Dr. Colpan also serves as a Supervisory Board member of 
Qalovis Farmer Automatic Energy GmbH, Laer, Germany. Dr. Colpan previously served as a Supervisory Board member of 
Ingenium Pharmaceuticals AG, GenPat77 Pharmacogenetics AG, GPC Biotech AG and Morphosys AG, each in Munich, 
Germany. 

Dr. Ross L. Levine, 47, joined the Supervisory Board and its Science and Technology Committee in 2016. He is a physician-
scientist focused on researching and treating blood and bone marrow cancers as the Laurence Joseph Dineen Chair in Leukemia 
Research, the Director of the Center for Hematologic Malignancies, and an Attending Physician at Memorial Sloan Kettering 
Cancer Center, as well as Professor of Medicine at Weill Cornell Medical College. He leads a research lab investigating 
genetics and targeted therapies in myeloid malignancies and is interested in application of next-generation sequencing 
technology in the practice of medicine in hematologic cancers. He trained in internal medicine at Massachusetts General 
Hospital and in hematology-oncology at the Dana-Farber Cancer Institute, earning board certification in these specialties. He 
received his M.D. from the Johns Hopkins University School of Medicine and his A.B. degree from Harvard College.

Dr. Elaine Mardis, 56, joined the Company’s Supervisory Board and its Science and Technology Committee in 2014. Dr. 
Mardis is the Co-Executive Director of the Institute for Genomic Medicine at Nationwide Children’s Hospital in Columbus, 
OH. She also is Professor of Pediatrics at the Ohio State University College of Medicine. Dr. Mardis has research interests in 
the application of genomic technologies to improve our understanding of human disease, and toward improving the precision of 
medical diagnosis, prognosis and treatment. Dr. Mardis is the former Robert E. and Louise F. Dunn Distinguished Professor of 
Medicine at Washington University School of Medicine in St. Louis, MO, where she was on the faculty for 22 years. As Co-
Director of the McDonnell Genome Institute, she devised methods and automation that contributed to the Human Genome 
Project and has since played key roles in the 1000 Genomes Project, The Cancer Genome Atlas, and the Pediatric Cancer 
Genome Project. Prior to joining the Washington University faculty, she was a senior research scientist at BioRad Laboratories 
in Hercules, CA. Dr. Mardis is a board member of the American Association for Cancer Research, and has scientific advisory 
roles at the Regeneron Genomics Center, PACT Pharma LLC, and Interpreta LLC. She also serves the U.S. government as a 
scientific advisor to the Veteran’s Administration for the Million Veterans Program. Dr. Mardis received her Bachelor of 
Science degree in Zoology in 1984 and her Ph.D. in Chemistry and Biochemistry in 1989, both from the University of 
Oklahoma.

Lawrence A. Rosen, 61, joined the Company's Supervisory Board as well as the Audit Committee in 2013 and has served as 
the committee's chairman since 2014. Mr. Rosen was a member of the Board of Management and Chief Financial Officer of 
Deutsche Post DHL until September 2016. Holding this position since 2009, Mr. Rosen was in charge of controlling, corporate 
accounting and reporting, investor relations, corporate finance, corporate internal audit and security, taxes, as well as the 
group’s global business services. Prior to joining Deutsche Post DHL, Mr. Rosen served as Chief Financial Officer of Fresenius 
Medical Care AG & Co. KGaA in Germany from 2003 to 2009. Prior to that, he was Senior Vice President and Treasurer for 
Aventis SA in Strasbourg, France. Between 1984 and 2000, Mr. Rosen held different positions at the Aventis predecessor 
companies Hoechst AG and American Hoechst/Hoechst Celanese Inc. Since 2015, Mr. Rosen has served as a member of the 
board of Lanxess AG and previously served on the board of Postbank AG from 2009 until 2015. Mr. Rosen, who is a U.S. 
citizen, holds a Bachelor's degree in Economics from the State University of New York and an M.B.A. from the University of 
Michigan.

Elizabeth E. Tallett, 69, joined the Company's Supervisory Board as well as the Audit Committee and Compensation 
Committee in 2011 and since 2016 has served as Chairwoman of the Compensation Committee. She is a member of the 
Selection and Appointment Committee. Ms. Tallett was a Principal of Hunter Partners, LLC, a management company for early 
to mid-stage pharmaceutical, biotechnology and medical device companies, from 2002 until February 2015. Ms. Tallett 
continues to consult with early stage health care companies. Her senior management experience includes President and CEO of 
Transcell Technologies Inc., President of Centocor Pharmaceuticals, member of the Parke-Davis Executive Committee, and 
Director of Worldwide Strategic Planning for Warner-Lambert Company. Ms. Tallett graduated from Nottingham University, 
England with dual Bachelor's degrees with honors in mathematics and economics. She is a member of the board of directors of 
Principal Financial Group, Inc. (where she is currently the Lead Director), Meredith Corp and is chair of the board of Anthem, 

64

Inc. She is a former director of Coventry Health Care, Inc. Ms. Tallett was a founding board member of the Biotechnology 
Council of New Jersey and is a Trustee of Solebury School in Pennsylvania. 

Professor Dr. Manfred Karobath, 78, had been a member of the Supervisory Board since 2000 and joined the Compensation 
Committee in 2005. In 2016, Prof. Karobath was appointed as Chairman of the Supervisory Board. He joined the Science and 
Technology Committee in 2014 and the Compensation Committee in 2016. He was also the Chairman of the Selection and 
Appointment Committee. Prof. Dr. Karobath studied medicine, and from 1967 to 1980 he worked first in the Dept. of 
Biochemistry of the University of Vienna and, after a stage as postdoctoral fellow, he joined the Dept. of Psychiatry where he 
became Professor of Biological Psychiatry. In 1980, he joined Sandoz Pharma in Basel, first in drug discovery, and later 
becoming Senior Vice President and head of R&D. In 1992, Prof. Dr. Karobath joined Rhone Poulenc Rorer (RPR) as President 
of R&D and Executive Vice President, and later, he became a member of the boards of directors of RPR, Pasteur Mérieux 
Connought, Centeon and Rhone Poulenc Pharma. He has received several scientific awards and has published 92 scientific 
papers. Prof. Dr. Karobath did not stand for re-election at the Company’s Annual General Meeting in June 2018.

Conflicts of Interest, Loans or Similar Benefits

Resolutions to enter into transactions under which members of the Supervisory Board could have a conflict of interest with 
QIAGEN, and which are of material significance to QIAGEN and/or the relevant member of the Supervisory Board, must be 
reported and require the approval of the Supervisory Board plenum. A Supervisory Director that has a personal conflict of 
interest will not participate in the decision making process regarding such item. In 2018 neither QIAGEN nor its Supervisory 
Board members have entered into any such transactions. No credit, loans or similar benefits were granted to members of the 
Supervisory Board. Additionally, the Supervisory Board Members did not receive any benefits from third parties that were 
either promised or granted in view of their position as members of the Supervisory Board.

Committees of the Supervisory Board

The Supervisory Board has established an Audit Committee, a Compensation Committee, a Selection and Appointment 
Committee and a Science and Technology Committee from among its members and can establish other committees as deemed 
beneficial. The Supervisory Board has approved charters under which each of the committees operates. These charters are 
published on our website www.qiagen.com. The committees are comprised of the following members: 

Name of Supervisory Director(1)
Stéphane Bancel

Dr. Håkan Björklund

Dr. Metin Colpan

Dr. Ross L. Levine

Dr. Elaine Mardis

Lawrence A. Rosen

Elizabeth E. Tallett

___________________

Member of Audit
Committee

Member of
Compensation 
Committee

Member of Selection 
and Appointment 
Committee

Member of Science 
and Technology 
Committee

(Chairman)

(Chairman)

(Chairman)

(Chairwoman)

(1) Prof. Dr. Manfred Karobath served as a member of the Compensation Committee, as a member of the Science and 
Technology Committee and as the Chairman of the Selection and Appointment Committee until June 2018.

We believe that all of our Supervisory Directors meet the independence requirements set forth in the Dutch Corporate 
Governance Code (the Dutch Code). We further believe that all Supervisory Board Directors qualify as independent under the 
independence standards set forth in the New York Stock Exchange (NYSE) Listed Company Manual. Pursuant to the NYSE 
rules, a majority of the Supervisory Directors must qualify as independent, as defined in the Rules. 

Audit Committee

The Audit Committee currently consists of three members, Mr. Rosen (Chairman), Ms. Tallett and Mr. Bancel, and meets at 
least quarterly. The Audit Committee members are appointed by the Supervisory Board and serve for a term of one year. We 
believe that all members of our Audit Committee meet the independence requirements as set forth in Rule 10A-3 of the 
Securities Exchange Act of 1934, as amended, and the New York Stock Exchange Listed Company Manual. The Board has 
designated Mr. Rosen as an “audit committee financial expert” as that term is defined in the United States Securities and 

65

Exchange Commission rules adopted pursuant to the Sarbanes-Oxley Act of 2002 and as defined in provisions III.3.2 and III.
5.7 of the Dutch Code. The Audit Committee performs a self-evaluation of its activities on an annual basis.

The Audit Committee's primary duties and responsibilities include, among other things, to serve as an independent and 
objective party to monitor QIAGEN's accounting and financial reporting process and internal risk management, control and 
compliance systems. The Audit Committee also is directly responsible for proposing the external auditor to the Supervisory 
Board, which then proposes the appointment of the external auditor to the General Meeting. Further, the Audit Committee is 
responsible for the compensation and oversight of QIAGEN’s external auditor and for providing an open avenue of 
communication among the external auditor as well as the Management Board and the Supervisory Board. Our Internal Audit 
department operates under the direct responsibility of the Audit Committee. Further, the Audit Committee is responsible to 
establish procedures to allow for the confidential and or anonymous submission by employees of concerns. Additionally, this 
includes the receipt, retention and treatment of submissions received regarding accounting, internal accounting controls, or 
auditing matters. The Audit Committee discusses our financial accounting and reporting principles and policies and the 
adequacy of our internal accounting, financial and operating controls and procedures with the external auditor and 
management; considers and approves any recommendations regarding changes to our accounting policies and processes; 
reviews with management and the external auditor our quarterly earnings reports prior to their release to the press; and reviews 
the quarterly and annual reports (reported on Forms 6-K and 20-F) to be furnished to or filed with the Securities and Exchange 
Commission and the Deutsche Boerse. The Audit Committee met seven times in 2018 and met with the external auditor 
excluding members of the Managing Board in July 2018. The Audit Committee reviews major financial risk exposures, pre-
approves related-party transactions between the Company and Supervisory Board or Managing Board, and reviews any legal 
matter including compliance topics that could have a significant impact on the financial statements. 

Compensation Committee

The Compensation Committee’s primary duties and responsibilities include, among other things, the preparation of a proposal 
for the Supervisory Board concerning the Remuneration Policy for the Managing Board to be adopted by the General Meeting, 
the preparation of a proposal concerning the individual compensation of Managing Board members to be adopted by the 
Supervisory Board and the preparation of the Remuneration Report on compensation policies for the Managing Board to be 
adopted by the Supervisory Board. The Compensation Committee reviews and approves all equity-based compensation, 
reviews and approves the annual salaries, bonuses and other benefits of executive officers, and reviews general policies relating 
to employee compensation and benefits. The Remuneration Report reviews the implementation of the Remuneration Policy in 
the most recent year and provides an outline of the Remuneration Policy for the future. The Compensation Committee engages 
external consultants to ensure that the overall remuneration levels are benchmarked regularly, against a selected group of 
companies and key markets in which QIAGEN operates. The Compensation Committee currently consists of three members, 
Ms. Tallett (Chairwoman), Mr. Bancel and Dr. Björklund. Members are appointed by the Supervisory Board and serve for a 
term of one year. The Compensation Committee met five times in 2018.

Selection and Appointment Committee

The Selection and Appointment (Nomination) Committee is primarily responsible for the preparation of selection criteria and 
appointment procedures for members of the Supervisory Board and Managing Board as well as the periodic evaluation of the 
scope and composition of the Managing Board and the Supervisory Board, including the profile of the Supervisory Board. 
Additionally, the Selection and Appointment Committee periodically evaluates the functioning of individual members of the 
Managing Board and Supervisory Board, reporting these results to our Supervisory Board. It also proposes the 
(re-)appointments of members of our Managing Board and Supervisory Board and supervises the policy of our Managing 
Board in relation to selection and appointment criteria for senior management. Current members of the Selection and 
Appointment Committee are Dr. Björklund (Chairman), Dr. Colpan, and Ms. Tallett. Members are appointed by the Supervisory 
Board and serve for a one-year term. The Selection and Appointment Committee did not meet in 2018.

Science and Technology Committee

The Science and Technology Committee is primarily responsible for reviewing and monitoring research and development 
projects, programs, budgets, infrastructure management and overseeing the management risks related to the Company's 
portfolio and information technology platforms. The Science and Technology Committee provides understanding, clarification 
and validation of the fundamental technical basis of the Company's businesses in order to enable the Supervisory Board to 
make informed, strategic business decisions and vote on related matters, and to guide the Managing Board to ensure that 
powerful, global, world-class science is developed, practiced and leveraged throughout the Company to create shareholder 
value. The current members of the Science and Technology Committee are Dr. Colpan (Chairman), Dr. Levine, Mr. Bancel and 
Dr. Mardis. Members are appointed by the Supervisory Board and serve for a term of one year. The Science and Technology 
Committee met four times in 2018.

Diversity within the Management Board and Supervisory Board

66

The Dutch Civil Code provided for statutory provisions to ensure a balanced representation of men and women on the 
Management Board and Supervisory Boards until January 1, 2016. These statutory rules have expired, but a new bill entered 
into force on April 13, 2017, extending the provision on gender balance to December 31, 2019. Balanced representation of men 
and women is deemed to exist if at least 30 percent of the seats were filled by men and at least 30 percent are filled by women. 
Within the meaning of the new legislation, our Management Board and Supervisory Board currently do not qualify as balanced. 
QIAGEN recognizes the benefits of diversity, including gender balance. In nominating candidates for these boards, QIAGEN 
supports the trend toward higher participation of women. QIAGEN feels that gender is only one part of diversity and strives for 
a diverse composition in the Managing Board and Supervisory Board also in terms of other factors such as age, nationality, 
public reputation, industry or academic background. QIAGEN is committed to expanding diversity while pursuing individuals 
for these boards with a unique blend of scientific and commercial expertise and experience that will contribute to the future 
success of its business. Management development programs support the career advancement of leaders regardless of gender and 
other factors. As a result a number of women are in key leadership roles, particularly in leading commercial and operational 
positions around the world. In line with this commitment, QIAGEN's Selection and Appointment committee will continue 
selecting future members of the Managing Board and Supervisory Board with due observance of its aim to have a diverse 
leadership team on the basis of gender, but also on the basis of age, wide ranging experience, backgrounds, skills, knowledge 
and insight. This all without compromising QIAGEN's commitment to hiring the best individuals for those positions. More 
information about diversity within the Board other than gender, can be found in below under the section Dutch Corporate 
Governance Code - Comply or explain.

Compensation of Managing Board Members and Supervisory Directors

Remuneration policy 

The objective of our remuneration policy is to attract and retain the talented, highly qualified international leaders and skilled 
individuals, who enable QIAGEN to achieve its short and long-term strategic initiatives and operational excellence. Our 
remuneration policy aligns remuneration with individual performance, corporate performance and fosters sustainable growth 
and long-term value creation in the context of QIAGEN’s social responsibility and stakeholders’ interest. 

The remuneration policy and overall remuneration levels are benchmarked regularly, against a selected group of companies and 
key markets in which QIAGEN operates, to ensure overall competitiveness. QIAGEN participates in various compensation 
benchmarking surveys that provide information on the level, as well as the structure, of compensation awarded by various 
companies and industries for a broad range of positions around the world. The companies in the peer group are selected on the 
basis of market capitalization, competitors for talent, similar complexity and international spread, operating in similar 
industries.

The performance of the Managing Board members is measured annually against a written set of goals. The remuneration of the 
Managing Board members is linked to the achievement of QIAGEN’s strategic and financial goals. To ensure that remuneration 
is linked to performance, a significant proportion of the remuneration package is variable and contingent on performance of the 
individual and the company. These goals are set at ambitious levels each year to motivate and drive performance, with a focus 
on achieving both long-term strategic initiatives and short-term objectives based on the annual operative planning. Performance 
metrics used for these goals include the achievement of financial and non-financial targets.

The remuneration package of the Managing Board members consists of a combination of base salary, short term variable cash 
award and several elements of long term incentives (together, ‘total direct compensation’). In addition, the members of the 
Managing Board receive a pension arrangement and other benefits that are standard in our industry, such as a company car. 

The total target remuneration package of the Managing Board members is appropriately set against a variety of factors which 
includes external and internal equity, experience, complexity of the position, scope and responsibilities. We aim to provide the 
members of the Managing Board a total direct compensation at market median level. 

The structure of the remuneration package for the Managing Board is designed to balance short-term operational excellence 
with long-term sustainable value creation while taking into account the interests of its stakeholders. As such a significant part of 
the total remuneration of the Managing Board members consist of variable remuneration which can differ substantially from 
year to year depending on our corporate results and individual performance and may include equity-based compensation which 
may be subject to vesting conditions over a period of up to 10 years.

The remuneration policies for the Managing Board and for other senior management members of QIAGEN are generally 
aligned and consistent.

Managing Board compensation

The compensation granted to the members of the Managing Board in 2018 consisted of a fixed salary and variable components, 
with the significant majority of compensation awarded in the form of QIAGEN stock units that are restricted for a long multi-
year period to align management with the interests of shareholders and other stakeholders. Variable compensation included 

67

long-term equity incentives that were awarded based on individual performance as well as equity awards in lieu of the value of 
the annual cash bonus. 

In 2014, the General Meeting of Shareholders approved a new remuneration policy for the Managing Board which provides 
that future annual regular equity-based compensation grants to members of the Managing Board will primarily consist of 
performance stock units. Grants of stock options and restricted stock units which are based on time vesting only shall no longer 
be granted on a regular basis and shall be reserved for use as special equity incentive rewards in certain situations.

Stock options, if granted, to the Managing Board members must have an exercise price that is higher than the market price at 
the time of grant. Restricted Stock Units granted to the Managing Board members, vest over a 10-year period. Performance 
Stock Units are subject to long-term vesting periods and contingent upon the achievement of several financial goals over a 
multi-year period.

In 2018, a grant of Performance Stock Units with mandatory minimum holding levels of QIAGEN shares was made under the 
Commitment Program linked to achievement of a three-year plan covering 2019 and 2021 including quantitative goals for net 
sales, earnings before interest and taxes (EBIT), QIAGEN Value Added (QVA), a steering metric that measures the ability of 
QIAGEN to generate returns and exceed its cost of capital and share price development as compared to peer companies. Under 
the Commitment Program, the financial targets for vesting are based on three-year goals as defined within QIAGEN’s five-year 
business plan covering the period from 2019 until the end of 2023. The targets for vesting were set and approved by the 
Supervisory Board. 

The table below state the amounts earned on an accrual basis by our Managing Board members in 2018.

For the year ended December 31, 2018 (in US$ thousands, except for number of award
grants)
Fixed Salary
Other (3)
Total fixed income 2018
Short-term variable cash bonus (1)
Total short-term income 2018
Defined contribution on benefit plan
Number of performance stock units granted 2018 (2)
Related recognized compensation expense

Peer M.
Schatz

Roland
Sackers

$

$

$
$

$

1,281

5
1,286
—
1,286
78
661,315

2,645

$

$

$
$

$

575

37
612
—
612
80
197,000

763

 ____________________

(1)  The Variable Cash Bonus does not include values which were converted to equity-based compensation for each Managing 

Board member at his election in lieu of the value of the cash bonus earned by such Managing Board member in 2018. In 
2019, Mr. Schatz will receive a grant of 60,982 performance stock units and Mr. Sackers will receive a grant of 21,131 
performance stock units. The performance stock units will vest 40% over three years and 60% over five years from the date 
of grant, with the final performance measurement aligned to achievement of 2019 performance goals.

(2)  The Performance Stock Units Granted amount includes the number of performance stock units granted to each Managing 
Board member under the Company's Commitment Program. In 2018, Mr. Schatz received a grant of 307,000 performance 
stock units and Mr. Sackers received a grant of 97,000 performance stock units.

(3)  Amounts include, among others, car lease and 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.

The total recognized compensation expense in accordance with IFRS 2 in the year 2018 (2017) for stock units including 
recognized expenses for equity awards granted in previous years as well as for any non-periodical share-based payments in 
kind of a bonus amounted to $12.3 million ($10.7 million) for Mr. Schatz and $3.6 million ($3.2 million) for Mr. Sackers.

Based on such valuations the total compensation including recognized compensation expenses in the year 2018 (2017) for 
members of the Managing Board was $18.0 million ($16.7 million), and amounts $13.7 million ($12.6 million) for Mr. Schatz 
and $4.3 million ($4.1 million) for Mr. Sackers. Total non-periodical remuneration according Dutch Civil Code included in 
total compensation for the Managing Board was $3.4 million ($3.1 million) and amounts $2.6 million ($2.4 million) for Mr. 
Schatz and $0.8 million ($0.7 million) for Mr. Sackers.

68

Further details on the composition of remuneration for the Managing Board, and the implementation of the Remuneration 
Policy during 2018, are disclosed in the Remuneration Report of the Compensation Committee as published on our website at 
www.qiagen.com. 

Supervisory Board compensation

The Supervisory Board remuneration is aligned to the applicable market standards, considering peer companies of similar size 
and complexity in similar industries, including biotechnology, life science supplies, diagnostics and pharmaceuticals, to reflect 
our nexus to the European Markets as a Dutch company as well as our U.S. focus as a NYSE listed company subject to U.S. 
regulations and the fact that several of the Supervisory Board members are residing in the United States.

The Supervisory Board compensation for 2018 consists of fixed retainer compensation and additional retainer amounts for 
Chairman and Vice Chairman. Annual remuneration of the Supervisory Board members is as follows:

Fee payable to the Chairman of the Supervisory Board

Fee payable to the Vice Chairman of the Supervisory Board

Fee payable to each member of the Supervisory Board

Additional compensation payable to members holding the following positions:

Chairman of the Audit Committee

Chairman of the Compensation Committee

Chairman of the Selection and Appointment Committee and other board committees

Fee payable to each member of the Audit Committee

Fee payable to each member of the Compensation Committee

Fee payable to each member of the Selection and Appointment Committee and other board committees

$150,000

$90,000

$57,500

$25,000

$18,000

$12,000

$15,000

$11,000

$6,000

Further, the Supervisory Board members will be reimbursed for tax consulting costs incurred in connection with the preparation 
of their tax returns up to an amount of €5,000 per person per fiscal year . 

Supervisory board members also receive a variable component, in the form of share-based compensation. We did not pay any 
agency or advisory service fees to members of the Supervisory Board.

The following table summarizes the total compensation paid to the members of the Supervisory Board in 2018:

For the year ended December 31, 2018
(in US$ thousands, except for number
of share grants)

Stéphane Bancel

Dr. Håkan Björklund
Dr. Metin Colpan
Prof. Dr. Manfred Karobath1
Dr. Ross L. Levine

Dr. Elaine Mardis

Lawrence A. Rosen

Elizabeth E. Tallett

____________________________

Fixed
remuneration
57.5
$
103.8
$
57.5
$
75.0
$
57.5
$
57.5
$
57.5
$
57.5
$

Chairman /
Chairwoman
—
6.0
12.0
6.0
—
—
25.0
18.0

Committee
membership

Total (2)

Number of
restricted
stock units
granted

Related 
recognized 
compensatio
n expense (2)
58.3
58.3
58.3
133.0
58.3
58.3
58.3
158.8

9,866 $
9,866 $
9,866 $
9,866 $
9,866 $
9,866 $
9,866 $
9,866 $

32.0 $
14.0 $
6.0 $
8.5 $
6.0 $
6.0 $
— $
21.0 $

89.5
123.8
75.5
89.5
63.5
63.5
82.5
96.5

(1) Prof. Dr. Manfred Karobath was a member of the Supervisory Board since 2000 and did not stand for re-election at the Company’s Annual General Meeting 
in June 2018.

(2)  Supervisory Directors are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These reimbursements are excluded 
from the amounts presented herein.

The total recognized compensation expense in accordance with IFRS 2 in the year 2018 (2017) for long-term compensation of 
restricted stock units including recognized expenses for equity awards granted in previous years as well as for any non-
periodical share-based payments in kind of a bonus amounted to $1.5 million ($1.6 million) and includes $259.0 thousand 
($269.0 thousand) for Mr. Bancel, $58.3 thousand ($0) for Mr. Björklund, $270.6 thousand ($339.4 thousand) for Mr. Colpan,  

69

$120.2 thousand ($201.9 thousand) for Mr. Karobath, $128.0 thousand ($55.4 thousand) for Mr. Levine, $227.6 thousand 
($218.8 thousand) for Ms. Mardis, $259.0 thousand ($268.9 thousand) for Mr. Rosen and $201.4 thousand ($201.9 thousand) 
for Ms. Tallett. 

The total recognized compensation expenses for members of the Supervisory Board in 2018 (2017) for short-term and long-
term compensation totaled $2.2 million ($2.3 million) and includes amounts of $348.5 thousand ($358.5 thousand) for Mr. 
Bancel, $182.1 thousand ($55.9 thousand) for Mr. Björklund, $346.1 thousand ($414.9 thousand) for Mr. Colpan, $209.7 
thousand ($380.9 thousand) for Mr. Karobath, $191.5 thousand ($118.9 thousand) for Mr. Levine, $291.1 thousand ($282.3 
thousand) for Ms. Mardis, $341.5 thousand ($351.4 thousand) for Mr. Rosen, and $297.9 thousand ($298.4 thousand) for Ms. 
Tallett. 

Total non-periodical remuneration according Dutch Civil Code included in total compensation in 2018 (2017), which includes 
the expense related to the short-term variable cash bonus and the expense related to the long-term compensation of equity 
awards granted in 2018 (2017), totaled $0.6 million ($0.6 million) and includes amounts of $58.3 thousand ($55.4 thousand) for 
Mr. Bancel, $58.3 thousand ($0) for Mr. Björklund, $58.3 thousand ($55.4 thousand) for Mr. Colpan, $133.0 thousand ($147.0 
thousand) for Mr. Karobath, $58.3 thousand ($55.4 thousand) for Mr. Levine, $58.3 thousand ($55.4 thousand) for Ms. Mardis, 
$58.3 thousand ($55.4 thousand) for Mr. Rosen, and $158.8 thousand ($147.0 thousand) for Ms. Tallett.

Share Ownership

The following table sets forth certain information as of January 31, 2019 concerning the ownership of Common Shares by our 
directors and officers. In preparing the following table, we have relied on information furnished by such persons.

Name and Country of Residence

Peer M. Schatz, Germany

Roland Sackers, Germany

Stéphane Bancel, United States

Dr. Håkan Björklund, Sweden

Dr. Metin Colpan, Germany

Dr. Ross L. Levine, United States

Dr. Elaine Mardis, United States

Lawrence A. Rosen, United States

Elizabeth Tallett, United States

 ____________________

Shares Beneficially Owned (1)

 Number (2)

2,732,805

40,000

4.429

—

(3)

(4)

(5)

3,539,784

(6)

—

— (7)

— (8)

16,103

(9)

Percent
Ownership

1.21%

*

*

—

1.57%

—

—

—

*

 *    Indicates that the person beneficially owns less than 0.5% of the Common Shares issued and outstanding as of January 31, 

2019.

(1)  The number of Common Shares outstanding as of January 31, 2019 was 225,512,336. 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, 2019. 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 505,524 shares issuable upon the exercise of options now exercisable having exercise prices ranging from 
$15.59 to $22.25 per share. Options expire in increments during the period between February 2020 and February 2023. 
Does not include 386,571 shares issuable upon the release of unvested stock awards that could become releasable within 
60 days from the date of this table. Includes 1,477,171 shares held by PS Capital Management, of which Mr. Schatz is the 
sole stockholder. 350,000 of the shares beneficially owned by Mr. Schatz have been pledged by him as security for an 
obligation. 

(4)  Does not include 135,739 shares issuable upon the exercise of options now exercisable having exercise prices ranging from 
$15.59 to $22.25 per share. Options expire in increments during the period between February 2020 and February 2023. 
Does not include 125,688 shares issuable upon the release of unvested stock awards that could become releasable within 
60 days from the date of this table.

70

 
(5)  Does not include 10,296 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 7,893 shares issuable upon the exercise of options now exercisable having exercise prices ranging from 

$15.59 to $22.43 per share. Options expire in increments during the period between February 2019 and February 2022. 
Includes 2,741,579 shares held by CC Verwaltungs GmbH, of which Dr. Colpan is the sole stockholder and 770,370 shares 
held by Colpan GbR. Does not include 10,833 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 4,296 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 10,296 shares issuable upon the release of unvested stock awards that could become releasable within 60 

days from the date of this table.

(9)  Does not include 1,563 shares issuable upon the exercise of options now exercisable having exercise prices of $15.59 per 
share. Options expire on February 2022. Does not include 10,296 shares issuable upon the release of unvested stock 
awards that could become releasable within 60 days from the date of this table.

The following table sets forth the options of our officers and directors as of January 31, 2019:

Name

Peer M. Schatz

Roland Sackers

Dr. Metin Colpan

Elizabeth E. Tallett

Additional Information

Shareholders

Total Vested
Options

505,524

135,739

7,893

1,563

Expiration Dates

Exercise Prices

2/26/2020 to 2/28/2023

$15.59 to $22.25

2/26/2020 to 2/28/2023

$15.59 to $22.25

2/27/2019 to 2/28/2022

$15.59 to $22.43

2/28/2022

$15.59

Our shareholders exercise their voting rights through Annual and Extraordinary General Meetings. Resolutions of the General 
Meeting are adopted by an absolute majority of votes cast, unless a different majority of votes or quorum is required by Dutch 
law or the Articles of Association. Each common share confers the right to cast one vote. 

Furthermore, the Managing Board, or where appropriate, the Supervisory Board, shall provide all shareholders and other parties 
in the financial markets with equal and simultaneous information about matters that may influence QIAGEN's share price.

QIAGEN is required to convene an Annual General Meeting in The Netherlands no later than six months following the end of 
each year. The agenda for the Annual General Meeting must contain certain matters as specified in QIAGEN's Articles of 
Association and under Dutch law, including, among other things, the adoption of QIAGEN's annual financial statements.

Additional Extraordinary General Meetings may be  requested and/or convened at any time by the Managing Board, the 
Supervisory Board or by one or more shareholders jointly representing at least 40% of QIAGEN's issued share capital. 
Furthermore, one or more shareholders, who jointly represent at least 10% of QIAGEN's issued share capital may, on their 
application, be authorized by the district court judge having applications for interim relief, to convene a General Meeting. 
Shareholders are entitled to propose items for the agenda of the General Meeting provided that they hold at least 3% of the 
issued share capital. Proposals for agenda items for the General Meeting must be submitted at least 60 days prior to the meeting 
date. The notice convening a General Meeting, accompanied by the agenda, shall be sent no later than 42 days prior to the 
meeting. QIAGEN informs the General Meeting by means of explanatory notes to the agenda, providing all facts and 
circumstances relevant to the proposed resolutions.

Pursuant to the Dutch Code, all transactions between the company and legal or natural persons who hold at least ten percent of 
the shares in the company shall be agreed on terms that are customary in the sector concerned. Decisions to enter into 
transactions in which there are conflicts of interest with such persons that are of material significance to the company and/or to 
such persons require the approval of the Supervisory Board. QIAGEN has not entered into any such transactions in 2017.

Stock Plans

We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) which was approved by our 
shareholders on June 14, 2005. The 2005 Plan expired by its terms in April 2015 and no further awards will be granted under 
the 2005 Plan. On June 25, 2014, our shareholders approved the QIAGEN N.V. 2014 Stock Plan (the 2014 Plan), which 
replaced the 2005 Plan in April 2015. An aggregate of 16.7 million Common Shares were reserved for issuance pursuant to the 

71

2014 Plan, subject to certain antidilution adjustments. We issue Treasury Shares to satisfy option exercises and award releases 
and had approximately 19.9 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at 
December 31, 2018.

Pursuant to the 2014 Plan, stock rights, which include options to purchase our Common Shares, stock grants and stock-based 
awards, may be granted to employees and consultants of QIAGEN and its subsidiaries and to Supervisory Directors. Options 
granted pursuant to the 2014 Plan may either be incentive stock options within the meaning of Section 422 of the United States 
Internal Revenue Code of 1986, as amended (the Code), or non-qualified stock options. Options granted to members of the 
Supervisory Board and the Managing Board must have an exercise price that is higher than the market price at the time of 
grant. Generally, each of the options has a term of ten years, subject to earlier termination in the event of death, disability or 
other termination of employment. The vesting and exercisability of certain stock rights will be accelerated in the event of a 
Change of Control, as defined in the agreements under the 2014 Plan.

The Plan is administered by the Compensation Committee of the Supervisory Board, which selects participants from among 
eligible employees, consultants and directors and determines the number of shares subject to the stock-based award, the length 
of time the award will remain outstanding, the manner and time of the award's vesting, the price per share subject to the award 
and other terms and conditions of the award consistent with the Plan. The Compensation Committee's decisions are subject to 
the approval of the Supervisory Board.

The Compensation Committee has the power, subject to Supervisory Board approval, to interpret the plans and to adopt such 
rules and regulations (including the adoption of “sub plans” applicable to participants in specified jurisdictions) as it may deem 
necessary or appropriate. The Compensation Committee or the Supervisory Board may at any time amend the plans in any 
respect, subject to Supervisory Board approval, and except that (i) no amendment that would adversely affect the rights of any 
participant under any option previously granted may be made without such participant's consent and (ii) no amendment shall be 
effective prior to shareholder approval to the extent such approval is required to ensure favorable tax treatment for incentive 
stock options or to ensure compliance with Rule 16b-3 under the United States Securities Exchange Act of 1934, as amended 
(the Exchange Act) at such times as any participants are subject to Section 16 of the Exchange Act.

As of January 31, 2019, there were 0.9 million options outstanding with exercise prices ranging between $14.91 and $23.16 and 
expiring between February 27, 2019 and October 31, 2023. The exercise price of the options is the fair market value of the 
Common Shares as of the date of grant or a premium above fair market value. Additionally, there were 8.3 million stock unit 
awards outstanding as of January 31, 2019. These awards will be released between February 15, 2019 and May 31, 2028. As of 
January 31, 2019, options to purchase 0.7 million Common Shares and 3.8 million stock unit awards were held by the officers 
and directors of QIAGEN, as a group.

Further detailed information regarding stock options and awards granted under the plan can be found in Note 21 "Share-Based 
Payments" included in the Consolidated Financial Statements.

Independence

Unlike the New York Stock Exchange listing standards which require a majority of the Supervisory Board members to be 
independent, the Dutch Corporate Governance Code distinguishes between certain independence criteria which may be fulfilled 
by not more than one Supervisory Board Members (as e.g. prior employment with the Company, receiving personal financial an 
important business relationship with the Company) and other criteria which may not be fulfilled by more than the majority of 
the Supervisory Board members. In some cases the Dutch independence requirement is more stringent, such as by requiring a 
longer “look back” period (five years) for former executive directors. In other cases, the New York Stock Exchange rules are 
more stringent, such as a broader definition of disqualifying affiliations. Currently, all members of our Supervisory Board are 
“independent” under both the New York Stock Exchange and Dutch definitions.

Risk Management

Reference is made to the discussion in the section "Principle Risks and Uncertainties" above.

Disclosure Controls and Procedures

Our Managing Directors, with the assistance of other members of management, performed an evaluation of the effectiveness of 
the design and operation of our disclosure controls and procedures. Based on that evaluation, they concluded that as of 
December 31, 2018, our disclosure controls and procedures were effective to ensure that information required to be disclosed 
by us in the reports that we file is recorded, processed, summarized and reported in a timely manner, and is accumulated and 
communicated to our management, including our Managing Directors, as appropriate to allow timely decisions regarding 
required disclosure.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, no matter how well 
designed, such as the possibility of human error and the circumvention or overriding of the controls and procedures. Therefore, 
even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable 

72

assurance of achieving their control objectives. In addition, any determination of effectiveness of controls is not a projection of 
any effectiveness of those controls to future periods, as those controls may become inadequate because of changes in conditions 
or the degree of compliance with the policies or procedures may deteriorate.

Report of Management on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The 
Company’s system of internal controls over financial reporting is designed to provide reasonable assurance regarding the 
reliability of financial reporting and the preparation of the consolidated financial statements in accordance with generally 
accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even 
when determined to be effective can provide only reasonable assurance with respect to financial statement preparation and 
presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become 
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 
2018. In making this assessment, management used the updated criteria set forth in 2013 by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on our assessment under the COSO Internal Control-Integrated Framework, management believes that, as of 
December 31, 2018, our internal control over financial reporting is effective. 

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during 2018 that has materially affected, or is 
reasonably likely to materially affect, our internal control over financial reporting.

Independent Auditors

In accordance with the requirements of Dutch law, our independent registered public accounting firm for our statutory 
consolidated financial statements prepared in accordance with International Financial Reporting Standards and filed with the 
Netherlands Authority for the Financial Markets (AFM), is appointed, and may be removed by, the General Meeting. The 
Supervisory Board nominates a candidate for the appointment as external auditor, for which purpose both the Audit Committee 
and the Managing Board advise the Supervisory Board. At the Annual General Meeting in 2018, KPMG Accountants N.V. was 
appointed as external auditor for the Company for 2018 year. The external auditor is invited to attend the meeting of the 
Supervisory Board at which the statutory financial statements prepared in accordance with International Financial Reporting 
Standards and filed with the AFM shall be approved and is furthermore invited to attend the General Meeting at which the 
statutory financial statements are adopted and may be questioned by the General Meeting on its statement on the fairness of our 
annual accounts prepared in accordance with International Financial Reporting Standards.

The remuneration of the external auditor, and instructions to the external auditor to provide non-audit services, shall be 
approved by the Supervisory Board on the recommendation of the Audit Committee and after consultation with the Managing 
Board. At least once every four years, the Supervisory Board and the Audit Committee shall conduct a thorough assessment of 
the functioning of the external auditor. The main conclusions of this assessment shall be communicated to the General Meeting 
for the purposes of assessing the nomination for the appointment of the external auditor. The external auditor is invited to attend 
the meeting of the Supervisory Board at which the financial statements shall be approved and is furthermore invited to attend 
the General Meeting at which the financial statements are adopted and may be questioned by the General Meeting on its 
statement on the fairness of our annual accounts.

Whistleblower Policy and Code of Conduct

We have a formal Whistleblower Policy concerning the reporting of alleged irregularities within QIAGEN of a general, 
operational or financial nature. Furthermore, we have a published Code of Conduct that outlines business principles for our 
employees and rules of conduct. The Code of Conduct can be found on our website at www.qiagen.com.

Anti-Takeover Measures

In 2004, the Supervisory Board granted an option to the Dutch Foundation Stichting Preferente Aandelen QIAGEN that allows 
the Foundation to acquire preference shares from QIAGEN if (i) a person has (directly or indirectly) acquired or has expressed 
a desire to acquire more than 20% of our issued share capital, or (ii) a person holding at least a 10% interest in the share capital 
has been designated as a hostile person by our Supervisory Board. The option enables the Foundation to acquire preference 
shares equal to the number of our outstanding common shares at the time of the relevant exercise of the right, less one share. 
When exercising the option and exercising its voting rights on these shares, the Foundation must act in the interest of QIAGEN 
and the interests of our stakeholders. No preference shares are currently outstanding.

73

Dutch Corporate Governance Code - Comply or Explain

The corporate governance structure and compliance with the Dutch Code is the joint responsibility of the Managing Board and 
the Supervisory Board. They are accountable for this responsibility to the General Meeting. We continue to seek ways to 
improve our corporate governance by measuring itself against international best practice. The Dutch Code was last amended on 
December 8, 2016, and applicable as of the financial year 2018 and can be found at www.commissiecorporategovernance.nl. 

Non-application of a specific best practice provision is not in itself considered objectionable by the Dutch Code and may well 
be justified because of particular circumstances relevant to a company. In accordance with Dutch law, we disclose in our 
Annual Report the application of the Dutch Code's principles and best practice provisions. 

To the extent that we do not apply certain principles and best practice provisions, or do not intend to apply these in the current 
or the subsequent year, we state the reasons. 

We take a positive view of the Dutch Code and apply nearly all of the best practice provisions. However, we prefer not to apply 
some provisions due to the international character of our business as well as the fact - acknowledged by the Commission that 
drafted the Dutch Code - that existing contractual agreements between QIAGEN and individual members of the Managing 
Board cannot be set aside at will.

The following provides an overview of exceptions that we have identified:

1. 

Best practice provision 2.2.2 recommends that a supervisory board member is appointed for a period of four years. A 
member may be reappointed for a term of additional two years, which appointment may be extended by at most two 
years. Best practice provision 2.2.2 does not apply to supervisory board members, who as of the date of the entry into 
force of this Code, have already held office for more than eight years, provided that best practice provision III.3.5 of the 
Dutch Code adopted in 2008, that is replaced by the Dutch Code 2016 is being complied with. Best practice provision 
III.3.5. of the Dutch Code 2008 recommends that a supervisory board member is appointed for a maximum of three 4-
year terms.

Members of the Supervisory Board are appointed annually for a one-year period beginning on the day following the 
General Meeting up to and including the day of the General Meeting held in the following year. Further, Dr. Metin 
Colpan has joined the Supervisory Board in 2004. We value the profound industry experience of Dr. Colpan and his in-
depth knowledge of QIAGEN. QIAGEN therefore supports the reappointment of Dr. Colpan beyond the eight-year term 
as recommended by the Dutch Code.

2. 

Best practice provision 2.1.5 recommends that the Supervisory Board should draw up a diversity policy for the 
composition of the Management Board, the Supervisory Board and, if applicable, the Executive Committee. The policy 
should address concrete targets relating to diversity and the diversity aspects to the Company, such as nationality, age, 
gender and education and work background.

While QIAGEN strives for a diverse composition of the Supervisory Board, Managing Board, Executive Committee and 
in all other management levels of the Company, we do not consider the definition of concrete targets relating to diversity 
useful. We are committed to creating an environment where all individuals have the opportunity to grow and contribute 
to our progress, regardless of their age, educational background, gender, nationality, physical abilities, race and ethical 
background, religion, or sexual orientation. We consider it to be a key success factor on the path to achieving our 
mission and goals. Individuals and teams alike understand the diverse needs of our customers, identify and realize cross-
functional opportunities for our business areas, and can quickly adapt to a fast changing environment. In 2018, our 
multicultural workforce was composed of 71 nationalities with an average age of 40.1. With 49% women, we are well 
balanced in terms of gender on an aggregate level. Information on the composition of our Managing and Supervisory 
Boards can be found above and more information on gender diversity within the Managing and Supervisory Board can 
be found about under the section "Diversity within the Management Board and Supervisory Board."

3. 

Best practice provision 3.1.2 vi. recommends that when formulating the remuneration policy, it should be considered 
that shares awarded to management board should be held for a period of at least five years 

Pursuant to the Company’s Remuneration Policy, long-term equity-based grants to members of the Managing Board 
under the 2014 Plan primarily consist of an award of performance stock units, i.e. long-term incentive awards which are 
dependent upon the achievement of pre-defined performance goals. Grants of restricted stock units, which are based on 
time vesting only, are no longer to be granted on a regular basis and shall be reserved for use as special equity incentive 
rewards in certain situations. Performance stock units and restricted stock units granted until February 2018 are basically 
structured so that 40% of a grant vests after three years, 50% after five years and the remaining 10% after ten years. 
Grants of performance stock units and restricted stock units granted after February 2018 vest 40% after three years, 60% 
after five years. In 2019, the members of the Managing Board elected to receive in lieu of their 2018 cash bonus the 
value earned in the year in performance stock units which vest over five years from the grant date.

74

4. 

Best practice provision 3.2.3 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).

Our Managing Board members have entered into employment agreements with QIAGEN N.V. and some QIAGEN 
affiliates for which they hold managing positions. In case of termination of an agreement without serious cause as 
defined by the applicable law, the respective affiliate would remain obliged to compensate the Managing Board member 
for the remaining term of the employment agreement. QIAGEN believes that these contractual arrangements are well 
justified due to the long tenures of the Managing Board members.

5. 

Best practice provision 2.2.4 recommends that the supervisory board should draw up a retirement schedule in order to 
avoid, as far as possible, a situation in which many supervisory board members retire simultaneously. The retirement 
schedule should be made generally available and should be posted on the company’s website.

The Supervisory Board follows the practice to discuss retirement plans of individual members early to proactively 
manage continuity within the Supervisory Board. QIAGEN believes that this practice provides a more flexible and better 
succession planning than a fixed retirement schedule.

6. 

Best practice provision 3.3.2 recommends that a supervisory board member may not be granted any shares and/or rights 
to shares by way of remuneration.

QIAGEN has granted stock options to the members of the Supervisory Board as a remuneration component since its 
establishment until 2013 when we stopped granting stock options. Since 2007, Supervisory Board members have been 
granted restricted stock units. We believe that the reasonable level of equity-based compensation which we practice 
allows a positive alignment of shareholder interests with the other duties of the Supervisory Board and that this practice 
is necessary to attract and retain Supervisory Board members as the granting of share-based compensation to 
Supervisory Board members is a common practice in our industry.

NYSE Exemptions

Exemptions from the NYSE corporate governance standards are available to foreign private issuers, such as QIAGEN when 
those standards are contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or 
contrary to generally accepted business practices in the issuer’s country of domicile. In connection with QIAGEN’s listing on 
the NYSE, the NYSE accepted QIAGEN's exemptions from certain corporate governance standards that are contrary to the 
laws, rules, regulations or generally accepted business practices of The Netherlands. These exemptions and the practices 
followed by QIAGEN are described below:

•  QIAGEN is exempt from NYSE’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 NYSE’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 NYSE’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.

75

Corporate Governance Statement

This is a statement concerning corporate governance as referred to in article 2a of the decree on additional requirements for 
annual reports (Vaststellingsbesluit nadere voorschriften inhoud jaarverslag) effective as of January 1, 2010 (the “Decree”). The 
information required to be included in this corporate governance statement as described in articles 3, 3a and 3b of the Decree 
can be found in the following sections of this Annual Report:

• 

• 

• 

• 

• 

• 

The information concerning compliance with the Dutch Corporate Governance Code (published at 
www.commissiecorporategovernance.nl), as required by article 3 of the Decree, can be found in the relevant sections 
under "Corporate Governance Report" in this Annual Report;

The information concerning QIAGEN's risk management and control frameworks relating to the financial reporting 
process, as required by article 3a sub a of the Decree, can be found in the relevant sections under "Corporate Governance 
Report" in this Annual Report;

The information regarding the functioning of QIAGEN's General Meeting of Shareholders, and the authority and rights of 
QIAGEN's shareholders, as required by article 3a sub b of the Decree, can be found in the relevant sections under 
"Corporate Governance Report" in this Annual Report;

The information regarding the composition and functioning of QIAGEN's Managing Board, the Supervisory Board and its 
committees, as required by article 3a sub c of the Decree, can be found in the relevant sections under "Corporate 
Governance Report " and the Report of the Supervisory Board in this Annual Report;

The information concerning the inclusion of the information required by the Decree Article 10 EU Takeover Directive, as 
required by article 3b of the Decree, can be found in the relevant sections under "Corporate Governance Report" in this 
Annual Report;

The information concerning the powers to issue and repurchase shares can be found under "Shareholdings and Other 
Information" in this Annual Report.

Requirements – Germany

QIAGEN is required, as a company of which the shares are listed on the Frankfurt Stock Exchange, to follow the applicable 
German capital market laws, in particular the Wertpapierhandelsgesetz.

Requirements – the United States

QIAGEN’s shares are listed on the New York Stock Exchange (NYSE) and must therefore comply with such of the 
requirements of US legislation, such as the Sarbanes-Oxley Act of 2002, regulations enacted under US securities laws and the 
listing standards of the NYSE as are applicable to foreign private issuers.

76

Responsibility Statement of the Management Board

In accordance with best practice II.1.5 of the Dutch corporate governance code of December 2008, taking into account the 
recommendation of the Corporate Governance Code Monitoring Committee on the application thereof, the Managing Board 
confirms that internal controls over financial reporting provide a reasonable level of assurance that the financial reporting does 
not contain any material inaccuracies, and confirms that these controls functioned properly in the year under review and that 
there are no indications that they will not continue to do so. The financial statements fairly represent the Company's financial 
condition and the results of the Company's operations and provide the required disclosures.

It should be noted that the above does not imply that these systems and procedures provide absolute assurance as to the 
realization of operational and strategic business objectives, or that they can prevent all misstatements, inaccuracies, errors, 
fraud and non-compliances with legislation, rules and regulations.

In accordance with Article 5.25c of the Financial Markets Supervisory Act, and in view of all of the above the management 
board confirms that, to the best of its knowledge, the financial statements give a true and fair view of the assets, liabilities, 
financial position and profit or loss of the Company and the annual report includes a fair review of the position at the balance 
sheet date and the development and performance of the business during the financial year together with a description of the 
principal risks and uncertainties that the Company faces.

QIAGEN N.V.

Peer M. Schatz  
Chief Executive Officer  

Roland Sackers 
Chief Financial Officer

77

 
 
 
 
 
QIAGEN N.V.

CONSOLIDATED FINANCIAL STATEMENTS

QIAGEN N.V. 

CONSOLIDATED BALANCE SHEETS
(in thousands) 

Assets

Current assets:

Cash and cash equivalents

Current financial assets

Trade accounts receivable

Income taxes receivable

Inventories

Fair value of derivative financial instruments

Other current assets

Total current assets

Non-current assets:

Property, plant and equipment

Goodwill

Other intangible assets

Equity accounted investments

Non-current financial assets

Deferred tax assets

Fair value of derivative financial instruments

Other non-current assets

Total non-current assets

Total assets

Note

December 31,
2018

December 31,
2017

(3)

(7)

(8)

(3)

(24, 25)

(9)

(10)

(12)

(12)

(11)

(7)

(16)

(24, 25)

(9)

$

1,159,079

$

214,568

351,612

34,936

162,912

102,754

89,795

657,714

359,198

329,138

39,509

155,927

7,480

74,654

2,115,656

1,623,620

340,012

2,134,125

674,997

14,845

81,639

57,851

295,363

83,329

3,682,161

$

5,797,817

$

324,011

2,038,180

703,014

18,462

36,813

67,985

224,398

48,629

3,461,492

5,085,112

The accompanying notes are an integral part of these consolidated financial statements. 

Consolidated Financial Statements F-1

QIAGEN N.V.  

CONSOLIDATED BALANCE SHEETS
(in thousands, except par value) 

Note 

December 31,
2018

December 31,
2017

Liabilities and equity

Current liabilities:

Current financial debts

Trade and other accounts payable

Provisions

Income tax payable

Fair value of derivative financial instruments

Other current liabilities

Total current liabilities

Non-current liabilities:

Non-current financial debts

Deferred tax liabilities

Fair value of derivative financial instruments

Other non-current liabilities

Total non-current liabilities

Equity:

Common Shares, 0.01 EUR par value, authorized —
410,000 shares, issued — 230,829 shares in 2018 and
2017

Share premium

Retained earnings

Reserves

Less treasury shares, at cost — 5,320 and 4,272 shares
in 2018 and 2017, respectively

Total equity

Total liabilities and equity

(13)

(24, 25)

(14)

(15)

(16)

(24, 25)

(14)

(17)

(17)

(17)

(15)

$

503,589

$

69,415

4,237

30,047

107,027

258,780

973,095

—

59,205

4,853

22,632

2,424

230,243

319,357

1,671,811

1,757,402

70,617

614,200

89,279

85,053

412,536

84,354

2,445,907

2,339,345

2,702

1,727,922

1,133,682
(306,588)

(178,903)
2,378,815

2,702

1,687,564

1,071,393
(216,262)

(118,987)
2,426,410

$

5,797,817

$

5,085,112

The accompanying notes are an integral part of these consolidated financial statements. 

Consolidated Financial Statements F-2

QIAGEN N.V. 

CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data) 

Net sales

Cost of sales
Gross profit

Operating expenses:

Other operating income

Research and development expense

Sales and marketing expense

General and administrative, restructuring, integration and
other expense

Other operating expense

Total operating expenses, net

Income from operations

Financial income

Financial expense

Foreign currency losses, net

Gain from equity accounted investments

Other financial (expense) income, net

Total finance (expense) income, net

Income before income taxes

Income taxes
Net income

Basic earnings per common share

Diluted earnings per common share

Weighted average shares outstanding (in thousands)

Basic

Diluted

Note
(4, 20)

$

Years ended December 31,

2018

1,501,848
(509,069)
992,779

$

2017

1,417,536
(504,948)
912,588

(10, 12, 22)

(15)

(11)

(25)

(16)

$

$

$

29,764
(157,877)
(431,313)

(147,690)
(13,117)

(720,233)
272,546

20,851
(67,293)
(12,257)
2,592
(69,544)

(125,651)
146,895

(42,001)
104,894

0.46

0.45

$

$

$

5,326
(146,046)
(414,960)

(193,622)
(6,336)

(755,638)
156,950

10,645
(49,685)
(3,259)
3,165

39,408

274

157,224
(89,846)

67,378

0.30

0.29

226,640
233,456

228,074

233,009

The accompanying notes are an integral part of these consolidated financial statements. 

Consolidated Financial Statements F-3

 
QIAGEN N.V. 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) 
(in thousands) 

Net income

Other comprehensive income (loss) not reclassified to profit or loss
in subsequent periods:

Years ended December 31,

Note

2018

2017

$

104,894

$

67,378

Gain on pensions, before tax

1,325

886

Other comprehensive income (loss) to be reclassified to profit or loss
in subsequent periods:

Foreign currency translation adjustments, before tax

Gains (losses) on cash flow hedges, before tax

Reclassification adjustments on cash flow hedges, before tax

Net investment hedge

Net change in fair value of financial assets, before tax

Other comprehensive (loss) income, before tax

Income tax relating to components of other comprehensive loss

Total other comprehensive (loss) income, after tax

Comprehensive income

(25)

(25)

(25)

(7)

(108,486)
11,368
(9,774)
13,839

—
(91,728)
460
(91,268)
13,626

136,910
(30,310)
26,136
(19,757)

(854)
113,011

1,034

114,045

181,423

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Financial Statements F-4

 
QIAGEN N.V. 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands)

Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Non-cash impairments
Amortization of debt discount and issuance costs
Deferred income taxes
Share based compensation
(Gain) loss on financial assets
Reversals of contingent consideration
Other non-cash items, including fair value changes in derivatives

Changes in operating assets and liabilities:
Accounts receivable
Inventories
Other current assets
Other non-current assets
Accounts payable
Accrued and other liabilities
Other non-current liabilities
Income taxes
Interest paid
Interest received
Income taxes paid, net of refunds

Net cash provided by operating activities
Cash flows from investing activities:

Purchases of property, plant and equipment
Purchases of intangible assets
Development expenses
Proceeds from sale of equipment
Purchases of financial assets
Proceeds from financial assets
Purchase of investments
Cash paid for acquisitions, net of cash acquired
Proceeds from divestiture
Cash paid for collateral asset
Other investing activities
Net cash used in investing activities
Cash flows from financing activities:

Capital repayment
Proceeds from issuance of cash convertible notes, net of issuance costs
Proceeds from long-term debt, net of issuance costs
Purchase of call option related to cash convertible notes
Proceeds from issuance of warrants
Principal payments on finance leases
Proceeds from issuance of common shares
Purchase of treasury shares
Other financing activities

Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Supplemental disclosure of non-cash investing activities:

Equipment purchased through capital lease

Years ended December 31,

Note 

2018

2017

$

104,894

$

67,378

(10, 12)
(6)

(16)
(21)
(7)

(15, 25)

(8)
(3)

(14)

(16)

(10)
(12)
(12)

(7)
(7)
(11)
(5)
(5)

(15)
(15)
(15)
(15)
(15)

(17)

214,547
17,020
36,393
(12,990)
40,113
(2,725)
—
58,470

(41,813)
(36,918)
(9,942)
(29,883)
6,993
1,153
15,911
39,489
(25,902)
17,978
(29,317)
363,471

(55,774)
(94,989)
(3,975)
—
(568,002)
691,765
(9,398)
(172,832)
16,394
(3,461)
(15,059)
(215,331)

—
494,879
—
(97,277)
72,406
(1,308)
4,412
(104,685)
(8,019)
360,408
(7,183)
501,365
657,714
1,159,079

$

226,491
5,137
24,773
55,773
34,442
1,055
(3,269)
(42,829)

(34,165)
(21,633)
(5,245)
(441)
4,321
9,056
24,090
3,156
(20,252)
7,478
(40,499)
294,817

(27,225)
(97,180)
(8,038)
42
(450,564)
189,006
(4,777)
(50,549)
—
(20,707)
(2,310)
(472,302)

(243,945)
394,391
329,875
(73,646)
45,396
(1,402)
6,075
(60,970)
(8,587)
387,187
8,832
218,534
439,180
657,714

— $

88

$

$

The accompanying notes are an integral part of these consolidated financial statements.  

Consolidated Financial Statements F-5

QIAGEN N.V. 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands) 

Common Shares

Note 

Shares

Amount

Share
premium

Retained
earnings

Cash
flow
hedge
reserve

Revaluation
reserve

Pension
reserve

Foreign
currency
translation

Treasury Shares

Shares

Amount

Total
equity

Balance at January 1, 2017

239,707

$

2,812

$ 1,897,399

$ 1,059,927

$ (7,600)

$

(156) $

(1,498) $

(321,053)

(5,147) $ (120,006) $ 2,509,825

—

—

—

—

—

—

—

Net income

Other comprehensive income (loss)

Total comprehensive income

Capital Repayment

Purchase of treasury shares

Tax benefit of employee stock plans

Share-based payments

Employee stock plans

Balance at December 31, 2017

(17)

(17)

(21)

(21)

(21)

Balance at January 1, 2018, as previously
reported

IFRS 9 impact of change in accounting
policy

IFRS 15 impact of change in accounting
policy

(2)

(4)

—

—

—

—

—

—

—

—

—

67,378

—

— (22,887)

67,378

(22,887)

(8,878)

(110)

(244,319)

—

—

—

—

230,829

230,829

$

$

—

42

34,442

—

—

—

—

—

(55,912)

2,702

$ 1,687,564

$ 1,071,393

$(30,487)

2,702

$ 1,687,564

$ 1,071,393

$(30,487)

$

$

—

(786)

(786)

—

—

—

—

—

—

620

620

—

—

—

—

—

—

137,098

137,098

—

—

—

—

—

—

—

—

191

—

—

—

—

67,378

114,045

181,423

(244,429)

(1,909)

(60,970)

(60,970)

—

—

—

—

2,593

61,989

42

34,442

6,077

(942) $

(878) $

(183,955)

(4,272) $ (118,987) $ 2,426,410

(942) $

(878) $

(183,955)

(4,272) $ (118,987) $ 2,426,410

—

—

—

—

—

—

(942)

(1,306)

—

—

942

—

—

—

—

—

—

—

—

—

—

(1,306)

Adjusted balance at January 1, 2018

230,829

$

2,702

$ 1,687,564

$ 1,069,145

$(30,487)

$

— $

(878) $

(183,955)

(4,272) $ (118,987)

2,425,104

Net income

Other comprehensive income (loss)

Total comprehensive income

Purchase of treasury shares

Tax benefit of employee stock plans

Share-based payments

Employee stock plans

(17)

(21)

(21)

(21)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

245

40,113

—

(40,357)

104,894

—

104,894

—

15,034

15,034

—

—

—

—

—

—

—

—

754

754

—

—

—

—

—

(107,056)

(107,056)

—

—

—

—

—

—

—

—

—

—

104,894

(91,268)

13,626

(2,871)

(104,685)

(104,685)

—

—

—

—

1,823

44,769

245

40,113

4,412

Balance at December 31, 2018

230,829

$

2,702

$ 1,727,922

$ 1,133,682

$(15,453)

$

— $

(124) $

(291,011)

(5,320) $ (178,903) $ 2,378,815

The accompanying notes are an integral part of these consolidated financial statements. 

Consolidated Financial Statements F-6

—

—

—

—

—

—

—

—

—

QIAGEN N.V. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2018 

1.  Corporate Information, Basis of Presentation and Statement of Compliance

QIAGEN N.V. is a public limited liability company ('naamloze vennootschap') under Dutch law with registered office at 
Hulsterweg 82, 5912 PL 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 that are used by over 500,000 customers worldwide 
to transform biological materials into valuable molecular insights. Our sample technologies isolate and process DNA, RNA and 
proteins - the building blocks of life - from blood, tissue and other materials. Assay technologies are used to make these 
biomolecules visible and ready for analysis. Bioinformatics software and knowledge bases are used to analyze and interpret 
complex genomic data to report relevant, actionable insights. Automation solutions are used to tie these together in seamless 
and cost-effective workflows. We provide this portfolio to four major customer classes: Molecular Diagnostics (human 
healthcare), Applied Testing (forensics and food safety), Pharma (pharmaceutical and biotechnology companies) and Academia 
(life sciences research). With approximately 5,000 employees in over 35 locations worldwide, we market our products in more 
than 130 countries.

The accompanying consolidated financial statements were prepared in accordance with International Financial Reporting 
standards (IFRS) as endorsed by the European Union (EU) 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 financial assets that have been measured at fair value. 
The financial statements of the Company have been prepared on the basis of the going concern assumption. The consolidated 
financial statements also comply with the financial reporting requirements included in Section 9 in Book 2 of the Netherlands 
Civil Code, as far as applicable. 

We undertake acquisitions to complement our own internal product development activities. On April 27, 2018, we acquired all 
shares in STAT-Dx Life, S.L. (STAT-Dx), a privately-held company located in Barcelona, Spain and on April 19, 2018, we 
acquired all remaining shares of a privately held entity in which we held a minority interest. On January 6, 2017, we acquired 
OmicSoft Corporation, located in Cary, North Carolina (U.S.). Accordingly, at their respective acquisition dates, all 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. 

The consolidated financial statements of QIAGEN for the year ended December 31, 2018, were authorized for issue in accordance 
with a resolution of the Supervisory Board on April 25, 2019.

2.  Effects of New Accounting Policies and Disclosures

The new accounting policies adopted in 2018 did not have a material impact to the condensed consolidated financial 
statements. 

• 

In June 2016, the IASB issued three amendments to IFRS 2, Share-based Payment, to eliminate diversity in practice in 
the classification and measurement of particular share-based payment transactions. The amendments are narrow in 
scope and address specific areas of classification and measurement and are intended to eliminate diversity in practice 
in three main areas:

  The effects of vesting conditions on the measurement of a cash-settled share-based payment transaction;
  The classification of a share-based payment transaction with net settlement features for withholding tax 

obligations; and

  The accounting where a modification to the terms and conditions of a share-based payment transaction 

changes its classification from cash-settled to equity-settled.

The amendments to IFRS 2 are effective for accounting periods beginning on or after January 1, 2018. Entities are 
required to apply the amendments without restating prior periods, but retrospective application is permitted if elected 
for all three amendments and other criteria are met. We adopted the amendments on January 1, 2018 without any 
impact on our financial position, results of operations or cash flows at adoption.

•  The IASB completed its process to replace IAS 39, Financial Instruments: Recognition and Measurement, with the 
issuance of the final amendments to IFRS 9. The IASB issued the fourth and final version of IFRS 9, Financial 
Instruments, which we adopted on January 1, 2018 using a cumulative-effect adjustment to the balance sheet as of the 
beginning of the fiscal year of adoption. IFRS 9 contains three principal classification categories for financial assets: 
measured at amortized cost, fair value through other comprehensive income (FVOCI), and fair value through the P&L 
Consolidated Financial Statements F-7

(FVTPL). IFRS 9 largely retains the former IAS 39 requirements for the classification and measurement of financial 
liabilities. Upon adoption, we recorded a cumulative effect adjustment to decrease opening retained earnings at 
January 1, 2018 by $0.9 million as required for our equity investments recorded at fair value. The implementation of 
the amendments is expected to increase the volatility of net income as gains or losses will be recognized in net 
income; however, the extent of any volatility will be dependent upon the significance of the equity investments. The 
adoption of IFRS 9 has not had a significant effect on the Company's accounting policies related to financial liabilities 
and derivative financial instruments.
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers and the standard is effective for 
annual periods beginning on or after January 1, 2018. This standard could impact in particular in the areas of 
allocating revenue to the different performance obligations under one contract and the timing of revenue recognition. 
We adopted this standard on its effective date, January 1, 2018 using the modified retrospective method, by 
recognizing the cumulative effect of initially applying IFRS 15 to incomplete contracts as a $1.3 million adjustment to 
the opening balance of equity at January 1, 2018. The details of the changes and quantitative impact are discussed in 
Note 4.

• 

New and amended standards and interpretations not yet adopted:

We have not early adopted the following new and amended standard. We will adopt the new and amended standard at their 
effective dates.

• 

In January 2016, the IASB published IFRS 16 Leases. Under the new guidance, lessees will be required to present 
right-of-use assets and lease liabilities on the balance sheet. This new lease guidance requires that a lessee recognize 
the following for leases at the commencement date:

•  A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, 

measured on a discounted basis; and 

•  A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a 

specified asset for the lease term.

IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. A lessee should apply IFRS 16 
to its leases either: (a) retrospectively to each prior reporting period presented applying IAS 8, Accounting Policies, 
Changes in Accounting Estimates and Errors; or (b) retrospectively with the cumulative effect of initially applying 
IFRS 16 recognized at the date of initial application. A lessor is not required to make any adjustments on transition for 
leases in which it is a lessor and should account for those leases applying IFRS 16 from the date of initial application. 
We elected the package of practical expedients which allows us to not reassess (1) whether existing contracts contain 
leases, (2) the lease classification for existing leases, and (3) whether existing initial direct costs meet the new 
definition. We also elected the hindsight practical expedient which permits entities to use hindsight in determining the 
lease term when transitioning IFRS 16. We adopted IFRS 16 as per the effective date of January 1, 2019, 
retrospectively with the cumulative effect in retained earnings and we will not restate comparative periods. Our initial 
lease liability and right-of-use asset will each be approximately $57 million on our consolidated balance sheet as of 
January 1, 2019, primarily relating to leased office space. The standard did not materially impact our consolidated net 
earnings or cash flows.

3.  Summary of Significant Accounting Policies, Estimates and Judgments 

Significant Accounting Policies

3.1  Consolidation Principles

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 
December 31, 2018 and for the year then ended.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and 
continue to be consolidated until the date that such control ceases. An entity is controlled when the Company has power over 
the entity, exposure or rights to variable returns from its involvement with the entity, and the ability to affect those returns 
through its power over the entity. In determining whether control exists, potential voting rights must be taken into account if 
those rights are substantive, in other words they can be exercised on a timely basis when decisions about the relevant activities 
of the entity are to be taken. Entities consolidated by the Company are referred to as "subsidiaries." The financial statements of 
the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All 
intra-Company balances, income and expenses, unrealized gains and losses and dividends resulting from intra-Company 
transactions are eliminated in full.

Consolidated Financial Statements F-8

Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the 
noncontrolling interest. Total comprehensive income is attributed to the owners of the parent and to the noncontrolling interest 
even this results in a deficit balance.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction. 

If the Company loses control over a subsidiary, it derecognizes the assets (including goodwill) and liabilities of the subsidiary, 
the carrying amount of any noncontrolling interest, the cumulative translation differences, recorded in equity, recognizes the 
fair value of the consideration received, recognizes the fair value of any investment retained, any surplus or deficit in profit or 
loss and reclassifies the parent's share of components previously recognized in other comprehensive income to profit or loss.

3.2  Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate 
of the consideration transferred, measured at acquisition date fair value and the amount of any noncontrolling interest in the 
acquiree. The Company measures the noncontrolling interest in the acquiree at fair-value. Acquisition related costs incurred 
are expensed.

When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification 
and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the 
acquisition date. 

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. 
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be 
recognized either in profit or loss or as change to other comprehensive income. If the contingent consideration is classified as 
equity, it shall not be remeasured until it is finally settled within equity.

Goodwill is initially measured at cost being the excess of the consideration transferred and the amount recognized for 
noncontrolling interest over the Company's net identifiable assets acquired and liabilities assumed. If this consideration is 
lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized as profit.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment 
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company's cash 
generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the 
acquiree are assigned to those units.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill 
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or 
loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the 
operation disposed of and the portion of the cash-generating unit retained. 

Management monitors and makes decisions regarding the Company's operations on a functional specific and global level. 
Therefore, we concluded that the consolidated Company as a whole qualifies as one cash generating unit.

3.3  Equity Accounted Investments

Investments in entities in which the Company has significant influence, generally participations of 20% or more of the voting 
power, but over which it does not exercise management control are accounted for using the equity method.

Under the equity method, the investment is carried in the statement of financial position at cost plus post acquisition changes 
in the Company's share of net assets of the associate. 

After application of the equity method, the Company determines whether it is necessary to recognize an additional impairment 
loss on the Company's investment. The Company determines at each reporting date whether there is any objective evidence 
that the investment is impaired. If this is the case the Company calculates the amount of impairment as the difference between 
the recoverable amount of the investment and its carrying value and recognizes the amount in the income statement.

Upon loss of significant influence over the associate, the Company measures and recognizes any retaining investment at its 
fair value. 

3.4  Foreign Currency Translation

The Company's presentation currency is the U.S. dollar (US$) which is also the parent company's functional currency. The 
subsidiaries' functional currencies are the local currency of the respective country with the exception of QIAGEN U.S. 
Finance Holdings (Luxembourg) SARL and QIAGEN Finance (Ireland) Ltd. which functional currencies are the U.S. dollar. 
Statements of financial position prepared in the functional currencies are translated to the presentation currency at exchange 
rates in effect at the end of the accounting period except for shareholders' equity accounts, which are translated at rates in 

Consolidated Financial Statements F-9

effect when these balances were originally recorded. Revenue and expense accounts are translated at a weighted average of 
exchange rates during the period. The cumulative effect of translation is included in shareholders' equity. On disposal of a 
subsidiary, such translation differences are recognized in the income statement as part of the gain or loss on sale.

Foreign currency transactions involving monetary assets and liabilities denominated in a currency other than the functional 
currency of the entity are translated using the exchange rate prevailing at the dates of the transactions. Foreign currency 
transaction gains and losses realized until settlement are included in the income statement, except for those related to 
intercompany transactions of a long-term investment nature which represent in substance part of the reporting entity's net 
investment in a foreign entity; such gains and losses are included in the cumulative foreign currency translation adjustments 
component of shareholders' equity. The net loss on foreign currency transactions in 2018 was $(12.3) million, and in 2017 was
$(3.3) million.

The exchange rates of key currencies affecting the Company were as follows: 

(US$ equivalent for one)
Euro (EUR)
Pound Sterling (GBP)
Swiss Franc (CHF)
Australian Dollar (AUD)
Canadian Dollar (CAD)
Japanese Yen (JPY)
Chinese Yuan (CNY)

3.5  Revenue Recognition

Closing rate as at December 31,

2018

2017

Annual average rate
2017
2018

1.1450
1.2800
1.0161
0.7059
0.7337
0.0091
0.1454

1.1993
1.3517
1.0249
0.7815
0.7975
0.0089
0.1537

1.1813
1.3356
1.0228
0.7478
0.7719
0.0091
0.1514

1.1292
1.2882
1.0156
0.7666
0.7710
0.0089
0.1480

Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our customers in 
an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The majority 
of our sales revenue continues to be recognized when products are shipped to the customers. Prior to January 1, 2018, 
payments for milestones, generally based on the achievement of substantive and at-risk performance criteria, were recognized 
in full at such time as the specified milestone had been achieved according to the terms of the agreement. See Note 4 
"Revenue". 

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, 2018 and 2017, shipping and handling costs totaled $28.4 million and $28.6 million, respectively.

3.6 Operating Expenses

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, 2018 and 2017 were $8.1 million and $7.2 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 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 
and other costs 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. See 
Note 6 "Restructuring" for the details.

Consolidated Financial Statements F-10

 
Research and Development

Research costs are expensed as incurred. Development expenditures on an individual project are recognized as an intangible 
asset when the Company can demonstrate:

• 

• 

The technical feasibility of completing the intangible asset so that it will be available for use or sale.

Its intention to complete and its ability to use or sell the asset.

•  How the asset will generate probable future economic benefits.

• 

• 

The availability of resources to complete the asset and to use or sell the intangible asset.

The ability to measure reliably the expenditure during development.

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be 
carried at cost less any accumulated amortization and accumulated impairment losses.

Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the 
period of expected future benefit. Amortization is recorded in cost of sales. During the period of development, the asset is 
tested for impairment annually. The capitalized expenses are amortized on a straight-line basis over their estimated useful lives 
(between three and five years). 

3.7  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 statement of financial 
position. When the grant relates to an asset, the value of the grant is deducted from the carrying amount of the asset and 
recognized over the same period that the related asset is depreciated or amortized. 

The Company has received cost grants and investment grants. In 2018, the Company recorded income from government grants 
in the amount of $1.2 million (2017: $1.6 million). As of December 31, 2018, liabilities in the amount of $1.0 million (2017: 
$1.8 million) are recorded with respect to grants which have been received but for which not all conditions have been met.

3.8  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. 

3.9  Post-Employment Benefits

The Company operates a number of defined benefit and defined contribution plans. For defined benefit plans, the Company 
provides for benefits payable to their employees on retirement by charging current service costs to income. The defined 
benefit liability comprises the present value of the defined benefit obligation less past service cost and actuarial gains and 
losses not yet recognized and less the fair value of plan assets out of which the obligations are to be settled directly.  The 
Company's contributions to the defined contribution pension plans are charged to the income statement in the year to which 
they relate. Refer to Note 22 "Employee Benefits and Personnel Costs" for more details.

3.10  Share-Based Payments

The Company has a stock option plan, which is described in detail under Note 21 "Share-Based Payments". A compensation 
charge is calculated at the date the options are granted. This charge is recognized over the stock option's vesting period. When 
the option is exercised, the proceeds received net of any transaction costs are credited to share capital and share premium.

3.11  Taxation

Taxes reported in the consolidated income statements include current and deferred income taxes. 

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered 
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or 
substantively enacted, by the reporting date, in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized directly in equity is recognized in equity and not in the income statement. 
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax 
regulations are subject to interpretation and establishes provisions where appropriate.

Consolidated Financial Statements F-11

Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of 
assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized 
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are 
recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against 
current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Income tax exposure

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and 
timing of future taxable income. Given the wide range of international business relationships and the long-term nature and 
complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or 
future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. 

The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities 
of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience 
of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. 
Such differences of Interpretation may arise on a wide variety of issues depending on the conditions prevailing in the 
respective Company's domicile.

3.12  Financial Instruments 

Recognition and initial measurement

The Company's financial assets include cash and short-term deposits, trade and other receivables, loan and other receivables, 
quoted and unquoted financial instruments, and derivative financial instruments. The Company's financial liabilities include 
trade and other payables, bank overdraft, loans and borrowings, and derivative financial instruments.

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and 
financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially 
measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. 
A trade receivable without a significant financing component is initially measured at the transaction price.

3.13 Financial Instruments - Classification and Subsequent Measurement

Financial assets - Policy applicable from 1 January 2018

On initial recognition, a financial asset is classified as measured at: amortized costs; FVOCI - debt investment; FVOCI - 
equity investment; or FVTPL. 

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for 
managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting 
period following the change in the business model.

A financial asset is measured at amortized cost if if meets both of the following conditions and is not designated as an FVTPL:

• 

• 

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the 
principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• 

• 

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling 
financial assets; and

its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the 
principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present 
subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.

Consolidated Financial Statements F-12

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This 
includes all derivative financial assets (see Note 25). On initial recognition, the Company may irrevocably designate a 
financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so 
eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets - Business model assessment: Policy applicable from 1 January 2018

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio 
level because this best reflects the way the business is managed and information is provided to management. The 
information considered includes:

how the performance of the portfolio is evaluated and reported to the Company’s management;
the risks that affect the performance of the business model (and the financial assets held within that business 

• 
the stated policies and objectives for the portfolio and the operation of those policies in practice. These include 
whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate 
profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows 
or realizing cash flows through the sale of the assets;
• 
• 
model) and how those risks are managed;
• 
managed or the contractual cash flows collected; and
• 
expectations about future sales activity.

the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and 

how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets 

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for 
this purpose, consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are 
measured at FVTPL.

Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest: Policy applicable 
from 1 January 2018

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ 
is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding 
during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as 
well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the 
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could 
change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, 
the Company considers:

• 

• 

• 

• 

contingent events that would change the amount or timing of cash flows;

terms that may adjust the contractual coupon rate, including variable rate features;

prepayment and extension features; and

terms that limit the Company’s claim to cash flows from specified assets (e.g. non recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount 
substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include 
reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a 
discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that

substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include 
reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the 
prepayment feature is insignificant at initial recognition.

Financial assets - Subsequent measurement and gains and losses: Policy applicable from 1 January 2018

Consolidated Financial Statements F-13

Financial assets at
FVTPL

These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognized in profit or loss.
However, see Note 25 for derivatives designated as hedging instruments.

Financial assets at
amortised cost

These assets are subsequently measured at amortized cost using the effective
interest method. The amortized cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment are recognized in
profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

These assets are subsequently measured at fair value. Interest income calculated
using the effective interest method, foreign exchange gains and losses and
impairment are recognized in profit or loss. Other net gains and losses are
recognized in OCI. On derecognition, gains and losses accumulated in OCI are
reclassified to profit or loss.

Debt investments
at FVOCI

Equity
investments at
FVOCI

These assets are subsequently measured at fair value. Dividends are recognized as
income in profit or loss unless the dividend clearly represents a recovery of part of
the cost of the investment. Other net gains and losses are recognized in OCI and
are never reclassified to profit or loss.

The Company does not hold any debt or equity investments at FVOCI as of December 31, 2018.

Financial assets - Policy applicable before 1 January 2018

The Company classified its financial assets into one of the following categories:

• 

• 

• 

• 

loans and receivables;

held to maturity;

available for sale; and

at FVTPL, and within this category as:

– 

– 

– 

held for trading;

derivative hedging instruments; or

designated as at FVTPL.

Financial assets - Subsequent measurement and gains and losses: Policy applicable before 1 January 2018

Financial assets at
FVTPL
Held-to-maturity
financial assets
Loans and
receivables

Available-for-sale
financial assets

Measured at fair value and changes therein, including any interest or dividend
income, were recognised in profit or loss. However, see Note 25 for derivatives
designated as hedging instruments.

Measured at amortised cost using the effective interest method.

Measured at amortised cost using the effective interest method.
Measured at fair value and changes therein, other than impairment losses, interest
income and foreign currency differences on debt instruments, were recognised in
OCI and accumulated in the fair value reserve. When these assets were
derecognised, the gain or loss accumulated in equity was reclassified to profit or
loss.

Financial liabilities - Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it 
is classified as held for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at 
FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. 
Other financial liabilities

are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains 
and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

See Note 25 for financial liabilities designated as hedging instruments.

3.14 

Derecognition

Financial assets

Consolidated Financial Statements F-14

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it 
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of 
ownership of the financial asset

are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership 
and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of financial position, but retains 
either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not 
derecognized.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or canceled, or expire. The 
Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are 
substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid 
(including any non cash assets transferred or liabilities assumed) is recognized in profit or loss.

3.15 

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, 
and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them 
on a net basis or to realize the asset and settle the liability simultaneously.

3.16 

Derivative Financial Instruments and Hedge Accounting

The Company holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded 
derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and 
certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and 
changes therein are generally recognized in profit or loss.

At inception of designated hedging relationships, the Company documents the risk management objective and strategy for 
undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging 
instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each 
other.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the 
derivative is recognised in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of 
the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a 
present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is 
recognized immediately in profit or loss.

The Company designates only the change in fair value of the spot element of forward exchange contracts as the hedging 
instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts 
(‘forward points’) is separately accounted for as a cost of hedging and recognized in a costs of hedging reserve within equity.

When the hedged forecast transaction subsequently results in the recognition of a non financial item such as inventory, the 
amount accumulated in the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the 
non financial item when it is recognized.

For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging reserve is 
reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or 
loss.

If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is 
exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, 
the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a transaction resulting in 
the recognition of a non financial item, it is included in the non financial item’s cost on its initial recognition or,

for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash 
flows affect profit or loss.

Consolidated Financial Statements F-15

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging 
reserve and the cost of hedging reserve are immediately reclassified to profit or loss.

Net investment hedges

When a derivative instrument or a non derivative financial liability is designated as the hedging instrument in a hedge of a net 
investment in a foreign operation, the effective portion of, for a derivative, changes in the fair value of the hedging instrument 
or, for a non derivative, foreign exchange gains and losses is recognised in OCI and presented in the translation reserve within 
equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the 
non derivative is recognized immediately in profit or loss. The amount recognised in OCI is reclassified to profit or loss as a 
reclassification adjustment on disposal of the foreign operation.

Derivative financial instruments and hedge accounting - Policy applicable before 1 January 2018

The policy applied in the comparative information presented for 2017 is similar to that applied for 2018. However, for all cash 
flow hedges, including hedges of transactions resulting in the

recognition of non financial items, the amounts accumulated in the cash flow hedge reserve were reclassified to profit or loss 
in the same period or periods during which the hedged expected future cash flows affected profit or loss. Furthermore, for cash 
flow hedges that were terminated before 2017, forward points were recognized immediately in profit or loss.

Refer to Note 25 "Financial Risk Factors and Use of Derivative Financial Instruments" for more details.

3.17  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. 

(in thousands)
Cash at bank and on hand
Short-term bank deposits
Cash and Cash Equivalents

3.18  Inventories

2018

208,083
950,996
1,159,079

$

$

2017

139,597
518,117
657,714

$

$

Inventories are stated at the lower of cost and net realizable value. The moving average method of valuation is used. The cost 
of work in process and finished goods includes raw materials, direct labor and production overhead expenditure based upon 
normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business less the cost of 
completion and distribution expenses. Provisions are established for slow-moving and obsolete inventory. 

(in thousands)
Raw materials
Work in process
Finished goods
Inventories

2018

2017

$

$

25,819
38,659
98,434
162,912

$

$

23,717
33,153
99,057
155,927

Included in inventories as of December 31, 2018, are $14.4 million (2017: $18.9 million) of inventory provisions. The 
movement in inventory provisions was recorded under cost of sales. During 2018 inventories in the amount of $180.3 million 
have been recognized as cost of sales (2017: $182.5 million).

3.19  Property, Plant and Equipment

Property, plant and equipment, including equipment under finance lease, are stated at cost of acquisition or construction cost 
less accumulated depreciation and accumulated impairment in value. Depreciation is computed using the straight-line and 
declining balance methods over the following estimated useful lives of the assets:

Buildings and improvements
Machinery and equipment
Furniture and office equipment

5-40 years
3-10 years
3-10 years

Land is not depreciated. Construction costs include borrowing costs and operating expenses that are directly attributable to 
items of property, plant and equipment capitalized during construction. Subsequent expenditure on an item of property, plant 
and equipment is capitalized at cost only when it is probable that future economic benefits associated with the item will flow 
to the Company and the cost of the item can be measured reliably. Repair and maintenance costs are expensed as incurred. 
Gains and losses on disposal or retirement of items of property, plant and equipment are determined by comparing the 

Consolidated Financial Statements F-16

 
 
proceeds received with the carrying amounts and are included in the consolidated income statements. The asset's residual 
values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

3.20  Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception 
date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a 
right to use the asset.

Company as a lessee

Finance leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased 
item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value 
of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability 
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in the 
income statement.

Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company 
will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the 
asset and the lease term.

Operating lease payments are recognized as an expense in the income statement on a straight line basis over the lease term.

Company as a lessor

Leases where the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as 
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased 
asset and recognized over the lease term on the same bases as rental income. Contingent rents are recognized as revenue in the 
period in which they are earned.

3.21  Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a 
business combination is its fair value as at the date of acquisition. Expenditure on acquired technology rights, patents, 
trademarks and licenses are capitalized as intangible assets when it is probable that future economic benefits will flow to the 
Company and the cost can be measured reliably. Following initial recognition, intangible assets are carried at cost less any 
accumulated amortization and any accumulated impairment losses.

Amortization expense related to developed technology and patent and license rights acquired in a business combination is 
included in cost of sales. Amortization of trademarks and customer base acquired in a business combination is recorded in 
sales and marketing expense. Amortization expenses of intangible assets not acquired in a business combination are recorded 
within cost of sales, research and development, or sales and marketing line items based on the nature and use of the asset.

The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized 
over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be 
impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at 
least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic 
benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated 
as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the income 
statement in the expense category consistent with the function of the intangible asset.

Developed technology, patents and license rights, computer software, development costs and other intellectual properties are 
amortized on a straight-line basis over their estimated useful lives as follows:

Developed technology, patents and license rights
Computer software
Development costs
Other intellectual properties

5-15 years
3-7 years
3-5 years
5-15 years

3.22  Impairment

Impairment of financial assets

The Company recognizes an allowance for expected credit losses (ECLs) for trade receivables, contract assets, and debt 
investments carried and amortized cost. ECLs are based on the difference between the contractual cash flows due in 

Consolidated Financial Statements F-17

accordance with the contract and all the cash flows that the company expects to receive, discounted at an approximation of the 
original effective interest rate.

ECLs are recognized in two stages. For credit risk exposures for which there has not been a significant increase in credit risk 
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 
months (12-month ECLs). The company considers a financial asset to be in default when the counterparty is unlikely to pay its 
credit obligations to the company in full or when the financial asset is past due. For those credit exposures for which there has 
been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over 
the remaining life of the exposure, irrespective of the timing of the default (lifetime ECLs). When determining whether the 
credit risk of a financial asset has increased significantly since initial recognition, the Company considers reasonable and 
supportable information that is relevant and available without undue cost or effort. This includes both quantitative and 
qualitative information and analysis, based on the company's historical experience and informed credit assessment and 
including forward-looking information, such as forecast economic conditions.

The Company assess the trade receivables allowance by applying the IFRS 9 simplified approach to measuring expected credit 
losses (ECLs), which uses the lifetime ECL allowance. To measure the ECLs on trade receivables, the Company considers any 
credit-risk concentration, collective debt risk based on historical losses, specific circumstances considering the market 
information on a country specific basis, and other forward looking information. Trade receivables are written off when there is 
no reasonable expectation of recovery of the asset (for example because of bankruptcy).

Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication 
exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An 
asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs to sell and its value 
in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of 
those from other assets or the Company's assets. Where the carrying amount of an asset or CGU exceeds its recoverable 
amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the 
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market 
assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an 
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for 
publicly traded subsidiaries or other available fair value indicators.

Impairment losses are recognized in the income statement in those expense categories consistent with the function of the 
impaired asset, except for property previously revalued where the revaluation was taken to other comprehensive income. In 
this case, the impairment is also recognized in other comprehensive income up to the amount of any previous revaluation.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that 
previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company 
estimates the asset's or cash-generating unit's recoverable amount. A previously recognized impairment loss is reversed only if 
there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss 
was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor 
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for 
the asset in prior years. Such reversal is recognized in the income statement unless the asset is carried at a revalued amount, in 
which case the reversal is treated as a revaluation increase.

Goodwill

Goodwill is subject to impairment tests annually, as of October 1, or earlier if indicators of potential impairment exist. We 
assess goodwill for impairment at least annually in the absence of an indicator of possible impairment and immediately upon 
an indicator of possible impairment. 

Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or Company of 
cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash generating unit is less than 
their carrying amount an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future 
periods.

Intangible assets

Intangible assets with indefinite useful lives are tested for impairment annually as of October 1 either individually or at the 
cash generating unit level, as appropriate and when circumstances indicate that the carrying value may be impaired.

3.23  Provisions

Consolidated Financial Statements F-18

Provisions are recognized by the Company when a present legal or constructive obligation exists as a result of past events, it is 
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable 
estimate of the amount of the obligation can be made. Where the effect of the time value of money is material, the amount of a 
provision is the present value of the expenditures expected to be required to settle the obligation. Where discounting is used, 
the increase in the provision due to the passage of time is recognized as a financing cost.

Restructuring provisions are recorded in the period in which management has committed to a detailed formal plan, has raised a 
valid expectation in those affected that it will carry out the restructuring and it becomes probable that a liability will be 
incurred and the amount can be reasonably estimated. Restructuring provisions comprise lease termination penalties, other 
penalties and employee termination payments.

3.24  Segment Reporting

We determined that we operate as one operating segment. 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 cash generating unit. 

3.25  Cash Flow Statement

The cash flow statement provides an explanation of the changes in cash and cash equivalents. It is prepared on the basis of a 
comparison of the statements of financial position as of January 1 and December 31 using the indirect method. Investing and 
financing transactions that do not require the use of cash or cash equivalents have been excluded from the cash flow statement. 
In 2018 and 2017 such eliminations primarily related to non-cash impacts from the convertible bonds.

Significant Accounting Estimates and Judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the 
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and 
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities 
within the next financial year are described below. 

Purchase Price Allocation

The purchase price allocation for acquisitions requires extensive use of accounting estimates and judgments to allocate the 
purchase price to the identifiable tangible and intangible assets acquired, including in-process research and development, and 
liabilities assumed based on their respective fair values. An acquisition may include contingent consideration as part of the 
purchase price. Contingent consideration is accounted for at fair value at the acquisition date with subsequent changes to the 
fair value being recognized in earnings. Additionally, we must determine whether an acquired entity is considered to be a 
business or a set of net assets, because a portion of the purchase price can only be allocated to goodwill in a business 
combination.

We have made several acquisitions in recent years. The purchase prices for the acquisitions were allocated to tangible and 
intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. We engaged an 
independent third-party valuation firm to assist us in determining the estimated fair values of in-process research and 
development and identifiable intangible assets. Such a valuation requires significant estimates and assumptions, including but 
not limited to determining the timing and estimated costs to complete the in-process projects, projecting regulatory approvals, 
estimating future cash flows, and developing appropriate discount rates. We believe the estimated fair values of contingent 
consideration and assets acquired and liabilities assumed are based on reasonable assumptions. However, the fair value 
estimates for the purchase price allocations may change during the allowable allocation period, which is up to one year from 
the acquisition dates, if additional information becomes available.

Fair Value Measurements

We have categorized our assets and liabilities that are measured at fair value, based on the priority of the inputs to the 
valuation techniques, in a three-level fair value hierarchy: Level 1 - using quoted prices in active markets for identical assets 
or liabilities; Level 2 - using observable inputs other than quoted prices; and Level 3 – using unobservable inputs. We 
primarily apply the market approach for recurring fair value measurements, maximize our use of observable inputs and 
minimize our use of unobservable inputs. We utilize the mid-point price between bid and ask prices for valuing the majority of 
our assets and liabilities measured and reported at fair value. In addition to using market data, we make assumptions in valuing 
assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

Certain of our derivative instruments, which are classified in Level 2 of the fair value hierarchy, are valued using industry-
standard models that consider various inputs, including time value, volatility factors, and current market and contractual prices 
for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in 

Consolidated Financial Statements F-19

the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by 
observable prices at which transactions are executed in the marketplace.

Certain of our acquisitions involve contingent consideration, the payment of which is contingent on the occurrence of future 
events. Contingent consideration is classified in Level 3 of the fair value hierarchy and is initially recognized at fair value as a 
cost of the acquisition. After the acquisition, the contingent consideration liability is remeasured each reporting period. The 
fair value of contingent consideration is measured predominantly on unobservable inputs such as assumptions about the 
likelihood of achieving specified milestone criteria, projections of future financial performance, assumed discount rates and 
assumed weightings applied to potential scenarios in deriving a probability weighted fair value. Significant judgment is used 
in developing these estimates and assumptions both at the acquisition date and in subsequent periods. If actual events differ 
from management's estimates, or to the extent these estimates are adjusted in the future, our financial condition or results of 
operations could be affected in the period of any change. 

For other fair value measurements, we generally use an income approach to measure fair value when there is not a market 
observable price for an identical or similar asset or liability. This approach utilizes management’s best assumptions regarding 
expectations of projected cash flows, and discounts the expected cash flows using a commensurate risk-adjusted discount rate. 

Impairment of Intangible Assets 

Assets are tested or reviewed for impairment in accordance with the accounting policy stated under Note 3.22 "Impairment". 

In the fourth quarter of 2018, we performed our annual impairment assessment of goodwill (using data as of October 1, 2018). 
We performed our goodwill impairment testing on a single cash generating unit basis which is consistent with our reporting 
structure. Differences in assumptions used in projecting future operating cash flows and cost of funds could have a significant 
impact on the determination of impairment amounts. In estimating future cash flows, we used our internal five-year 
projections. Our projections were based on recent sales data for existing products, planned timing of new product launches or 
capital projects, and customer commitments related to new and existing products. These projections also included assumptions 
of future production volumes and pricing. Based on the sensitivity analysis performed, we determined that in the event that our 
estimates of projected future cash flows, growth rates and weighted average cost of capital were too high by 10%, there would 
still be no impact on the reported value of goodwill. We concluded that no impairment existed at October 1, 2018 or through 
December 31, 2018.

Due to the numerous variables associated with our judgments and assumptions relating to the valuation of the cash generating 
unit and the effects of changes in circumstances affecting these valuations, both the precision and reliability of the resulting 
estimates are subject to uncertainty, and as additional information becomes known, we may change our estimates.

Development Costs

Development costs are capitalized in accordance with the accounting policy stated under Note 3.6 "Research and 
Development". Determining the amounts to be capitalized requires management to make assumptions regarding the expected 
future cash generation of the assets, discount rates to be applied and the expected period of benefits. At least annually, 
management reviews the carrying amount of projects and assessed whether they were impaired or not. 

Income Taxes 

The Company is subject to income taxes in numerous jurisdictions that require estimates to be made based on interpretations 
of laws or regulations. Various internal and external factors, such as changes in tax laws, regulations and rates, changing 
interpretations of existing tax laws or regulations, future level of research and development spending and changes in overall 
levels of pre-tax income may have favorable or unfavorable effects on the income tax and deferred tax provisions in the period 
in which such determination is made. 

Deferred tax assets are recognized in accordance with the accounting policy stated in Note 3.11 "Taxation". Deferred tax assets 
are recognized for net operating loss carry-forwards to the extent that it is probable that taxable profit will be available against 
which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets 
that can be recognized based upon the likely timing and level of future taxable profits.

Share-Based Payments - Stock Options

The Company utilizes the Black-Scholes-Merton valuation model for estimating the fair value of its stock options as stated 
under Note 21 "Share-Based Payments". 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.

Share-Based Payments - 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 is determined based on the number of stock units granted and the fair market value of our shares on the grant date. The 

Consolidated Financial Statements F-20

fair market value at the time of the grant, less an estimate for pre-vesting forfeitures, is recognized in expense over the vesting 
period. We grant performance-based stock units subject to performance periods of one-year up to three years. Thus the 
estimates of performance achieved during the performance period may be subject to significant changes from period to period 
as the performance is completed. 

4.  Revenue

Accounting Policies

We adopted  IFRS 15 Revenue from Contracts with Customers with a date of initial application of January 1, 2018. The 
comparative information has not been adjusted and continues to be reported under  IAS 18 Revenue. As a result, we changed 
our accounting policy for revenue recognition as detailed below. 

We applied IFRS 15 using the modified retrospective method by recognizing the effect of initially applying IFRS 15 as an $1.3 
million adjustment to the opening balance of retained earnings at January 1, 2018 for all contracts not completed at January 1, 
2018. The following table presents the impact from the adoption of IFRS 15 on our consolidated balance sheet:

(in thousands)
Trade accounts receivable

Other current liabilities

Non-current deferred tax assets

Retained earnings

Balance at
December 31, 2017

IFRS 15
Adjustments

Balance at
January 1, 2018

$

$

$

$

329,138

230,243

67,985

1,071,393

$

$

$

$

160

$

765
$
(701) $
(1,306) $

329,298

231,008

67,284

1,070,087

The adoption of IFRS 15 resulted in higher revenues of $9.4 million for the year ended December 31, 2018 following primarily 
the change in the timing of the recognition of milestone payments. The following table summarizes the impacted line items 
from our consolidated statements of income for the year ended December 31, 2018: 

(in thousands, except per share amounts)
Net sales

Income taxes

Net income

Basic earnings per common share

Diluted earnings per common share

Twelve months ended
December 31, 2018
under previous
standard

$

$

$

$

$

1,492,464

$
(40,531) $
$
96,980

0.43

0.42

$

$

Effect of IFRS 15

December 31, 2018
As Reported

$
9,384
(1,470) $
$
7,914

0.03

0.03

$

$

1,501,848
(42,001)
104,894

0.46

0.45

The impact from the adoption of IFRS 15 on our consolidated balance sheet as of December 31, 2018 and consolidated 
statements of cash flows for the year ended December 31, 2018 was not material.

Nature of Goods and Services

Our revenues are reported net of sales and value added taxes and accruals for estimated rebates and returns 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. Revenue is recognized upon transfer of control of promised products or services to 
customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter 
into contracts that can include various combinations of products and services, which are generally distinct and accounted for as 
separate performance obligations. The transaction price is allocated to performance obligations based on their relative stand-
alone selling prices. 

We offer warranties on our products. Certain of our warranties are assurance-type in nature and do not cover anything beyond 
ensuring that the product is functioning as intended. Based on the guidance in IFRS 15, assurance-type warranties do not 
represent separate performance obligations. The Company also sells separately-priced service contracts which qualify as 
service-type warranties and represent separate performance obligations.

We sell our products and services both directly to customers and through distributors generally under agreements with payment 
terms typically less than 90 days and in most cases not exceeding one year and therefore contracts do not contain a significant 
financing component. 

Consumable and Related Revenue 

Consolidated Financial Statements F-21

Consumable Products: In the last three years, revenue from consumable product sales has accounted for approximately 
78-80% of our net sales and revenue is recognized when performance obligations under the terms of a contract with a customer 
are satisfied. The majority of our contracts have a single performance obligation to transfer a product or multiple performance 
obligations to transfer multiple products concurrently. Accordingly, we recognize revenue when control of the products has 
transferred to the customer, which is generally at the time of shipment of products as this is when title and risk of loss have 
been transferred. In addition, invoicing typically occurs at this time so this is when we have a present right to payment. 
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products and is generally 
based upon a negotiated formula, list or fixed price. 

Related Revenue: Revenues from related products include software-as-a-service (SaaS), licenses, intellectual property and 
patent sales, royalties and milestone payments and over the last three years has accounted for approximately 7-9% of our net 
sales.

SaaS arrangements: Revenue from SaaS arrangements, which allow customers to use hosted software over the contract period 
without taking possession of the software, is recognized 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. 

Licenses: Licenses for on-site software, which allow customers to use the software as it exists when made available, are sold as 
perpetual licenses or subscriptions. Revenue from on-site licenses are recognized upfront at the point in time at the later of 
when the software is made available to the customer and the beginning of the license term. When a portion of the transaction 
price is allocated to a performance obligation to provide support and/or updates, revenue is recognized as the updates/support 
are provided, generally over the life of the license. Fees from research collaborations include payments for technology transfer 
and access rights. Royalties from licensees of intellectual property are based on sales of licensed products and revenues are 
recognized at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the 
royalty has been allocated has been satisfied (or partially satisfied). 

Milestone Payments: At the inception of each companion diagnostic co-development arrangement that includes development 
milestone payments, which represent variable consideration, we evaluate whether the milestones are probable of being reached 
and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a 
significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone 
payments that are not within our control, such as milestones which are achieved through regulatory approvals, are considered to 
be constrained and excluded from the transaction price until those approvals are received. Revenue is recognized following the 
input method as this is considered to best depict the timing of the transfer of control. This involves measuring actual hours 
incurred to date as a proportion of the total budgeted hours of the project. At the end of each subsequent reporting period, the 
proportion of completion is trued-up. We also re-evaluate the probability of achievement of development milestones and any 
related constraint on a periodic basis, and if necessary, adjust our estimate of the overall transaction price. Any such 
adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. 

Instruments

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 the customer obtains control 
of the instrument which is predominantly at the time of delivery or when title has transferred to the customer. Service revenue is 
recognized over the term of the service period as the customers benefit from the service throughout the service period. Revenue 
related to services performed on a time-and-materials basis is recognized when performed.

Contract Estimates

The majority of our revenue is derived from contracts (i) with an original expected length of one year or less and (ii) contracts 
for which we recognize revenue at the amount in which we have the right to invoice as product is delivered. We have elected 
the practical expedient not to disclose the value of remaining performance obligations associated with these types of contracts.  
In addition, we have elected the practical expedient not to disclose the value of remaining performance obligations associated 
with licenses of intellectual property for which payment is based on sales of the licensed products. 

However, we have certain companion diagnostic co-development contracts to provide research and development activities in 
which our performance obligations extend over multiple years. As of December 31, 2018, we had $36.6 million of remaining 
performance obligations for which the transaction price is not constrained related to these contracts of which we expect to 
recognize approximately 50% over the next 12 months and the remainder thereafter.

Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue 
pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as 
invoiced, contracts for licenses of intellectual property where payment is based on sales of the licensed products and contracts 

Consolidated Financial Statements F-22

with variable consideration related to undelivered performance obligations, is not material. Additionally, revenue recognized in 
the reporting period from performance obligations satisfied, or partially satisfied, in a previous period, is not material.

Contract Balances

The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables 
(contract assets), and customer advances and deposits (contract liabilities) in the consolidated balance sheet. 

Contract assets as of December 31, 2018 totaled $6.9 million and are included in other current assets in the accompanying 
consolidated balance sheet and relate to the companion diagnostic co-development contracts discussed above. There were no 
material contract assets as of January 1, 2018.

Contract liabilities primarily relate to advances or deposits received from customers before revenue is recognized and is 
primarily related to instrument service and software subscription revenue. As of December 31, 2018 and January 1, 2018, the 
amount of deferred revenue reported as other current liabilities totaled to $45.4 million and $49.4 million, respectively, and $9.0 
million and $6.2 million are reported as other non-current liabilities, respectively. During the year ended December 31, 2018, 
we satisfied the associated performance obligations and recognized revenue of $44.5 million, respectively, related to advance 
customer payments previously received.

Practical Expedients and Accounting Policy Elections

We exclude from net sales any value add, sales and other taxes which we collect concurrent with revenue-producing activities. 
If we perform shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to 
delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued when the related revenue is 
recognized. As such, shipping and handling fees billed to customers in a sales transaction are recorded in net sales and shipping 
and handling costs incurred are recorded in sales and marketing expenses. We recognize the incremental costs of obtaining 
contracts (commissions) as an expense when incurred for contracts that have a duration of one year or less. There were no 
deferred contract costs recorded at December 31, 2018. We apply the practical expedient to not disclose information about 
remaining performance obligations from contracts that have original expected duration of one year or less, revenue that is 
recognized as invoiced and revenue that is recognized based on the sales of the licensed products.

Disaggregation of Revenue

We disaggregate our revenue based on product categories and customer class as shown in the tables below for the years ended 
December 31, 2018 and 2017:

Molecular Diagnostics

Applied Testing

Pharma

Academia

Total

(in thousands)

Molecular Diagnostics

Applied Testing

Pharma

Academia

Total

2018

Consumables and
related

Instruments

Total

$

649,602

$

82,197

$

109,196

258,487

298,174

27,962

32,061

44,169

731,799

137,158

290,548

342,343

$

1,315,459

$

186,389

$

1,501,848

2017

Consumables and
related

Instruments

Total

$

605,462

$

77,702

$

106,380

245,187

285,686

30,654

29,642

36,823

683,164

137,034

274,829

322,509

$

1,242,715

$

174,821

$

1,417,536

Refer to Note 20 "Segment Information" for disclosure of revenue by geographic region.

5.  Acquisitions and Divestitures

Consolidated Financial Statements F-23

Acquisitions have been accounted for as business combinations, and the acquired companies’ results have been included in the 
accompanying consolidated income statements 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.

2018 Acquisition

In April 2018, we acquired all shares in STAT-Dx Life, S.L. (STAT-Dx), a privately-held company located in Barcelona, Spain, 
which is developing the next generation of multiplex diagnostics for one-step, fully integrated molecular analysis of common 
syndromes using a novel system based on real-time PCR technology and proven QIAGEN chemistries. 

The cash consideration totaled $148.8 million. The acquisition included contingent consideration which is recorded as part of 
the purchase price based on the acquisition date fair value. Under the purchase agreement, potential contingent payments 
through 2022 total $44.3 million, of which the fair value of $37.4 million was recorded as purchase price using a probability-
weighted analysis of the future milestones applying discount rates between 6.5% and 6.9%. For the year ended December 31, 
2018, acquisition-related costs total $7.1 million, of which $4.8 million are included in general and administrative, 
restructuring, integration and other expenses, net and $2.3 million are included in cost of sales in the accompanying 
consolidated statements of income.

The allocation of the purchase price is preliminary and is not yet finalized. The preliminary allocation of the purchase price is 
based upon preliminary estimates which used information that was available to management at the time the consolidated 
financial statements were prepared and these estimates and assumptions are subject to change within the measurement period, 
up to one year from the acquisition date. Accordingly, the allocation may change. We continue to gather information about the 
acquired tax balances. 

The preliminary purchase price allocation as of December 31, 2018 differed from the initial preliminary purchase price 
allocation as follows: 

(in thousands)

Purchase Price:

Cash consideration

Fair value of contingent consideration

Preliminary Allocation:

Cash and cash equivalents

Prepaid expenses and other current assets
Inventories

Income tax receivables

Accounts payable

Accruals and other current liabilities

Fixed and other long-term assets

Developed technology

In-process research and development

Goodwill

As of
December 31, 
2018

As of
April 27, 2018

Difference

$

$

$

148,780

37,377

186,157

$

$

148,780

36,751

185,531

$

$

7,357

$

7,357

$

1,432
1,868

2,213
(1,412)
(1,785)
6,306

31,300

24,300

117,621

1,432
1,868

2,213
(1,412)
(560)
6,434

80,100

—

97,268

—

626

626

—

—
—

—

—
(1,225)
(128)
(48,800)
24,300

20,353

6,126

626

Deferred tax liability on fair value of identifiable intangible assets
acquired

Total

(3,043)
186,157

$

(9,169)
185,531

$

$

The in-process research and development recognized relates to technologies that remain in development and have not yet 
obtained regulatory approval. The technologies within in-process research and development are expected to be completed 
within the next two years.

Consolidated Financial Statements F-24

The changes in the values of in-process research and development assets and developed technology relate to new information 
obtained regarding key assumptions in the valuation model since the initial purchase price allocation. This resulted in an 
immaterial impact to the amortization expense recorded during 2018. The weighted average amortization period for the 
developed technology is 10 years. The goodwill acquired is not deductible for tax purposes.

Revenue and earnings in the reporting periods since the acquisition date have not been significant. No pro forma financial 
information has been provided herein as the acquisition of STAT-Dx did not have a material impact to net sales, net income or 
earnings per share on a pro forma basis. 

Other 2018 Acquisition

In April 2018, we acquired all remaining shares of a privately held entity in which we held a minority interest. The value of the 
minority interest investment was revalued in connection with the acquisition by $4.8 million and a corresponding gain was 
recorded in general and administrative, restructuring, integration and other, net in the accompanying consolidated statement of 
income for the year ended December 31, 2018. The allocation of the purchase price is preliminary and is based upon 
preliminary estimates which used information that was available to management at the time the financial statements were 
prepared and these estimates and assumptions are subject to change within the measurement period, up to one year from the 
acquisition date. Accordingly, the allocation may change. We continue to gather information about the acquired tax balance. 
This acquisition was not significant to the overall consolidated financial statements and the acquisition 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. 

2017 Acquisitions

In January 2017, we acquired OmicSoft Corporation, a leading provider of omics data management solutions located in Cary, 
North Carolina (U.S.). This acquisition was not significant to the overall consolidated financial statements and as of 
December 31, 2017, the allocation of the purchase price was final. The acquisition 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.

Divestitures

2018 Divestitures

In April 2018, we sold a portfolio of veterinary testing products for a total of €15.1 million  ($18.5 million), of which $16.4 
million was received in cash and the balance due in April 2020. An $8.0 million gain was recorded on the sale to other 
operating income in the accompanying consolidated income statement for the year-ended December 31, 2018.

6.  Restructuring

2017 Restructuring

During the fourth quarter of 2017, we initiated restructuring initiatives to mitigate the negative impacts stemming from the U.S. 
tax legislation as further discussed in Note 16 "Income Tax". Total pre-tax costs for the program were $25 million and no 
additional costs will be incurred related to this program. Cumulative costs for this program were as follows:

(in thousands)

Cost of sales

General and administrative, restructuring, integration and other,
net

Total 2017 costs

Cost of sales

General and administrative, restructuring, integration and other,
net

Total 2018 costs

Total cumulative costs

Personnel
Related

Contract and
Other Costs

Inventory
Write-offs &
Asset
Impairments

Total

$

— $

— $

3,039

$

3,039

—

—
424

10,381

10,805

4,583

4,583
1,193

4,232

5,425

—

3,039
—

1,610

1,610

$

10,805

$

10,008

$

4,649

$

4,583

7,622
1,617

16,223

17,840

25,462

Consolidated Financial Statements F-25

The following table summarizes the cash components of the restructuring activity.

(in thousands)

Costs incurred in 2017

Foreign currency translation adjustment

Liability at December 31, 2017

Additional costs in 2018

Release of excess accrual

Payments

Foreign currency translation adjustment

Liability at December 31, 2018

Personnel
Related

Contract and
Other Costs

Total

$

— $

4,583

$

4,583

—

—
12,642
(1,837)
(6,892)
(93)
3,820

$

2

4,585
5,554
(129)
(7,149)
(17)
2,844

$

2

4,585
18,196
(1,966)
(14,041)
(110)
6,664

$

During 2018, fixed asset impairments of $1.6 million were recorded in connection with this initiative and are included within 
general and administration, restructuring, integration and other in the accompanying consolidated income statement. As of 
December 31, 2018 and 2017, liabilities of $6.7 million and $4.6 million, respectively, are included in other current liabilities in 
the accompanying consolidated balance sheets. 

2016 Restructuring

During the fourth quarter of 2016, we initiated a series of targeted actions to support faster sales momentum and improve 
efficiency and accountability. The objective with these actions is to ensure that we grow sustainably and consistently in the 
coming years. Measures include simplifying our geographic presence with site reductions, focusing resources to shared service 
centers, and streamlining selected organizational structures. No additional costs will be incurred related to this program. 
Cumulative costs for this program were as follows:

Personnel
Related

Facility
Related

Contract
and Other
Costs

Asset
Impairments
& Disposals

Total

$

1,222

$

205

$

43

$

11,553

$

13,023

(in thousands)

Cost of sales

General and administrative, restructuring, integration and
other, net

Other expense

Total 2016 costs

Cost of sales

General and administrative, restructuring, integration and
other, net

Total 2017 costs

General and administrative, restructuring, integration and
other, net
Total 2018 costs (releases)

17,998

—

19,220

1,071

8,097

9,168

29
29

Total cumulative costs

$

28,417

$

6,960

—

7,165

—

350

350

8,272

—

8,315

238

9,612

9,850

(838)
(838)
6,677

$

(546)
(546)
17,619

22,963

10,946

45,462

—

—

—

—
—

$

45,462

$

56,193

10,946

80,162

1,309

18,059

19,368

(1,355)
(1,355)
98,175

Personnel Related expenses during 2017 and 2016 includes reductions in costs of $0.7 million and $2.0 million, respectively, as 
a result of forfeitures of share-based compensation in connection with terminations. During the year ended December 31, 2016, 
Asset Impairments and Disposals include $31.4 million for intangible asset impairments, $2.0 million for fixed asset 
abandonments, and $1.1 million primarily in connection with the write-off of prepaid contract costs. The total $10.9 million of 
expense, includes $8.3 million associated with an impairment of an equity method investment and $2.6 million disposal of 
goodwill, included in gain (loss) from equity accounted investments and other operating expenses, respectively, in the 
consolidated income statement for the year ended December 31, 2016.

Consolidated Financial Statements F-26

The following table summarizes the cash components of the restructuring activity. 

(in thousands)

Liability at December 31, 2016

Additional costs in 2017

Release of excess accrual

Payments

Facility deferred rent reclassified to restructuring liability

Foreign currency translation adjustment

Liability at December 31, 2017

Additional costs in 2018

Release of excess accrual

Payments

Foreign currency translation adjustment

Liability at December 31, 2018

Personnel
Related

Facility
Related

Contract and
Other Costs

Total

$

18,480

$

7,882

$

5,943

$

32,305

12,985
(3,083)
(25,586)
—

1,126

3,922
372
(343)
(3,648)
(48)
255

$

$

1,798
(1,448)
(7,478)
241

57

1,052
—
(838)
(214)
—

$

$

$

— $

9,883
(30)
(14,887)
—

157

$

1,066
—
(546)
(494)
(26)
— $

24,666
(4,561)
(47,951)
241

1,340

6,040
372
(1,727)
(4,356)
(74)
255

At December 31, 2018, $0.3 million of the liability is included in other current liabilities in the accompanying consolidated 
balance sheet. At December 31, 2017, $5.2 million of the liability is included in other current liabilities and $0.8 million is 
included in other non-current liabilities in the accompanying consolidated balance sheet. 

7.  Financial Assets

(in thousands)
Current financial assets:

Unquoted debt securities
Quoted equity securities
Current Financial Assets
Non-current financial instruments:

Unquoted debt securities
Quoted equity securities
Unquoted equity securities
Non-current Financial Assets
Total Financial Assets

Unquoted Debt Securities

2018

2017

$

$

$

$
$

$

214,568
350
214,918   $

20,038
2,117
59,484
81,639
296,557

$

$
$

359,198
—
359,198

—
3,208
33,605
36,813
396,011

At December 31, 2018 and 2017, we had $234.3 million and $359.2 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 measured at fair market value with gains and 
losses recorded in earnings. At December 31, 2018, these loans consist of $134.1 million and €87.5 million  ($100.2 million as 
of December 31, 2018) which mature at various dates through October 2020. 

(in thousands)

Balance at beginning of the year

Unquoted debt securities acquired

Unquoted debt securities sold

Gain (loss) on sales of unquoted debt securities

Translation

Balance at end of the year

Quoted Equity Securities

2018

2017

$

359,198

$

89,300

568,002
(691,765)
2,725
(3,554)
234,606

$

450,564
(184,882)
(1,055)
5,271

$

359,198

A summary of our investments in quoted equity securities that have readily determinable fair values follows below. These 
investments are reported at fair value with gains and losses recorded in earnings beginning in January 2018 upon adoption of 

Consolidated Financial Statements F-27

IFRS 9. Prior to adoption, these investments were reported at fair value with unrealized gains and losses recognized in 
accumulated other comprehensive income on the balance sheet. Accordingly, upon adoption, we recorded a cumulative effect 
adjustment to decrease opening retained earnings at January 1, 2018 by a net of tax amount of $0.9 million (pre-tax $1.1 
million) for unrealized losses as of the adoption date. 

(in thousands, except shares held)
HTG Molecular Diagnostics, Inc (HTGM)

Shares held

Cost basis

Fair value

Total recognized gain during the period

Total cumulative unrealized gain (loss)

As of December 31,

2018

2017

833,333

833,333

$

$

$

$

2,000

2,117

425

117

$

$

$

$

2,000

1,692

—
(308)

During the year ended December 31, 2018, the increase of $0.4 million in fair market value was recognized as a gain in other 
operating income in the accompanying consolidated statement of income. These marketable securities are included in non-
current financial assets in the accompanying consolidated balance sheets. 

(in thousands, except shares held)
Curetis N.V.

Shares held

Cost basis

Fair value

Total recognized loss during the period

Total cumulative unrealized loss

As of December 31,

2018

2017

204,000

320,424

$

$

$

$

1,444

$

350
$
(572) $
(1,094) $

2,268

1,516

—
(752)

During the year ended December 31, 2018, we sold 116,424 shares of Curetis N.V. and recognized a gain of $0.3 million in 
other operating income in the accompanying consolidated statement of income in connection with the sale of these shares. The 
fair market value of shares held during the year decreased by $0.6 million and was recognized as a loss in other operating 
expense in the accompanying consolidated statement of income. As of December 31, 2018 and 2017, these marketable 
securities are included in current financial assets and non-current financial assets, respectively, in the accompanying consolidate 
balance sheets. 

Unquoted Equity Securities 

At December 31, 2018 and 2017, we had investments in non-publicly traded companies that do not have readily determinable 
fair values with carrying amounts that totaled $59.5 million and $33.6 million, respectively. Upon adoption of IFRS 9 in 2018, 
these investments are required to be accounted for at fair value through profit and loss unless the investment is not held for 
trading, and the holder elects at initial recognition to account for it at fair value through other comprehensive income. As this 
election has not been made, these investments are accounted for at fair value through profit and loss. 

Changes in these investments for the years ended December 31, 2018 and 2017 are as follows:

(in thousands)

Balance at beginning of year

Cash investments in equity securities

Net increases due to observable price changes

Conversion of note receivable to equity securities

Sale of equity securities

Impairments

Full acquisition of equity securities

Foreign currency translation adjustments

Balance at end of year

2018

2017

$

33,605

$

38,173

9,633

13,104

11,369
(5,400)
—
(2,710)
(117)
59,484

$

278

—

—

—
(5,137)
—

291

33,605

$

During 2018, we made investments of $9.6 million in equity securities, of which $9.3 million was an additional investment in 
NeuMoDx Molecular, Inc. (NeuMoDx). The investment is part of a strategic partnership with NeuMoDx to commercialize two 

Consolidated Financial Statements F-28

new fully integrated systems for automation of PCR (polymerase chain reaction) testing. Under the agreement, we will initially 
distribute the NeuMoDx™ 288 (high-throughput version) and NeuMoDx™ 96 (mid-throughput version) in Europe and other 
major markets worldwide outside of the United States. NeuMoDx will distribute these instruments within the United States 
directly. The two companies have also entered into an agreement under which we can acquire all NeuMoDx shares not currently 
owned by QIAGEN at a predetermined price of approximately $234 million, subject to the achievement of certain regulatory 
and operational milestones.

For the year ended December 31, 2018, we recognized a gain of $13.1 million in other operating income in the accompanying 
consolidated statement of income due to upward adjustments resulting from observable price changes. These adjustments were 
due to equity offerings at a higher price from the issuer in orderly transactions for identical or similar investments as those we 
hold. 

During 2018, we converted a note receivable from a non-publicly traded company, considered a related party, into an equity 
interest in that company and is currently held at the value of the shares received. This note held a balance of $11.4 million 
including principal balance and accrued interest at conversion which was a non-cash investing activity and is therefore not 
included in the consolidated statement of cash flows. Also during 2018, we sold our interest in a non-publicly traded company 
which had a book value of $5.4 million. Proceeds from the sale totaled $10.5 million in cash resulting in a corresponding gain 
of $5.1 million recorded in other operating income in the accompanying consolidated statement of income. Additionally during 
2018, we acquired all remaining shares of a privately held entity in which we held a minority interest as discussed in Note 5 
"Acquisitions and Divestitures". 

One of our investments in unquoted equity securities is a structured entity that we do not have the ability to affect the variable 
returns through power over the entity. Therefore, this investment is not consolidated. As of December 31, 2018 and 2017, this 
investment had a total carrying value of $41.0 million and $20.0 million, respectively, which is included in non-current 
financial assets in the consolidated balance sheets, representing our maximum exposure to loss.

In 2017, we recorded total impairments to unquoted equity securities of $5.1 million in other operating expense in the 
accompanying consolidated statement of income. 

8.  Trade Accounts Receivable

We sell our products worldwide through sales subsidiaries and distributors. There is no concentration of credit risk with respect 
to trade accounts receivable as we have a large number of internationally dispersed customers. Trade accounts receivable are 
non-interest bearing and mostly have payment terms of 30-90 days.

(in thousands)
Trade accounts receivable
Notes receivable
Allowance for credit loss
Trade Accounts Receivable, net

2018

2017

$

$

342,849
18,033
(9,270)
351,612

$

$

319,913
17,233
(8,008)
329,138

The notes receivable represent a written promise from customers to pay definite amounts of money on specific future dates.

The following table provides a breakdown of trade accounts receivable which are current and overdue but not fully impaired 
receivables.

(in thousands)
Current
overdue 1-30 days
overdue 31-90 days
overdue > 90 days
Trade accounts receivable, net

The changes in the allowance for doubtful accounts receivable are as follows:

2018

2017

$

$

229,839
42,781
28,623
50,369
351,612

$

$

206,578
49,379
27,105
46,076
329,138

Consolidated Financial Statements F-29

(in thousands)
Balance as of January 1
Additions charged to expense
Deductions from allowance (1)

Currency translation adjustments and other
Balance as of December 31

2018

2017

$

$

$

8,008
4,448
(2,827)

(359)
9,270

$

7,614
3,094
(3,233)

533
8,008

(1) Write-offs for which an allowance was previously provided.

Included in the above balances as per December 31, 2018 are allowances for individually impaired receivables of $3.2 million 
(2017: $3.0 million).

9.  Other Current and Non-current Assets

Other current assets at December 31, 2018 and 2017 consist of the following:

(in thousands)
Prepaid expenses
Cash collateral
Value added tax
Other receivables
Other Current Assets

Other non-current assets at December 31, 2018 and 2017 consist of the following:

(in thousands)
Prepaid licenses and royalties
Non-current loans receivable with related parties including interest
Other non-current assets
Prepayment of intangibles
Non-current deposits and escrow payments
Other Non-current Assets

2018

2017

$

$

$

$

28,884
25,368
24,416
11,127
89,795

2018

39,697
24,300
10,420
7,884
1,028
83,329

$

$

$

$

17,422
21,907
17,870
17,455
74,654

2017

11,261
17,713
11,177
7,167
1,311
48,629

Prepaid licenses and royalties include $30.0 million of prepaid royalties to Natera in 2018 for a partnership to develop genetic 
assays for the GeneReader NGS System.

Consolidated Financial Statements F-30

10.  Property, Plant and Equipment

Cost (in thousands)
January 1, 2017
Currency adjustments
Additions
Business combinations
Disposals
Transfers
December 31, 2017
Currency adjustments
Additions
Business combinations
Disposals
Transfers
December 31, 2018

Depreciation (in thousands)
January 1, 2017
Currency adjustments
Depreciation
Disposals
December 31, 2017
Currency adjustments
Depreciation
Disposals
December 31, 2018
Net book value
December 31, 2017
December 31, 2018

Land and
buildings
$ 284,710
21,079
3,788
—
(148)
324
309,753
(8,091)
947
—
—
96
$ 302,705

Machinery
and
equipment
$ 257,348
22,129
24,451
—
(7,768)
3,015
299,175
(15,892)
31,125
4,506
(15,248)
3,084
$ 306,750

Furniture
and office
equipment
89,560
$
6,874
6,148
—
(5,625)
6,300
103,257
(3,354)
10,121
316
(5,835)
5,265
$ 109,770

Leasehold
improvements
32,709
$
2,413
1,770
80
(246)
646
37,372
(1,348)
1,470
894
(1,252)
848
37,984

$

Construction
in progress

$

$

7,324
518
11,112
—
(42)
(10,285)
8,627
(206)
29,388
—
(441)
(9,293)
28,075

Total
$ 671,651
53,013
47,269
80
(13,829)
—
758,184
(28,891)
73,051
5,716
(22,776)
—
$ 785,284

Land and
buildings

Machinery
and
equipment

Furniture
and office
equipment

$

(74,371) $ (195,089) $ (69,394) $
(16,181)
(7,294)
(30,092)
(8,118)
5,443
108
(235,919)
(89,675)
12,365
2,882
(28,853)
(8,244)
13,334
—
(239,073)
(95,037)

(6,518)
(9,953)
4,967
(80,898)
2,702
(9,884)
5,719
(82,361)

Leasehold
improvements
(24,089)
(1,853)
(1,876)
137
(27,681)
959
(2,293)
214
(28,801)

Construction
in progress

Total

— $ (362,943)
(31,846)
—
(50,039)
—
—
10,655
— (434,173)
18,908
—
(49,274)
—
—
19,267
— (445,272)

$ 220,078
$ 207,668

$
$

63,256
67,677

$
$

22,359
27,409

$
$

9,691
9,183

$
$

8,627
28,075

$ 324,011
$ 340,012

No property, plant and equipment were pledged as security against non-current financial debts at December 31, 2018 and 2017. 
The net carrying amount of property, plant and equipment under finance lease contracts, primarily buildings, amounts to $0.1 
million as of December 31, 2018 (2017: $1.4 million). 

The asset's residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial 
year end. For the years ended December 31, 2018 and 2017, interest capitalized in connection with construction projects was 
not significant.

Consolidated Financial Statements F-31

 
 
 
 
 
 
11.  Equity Accounted Investments

We have made strategic investments in certain companies that are accounted for using the equity 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. 

Amounts from equity method investments considered in the financial statements are as follows:

($ in thousands)
PreAnalytiX GmbH

MAQGEN Biotechnology Co., Ltd

Suzhou Fuda Business Management and
Consulting Partnership
Apis Assay Technologies Ltd

Hombrechtikon Systems Engineering AG
Biotype Innovation GmbH

Pyrobett

Ownership
Percentage

50.00% $
40.00%

33.67%

19.00%

19.00%

0.00%

19.00%

Equity investments
as of December 31,

Share of income (loss)
for the years ended December 31,

2018

2017

2018

2017

5,405

$

7,562

$

5,154

3,138

770

378

—

—

3,285

—

—

1,155

3,821

2,639

$

14,845

$

18,462

$

$

4,062
(579)

3,818
(542)

—

—
(668)
(123)
(100)
2,592

—

—
(346)
39

195

$

3,164

These equity method investments are included in equity accounted investments in the consolidated balance sheets for the years 
ended December 31, 2018 and 2017. 

During the year ended December 31, 2018, we recorded impairments to the Biotype and Pyrobett investments totaling $6.1 
million in other operating expense in the accompanying consolidated statements of income following changes in the investee's 
circumstances that indicated the carrying value was no longer recoverable. Accordingly, the investments were fully impaired. 
We retain a QIAGEN representative on the board at Pyrobett and therefore have significant influence and account for this as an 
equity method investment in spite of the fact our share is below 20%. 

Also during 2018, we acquired a 19% interest in Apis Assay Technologies Ltd. for $0.8 million and due to the expected 
business activity, QIAGEN has significant influence. Accordingly, the investment in this company is recorded at equity. As of 
December 31, 2018, this investment had a carrying value of $0.8 million, which is included in other non-current assets in the 
consolidated balance sheet, representing our maximum exposure to loss. 

During 2017, we acquired a 40% interest in MAQGEN Biotechnology Co., Ltd. for $4.0 million and contributed an additional 
$3.2 million during 2018. We have a commitment to contribute an additional $4.8 million in future periods. Also, during 2017, 
we sold our interest in QIAGEN (Suzhou) Institute of Translation Research Co., Ltd., which had no book value at the time of 
sale, for $3.5 million and recorded a corresponding gain in other income, net in the accompanying statement of income. 

As of December 31, 2018 and 2017, the investment in Hombrechtikon Systems Engineering AG (HSE) had a carrying value of 
$0.4 million and $1.2 million, respectively. In 2016, we transferred the research and development activities of our 
instrumentation business to a new company and also acquired a 19.0% interest in HSE. Due to the ongoing business activity, 
QIAGEN has significant influence.  Accordingly, the investment in this company is recorded at equity in spite of the fact that 
QIAGEN's share is below 20%. 

The below tables shows the changes in our equity method investments for the years ended December 31, 2018 and 2017:

(in thousands)
Equity method investments as at January 1st
Acquisition of shares
Impairment
Dividend distribution received
Share of profit
Exchange rate differences / other
Equity method investments as at December 31st

The following overview reflects 100% of the balances of the relating companies:

2018

2017

$

$

18,462
7,181
(6,142)
(6,059)
2,592
(1,189)
14,845

$

$

10,826
4,000
—
—
3,164
472
18,462

Consolidated Financial Statements F-32

 
 
(in millions)
Total assets
Shareholders' equity
Net sales
Net result

2018

2017

$
$
$
$

57.0
48.0
30.9
10.4

$
$
$
$

56.5
48.0
28.8
4.0

12.  Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows:

(in thousands)
Goodwill as at January1st
Goodwill acquired during the year
Purchase adjustments
Disposals
Currency adjustments
Goodwill as at December 31st

2018
2,038,180
142,287
—
(5,682)
(40,660)
2,134,125

$

$

2017
1,951,660
26,934
—
—
59,586
2,038,180

$

$

The changes in the carrying amount of goodwill during the years ended December 31, 2018  resulted primarily from the 
acquisition of STAT-Dx and other acquisitions and divestitures discussed in Note 5 "Acquisitions and Divestitures" and changes 
in foreign currency translation. The changes in goodwill during the year ended December 31, 2017 resulted primarily from 
changes in foreign currency translation together with acquired goodwill from the 2017 acquisition of OmicSoft. 

In the fourth quarter of 2018, we performed our annual impairment assessment of goodwill (using data as of October 1, 2018) in 
accordance with the provisions of IAS 36. No events or changes in circumstances indicated that the acquired goodwill might be 
impaired.

Management monitors and makes decisions regarding the Company's operations on a functional specific and global level. 
Therefore, we concluded that the goodwill impairment test needs to be performed on the level of the consolidated Group as a 
whole (one cash generating unit). In testing for potential impairment, we measured the estimated fair value of the cash 
generating unit based upon discounted future operating cash flows using a discount rate reflecting our estimated average cost of 
funds.

For impairment testing, the recoverable amount of goodwill allocated to the cash generating unit (higher of the cash generating 
unit's fair value less selling costs and its value in use) is compared to the carrying amount of the net assets employed (including 
goodwill) of the cash generating unit. Value in use is normally assumed to be higher than the fair value less selling costs; 
therefore, fair value less selling costs is only investigated when value in use is lower than the carrying amount of the cash 
generating unit.

Key assumptions used in the value in use calculations

The value in use is calculated based on estimated future cash flow projections expected to result from the use of the cash 
generating unit, discounted using an appropriate long-term pre-tax discount rate. The value in use calculations use cash flow 
projections based on financial budgets and models over the projection period (five years) as available for internal reporting 
purposes and in accordance with standard valuation practices. The growth rates used are based on industry growth forecasts for 
the projected period as well as for the subsequent period (long-term growth rate of 3% in 2018 and 2017). The discount rates 
used are based on the pre-tax weighted average cost of capital (2018: 7.70%; 2017: 7.10%) and are verified against external 
analyst reports.

Sensitivity to changes in assumptions

Changes in assumptions used in projecting future operating cash flows and cost of funds could have a significant impact on the 
determination of impairment amounts. In estimating future cash flows, we used our internal budgets. Our budgets were based 
on recent sales data for existing products, planned timing of new product launches or capital projects, and customer 
commitments related to new and existing products. These budgets also included assumptions of future production volumes and 
pricing. The calculation of value in use is most sensitive to discount rates and growth rates used.

Discount rates reflect management's estimate of the risks profile for the respective valuation object. The growth rates used are 
based on industry growth forecasts for the projected period as well as for the subsequent period.

We concluded that no impairment existed. We believe that any reasonably possible change in the key assumptions would not 
have an impact on reported goodwill. Even if our estimates of projected future cash flows in respect of discount and growth 

Consolidated Financial Statements F-33

 
rates were too high by 10%, there would be no impact on the reported value of goodwill at December 31, 2018. Due to the 
numerous variables associated with our judgments and assumptions relating to the valuation of the cash generating unit and the 
effects of changes in circumstances affecting these valuations, both the precision and reliability of the resulting estimates are 
subject to uncertainty, and as additional information becomes known, we may change our estimates.

Other Intangible Assets

Cost (in thousands)
January 1, 2017
Currency adjustments
Additions
Business combinations
Disposals
December 31, 2017
Currency adjustments
Additions
Business combinations
Disposals
December 31, 2018

Amortization (in thousands)
January 1, 2017
Currency adjustments
Amortization
Disposals
December 31, 2017
Currency adjustments
Amortization
Impairment losses
Disposals
December 31, 2018
Net book value
December 31, 2017
December 31, 2018

Developed
technology,
patent and
license rights
1,081,722
$
56,994
14,679
28,000
(2,670)
1,178,725
(27,695)
32,139
53,900
(18,662)
1,218,407

$

$

$

Computer
software

216,163
23,386
62,856
—
(1,681)
300,724
(11,327)
53,999
208
(13,799)
329,805

$

Development
costs
123,494
8,088
8,038
—
(276)
139,344
(3,103)
3,975
—
—
140,216

$

Other
intellectual
properties

$

$

423,509
17,097
849
700
(4,137)
438,018
(10,224)
19
27,300
(3,797)
451,316

$

$

Total
1,844,888
105,565
86,422
28,700
(8,764)
2,056,811
(52,349)
90,132
81,408
(36,258)
2,139,744

Developed
technology,
patent and
license rights
$

(702,006) $
(31,323)
(92,685)
1,750
(824,264)
16,965
(79,106)
—
15,519
(870,886)

Computer
software

Development
costs

Other
intellectual
properties

Total

(88,215) $
(10,178)
(32,465)
444
(130,414)
5,626
(38,593)
(7,890)
13,113
(158,158)

(90,305) $
(5,886)
(10,044)
276
(105,959)
2,161
(8,111)
—
—
(111,909)

(246,067) $ (1,126,593)
(57,486)
(10,099)
(176,305)
(41,111)
6,587
4,117
(1,353,797)
(293,160)
6,322
31,074
(165,280)
(39,470)
(7,890)
—
31,146
2,514
(1,464,747)
(323,794)

354,461
347,521

$

170,310
171,647

$

$

33,385
28,307

$

144,858
127,522

$

703,014
674,997

Amortization expense on intangible assets is included in the line items cost of sales, research and development expense, sales 
and marketing expense or general and administrative expense in the accompanying consolidated statements of income 
depending on the nature and use of the asset. In 2018, purchased intangibles amortization related to developed technology and 
patent and license rights acquired in a business combination is included in cost of sales in the amount of $56.7 million (2017: 
$72.7 million) and purchased intangibles amortization of trademarks and customer base acquired in a business combination is 
recorded in sales and marketing expense in the amount of $39.0 million (2017: $39.4 million). 

Amortization of capitalized development costs have been recorded to cost of sales in the amount of $8.1 million in 2018 (2017: 
$10.0 million).

Cash paid for purchases of intangible assets during the year ended December 31, 2018 totaled $95.0 million, of which $11.9 
million is related to current year payments for licenses that were accrued as of December 31, 2017 and $3.3 million is related to 
prepayments recorded in other non-current assets in the accompanying consolidated balance sheet. Intangible asset additions of 
$86.2 million includes $79.8 million of cash paid during the year ended December 31, 2018, together with $4.2 million of 

Consolidated Financial Statements F-34

additions that were accrued as of  December 31, 2018 and $2.2 million of additions which were previously recorded as 
prepayments. Cash paid for intangible assets during the year ended December 31, 2017 totaled $97.2 million of which $16.5 
million is related to current year payments for licenses that were accrued as of December 31, 2016 and $5.8 million is related to 
prepayments recorded in other non-current assets in accompanying consolidated balance sheet. Intangible asset additions of 
$78.3 million includes $74.9 million of cash paid during the year ended December 31, 2017, together with $3.5 million of 
additions which were previously recorded as prepayments. 

In 2018, we recorded asset impairment charges of $7.9 million of computer software of which $1.6 million related to the 2017 
Restructuring program discussed in Note 6 "Restructuring" and $6.3 million related to strategic shifts in our business. 

13.  Provisions

For the years ended December 31, 2018 and 2017, provisions as per the accompanying consolidated statements of financial 
position totaled $4.2 million and $4.9 million, respectively, and included amounts related to our warranty and acquisition 
related provisions.

Warranty provision

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. 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 provisions in the accompanying consolidated 
statement of financial position. We believe our warranty reserves as of December 31, 2018 and 2017 appropriately reflect the 
estimated cost of such warranty obligations. The changes in the carrying amount of warranty obligations are as follows:  

(in thousands)
Warranty obligation as at January 1st
Provision charged to cost of sales
Usage
Adjustments to previously provided warranties, net
Currency translation
Warranty obligation as at December 31st

Acquisition related cost

The provision for acquisition and related costs primarily relates to personnel and consulting costs.

(in thousands)
Acquisition related costs as at January 1st
Provision charged to expenses
Usage
Currency adjustments and other
Acquisition related costs as at December 31st

2018

1,802
3,564
(3,938)
(39)
1,389

$

$

For all provisions it is expected that the respective amounts will be utilized in the next financial year.

14.  Other Current and Non-current Liabilities

Other current liabilities at December 31, 2018 and 2017 consist of the following:

2018

2017

$

$

3,051
2,892
(2,760)
(243)
(92)
2,848

$

$

$

$

2,779
3,024
(2,859)
(54)
161
3,051

2017

1,885
7,233
(7,386)
70
1,802

Consolidated Financial Statements F-35

(in thousands)
Accrued expenses and other liabilities
Payroll and related accrued liabilities
Deferred revenue
Accrued contingent consideration
Future license payments
Restructuring
Accrued interest on non-current financial debt
Royalties
Cash collateral liability
Current finance lease obligations
Other current liabilities

Other non-current liabilities at December 31, 2018 and 2017 consist of the following:

(in thousands)
Accrued expenses
Future license payments
Accrued contingent consideration
Non-current employee benefit obligations
Deferred revenue
Non-current finance lease obligation
Restructuring
Other non-current liabilities

2018

2017

$

$

$

$

88,640
66,871
45,358
27,820
10,511
6,850
6,200
5,469
1,000
61
258,780

2018

24,520
24,266
21,466
10,033
8,972
22
—
89,279

$

$

$

$

69,250
63,525
49,357
11,539
11,883
8,073
5,543
6,714
3,000
1,359
230,243

2017

31,899
35,329
—
10,101
6,158
57
810
84,354

Please refer to Note 19 "Commitments and Contingencies" for additional information.

15.  Financial Debts

Our credit facilities available and undrawn at December 31, 2018 total €426.6 million  (approximately $488.5 million). This 
includes a €400.0 million  syndicated multi-currency revolving credit facility expiring December 2021 of which no amounts 
were utilized at December 31, 2018 or at December 31, 2017, and three other lines of credit amounting to €26.6 million  with no 
expiration date, none of which were utilized as of December 31, 2018 or as of December 31, 2017. The €400.0 million  facility 
can be utilized in Euro, British pounds sterling, Swiss franc 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 or six 
months. The commitment fee is calculated based on 35% of the applicable margin.  In 2018 and 2017, $1.0 million and $0.9 
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, 2018. The credit facilities are for general 
corporate purposes.

At December 31, 2018 and December 31, 2017, total long-term debt, net of debt issuance costs of $14.2 million and $12.4 
million, respectively, consists of the following:

Consolidated Financial Statements F-36

(in thousands)

2018

2017

0.375% Senior Unsecured Cash Convertible Notes due 2019

$

427,445

$

0.875% Senior Unsecured Cash Convertible Notes due 2021

0.500% Senior Unsecured Cash Convertible Notes due 2023

1.000% Senior Unsecured Cash Convertible Notes due 2024

3.19% Series A Senior Notes due October 16, 2019

3.75% Series B Senior Notes due October 16, 2022

3.90% Series C Senior Notes due October 16, 2024

German Private Placement (Schuldschein)

Total current and non-current financial debts

Less: current portion of financial debts

Total non-current financial debts

Total amount secured

Unused lines of credit for short-term financing

279,492

335,201

397,793

72,956

299,412

26,933

336,168

2,175,400

503,589

414,843

270,762

322,902

—

72,903

299,259

26,921

349,812

1,757,402

—

$

1,671,811

$

1,757,402

—

488,457

—

511,621

The notes are all unsecured obligations that rank pari passu. Interest expense on non-current debt was $61.2 million for the year 
ended December 31, 2018 (2017: $43.6 million).

Future maturities (stated at the carrying values) and future interest as of December 31, 2018 and 2017 is as follows:

As of December 31, 2018
(in thousands)
2019
2020
2021
2022
2023
Thereafter
Total financial debts 2018

As of December 31, 2017
(in thousands)
2018
2019
2020
2021
2022
Thereafter
Total financial debts 2017

Carrying value

Loans (fixed and
floating-rate)

Convertible notes
(fixed-rate)

Total future
contractual cash
obligations

503,589
—
315,732
471,092
335,201
549,786
2,175,400

$

$

91,058
16,259
55,565
484,380
2,368
154,311
803,941

$

$

440,612
9,625
283,880
7,000
341,601
402,126
1,484,844

$

$

531,670
25,884
339,445
491,380
343,969
556,437
2,288,785

Carrying value

Loans (fixed and
floating-rate)

Convertible notes
(fixed-rate)

Total future
contractual cash
obligations

— $

487,746
—
311,743
478,053
479,860
1,757,402

$

18,189
90,445
15,860
56,712
491,835
162,026
835,067

$

$

6,238
419,822
4,625
273,338
2,000
324,301
1,030,324

$

$

24,427
510,267
20,485
330,050
493,835
486,327
1,865,391

$

$

$

$

Cash Convertible Notes due 2019, 2021, 2023 and 2024

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). The aggregate net proceeds of the 2019 
and 2021 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 other debt.

On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes which is due 
in 2023 (2023 Notes). The net proceeds of the 2023 Notes were $365.6 million, after payment of the net cost of the Call Spread 
Overlay described below and transaction costs paid through December 31, 2018.

On November 13, 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 
2024 (2024 Notes). The net proceeds of the 2024 Notes were $470.0 million, after payment of the net cost of the Call Spread 
Overlay described below and transaction costs paid through December 31, 2018.

Consolidated Financial Statements F-37

We refer to the 2019 Notes, 2021 Notes 2023 Notes and 2024 Notes, collectively as the “Cash Convertible Notes”. Interest on 
the Cash Convertible Notes is payable semi-annually in arrears and will mature on the maturity date unless repurchased or 
converted with their terms prior to such date. The interest rate and corresponding maturity of each Note are summarized as 
follows:

Cash Convertible Notes

Annual Interest Rate

2019 Notes

2021 Notes

2023 Notes

2024 Notes

0.375%

0.875%

0.500%

1.000%

Date of Interest Payments
March 19 and September 19

Interest Payment Start
Date
September 19, 2014

Maturity Date
March 19, 2019

March 19 and September 19

September 19, 2014

March 19, 2021

March 13 and September 13

March 13, 2018

September 13, 2023

May 13 and November 13

May 13, 2019

November 13, 2024

The Cash Convertible Notes are solely convertible into cash in whole, but not in part, at the option of noteholders under the 
circumstances described below and during the following contingent conversion periods:

Cash Convertible Notes
2019 Notes

2021 Notes

2023 Notes

2024 Notes

Contingent Conversion Period

From April 29, 2014 to September 18, 2018

From April 29, 2014 to September 18, 2020

From October 24, 2017 to March 13, 2023

From December 24, 2018 to August 2, 2024

Additionally, conversion may occur at any time following a Contingent Conversion Period through the fifth business day 
immediately preceding the applicable maturity date. The Contingent Conversion Period for the 2019 Notes has passed and the 
noteholders may convert at anytime until March 14, 2019.

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 of the Cash Convertible Notes into cash at their option at any time during the Contingent Conversion 
Periods described above only under the following circumstances (Contingent Conversion Conditions):

• 

• 

• 

• 

• 

• 

• 

during any calendar quarter commencing after the calendar quarter (and only during such calendar quarter) ending on 
March 31, 2014 for 2019 and 2021 Cash Convertible Notes, on September 30, 2017 for 2023 Cash Convertible Notes, 
and on September 30, 2018 for 2024 Cash Convertible Notes; if the last reported sale price of our common stock for at 
least 20 trading days 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 10 consecutive trading day period in which the quoted price 
for the 2019 Cash Convertible Notes or the 2021 Cash Convertible 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 parity event or trading price unavailability event, as the case maybe occurs for the 2023 Cash Convertible Notes and 
2024 Cash Convertible Notes during the period of 10 days, including the first business day following the relevant 
trading price notification date. 

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 until such 
event has been cured or waived or the payment of the Notes have been accelerated. 

The Contingent Conversion Conditions in the 2019, 2021, 2023 and 2024 Notes noted above have been analyzed under IFRS 9, 
Financial Instruments, and, based on our analysis, we determined that each of the embedded features listed above are clearly 
and closely related to the 2019, 2021, 2023 and 2024 Notes (i.e., the host contract). As a result, pursuant to the accounting 
provisions of IFRS 9, Financial Instruments, these features noted above are not required to be bifurcated as separate 
instruments. As of December 31, 2018, no contingent conversion condition was triggered.  

The initial conversion rate for 2024 Notes is 4,360.3098 shares of our common stock per $200,000 principal amount of 2024 
Notes (reflecting an initial conversion price of approximately $45.8683 per share of common stock). For the 2023 Notes, the 

Consolidated Financial Statements F-38

initial conversion rate is 4,829.7279 shares of our common stock per $200,000 principal amount of the 2023 Notes (reflecting 
an initial conversion price of approximately $42.4102 per share of common stock). As adjusted by the synthetic share 
repurchase discussed in Note 17 "Equity", the conversion rate for the 2019 Notes and 2021 Notes is 7,063.1647 shares of our 
common stock per $200,000 principal amount of Cash Convertible Notes (reflecting an adjusted conversion price of 
approximately $28.32 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 Cash Convertible 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.

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 for the 2019 and 2021 Notes, $74.5 million for the 2023 Notes, and $98.5 million for the 2024 
Notes, 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 25 
"Financial Risk Factors and Use of Derivative Financial Instruments".

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 using the effective interest method over the expected life 
of the debt, which is five and seven for the 2019 Notes and 2021 Notes, and six years for the 2023 Notes and 2024 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 Notes, 2021 Notes, 2023 Notes and 2024 Notes is 2.937%, 3.809%, 3.997% and 4.782% 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. 

Beginning on October 1, 2018 and ending at the close of business on December 31, 2018, the 2021 Notes became convertible 
pursuant to the indenture. The 2021 Notes became convertible pursuant to Section 12.01(b)(iv) of the indenture because the 
arithmetic mean of the last reported sale prices of our common stock, in each trading day in at least one 20 consecutive trading 
day period during the 30 consecutive trading day period ending on the last trading day of the preceding fiscal quarter, was 
greater than 130% of the conversion price in effect on such last trading day. The 2021 Notes were convertible at a conversion 
ratio of 7,063.1647 per $200,000 principal amount of 2021 Notes, which is equivalent to a conversion price of approximately 
$28.32 per share of our common stock. During this period, $3.2 million of our 2021 Notes was converted and will be paid in 
March of 2019. 

No Contingent Conversion Conditions were triggered for the Cash Convertible Notes as of December 31, 2018.

In connection with the issuance of the 2019 and 2021 Cash Convertible Notes, we incurred approximately $13.1 million in 
transaction costs. We incurred approximately $6.2 million in transaction costs for the 2023 Cash Convertible Notes. For 2024 
Cash Convertible Notes, we incurred $5.7 million transaction costs of which $0.6 million was accrued as of December 31, 
2018. Such costs have been allocated to the Cash Convertible Notes and deferred and are being amortized to interest expense 
over the terms of the Cash Convertible Notes using the effective interest method. 

Interest expense related to the Cash Convertible Notes was comprised of the following: 

(in thousands) 
Coupon interest

Amortization of original issuance discount

Amortization of debt issuance costs

Total interest expense related to the Cash Convertible Notes

Year-Ended December 31

2018

2017

$

$

6,890

$

32,114

3,485

42,489

$

4,832

21,377

2,615

28,824

Consolidated Financial Statements F-39

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 2019 and 2021 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. 

During 2017, we used $73.7 million of the proceeds from the from the issuance of the 2023 Cash Convertible Notes to pay for 
the premium for the Call Option, and simultaneously received $45.3 million from the sale of Warrants, for a net cash outlay of 
$28.3 million for the Call Spread Overlay.  Issuance costs incurred in connection with the Warrant and the Call Option were 
$0.3 million and $0.1 million respectively.

In November 2018, we used $97.3 million of the proceeds from the issuance of the 2024 Cash Convertible Notes to pay for the 
premium for the Call Option, and simultaneously received $72.4 million from the sale of Warrants, for a net cash outlay of 
$24.9 million for the Call Spread Overlay. Issuance costs incurred in connection with the Warrant and the Call Option were $0.5 
million and $0.5 million respectively, of which $0.8 million was accrued as of December 31, 2018.

The Call Options and Warrants are derivative financial instruments and are discussed further in Note 25 "Financial Risk Factors 
and Use of Derivative Financial Instruments". 

Aside from the initial payment of a premium of $105.2 million (2019 and 2021 Notes), $73.7 million (2023 Notes), and $97.3 
million (2024 Notes) 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. 

We issued Warrants as summarized in the table below. The number of warrants and exercise prices are subject to customary 
adjustments under certain circumstances. The proceeds, net of issuance costs, from the sale of the Warrants are included as 
additional paid in capital in the accompanying consolidated balance sheets.

Cash convertible
notes

Issued on

Number of share 
warrants
(in millions)

Exercise price per
share

2019

2021

2023

2024

March 19, 2014

March 19, 2014

September 13, 2017

November 13, 2018

15.2

10.6

9.7

10.9

$32.0560

$32.0560

$50.9664

$52.1639

Proceeds from 
issuance of 
warrants, net of 
issuance costs
(in millions)
$40.6

$28.3

$45.3

$72.4

Warrants expire over a
period of 50 trading days
beginning on

December 27, 2018

December 29, 2020

June 26, 2023

August 27, 2024

The Warrants that were issued with our Cash Convertible Notes discussed above, 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, plus cash in lieu of any fractional shares.  The Warrants are exercisable only upon expiration and 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. 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. Based on an 
estimation using the changes in the U.S. Treasury rates, the Level 2 fair value of these senior notes as of December 31, 2018 
and December 31, 2017 was approximately $391.7 million and $394.7 million, respectively. 

German Private Placement (Schuldschein)

In 2017, we completed a German private placement bond ("Schuldschein") which was issued in several tranches totaling $331.1 
million due in various periods through 2027. The Schuldschein consists of U.S. dollar and Euro denominated tranches. The 

Consolidated Financial Statements F-40

Euro tranches are designated as a foreign currency non-derivative hedging instrument that qualifies as a net investment hedge 
as described in Note 25 "Financial Risk Factors and Use of Derivative Financial Instruments". Based on the spot rate method, 
the change in the carrying value of the Euro denominated tranches attributed to the net investment hedge as of December 31, 
2018 totaled $5.9 million of unrealized loss and is recorded in equity. We paid $1.2 million in debt issuance costs which are 
being amortized through interest expense over the lifetime of the notes. A summary of the tranches as of December 31, 2018 is 
as follows: 

Currency
EUR

Notional Amount
€1 1.5 million

Interest Rate
Fixed 0.4%

EUR

EUR

EUR

USD

EUR

EUR

EUR

EUR

€23.0 million

Floating EURIBOR + 0.4%

€21.5 million

Fixed 0.68%

€64.5 million

Floating EURIBOR + 0.5%

$45.0 million

Floating LIBOR + 1.2%

€25.0 million

Floating EURIBOR + 0.5%

€64.0 million

Fixed 1.09%

€31.0 million

Floating EURIBOR + 0.7%

€14.5 million

Fixed 1.61%

Maturity
March 2021

March 2021

October 2022

October 2022

October 2022

October 2022

June 2024

June 2024

June 2027

Carrying Value as of
December 31, 2018
(in thousands)

$

$

13,143

26,286

24,561

73,684

44,891

28,543

73,097

35,406

16,557
336,168

The Financial Conduct Authority of the United Kingdom plans to phase out the London Interbank Offered Rate (LIBOR) by the 
end of 2021. Presently, the future of LIBOR is unclear, yet the Schuldschein agreements do contain language for the 
determination of interest rates in the event the LIBOR rate is not available. Changes to these agreements may be required 
should an alternative benchmark be required.

16.  Income Tax 

Major components of income tax expense as presented in the income statement for the years ended December 31, 2018 and 
2017, are:

(in thousands)

  Current income tax charge

  Adjustment in respect of current income tax of previous years

  Current Income Tax

  Relating to origination and reversal of temporary differences

  Relating to changes in tax rates
  Deferred Income Tax

  Total Income Tax

2018

2017

$

54,497

$

494

54,991
(14,897)
1,907
(12,990)
42,001

$

$

36,392
(2,319)
34,073

42,815

12,958
55,773

89,846

Deferred tax related to items charged or credited directly to equity during 2018 and 2017 shown in the statement of 
comprehensive income totaled $0.5 million and $1.0 million, respectively.

The applicable statutory income tax rate in The Netherlands was 25% in 2018 and in 2017. The principal items comprising the 
differences between income taxes computed at the Netherlands statutory rate and the effective tax rate for the years ended 
December 31, 2018 and 2017 is as follows:

Consolidated Financial Statements F-41

(in thousands)

Income before Tax

At Dutch statutory income tax rate of 25.0%
Taxation of foreign operations, net(1)
Income taxes related to prior years
Changes in tax rates impacting deferred taxes(2)
Tax impact from non-deductible items(3)
Tax impact from tax exempt income(4)
Other(5)
Total Income Tax

  ____________________

2018

2017

Amount

Percent

Amount

Percent

$

146,895

—

$

157,224

36,724
(34,066)
494

1,907

17,687

14,714

4,541

42,001

$

25.0 %
(23.2)%
0.3 %

1.3 %

12.0 %

10.0 %

3.1 %
28.6 % $

39,306
(38,563)
(2,319)
12,958

36,261
(11,135)
53,338

89,846

—

25.0 %

(24.5)%

(1.5)%

8.2 %

23.1 %

(7.1)%

33.9 %

57.1 %

 (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 
operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland and 
Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions 
in these jurisdictions. Additionally in 2016, in certain foreign jurisdictions (primarily Germany and the U.S.), we recorded 
acquisition related and impairment charges which reduced pretax income in these higher tax jurisdictions.

(2)  The Netherlands' top statutory corporate income tax rate will be reduced in steps from 25% to 22.55% in 2020 and to 20.5% 
in 2021. In 2017, we revalued our U.S. deferred tax assets and liabilities to reflect the corporate income tax rate change 
from 35% to 21% as a result of U.S. tax reform. 

(3)  During 2017, we recorded an additional $21.0 million accrual for tax contingencies, primarily related to ongoing income tax 

audits. 

(4)  Tax impacts include income/loss related to the change in fair value of the Warrants for the Cash Convertible Notes. In 2018 

and 2017, this fair value change results in a gain and loss, respectively. 

(5) In 2017, the deferred tax asset related to U.S. interest carry forward of $60.8 million has been reduced to zero. 

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 
potentially open back to 2006 for income tax examinations by tax authorities. The German group is open to audit for the tax 
years starting in 2010. The U.S. consolidated group is subject to Federal and most state income tax examinations by tax 
authorities beginning with the year ending December 21, 2015 through the current period. Our subsidiaries, with few 
exceptions, are no longer subject to income tax examinations by tax authorities for years before 2014.  

In February 2014, the U.S. tax authorities (Internal Revenue Service) began the audit of our U.S. Federal tax returns for 2011 
and 2012 years and the audit was closed in 2016 without any tax adjustments. As a result, we released $6.6 million of 
unrecognized tax benefit due to closure of the tax audit. In February 2016, German tax authorities began the audit of the 
German tax returns for the 2010-2013 tax years and we expect the audit to close in the first half of 2019. The German Tax 
authority began the audit for the 2014-2016 tax years beginning in February 2019.

Changes in the gross amount of unrecognized tax benefits are as follows:

Consolidated Financial Statements F-42

(in thousands)
Balance at beginning of year

Additions based on tax positions related to the current year

Additions for tax positions of prior years

Reductions due to lapse of statute of limitations

(Decrease) increase from currency translation

Balance at end of year

2018

2017

$

44,033

$

3,359

11,984
(1,238)
(2,358)
55,780

$

$

18,294

12,212

9,933

—

3,594

44,033

At December 31, 2018 and 2017, our net unrecognized tax benefits totaled approximately $55.8 million and $44.0 million, 
respectively, of which $55.8 million and $44.0 million in benefits, if recognized, would favorably affect our effective tax rate in 
any future period. It is reasonably possible that approximately $22.5 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 above unrecognized tax benefits, if ever recognized in the 
financial statements, would be recorded in the statement of income as part of the income tax expense.

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, 2018 and 2017, we have net interest expense and penalties of $1.1 million and 
$1.5 million, respectively.  At December 31, 2018 and 2017, we have accrued interest of $4.1 million and $3.0 million, 
respectively, which are not included in the table above. 

We have recorded net deferred tax liabilities of $12.8 million and had deferred tax assets of $17.1 million at December 31, 2018 
and 2017, respectively. The components of the net deferred asset and liability at December 31, 2018 and December 31, 2017 are 
as follows:

(in thousands)
Accrued liabilities
Equity awards
Bad debts, inventory and revaluation
Net operating loss and credit carryforward
Intangibles
Depreciation and amortization
Convertible debt
Other
Offsetting
Deferred Tax Asset
Intangibles
Depreciation and amortization
Bad debts, inventory and revaluations
Other
Offsetting
Deferred Tax (Liability)

Net Deferred Tax (Liability) / Asset

2018

2017

Change

$

15,480
22,857
26,638
12,861
1,721
3,604
8,102
4,788
(38,200)
57,851
(71,196)
(25,448)
(7,074)
(5,099)
38,200
(70,617) $

$

15,199
23,164
32,203
25,470
2,243
1,103
10,865
3,163
(45,425)
67,985
(102,096)
(23,649)
(1,420)
(3,313)
45,425
(85,053) $

281
(307)
(5,565)
(12,609)
(522)
2,501
(2,763)
1,625
7,225
(10,134)
30,900
(1,799)
(5,654)
(1,786)
(7,225)
14,436

(12,766) $

(17,068) $

4,302

$

$

$

The movement in deferred income tax assets and liabilities during the year is as follows:

(in thousands)
Change in deferred tax recognized in income
Change in deferred tax related to business combinations (1)

Change in deferred tax recognized in equity (2)
Change in Deferred Tax

  ____________________

2018

2017

12,990
(7,602)

(1,086)
4,302

$

$

(55,773)
—

(5,337)
(61,110)

$

$

Consolidated Financial Statements F-43

 
 (1) The change in deferred tax related to business combinations represents the deferred tax liability on fair value of identifiable 
intangible assets acquired and deferred tax asset on tax loss carry forwards as discussed in Note 5 "Acquisitions and 
Divestitures".

(2) The change deferred tax recognized in equity represents changes in components of other comprehensive income or loss, 
equity awards and translation adjustment.

At December 31, 2018 and 2017, we had $408.7 million and $432.7 million in total worldwide net operating loss (NOL) 
carryforwards. Included in these amounts at December 31, 2018 and 2017, we had $56.5 million and $20.9 million of unused 
tax losses for which no deferred tax asset is recognized in the statement of financial position, most of which do not expire. At 
December 31, 2018 and 2017, we had $112.2 million and $108.5 million of U.S. federal (NOL) carryforwards. At 
December 31, 2018, the entire NOLs in the U.S. are subject to limitations under Section 382 of the Internal Revenue Code.  The 
NOLs in the U.S. will expire beginning December 31, 2024 through December 31, 2034. Also included in the above amount as 
of December 31, 2018 and 2017, were other foreign NOL carryforwards totaling approximately $240.0 million and $303.2 
million, respectively. As of December 31, 2018, we had NOL carryforwards in Germany of $214.2 million predominantly trade 
tax NOLs, which we expect to be utilized in 2019 due to the closure of the tax audit. Of the total $240.0 million NOL 
carryforward, a portion of the foreign NOLs will be expiring beginning 2027. 

At December 31, 2018, we had temporary differences of $232.9 million related to U.S. interest carryforwards which do not 
expire and for which no deferred taxes were recognized. 

17.  Equity

Common Shares 

The authorized classes of our shares consist of Common Shares (410 million authorized), Preference Shares (450 million 
authorized) and Financing Preference Shares (40 million authorized).  All classes of shares have a par value of €0.01. No 
Financing Preference Shares or Preference Shares have been issued. Like all shareholders' equity accounts, common shares are 
translated to U.S. dollars at the foreign exchange rates in effect when the shares are issued. 

Retained Earnings 

At the Annual General Meeting of Shareholders on June 17, 2019, the Board of Directors will propose to carry forward the profit 
for the year of QIAGEN N.V., the holding company of the Group, which is determined in accordance with the legal provisions of 
the Dutch Civil Code.

Share Repurchase Programs

On January 31, 2018, we announced our fifth share repurchase program of up to $200 million of our common shares. During 
2018, we repurchased 2.9 million QIAGEN shares for $104.7 million (including transaction costs).

On April 27, 2016, we announced the launch of our fourth $100 million share repurchase program which was expected to be 
completed by the end of 2017. During 2017, 1.9 million QIAGEN shares were repurchased for $61.0 million (including 
transaction costs). 

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 exchangeable debt 
instruments, warrants and employee share-based remuneration plans. 

Synthetic Share Repurchase

In August 2016, we announced our plan to return approximately $250.0 million to shareholders through a synthetic share 
repurchase program that combines a direct capital repayment with a reverse stock split. The synthetic share repurchase was 
implemented through a series of amendments to our Articles of Association which were approved by our shareholders at an 
Extraordinary General Meeting (EGM) held on October 26, 2016. The first amendment involved an increase in share capital by 
an increase in the nominal value per common share from EUR 0.01 to EUR 1.04 and a corresponding reduction in additional 
paid in capital. The second amendment involved a reduction in stock whereby 27 existing common shares with a nominal value 
of EUR 1.04 each were consolidated into 26 new common shares with a nominal value of EUR 1.08 each. The third 
amendment was a reduction of the nominal value per common share from EUR 1.08 to EUR 0.01. As a result of these 
amendments, which in substance constitute a synthetic share buyback, $243.9 million was repaid to our shareholders and the 
outstanding number of common shares was reduced by 8.9, or 3.7%. The capital repayment program was completed in January 
2017. Expenses incurred related to the capital repayment and share consolidation amounted to $0.5 million and were charged to 
equity.

Consolidated Financial Statements F-44

18.  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” securities to issue common shares were exercised.

The following schedule summarizes the information used to compute earnings per common share:

(in thousands, except per share data)

Years ended December 31,

2018

2017

Net income attributable to the owners of QIAGEN N.V.

$

104,894

$

67,378

Weighted average number of common shares used to compute basic net income per
common share

Dilutive effect of stock options and awards

Dilutive effect of outstanding warrants

Weighted average number of common shares used to compute diluted net income per
common share

Outstanding options and awards having no dilutive effect, not included in above

calculation

Basic earnings per common share attributable to the owners of QIAGEN N.V.

Diluted earnings per common share attributable to the owners of QIAGEN N.V.

226,640

4,613

2,203

228,074

4,760

175

233,456

233,009

272

0.46

0.45

$

$

52

0.30

0.29

$

$

19.  Commitments and Contingencies

Lease commitments

We lease facilities and equipment under operating lease arrangements expiring in various years through 2028. Certain rental 
commitments provide for escalating rental payments or have renewal options extending through various years. Certain facility 
and equipment leases constitute finance leases expiring in various years through 2020. The accompanying consolidated 
financial statements include the assets and liabilities arising from these capital lease obligations. Rent expense under non-
cancelable operating lease agreements not including facility related costs accrued in association with the restructuring activities 
discussed in Note 6 "Restructuring" was $25.1 million in 2018 and $24.5 million in 2017.

Minimum future obligations under finance and operating leases at December 31, 2018, are as follows:

(in thousands)
2019
2020
2021
2022
2023
Thereafter
Total minimum lease obligations at December 31, 2018
Less: amount representing interest
Less: current portion
Present value of minimum lease obligations at December 31, 2018

The information for the comparative period is provided below:

Operating Leases
20,235
$
14,845
10,745
6,839
3,854
4,148
60,666

$

Finance Leases

$

$

63
23
—
—
—
—
86
(3)
(61)
22

Consolidated Financial Statements F-45

 
(in thousands)
2018
2019
2020
2021
2022
Thereafter
Total minimum lease obligations at December 31, 2017
Less: amount representing interest
Less: current portion
Present value of minimum lease obligations at December 31, 2017

Licensing and Purchase Commitments

Operating Leases
18,483
$
16,011
11,762
8,457
6,126
4,038
64,877

$

Finance Leases

$

$

1,411
45
14
—
—
—
1,470
(54)
(1,359)
57

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 0.45 percent to 25 percent of covered products or based on 
quantities sold. Several of these agreements have minimum royalty requirements. The accompanying consolidated financial 
statements include accrued royalties relating to these agreements in the amount of $5.5 million and $6.7 million at 
December 31, 2018 and 2017, respectively. Royalty expense relating to these agreements amounted to $14.0 million and $16.8 
million, for the years ended December 31, 2018 and 2017, 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, 2018, we had commitments to purchase goods or services, and for future minimum guaranteed royalties. They 
are as follows:

(in thousands)
2019
2020
2021
2022
2023
Thereafter
Total licensing and purchase commitments at December 31, 2018

Purchase
Commitments

License & Royalty
Commitments

$

$

93,214
20,804
8,883
2,690
2,690
—
128,281

$

$

11,973
11,613
9,167
6,731
4,704
4,443
48,631

As of December 31, 2018, future license payments of $10.5 million and $24.3 million are included in other current liabilities 
and other non-current liabilities, respectively.

The information for the comparative period is provided below:

(in thousands)
2018
2019
2020
2021
2022
Thereafter
Total licensing and purchase commitments at December 31, 2017

Contingent Consideration Commitments

Purchase
Commitments

License & Royalty
Commitments

65,073
22,556
10,472
943
11
434
99,489

$

$

12,907
11,858
11,558
8,860
6,161
3,748
55,092

$

$

Pursuant to the purchase agreements for certain acquisitions and other contractual arrangements, we could be required to make 
additional contingent cash payments totaling up to $57.3 million based on the achievement of certain revenue and operating 
results milestones as follows: $23.7 million in 2019, $22.7 million in 2020, $5.9 million in 2022 and $5.0 million, payable in 
any 12-month period from now until 2028 based on the accomplishment of certain revenue or other milestones, regulatory 
approvals or clearances. Of the $57.3 million total contingent obligation as discussed further in Note 24 "Fair Value 
Measurements", we have assessed the fair value at December 31, 2018 to be $49.0 million, of which $27.5 million is included 

Consolidated Financial Statements F-46

in other current liabilities and $21.5 million is included in other non-current 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, 2018, the commitment under these agreements totaled $16.9 million (2017: $16.8 million). The 
employment agreements with the Managing Directors and the German affiliate include a clause, whereby the affiliate will 
compensate the Managing Directors for potential deductions under Dutch law which, since 2014, has introduced a duty to 
deduct from a Managing Director’s remuneration any increase in the value of shares or options that were part of his pay to the 
extent that such increase is based on a public offer, merger or other identity changing transaction.

Litigation

From time to time, we may be party to legal proceedings incidental to our business. As of December 31, 2018, certain claims, 
suits or legal proceedings arising out of the normal course of business have been filed or were pending against QIAGEN or our 
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 the amount of probable loss can be estimated. 

Litigation accruals recorded in accrued and other current liabilities totaled $6.0 million as of December 31, 2018. The estimated 
amount of a range of possible losses is between $5.7 million and $7.4 million. 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 our 
financial position or results of operations above the amounts accrued. However, the outcome of these matters is ultimately 
uncertain, thus any settlements or judgments against us in excess of management's expectations could have a material adverse 
effect on our financial position, results of operations or cash flows.

For the year ended December 31, 2017, we had settlement amounts related to various acquisition-related litigation matters 
totaling $49.2 million, primarily related to PCR-based biomarker disputes and patent litigation, which were settled during 2017 
of which $45.3 million was recorded to general and administrative, restructuring, integration and other expense and $3.9 
million was recorded as a license right. $44.8 million of the settlement amounts were paid during 2017 and as of December 31, 
2017, $4.4 million was accrued in other current liabilities.

20.  Segment Information

Considering the acquisitions made during 2018, we determined that we still operate as one business segment in accordance with 
IFRS 8 Operating Segments.  As a result of our continued restructuring and streamlining of the growing organization, our chief 
operating decision maker (CODM) continues to make 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 and operating income 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. Refer to Note 4 
"Revenue" for disaggregation of revenue based on product categories and customer class. 

Geographical Information

Net sales are attributed to countries based on the location of the customer. QIAGEN operates manufacturing facilities in 
Germany, China, and the United States that supply products to customers as well as QIAGEN subsidiaries in other countries. 
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 $15.9 million 
and $15.0 million for the years ended 2018 and 2017, respectively, and these amounts are included in the line item Europe, 
Middle East and Africa as shown in the table below.

Consolidated Financial Statements F-47

 
(in thousands)
Net Sales
Americas:

United States

Other Americas

Total Americas

Europe, Middle East and Africa

Asia Pacific and Rest of World

Total

2018

2017

$

632,660

$

60,359

693,019

490,301

318,528

579,906

73,478

653,384

462,980

301,172

$

1,501,848

$

1,417,536

Long-lived assets include property, plant and equipment, goodwill, other intangible assets, equity accounted investments, non-
current financial assets and other non-current assets.  The Netherlands, which is included in the balances for Europe, reported 
long-lived assets of $47.6 million and $21.9 million for the years ended 2018 and 2017, respectively. 

(in thousands)
Long-lived assets
Americas:

United States

Other Americas

Total Americas

Germany

Other Europe, Middle East and Africa

Asia Pacific and Rest of World

Total

Operating Income Information

2018

2017

$

1,923,019

$

1,859,418

9,833

1,932,852

540,227

616,782

239,086

11,248

1,870,666

579,544

462,679

256,220

$

3,328,947

$

3,169,109

Our chief operating decision maker (CODM) makes decisions with regard to business operations and resource allocation 
considering many measures, the primary income measure being adjusted operating income.  Adjusted results are financial 
measures that are considered to provide insight into our core business performance. The table below provides details regarding 
adjustments from the primary metric used by the CODM to income from operations for the years ended December 31, 2018 and 
2017.

(in thousands)

Adjusted income from operations

Purchased intangible amortization
Business integration and acquisition related items

Development costs

Other income and expense
Income from operations

21.  Share-Based Payments

$

2018

2017

$

403,315
(95,755)
(40,979)
(4,136)
10,101

371,461
(112,147)
(105,896)
(2,004)
5,536

$

272,546

$

156,950

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 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 5 or 10 years, subject to earlier termination in 
certain situations. The vesting and exercisability of certain stock rights will be accelerated in the event of a Change of Control, 
as defined in the plans. 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 award releases and had approximately 
19.9 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at December 31, 2018. 

Consolidated Financial Statements F-48

 
Stock Options

We have not granted stock options since 2013. A summary of the status of employee stock options as of December 31, 2018 and 
2017, and changes during the years then ended is presented below:

Outstanding at January 1, 2018
Exercised
Expired
Outstanding at December 31, 2018
Vested at December 31, 2018
Vested and expected to vest at December 31, 2018

Outstanding at January 1, 2017
Exercised
Expired
Outstanding at December 31, 2017
Vested at December 31, 2017
Vested and expected to vest at December 31, 2017

Stock Options
(in thousands)
$
1,149
(249) $
(2) $
$
$
$

898
898
898

1,439
$
(287) $
(3) $
$
$
$

1,149
1,149
1,149

Weighted
Average Exercise
Price US$

19.54
17.77
15.84
20.04
20.04
20.04

19.84
21.08
18.63
19.54
19.54
19.54

The total intrinsic value of options exercised during the years ended December 31, 2018 and 2017 was $5.0 million and $3.3 
million, respectively. The actual tax benefit for the tax deductions from option exercises totaled $0.8 million and $0.7 million 
during the years ended December 31, 2018 and 2017, respectively. At December 31, 2018, there was no unrecognized share-
based compensation expense related to employee stock option awards. 

At December 31, 2018 and 2017, 0.9 million and 1.1 million options were exercisable at a weighted average price of $20.04 
and $19.54 per share, respectively. The options outstanding at December 31, 2018 will 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. The final 
number of performance stock units earned is based on the performance achievement which for some grants can reach up to 
120% of the granted shares. There is no exercise price and the fair market value at the time of the grant is recognized over the 
requisite vesting period, generally 5 or 10 years. The fair market value is determined based on the number of stock units granted 
and the market value of our shares on the grant date. Pre-vesting forfeitures were estimated to be approximately 6.6% (2017: 
7.0%). At December 31, 2018, there was $95.2 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 2.40 years (2017: 
$67.5 million over a weighted average of 2.35 years). The weighted average grant date fair value of restricted stock units 
granted during the year ended December 31, 2018 was $35.37 (2017: $31.12). The total fair value of restricted stock units 
released during the years ended December 31, 2018 and 2017 was $54.3 million and $69.2 million, respectively.

A summary of stock units as of December 31, 2018 and 2017, and changes during the year then ended are presented below:

(in thousands)
Outstanding at January, 1st
Granted
Released
Forfeited
Outstanding at December 31st
Vested and expected to vest at December 31st

Compensation Expense

2018

2017

8,102
2,344
(1,575)
(528)
8,343
7,238

10,198
1,976
(2,306)
(1,766)
8,102
6,914

Share-based compensation expense for the years ended December 31, 2018 and 2017 totaled approximately $40.1 million and 
$34.4 million, respectively as shown in the table below. No share-based compensation cost was capitalized in inventory in 2018 
and 2017 as the amounts were not material. Following the restructuring program discussed in Note 6 "Restructuring", share-
based compensation expense in 2017 includes the impact of $0.7 million in forfeitures in connection with the restructuring 
terminations. 

Consolidated Financial Statements F-49

 
(in thousands)
Cost of sales
Research and development
Sales and marketing
General and administrative
Share-based compensation expense before taxes
Less: Income tax benefit (1)
Net share-based compensation expense

2018

2017

$

$

2,879
6,457
9,372
21,405
40,113
7,869
32,244

$

$

2,641
5,367
6,820
19,614
34,442
8,110
26,332

(1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements totaled $4.7 
million and $5.2 million for the years ended December 31, 2018 and 2017, respectively.

22.  Employee Benefits and Personnel Costs

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 $4.0 million and $3.6 million for the years ended December 31, 2018 and 2017, respectively.  We 
also have defined contributions up to an established maximum.  We make matching contributions up to an established maximum.  
Matching contributions made to the plan, and expensed, totaled approximately $0.2 million and $0.3 million for the years ended 
December 31, 2018 and 2017, respectively.

We have five defined benefit, non-contributory retirement or termination plans that cover certain employees in Germany, France, 
Japan, Italy and the United Arab Emirates. 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 $7.4 million at December 31, 2018 and $8.0 
million at December 31, 2017, and is included as a component of other non-current liabilities on the accompanying consolidated 
balance sheets. 

Personnel Costs

Personnel costs amounted to $483.6 million in 2018 (2017:  $453.6 million). As of December 31, 2018, there were 4,952 employees 
within the Group (2017: 4,688).

(in thousands)
Salaries and wages
Social security
Share-based payment expense
Termination costs
Other
Personnel Costs

2018

2017

$

$

283,192
84,670
40,113
10,834
64,765
483,574

$

$

266,866
78,994
34,442
9,168
64,138
453,608

The personnel costs are allocated to the functional areas in which the respective employees are working or in the case of the 
incremental termination benefits which are the result of restructuring activities as discussed in Note 6 "Restructuring" are recorded 
in cost of sales and general and administrative, restructuring, integration and other costs. 

23.  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:

(in thousands)
Net sales

For the years ended 
December 31,

2018

2017

$

23,358

$

3,852

Consolidated Financial Statements F-50

 
Net sales with related parties primarily reflects our ventures in China including our joint venture with Sichuan Maccura 
Biotechnology Co., Ltd with a focus on accelerating the growth of our GeneReader NGS System as well as the partnership to 
externalize the HPV test franchise for cervical cancer screening in China. 

(in thousands)
Accounts receivable

Other non-current assets

Accounts payable

Other current liabilities

Other non-current liabilities

As of December 31,

2018

2017

$

$

$

$

$

10,109

24,300

4,888

$

$

$

5,488

$
— $

3,802

17,713

1,921

9,028

3,075

Other non-current assets include long-term loan receivables from companies with which we have an investment or partnership 
interest. During 2018, we purchased a convertible note for $15.0 million from a privately held company. The note is due in 
December 2021 and bears interest at 8%. In the event the company goes public, the note will convert into common shares in the 
company ranking pari-passu with existing common shares. During 2018, we converted a note receivable from a non-publicly 
traded company, considered a related party, into an equity interest in that company. This note held a balance of $11.4 million 
including principal balance and accrued interest at conversion. During 2017, we purchased a convertible note for $3.0 million 
from a publicly listed company considered a related party. The note is due in October 2020 and bears interest of 3.0%. As of 
December 31, 2018, the principal and accrued interest of this note totals $2.9 million while the remaining $0.3 million is 
attributable to the embedded derivative, that is bifurcated and measured at fair value, associated to a convertible feature of this 
note. 

Liabilities to related parties include payables and other liabilities associated to the 19.0% interest in Hombrechtikon Systems 
Engineering AG (HSE) acquired in 2016 as discussed in Note 11 "Equity Accounted Investments" for a total obligation of $9.8 
million payable over 3 years. During the year ended December 31, 2018, we had research and development expense incurred 
with HSE for a total of $12.2 million. As of December 31, 2018, the remaining obligation from the acquisition together with 
amounts payable from research and development services totaled $5.3 million, of which $3.5 million was included in accounts 
payable and $1.8 million was included in other current liabilities in the accompanying consolidated balance sheet. As of 
December 31, 2017, the total remaining obligation was $6.2 million, of which $3.1 million was included in other current 
liabilities and $3.1 million was included in other non-current liabilities in the accompanying consolidated balance sheet.

Compensation of Directors and Officers 

Total compensation for members of the Managing and Supervisory Boards for the period ended December 31, 2018, amounts to
$20.2 million (2017: $19.0 million) as shown in the table below. Total non-periodical remuneration according to Netherlands Civil 
Code included in total compensation for the period ended December 31, 2018 was $4.0 million (2017: $3.7 million).

Remuneration of the Managing Board

The tables below state the amounts earned on an accrual basis by our Managing Board members in 2018 and 2017. 

For the year ended December 31, 2018
(in thousands, except for number of award grants)
Fixed Salary
Other (1)
Total fixed income 2018
Short-term variable cash bonus (3)
Total short-term income 2018
Defined contribution on benefit plan
Number of performance stock units granted 2018 (2)
Related recognized compensation expense
Total compensation

______________________________________

Peer M. Schatz Roland Sackers
575

1,281

$

$

5
1,286
—
1,286
78
661,315

2,645
4,009

$

$
$

$
$

37
612
—
612
80
197,000

763
1,455

$

$
$

$
$

(1)  Amounts include, among others, car lease and 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 

Consolidated Financial Statements F-51

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.

(2)  The Performance Stock Units Granted amount includes the number of performance stock units granted to each Managing Board member under the 

Company's Commitment Program as discussed further in the Corporate Governance Report within this Annual Report. Of the total performance shares 
granted in 2018, 307,000 were granted to Mr. Schatz and 97,000 were granted to Mr. Sackers under this Commitment Program. 

(3)  The Variable Cash Bonus does not include values which were converted to equity-based compensation for each Managing Board member at his election 
in lieu of the value of the cash bonus earned by such Managing Board member in 2018. In 2019, Mr. Schatz will receive a grant of 60,982 performance 
stock units and Mr. Sackers will receive a grant of 21,131 performance stock units. The performance stock units will vest 40% over three years and 60% 
over five years from the date of grant, with the final performance measurement aligned to achievement of 2019 performance goals.

For the year ended December 31, 2017
(in thousands, except for number of option and award grants)
Fixed Salary
Other (1)
Total fixed income 2017
Short-term variable cash bonus
Total short-term income 2017
Defined contribution on benefit plan
Number of performance stock units granted 2017 (2)
Related recognized compensation expense
Total compensation

______________________________________

Peer M. Schatz Roland Sackers
535

1,192

$

$

5
1,197
671
1,868
74
445,000

1,764
3,706

$

$

$
$

38
573
237
810
76
186,075

439
1,325

$

$

$
$

(1)  Amounts include, among others, car lease and 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.

(2)  The Performance Stock Units Granted amount includes a special incentive grant of 100,000 PSU which was not achieved

Remuneration of the Supervisory Board

The tables below state the amounts earned on an accrual basis by the members of the Supervisory Board in 2018 and 2017:

For the year ended
December 31, 2018 (in
thousands, except for
number of share grants)

Fixed
remuneration
57.5
$
Stéphane Bancel
Dr. Håkan Björklund
103.8
$
57.5
$
Dr. Metin Colpan
Prof. Dr. Manfred Karobath (1) $
75.0
57.5
$
Dr. Ross L. Levine
57.5
$
57.5
$
57.5
$

Lawrence A. Rosen

Elizabeth E. Tallett

Dr. Elaine Mardis

Committee
Chairman /
Chairwoman
—
6.0
12.0
6.0
—
—
25.0
18.0

Committee
membership

Total (2)

Number of
restricted
stock units
granted

Related
recognized
compensation
expense

32.0 $
14.0 $
6.0 $
8.5 $
6.0 $
6.0 $
— $
21.0 $

89.5
123.8
75.5
89.5
63.5
63.5
82.5
96.5

9,866 $
9,866 $
9,866 $
9,866 $
9,866 $
9,866 $
9,866 $
9,866 $

58.3
58.3
58.3
133.0
58.3
58.3
58.3
158.8

______________________________________

(1)  Prof. Dr. Manfred Karobath was a member of the Supervisory Board since 2000 and did not stand for re-election at the Company’s Annual General 

Meeting in June 2018.

(2)  Supervisory Directors are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These reimbursements are excluded 

from the amounts presented herein.

Consolidated Financial Statements F-52

For the year ended
December 31, 2017 (in
thousands, except for
number of share grants)
Stéphane Bancel
Dr. Håkan Björklund
Dr. Metin Colpan
Prof. Dr. Manfred Karobath
Dr. Ross L. Levine

Dr. Elaine Mardis
Lawrence A. Rosen
Elizabeth E. Tallett

Fixed
remuneration
57.5
$
43.1
$
57.5
$
150.0
$

$
$
$
$

57.5
57.5
57.5
57.5

Committee
Chairman /
Chairwoman
—
—
12.0
12.0
—
—
25.0
18.0

______________________________________

Committee
membership

Total(1)

Number of
restricted
stock units
granted

Related
recognized
compensation
expense

32.0 $
12.8 $
6.0 $
17.0 $
6.0 $
6.0 $
— $
21.0 $

89.5
55.9
75.5
179.0

63.5
63.5
82.5
96.5

10,732 $
—
10,732 $
10,732 $
10,732 $
10,732 $
10,732 $
10,732 $

55.4
—
55.4
147.0

55.4
55.4
55.4
147.0

(1)  Supervisory Directors are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These reimbursements are excluded 

from the amounts presented herein.

Supervisory Board and Managing Board members’ interests in QIAGEN N.V. shares 

Share Ownership

The following table sets forth certain information as of January 31, 2019 concerning the ownership of Common Shares by our 
directors and officers. In preparing the following table, we have relied on information furnished by such persons. 

Name and Country of Residence

Peer M. Schatz, Germany

Roland Sackers, Germany

Stéphane Bancel, United States

Dr. Håkan Björklund, Sweden

Dr. Metin Colpan, Germany

Dr. Ross L. Levine, United States

Dr. Elaine Mardis, United States

Lawrence A. Rosen, United States

Elizabeth Tallett, United States

 ____________________

Shares
Beneficially
Owned

Percent
Ownership

2,732,805

1.21%

40,000

4.429

—

3,539,784

—

—

—

16,103

*

*

—

1.57%

—

—

—

*

 *    Indicates that the person beneficially owns less than 0.5% of the Common Shares issued and outstanding as of January 31, 

2019.    

24.  Fair Value Measurements

Financial Instruments are measured at fair value according the following hierarchy which prioritizes the inputs used in 
measuring fair value as follows: 

•        Level 1, 
Level 2, 
• 

• 

Level 3, 

Observable inputs, such as quoted prices in active markets; 

Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; 
and 

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 financial assets, which are classified in Level 1 
and Level 2 of the fair value hierarchy, 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 25 "Financial Risk Factors and Use 
of Derivative Financial Instruments", 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. There have been no 
transfers between levels.

Consolidated Financial Statements F-53

 
 
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, the Warrants liability and the embedded conversion option liability. See Note 15 "Financial Debts" and Note 25 
"Financial Risk Factors and Use of Derivative Financial Instruments" 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, 2018 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 6.5% and 
17.2%), 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. If minor changes were made in the key 
assumptions on which these valuations are based, there would be no material effect on the fair value of contingent consideration 
on the statement of financial position or the corresponding effect in the consolidated statement of income for the years ended 
December 31, 2018 and 2017. The maximum amount of contingent consideration relating to business combinations is disclosed 
in Note 19 "Commitments and Contingencies".

Upon adoption of IFRS 9 in 2018, our Level 3 instruments also include unquoted equity securities for which we estimate the 
value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs. 
These investments are carried at fair value which is considered to be cost, less any impairment, plus or minus changes resulting 
from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. 

As of December 31, 2018, we held the following financial instruments carried at fair value on the statement of financial position:

(in thousands)
Financial assets, current
Financial assets, non-current
Call option
Foreign exchange contracts
Assets
Foreign exchange contracts
Interest rate contracts
Cash conversion option
Warrants
Contingent consideration
Liabilities

2018

Level 1

Level 2

Level 3

$

$

$

$

$

214,918
81,639
395,095
2,673
694,325
(5,957)
(18,768)
(399,262)
(297,240)
(48,971)
(770,198)

$

$

350
2,117
—
—
2,467
—
—
—
—
—
— $

$

$

214,568
20,038
395,095
2,673
632,374
(5,957)
(18,768)
(399,262)
(297,240)
—

(721,227) $

—
59,484
—
—
59,484
—
—
—
—
(48,971)
(48,971)

As of December 31, 2017, we held the following financial instruments carried at fair value on the statement of financial position:

Consolidated Financial Statements F-54

(in thousands)
Financial assets, current
Financial assets, non-current
Call option
Foreign exchange contracts
Interest rate contracts
Assets
Foreign exchange contracts
Interest rate contracts
Cash conversion option
Warrants
Contingent consideration
Liabilities

$

$

$

2017

Level 1

Level 2

Level 3

$

359,198
3,208
223,164
7,480
1,017
594,067
(2,424)
(29,103)
(224,286)
(159,147)
(11,539)
(426,499) $

$

— $

$

3,208
—
—
—
3,208
—
—
—
—
—
— $

$

$

359,198
—
223,164
7,480
1,017
590,859
(2,424)
(29,103)
(224,286)
(159,147)
—

(414,960) $

—
—
—
—
—
—
—
—
—
—
(11,539)
(11,539)

Refer to Note 7 "Financial Assets" for the change in unquoted equity securities with Level 3 inputs during the year ended 
December 31, 2018 included in financial assets, non-current in the table above. For liabilities with Level 3 inputs, the following 
table summarizes the activity as of December 31, 2018 and 2017:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Contingent
Consideration (in thousands)
Contingent consideration as at January 1st
Additions

Payments

Gain included in earnings

Contingent consideration as at December 31st

2018

2017

$

$

(11,539) $
(53,962)
16,530

—
(48,971) $

(8,754)
(10,954)
4,900

3,269
(11,539)

As of December 31, 2018, the liability for contingent consideration totals $49.0 million, of which $27.5 million is included in 
other current liabilities and $21.5 million is included in other non-current liabilities in the accompanying consolidated balance 
sheet. During 2017, gains for the reduction in the fair value of contingent consideration related to unmet milestones of $3.3 
million was recognized in general and administrative, restructuring, integration and other in the accompanying consolidated 
statement of income. 

The table below presents the carrying values and the estimated fair values of financial instruments not presented in the tables 
above. 

(in thousands)
Long-term debt including current
portion:
Cash convertible notes
U.S. Private placement
German private placement

As of December 31, 2018

As of December 31, 2017

Carrying
Amount

Level 1

Level 2

Carrying
Amount

Level 1

Level 2

$ 1,439,931
399,301
336,168
$ 2,175,400

$ 1,794,000
—
—
$ 1,794,000

$

$

— $ 1,008,507
399,083
349,812
$ 1,757,402

391,700
337,768
729,468

$

$

— $ 1,269,613
394,669
—
349,977
—
— $ 2,014,259

The fair values of the financial instruments presented in the tables above were determined as follows:

Cash Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on the Cash 
Convertible Notes due in 2019, 2021, 2023 and 2024. During 2018, we determined that the quoted prices were from active 
markets and accordingly moved the fair value from level 2 to level 1 of the fair value hierarchy.

U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. Treasury 
rates. 

German Private Placement: Fair value is based on an estimation using changes in the euro swap rates.

The carrying values of financial instruments, including cash and equivalents, accounts receivable, accounts payable and other 
current liabilities, approximate their fair values due to their short-term maturities. The estimated fair values may not represent 

Consolidated Financial Statements F-55

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 adjustments in the twelve months ended periods ended December 31, 2018 and 2017 for nonfinancial assets or 
liabilities required to be measured at fair value on a nonrecurring basis. 

25. Financial Risk Factors and Use of Derivative Financial Instruments 

25.1. 

Financial Risks

Market risk

Our market risk relates primarily to interest rate exposures on cash, short-term investments and borrowings and foreign 
currency exposures. Financial risk is centrally managed and is regulated by internal guidelines which require a continuous 
internal risk analysis. The overall objective of our risk management is to reduce the potential negative earnings effects from 
changes in interest and foreign exchange rates. Exposures are managed through operational methods and financial instruments 
relating to interest rate and foreign exchange risks. 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 rates. The principal 
objective of such derivative instruments is to minimize the risks and/or costs associated with global financial and operating 
activities. We do not utilize derivative or other financial instruments for trading or other speculative purposes. All derivatives 
are recognized as either assets or liabilities in the balance sheet and are measured at fair value with any change in fair value 
recognized in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain 
exposures. In determining fair value, we consider both the counterparty credit risk and our own creditworthiness, to the extent 
that the derivatives are not covered by collateral agreements with respective counterparties.

Foreign currency exchange rates

As a global enterprise, we are subject to risks associated with fluctuations in foreign currencies with regard to our ordinary 
operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions as well as 
future cash flows resulting from anticipated transactions including intra-group transactions. We manage our balance sheet 
exposure on a group-wide basis primarily using foreign exchange forward contracts, options and cross-currency swaps.

A significant portion of our revenues and expenses are earned and incurred in currencies other than the U.S. dollar. The euro is 
the most significant such currency, with others including the British pound, Japanese yen, Chinese renminbi, Turkish lira, 
Brazilian real, Indian rupee, Swiss franc, and Canadian and Australian dollars. Fluctuations in the value of the currencies in 
which we conduct our business relative to the U.S. dollar have caused and will continue to cause U.S. dollar translations of such 
currencies to vary from one period to another. Due to the number of currencies involved, the constantly changing currency 
exposures, and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange rate 
fluctuations upon future operating results. In general terms, depreciation of the U.S. dollar against our other foreign currencies 
will increase reported net sales. However, this effect is, at least partially, offset by the fact that we also incur substantial 
expenses in foreign currencies.

We have significant production and manufacturing facilities located in Germany and intercompany sales of inventory also 
expose us to foreign currency exchange rate risk. Intercompany sales of inventory are generally denominated in the local 
currency of the subsidiary purchasing the inventory in order to centralize foreign currency risk with the manufacturing 
subsidiary. We use an in-house bank approach to net and settle intercompany payables and receivables as well as intercompany 
foreign exchange swaps and forward contracts in order to centralize the foreign exchange rate risk to the extent possible. We 
have entered in the past and may enter in the future into foreign exchange derivatives including forwards, swaps and options to 
manage the remaining foreign exchange exposure.

For the presentation of market risks, IFRS 7 requires sensitivity analyses that show the effects of hypothetical changes of 
relevant risk variables on profit or loss and shareholders' equity. Currency risks as defined by IFRS 7 arise on account of 
financial instruments being denominated in a currency that is not the functional currency and being of a monetary nature; 
differences resulting from the translation of financial statements into the Company's presentation currency are not taken into 
consideration. Relevant risk variables are generally all non-functional currencies in which QIAGEN has financial instruments. 

QIAGEN is exposed to currency risks from financial derivatives. If each of the respective currency pairs for which the 
Company has financial derivatives in place, which do not qualify for hedge accounting in accordance with IFRS 9, varied from 
the rates used for the preparation of the consolidated financial statements, this would have had an effect on the net income of 
the Company. Any effect would have been almost fully off-set by corresponding valuation adjustments in the positions, which 
economically had been hedged by these financial derivatives. Accordingly, the net effect of such variance in currency rates 
would not have been material. 

Consolidated Financial Statements F-56

If, at December 31, 2018, the U.S. dollar had gained or lost 10% against all identified major currencies, the estimated effect on 
the fair value of the financial derivatives would have been as follows:

(in thousands)
Currency
Euro (EUR)
Australian Dollar (AUD)
Swedish Krona (SEK)
Japanese Yen (JPY)
Canadian Dollar (CAD)
Singapore Dollar (SGD)
Swiss Franc (CHF)
Pound Sterling (GBP)
Turkish Lira (TRY)
South Korean Won (KRW)
Chinese Yuan (CNY)
Norwegian Krone (NOK)
Polish Zloty (PLN)
Total

Interest rates

As of December 31, 2018

As of December 31, 2017

10% higher

10% lower

10% higher

10% lower

(5,947)
9,493
(345)
—
(399)
(1,795)
(8,478)
895
1,393
529
263
209
362
(3,820)

5,947
(9,493)
422
—
488
2,196
10,389
(895)
(1,699)
(647)
(321)
(256)
(443)
5,688

18,409
10,710
390
201
(616)
(3,704)
470
68
—
—
—
—
—
25,928

(18,409)
(10,710)
(477)
(246)
753
4,528
(575)
(68)
—
—
—
—
—
(25,204)

The Company is exposed to interest rate risk by floating rate financial debt and floating rate financial assets. This exposure is 
managed by varying the proportion of fixed and floating rate debt, while all non-derivative financial assets pay interest on 
floating rates. Net financial income earned on the Company's net financial assets is generally affected by changes in the level of 
interest rates, principally the Euro and the U.S. dollar interest rate. 

At December 31, 2018, we had $1.2 billion in cash and cash equivalents (2017: $657.7 million). Interest income earned on our 
cash investments is affected by changes in the relative levels of market interest rates. We only invest in high-grade investment 
instruments. A hypothetical adverse 10% movement in market interest rates would not have materially impact our financial 
statements.

Borrowings against lines of credit are at variable interest rates. We had no amounts outstanding against our lines of credit at 
December 31, 2018 and 2017. A hypothetical adverse 10% movement in market interest rates would not have materially 
impacted our financial statements.

At December 31, 2018, we had $2.2 billion in current and non-current financial debt (2017: $1.8 billion). A hypothetical 
adverse 10% movement in market interest rates would not have materially impacted our financial statements.

Liquidity risk

To date, we have funded our business primarily through internally generated funds, debt and the private and public sales of 
equity. Our primary use of cash has been to support continuing operations and our investing activities including capital 
expenditure requirements and acquisitions. As of December 31, 2018 and 2017, we had cash and cash equivalents of $1.16 
billion and $657.7 million, respectively.  We also had current financial assets of $214.6 million and $359.2 million, respectively. 
Cash and cash equivalents are primarily held in Euros and U.S. dollars, other than those cash balances maintained in the local 
currency of subsidiaries to meet local working capital needs. As of December 31, 2018 and 2017, we had working capital of 
$1.1 billion and $1.3 billion, respectively.

In October 2016, we extended the maturity of our €400.0 million syndicated revolving credit facility , which now has a 
contractual lifetime until December 2021 of which no amounts were utilized at December 31, 2018. We have additional credit 
lines totaling €26.6 million  with no expiration date, none of which were utilized as of December 31, 2018. We also have finance 
lease obligations, including interest, in the amount of $0.1 million (2017: $1.5 million), and repayment obligations of $2.2 
billion of financial debt (2017: $1.8 billion), of which $503.6 million is current as of December 31, 2018.

Consolidated Financial Statements F-57

 
As of December 31, 2018, our future contractual cash obligations are as follows:

Contractual Obligations
(in thousands)
Financial debt (1)
Purchase obligations

Operating leases

License and royalty 
payments (2)
Finance lease 
obligations (3)
Total contractual cash
obligations

  ____________________

Payments Due by Period

Total

2018

2019

2020

2021

2022

Thereafter

$ 2,288,785

$

531,670

$

25,884

$

339,445

$

491,380

$

343,969

$

556,437

128,281

60,666

93,214

20,235

20,804

14,845

8,883

10,745

48,631

11,973

11,613

9,167

86

63

23

—

2,690

6,839

6,731

—

2,690

3,854

4,704

—

—

4,148

4,443

—

$ 2,526,449

$

657,155

$

73,169

$

368,240

$

507,640

$

355,217

$

565,028

(1) Amounts include required principal, stated at current carrying values, and interest payments. 

(2) As of December 31, 2018, $10.5 million and $24.3 million are included in other current liabilities and other non-current 
liabilities, respectively.

(3) Includes future cash payments, including interest, due under finance lease arrangements.

In addition to the above and pursuant to purchase agreements for several of our recent acquisitions, we could be required to 
make additional contingent cash payments totaling up to $57.3 million based on the achievement of certain revenue and 
operating results milestones as follows: $23.7 million in 2019, $22.7 million in 2020, $5.9 million in 2022 and $5.0 million, 
payable in any 12-month period from now until 2028 based on the accomplishment of certain revenue targets, the launch of 
certain products or the grant of certain patent rights. As of December 31, 2018, we have accrued $49.0 million for these 
contingent payments, of which $27.5 million is included in other current liabilities and $21.5 million is included in other non-
current liabilities.

We believe that funds from operations, existing cash and cash equivalents, together with the proceeds from our public and 
private sales of equity, and availability of financing facilities, will be sufficient to fund our planned operations and expansion 
during the coming year. However, any global economic downturn may have a greater impact on our business than currently 
expected, and we may experience a decrease in the sales of our products, which could impact our ability to generate cash. If our 
future cash flows from operations and other capital resources are not adequate to fund our liquidity needs, we may be required 
to obtain additional debt or equity financing or to reduce or delay our capital expenditures, acquisitions or research and 
development projects. If we could not obtain financing on a timely basis or at satisfactory terms, or implement timely 
reductions in our expenditures, our business could be adversely affected.

Credit risk

Financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents, financial assets , 
and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and financial assets 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. There were no significant concentrations of credit risk during the reporting period. The maximum exposure to 
credit risk is represented by the carrying amount of each financial asset in the statement of financial position.

Credit risk is managed on a Company basis, except for credit risk relating to accounts receivable balances. Each local entity is 
responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms 
and conditions are offered. 

Counterparty risk

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. To the extent that derivatives are not subject to 
mutual collateralization 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 

Consolidated Financial Statements F-58

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 all derivative agreements, with the exception of the 
Call Spread Overlay, under master agreement which allow us to manage the exposure with the respective counterparty on a net 
basis. Most of these master agreements, include bilateral collateral agreements.

Fair values

The fair values of financial assets and financial liabilities are determined in accordance with the accounting policies stated 
under Notes 3.12 "Financial Assets" and 3.13 "Financial Liabilities", respectively. 

Equity prices

The Warrants issued as part of the Call Spread Overlay discussed in Note 15 "Financial Debts" and Note 25.2 "Use of 
Derivative Financial Instruments" expose us to income statement volatility due to changes in our own equity price. Changes in 
the fair value of the Warrants are recognized in other financial expense, net. Assuming a hypothetical 10% increase or decrease 
in equity prices at December 31, 2018, the estimated effect would have been approximately $108.3 million loss or $89.0 million 
gain, respectively (2017: $62.8 million loss or $52.3 million gain).

Commodities

The Company has exposures to price risk related to anticipated purchases of certain commodities used as raw materials in its 
business. A change in commodity prices may alter the gross margin, but due to the limited exposure to any single raw material, 
a price change is unlikely to have a material unforeseen impact on the Company's earnings.

25.2.  Use of Derivative Financial Instruments

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 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, 2018, cash collateral 
positions consisted of $1.0 million recorded in other current liabilities and $25.4 million recorded in other current assets in the 
accompanying consolidated balance sheet.  As of December 31, 2017, we had a liability position of $3.0 million recorded in 
other current liabilities and $21.9 million recorded in other current assets in the accompanying consolidated balance sheet. 

In 2017, we entered into a foreign currency non-derivative hedging instrument that is designated and qualifies as net investment 
hedge. The objective of the hedge is to protect part of the net investment in foreign operations against adverse changes in the 
exchange rate between the Euro and the functional currency of the U.S. dollar. The non-derivative hedging instrument is the 
German private corporate bond ("Schuldschein") which was issued in the total amount of $331.1 million as described in Note 
15 "Financial Debts". Of the $331.1 million, which is held in both U.S. dollars and Euro, €255.0 million  is designated as the 
hedging instrument against a portion of our Euro net investments in our foreign operations. The relative changes in both the 
hedged item and hedging instrument are calculated by applying the change in spot rate between two assessment dates against 
the respective notional amount. The effective portion of the hedge is recorded in the cumulative translation adjustment account 
within other accumulated comprehensive income (loss). Based on the spot rate method, the unrealized loss recorded in equity as 
of December 31, 2018 is $5.9 million. Since we are using the debt as the hedging instrument, which is also remeasured based 
on the spot rate method, there is no hedge ineffectiveness related to the net investment hedge as of December 31, 2018.

As of  December 31, 2018 and 2017, 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 2018 and in 2017, we did not record any hedge ineffectiveness related to any cash-flow 
hedges in earnings. Based on their valuation as of December 31, 2018, we expect approximately $9.5 million of derivative 
losses included in accumulated other comprehensive loss 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.

Consolidated Financial Statements F-59

As of December 31, 2018 and 2017, we held derivative instruments that qualify for hedge accounting as 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 2018 and 2017, we concluded there was no ineffectiveness. 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.

Interest Rate Derivatives

We use interest rate derivative contracts to align our portfolio of interest bearing assets and liabilities with our risk management 
objectives. 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, 2018, the €180.0 million  notional swap amount had a fair value of $17.6 million recorded in 
fair value of derivative financial instruments -non-current liability and accrued and unpaid interest of $1.4 million recorded in 
other current assets. As of December 31, 2017, this swap had a fair value of $28.9 million recorded in fair value of derivative 
financial instruments - non-current liability and accrued and unpaid interest of $1.2 million recorded in other current assets, in 
the accompanying consolidated 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. As of December 31, 2018, the $200.0 million notional swap amount had a fair value of $1.2 million, of 
which $0.5 million is recorded in fair value of derivative financial instruments - current liability and $0.7 million is recorded in 
fair value of derivative financial instruments - non-current liability with unpaid interest of $0.1 million recorded in other current 
liabilities in the accompanying consolidated balance sheet. As of December 31, 2017, this swap had a fair value of $0.9 million 
of which $1.0 million is recorded in fair value of derivative instruments - non-current asset and $0.2 million is recorded in fair 
value of derivative instruments - current liability and accrued and unpaid interest of $0.3 million which is recorded in other 
current assets, respectively, in the accompanying consolidated balance sheet. During the years ended December 31, 2018 and 
2017, losses of $2.1 million and $2.2 million, respectively, are recorded in other financial income (expense), net in the 
accompanying consolidated income statements.

Call Spread Overlay 

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 2019 and 2021 Cash Convertible Notes and which are more fully described in Note 15 "Financial 
Debts". We used $105.2 million of the proceeds from the issuance of the 2019 and 2021 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. 

We used $73.7 million of the proceeds from the from the issuance of the 2023 Cash Convertible Notes to pay for the premium 
for the Call Option, and simultaneously received $45.3 million from the sale of Warrants, for a net cash outlay of $28.3 million 
for the Call Spread Overlay.  Issuance costs incurred in connection with the Warrant and the Call Option were $0.3 million and 
$0.1 million respectively, which $0.1 million was accrued as of December 31, 2017.

In November 2018, we used $97.3 million of the proceeds from the from the issuance of the 2024 Cash Convertible Notes to 
pay for the premium for the Call Option, and simultaneously received $72.4 million from the sale of Warrants, for a net cash 
outlay of $24.9 million for the Call Spread Overlay. Issuance costs incurred in connection with the Warrant and the Call Option 
were $0.5 million and $0.5 million respectively, of which $0.8 million was accrued as of December 31, 2018.

In these transactions, the Call Options are intended to address the equity price risk inherent in the cash conversion feature of 
each instrument 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 (2019 and 2021 Notes), $73.7 million (2023 Notes) and $97.3 
million (2024 Notes) 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 24 "Fair Value Measurements". The fair value of the Call 
Options at December 31, 2018 was approximately $395.1 million, of which $100.1 million is recorded in fair value of 
derivative instruments - current asset and $295.0 million is recorded in fair value of derivative instruments - non-current asset 

Consolidated Financial Statements F-60

in the accompanying consolidated balance sheet. The fair value of the Call Options at December 31, 2017 was approximately 
$223.2 million and is recorded in fair value of derivative instruments - non-current asset in the accompanying consolidated 
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. For the years ended December 31, 2018 and 2017, the 
change in the fair value of the Call Options resulted in gains of $74.7 million and $37.4 million, respectively, which are 
recognized in other financial income (expense), net in the accompanying consolidated statements of income. 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.

In connection with the issuance of Cash Convertible Notes, we issued Warrants as follows: For 2019 and 2021 Cash 
Convertible Notes, we issued Warrants for approximately 25.8 million shares with an initial exercise price of $32.085 per share. 
Following the synthetic share repurchase program discussed in Note 17 "Equity", the adjusted exercise price is $32.056; For 
2023 Cash Convertible Notes, we issued Warrants for approximately 9.7 million shares with an exercise price of $50.9664 per 
share; 2024 Cash Convertible Notes, we issued Warrants for approximately 10.9 million shares with an with an exercise price 
of $52.1639 per share.  Additional details regarding the Warrants as well as the Cash Convertible Notes are included in Note 15 
"Financial Debts". 

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).

The fair value of the Warrants at December 31, 2018, was approximately $297.2 million, of which $296.8 million is recorded in 
fair value of derivative financial instruments non-current liability and $0.4 million is recorded in fair value of derivative 
financial instruments - current liability in the accompanying consolidated balance sheet. As of December 31, 2017, the fair 
value of the Warrants was $159.1 million which is recorded in fair value of derivative financial instruments - non-current 
liability, in the accompanying consolidated balance sheet. For the years ended December 31, 2018 and 2017, the change in the 
fair value of the Warrants resulted in a gain of $65.7 million and a loss of $40.8 million, respectively, which are recognized in 
other financial income (expense), net in the accompanying consolidated statements of income. 

Cash Convertible Notes Embedded Cash Conversion Option 

The embedded cash conversion options within the Cash Convertible Notes are 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 financial expense, net until the cash conversion option settles or expires. For further discussion of 
the Cash Convertible Notes, refer to Note 15 "Financial Debts". The initial fair value liability of the embedded cash conversion 
option for the 2019 and 2021 Notes was $105.2 million , for the 2023 Notes was $74.5 million and for the 2024 Notes was 
$98.5 million, which simultaneously reduced the carrying values 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 24 "Fair Value Measurements". The fair value of the embedded cash conversion option at 
December 31, 2018 was approximately $399.3 million, of which $100.2 million is recorded in fair value of derivative 
instruments - current liability and $299.1 million is recorded in fair value of derivative instruments - non-current liability in the 
accompanying balance sheet. The fair value of the embedded cash conversion option at December 31, 2017 was approximately 
$224.3 million which is recorded in fair value of derivative instruments - non-current liability in the accompanying balance 
sheet. For the year ended December 31, 2018 and 2017, the change in the fair value of the embedded cash conversion option 
resulted in losses of $76.5 million and $36.7 million, respectively, recognized in other financial income (expense), net. 

Embedded Conversion Option

During 2017, we purchased a convertible note for $3.0 million from a publicly listed company considered a related party. The 
embedded derivative, that is bifurcated and measured at fair value, associated to a convertible feature of this note had a fair 
value of $0.3 million and $0.2 million as of December 31, 2018 and 2017, respectively, included in fair value of derivative 
instruments - non-current asset.

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 

Consolidated Financial Statements F-61

intercompany items. We manage balance sheet exposure on a group-wide basis using foreign exchange forward contracts, 
foreign exchange options and cross-currency swaps.

We are party to various foreign exchange forward, option and swap arrangements which had, at December 31, 2018, an 
aggregate notional value of $792.7 million and fair value of $2.7 million included in fair value of derivative instruments - 
current asset and $6.0 million included in fair value of derivative instruments - current liability, respectively, which expire at 
various dates through November 2019. 

We were party to various foreign exchange forward and swap arrangements which had, at December 31, 2017, an aggregate 
notional value of $587.3 million and fair values of $7.5 million and $2.4 million included in fair value of derivative instruments 
- current asset and fair value of derivative instruments - current liability, respectively, and which expired at various dates 
through March 2018. 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 financial 
expense, 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, 2018 and 2017: 

(in thousands)
Derivative instruments designated as hedges
Interest rate contracts(1)
Total derivative instruments designated as hedges
Undesignated derivative instruments

Embedded conversion option

Call spread overlay

Cash conversion options

Foreign exchange contracts

Derivatives in Asset Positions
Fair value

Derivatives in Liability Positions
Fair value

12/31/2018

12/31/2017

12/31/2018

12/31/2017

$

$

$

— $
— $

349

$

395,095

—

2,673

$

$

$

1,017

1,017

217

223,164

—

7,480

(18,768) $
(18,768) $

(29,103)
(29,103)

— $

(399,262)
(297,240)
(5,957)
(702,459) $

—
(224,286)
(159,147)
(2,424)
(385,857)

Total undesignated derivative instruments

$

398,117

$

230,861

$

_________________

 (1) The fair value amounts for the interest rate contracts do not include accrued interest of $1.4 million and $1.6 million included 
in other current assets in the consolidated balance sheets as of December 31, 2018 and 2017, respectively.

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, 2018 and 2017:

Consolidated Financial Statements F-62

 
Year-Ended December 31, 2018 (in thousands)
Non-derivative instruments

Net investment hedge
Derivative instruments designated as hedges

Interest rate contracts
Undesignated derivative instruments

Interest rate contracts

Call spread overlay

Cash conversion option

Foreign exchange contracts

Year-Ended December 31, 2017 (in thousands)
Non-derivative instruments

Net investment hedge
Derivative instruments designated as hedges

Interest rate contracts
Undesignated derivative instruments

Interest rate contracts

Call spread overlay

Cash conversion option

Foreign exchange contracts

$

$

$

$

Gain (loss)
recognized in 
equity

Location of
(gain) loss in
income statement

(Gain) loss
reclassified
from equity into
income

Gain 
(loss) recognized
in income

13,839

Other financial
expense, net

—

11,368

Other financial
expense, net

$

(9,774)

n/a

n/a

n/a

n/a

n/a

n/a

Other financial
expense, net

Other financial
expense, net

Other financial
expense, net

Foreign currency 
losses, net

n/a

n/a

n/a

n/a

$

(2,051)

(1,818)

(65,660)

(19,857)
(89,386)

$

Gain (loss)
recognized in 
equity

Location of
(gain) loss in
income statement

(Gain) loss
reclassified
from equity into
income

Gain 
(loss) recognized
in income

(19,757)

Other financial
expense, net

—

(30,310)

Other financial
expense, net

$

26,136

n/a

n/a

n/a

n/a

n/a

n/a

Other financial
expense, net

Other financial
expense, net

Other financial
expense, net

Foreign currency 
losses, net

n/a

n/a

n/a

n/a

$

(2,199)

673

40,779

11,813
51,066

$

26.  Additional Information for Financial Instruments

The tables below present the carrying amounts, fair values and measurements in accordance with IFRS 9 and IAS 39 as of 
December 31, 2018 and 2017, respectively.

Consolidated Financial Statements F-63

December 31, 2018 (US$ thousands)
Assets
Cash and cash equivalents

Financial assets

Trade accounts receivable
Derivatives designated as hedges
Undesignated derivatives
Liabilities
Financial debts
Finance lease obligations
Trade accounts payable
Derivatives in effective hedges
Undesignated derivatives
Contingent consideration
Aggregated by category
Financial Assets measured at Amortized Cost (AC)
Financial Liabilities measured at Amortized Cost
(FLAC)
Instruments at fair value through profit or loss (FVTPL)

December 31, 2017 (US$ thousands)
Assets
Cash and cash equivalents
Available-for-sale assets
Trade accounts receivable
Derivatives designated as hedges
Undesignated derivatives
Liabilities
Financial debts
Finance lease obligations
Trade accounts payable
Derivatives in effective hedges
Undesignated derivatives
Contingent consideration
Aggregated by category
Loans and receivables (LaR)
Available-for-sale financial assets (AfS)
Financial liabilities measured at amortized cost (FLAC)
Instruments at fair value through profit or loss (FVTPL)

IFRS 9
Category

Total
Carrying
Amount

Amortized
Cost

Cost

At Fair
Value

AC

FVTPL

AC
N/A
FVTPL

FLAC
N/A
FLAC
N/A
FVTPL
FVTPL

1,159,079

1,159,079

296,207

351,612
—
398,117

—

351,612
—
—

(2,175,400)
(83)
(69,415)
(18,768)
(702,459)
(48,971)

(2,175,400)
(83)
(69,415)
—
—

—

—

—
—
—

—

296,207

—
—
398,117

— (2,523,468)
—
—
—
—
(18,768)
—
(702,459)
—
(48,971)
—

1,510,691

1,510,691

—

—

(2,244,815)
(57,106)

(2,244,815)
—

— (2,523,468)
(57,106)
—

IAS 39
Category

Total
Carrying
Amount

Amortized
Cost

Cost

At Fair
Value

LaR
AfS
LaR
N/A
FVTPL

FLAC
N/A
FLAC
N/A
FVTPL
FVTPL

657,714
396,011
329,138
1,206
232,008

657,714
—
329,138
—
—

—
33,605
—
—
—

—
362,406
—
1,206
232,008

(1,757,402)
(1,416)
(59,205)
(28,942)
(386,018)
(11,539)

(1,757,402)
(1,416)
(59,205)
—
—
—

— (2,014,258)
—
—
—
—
(28,942)
—
(386,018)
—
(11,539)
—

986,852
396,011
(3,830,865)
(165,549)

986,852
—
(1,816,607)
—

—
33,605

—
362,406
— (2,014,258)
(165,549)
—

As of December 31, 2018 and 2017, fair values of financial debts amount to $2.5 billion and $2.0 billion, respectively. The 
carrying amounts of all other financial assets and financial liabilities approximate their fair values.

As of December 31, 2018 and 2017, there are no significant concentrations of risks arising from financial instruments.

The table below presents the carrying amounts of financial instruments and their fair values as of December 31, 2018 and 2017:

Consolidated Financial Statements F-64

(in US$ thousands)
Financial assets
Cash and cash equivalents
Financial assets
Trade accounts receivable
Derivatives designated as hedges
Derivatives measured at fair value through profit or loss
Financial liabilities
Financial debts
Finance lease obligations
Trade accounts payable
Contingent consideration
Derivatives in effective hedges
Instruments measured at fair value through profit or loss

Net Results by Category

December 31, 2018

(in thousands)
Loans and receivables (LaR)
Financial assets
Financial liabilities measured at amortized cost
(FLAC) 
Net result

$

$

December 31, 2018

December 31, 2017

Carrying
Amount

Fair Value

Carrying
Amount

Fair Value

1,159,079
296,557
351,612
—
398,117

1,159,079
296,557
351,612
—
398,117

657,714
396,011
329,138
1,206
232,008

657,714
396,011
329,138
1,206
232,008

(2,175,400)
(83)
(69,415)
(48,971)
(18,768)
(702,459)

(2,523,468)
(83)
(69,415)
(48,971)
—
(702,459)

(1,757,402)
(1,416)
(59,205)
(11,539)
(28,942)
(386,018)

(2,014,258)
(1,416)
(59,205)
(11,539)
—
(386,018)

From
interest

15,061
—

Subsequent Measurement
Allowances /
Impairments
—
—

At fair value
—
(147)

De-
recognition

Net result
15,061
(147)

— $
—

(62,766)
(47,705) $

—
(147) $

—
— $

(62,766)
—
— $ (47,852)

Interest from financial instruments is recognized in financial expense.

The Company recognizes the other components of net gain/loss in other financial income/expense, except for impairments of 
trade receivables that are classified as “loans and receivables” which are reported under general and administrative, 
restructuring, integration and other expense. 

The information for the comparative period is provided below:

December 31, 2017

(in thousands)
Loans and receivables (LaR)
Available-for-sale financial assets (AfS)
Financial liabilities measured at amortized cost
(FLAC)
Net result  

27. Capital Management 

From
interest

$

6,194
—

Subsequent Measurement
Allowances /
Impairments
—
(5,137)

At fair value
—
(855)

De-
recognition

Net result
6,194
(5,992)

— $
—

(45,141)

—

—

—

(45,141)

$

(38,947) $

(855) $

(5,137) $

— $

(44,939)

The primary objectives of the Group's capital management are to safeguard the Group's ability to continue as a going concern 
and to ensure financial flexibility to execute the Group's strategic growth targets. We regularly review our capital structure to 
ensure a low cost of capital to enhance shareholder value. The Group's overall strategy remains unchanged from 2017 and we 
are not subject to any externally imposed capital requirements. All common shares issued are fully paid.

In November 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 
2024 (2024 Notes). The net proceeds of the 2024 Notes were $470.0 million, after payment of the net cost of the Call Spread 
Overlay described below and transaction costs paid through December 31, 2018. 

In January 2017, we completed a capital repayment program through a synthetic share repurchase program that combined a 
direct capital repayment with a reverse stock split as discussed in Note 17 "Equity". During 2017, 1.9 million QIAGEN shares 
were repurchased for $61.0 million (including transaction costs) and on January 31, 2018, we announced our fifth share 
repurchase program of up to $200 million of our common shares.

Consolidated Financial Statements F-65

 
 
 
 
 
 
 
 
In 2017, we completed a German private placement bond ("Schuldschein") which was issued in several tranches totaling $331.1 
million due in various periods through 2027. Additionally in 2017, we issued $400.0 million aggregate principal amount of 
Cash Convertible Senior Notes which is due in 2023 (2023 Notes). The net proceeds of the 2023 Notes were $365.6 million, 
after payment of the net cost of the Call Spread Overlay described below and transaction costs paid through December 31, 
2018.

An important indicator of capital management efforts is the ratio of shareholders' equity compared to total assets as shown in 
the consolidated statement of financial position:

(in thousands, except of ratio)
Shareholders' equity attributable to equity holders of the parent
Total Assets
Shareholders' equity ratio in %

2018
$ 2,378,815
$ 5,797,817

2017
2,426,410
5,085,112

$
$

41%

48%

Total financial debt consists of cash convertible notes and private placements as discussed in Note 15 "Financial Debts". The 
changes in financial debts reconciled to the cash flows arising from financing activities as follows:

Reconciliation of Liabilities Arising from Financing Activities

Total financial debt consists of cash convertible notes and private placements as discussed in Note 15. The changes in financial 
debts reconciled to the cash flows arising from financing activities as follows:

(in thousands)
Cash convertible notes
Private Placement
German Private Placement (Schuldschein)
Total non-current debt
Finance leases
Total liabilities from financing activities

12/31/2017 Cash flows
$ 494,879
$1,008,507
—
399,083
—
349,812
494,879
1,757,402
(1,308)
1,416
$ 493,571
$1,758,818

Foreign 
currency 
and 
other(2)

Embedded
derivative
$ (98,475) $

12/31/2018
(579) $1,439,931
399,301

—
—
(98,475)
—

336,168
2,175,400
83
$ (98,475) $ (14,443) $2,175,483

—
(13,839)
(14,418)
(25)

Amortization 
of debt 
discount and 
issuance 
costs (1)

$

$

35,599
218
195
36,012
—
36,012

Amortization 
of debt 
discount and 
issuance 
costs (1)

(in thousands)
Cash convertible notes

Private Placement

German Private Placement (Schuldschein)

Total non-current debt

Finance leases

Total liabilities from financing activities

Foreign 
currency 
and 
other(3)

Embedded
derivative
$ (74,500) $

12/31/2016 Cash flows

$ 665,176

$ 394,391

$

23,992

398,865

—
1,064,041

2,555

—

329,875
724,266
(1,402)

218

180
24,390

—

—

(74,500)
—

12/31/2017
(552) $1,008,507
399,083

—

19,757
19,205

263

349,812
1,757,402

1,416

$1,066,596

$ 722,864

$

24,390

$ (74,500) $

19,468

$1,758,818

(1) Total amortization of debt discount and issuance costs for the years ended December 31, 2018 and 2017 totaled $36.4 million 
and $24.8 million, respectively which included costs related to the syndicated multi-currency revolving credit facility expiring 
December 2021 of which no amounts were utilized at December 31, 2018 or at 2017.

(2) For the year ended December 31, 2018, the Cash Convertible Notes are net of debt issuance costs, of which $0.6 million  
were unpaid as of year-end and the German Private Placement experienced unrealized foreign currency gains totaling $13.8 
million. Finance leases for the years ended December 31, 2018 included non-cash charges of less than $0.1 million of foreign 
currency impacts. 

(3) For the year ended December 31, 2017, the Cash Convertible Notes are net of debt issuance costs, of which $0.6 million  
were unpaid as of year-end and the German Private Placement experienced unrealized foreign currency losses totaling $19.8 

Consolidated Financial Statements F-66

million. Finance leases for the year end included non-cash charges $0.3 million which include non-cash additions and foreign 
currency impacts. 

28. Subsequent Events

Events that occurred after the balance sheet date that provide no information on the actual situation at the balance sheet date are 
not recognized in the financial statements. When those events are relevant for the economic decisions of users of the financial 
statements, the nature and the estimated financial effects of the events are disclosed in the financial statements. 

On January 7, 2019, we announced the acquisition of N-of-One, Inc, a privately-held U.S. molecular decision support company 
and pioneer in clinical interpretation services for complex genomic data. The cash consideration totaled approximately $26.0 
million. The acquisition included contingent consideration which is recorded as part of the purchase price based on the 
acquisition date fair value. The addition of N-of-One will enable QIAGEN to significantly expand its decision-support solutions 
while offering a broader range of software, content and service-based solutions. It will also enable QIAGEN to provide 
customers with greater access to valuable genomic data assets and service offerings. N-of-One is not expected to provide a 
significant contribution to our results in 2019.

January 31, 2019, we acquired the digital PCR assets of Formulatrix, Inc., a developer of laboratory automation solutions. 
Combining the Formulatrix assets with QIAGEN technologies and automation, we expect to bring to market a fully integrated 
digital PCR solution with a targeted launch in 2020. We agreed to pay Formulatrix $125.0 million in cash upon closing and 
future milestone payments of $135.9 million in 2020.

Consolidated Financial Statements F-67

 
29. Consolidated Companies 

The following is a list of the Company's subsidiaries as of December 31, 2018, other than certain subsidiaries that did not in the 
aggregate constitute a significant subsidiary:

Company Name
Amnisure International, LLC
Cellestis Pty. Ltd.
QIAGEN Aarhus A/S
QIAGEN AB
QIAGEN AG
QIAGEN Australia Holding Pty. Ltd.
QIAGEN Benelux B.V.
QIAGEN Beverly, LLC
QIAGEN China (Shanghai) Co. Ltd.
QIAGEN Deutschland Finance Holding (Luxembourg) SARL
QIAGEN Deutschland Holding GmbH
QIAGEN Finance (Ireland) Ltd.
QIAGEN Finance (Malta) Ltd.
QIAGEN France S.A.S.
QIAGEN Gaithersburg, LLC
QIAGEN GmbH
QIAGEN Hamburg GmbH
QIAGEN Inc. (Canada)
QIAGEN Instruments AG
QIAGEN K.K.
QIAGEN Lake Constance GmbH
QIAGEN, LLC
QIAGEN Ltd.
QIAGEN Manchester Ltd.
QIAGEN Marseille SA
QIAGEN North American Holdings Inc.
QIAGEN Pty. Ltd.
QIAGEN Redwood City, Inc.
QIAGEN Sciences, LLC
QIAGEN S.r.l.
QIAGEN U.S. Finance Holdings (Luxembourg) SARL
QIAGEN U.S. Finance, Inc.

Jurisdiction
of Incorporation
USA
Australia
Denmark
Sweden
Switzerland
Australia
Netherlands
USA
China
Luxembourg
Germany
Ireland
Malta
France
USA
Germany
Germany
Canada
Switzerland
Japan
Germany
USA
UK
UK
France
USA
Australia
USA
USA
Italy
Luxembourg
USA

Consolidated Financial Statements F-68

30. Fees Paid to External Auditors 

At our 2018 Annual General Meeting of Shareholders on June 19, 2018, our shareholders appointed KPMG Accountants N.V. 
to serve as our external auditor for our statutory consolidated financial statements prepared in accordance with International 
Financial Reporting Standards for the year ended December 31, 2018. Set forth below are the total fees billed (or expected to be 
billed), on a consolidated basis, by the independent public accounting firm or their affiliates for providing audit and other 
professional services in each of the last two years:

(in thousands)

2018

2017

Audit fees
Audit related fees
Tax and all other fees
Service fees to external auditors

KPMG Network

2,555
324
93
2,972

$

KPMG
Accountants N.V.
219
—
—
219

$

KPMG Network

KPMG
Accountants N.V.

1,840
450
35
2,325

$

$

108
—
—
108

Audit fees consist of fees and expenses billed for the annual audit and quarterly review of QIAGEN’s consolidated financial 
statements. They also include fees billed for other audit services, which are those services that only the statutory auditor can 
provide.

Audit-related fees consist of fees and expenses billed for assurance and related services that are related to the performance of 
the audit or review of QIAGEN’s financial statements and include consultations concerning financial accounting and reporting 
standards and review of the opening balance sheets of newly acquired companies.

Tax fees include fees and expenses billed for tax compliance services, including assistance on the preparation of tax returns and 
claims for refund; tax consultations, such as assistance and representation in connection with tax audits and appeals. All other 
fees include various fees and expenses billed for services as approved by the Audit Committee. 

Consolidated Financial Statements F-69

QIAGEN N.V.

COMPANY FINANCIAL STATEMENTS

Company Financial Statements F-70

QIAGEN N.V. 

COMPANY FINANCIAL STATEMENTS  

BALANCE SHEETS 
(before profit appropriation)
(in thousands) 

Note December 31, 2018 December 31, 2017

Assets
Fixed assets:

Intangible fixed assets:

Goodwill
Other intangible assets

Tangible fixed assets:

Property, plant and equipment

Financial fixed assets:

Non-current financial assets
Financial fixed assets
Fair value of derivative financial instruments
Other fixed assets

Total fixed assets
Current assets:

Trade and other receivables:

Receivables from group companies
Prepaid and other current assets

Securities:

Current financial assets
Fair value of derivative financial instruments

Cash and cash equivalents:

Cash and cash equivalents

Total current assets
Total assets

Liabilities and equity
Shareholders' equity:
Common shares
Share premium
Legal reserves
Other reserves
Treasury shares
Retained earnings
Net income for the period

Total shareholders' equity
Non-current liabilities:

Non-current financial debts
Deferred tax liabilities
Fair value of derivative financial instruments
Other non-current liabilities

Total non-current liabilities
Current liabilities:

Current portion of non-current financial debts
Accounts payable trade
Payables to group companies
Fair value of derivative financial instruments
Accrued liabilities

Total current liabilities
Total liabilities and shareholders' equity

(3)
(2)

(4)

(5)
(6)
(11)

(5)
(11)

(8)
(10)
(10)
(10)

(7)

(11)

(7)

(11)

$

307,116
1

$

938

23,592
3,411,757
295,015
2,027
4,040,446

624,882
31,620

214,568
102,754

1,032,716
2,006,540
6,046,986

2,727
1,727,922
(270,322)
(124)
(178,903)
992,621
104,894
2,378,815

1,671,811
1,200
614,200
14,431
2,301,642

503,589
1,839
717,430
107,027
36,644
1,366,529
6,046,986

$

$

194,126
66

1,123

9,814
3,496,959
224,181
5,197
3,931,466

729,430
28,432

359,198
7,480

273,198
1,397,738
5,329,204

2,606
1,687,564
(174,384)
(1,820)
(118,987)
964,053
67,378
2,426,410

1,757,402
799
412,536
—
2,170,737

—
1,984
712,122
2,424
15,527
732,057
5,329,204

The accompanying notes are an integral part of these company financial statements.  

Company Financial Statements F-71

QIAGEN N.V. 

COMPANY FINANCIAL STATEMENTS  

INCOME STATEMENTS
(in thousands) 

Other expense

Operating expenses:

Sales and marketing expense

General and administrative, restructuring, integration and other
expense

Other operating income
Total operating expenses, net

Loss from operations

Financial income

Financial expense

Other financial (expense) income, net

Total finance (expense) income, net

Loss before income taxes

Income taxes
Loss after income tax

Results related to subsidiaries, after tax
Net income for the period

Note

Years ended December 31,
2017
2018

$

(47) $

(352)

(11,146)
352
(11,146)
(11,193)
17,545
(64,504)
(106,706)
(153,665)
(164,858)
(2,598)
(167,456)
272,350

$

104,894

$

(7)

(11)

(115)

(584)

(19,828)
179
(20,233)
(20,348)
8,672
(45,195)
39,840

3,317
(17,031)
48
(16,983)
84,361

67,378

The accompanying notes are an integral part of these company financial statements.  

Company Financial Statements F-72

QIAGEN N.V. 

COMPANY FINANCIAL STATEMENTS

STATEMENTS OF CHANGES IN EQUITY
(in thousands) 

Common shares

Shares

Amount

Share
premium

Retained
earnings

Net
Income

Legal
reserves

Other
reserves

Total
shareholders'
equity

Treasury shares

Shares

Amount

Balance at January 1, 2017

239,707

$ 2,653

$1,897,399

$ 969,788

$ 49,378

$(287,733)

$ (1,654)

(5,147)

$(120,006)

$ 2,509,825

Appropriation of prior year net income

Net income for the period

Capital repayment

Effect from capitalized development
costs

Effect from foreign currency translation

Effect from cash flow hedge

Effect from available-for-sale financial
asset

Effect from pension reserve

Purchase of treasury shares

Stock awards and options

—

—

—

—

—

—

(8,878)

(110)

(244,319)

49,378

(49,378)

—

—

862

(63)

—

—

—

—

67,378

—

—

—

—

—

—

—

—

—

—

—

(862)

137,098

(22,887)

—

—

—

—

—

—

—

—

—

—

(786)

620

—

—

191

—

—

—

—

—

—

—

—

—

—

—

—

—

—

67,378

(244,429)

—

137,098

(22,887)

(786)

620

— (1,909)

(60,970)

(60,970)

—

2,593

61,989

40,561

34,484

(55,912)

—

—

—

—

—

—

—

—

63

—

—

—

—

—

Balance at December 31, 2017

230,829

$ 2,606

$1,687,564

$ 964,053

$ 67,378

$(174,384)

$ (1,820)

(4,272)

$(118,987)

$ 2,426,410

Common shares

Share
premium

Retained
earnings

Net
income

Legal
reserves

Other
reserves

Note

Shares

Amount

Total
shareholders'
equity

Treasury shares

Shares

Amount

Balance at January 1, 2018, as
previously reported

IFRS 9 impact of change in accounting
policy

IFRS 15 impact of change in accounting
policy

230,829

2,606

1,687,564

964,053

67,378

(174,384)

(1,820)

(4,272)

(118,987)

2,426,410

—

—

—

—

—

—

(942)

(1,306)

—

—

—

—

942

—

—

—

—

—

—

(1,306)

Adjusted balance at January 1, 2018

230,829

$ 2,606

$1,687,564

$ 961,805

$ 67,378

$(174,384)

$

(878)

(4,272)

$(118,987)

$ 2,425,104

Appropriation of prior year net income

Net income for the period

Effect from capitalized development
costs

Effect from foreign currency translation

(10)

(10)

Effect from cash flow hedge

Effect from pension reserve

Purchase of treasury shares

Stock awards and options

—

—

—

—

—

—

—

—

—

—

—

121

—

—

—

—

67,378

(67,378)

— 104,894

—

—

3,916

(121)

—

—

—

—

(3,916)

— (107,056)

—

—

—

—

15,034

—

—

—

—

—

—

—

—

754

—

—

—

—

—

—

—

—

—

—

—

—

—

104,894

—

(107,056)

15,034

754

— (2,871)

(104,685)

(104,685)

—

1,823

44,769

44,770

40,358

(40,357)

—

—

—

—

—

—

—

—

—

—

—

—

—

Balance at December 31, 2018

230,829

$ 2,727

$1,727,922

$ 992,621

$104,894

$(270,322)

$

(124)

(5,320)

$(178,903)

$ 2,378,815

The accompanying notes are an integral part of these company financial statements.  

Company Financial Statements F-73

QIAGEN N.V.

NOTES TO THE COMPANY FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2018 

1.  Accounting Policies

The financial statements of QIAGEN N.V. (the 'Company') included in this section are prepared in accordance with IFRS 
accounting principles as used in the QIAGEN N.V. Consolidated (the 'Consolidated') Financial Statements, considering the 
provisions of section 362 of Book 2 of the Netherlands Civil Code. 

Subsidiaries are accounted for using the net equity value in these Company financial statements. 

2.  Other Intangible Assets

Intangible assets represent developed technology, computer software, patent rights and licenses. There were no additions to 
intangible assets during the years ended December 31, 2018 and 2017. As of December 31, 2018, the historic cost of intangibles 
assets $8.1 million (2017: $8.1 million) and accumulated amortization amounted to $8.1 million (2017: $8.0 million). 
Amortization expense on intangible assets during the year ended December 31, 2018 was $0.1 million (2017: $0.1 million).

3.  Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows:

(in thousands)
Goodwill as at January 1st
Goodwill acquired during the year
Goodwill transferred from (to) indirectly owned Group companies
Currency adjustments
Goodwill as at December 31st

2018

2017

$

$

194,126
117,621
6,780
(11,411)
307,116

$

$

62,437
—
119,227
12,462
194,126

In 2018, the changes in goodwill resulted from goodwill acquired during the year and transferred from indirectly owned Group 
companies partially offset by foreign currency translation. In 2017, the changes in goodwill resulted from goodwill transferred 
from indirectly owned Group companies and foreign currency translation. 

4.  Property, Plant and Equipment

The changes in property, plant and equipment for the years ended December 31, 2018 and 2017 are as follows:

(in thousands)

Property. plant and equipment as at January 1st

Additions

Depreciation

Property, plant and equipment as at December 31st

2018

2017

$

$

1,123

$

27
(212)
938

$

1,300

35
(212)
1,123

The historic cost as of December 31, 2018 and 2017 for property, plant and equipment was $1.8 million and $1.8 million, 
respectively. As of December 31, 2018 and 2017, accumulated amortization was $0.9 million and $0.7 million, respectively. 

5. Financial Assets

At December 31, 2018, the Company had investments in unquoted debt securities which had a fair market value and cost of 
approximately $234.3 million (2017: $359.2 million). At December 31, 2018, the Company holds investments of $3.6 million 
for noncontrolling interests in privately-held companies which are considered unquoted equity securities (2017: $8.3 million). 
At December 31, 2018, the Company holds an investment of $0.4 million for noncontrolling interests in a publicly-held 
company which is classified as quoted equity securities (2017: $1.5 million).  Information on the accounting for these financial 
assets is provided in Note 7 "Financial Assets" to the Consolidated Financial Statements of the Group.

Company Financial Statements F-74

(in thousands)
Unquoted equity securities
Quoted equity securities
Unquoted debt securities
Financial assets

thereof current financial assets
thereof non-current financial assets

6.  Financial Fixed Assets

2018

2017

$

$
$
$

3,554
350
234,256
238,160
214,568
23,592

$

$
$
$

8,298
1,516
359,198
369,012
359,198
9,814

The financial fixed assets are presented in the statements of financial position based on either their net asset value in accordance 
with the aforementioned accounting principles of the Consolidated Financial Statements, or at amortized cost. There are no 
indications the fair value of the financial assets are lower than the values as presented in the statements of financial position as of  
December 31, 2018. 

(in thousands)
January 1, 2017
Increases
Decreases
Dividends received
Share of net profit
December 31, 2017

(in thousands)
January 1, 2018
Increases
Decreases
Dividends received
Share of net profit
Translation adjustments
December 31, 2018

7. Financial Debts

Total
$ 3,204,976
802,690
(445,041)
(65,273)
(393)
$ 3,496,959

Total

$ 3,496,959
269,273
(203,525)
(150,410)
(620)
80
$ 3,411,757

$

$

$

$

Investments in
subsidiaries

Participation
interest

Loans
receivable

2,401,713
320,379
—
(65,273)
(46)
2,656,773

$

$

2,444
4,000
—
—
(347)
6,097

Investments in
subsidiaries

Participation
interest

2,656,773
217,267
—
(150,410)
59
—
2,723,689

$

$

6,097
3,970
(2,539)
—
(679)
—
6,849

$

$

$

$

800,819
478,311
(445,041)
—
—
834,089

Loans
receivable

834,089
48,036
(200,986)
—
—
80
681,219

Information on the financial debts of $706.9 million related to the Cash Convertible Notes due in 2019 and 2021, $335.2 
million related to the Cash Convertible Notes due in 2023, $397.8 million related to the Cash Convertible Notes due in 2024, 
$399.3 million related to the Private Placement and $336.2 million related to the German private placement bond 
("Schuldschein") are provided under Note 15 "Financial Debts" to the Consolidated Financial Statements of the Group. Our 
revolving facility agreement and private placement contains certain financial and non-financial covenants, including but not 
limited to, restrictions on the encumbrance of assets, restrictions on priority indebtedness and maintenance of certain financial 
ratios.  We were in compliance with these covenants at December 31, 2018.

Of the total $2.2 billion financial debts as of December 31, 2018, $503.6 million is included in current liabilities and $1.7 
billion is included in non-current liabilities in the accompanying balance sheet of QIAGEN N.V. During the years ended 
December 31, 2018 and 2017, financial expense of $64.5 million and $45.2 million, respectively, is included in the 
accompanying income statement of QIAGEN N.V. and is primarily associated with these financial debts.  

8.  Common Shares

The authorized classes of our shares consist of Common Shares, Preference Shares and Financing Preference Shares. No 
Financing Preference Shares or Preference Shares have been issued. The Company had the following authorized shares issued 
and outstanding as of December 31, 2018 and 2017:

Company Financial Statements F-75

 
 
Authorized, (in thousands)
Common shares
Preference shares
Financing preference shares
At December 31st

Issued and outstanding, (in thousands)
Common shares issued
Treasury shares
Outstanding at December 31st

Par value in EUR per share
Common shares
Preference shares
Financing preference shares

Par value (in thousands)
Common shares issued at December 31st in EUR
Common shares issued at December 31st in USD

2018
410,000
450,000
40,000
900,000

2018
230,829
(5,320)
225,509

2017
410,000
450,000
40,000
900,000

2017
230,829
(4,272)
226,557

2018

2017

0.01
0.01
0.01

0.01
0.01
0.01

2018

2017

2,308
2,727

2,308
2,606

Company Financial Statements F-76

9.  Subsidiaries

The following is a list of the Company's subsidiaries as of December 31, 2018, other than certain subsidiaries that did not in the 
aggregate constitute a significant subsidiary:

Company Name
Amnisure International, LLC
Cellestis Pty. Ltd.
QIAGEN Aarhus A/S
QIAGEN AB
QIAGEN AG
QIAGEN Australia Holding Pty. Ltd.
QIAGEN Benelux B.V.
QIAGEN Beverly, LLC
QIAGEN China (Shanghai) Co. Ltd.
QIAGEN Deutschland Finance Holding (Luxembourg) SARL
QIAGEN Deutschland Holding GmbH
QIAGEN Finance (Ireland) Ltd.
QIAGEN Finance (Malta) Ltd.
QIAGEN France S.A.S.
QIAGEN Gaithersburg, LLC
QIAGEN GmbH
QIAGEN Hamburg GmbH
QIAGEN Inc. (Canada)
QIAGEN Instruments AG
QIAGEN K.K.
QIAGEN Lake Constance GmbH
QIAGEN, LLC
QIAGEN Ltd.
QIAGEN Manchester Ltd.
QIAGEN Marseille SA
QIAGEN North American Holdings Inc.
QIAGEN Pty. Ltd.
QIAGEN Redwood City, Inc.
QIAGEN Sciences, LLC
QIAGEN S.r.l.
QIAGEN U.S. Finance Holdings (Luxembourg) SARL
QIAGEN U.S. Finance, Inc.

10.  Equity

Share Premium

Jurisdiction
of Incorporation Ownership
USA
Australia
Denmark
Sweden
Switzerland
Australia
Netherlands
USA
China
Luxembourg
Germany
Ireland
Malta
France
USA
Germany
Germany
Canada
Switzerland
Japan
Germany
USA
UK
UK
France
USA
Australia
USA
USA
Italy
Luxembourg
USA

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Voting
Rights

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

The share premium concerns the income from the issuing of shares in so far as this exceeds the nominal value of the shares 
(above par income). Of share premium, no legal restrictions apply to the distribution thereof and therefore can be considered 
freely distributable

Legal Reserves

Legal reserves as of December 31, 2018 and 2017 were $(270.3) million and $(174.4) million, respectively, and include the 
amounts as shown in the table below:

(in thousands)
Cumulative foreign currency translation adjustment
Capitalized development costs related to subsidiaries
Cash flow hedge reserve
Legal reserves

2018
(291,011) $
36,142
(15,453)
(270,322) $

2017
(183,955)
40,058
(30,487)
(174,384)

$

$

Company Financial Statements F-77

The legal reserves set up in connection with the capitalized development costs related to subsidiaries as described in Note 12 
"Goodwill and Intangible Assets" to the Consolidated Financial Statements of the Group. As a result of the capitalization and 
subsequent amortization of these capitalized development costs, the net impact on the legal reserves was $(3.9) million and 
$(0.9) million for the years ended December 31, 2018 and 2017, respectively. 

Other Reserves

Other reserves as of December 31, 2018 and 2017 were $(0.1) million and $(1.8) million, respectively, and include the amounts 
as shown in the table below.

(in thousands)
Pension reserve
Available-for-sale reserve
Other reserves

2018

2017

(124) $
—
(124) $

(878)
(942)
(1,820)

$

$

The change in available-for-sale reserve is due to the cumulative effect adjustment as of January 1, 2018 upon adoption of IFRS 
9 Financial Instruments. The amounts noted in the table above for other reserves include adjustment for the impact of deferred 
income taxes.

11.  Financial Instruments

Information on the use of financial instruments and on related risks is provided in Note 25 "Financial Risk Factors and Use of 
Derivative Financial Instruments" to the Consolidated Financial Statements of the Group and includes information about the 
Group's exposure to these risks, the Group's objectives, policies and processes for measuring and managing risk, and the 
Group's management of capital.

These risks, objectives, policies and processes for measuring and managing risk, and the management of capital apply also to 
the separate financial statements of QIAGEN N.V.

In the ordinary course of business, we use derivative instruments to manage potential losses from foreign currency exposures 
and interest bearing assets or liabilities as further described in Note 25 to the Consolidated Financial Statements. For the years 
ended December 31, 2018 and 2017, gains and losses on these derivatives instruments are included in Other financial (expense) 
income, net in the accompanying income statements of QIAGEN N.V. 

12.  Income Tax

Together with Life Biotech Partners B.V., the Company forms a fiscal unity for corporate income tax purposes. For value-added 
tax purposes, the fiscal unity includes all Dutch subsidiaries of the Company. The standard conditions of fiscal unity stipulate 
that each of the companies is liable for the tax payable of all companies belonging to the fiscal unity. 

13.  Employee Information

Average Number of Employees
Research & Development
Sales
Production
Marketing
Administration
Total

2018

2017

1,005
1,938
1,074
293
511
4,821

974
1,897
1,039
293
484
4,687

The average number of employees working outside the Netherlands during the year ended December 31, 2018 was 4,772 (2017: 
4,635). 

The pension plans applicable to the employees are financed through contributions to external pension insurance companies. The 
contribution due is accounted for in the profit and loss account as an expense. Prepaid contributions are recognized as deferred 
assets if these lead to a refund or reduction of future payments. Contributions that are due but have not yet been paid are 
presented as liabilities. Information on personnel costs is provided under Note 22 "Employee Benefits and Personnel Costs" to 
the Consolidated Financial Statements of the Group.

Company Financial Statements F-78

14.  Related Party Transactions

Information on related party transactions including remuneration of the members of the Managing and Supervisory Board is 
provided under Note 23 "Related Party Transactions" to the Consolidated Financial Statements of the Group. Information on 
the remuneration policy is provided in the Corporate Governance Report.

15.  Auditor Fees

Information on auditor fees is provided under Note 30 "Fees Paid External Auditors" to the Consolidated Financial Statements 
of the Group.

16. Subsequent Events

Based on the Company’s review, no events or transactions have occurred subsequent to December 31, 2018 other than those 
described in Note 28 "Subsequent Events" to the Consolidated Financial Statements, that would have a material impact on the 
financial statements as presented.

Company Financial Statements F-79

Signatures 

Venlo, the Netherlands, April 29, 2019

QIAGEN N.V.

Peer M. Schatz 

Roland Sackers

Chief Executive Officer 

Chief Financial Officer

Company Financial Statements F-80

 
 
 
 
 
OTHER INFORMATION

Company Financial Statements F-81

To: the General Meeting of Shareholders and the Supervisory Board of QIAGEN N.V.

Report on the audit of the financial statements 2018 included in the annual report

Our opinion

In our opinion:

– 

– 

the accompanying consolidated financial statements give a true and fair view of the financial position 
of QIAGEN N.V. as at 31 December 2018 and of its result and its cash flows for the year then ended, 
in accordance with International Financial Reporting Standards as adopted by the European Union 
(EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.

the accompanying company financial statements give a true and fair view of the financial position of 
QIAGEN N.V. as at 31 December 2018 and of its result for the year then ended in accordance with 
Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the financial statements 2018 of QIAGEN N.V. (also referred to as ‘the Company’) 
based in Venlo, Netherlands. The financial statements include the consolidated financial statements and 
the company financial statements.

The consolidated financial statements comprise: 

1 

2 

3 

the consolidated balance sheet as at December 31, 2018;

the following consolidated statements for 2018: the income statement, the statement of 
comprehensive income (loss), statement of cash flows and statement of changes in equity; and

the notes comprising a summary of the significant accounting policies and other explanatory 
information. 

The company financial statements comprise:

1 

2 

3 

the company balance sheet as December 31, 2018;

the company income statement for 2018;

the company statement of changes in equity for 2018; and

4    the notes comprising a summary of the accounting policies and other explanatory information

notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our 
responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the 
financial statements’ section of our report.

We are independent of QIAGEN N.V. in accordance with the EU Regulation on specific requirements 
regarding statutory audits of public-interest entities, the ‘Wet toezicht accountantsorganisaties’ (Wta, 
Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-
opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to 

independence) and other relevant independence regulations in the Netherlands. Furthermore, we have 
complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics). 

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 
opinion.

Audit approach

Summary

Materiality
- Materiality of USD 8.0 million
- 5% of normalized pre-tax income

Group audit
- 94% of total assets
- 84% of revenue

Key audit matters
- Revenue recognition for milestone contracts
- Cash convertible notes and call spread overlay
- Investments in NeuMoDx 

Opinion
- Unqualified

Materiality

Based on our professional judgement we determined the materiality for the financial statements as a 
whole at USD 8.0 million (2017: USD 7.0 million). The materiality is determined with reference to 
normalized pre-tax income (5.0%). The pre-tax income is normalized by excluding one-time income and 
expenses, which mainly include legal settlements. We consider pre-tax income (normalized) as the most 
appropriate benchmark because of the nature of the business and the fact that the main stakeholders are 
primarily focused on profit before tax. We have also taken into account misstatements and/or possible 
misstatements that in our opinion are material for the users of the financial statements for qualitative 
reasons. 

We agreed with the Supervisory Board that misstatements in excess of USD 400,000 which are identified 
during the audit, would be reported to them, as well as smaller misstatements that in our view must be 
reported on qualitative grounds.

Scope of the group audit

QIAGEN N.V. is at the head of a group of components. The financial information of this group is included 
in the consolidated financial statements of QIAGEN N.V..

Our group audit is mainly focused on significant components. Decisive were the size and/or the risk 
profile of the group entities or operations. Based on the size and the risk profile of the components, we 
determined the scope of the audit procedures to be performed. We requested KPMG Germany to 
perform the majority of the audit procedures for both the German and foreign locations. For the 
components in the United States KPMG USA was engaged to perform  specified audit procedures in 
addition to the audit procedures performed by KPMG Germany.

We have:

–  performed part of the audit procedures at group level by ourselves ; 

–  made use of the work of the component auditors who performed full scope audit procedures (audit of 
complete reporting package) and specified audit procedures at the parent and local entity level; and

–  performed analytical procedures and desktop review procedures with assistance of KPMG Germany 
on the remaining entities to validate our assessment that these were not significant components.

The group audit team set materiality levels for the audits of components, which ranged from USD 1.0 
million to USD 6.0 million, based on the judgement of the group audit team given the mix of size and risk 
profile of these entities within the group.

The group audit team has sent detailed instructions to the auditor of the component which includes the 
significant risk areas that should be covered and sets out the information required to be reported to the 
group audit team. The group audit team visited the entity location in Germany, and held telephone 
conferences with the component auditors. During these visits and telephone conferences, the audit 
approach, the findings and observations reported to the group audit team were discussed in detail. For 
certain components a file review has also been performed.

By performing the procedures mentioned above at components, together with additional procedures at 
group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s 
financial information to provide an opinion about the financial statements.

The procedures as described above can be summarized as follows:

Audit scope in relation to fraud and non-compliance with laws and regulations

In accordance with the Dutch Standards on Auditing we are responsible for obtaining reasonable 
assurance that the financial statements taken as a whole are free from material misstatement, whether 
caused by fraud or error. In determining the audit procedures we will make use of the evaluation of 
management in relation to fraud risk management (prevention, detection and response), including ethical 
standards to create a culture of honesty.

In our process of identifying fraud risks we assessed fraud risk factors, which we discussed with 
management and Supervisory Board. Fraud risk factors are events or conditions that indicate an 
incentive or pressure to commit fraud or provide an opportunity to commit fraud. We also assessed 

factors related to the risk of non-compliance with laws and regulations which could have a direct or 
indirect impact on the financial statements.

In line with the auditing standards we evaluated the two presumed fraud risks: fraud risk in relation to the 
revenue recognition and fraud risk in relation to management override of controls. After due consideration 
of the non-complex nature of sales transactions this year, we concluded that the presumed risk of fraud 
for revenue recognition was not present and consequently no additional procedures were required. 

Based on our analysis of fraud risk factors, we have identified a fraud risk in respect of the investment in 
NeuMoDx. The complexity of the arrangements in respect of NeuMoDx and consequently the accounting 
thereof warranted special attention during our audit. For details regarding the fraud risk in relation to the 
investments in NeuMoDx, we refer to the key audit matter on this topic as included in this auditor’s report.

Our audit procedures in response to the risk of management override of controls included an evaluation 
of the of internal controls relevant to mitigate this risk and supplementary substantive audit procedures, 
including testing significant estimates (considering potential bias), designing specific data analytics 
routines to identify and test high-risk journal entries (e.g. entries that deviate from the normal pattern) and 
testing consolidation and post-closing journal entries.

Our audit procedures differ from a specific forensic fraud investigation, which investigation often has a 
more in-depth character. 

We did not identify significant risks in relation to non-compliance with laws and regulations which could 
have a direct or indirect impact on the consolidated financial statements. Our procedures to address 
fraud risks and/or risk of non-compliance to laws and regulations did not result in findings to be included 
in this audit report other than disclosed in the key audit matter. 

Our key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our 
audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. 
The key audit matters are not a comprehensive reflection of all matters discussed.

These matters were addressed in the context of our audit of the financial statements as a whole and in 
forming our opinion thereon, and we do not provide a separate opinion on these matters.

Compared to last year the ‘net investment hedge on Germany private-placement’ is no longer a key audit 
matter, because no private placement took place in the current year. 

Revenue recognition for milestone contracts

Description

As of 1 January 2018 IFRS 15 “Revenue recognition from contracts with customers” is adopted and has 
changed the manner in which the Company accounts for its revenue. The change is mainly related to a 
different mechanism for the allocation of the consideration of the contract to the performance 
obligations. This is based on stand-alone selling prices determined using the adjusted market approach 
and changes in timing of revenue recognition for certain upgrades and services. The adoption of the 
new standard has mostly affected revenue with milestone payments, that changes revenue recognition 
from milestone method under IAS 18 to Input method under IFRS 15. Under the new accounting 
standard, QIAGEN N.V. is required to identify appropriate inputs and outputs to be used to accurately 
measure progress and appropriately recognize revenue over time. Given the complexity and the non-
routine nature of this accounting policy change and high level of estimation of inputs used to measure 
progress in percentage of completion of revenue recognition model as well as the effect of this on our 
audit work, we consider this a key audit matter.
Our response

Our audit procedures included, amongst others, assessing the appropriateness of the Company’s 
revenue recognition accounting policies under the new accounting standard IFRS 15. In addition, we 
tested the operating effectiveness of the Company’s controls related to the milestone contracts process 
and controls related to the transition into the new accounting standard. Furthermore, we assessed 
management transition process and retrospective adjustment of the related comparative figures by, 
amongst others, assessment of sales contracts, individual sale transactions, confirmations by customers 
and assessment of over-time and point in time revenue recognition for individual performance 
obligations.
Finally, we assessed the adequacy of the Company’s disclosures included in Note 4 to the financial 
statements in relation to IFRS 15 requirements.

Our observation

The results of our procedures relating to transition to new revenue recognition standard as well as the 
retrospective adjustment of the comparative figures and assumptions and inputs used by management 
for making estimates were satisfactory. Furthermore, we assessed the adequacy of the disclosure in 
Notes 2 and 4 to the financial statements and found these to be appropriate.

Cash convertible notes and call spread overlay

Description

In the fourth Quarter of 2018, QIAGEN N.V. issued a six year USD 500 million face value convertible 
bond with a maturity date of 13 November 2024. Concurrent with the issuance of the Cash Convertible 
Notes, QIAGEN N.V. entered into privately negotiated hedge transactions (Call Options) and warrants to 
purchase shares of QIAGEN N.V. common stock (Warrants) to certain financial institutions (in 
combination referred to as the Call Spread Overlay). The call options are intended to offset any cash 
payments by the Company in excess of the principal amount due upon any conversion of the Notes. 
The accounting for the Cash Convertible Notes and the Call Spread Overlay is complex, accounting 
considerations include the bifurcation of embedded derivatives, fair value measurements including 
conversion rates and the determination of debt-equity classification of Warrants. Considering the 
complexity related to the Cash Convertible Notes and Call Spread Overlay we consider these to be a 
key audit matter.

Our response

We inquired key management personnel involved in the transaction to determine the nature, terms, and 
business purpose of the transaction. The audit team inspected with assistance of our Financial Risk 
Management Specialists the Company's technical accounting memorandum and assessed the 
application of the relevant authoritative guidance under IAS 32, Financial Instruments: Presentation and 
IFRS 9, Financial Instruments. We also evaluated the models used by the Company to assess the fair 
value of the bifurcated derivative liability as well as the fair value of the Call Options and Warrants. We 
inspected supporting documentation, including the executed agreements and reconciled the supporting 
documentation to the Company's technical accounting memorandum and financial statements. 
Additionally, we assessed the adequacy of the disclosures included in Note 15, Financial Debts and 
Note 25 Financial Risk Factor and Use of Derivate Financial Instruments.

Our observation

The results of our procedures, to ensure appropriate accounting of the cash convertible notes and the 
call spread overlay including the appropriateness of the valuation assumptions used were satisfactory. 
Furthermore, we assessed the adequacy of the disclosure in Note 15, Financial Debts, and Note 25, 
Financial Risk Factors and Use of Derivative Financial Instruments and found these to be appropriate.

Investments in NeuMoDx

Description

In 2018, QIAGEN N.V. entered into a suite of transactions with NeuMoDx, a development stage entity 
developing a new platform for high-throughput, low cost molecular testing. QIAGEN N.V. additionally 
invested $9.3 million resulting in a 19.9% share in NeuModx. Furthermore, the transactions provided 
QIAGEN N.V. with distribution rights over NeuMoDx products in certain regions, and also a purchase 
agreement for the remaining 80.1% of the shares. This purchase agreement can be executed once the 
contractual conditions have been met. The purchase agreement provides QIAGEN N.V. with the ability 
to waive the conditions. The purchase consideration for the remaining shares equals $234 million.
Considering the potential size of the transactions, the amount of considerations and the technical 
expertise needed in evaluating whether the entity should be consolidated, we consider it to be a key 
audit matter related to a fraud risk. The complexity of the transactions and the number of agreements 
related to the transaction, could provide the Company with the opportunity to intentionally reflect the 
numbers differently. 

Our response

We inquired key management personnel involved in the transaction to determine the nature, terms and 
business purpose of the transaction. The audit team inspected with the assistance of our Accounting 
Specialists the Company’s technical accounting memorandum and assessed the application of the 
relevant authoritative guidance under IFRS 10, Consolidated Financial Statements. We inspected the 
supporting documents including agreements and reconciled the supporting documentation to the 
Company’s technical accounting memorandum and the financial statements. Additionally, we assessed 
the adequacy of the disclosures included in Note 7, Financial Assets. 

Our observation

The results of our procedures on the accounting of the NeuMoDx investment were satisfactory. 
Furthermore, we assessed the adequacy of the disclosure in Note 7 to the financial statements and 
found these to be appropriate.

Report on the other information included in the annual report 

In addition to the financial statements and our auditor’s report thereon, the annual report contains other 
information that consists of:

–  Report of the Supervisory Board;

–  Management Report;

–  Corporate Governance Report;

–  Corporate Governance Statement;

–  Responsibility Statement of the Management Board; and

– 

the other information pursuant to Part 9 of Book 2 of the Dutch Civil Code.

Based on the following procedures performed, we conclude that the other information:

– 

is consistent with the financial statements and does not contain material misstatements; and

–  contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained through our 
audit of the financial statements or otherwise, we have considered whether the other information contains 
material misstatements. 

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil 
Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the 
scope of those performed in our audit of the financial statements. 

Management is responsible for the preparation of the other information, including the information as 
required by Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements

Engagement

We were engaged by Supervisory Board as auditor of QIAGEN N.V. on 23 June 2015 as of the audit for 
the year 2015 and have operated as statutory auditor ever since that financial year.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on 
specific requirements regarding statutory audits of public-interest entities.

Description of responsibilities regarding the financial statements

Responsibilities of Management and the Supervisory Board for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in 
accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, Management is 
responsible for such internal control as management determines is necessary to enable the preparation 
of the financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, Management is responsible for assessing the 
Company’s ability to continue as a going concern. Based on the financial reporting frameworks 
mentioned, Management should prepare the financial statements using the going concern basis of 
accounting unless Management either intends to liquidate the Company or to cease operations, or has 
no realistic alternative but to do so. Management should disclose events and circumstances that may 
cast significant doubt on the company’s ability to continue as a going concern in the financial statements.  

The Supervisory Board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient 
and appropriate audit evidence for our opinion. 

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not 
detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the 
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the 
basis of these financial statements. The materiality affects the nature, timing and extent of our audit 
procedures and the evaluation of the effect of identified misstatements on our opinion. 

A further description of our responsibilities for the audit of the financial statements is included in appendix 
on page 10. This description forms part of our auditor’s report.

Amstelveen, 29 April 2019 

KPMG Accountants N.V.

M. Meester RA

Appendix 

We have exercised professional judgement and have maintained professional scepticism throughout the 
audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence 
requirements. Our audit included among others:

– 

identifying and assessing the risks of material misstatement of the financial statements, whether due 
to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining 
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not 
detecting a material misstatement resulting from fraud is higher than the risk resulting from error, as 
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of 
internal control;

–  obtaining an understanding of internal control relevant to the audit in order to design audit procedures 
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 
effectiveness of the Company’s internal control;

–  evaluating the appropriateness of accounting policies used and the reasonableness of accounting 

estimates and related disclosures made by Management;

–  concluding on the appropriateness of Management’s use of the going concern basis of accounting, 

and based on the audit evidence obtained, whether a material uncertainty exists related to events or 
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If 
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to 
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our 
auditor’s report. However, future events or conditions may cause a company to cease to continue as 
a going concern;

–  evaluating the overall presentation, structure and content of the financial statements, including the 

disclosures; and

–  evaluating whether the financial statements represent the underlying transactions and events in a 

manner that achieves fair presentation.

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising 
and performing the group audit. In this respect we have determined the nature and extent of the audit 
procedures to be carried out for group components. Decisive were the size and/or the risk profile of the 
group components or operations. On this basis, we selected group components for which an audit or 
review had to be carried out on the complete set of financial information or specific items. 

We communicate with the Supervisory Board regarding, among other matters, the planned scope and 
timing of the audit and significant audit findings, including any significant findings in internal control that 
we identify during our audit. In this respect we also submit an additional report to the audit committee in 
accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audits of 
public-interest entities. The information included in this additional report is consistent with our audit 
opinion in this auditor’s report.

We provide the Supervisory Board with a statement that we have complied with relevant ethical 
requirements regarding independence, and to communicate with them all relationships and other matters 
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Supervisory Board, we determine the key audit matters: those 
matters that were of most significance in the audit of the financial statements. We describe these matters 
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in 
extremely rare circumstances, not communicating the matter is in the public interest.

Provisions in the Articles of Association Governing the Appropriation of Net Income

According to Article 40 till 42 of the Articles of Association, the allocation of net income will be as follows. Subject to certain 
exceptions, dividends may only be paid out of profits as shown in our annual report as adopted by the General Meeting of 
Shareholders. Distributions may not be made if the distribution would reduce the shareholders’ equity below the sum of the 
paid-up capital and any reserves required by Dutch Law or the Articles. 

Out of profits, dividends must first be paid on any outstanding Preference Shares (the “Preference Share Dividend”) in a 
percentage (the “Preference Share Dividend Percentage”) of the obligatory amount (call) paid up on such shares at the 
beginning of the fiscal year in respect of which the distribution is made. The Preference Share Dividend Percentage is equal to 
the Average Main Refinancing Rates during the financial year for which the distribution is made. Average Main Refinancing 
Rate shall be made understood to mean the average value on each individual day during the financial year for which the 
distribution is made of the Main Refinancing Rates prevailing on such day. Main Refinancing Rate shall be understood to mean 
the rate of the Main Refinancing Operation as determined and published from time to time by the European Central Bank. If 
and to the extent that profits are not sufficient to pay the Preference Share Dividend in full, the deficit shall be paid out of the 
reserves, with the exception of any reserve, which was formed as share premium reserve upon the issue of Financing Preference 
Shares. If in any fiscal year the profit is not sufficient to make the distributions referred to above and if no distribution or only a 
partial distribution is made from the reserves referred to above, such that the deficit is not fully made good no further 
distributions will be made as described below until the deficit has been made good. 

Out of profits remaining after payment of any dividends on Preference Shares such amounts shall be kept in reserve as 
determined by the Supervisory Board. Out of any remaining profits not allocated to reserve, a dividend shall be paid on the 
Financing Preference Shares in a percentage over the par value, increased by the amount of share premium that was paid upon 
the first issue of Financing Preference Shares, which percentage is related to the average effective yield on the prime interest 
rate on corporate loans in the United States as quoted in the Wall Street Journal. If and to the extent that the profits are not 
sufficient to pay the Financing Preference Share Dividend in full, the deficit may be paid out of the reserves if the Managing 
Board so decides with the approval of the Supervisory Board, with the exception of the reserve which was formed as share 
premium upon the issue of Financing Preference Shares. 

Insofar as the profits have not been distributed or allocated to the reserves as specified above, they are at the free disposal of the 
General Meeting of Shareholders, provided that no further dividends will be distributed on the Preference Shares or the 
Financing Preference Shares. 

The General Meeting may resolve, on the proposal of the Supervisory Board, to distribute dividends or reserves, wholly or 
partially, in the form of QIAGEN shares.

Proposal for Profit Appropriation

The General Meeting of Shareholders will be asked to approve the following appropriation of the 2018 net income for the 
period: an amount of $104.9 million to be added to retained earnings. 

Company Financial Statements F-91