Qiagen
Annual Report 2019

Plain-text annual report

2 0 1 9 Q I A G E N N . V . F I N A N C I A L R E P O R T Sample to Insight As the innovative market and technology leader, QIAGEN creates Sample to Insight solutions that enable access to valuable molecular insights from any biological sample. Our 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. Our commitment to customers, patients, investors and other stakeholders drives our innovation and leadership in all areas where our Sample to Insight techno logies are required. The exceptional talent, skill and passion of our employees are key to QIAGEN’s excellence, success and value. Content Overview Financial Results 008 Report of the Supervisory Board 134 Consolidated Financial Statements 012 The Executive Committee 016 Common Shares 142 Notes to Consolidated Financial Statements 206 Auditor’s Report 212 List of Subsidiaries Management Report Appendix 024 Business and Operating Environment 213 Service 054 Opportunities and Risks 076 Performance Review 088 Human Resources 092 Non-Financial Statement 108 Future Perspectives Corporate Governance and Compensation 112 Corporate Structure 112 Managing Board 114 Supervisory Board 124 Share Ownership 125 Additional Information This document contains detailed financial information about QIAGEN prepared under U.S. generally accepted accounting standards (U.S. GAAP) and included in our Form 20-F annual report filed with the U.S. Securities and Exchange Commission. QIAGEN also publishes an Annual Report under IFRS accounting standards, which is available on our website at www.QIAGEN.com. Overview 008 Report of the Supervisory Board 012 The Executive Committee 016 Common Shares Overview Overview Overview Common Shares Report of the Supervisory Board QIAGEN’s common share price fluctuated widely in U.S. and European markets in 2019 but ended the year close to QIAGENers – the name we use proudly for our more than 5,100 employees worldwide – are the reason for our QIAGENers – the name we use proudly for our more than 5,100 employees starting price levels. The performance was influenced by challenges facing sales growth, successful initiatives to success. The members of the Supervisory Board wish to thank all QIAGENers for their contributions during 2019 Report of the Supervisory Board worldwide – are the reason for our success. The members of the Supervisory improve profitability and a review of strategic options for QIAGEN. We thank shareholders for their support. toward achieving our vision of making improvements in life possible. We would also like to thank our shareholders, Board wish to thank all QIAGENers for their contributions during 2019 toward QIAGEN’s senior executives and Investor Relations team have been recognized for proactive, transparent customers, business partners and other stakeholders for honoring QIAGEN with their continued collaboration and communications with the financial community. trust. QIAGENers – the name we use proudly for our more than 5,100 employees worldwide – are the reason for our achieving our vision of making improvements in life possible. We would also success. The members of the Supervisory Board wish to thank all QIAGENers for their contributions during 2019 like to thank our shareholders, customers, business partners and other stake- toward achieving our vision of making improvements in life possible. We would also like to thank our shareholders, Market Environment Agreement for Thermo Fisher Scientific Inc. to Acquire QIAGEN customers, business partners and other stakeholders for honoring QIAGEN with their continued collaboration and holders for honoring QIAGEN with their continued collaboration and trust. trust. Stock markets globally moved up in 2019 after a weak year in 2018. During 2019, investors responded to As an important subsequent event to 2019, QIAGEN and Thermo Fisher Scientific Inc. (NYSE: TMO) announced on accommodative monetary policy including interest rate cuts by the U.S. Federal Reserve and European Central Bank, March 3, 2020, that their boards of directors, as well as the Managing Board of QIAGEN N.V., have unanimously as well as some additional clarity in trade relationships. Slower economic growth and geopolitical strains in 2019 approved Thermo Fisher’s proposal to acquire QIAGEN for €39 per share in cash. The offer price represents a Agreement for Thermo Fisher Scientific Inc. to Acquire QIAGEN caused uncertainties for investors but did not prevent brisk advances in stock prices in markets around the world. premium of approximately 23% to the closing price of QIAGEN’s common stock on the Frankfurt Prime Standard on March 2, 2020, the last trading day prior to the announcement of the transaction. Thermo Fisher will commence a As an important subsequent event to 2019, QIAGEN and Thermo Fisher Scientific Inc. (NYSE: TMO) announced on tender offer to acquire all of the ordinary shares of QIAGEN. At the time of the announcement, the transaction March 3, 2020, that their boards of directors, as well as the Managing Board of QIAGEN N.V., have unanimously Market benchmarks for the year were very strong. The S&P 500 index in the United States finished up 28.9% in valued QIAGEN at approximately $11.5 billion, which includes the assumption of approximately $1.4 billion of net approved Thermo Fisher’s proposal to acquire QIAGEN for €39 per share in cash. The offer price represents a 2019, while the NASDAQ Biotechnology Index in the U.S. finished up 26.8%. The DAX index of the 30 largest debt. The transaction, which is expected to be completed in the first half of 2021, is subject to the satisfaction of premium of approximately 23% to the closing price of QIAGEN’s common stock on the Frankfurt Prime Standard on companies in Germany rose 25.5% during the year, and Germany’s TecDAX, of which QIAGEN is a member, customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain March 2, 2020, the last trading day prior to the announcement of the transaction. Thermo Fisher will commence a improved by 23.0% for the year. tender offer to acquire all of the ordinary shares of QIAGEN. At the time of the announcement, the transaction resolutions relating to the transaction at an Extraordinary General Meeting of QIAGEN’s shareholders, and valued QIAGEN at approximately $11.5 billion, which includes the assumption of approximately $1.4 billion of net completion of the tender offer. Thermo Fisher has obtained committed bridge financing. Permanent funding is The molecular diagnostics and life science tools segment grew at a healthy pace in 2019. Expanding use of new debt. The transaction, which is expected to be completed in the first half of 2021, is subject to the satisfaction of expected to come from cash on hand and the issuance of new debt. The transaction is not subject to any financing technologies such as next-generation sequencing (NGS), liquid biopsies and gene editing helped drive demand for customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain condition. molecular testing instruments and consumables in research. Funding for academic and pharmaceutical research grew resolutions relating to the transaction at an Extraordinary General Meeting of QIAGEN’s shareholders, and at mid-single digit rates. In healthcare, molecular testing continued to disseminate for precision medicine in oncology, completion of the tender offer. Thermo Fisher has obtained committed bridge financing. Permanent funding is The members of the Supervisory Board unanimously support this agreement, which will enable QIAGEN to enter a diagnosis of infectious diseases and identification of rare diseases, despite uncertainties in reimbursement and expected to come from cash on hand and the issuance of new debt. The transaction is not subject to any financing promising new era and will give our employees the opportunity to have an even greater impact. The combination is government policies. In 2019 QIAGEN delivered 4% growth in net sales at constant exchange rates (CER) and 9% condition. designed to deliver significant cash value to our shareholders, while enabling QIAGEN to accelerate the expansion growth in adjusted earnings per share CER. QIAGEN sales grew among its Molecular Diagnostics and Life Sciences of its solutions to provide customers worldwide with breakthroughs that advance our knowledge about the science of (Pharma and Academia/Applied Testing) customers, led by the Americas and Europe/Middle East/Africa regions. The members of the Supervisory Board unanimously support this agreement, which will enable QIAGEN to enter a life and improve health outcomes. Growth drivers included the QuantiFERON-TB tests, universal NGS technologies, QIAsymphony and QIAstat-Dx promising new era and will give our employees the opportunity to have an even greater impact. The combination is automation systems, and the Precision Medicine portfolio. QIAGEN intensified its focus in 2019 to allocate resources designed to deliver significant cash value to our shareholders, while enabling QIAGEN to accelerate the expansion to the highest-potential growth drivers in its Sample to Insight portfolio while improving profitability, enhancing 2019: A Challenging Year in Terms of Performance of its solutions to provide customers worldwide with breakthroughs that advance our knowledge about the science of shareholder value and maintaining flexibility. life and improve health outcomes. 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 2019 with detailed written and oral reports from the Managing Global shares listed in the U.S. and Europe 2019: A Challenging Year in Terms of Performance Directors, members of the Executive Committee and other senior leaders. QIAGEN’s global shares have been registered and traded in the United States since 1996, trading on the New York A key role of the Supervisory Board is to monitor the performance and progress of QIAGEN’s business on a regular Stock Exchange since January 10, 2018, after listing for more than 20 years on NASDAQ markets. The global QIAGEN had a challenging year in 2019. During the second half, QIAGEN had to update its outlook to the capital basis, and this was done during the course of 2019 with detailed written and oral reports from the Managing shares also have traded in Germany on the Frankfurt Stock Exchange since 1997, and the Prime Standard segment markets to take into account a decision to stop a joint venture for the GeneReader NGS System in China and Directors, members of the Executive Committee and other senior leaders. since its launch in 2003. The dual listing of global shares on NYSE and the Frankfurt exchange offers advantages for expectations for a continued reduction in revenues from companion diagnostic co-development projects as a result of QIAGEN, our shareholders and employees, increasing the potential market opportunity to attract investors, the decision to gain access to the clinical next-generation sequencers of Illumina, Inc. through a new partnership. In QIAGEN had a challenging year in 2019. During the second half, QIAGEN had to update its outlook to the capital particularly those in the U.S. that can only invest in U.S. dollar-denominated investments, and enhances liquidity. the end, QIAGEN achieved the revised targets for net sales growth and improvements in adjusted earnings per share markets to take into account a decision to stop a joint venture for the GeneReader NGS System in China and Unlike American Depositary Receipts (ADRs), QIAGEN’s global shares provide equal rights for all shareholders and (EPS), which excludes purchased intangibles amortization, long-lived asset impairments and other items such as expectations for a continued reduction in revenues from companion diagnostic co-development projects as a result of can be traded on either exchange, in U.S. dollars or euros. business integration, acquisition-related costs, litigation costs and restructuring. Our teams completed projects during the decision to gain access to the clinical next-generation sequencers of Illumina, Inc. through a new partnership. In the year to reallocate resources to support business expansion while also improving profitability. the end, QIAGEN achieved the revised targets for net sales growth and improvements in adjusted earnings per share Share Price and Liquidity (EPS), which excludes purchased intangibles amortization, long-lived asset impairments and other items such as CEO Leadership Transition business integration, acquisition-related costs, litigation costs and restructuring. Our teams completed projects during the year to reallocate resources to support business expansion while also improving profitability. CEO Leadership Transition 8 Overview Report of the Supervisory Board QIAGENers – the name we use proudly for our more than 5,100 employees worldwide – are the reason for our success. The members of the Supervisory Board wish to thank all QIAGENers for their contributions during 2019 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. Agreement for Thermo Fisher Scientific Inc. to Acquire QIAGEN As an important subsequent event to 2019, QIAGEN and Thermo Fisher Scientific Inc. (NYSE: TMO) announced on March 3, 2020, that their boards of directors, as well as the Managing Board of QIAGEN N.V., have unanimously approved Thermo Fisher’s proposal to acquire QIAGEN for €39 per share in cash. The offer price represents a premium of approximately 23% to the closing price of QIAGEN’s common stock on the Frankfurt Prime Standard on March 2, 2020, the last trading day prior to the announcement of the transaction. Thermo Fisher will commence a tender offer to acquire all of the ordinary shares of QIAGEN. At the time of the announcement, the transaction valued QIAGEN at approximately $11.5 billion, which includes the assumption of approximately $1.4 billion of net debt. The transaction, which is expected to be completed in the first half of 2021, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of QIAGEN’s shareholders, and completion of the tender offer. Thermo Fisher has obtained committed bridge financing. Permanent funding is expected to come from cash on hand and the issuance of new debt. The transaction is not subject to any financing condition. The members of the Supervisory Board unanimously support this agreement, which will enable QIAGEN to enter a promising new era and will give our employees the opportunity to have an even greater impact. The combination is designed to deliver significant cash value to our shareholders, while enabling QIAGEN to accelerate the expansion of its solutions to provide customers worldwide with breakthroughs that advance our knowledge about the science of life and improve health outcomes. 2019: A Challenging Year in Terms of Performance 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 2019 with detailed written and oral reports from the Managing Directors, members of the Executive Committee and other senior leaders. QIAGEN had a challenging year in 2019. During the second half, QIAGEN had to update its outlook to the capital markets to take into account a decision to stop a joint venture for the GeneReader NGS System in China and expectations for a continued reduction in revenues from companion diagnostic co-development projects as a result of the decision to gain access to the clinical next-generation sequencers of Illumina, Inc. through a new partnership. In O V E R V I E W Report of the Supervisory Board the end, QIAGEN achieved the revised targets for net sales growth and improvements in adjusted earnings per share (EPS), which excludes purchased intangibles amortization, long-lived asset impairments and other items such as business integration, acquisition-related costs, litigation costs and restructuring. Our teams completed projects during the year to reallocate resources to support business expansion while also improving profitability. CEO Leadership Transition QIAGEN announced in October 2019 that Peer M. Schatz had notified the Supervisory Board that, after 27 years with the Company, he had decided to step down as Chief Executive Officer and Chairman of the Managing Board, and would remain with QIAGEN as a Special Advisor to the Supervisory Board. Thierry Bernard, Senior Vice President, Head of Molecular Diagnostics Business Area, was appointed in October 2019 as Interim CEO and worked in tandem with Roland Sackers, Chief Financial Officer and Member of the Managing Board. Mr. Bernard was named CEO in March 2020, and will be proposed for election as a Managing Director, along with Mr. Sackers, at the next Annual General Meeting scheduled for June 2020. The members of the Supervisory Board would like to thank Mr. Schatz for his exceptional contributions and dedication to QIAGEN. We all owe him tremendous gratitude for his outstanding leadership and track record that contributed to the creation of a true success story in the life sciences industry and enabled such great advances in science and healthcare. We respect his decision to pursue other interests. Composition of the Supervisory Board The composition of the Supervisory Board did not change during 2019. All current members of the Supervisory Board will stand for re-election at the upcoming Annual General Meeting in June 2020. Additionally, all members, with the exception of Metin Colpan and 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, as well as in the Governance section of this Annual Report. 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 their duties as Supervisor Board member, date of initial appointment and current term of office is set forth in the Corporate Governance Report and on our website at www.QIAGEN.com. 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 29% 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 2019 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. The Supervisory Board met seven times during 2019, and conducted 15 telephone conference calls. These meetings also included 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 9 QIAGEN announced in October 2019 that Peer M. Schatz had notified the Supervisory Board that, after 27 years with the Company, he had decided to step down as Chief Executive Officer and Chairman of the Managing Board, and would remain with QIAGEN as a Special Advisor to the Supervisory Board. Thierry Bernard, Senior Vice President, Head of Molecular Diagnostics Business Area, was appointed in October 2019 as Interim CEO and worked in tandem with Roland Sackers, Chief Financial Officer and Member of the Managing Board. Mr. Bernard was named CEO in March 2020, and will be proposed for election as a Managing Director, along with Mr. Sackers, at the next Annual General Meeting scheduled for June 2020. The members of the Supervisory Board would like to thank Mr. Schatz for his exceptional contributions and dedication to QIAGEN. We all owe him tremendous gratitude for his outstanding leadership and track record that contributed to the creation of a true success story in the life sciences industry and enabled such great advances in science and healthcare. We respect his decision to pursue other interests. Composition of the Supervisory Board The composition of the Supervisory Board did not change during 2019. All current members of the Supervisory Board will stand for re-election at the upcoming Annual General Meeting in June 2020. Additionally, all members, with the exception of Metin Colpan and 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, as well as in the Governance section of this Annual Report. 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 their duties as Supervisor Board member, date of initial appointment and current term of office is set forth in the Corporate Governance Report and on our website at www.QIAGEN.com. 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 29% 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 2019 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. The Supervisory Board met seven times during 2019, and conducted 15 telephone conference calls. These meetings also included 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 Report. 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, especially in view of the regulations set forth in the Dutch Corporate Governance Code. Committees of the Supervisory Board The Supervisory Board has established an Audit Committee (Chair Lawrence Rosen), a Compensation Committee (Chair Elizabeth E. Tallett), a Selection and Appointment Committee (Chair Håkan Björklund), and a Science and Technology Committee (Chair 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 2019 physically or by phone. Further detailed information on the composition of the Supervisory Board and its committees, the number of committee meetings held in 2019 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 Report, 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 follows the principles described in the Dutch Corporate Governance Code, although some minor deviations, which are explained in detail in our Corporate Governance 10 Report, 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 (NYSE) 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. 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 applicable German capital market laws. Financial Statements and Audits In this Annual Report, the financial statements for 2019 are presented as prepared by the Managing Board and 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. members, including positions held on other boards, is included in the Corporate Governance Report. 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, especially in view of the regulations set forth in the Dutch Corporate Governance Code. Committees of the Supervisory Board The Supervisory Board has established an Audit Committee (Chair Lawrence Rosen), a Compensation Committee (Chair Elizabeth E. Tallett), a Selection and Appointment Committee (Chair Håkan Björklund), and a Science and Technology Committee (Chair 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 2019 physically or by phone. Further detailed information on the composition of the Supervisory Board and its committees, the number of committee meetings held in 2019 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 Report, 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. O V E R V I E W Report of the Supervisory Board 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 follows the principles described in the Dutch Corporate Governance Code, although some minor deviations, which are explained in detail in our Corporate Governance Report, 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 (NYSE) 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. 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 applicable German capital market laws. Financial Statements and Audits In this Annual Report, the financial statements for 2019 are presented as prepared by the Managing Board and 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 an eventful year. Venlo, the Netherlands, April 2020 The Supervisory Board: Dr. Håkan Björklund Chairman of the Supervisory Board 11 Overview Overview Common Shares The Executive Committee Overview QIAGEN’s common share price fluctuated widely in U.S. and European markets in 2019 but ended the year close to starting price levels. The performance was influenced by challenges facing sales growth, successful initiatives to improve profitability and a review of strategic options for QIAGEN. We thank shareholders for their support. QIAGEN’s senior executives and Investor Relations team have been recognized for proactive, transparent communications with the financial community. The Executive Committee Market Environment Stock markets globally moved up in 2019 after a weak year in 2018. During 2019, investors responded to accommodative monetary policy including interest rate cuts by the U.S. Federal Reserve and European Central Bank, Thierry Bernard Stephany Foster as well as some additional clarity in trade relationships. Slower economic growth and geopolitical strains in 2019 Chief Executive Officer Senior Vice President and Head of caused uncertainties for investors but did not prevent brisk advances in stock prices in markets around the world. Human Resources Dr. Barthold Piening Senior Vice President, Head of Global Operations Market benchmarks for the year were very strong. The S&P 500 index in the United States finished up 28.9% in 2019, while the NASDAQ Biotechnology Index in the U.S. finished up 26.8%. The DAX index of the 30 largest companies in Germany rose 25.5% during the year, and Germany’s TecDAX, of which QIAGEN is a member, improved by 23.0% for the year. Dr. Barthold Piening Senior Vice President, Head of Global Operations Thierry Bernard Stephany Foster The molecular diagnostics and life science tools segment grew at a healthy pace in 2019. Expanding use of new Chief Executive Officer Senior Vice President and Head of technologies such as next-generation sequencing (NGS), liquid biopsies and gene editing helped drive demand for Human Resources molecular testing instruments and consumables in research. Funding for academic and pharmaceutical research grew at mid-single digit rates. In healthcare, molecular testing continued to disseminate for precision medicine in oncology, diagnosis of infectious diseases and identification of rare diseases, despite uncertainties in reimbursement and Roland Sackers Dr. Thomas Schweins government policies. In 2019 QIAGEN delivered 4% growth in net sales at constant exchange rates (CER) and 9% Senior Vice President, Life Science Chief Financial Officer growth in adjusted earnings per share CER. QIAGEN sales grew among its Molecular Diagnostics and Life Sciences Business Area (Pharma and Academia/Applied Testing) customers, led by the Americas and Europe/Middle East/Africa regions. Growth drivers included the QuantiFERON-TB tests, universal NGS technologies, QIAsymphony and QIAstat-Dx automation systems, and the Precision Medicine portfolio. QIAGEN intensified its focus in 2019 to allocate resources Jean-Pascal Viola to the highest-potential growth drivers in its Sample to Insight portfolio while improving profitability, enhancing Senior Vice President, Head of shareholder value and maintaining flexibility. Corporate Business Development & Intellectual Property & Litigation Roland Sackers Global shares listed in the U.S. and Europe Chief Financial Officer Dr. Jonathan Sheldon Senior Vice President, QIAGEN Digital Insights Business Area Dr. Thomas Schweins Senior Vice President, Life Science Business Area Dr. Jonathan Sheldon Senior Vice President, QIAGEN Digital Insights Business Area QIAGEN’s global shares have been registered and traded in the United States since 1996, trading on the New York Stock Exchange since January 10, 2018, after listing for more than 20 years on NASDAQ markets. The global Chief Executive Officer shares also have traded in Germany on the Frankfurt Stock Exchange since 1997, and the Prime Standard segment Jean-Pascal Viola since its launch in 2003. The dual listing of global shares on NYSE and the Frankfurt exchange offers advantages for Senior Vice President, Head of QIAGEN, our shareholders and employees, increasing the potential market opportunity to attract investors, Joined QIAGEN in February 2015 to lead QIAGEN’s growing presence in Molecular Diagnostics, the application of Corporate Business Development & particularly those in the U.S. that can only invest in U.S. dollar-denominated investments, and enhances liquidity. Sample to Insight solutions for molecular testing in human healthcare. He was named Chief Executive Officer in Intellectual Property & Litigation Unlike American Depositary Receipts (ADRs), QIAGEN’s global shares provide equal rights for all shareholders and March 2020, after having previously served in this role on an interim basis. Mr. Bernard previously worked at can be traded on either exchange, in U.S. dollars or euros. bioMérieux, where he served in roles of increasing responsibility for 15 years, most recently as Corporate Vice President, Global Commercial Operations, Investor Relations and the Greater China Region. Prior to joining bioMérieux, he served in management roles in multiple international environments. Mr. Bernard is a member of the Share Price and Liquidity Boards of Directors of three privately held U.S. companies, First Light Biosciences, HepatoChem and more recently, Chief Executive Officer Daktari Diagnostics, where he also served as CEO. He has earned degrees from Sciences Po (Paris), Harvard 12 Joined QIAGEN in February 2015 to lead QIAGEN’s growing presence in Molecular Diagnostics, the application of Sample to Insight solutions for molecular testing in human healthcare. He was named Chief Executive Officer in March 2020, after having previously served in this role on an interim basis. Mr. Bernard previously worked at bioMérieux, where he served in roles of increasing responsibility for 15 years, most recently as Corporate Vice President, Global Commercial Operations, Investor Relations and the Greater China Region. Prior to joining bioMérieux, he served in management roles in multiple international environments. Mr. Bernard is a member of the Boards of Directors of three privately held U.S. companies, First Light Biosciences, HepatoChem and more recently, Daktari Diagnostics, where he also served as CEO. He has earned degrees from Sciences Po (Paris), Harvard Thierry BernardThierry BernardOverview The Executive Committee Thierry Bernard Chief Executive Officer Stephany Foster Dr. Barthold Piening Senior Vice President and Head of Senior Vice President, Head of Global Human Resources Operations Roland Sackers Chief Financial Officer Dr. Thomas Schweins Dr. Jonathan Sheldon Senior Vice President, Life Science Senior Vice President, QIAGEN Business Area Digital Insights Business Area O V E R V I E W The Executive Committee Jean-Pascal Viola Senior Vice President, Head of Corporate Business Development & Intellectual Property & Litigation Chief Executive Officer Joined QIAGEN in February 2015 to lead QIAGEN’s growing presence in Molecular Diagnostics, the application of Sample to Insight solutions for molecular testing in human healthcare. He was named Chief Executive Officer in March 2020, after having previously served in this role on an interim basis. Mr. Bernard previously worked at bioMérieux, where he served in roles of increasing responsibility for 15 years, most recently as Corporate Vice President, Global Commercial Operations, Investor Relations and the Greater China Region. Prior to joining bioMérieux, he served in management roles in multiple international environments. Mr. Bernard is a member of the Boards of Directors of three privately held U.S. companies, First Light Biosciences, HepatoChem and more recently, Daktari Diagnostics, where he also served as CEO. He has earned degrees from Sciences Po (Paris), Harvard Business School, London School of Economics and the College of Europe and is a member of French Foreign Trade Advisors. Senior Vice President and Head of Human Resources Joined QIAGEN in 2005 as Head of Global Internal Audit and was most recently Vice President, Head of Global Compensation and Benefits. Ms. Foster was also member of the NAELT (North America Executive Leadership Team) and steers the Diversity and Inclusion program at QIAGEN. She was named to her current role in October 2019. Prior to joining QIAGEN, Stephany Foster worked in internal audit at MorganFranklin and Independence Air. She started her career at PricewaterhouseCoopers, specializing in Sarbanes Oxley Auditing. Ms. Foster has a master’s degree in Accounting from the University of Notre Dame and is a Certified Public Accountant (CPA), a Certified Internal and Information Systems Auditor (CIA / CISA) and Certified Fraud Examiner (CFE). Senior Vice President, Head of Global Operations Joined QIAGEN in December 2018 as Senior Vice President, Head of Global Operations, and a member of the Executive Committee. Dr. Piening has more than 30 years of experience in strategy and operations in the pharmaceutical, life science and medical device industries. Prior to joining QIAGEN, he was Executive Board member in charge of production and technology for the German pharma company STADA. Dr. Piening had previously served as Chief Operating Officer and EC member of Acino Pharma, and before that as Head of Global Operations for Takeda Pharmaceuticals International. Earlier, he had roles of increasing responsibility at Byk Gulden, ALTANA Pharma and Nycomed. After studying pharmaceutical sciences at the University of Kiel in Germany and the University of Wales in Cardiff, U.K., he earned a degree in Pharmaceutics with Approbation and a Ph.D. in Pharmaceutical Chemistry from the University of Kiel. He also earned an MBA at WHU-Vallendar in Germany and Northwestern University in the United States. Chief Financial Officer Joined QIAGEN 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 Masters Degree in Business Administration (Diplom-Kaufmann) from the University of Münster, Germany. He is a board member of the industry association BIO Deutschland. Mr. Sackers has been a member of the Supervisory Board and Chairman of the Audit Committee of Evotec SE since 2019. Senior Vice President, Life Science Business Area Joined QIAGEN in 2004 as Vice President Corporate Strategy and was appointed Vice President Marketing & Strategy in 2005, where he was deeply involved in managing the global business toward Life Science customers. In 13 late 2011, Dr. Schweins assumed responsibility for Human Resources and initiated a multi-year transformation process to increase efficiency and effectiveness of the function. In 2017, Dr. Schweins took over the leadership of the Life Science Business Area and consequently resigned from his role as head of HR. Dr. Schweins came to QIAGEN from The Boston Consulting Group. He previously worked as Technology Manager, and later as an Assistant to the Management Board at Hoechst / Aventis. Dr. Schweins earned an M.Sc. Degree in Biochemistry from the University of Hanover. He obtained his Ph.D. at the Max Planck Society and received an M.Sc. from the University of Southern California in Los Angeles, where he studied Business Administration and Chemistry. Senior Vice President, QIAGEN Digital Insights Business Area Thierry BernardStephany FosterDr. Barthold PieningRoland SackersDr. Thomas SchweinsDr. Jonathan SheldonBusiness School, London School of Economics and the College of Europe and is a member of French Foreign Trade Advisors. Senior Vice President and Head of Human Resources Joined QIAGEN in 2005 as Head of Global Internal Audit and was most recently Vice President, Head of Global Compensation and Benefits. Ms. Foster was also member of the NAELT (North America Executive Leadership Team) and steers the Diversity and Inclusion program at QIAGEN. She was named to her current role in October 2019. Prior to joining QIAGEN, Stephany Foster worked in internal audit at MorganFranklin and Independence Air. She started her career at PricewaterhouseCoopers, specializing in Sarbanes Oxley Auditing. Ms. Foster has a master’s degree in Accounting from the University of Notre Dame and is a Certified Public Accountant (CPA), a Certified Internal and Information Systems Auditor (CIA / CISA) and Certified Fraud Examiner (CFE). Senior Vice President, Head of Global Operations Joined QIAGEN in December 2018 as Senior Vice President, Head of Global Operations, and a member of the Executive Committee. Dr. Piening has more than 30 years of experience in strategy and operations in the pharmaceutical, life science and medical device industries. Prior to joining QIAGEN, he was Executive Board member in charge of production and technology for the German pharma company STADA. Dr. Piening had previously served as Chief Operating Officer and EC member of Acino Pharma, and before that as Head of Global Operations for Takeda Pharmaceuticals International. Earlier, he had roles of increasing responsibility at Byk Gulden, ALTANA Pharma and Nycomed. After studying pharmaceutical sciences at the University of Kiel in Germany and the University of Wales in Cardiff, U.K., he earned a degree in Pharmaceutics with Approbation and a Ph.D. in Pharmaceutical Chemistry from the University of Kiel. He also earned an MBA at WHU-Vallendar in Germany and Northwestern University in the United States. Chief Financial Officer Joined QIAGEN 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 Masters Degree in Business Administration (Diplom-Kaufmann) from the University of Münster, Germany. He is a board member of the industry association BIO Deutschland. Mr. Sackers has been a member of the Supervisory Board and Chairman of the Audit Committee of Evotec SE since 2019. Senior Vice President, Life Science Business Area Joined QIAGEN in 2004 as Vice President Corporate Strategy and was appointed Vice President Marketing & Strategy in 2005, where he was deeply involved in managing the global business toward Life Science customers. In late 2011, Dr. Schweins assumed responsibility for Human Resources and initiated a multi-year transformation process to increase efficiency and effectiveness of the function. In 2017, Dr. Schweins took over the leadership of the Life Science Business Area and consequently resigned from his role as head of HR. Dr. Schweins came to QIAGEN from The Boston Consulting Group. He previously worked as Technology Manager, and later as an Assistant to the Management Board at Hoechst / Aventis. Dr. Schweins earned an M.Sc. Degree in Biochemistry from the University of Hanover. He obtained his Ph.D. at the Max Planck Society and received an M.Sc. from the University of Southern California in Los Angeles, where he studied Business Administration and Chemistry. Senior Vice President, QIAGEN Digital Insights Business Area Joined QIAGEN in 2018 as Senior Vice President, QIAGEN Digital Insights Business Area. He leads QIAGEN's growing presence in bioinformatics, enabling customers to transform raw data from biological samples into valuable molecular insights. Dr. Sheldon came to QIAGEN from Oracle, where he was Global Vice President leading Oracle's Healthcare business globally in the Health Sciences Global Business Unit and served on the executive committee. Previously, he established the bioinformatics group and served as Head of Bioinformatics at Roche (UK) Pharmaceuticals, as well as providing leadership in software firms serving the life science and healthcare sectors. He serves on the Board of Directors of the Drug Information Association (DIA). He received his B.Sc. in Biochemistry and Molecular Biology from the University of Manchester, and his Ph.D. in Biochemistry and Molecular Biology from the University of Cambridge. Senior Vice President, Head of Corporate Business Development & Intellectual Property & Litigation Joined QIAGEN in 2005 and worked in increasingly responsible roles until he was named Senior Vice President, Corporate Business Development, Intellectual Property & Litigation, in 2015. In October 2019, Mr. Viola was appointed member of the Executive Committee. He leads global efforts to expand QIAGEN’s portfolio through acquisitions and strategic partnerships, as well as the protection of the company’s intellectual property. Among other business transactions, his track record includes the acquisitions of Cellestis, Corbett Life Science, DxS and Enzymatics. Prior to joining QIAGEN, Mr. Viola served as President and CEO of Nextal Biotechnologies Inc., a provider of technologies for protein crystallization, and when QIAGEN acquired Nextal in 2005 he joined as Director of Protein Crystallization. Moving to Business Development in 2007, Mr. Viola led efforts in Asia-Pacific, the Americas, Global M&A and Corporate Ventures. He completed a Bachelor of Science in Biochemistry from the University of Montreal, Canada. 14 Stephany FosterDr. Barthold PieningRoland SackersDr. Thomas SchweinsDr. Jonathan SheldonJean-Pascal ViolaO V E R V I E W The Executive Committee 15 Overview Overview Common Shares Overview Common Shares QIAGEN’s common share price fluctuated widely in U.S. and European QIAGEN’s common share price fluctuated widely in U.S. and European markets in 2019 but ended the year close to markets in 2019 but ended the year close to starting price levels. The perfor- starting price levels. The performance was influenced by challenges facing sales growth, successful initiatives to QIAGEN’s common share price fluctuated widely in U.S. and European markets in 2019 but ended the year close to Common Shares improve profitability and a review of strategic options for QIAGEN. We thank shareholders for their support. starting price levels. The performance was influenced by challenges facing sales growth, successful initiatives to mance was influenced by challenges facing sales growth, successful initia- QIAGEN’s senior executives and Investor Relations team have been recognized for proactive, transparent improve profitability and a review of strategic options for QIAGEN. We thank shareholders for their support. tives to improve profitability and a review of strategic options for QIAGEN. communications with the financial community. QIAGEN’s senior executives and Investor Relations team have been recognized for proactive, transparent QIAGEN’s common share price fluctuated widely in U.S. and European markets in 2019 but ended the year close to communications with the financial community. We thank shareholders for their support. QIAGEN’s senior executives and starting price levels. The performance was influenced by challenges facing sales growth, successful initiatives to Market Environment Investor Relations team have been recognized for proactive, transparent improve profitability and a review of strategic options for QIAGEN. We thank shareholders for their support. Market Environment QIAGEN’s senior executives and Investor Relations team have been recognized for proactive, transparent communications with the financial community. Stock markets globally moved up in 2019 after a weak year in 2018. During 2019, investors responded to communications with the financial community. accommodative monetary policy including interest rate cuts by the U.S. Federal Reserve and European Central Bank, Stock markets globally moved up in 2019 after a weak year in 2018. During 2019, investors responded to as well as some additional clarity in trade relationships. Slower economic growth and geopolitical strains in 2019 accommodative monetary policy including interest rate cuts by the U.S. Federal Reserve and European Central Bank, caused uncertainties for investors but did not prevent brisk advances in stock prices in markets around the world. Market Environment as well as some additional clarity in trade relationships. Slower economic growth and geopolitical strains in 2019 caused uncertainties for investors but did not prevent brisk advances in stock prices in markets around the world. Stock markets globally moved up in 2019 after a weak year in 2018. During 2019, investors responded to Market benchmarks for the year were very strong. The S&P 500 index in the United States finished up 28.9% in accommodative monetary policy including interest rate cuts by the U.S. Federal Reserve and European Central Bank, 2019, while the NASDAQ Biotechnology Index in the U.S. finished up 26.8%. The DAX index of the 30 largest Market benchmarks for the year were very strong. The S&P 500 index in the United States finished up 28.9% in as well as some additional clarity in trade relationships. Slower economic growth and geopolitical strains in 2019 companies in Germany rose 25.5% during the year, and Germany’s TecDAX, of which QIAGEN is a member, 2019, while the NASDAQ Biotechnology Index in the U.S. finished up 26.8%. The DAX index of the 30 largest caused uncertainties for investors but did not prevent brisk advances in stock prices in markets around the world. improved by 23.0% for the year. companies in Germany rose 25.5% during the year, and Germany’s TecDAX, of which QIAGEN is a member, improved by 23.0% for the year. Market benchmarks for the year were very strong. The S&P 500 index in the United States finished up 28.9% in The molecular diagnostics and life science tools segment grew at a healthy pace in 2019. Expanding use of new 2019, while the NASDAQ Biotechnology Index in the U.S. finished up 26.8%. The DAX index of the 30 largest technologies such as next-generation sequencing (NGS), liquid biopsies and gene editing helped drive demand for The molecular diagnostics and life science tools segment grew at a healthy pace in 2019. Expanding use of new companies in Germany rose 25.5% during the year, and Germany’s TecDAX, of which QIAGEN is a member, molecular testing instruments and consumables in research. Funding for academic and pharmaceutical research grew technologies such as next-generation sequencing (NGS), liquid biopsies and gene editing helped drive demand for improved by 23.0% for the year. at mid-single digit rates. In healthcare, molecular testing continued to disseminate for precision medicine in oncology, molecular testing instruments and consumables in research. Funding for academic and pharmaceutical research grew diagnosis of infectious diseases and identification of rare diseases, despite uncertainties in reimbursement and at mid-single digit rates. In healthcare, molecular testing continued to disseminate for precision medicine in oncology, The molecular diagnostics and life science tools segment grew at a healthy pace in 2019. Expanding use of new government policies. In 2019 QIAGEN delivered 4% growth in net sales at constant exchange rates (CER) and 9% diagnosis of infectious diseases and identification of rare diseases, despite uncertainties in reimbursement and technologies such as next-generation sequencing (NGS), liquid biopsies and gene editing helped drive demand for growth in adjusted earnings per share CER. QIAGEN sales grew among its Molecular Diagnostics and Life Sciences government policies. In 2019 QIAGEN delivered 4% growth in net sales at constant exchange rates (CER) and 9% molecular testing instruments and consumables in research. Funding for academic and pharmaceutical research grew (Pharma and Academia/Applied Testing) customers, led by the Americas and Europe/Middle East/Africa regions. growth in adjusted earnings per share CER. QIAGEN sales grew among its Molecular Diagnostics and Life Sciences at mid-single digit rates. In healthcare, molecular testing continued to disseminate for precision medicine in oncology, Growth drivers included the QuantiFERON-TB tests, universal NGS technologies, QIAsymphony and QIAstat-Dx (Pharma and Academia/Applied Testing) customers, led by the Americas and Europe/Middle East/Africa regions. diagnosis of infectious diseases and identification of rare diseases, despite uncertainties in reimbursement and automation systems, and the Precision Medicine portfolio. QIAGEN intensified its focus in 2019 to allocate resources Growth drivers included the QuantiFERON-TB tests, universal NGS technologies, QIAsymphony and QIAstat-Dx government policies. In 2019 QIAGEN delivered 4% growth in net sales at constant exchange rates (CER) and 9% to the highest-potential growth drivers in its Sample to Insight portfolio while improving profitability, enhancing automation systems, and the Precision Medicine portfolio. QIAGEN intensified its focus in 2019 to allocate resources growth in adjusted earnings per share CER. QIAGEN sales grew among its Molecular Diagnostics and Life Sciences shareholder value and maintaining flexibility. to the highest-potential growth drivers in its Sample to Insight portfolio while improving profitability, enhancing (Pharma and Academia/Applied Testing) customers, led by the Americas and Europe/Middle East/Africa regions. shareholder value and maintaining flexibility. Growth drivers included the QuantiFERON-TB tests, universal NGS technologies, QIAsymphony and QIAstat-Dx Global Shares Listed in the U.S. and Europe automation systems, and the Precision Medicine portfolio. QIAGEN intensified its focus in 2019 to allocate resources to the highest-potential growth drivers in its Sample to Insight portfolio while improving profitability, enhancing Global shares listed in the U.S. and Europe QIAGEN’s global shares have been registered and traded in the United States since 1996, trading on the New York shareholder value and maintaining flexibility. Stock Exchange since January 10, 2018, after listing for more than 20 years on NASDAQ markets. The global QIAGEN’s global shares have been registered and traded in the United States since 1996, trading on the New York shares also have traded in Germany on the Frankfurt Stock Exchange since 1997, and the Prime Standard segment Stock Exchange since January 10, 2018, after listing for more than 20 years on NASDAQ markets. The global Global Shares Listed in the U.S. and Europe since its launch in 2003. The dual listing of global shares on NYSE and the Frankfurt exchange offers advantages for shares also have traded in Germany on the Frankfurt Stock Exchange since 1997, and the Prime Standard segment QIAGEN, our shareholders and employees, increasing the potential market opportunity to attract investors, since its launch in 2003. The dual listing of global shares on NYSE and the Frankfurt exchange offers advantages for QIAGEN’s global shares have been registered and traded in the United States since 1996, trading on the New York particularly those in the U.S. that can only invest in U.S. dollar-denominated investments, and enhances liquidity. QIAGEN, our shareholders and employees, increasing the potential market opportunity to attract investors, Stock Exchange since January 10, 2018, after listing for more than 20 years on NASDAQ markets. The global Unlike American Depositary Receipts (ADRs), QIAGEN’s global shares provide equal rights for all shareholders and particularly those in the U.S. that can only invest in U.S. dollar-denominated investments, and enhances liquidity. shares also have traded in Germany on the Frankfurt Stock Exchange since 1997, and the Prime Standard segment can be traded on either exchange, in U.S. dollars or euros. Unlike American Depositary Receipts (ADRs), QIAGEN’s global shares provide equal rights for all shareholders and since its launch in 2003. The dual listing of global shares on NYSE and the Frankfurt exchange offers advantages for can be traded on either exchange, in U.S. dollars or euros. QIAGEN, our shareholders and employees, increasing the potential market opportunity to attract investors, particularly those in the U.S. that can only invest in U.S. dollar-denominated investments, and enhances liquidity. Share Price and Liquidity Unlike American Depositary Receipts (ADRs), QIAGEN’s global shares provide equal rights for all shareholders and Share Price and Liquidity can be traded on either exchange, in U.S. dollars or euros. Share Price and Liquidity 16 Overview Common Shares QIAGEN’s common share price fluctuated widely in U.S. and European markets in 2019 but ended the year close to starting price levels. The performance was influenced by challenges facing sales growth, successful initiatives to improve profitability and a review of strategic options for QIAGEN. We thank shareholders for their support. QIAGEN’s senior executives and Investor Relations team have been recognized for proactive, transparent communications with the financial community. Market Environment Stock markets globally moved up in 2019 after a weak year in 2018. During 2019, investors responded to accommodative monetary policy including interest rate cuts by the U.S. Federal Reserve and European Central Bank, as well as some additional clarity in trade relationships. Slower economic growth and geopolitical strains in 2019 caused uncertainties for investors but did not prevent brisk advances in stock prices in markets around the world. Market benchmarks for the year were very strong. The S&P 500 index in the United States finished up 28.9% in 2019, while the NASDAQ Biotechnology Index in the U.S. finished up 26.8%. The DAX index of the 30 largest companies in Germany rose 25.5% during the year, and Germany’s TecDAX, of which QIAGEN is a member, improved by 23.0% for the year. The molecular diagnostics and life science tools segment grew at a healthy pace in 2019. Expanding use of new technologies such as next-generation sequencing (NGS), liquid biopsies and gene editing helped drive demand for molecular testing instruments and consumables in research. Funding for academic and pharmaceutical research grew at mid-single digit rates. In healthcare, molecular testing continued to disseminate for precision medicine in oncology, diagnosis of infectious diseases and identification of rare diseases, despite uncertainties in reimbursement and government policies. In 2019 QIAGEN delivered 4% growth in net sales at constant exchange rates (CER) and 9% growth in adjusted earnings per share CER. QIAGEN sales grew among its Molecular Diagnostics and Life Sciences (Pharma and Academia/Applied Testing) customers, led by the Americas and Europe/Middle East/Africa regions. Growth drivers included the QuantiFERON-TB tests, universal NGS technologies, QIAsymphony and QIAstat-Dx automation systems, and the Precision Medicine portfolio. QIAGEN intensified its focus in 2019 to allocate resources to the highest-potential growth drivers in its Sample to Insight portfolio while improving profitability, enhancing shareholder value and maintaining flexibility. Global Shares Listed in the U.S. and Europe QIAGEN’s global shares have been registered and traded in the United States since 1996, trading on the New York Stock Exchange since January 10, 2018, after listing for more than 20 years on NASDAQ markets. The global shares also have traded in Germany on the Frankfurt Stock Exchange since 1997, and the Prime Standard segment since its launch in 2003. The dual listing of global shares on NYSE and the Frankfurt exchange offers advantages for O V E R V I E W Common Shares QIAGEN, our shareholders and employees, increasing the potential market opportunity to attract investors, particularly those in the U.S. that can only invest in U.S. dollar-denominated investments, and enhances liquidity. Unlike American Depositary Receipts (ADRs), QIAGEN’s global shares provide equal rights for all shareholders and can be traded on either exchange, in U.S. dollars or euros. Share Price and Liquidity QIAGEN’s share price performance was mixed in 2019, declining 1.9% in U.S. dollars to $33.80 on the NYSE and rising 2.6% in euros to EUR 30.46 on the Frankfurt Stock Exchange (XETRA). Our shares continued to offer high liquidity, with average daily trading volume of approximately three million shares in 2019 (two million on the NYSE and other U.S. trading venues, and about one million on the Frankfurt Stock Exchange (XETRA) and other German exchanges). QIAGEN continued its commitment to disciplined capital allocation and shareholder returns. During 2019, QIAGEN repurchased 2.0 million shares on the Frankfurt Stock Exchange, under a program announced in January 2018. This program ended June 30, 2019, with a total of 4.9 million shares repurchased in 2018 and 2019 at an average price of EUR 32.0528 per share, for a total value of EUR 155.7 million (approximately $180 million) at the times of the purchases. As of December 31, 2019, the free float, which affects weighting of QIAGEN shares in various indices, was approximately 96%. Shareholder Structure QIAGEN has a global investor base comprised of more than 300 identified institutional investors, including about half in North America, about one-third in Europe and the remaining shares in the Asia-Pacific/Japan region. Members of the Managing Board and the Supervisory Board in total held about 2% of QIAGEN’s outstanding common shares at the end of 2019. Annual Shareholder Meeting At the Annual General Meeting on June 17, 2019, in Venlo, the Netherlands, shareholders voted in favor of all resolutions proposed by the Board of Directors, in many cases with majorities above 95% of the shares represented at the meeting. Shareholders present or represented at the meeting held approximately 161.9 million shares, 70% of QIAGEN’s approximately 230.8 million issued shares as of the record date for the meeting. Details of attendance and voting results are available at https://corporate.QIAGEN.com. Investor Relations and Engagement with Shareholders QIAGEN is committed to offering shareholders, analysts and communities around the world transparent, comprehensive and readily accessible information on our performance, strategy and future prospects, as well as our vision and mission. Interactions with existing and potential investors continued at an active pace through 2019, with QIAGEN executives taking part in many individual discussions during roadshows and investor conferences around the world. QIAGEN hosted an Analyst and Investor Day in New York on June 20, 2019, attended by about 100 market participants. Some investors and analysts also visited our sites in Hilden, Germany, and Germantown, Maryland, during 2019. Approximately 25 securities analysts, based in the United States, France, Germany and the United Kingdom, followed QIAGEN in 2019. QIAGEN Share Price Development and Average Trading Volume - NYSE 2019 Year-end price High Low Average daily trading volume (in million shares) $ 33.80 $ 43.16 $ 25.04 1.56 17 2019QIAGEN’s share price performance was mixed in 2019, declining 1.9% in U.S. dollars to $33.80 on the NYSE and rising 2.6% in euros to EUR 30.46 on the Frankfurt Stock Exchange (XETRA). Our shares continued to offer high liquidity, with average daily trading volume of approximately three million shares in 2019 (two million on the NYSE and other U.S. trading venues, and about one million on the Frankfurt Stock Exchange (XETRA) and other German exchanges). QIAGEN continued its commitment to disciplined capital allocation and shareholder returns. During 2019, QIAGEN repurchased 2.0 million shares on the Frankfurt Stock Exchange, under a program announced in January 2018. This program ended June 30, 2019, with a total of 4.9 million shares repurchased in 2018 and 2019 at an average price of EUR 32.0528 per share, for a total value of EUR 155.7 million (approximately $180 million) at the times of the purchases. As of December 31, 2019, the free float, which affects weighting of QIAGEN shares in various indices, was approximately 96%. Shareholder Structure QIAGEN has a global investor base comprised of more than 300 identified institutional investors, including about half in North America, about one-third in Europe and the remaining shares in the Asia-Pacific/Japan region. Members of the Managing Board and the Supervisory Board in total held about 2% of QIAGEN’s outstanding common shares at the end of 2019. Annual Shareholder Meeting At the Annual General Meeting on June 17, 2019, in Venlo, the Netherlands, shareholders voted in favor of all resolutions proposed by the Board of Directors, in many cases with majorities above 95% of the shares represented at the meeting. Shareholders present or represented at the meeting held approximately 161.9 million shares, 70% of QIAGEN’s approximately 230.8 million issued shares as of the record date for the meeting. Details of attendance and voting results are available at https://corporate.QIAGEN.com. Investor Relations and Engagement with Shareholders QIAGEN is committed to offering shareholders, analysts and communities around the world transparent, comprehensive and readily accessible information on our performance, strategy and future prospects, as well as our vision and mission. Interactions with existing and potential investors continued at an active pace through 2019, with QIAGEN executives taking part in many individual discussions during roadshows and investor conferences around the world. QIAGEN hosted an Analyst and Investor Day in New York on June 20, 2019, attended by about 100 market participants. Some investors and analysts also visited our sites in Hilden, Germany, and Germantown, Maryland, during 2019. Approximately 25 securities analysts, based in the United States, France, Germany and the United Kingdom, followed QIAGEN in 2019. QIAGEN Share Price Development and Average Trading Volume - NYSE 2019 Year-end price High Low Average daily trading volume (in million shares) $ 33.80 $ 43.16 $ 25.04 1.56 QIAGEN Share Price Development and Average Trading Volume - Frankfurt Stock Exchange (XETRA) 2019 Year-end price High Low Average daily trading volume (in million shares) € 30.46 € 39.19 € 22.54 0.60 18 20192019O V E R V I E W Common Shares QIAGEN Share Price Development and Average Trading Volume - Frankfurt Stock Exchange QIAGEN Share Price Development and Average Trading Volume - Frankfurt Stock Exchange (XETRA) 2019 (XETRA) 2019 Year-end price Year-end price High High Low Low Average daily trading volume (in million shares) Average daily trading volume (in million shares) € 30.46 € 30.46 € 39.19 € 39.19 € 22.54 € 22.54 0.60 0.60 19 20192019Key Share Data Year-end market capitalization (in $ million) Year-end market capitalization (in € million) Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID United States Germany France England Other 49% GARP 11% Value 3% Index 14% Growth 18% Other Non-Institutional 5% Non-Institutional Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID 7,698 6,937 6% 5% 18% 64% 2% 5% Key Share Data Key Share Data Year-end market capitalization (in $ million) Year-end market capitalization (in € million) Year-end market capitalization (in $ million) 7,698 Year-end market capitalization (in € million) 6,937 Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID United States Germany France England Other 49% GARP 11% Value 3% Index 14% Growth 18% Other United States Germany France England Other Non-Institutional 5% Non-Institutional Non-Institutional 6% 5% 18% 64% 2% 5% 49% GARP 11% Value 3% Index 14% Growth 18% Other 5% Non-Institutional Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID Source: QIAGEN Shareholder ID 7,698 6,937 6% 5% 18% 64% 2% 5% 20 20192019201949%11%3%14%18%5%6%5%18%64%2%5%49%11%3%14%18%United StatesGermanyFranceEnglandOtherNon-institutional18%64%GARPValueIndexGrowthOtherNon-institutionalO V E R V I E W Common Shares 21 Management Report 024 Business and Operating Environment 054 Opportunities and Risks 076 Performance Review 088 Human Resources 092 Non-Financial Statement 108 Future Perspectives M A N A G E M E N T R E P O R T Business and Operating Environment 23 Management Report Management Report Business and Operating Environment Business and Operating Environment QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights faster, better and more efficiently - from the raw biological sample to the final interpreted result. faster, better and more efficiently - from the raw biological sample to the final interpreted result. We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the increasing volumes and complexity of biological information, in keeping with our vision of making improvements in increasing volumes and complexity of biological information, in keeping with our vision of making improvements in life possible. life possible. QIAGEN began operations in 1986 as a pioneer in the emerging biotechnology sector, introducing a novel method 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 that standardized and accelerated extraction and purification of nucleic acids from biological samples. As molecular biology and genomic knowledge have grown to influence many areas of life, QIAGEN has expanded to serve the biology and genomic knowledge have 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 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, 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 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 analysis, such as identifying the genetic information of a pathogen or a gene mutation in a tumor. QIAGEN’s industry-leading Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and industry-leading Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in seamless and cost-effective molecular testing workflows - from Sample to Insight. seamless and cost-effective molecular testing workflows - from Sample to Insight. Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and growing QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and growing needs in the market, partnering with researchers and Pharma companies, and acquiring companies or technologies 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 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 $10 products for customers across the continuum of life science research and molecular diagnostics totals more than $10 billion. billion. We have funded our growth through internally generated funds, debt offerings, and private and public sales of We have funded our growth through internally generated funds, debt offerings, and private and public sales of equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol QGEN and on the Frankfurt Prime Standard as QIA. 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 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 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 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. 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 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 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. the website or any portion of the website by reference into this Annual Report. 24 Management Report Business and Operating Environment QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights faster, better and more efficiently - from the raw biological sample to the final interpreted result. We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the increasing volumes and complexity of biological information, in keeping with our vision of making improvements in life possible. 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 and genomic knowledge have 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 Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in seamless and cost-effective molecular testing workflows - from Sample to Insight. Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and 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 $10 billion. We have funded our growth through internally generated funds, debt offerings, and private and public sales of equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol Business and Operating Environment M A N A G E M E N T R E P O R T 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. On March 3, 2020, QIAGEN and Thermo Fisher Scientific Inc. (NYSE: TMO) announced that their boards of directors, as well as the managing board of QIAGEN N.V., unanimously approved Thermo Fisher’s proposal to acquire QIAGEN for €39 per share in cash. The offer price represents a premium of approximately 23% to the closing price of QIAGEN’s common stock on the Frankfurt Prime Standard on March 2, 2020, the last trading day prior to the announcement of the transaction. Thermo Fisher will commence a tender offer to acquire all of the ordinary shares of QIAGEN. The transaction values QIAGEN at approximately $11.5 billion at current exchange rates, which includes the assumption of approximately $1.4 billion of net debt. The transaction, which is expected to be completed in the first half of 2021, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of QIAGEN’s shareholders, and completion of the tender offer. Operating Environment in 2019 Global economic growth decelerated in 2019 amid weakness in global trade and investment, providing a challenging business environment for QIAGEN operations. Real Gross Domestic Product (GDP) for the world grew an estimated 2.4% in 2019, decelerating from 3.0% in 2018 and 3.2% in 2017, the World Bank reported. Advanced economies including the United States, the Euro area and Japan delivered slower growth in 2019. Emerging markets as a whole also decelerated, with slower growth in China, India and many developing countries. Growth in global trade slowed in 2019 amid challenges including tariffs, geopolitical developments and weaker demand in Europe and Asia, although trade tensions eased somewhat late in the year. Central banks including the U.S. Federal Reserve and the European Central Bank reduced interest rates and took other actions in 2019 to ease monetary policy and counter the slowdown in economic growth. The U.S. dollar strengthened against other currencies in 2018, with a negative impact of about 2 percentage points on growth in QIAGEN sales reported in dollars. As genomic knowledge expands exponentially, molecular testing continues to grow to meet needs for insights in diagnostics, life science research, pharmaceutical R&D and public safety. Technologies for next-generation sequencing (NGS) and polymerase chain reaction (PCR) continued to disseminate and evolve in 2019, making molecular testing more accessible, faster and more efficient. Molecular diagnostics kept growing dynamically and expanding into new areas of medicine – enabling clinicians to evaluate and monitor cancers, infectious diseases, immune status, and prenatal or neonatal health. In 2019, 11 of the 44 new drugs approved by the FDA were targeted with biomarker testing; in addition, 15 existing drugs gained new indications targeted with biomarker testing. Reimbursement for precision medicine, however, remained a challenge. In Academia, spending on NGS and other molecular technologies continued to grow despite perennial uncertainties about research funding. Pharma industry spending on R&D also grew in 2019, with DNA and RNA tests providing critical insights for drug discovery and clinical trials. The migration of genomic technologies from basic research into the mainstream remains a powerful driver for long-term growth of the industry, increasing the need for scalable, user-friendly and efficient workflows from beginning to end in molecular testing. QIAGEN has recently achieved a number of milestones by continuing to focus on strategic growth initiatives: › 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. Guidelines from the World Health Organization (WHO) and leading clinical organizations now recommend screening of high-risk individuals for latent TB infection and preventive treatment as a component of TB control 25 programs. grew 8% in 2019 to $240 million. › Sales of the QuantiFERON-TB franchise, including the fourth-generation QuantiFERON-TB Gold Plus (QFT-Plus), Economic EnvironmentIndustry EnvironmentRecent DevelopmentsSustaining the rapid growth of our QuantiFERON-TB franchise:On March 3, 2020, QIAGEN and Thermo Fisher Scientific Inc. (NYSE: TMO) announced that their boards of directors, as well as the managing board of QIAGEN N.V., unanimously approved Thermo Fisher’s proposal to acquire QIAGEN for €39 per share in cash. The offer price represents a premium of approximately 23% to the closing price of QIAGEN’s common stock on the Frankfurt Prime Standard on March 2, 2020, the last trading day prior to the announcement of the transaction. Thermo Fisher will commence a tender offer to acquire all of the ordinary shares of QIAGEN. The transaction values QIAGEN at approximately $11.5 billion at current exchange rates, which includes the assumption of approximately $1.4 billion of net debt. The transaction, which is expected to be completed in the first half of 2021, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of QIAGEN’s shareholders, and completion of the tender offer. Operating Environment in 2019 Global economic growth decelerated in 2019 amid weakness in global trade and investment, providing a challenging business environment for QIAGEN operations. Real Gross Domestic Product (GDP) for the world grew an estimated 2.4% in 2019, decelerating from 3.0% in 2018 and 3.2% in 2017, the World Bank reported. Advanced economies including the United States, the Euro area and Japan delivered slower growth in 2019. Emerging markets as a whole also decelerated, with slower growth in China, India and many developing countries. Growth in global trade slowed in 2019 amid challenges including tariffs, geopolitical developments and weaker demand in Europe and Asia, although trade tensions eased somewhat late in the year. Central banks including the U.S. Federal Reserve and the European Central Bank reduced interest rates and took other actions in 2019 to ease monetary policy and counter the slowdown in economic growth. The U.S. dollar strengthened against other currencies in 2018, with a negative impact of about 2 percentage points on growth in QIAGEN sales reported in dollars. As genomic knowledge expands exponentially, molecular testing continues to grow to meet needs for insights in diagnostics, life science research, pharmaceutical R&D and public safety. Technologies for next-generation sequencing (NGS) and polymerase chain reaction (PCR) continued to disseminate and evolve in 2019, making molecular testing more accessible, faster and more efficient. Molecular diagnostics kept growing dynamically and expanding into new areas of medicine – enabling clinicians to evaluate and monitor cancers, infectious diseases, immune status, and prenatal or neonatal health. In 2019, 11 of the 44 new drugs approved by the FDA were targeted with biomarker testing; in addition, 15 existing drugs gained new indications targeted with biomarker testing. Reimbursement for precision medicine, however, remained a challenge. In Academia, spending on NGS and other molecular technologies continued to grow despite perennial uncertainties about research funding. Pharma industry spending on R&D also grew in 2019, with DNA and RNA tests providing critical insights for drug discovery and clinical trials. The migration of genomic technologies from basic research into the mainstream remains a powerful driver for long-term growth of the industry, increasing the need for scalable, user-friendly and efficient workflows from beginning to end in molecular testing. QIAGEN has recently achieved a number of milestones by continuing to focus on strategic growth initiatives: › › › › › › › › › 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. Guidelines from the World Health Organization (WHO) and leading clinical organizations now recommend screening of high-risk individuals for latent TB infection and preventive treatment as a component of TB control programs. Sales of the QuantiFERON-TB franchise, including the fourth-generation QuantiFERON-TB Gold Plus (QFT-Plus), grew 8% in 2019 to $240 million. In November 2019 QIAGEN and DiaSorin announced the U.S. launch of the LIAISON QuantiFERON-TB Gold Plus test as a streamlined, highly automated option for latent TB screening programs from small-scale to high- throughput. QIAGEN and DiaSorin introduced QFT-Plus on LIAISON analyzers in Europe in late 2018, added the U.S. market following the recent FDA approval, and are planning availability for China in 2020. In October 2019 the Stop TB Partnership’s Global Drug Facility (GDF) added QFT-Plus to its diagnostic catalog, opening a new channel to reach countries with a high incidence of TB but limited resources. The GDF helps match global demand with funding from donors, governments and non-governmental organizations. QIAGEN continues to innovate in latent tuberculosis testing. In partnership with Ellume, QIAGEN is developing QuantiFERON-TB Access, a simplified, low-cost test offering ultrasensitive digital detection in a workflow designed for cost-efficiency and use in areas lacking laboratory infrastructure. The product will further advance global TB control efforts, particularly in low-resource and high-burden regions. Commercialization is expected to begin in 2020. QIAGEN continues to expand our global presence in the fast-growing market for next-generation sequencing (NGS). In 2019 we shifted our strategy and reoriented our NGS activities to focus on opportunities to build upon our strengths as a leader in "universal" technologies for preparing samples, analyzing genomic variations and interpreting sequencing data. NGS-related sales in 2019 achieved QIAGEN’s goal of more than $180 million, compared to over $140 million in 2018. Demand for our universal NGS technologies and Digital Insights from bioinformatics applications drove this growth. In October 2019 QIAGEN and Illumina, Inc. announced a 15-year partnership to broaden the use of NGS-based in vitro diagnostic kits to deliver insights for clinical decision-making, including companion diagnostics for precision medicine. Illumina and QIAGEN will cooperate to commercialize a menu of clinically validated workflows that combine QIAGEN’s proprietary content and digital solutions for use with Illumina’s MiSeq Dx, NextSeq 550Dx and future diagnostic systems. In the coming years we expect the partnership with Illumina, whose sequencing instruments are in widespread use worldwide, to expand our global presence in clinical decision- making using NGS technology. QIAGEN also announced in October 2019 that we have discontinued development of new NGS instruments. We will focus NGS-related development resources on maximizing the new Illumina partnership for NGS-based diagnostic kits, as well as expanding our offering of universal NGS consumables for use with any sequencer. QIAGEN intends to continue supporting and servicing customers of the GeneReader NGS System, which is available as a complete system for the processing of smaller targeted gene panels, but we do not expect to develop new sequencing platforms at this time. › 26 We continue to expand QIAGEN’s broad portfolio of universal, or platform-agnostic, NGS solutions. Among the new products introduced in 2019 are QIAseq Multimodal Panels, the industry’s only consolidated workflow to simultaneously detect DNA variants, RNA fusions and gene expression levels from a single sample; QIAseq FastSelect kits to remove unwanted RNA from samples, addressing critical bottlenecks in research into RNA and gene expression; and the QIAseq Expanded Carrier Screening Panel, enabling identification of genetic drivers of more than 200 rare and inherited diseases. › QIAGEN continues to lead our industry in precision medicine, 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 Sample to Insight tests supporting clinical trials and, with regulatory approvals, patient care. › In 2019 three of our co-development partnerships bore fruit in newly approved companion diagnostics in oncology. We introduced the therascreen PIK3CA RGQ PCR Kit in the U.S. as a companion diagnostic to aid in identifying patients for a new breast cancer therapy developed by Novartis (launched in Europe in early 2020); the therascreen FGFR RGQ RT-PCR Kit to help identify U.S. urothelial cancer patients for Janssen Biotech’s newly approved FGFR kinase inhibitor; and the therascreen EGFR RGQ PCR Kit in Japan - our first companion diagnostic Economic EnvironmentIndustry EnvironmentRecent DevelopmentsSustaining the rapid growth of our QuantiFERON-TB franchise:Driving growth in next-generation sequencing (NGS) with greater focus:Reaping the value of genomic insights for Precision Medicine:› In November 2019 QIAGEN and DiaSorin announced the U.S. launch of the LIAISON QuantiFERON-TB Gold Plus test as a streamlined, highly automated option for latent TB screening programs from small-scale to high- throughput. QIAGEN and DiaSorin introduced QFT-Plus on LIAISON analyzers in Europe in late 2018, added the U.S. market following the recent FDA approval, and are planning availability for China in 2020. › In October 2019 the Stop TB Partnership’s Global Drug Facility (GDF) added QFT-Plus to its diagnostic catalog, opening a new channel to reach countries with a high incidence of TB but limited resources. The GDF helps match global demand with funding from donors, governments and non-governmental organizations. › QIAGEN continues to innovate in latent tuberculosis testing. In partnership with Ellume, QIAGEN is developing QuantiFERON-TB Access, a simplified, low-cost test offering ultrasensitive digital detection in a workflow designed for cost-efficiency and use in areas lacking laboratory infrastructure. The product will further advance global TB control efforts, particularly in low-resource and high-burden regions. Commercialization is expected to begin in 2020. › QIAGEN continues to expand our global presence in the fast-growing market for next-generation sequencing (NGS). In 2019 we shifted our strategy and reoriented our NGS activities to focus on opportunities to build upon our strengths as a leader in "universal" technologies for preparing samples, analyzing genomic variations and interpreting sequencing data. › NGS-related sales in 2019 achieved QIAGEN’s goal of more than $180 million, compared to over $140 million in 2018. Demand for our universal NGS technologies and Digital Insights from bioinformatics applications drove this growth. › In October 2019 QIAGEN and Illumina, Inc. announced a 15-year partnership to broaden the use of NGS-based in vitro diagnostic kits to deliver insights for clinical decision-making, including companion diagnostics for precision medicine. Illumina and QIAGEN will cooperate to commercialize a menu of clinically validated workflows that combine QIAGEN’s proprietary content and digital solutions for use with Illumina’s MiSeq Dx, NextSeq 550Dx and future diagnostic systems. In the coming years we expect the partnership with Illumina, whose sequencing instruments are in widespread use worldwide, to expand our global presence in clinical decision- making using NGS technology. M A N A G E M E N T R E P O R T Business and Operating Environment › › › › › › › › › › QIAGEN also announced in October 2019 that we have discontinued development of new NGS instruments. We will focus NGS-related development resources on maximizing the new Illumina partnership for NGS-based diagnostic kits, as well as expanding our offering of universal NGS consumables for use with any sequencer. QIAGEN intends to continue supporting and servicing customers of the GeneReader NGS System, which is available as a complete system for the processing of smaller targeted gene panels, but we do not expect to develop new sequencing platforms at this time. We continue to expand QIAGEN’s broad portfolio of universal, or platform-agnostic, NGS solutions. Among the new products introduced in 2019 are QIAseq Multimodal Panels, the industry’s only consolidated workflow to simultaneously detect DNA variants, RNA fusions and gene expression levels from a single sample; QIAseq FastSelect kits to remove unwanted RNA from samples, addressing critical bottlenecks in research into RNA and gene expression; and the QIAseq Expanded Carrier Screening Panel, enabling identification of genetic drivers of more than 200 rare and inherited diseases. QIAGEN continues to lead our industry in precision medicine, 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 Sample to Insight tests supporting clinical trials and, with regulatory approvals, patient care. In 2019 three of our co-development partnerships bore fruit in newly approved companion diagnostics in oncology. We introduced the therascreen PIK3CA RGQ PCR Kit in the U.S. as a companion diagnostic to aid in identifying patients for a new breast cancer therapy developed by Novartis (launched in Europe in early 2020); the therascreen FGFR RGQ RT-PCR Kit to help identify U.S. urothelial cancer patients for Janssen Biotech’s newly approved FGFR kinase inhibitor; and the therascreen EGFR RGQ PCR Kit in Japan - our first companion diagnostic approval there - to help guide the use of a new Pfizer therapy in non-small cell lung cancer (NSCLC). All three run on the Rotor-Gene Q, a module in our QIAsymphony system. A partnership with Inovio Pharmaceuticals, launched in May 2019, will co-develop a liquid-biopsy companion diagnostic for Inovio’s DNA-based immunotherapy compound, which has potential to be the first treatment for human papillomavirus (HPV) infection of the cervix and first non-surgical treatment for precancerous lesions associated with the virus. A new collaboration with Amgen announced in early 2020 will develop tissue-based companion diagnostics to identify non-small cell lung cancer patients who would benefit from Amgen's investigational cancer treatment AMG 510. The test will identify patients with cancers that have the KRAS G12C genetic mutation, a common cause of cancer. We expanded our Day-One Lab Readiness network in 2019 through collaborations with CLIA-certified laboratories to ensure immediate patient access to QIAGEN companion diagnostics upon approval of new oncology drugs. Among the clinical labs now participating to accelerate patient access are LabCorp, Quest, NeoGenomics, SRL in Japan, and others. QIAGEN has strategically expanded our offering of automation solutions to enter growing segments of the life science and molecular diagnostics markets, as well as to meet the diverse, rapidly evolving needs of customers. The QIAsymphony system, a cost-effective modular automation solution that integrates PCR molecular testing from sample processing to final insights, surpassed our goal of 2,500 cumulative placements by year-end 2019. Related consumables grew globally, including an extensive menu of in vitro diagnostic tests in infectious disease, oncology and transplant care. The sample processing module, QIAsymphony SP, is a market-leading "front end" solution for reliable automated handling of samples, including liquid biopsies, for PCR and next-generation sequencing. The QIAstat-Dx system is approaching 1,000 cumulative placements, providing fast, cost-effective and easy-to-use syndromic testing with novel Sample to Insight solutions. In May 2019, we launched the platform in the United States with an FDA-cleared multiplex panel for differential diagnosis of respiratory infections. QIAstat-Dx was introduced in Europe in 2018 with CE-IVD marked panels for respiratory and gastrointestinal infections. The system produced $15 million of sales in 2019. In early 2020, QIAGEN created a version of the QIAstat-Dx respiratory panel for potential use in testing of patients for COVID-19 in China and other markets using the QIAstat-Dx platform. Additional diagnostic panels are planned to launch in 2020 to enhance the value to clinics and physician offices. 27 › The NeuMoDx 96 and 288 Molecular Systems are providing fully integrated, mid- to high-throughput PCR analysis systems for clinical laboratories, and now have eight CE-IVD cleared diagnostic kits covering a range of infectious diseases. QIAGEN has the right to commercialize these platforms in Europe and other markets outside the U.S. › Our development of disruptive new systems for digital PCR is on track to begin commercialization in 2020, combining proprietary QIAGEN technologies with assets acquired from Formulatrix in early 2019. Our digital PCR initiative aims to provide fully-integrated solutions that simplify workflows for laboratories, offer higher throughput and multiplexing, and provide customers with favorable costs for instruments and consumables. › As genomic data increasingly influences decisions in science and healthcare, QIAGEN’s Digital Insights solutions are driving growth with content-enabled bioinformatics that transform raw NGS data into actionable insights for customers. › Researchers worldwide use our software and industry-leading knowledge bases to accelerate innovation, guide experiments and translate genomic results into actions that enhance clinical care. Starting in 2014, QIAGEN has built a comprehensive, easy-to-use toolbox through acquisitions of Ingenuity, CLC bio, BIOBASE and OmicSoft. Digital Insights solutions are marketed as standalone products and integrated into QIAGEN Sample to Insight workflows to meet customer needs. Driving growth in next-generation sequencing (NGS) with greater focus:Reaping the value of genomic insights for Precision Medicine:Expanding QIAGEN automation solutions to serve growing market needs:Digital Insights solutions transforming raw data into valuable insights:approval there - to help guide the use of a new Pfizer therapy in non-small cell lung cancer (NSCLC). All three run on the Rotor-Gene Q, a module in our QIAsymphony system. › A partnership with Inovio Pharmaceuticals, launched in May 2019, will co-develop a liquid-biopsy companion diagnostic for Inovio’s DNA-based immunotherapy compound, which has potential to be the first treatment for human papillomavirus (HPV) infection of the cervix and first non-surgical treatment for precancerous lesions associated with the virus. › A new collaboration with Amgen announced in early 2020 will develop tissue-based companion diagnostics to identify non-small cell lung cancer patients who would benefit from Amgen's investigational cancer treatment AMG 510. The test will identify patients with cancers that have the KRAS G12C genetic mutation, a common cause of cancer. › We expanded our Day-One Lab Readiness network in 2019 through collaborations with CLIA-certified laboratories to ensure immediate patient access to QIAGEN companion diagnostics upon approval of new oncology drugs. Among the clinical labs now participating to accelerate patient access are LabCorp, Quest, NeoGenomics, SRL in Japan, and others. › › › › › › › › › › › QIAGEN has strategically expanded our offering of automation solutions to enter growing segments of the life science and molecular diagnostics markets, as well as to meet the diverse, rapidly evolving needs of customers. The QIAsymphony system, a cost-effective modular automation solution that integrates PCR molecular testing from sample processing to final insights, surpassed our goal of 2,500 cumulative placements by year-end 2019. Related consumables grew globally, including an extensive menu of in vitro diagnostic tests in infectious disease, oncology and transplant care. The sample processing module, QIAsymphony SP, is a market-leading "front end" solution for reliable automated handling of samples, including liquid biopsies, for PCR and next-generation sequencing. The QIAstat-Dx system is approaching 1,000 cumulative placements, providing fast, cost-effective and easy-to-use syndromic testing with novel Sample to Insight solutions. In May 2019, we launched the platform in the United States with an FDA-cleared multiplex panel for differential diagnosis of respiratory infections. QIAstat-Dx was introduced in Europe in 2018 with CE-IVD marked panels for respiratory and gastrointestinal infections. The system produced $15 million of sales in 2019. In early 2020, QIAGEN created a version of the QIAstat-Dx respiratory panel for potential use in testing of patients for COVID-19 in China and other markets using the QIAstat-Dx platform. Additional diagnostic panels are planned to launch in 2020 to enhance the value to clinics and physician offices. The NeuMoDx 96 and 288 Molecular Systems are providing fully integrated, mid- to high-throughput PCR analysis systems for clinical laboratories, and now have eight CE-IVD cleared diagnostic kits covering a range of infectious diseases. QIAGEN has the right to commercialize these platforms in Europe and other markets outside the U.S. Our development of disruptive new systems for digital PCR is on track to begin commercialization in 2020, combining proprietary QIAGEN technologies with assets acquired from Formulatrix in early 2019. Our digital PCR initiative aims to provide fully-integrated solutions that simplify workflows for laboratories, offer higher throughput and multiplexing, and provide customers with favorable costs for instruments and consumables. As genomic data increasingly influences decisions in science and healthcare, QIAGEN’s Digital Insights solutions are driving growth with content-enabled bioinformatics that transform raw NGS data into actionable insights for customers. Researchers worldwide use our software and industry-leading knowledge bases to accelerate innovation, guide experiments and translate genomic results into actions that enhance clinical care. Starting in 2014, QIAGEN has built a comprehensive, easy-to-use toolbox through acquisitions of Ingenuity, CLC bio, BIOBASE and OmicSoft. Digital Insights solutions are marketed as standalone products and integrated into QIAGEN Sample to Insight workflows to meet customer needs. In June 2019, our industry-leading QIAGEN Clinical Insight (QCI), a clinical decision support platform for interpretation and reporting of next-generation sequencing data, achieved a milestone of more than 1 million patient test cases analyzed and interpreted. We continually update and expand the content available through QCI. After acquiring N-of-One, Inc. in January 2019, we integrated N-of-One’s services and somatic cancer database, including medical interpretation and real-world evidence from more than 125,000 anonymized patient samples, into QIAGEN Clinical Insight. As a leader in sample technologies enabling laboratories to obtain highest-quality DNA and RNA for molecular testing, QIAGEN continues to innovate with front-end solutions in growing fields. QIAGEN technologies process an estimated 50,000 biological samples a day. In 2019 we rolled out several new products solving tough challenges for customers, such as new tools to accelerate RNA sequencing for research and liquid biopsies for efficient, less-invasive diagnosis. Our QIAcube Connect system, launched in January 2019 to amplify the benefits of automated sample processing for customers, reached more than 660 placements by year-end, with strong Life Sciences demand. Building on over 8,000 placements of our first-generation QIAcube instrument, QIAcube Connect delivers a new level of digitization and ease of use with thousands of protocols, assuring full standardization and freeing customers from repetitive manual processing. QIAGEN offers an innovative portfolio of liquid biopsy technologies for research and clinical applications. Liquid biopsies extract and purify DNA and RNA from blood or other body fluids, as an alternative to costly and sometimes impractical tissue biopsies. In 2019, our therascreen PIK3CA RGQ PCR Kit became the first FDA- approved liquid biopsy test using blood plasma to guide treatment decisions in breast cancer. › 28 In October 2019, we launched innovative new QIAseq FastSelect kits for customers in Life Sciences to remove unwanted RNA from biological samples for faster, simpler library preparation. The solutions address critical bottlenecks in RNA sequencing, enabling scientists to achieve more on-target NGS reads and more efficient use of resources. › QIAGEN implemented several organizational changes and portfolio initiatives in 2019 with the aim of driving future growth, efficiency and profitability. These actions prioritized resource allocation to streamline operations, strengthen the focus on execution and improve operating margins. › In October 2019, QIAGEN stopped internal development of new instruments for next-generation sequencing, restructuring to allocate resources from work on new proprietary NGS systems to QIAGEN's partnership with Illumina to commercialize in vitro diagnostic kits running on Illumina’s clinical NGS platforms, as well as to universal NGS portfolio. › Streamlining initiatives in 2019 aimed to create a more focused, agile and efficient global operation. Changes included shifting worldwide production into a regional structure, integrating global sales resources into the three Business Areas (Life Sciences, Molecular Diagnostics and QIAGEN Digital Insights), and moving additional activities to QIAGEN Business Services centers in Poland and the Philippines. › Digitization of a wide range of customer interactions continues to progress, with approximately 43% of 2019 sales coming via the QIAGEN website and other online channels. Products interpretation. QIAGEN's leadership in Sample to Insight solutions for molecular testing leverages our product portfolio across a wide range of applications and customer classes. We provide more than 500 core consumable products (sample and assay kits), instruments and automation systems, and digital insight solutions (or bioinformatics) for analysis and These diverse revenue streams comprise two main categories: , approximately 89% of net sales in 2019, including sample and assay kits, digital insights, royalties, co-development milestone Expanding QIAGEN automation solutions to serve growing market needs:Digital Insights solutions transforming raw data into valuable insights:Pioneering differentiated sample technologies and liquid biopsy solutions:Executing initiatives to prioritize resource allocation and create value:Consumables and related revenueslfd› In June 2019, our industry-leading QIAGEN Clinical Insight (QCI), a clinical decision support platform for interpretation and reporting of next-generation sequencing data, achieved a milestone of more than 1 million patient test cases analyzed and interpreted. We continually update and expand the content available through QCI. After acquiring N-of-One, Inc. in January 2019, we integrated N-of-One’s services and somatic cancer database, including medical interpretation and real-world evidence from more than 125,000 anonymized patient samples, into QIAGEN Clinical Insight. › As a leader in sample technologies enabling laboratories to obtain highest-quality DNA and RNA for molecular testing, QIAGEN continues to innovate with front-end solutions in growing fields. QIAGEN technologies process an estimated 50,000 biological samples a day. In 2019 we rolled out several new products solving tough challenges for customers, such as new tools to accelerate RNA sequencing for research and liquid biopsies for efficient, less-invasive diagnosis. Business and Operating Environment M A N A G E M E N T R E P O R T › › › › › › Our QIAcube Connect system, launched in January 2019 to amplify the benefits of automated sample processing for customers, reached more than 660 placements by year-end, with strong Life Sciences demand. Building on over 8,000 placements of our first-generation QIAcube instrument, QIAcube Connect delivers a new level of digitization and ease of use with thousands of protocols, assuring full standardization and freeing customers from repetitive manual processing. QIAGEN offers an innovative portfolio of liquid biopsy technologies for research and clinical applications. Liquid biopsies extract and purify DNA and RNA from blood or other body fluids, as an alternative to costly and sometimes impractical tissue biopsies. In 2019, our therascreen PIK3CA RGQ PCR Kit became the first FDA- approved liquid biopsy test using blood plasma to guide treatment decisions in breast cancer. In October 2019, we launched innovative new QIAseq FastSelect kits for customers in Life Sciences to remove unwanted RNA from biological samples for faster, simpler library preparation. The solutions address critical bottlenecks in RNA sequencing, enabling scientists to achieve more on-target NGS reads and more efficient use of resources. QIAGEN implemented several organizational changes and portfolio initiatives in 2019 with the aim of driving future growth, efficiency and profitability. These actions prioritized resource allocation to streamline operations, strengthen the focus on execution and improve operating margins. In October 2019, QIAGEN stopped internal development of new instruments for next-generation sequencing, restructuring to allocate resources from work on new proprietary NGS systems to QIAGEN's partnership with Illumina to commercialize in vitro diagnostic kits running on Illumina’s clinical NGS platforms, as well as to universal NGS portfolio. Streamlining initiatives in 2019 aimed to create a more focused, agile and efficient global operation. Changes included shifting worldwide production into a regional structure, integrating global sales resources into the three Business Areas (Life Sciences, Molecular Diagnostics and QIAGEN Digital Insights), and moving additional activities to QIAGEN Business Services centers in Poland and the Philippines. › Digitization of a wide range of customer interactions continues to progress, with approximately 43% of 2019 sales coming via the QIAGEN website and other online channels. Products QIAGEN's leadership in Sample to Insight solutions for molecular testing leverages our product portfolio across a wide range of applications and customer classes. We provide more than 500 core consumable products (sample and assay kits), instruments and automation systems, and digital insight solutions (or bioinformatics) for analysis and interpretation. These diverse revenue streams comprise two main categories: 89% of net sales in 2019, including sample and assay kits, digital insights, royalties, co-development milestone payments and services; and , approximately 11% of net sales in 2019, including related services and contracts. , approximately QIAGEN automation systems streamline molecular testing using consumables in efficient workflows and carrying customers through the process from Sample to Insight. Some QIAGEN consumables are designed to run on QIAGEN instruments, while others are universal kits designed for use with any molecular testing platform. Our broad portfolio of sample technologies isolate and process DNA, RNA and proteins from blood, tissue and other biological materials to prepare for a wide variety of molecular testing needs in research and clinical applications. Primary sample technology consumables 29 • Nucleic stabilization and purification kits designed for primary • QIAamp • DNeasy • RNeasy sample materials (DNA, RNA, proteins), manual and automated processing for genotyping, gene expression, viral and bacterial analysis • PAXgene • AdnaTest • Tiangen • Mainly based on silica membranes and buffers • Gentra Puregene • Oligotex • AllPrep • BioSprint • Kits and components for purification of nucleic acids and proteins • QIAprep • QIAquick • DyeEx from secondary sample materials (e.g. gel, plasmid DNA, proteins) Secondary sample technology consumables • Molecular biology reagents • Qproteome • BioMag • Ni-NTA • QIAGEN Plasmid Plus • QIAfilter • R.E.A.L. • HiSpeed • EndoFree Sample technology instruments • Instruments for nucleic acid purification and accessories • QIAsymphony SP • QIAcube Connect • QIAcube HT • QIAscout • Centrifuges • TissueLyser Targeted or multiplex assay technologies deploy a variety of methods to amplify biomolecules and make them visible and ready for molecular analysis using different techniques. Pioneering differentiated sample technologies and liquid biopsy solutions:Executing initiatives to prioritize resource allocation and create value:Consumables and related revenueslfdAutomation platforms and instrumentsMajor types of QIAGEN solutions and related brandsSample TechnologiesAssay TechnologiesSample TechnologiesSelected QIAGEN brandspayments and services; and including related services and contracts. , approximately 11% of net sales in 2019, QIAGEN automation systems streamline molecular testing using consumables in efficient workflows and carrying customers through the process from Sample to Insight. Some QIAGEN consumables are designed to run on QIAGEN instruments, while others are universal kits designed for use with any molecular testing platform. Our broad portfolio of sample technologies isolate and process DNA, RNA and proteins from blood, tissue and other biological materials to prepare for a wide variety of molecular testing needs in research and clinical applications. Primary sample technology consumables • Nucleic stabilization and purification kits designed for primary sample materials (DNA, RNA, proteins), manual and automated processing for genotyping, gene expression, viral and bacterial analysis • QIAamp • DNeasy • RNeasy • PAXgene • AdnaTest • Tiangen • Mainly based on silica membranes and buffers • Gentra Puregene • Oligotex • AllPrep • BioSprint Secondary sample technology consumables • Kits and components for purification of nucleic acids and proteins from secondary sample materials (e.g. gel, plasmid DNA, proteins) • QIAprep • QIAquick • DyeEx • Molecular biology reagents Sample technology instruments • Qproteome • BioMag • Ni-NTA • QIAGEN Plasmid Plus • QIAfilter • R.E.A.L. • HiSpeed • EndoFree • Instruments for nucleic acid purification and accessories • QIAsymphony SP • QIAcube Connect • QIAcube HT • QIAscout • Centrifuges • TissueLyser Targeted or multiplex assay technologies deploy a variety of methods to amplify biomolecules and make them visible and ready for molecular analysis using different techniques. 30 Automation platforms and instrumentsMajor types of QIAGEN solutions and related brandsSample TechnologiesAssay TechnologiesSample TechnologiesSelected QIAGEN brandspayments and services; and including related services and contracts. , approximately 11% of net sales in 2019, QIAGEN automation systems streamline molecular testing using consumables in efficient workflows and carrying customers through the process from Sample to Insight. Some QIAGEN consumables are designed to run on QIAGEN instruments, while others are universal kits designed for use with any molecular testing platform. Our broad portfolio of sample technologies isolate and process DNA, RNA and proteins from blood, tissue and other biological materials to prepare for a wide variety of molecular testing needs in research and clinical applications. Primary sample technology consumables • Nucleic stabilization and purification kits designed for primary • QIAamp • DNeasy • RNeasy sample materials (DNA, RNA, proteins), manual and automated processing for genotyping, gene expression, viral and bacterial analysis • PAXgene • AdnaTest • Tiangen • Mainly based on silica membranes and buffers • Gentra Puregene • Oligotex • AllPrep • BioSprint • Kits and components for purification of nucleic acids and proteins • QIAprep • QIAquick • DyeEx from secondary sample materials (e.g. gel, plasmid DNA, proteins) Secondary sample technology consumables • Molecular biology reagents • Qproteome • BioMag • Ni-NTA • QIAGEN Plasmid Plus • QIAfilter • R.E.A.L. • HiSpeed • EndoFree M A N A G E M E N T R E P O R T Business and Operating Environment Sample technology instruments • Instruments for nucleic acid purification and accessories • QIAsymphony SP • QIAcube Connect • QIAcube HT • QIAscout • Centrifuges • TissueLyser Targeted or multiplex assay technologies deploy a variety of methods to amplify biomolecules and make them visible and ready for molecular analysis using different techniques. Assay content consumables • Kits, assays, reagents and controls for identification and analysis of sequence-specific targets (such as DNA, methylated DNA, bacterial DNA, RNA, miRNA) with different technologies (such as PCR, Pyrosequencing, hybridization) in assay and array format • EpiTect • ADNATest • miCURY • GapmeR • qBiomarker • RT2 • Oligonucleotide synthesis, siRNAs, bisulfite conversion • miScript • AllStars • FlexiTube/FlexiPlate Enzymatics consumables • Custom-developed and configured enzymes and products which are sold to OEM customers • EnzScript • Phoenix Hot Start • VeraSeq • ZipScript Assay foundation consumables • Different generations of PCR, qPCR, reverse transcription and combinations (RT-PCR) kits for analysis of gene expression, genotyping and gene regulation, running on QIAGEN or third-party instruments and technologies • QuantiTect • QuantiFast • QuantiNova • OneStep RT-PCR • Rotor-Gene • HotStarTaq • Similar product portfolio developed and sold through QIAGEN second brands (Quanta, Tiangen) • Type-it • QIAGEN Multiplex • TopTaq • QIAxpert consumables, cloning kits and transfection reagents • OmniScript • SuperScript • HiPerFect • PolyFect • SuperFect Assay instruments • Modular PCR system with Sample to Insight laboratory automation • QIAsymphony RGQ • QIAsymphony AS • Rotor-Gene-Q • One-step molecular analysis of hard-to-diagnose syndromes • QIAstat-Dx • NeuMoDx 96 • NeuMoDx 288 • Fully integrated medium- to high-throughput PCR test analysis • PyroMark • QIAxpert • QIAxcel • Specialized instruments for assay setup and analysis • QIAgility Custom laboratory and genomic services • Custom services such as DNA sequencing, qPCR service, whole genome amplification, and non-cGMP DNA production • Provided on an individualized contract basis High-throughput or next-generation sequencing (NGS) enables analysis of multiple sequences in parallel, using massive analytical and computing power to generate date for a profile of a whole genome or portion of a genome. 31 Next-Generation Sequencing (NGS)Assay TechnologiesSelected QIAGEN brandsAutomation platforms and instrumentsMajor types of QIAGEN solutions and related brandsSample TechnologiesAssay TechnologiesSample TechnologiesSelected QIAGEN brandsAssay content consumables • Kits, assays, reagents and controls for identification and analysis of • EpiTect • ADNATest • miCURY sequence-specific targets (such as DNA, methylated DNA, bacterial DNA, RNA, miRNA) with different technologies (such as PCR, Pyrosequencing, hybridization) in assay and array format • GapmeR • qBiomarker • RT2 • Oligonucleotide synthesis, siRNAs, bisulfite conversion • miScript • AllStars • FlexiTube/FlexiPlate • Custom-developed and configured enzymes and products which are • EnzScript • Phoenix Hot Start • VeraSeq • ZipScript Enzymatics consumables sold to OEM customers Assay foundation consumables • Different generations of PCR, qPCR, reverse transcription and • QuantiTect • QuantiFast • QuantiNova combinations (RT-PCR) kits for analysis of gene expression, genotyping and gene regulation, running on QIAGEN or third-party instruments and technologies • OneStep RT-PCR • Rotor-Gene • HotStarTaq • Similar product portfolio developed and sold through QIAGEN • Type-it • QIAGEN Multiplex • TopTaq second brands (Quanta, Tiangen) • QIAxpert consumables, cloning kits and transfection reagents • OmniScript • SuperScript • HiPerFect • PolyFect • SuperFect Assay instruments • Modular PCR system with Sample to Insight laboratory automation • QIAsymphony RGQ • QIAsymphony AS • Rotor-Gene-Q • One-step molecular analysis of hard-to-diagnose syndromes • QIAstat-Dx • NeuMoDx 96 • NeuMoDx 288 • Fully integrated medium- to high-throughput PCR test analysis • PyroMark • QIAxpert • QIAxcel • Specialized instruments for assay setup and analysis • QIAgility Custom laboratory and genomic services • Custom services such as DNA sequencing, qPCR service, whole genome amplification, and non-cGMP DNA production • Provided on an individualized contract basis High-throughput or next-generation sequencing (NGS) enables analysis of multiple sequences in parallel, using massive analytical and computing power to generate date for a profile of a whole genome or portion of a genome. Universal NGS consumables • Predefined and custom NGS gene panels (DNA, RNA), library prep kits and components, whole genome amplification, etc. • QIAseq • REPLI-g • GeneRead Digital Insights solutions • Bioinformatics solutions to deliver actionable insights from NGS data, sold as freestanding software or cloud-based solutions, also integrated into many QIAGEN consumables and instruments • QIAGEN Clinical Insight • CLC Genomics Workbench • OmicSoft • N-of-One • QIAGEN Knowledge Base • HGMD • Ingenuity Variant Analysis • Ingenuity Pathway Analysis Genetic analysis used for forensics and human identification can positively identify or rule out identification of individuals or biological substances for purposes such as law enforcement investigation, paternity testing or food safety screening. Human ID / Forensics sample collection consumables • Sample cards and collection swabs • FTA • Other consumables Human ID / Forensics consumables • STR assays for Human ID, additional assays for food contamination • Investigator (human ID / forensics) • mericon (food safety) Customers With a growing portfolio of innovative products for molecular testing, QIAGEN has built customer relationships across the entire value chain of Life Sciences and Molecular Diagnostics. Discoveries often surface in universities and research institutes, 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 organize our business to serve the needs of major customer classes: › › Molecular Diagnostics - healthcare providers engaged in patient care including hospitals, public health organizations, reference laboratories and physician practices Life Sciences - researchers in universities, research institutes and industry customers using molecular testing to achieve new insights into disease or other biological processes, as well as applying molecular testing in non- healthcare fields › Academia / Applied Testing - exploring the secrets of life such as disease mechanisms and pathways, translating findings into drug targets or other products, or serving purposes such as forensics and human identification 32 › Pharma - pharmaceutical and biotechnology companies engaging in the R&D process from drug discovery to translational medicine and then clinical development QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare, and Molecular Diagnostics customers accounted for $737 million of our sales in 2019. The success of molecular testing in healthcare depends Forensics and Human IdentificationMolecular DiagnosticsNext-Generation Sequencing (NGS)Selected QIAGEN brandsForensics and Human IdentificationSelected QIAGEN brandsNext-Generation Sequencing (NGS)Assay TechnologiesSelected QIAGEN brands• Predefined and custom NGS gene panels (DNA, RNA), library prep • QIAseq • REPLI-g • GeneRead kits and components, whole genome amplification, etc. Universal NGS consumables Digital Insights solutions • Bioinformatics solutions to deliver actionable insights from NGS • QIAGEN Clinical Insight • CLC Genomics Workbench • OmicSoft data, sold as freestanding software or cloud-based solutions, also integrated into many QIAGEN consumables and instruments • N-of-One • QIAGEN Knowledge Base • HGMD • Ingenuity Variant Analysis • Ingenuity Pathway Analysis Genetic analysis used for forensics and human identification can positively identify or rule out identification of individuals or biological substances for purposes such as law enforcement investigation, paternity testing or food safety screening. Human ID / Forensics sample collection consumables • Sample cards and collection swabs • FTA • Other consumables • STR assays for Human ID, additional assays for food contamination • Investigator (human ID / forensics) • mericon (food safety) Human ID / Forensics consumables Customers With a growing portfolio of innovative products for molecular testing, QIAGEN has built customer relationships across the entire value chain of Life Sciences and Molecular Diagnostics. Discoveries often surface in universities and M A N A G E M E N T R E P O R T research institutes, 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 organize our business to serve the needs of major customer classes: Business and Operating Environment › › Molecular Diagnostics - healthcare providers engaged in patient care including hospitals, public health organizations, reference laboratories and physician practices Life Sciences - researchers in universities, research institutes and industry customers using molecular testing to achieve new insights into disease or other biological processes, as well as applying molecular testing in non- healthcare fields › Academia / Applied Testing - exploring the secrets of life such as disease mechanisms and pathways, translating findings into drug targets or other products, or serving purposes such as forensics and human identification › Pharma - pharmaceutical and biotechnology companies engaging in the R&D process from drug discovery to translational medicine and then clinical development QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare, and Molecular Diagnostics customers accounted for $737 million of our sales in 2019. The success of molecular testing in healthcare depends on the ability to accurately analyze purified nucleic acid samples from sources such as blood, tissue, body fluids and stool. Automated systems must process tests reliably and efficiently, often handling hundreds of samples concurrently. The range of assays for diseases and biomarkers, convenience and ease of laboratory workflow, and standardization of lab procedures also influence success. The molecular diagnostics market generates total sales estimated by industry experts at approximately $7 billion in 2019, including about $5 billion potentially addressable with QIAGEN's product portfolio. Molecular testing is the most dynamic segment of the global in vitro diagnostics market, growing at an estimated annual rate in the mid- single-digits at constant exchange rates. 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 Molecular Diagnostics business we focus on three priorities for fighting disease: › - accurately diagnosing cancer, enabling prevention or early detection, as well as guiding selection of therapies with individualized molecular insights for precision medicine. 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 BRCA1/2, JAK2, PIK3CA and others, as well as comprehensive gene panels for research applications in next-generation sequencing. We also provide industry-leading tests to screen for human papillomavirus (HPV) and protect women from cervical cancer. We have a deep pipeline of oncology tests for PCR and NGS analysis under development. In addition to our 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. › - using advanced tests to detect immune-system markers as a preventive strategy, such as screening patients for latent tuberculosis infection to guard against active TB disease, or to monitor immune function, for example in transplant patients. Our sensitive QuantiFERON technology accurately detects infection and measures immune response. Our lead products in this field, QuantiFERON-TB Gold Plus and QuantiFERON-TB Gold, are used in tuberculosis control efforts worldwide to detect latent TB infection (LTBI) by screening vulnerable populations, including 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. 33 In transplantation, our QuantiFERON Monitor provides monitoring of immune function in solid organ transplant patients and QuantiFERON-CMV Kit tests immunity for infection with cytomegalovirus (CMV) in at-risk patients. › - detecting and differentiating viral and bacterial infections - such as HIV, hepatitis, influenza, sexually transmitted diseases and healthcare-associated infections, as well as respiratory and gastrointestinal syndromes - can be useful in guiding treatment, such as selection of appropriate antibiotic or antiviral therapies. QIAGEN offers an extensive range of kits for diagnosing infectious diseases, including a broad menu of reliable tests on the QIAsymphony and NeuMoDx automation systems, as well as QIAstat-Dx panels for respiratory and gastrointestinal syndromes. We are expanding this portfolio by seeking regulatory approvals of new assays across these platforms. QIAGEN remains a global leader 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 Forensics and Human IdentificationMolecular DiagnosticsNext-Generation Sequencing (NGS)Selected QIAGEN brandsForensics and Human IdentificationSelected QIAGEN brandsOncologyImmune monitoringInfectious diseaseson the ability to accurately analyze purified nucleic acid samples from sources such as blood, tissue, body fluids and stool. Automated systems must process tests reliably and efficiently, often handling hundreds of samples concurrently. The range of assays for diseases and biomarkers, convenience and ease of laboratory workflow, and standardization of lab procedures also influence success. The molecular diagnostics market generates total sales estimated by industry experts at approximately $7 billion in 2019, including about $5 billion potentially addressable with QIAGEN's product portfolio. Molecular testing is the most dynamic segment of the global in vitro diagnostics market, growing at an estimated annual rate in the mid- single-digits at constant exchange rates. 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 Molecular Diagnostics business we focus on three priorities for fighting disease: › - accurately diagnosing cancer, enabling prevention or early detection, as well as guiding selection of therapies with individualized molecular insights for precision medicine. 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 BRCA1/2, JAK2, PIK3CA and others, as well as comprehensive gene panels for research applications in next-generation sequencing. We also provide industry-leading tests to screen for human papillomavirus (HPV) and protect women from cervical cancer. We have a deep pipeline of oncology tests for PCR and NGS analysis under development. In addition to our 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. › - using advanced tests to detect immune-system markers as a preventive strategy, such as screening patients for latent tuberculosis infection to guard against active TB disease, or to monitor immune function, for example in transplant patients. Our sensitive QuantiFERON technology accurately detects infection and measures immune response. Our lead products in this field, QuantiFERON-TB Gold Plus and QuantiFERON-TB Gold, are used in tuberculosis control efforts worldwide to detect latent TB infection (LTBI) by screening vulnerable populations, including 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. In transplantation, our QuantiFERON Monitor provides monitoring of immune function in solid organ transplant patients and QuantiFERON-CMV Kit tests immunity for infection with cytomegalovirus (CMV) in at-risk patients. › - detecting and differentiating viral and bacterial infections - such as HIV, hepatitis, influenza, sexually transmitted diseases and healthcare-associated infections, as well as respiratory and gastrointestinal syndromes - can be useful in guiding treatment, such as selection of appropriate antibiotic or antiviral therapies. QIAGEN offers an extensive range of kits for diagnosing infectious diseases, including a broad menu of reliable tests on the QIAsymphony and NeuMoDx automation systems, as well as QIAstat-Dx panels for respiratory and gastrointestinal syndromes. We are expanding this portfolio by seeking regulatory approvals of new assays across these platforms. QIAGEN remains a global leader 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, vigorous price competition has reduced QIAGEN’s HPV business to about 1% of total sales. QIAGEN partners with customers across diverse disciplines in academia and industry, providing sample technologies, assay technologies, Digital Insights and services to universities and institutes, Pharma and biotech companies, government and law enforcement agencies. Life Sciences customers accounted for $789 million of our sales in 2019. QIAGEN provides Sample to Insight solutions to academic and research institutions around the world. We focus on enabling researchers to use reliable, fast, highly reproducible and high-quality technologies, sometimes replacing time-consuming traditional or in-house methods. QIAGEN often partners with leading institutions in research projects and develops customized solutions such as NGS panels for digital sequencing of multiple gene targets. As academic institutions increasingly embrace translational research, bridging from discoveries to practical applications in medicine, our relationships in Academia also support our presence in the Pharma and Molecular Diagnostics markets. Applied Testing customers make up the growing market for molecular testing beyond research and human healthcare. QIAGEN is a global leader in solutions for governments and industry, particularly in forensic testing and human identification. The value of genetic "fingerprinting" has been proven in criminal investigations and examinations of paternity or ancestry, as well as food safety and veterinary diagnostics. QIAGEN provides sample collection and analytical solutions for law enforcement and human identification labs, as well as advanced technologies for studies of microbiomes and their effect on health and the environment. 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 34 QIAGEN sales to these companies support research, while the other half supports clinical development, including stratification of patient populations based on genetic information. QIAGEN Digital Insights solutions also are widely used to guide pharmaceutical research. In Precision Medicine, we have built a position as the industry’s preferred partner to co-develop companion diagnostics paired with targeted drugs. QIAGEN’s more than 25 master collaboration agreements with Pharma customers, some with multiple co-development projects, have created a rich pipeline of molecular tests that are transforming the treatment of cancer and other diseases. Companion diagnostics can move through clinical trials and regulatory approvals, along with the paired drugs, to commercialization and marketing to healthcare providers. Global Presence by Category of Activity and Geographic Market Net sales for the product categories are attributed based on those revenues related to sample and assay products and related revenues including bioinformatics solutions, and revenues derived from instrumentation sales. Consumables and related revenues Instrumentation $ 1,354,147 $ 1,315,459 $ 1,242,715 172,277 186,389 174,821 $ 1,526,424 $ 1,501,848 $ 1,417,536 OncologyImmune monitoringInfectious diseasesLife SciencesAcademia / Applied TestingPharmaProduct Category Information(in thousands)201920182017Net SalesTotalcareHPV Test for use in low-resource regions lead the market in HPV screening around the world. In the United careHPV Test for use in low-resource regions lead the market in HPV screening around the world. In the United States, vigorous price competition has reduced QIAGEN’s HPV business to about 1% of total sales. States, vigorous price competition has reduced QIAGEN’s HPV business to about 1% of total sales. QIAGEN partners with customers across diverse disciplines in academia and industry, providing sample QIAGEN partners with customers across diverse disciplines in academia and industry, providing sample technologies, assay technologies, Digital Insights and services to universities and institutes, Pharma and biotech technologies, assay technologies, Digital Insights and services to universities and institutes, Pharma and biotech companies, government and law enforcement agencies. Life Sciences customers accounted for $789 million of our companies, government and law enforcement agencies. Life Sciences customers accounted for $789 million of our sales in 2019. sales in 2019. QIAGEN provides Sample to Insight solutions to academic and research institutions around the world. We focus on QIAGEN provides Sample to Insight solutions to academic and research institutions around the world. We focus on enabling researchers to use reliable, fast, highly reproducible and high-quality technologies, sometimes replacing enabling researchers to use reliable, fast, highly reproducible and high-quality technologies, sometimes replacing time-consuming traditional or in-house methods. QIAGEN often partners with leading institutions in research projects time-consuming traditional or in-house methods. QIAGEN often partners with leading institutions in research projects and develops customized solutions such as NGS panels for digital sequencing of multiple gene targets. As academic and develops customized solutions such as NGS panels for digital sequencing of multiple gene targets. As academic careHPV Test for use in low-resource regions lead the market in HPV screening around the world. In the United institutions increasingly embrace translational research, bridging from discoveries to practical applications in institutions increasingly embrace translational research, bridging from discoveries to practical applications in States, vigorous price competition has reduced QIAGEN’s HPV business to about 1% of total sales. medicine, our relationships in Academia also support our presence in the Pharma and Molecular Diagnostics medicine, our relationships in Academia also support our presence in the Pharma and Molecular Diagnostics markets. markets. Business and Operating Environment M A N A G E M E N T R E P O R T Applied Testing customers make up the growing market for molecular testing beyond research and human Applied Testing customers make up the growing market for molecular testing beyond research and human QIAGEN partners with customers across diverse disciplines in academia and industry, providing sample healthcare. QIAGEN is a global leader in solutions for governments and industry, particularly in forensic testing and healthcare. QIAGEN is a global leader in solutions for governments and industry, particularly in forensic testing and technologies, assay technologies, Digital Insights and services to universities and institutes, Pharma and biotech human identification. The value of genetic "fingerprinting" has been proven in criminal investigations and human identification. The value of genetic "fingerprinting" has been proven in criminal investigations and companies, government and law enforcement agencies. Life Sciences customers accounted for $789 million of our examinations of paternity or ancestry, as well as food safety and veterinary diagnostics. QIAGEN provides sample examinations of paternity or ancestry, as well as food safety and veterinary diagnostics. QIAGEN provides sample sales in 2019. collection and analytical solutions for law enforcement and human identification labs, as well as advanced collection and analytical solutions for law enforcement and human identification labs, as well as advanced technologies for studies of microbiomes and their effect on health and the environment. technologies for studies of microbiomes and their effect on health and the environment. QIAGEN provides Sample to Insight solutions to academic and research institutions around the world. We focus on enabling researchers to use reliable, fast, highly reproducible and high-quality technologies, sometimes replacing QIAGEN has deep relationships with pharmaceutical and biotechnology companies. Drug discovery and QIAGEN has deep relationships with pharmaceutical and biotechnology companies. Drug discovery and time-consuming traditional or in-house methods. QIAGEN often partners with leading institutions in research projects translational research efforts increasingly employ genomic information, both to guide research in diseases and to translational research efforts increasingly employ genomic information, both to guide research in diseases and to and develops customized solutions such as NGS panels for digital sequencing of multiple gene targets. As academic differentiate patient populations most likely to respond to particular therapies. We estimate that about half of differentiate patient populations most likely to respond to particular therapies. We estimate that about half of institutions increasingly embrace translational research, bridging from discoveries to practical applications in QIAGEN sales to these companies support research, while the other half supports clinical development, including QIAGEN sales to these companies support research, while the other half supports clinical development, including medicine, our relationships in Academia also support our presence in the Pharma and Molecular Diagnostics stratification of patient populations based on genetic information. QIAGEN Digital Insights solutions also are widely stratification of patient populations based on genetic information. QIAGEN Digital Insights solutions also are widely markets. used to guide pharmaceutical research. used to guide pharmaceutical research. Applied Testing customers make up the growing market for molecular testing beyond research and human In Precision Medicine, we have built a position as the industry’s preferred partner to co-develop companion In Precision Medicine, we have built a position as the industry’s preferred partner to co-develop companion healthcare. QIAGEN is a global leader in solutions for governments and industry, particularly in forensic testing and diagnostics paired with targeted drugs. QIAGEN’s more than 25 master collaboration agreements with Pharma diagnostics paired with targeted drugs. QIAGEN’s more than 25 master collaboration agreements with Pharma human identification. The value of genetic "fingerprinting" has been proven in criminal investigations and customers, some with multiple co-development projects, have created a rich pipeline of molecular tests that are customers, some with multiple co-development projects, have created a rich pipeline of molecular tests that are examinations of paternity or ancestry, as well as food safety and veterinary diagnostics. QIAGEN provides sample transforming the treatment of cancer and other diseases. Companion diagnostics can move through clinical trials and transforming the treatment of cancer and other diseases. Companion diagnostics can move through clinical trials and collection and analytical solutions for law enforcement and human identification labs, as well as advanced regulatory approvals, along with the paired drugs, to commercialization and marketing to healthcare providers. regulatory approvals, along with the paired drugs, to commercialization and marketing to healthcare providers. technologies for studies of microbiomes and their effect on health and the environment. Global Presence by Category of Activity and Geographic Market Global Presence by Category of Activity and Geographic Market 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 Net sales for the product categories are attributed based on those revenues related to sample and assay products Net sales for the product categories are attributed based on those revenues related to sample and assay products differentiate patient populations most likely to respond to particular therapies. We estimate that about half of and related revenues including bioinformatics solutions, and revenues derived from instrumentation sales. and related revenues including bioinformatics solutions, and revenues derived from instrumentation sales. QIAGEN sales to these companies support research, while the other half supports clinical development, including stratification of patient populations based on genetic information. QIAGEN Digital Insights solutions also are widely used to guide pharmaceutical research. Consumables and related revenues Consumables and related revenues In Precision Medicine, we have built a position as the industry’s preferred partner to co-develop companion diagnostics paired with targeted drugs. QIAGEN’s more than 25 master collaboration agreements with Pharma customers, some with multiple co-development projects, have created a rich pipeline of molecular tests that are transforming the treatment of cancer and other diseases. Companion diagnostics can move through clinical trials and 174,821 174,821 regulatory approvals, along with the paired drugs, to commercialization and marketing to healthcare providers. Instrumentation Instrumentation $ 1,242,715 $ 1,242,715 $ 1,354,147 $ 1,354,147 $ 1,315,459 $ 1,315,459 172,277 172,277 186,389 186,389 $ 1,526,424 $ 1,526,424 $ 1,501,848 $ 1,501,848 $ 1,417,536 $ 1,417,536 Global Presence by Category of Activity and Geographic Market 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 Net sales for the product categories are attributed based on those revenues related to sample and assay products customer, as certain subsidiaries have international distribution): and related revenues including bioinformatics solutions, and revenues derived from instrumentation sales. Americas: Consumables and related revenues Instrumentation United States Other Americas Europe, Middle East and Africa Asia Pacific and Rest of World $ 1,354,147 $ 1,315,459 $ 1,242,715 $ 663,869 172,277 $ 632,660 186,389 $ 579,906 174,821 58,121 $ 1,526,424 60,359 $ 1,501,848 73,478 $ 1,417,536 721,990 693,019 653,384 487,476 490,301 462,980 316,958 318,528 301,172 $ 1,526,424 $ 1,501,848 $ 1,417,536 QIAGEN has built an increasing presence in key emerging markets as a growth strategy. The top seven emerging markets - Brazil, Russia, India, China, South Korea, Mexico and Turkey - contributed approximately 16% of net sales in 2019, 2018 and 2017. 35 Research and Development We are committed to expanding our global leadership in Sample to Insight solutions in Molecular Diagnostics and the Life Sciences. We target our research and development resources to the most promising technologies to address the unmet needs of our customers in healthcare and research labs in key geographic markets. As a percentage of sales, our research and development investments are among the highest in our industry. About 950 employees in research and development work in QIAGEN centers of excellence on three continents. Innovation at QIAGEN follows parallel paths: molecular technologies. genetic identification. › Creating new systems for automation of workflows - platforms for laboratories, hospitals and other users of novel › Expanding our broad portfolio of novel content - including assays to detect and measure biomarkers for disease or › Integrating Digital Insights with the testing process - software and cloud-based resources to interpret and transform raw molecular data into useful insights. Innovation in automation systems positions QIAGEN in fast-growing fields of molecular testing, as well as generating ongoing demand for our consumable products. We are 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, QIAstat-Dx and NeuMoDx automation systems in the coming years, as well as next-generation sequencing kits to support our universal NGS franchise and our in vitro diagnostics partnership with Illumina. In 2019, we launched novel companion diagnostics on the QIAsymphony platform for breast, lung and urothelial cancers. We also added the FDA approved respiratory panel for infectious diseases to the menus for QIAstat-Dx and the NeuMoDx 96 and 288 platforms. QIAGEN collaborates with many institutions and companies to create innovative molecular solutions. In May 2019, partnering with U.K.-based organizations, we launched APIS Assay Technologies Ltd., a new company aiming to Life SciencesAcademia / Applied TestingPharmaProduct Category Information(in thousands)201920182017Net SalesTotalGeographical Information(in thousands)201920182017Net SalesTotal AmericasTotalLife SciencesAcademia / Applied TestingPharmaProduct Category Information(in thousands)201920182017Net SalesTotalLife SciencesAcademia / Applied TestingPharmaProduct Category Information(in thousands)201920182017Net SalesTotal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): Americas: United States Other Americas Europe, Middle East and Africa Asia Pacific and Rest of World $ 663,869 $ 632,660 $ 579,906 58,121 60,359 73,478 721,990 693,019 653,384 487,476 490,301 462,980 316,958 318,528 301,172 $ 1,526,424 $ 1,501,848 $ 1,417,536 QIAGEN has built an increasing presence in key emerging markets as a growth strategy. The top seven emerging markets - Brazil, Russia, India, China, South Korea, Mexico and Turkey - contributed approximately 16% of net sales in 2019, 2018 and 2017. Research and Development We are committed to expanding our global leadership in Sample to Insight solutions in Molecular Diagnostics and the Life Sciences. We target our research and development resources to the most promising technologies to address the unmet needs of our customers in healthcare and research labs in key geographic markets. As a percentage of sales, our research and development investments are among the highest in our industry. About 950 employees in research and development work in QIAGEN centers of excellence on three continents. Innovation at QIAGEN follows parallel paths: › › › Creating new systems for automation of workflows - platforms for laboratories, hospitals and other users of novel molecular technologies. Expanding our broad portfolio of novel content - including assays to detect and measure biomarkers for disease or genetic identification. Integrating Digital Insights with the testing process - software and cloud-based resources to interpret and transform raw molecular data into useful insights. Innovation in automation systems positions QIAGEN in fast-growing fields of molecular testing, as well as generating ongoing demand for our consumable products. We are 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, QIAstat-Dx and NeuMoDx automation systems in the coming years, as well as next-generation sequencing kits to support our universal NGS franchise and our in vitro diagnostics partnership with Illumina. In 2019, we launched novel companion diagnostics on the QIAsymphony platform for breast, lung and urothelial cancers. We also added the FDA approved respiratory panel for infectious diseases to the menus for QIAstat-Dx and the NeuMoDx 96 and 288 platforms. QIAGEN collaborates with many institutions and companies to create innovative molecular solutions. In May 2019, partnering with U.K.-based organizations, we launched APIS Assay Technologies Ltd., a new company aiming to accelerate biomarker commercialization by bridging the translational gap between genomic discoveries and the development of new diagnostics. Our Digital Insights teams are developing new software and adding proprietary cloud-based content to support the latest research and clinical trends in molecular testing, especially the interpretation of large volumes of NGS data. We also integrate digital solutions 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 in the Americas, Europe, Australia and Asia with the greatest sales potential. Experienced marketing and sales staff, many of them scientists with academic degrees in molecular biology or related areas, sell our products and support our customers. Business managers oversee key accounts 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. 36 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 Design & Analysis Hub (www.geneglobe.com), upgraded in September 2019, 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. The new hub brings next- level experiment planning, execution and follow-up to life science researchers, linking our Digital Insights solutions with ordering of 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 and webinars 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 Geographical Information(in thousands)201920182017Net SalesTotal AmericasTotalaccelerate biomarker commercialization by bridging the translational gap between genomic discoveries and the development of new diagnostics. M A N A G E M E N T R E P O R T Business and Operating Environment Our Digital Insights teams are developing new software and adding proprietary cloud-based content to support the latest research and clinical trends in molecular testing, especially the interpretation of large volumes of NGS data. We also integrate digital solutions 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 in the Americas, Europe, Australia and Asia with the greatest sales potential. Experienced marketing and sales staff, many of them scientists with academic degrees in molecular biology or related areas, sell our products and support our customers. Business managers oversee key accounts 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 Design & Analysis Hub (www.geneglobe.com), upgraded in September 2019, 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. The new hub brings next- level experiment planning, execution and follow-up to life science researchers, linking our Digital Insights solutions with ordering of 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 and webinars 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 37 accelerate biomarker commercialization by bridging the translational gap between genomic discoveries and the development of new diagnostics. Our Digital Insights teams are developing new software and adding proprietary cloud-based content to support the latest research and clinical trends in molecular testing, especially the interpretation of large volumes of NGS data. We also integrate digital solutions 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 in the Americas, Europe, Australia and Asia with the greatest sales potential. Experienced marketing and sales staff, many of them scientists with academic degrees in molecular biology or related areas, sell our products and support our customers. Business managers oversee key accounts 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 Design & Analysis Hub (www.geneglobe.com), upgraded in September 2019, 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. The new hub brings next- level experiment planning, execution and follow-up to life science researchers, linking our Digital Insights solutions with ordering of 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 and webinars 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 customers' activities are slowed such as during times of higher unemployment, vacation periods or delays in 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. Additionally, we have customers who are active in the diagnostics testing market, and sales to these customers fluctuate to the extent their activities are impacted by public health concerns such as the timing and severity of flu season. Intellectual Property, Proprietary Rights and Licenses We have made and expect to continue to make investments in intellectual property. In 2019, additions to our intangible assets outside of business combinations totaled $286.2 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, 2019, we owned 352 issued patents in the United States, 275 issued patents in Germany and 1,700 issued patents in other major industrialized countries. We had 558 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 “Risks” included in the “Opportunities and Risks” section 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, transfection reagents and protein fractionation products. We believe our proprietary technologies and products offer significant advantages over competitors' products with 38 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 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 customers' activities are slowed such as during times of higher unemployment, vacation periods or delays in 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. Additionally, we have customers who are active in the diagnostics testing market, and sales to these customers fluctuate to the extent their activities are impacted by public health concerns such as the timing and severity of flu season. Intellectual Property, Proprietary Rights and Licenses We have made and expect to continue to make investments in intellectual property. In 2019, additions to our intangible assets outside of business combinations totaled $286.2 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, 2019, we owned 352 issued patents in the United States, 275 issued patents in Germany and 1,700 issued patents in other major industrialized countries. We had 558 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 See “Risks” included in the “Opportunities and Risks” section below for details regarding risks related to our reliance be our exclusive property. on patents and proprietary rights. Competition Business and Operating Environment M A N A G E M E N T R E P O R T 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, 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 supply performance of our raw material and component suppliers, and we assess on a continuous basis potential alternative sources of such materials and components, and on a yearly basis assess 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 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. We have inventory agreements with the majority of our suppliers and 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. 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 39 which the reference numbers have been published in the Official Journal of the European Communities. These harmonized standards include ISO 13485:2016, 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. European Union Regulations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 supply performance of our raw material and component suppliers, and we assess on a continuous basis potential alternative sources of such materials and components, and on a yearly basis assess 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 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. We have inventory agreements with the majority of our suppliers and 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. 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 13485:2016, 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 2020 before the infrastructure is established to begin the new approvals process. 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 generally 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. 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 depending on 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 requirements, and adherence to the FDA’s quality system regulations (QSRs), which are device-specific current good manufacturing practices. Class II devices are subject to premarket notification, QSRs, general controls and sometimes special controls, including performance standards and post-market surveillance. Class III devices are subject to most of the previously identified requirements as well as to pre-market approval. Class I devices are exempt from premarket review; most Class II 40 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 user fee, that is typically adjusted annually, to the FDA is usually required when a 510(k) notice or premarket approval application is submitted. . A 510(k) premarket 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 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” (NSE) determination 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. A person who receives an NSE determination in response to a 510(k) submission may, within 30 days of receipt of the NSE European Union RegulationsU.S. RegulationsIn Vitro Diagnostics510(k) Premarket Notification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 2020 before the infrastructure is established to begin the new approvals process. 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 Business and Operating Environment 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 M A N A G E M E N T R E P O R T within a single laboratory, have generally 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. 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 depending on 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 requirements, and adherence to the FDA’s quality system regulations (QSRs), which are device-specific current good manufacturing practices. Class II devices are subject to premarket notification, QSRs, general controls and sometimes special controls, including performance standards and post-market surveillance. Class III devices are subject to most of the previously identified requirements as well as to pre-market approval. 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 user fee, that is typically adjusted annually, to the FDA is usually required when a 510(k) notice or premarket approval application is submitted. . A 510(k) premarket 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 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” (NSE) determination 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. A person who receives an NSE determination in response to a 510(k) submission may, within 30 days of receipt of the NSE determination, submit a de novo request for the FDA to make a risk-based evaluation for classification of the device into Class I or II. Devices that are classified through the de novo process may be marketed and used as predicates for future 510(k) submissions. 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. In October 2017, the FDA published a final guidance entitled, “De Novo Classification Process (Evaluation of Automatic Class III Designation)” and in December 2018, the FDA issued a proposed rule which if finalized is intended to provide structure, clarity and transparency on the de novo classification process. We cannot predict what if any changes will occur or how they will affect our current or future products. . 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 41 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. 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 and on December 7, 2018, it published another draft guidance, “Developing and Labeling In Vitro Companion Diagnostic Devices for a Specific Group or Class of Oncology Therapeutic Products” which, if finalized, is intended to facilitate class labeling on diagnostic tests for oncology therapeutic products, where scientifically appropriate. U.S. RegulationsIn Vitro Diagnostics510(k) Premarket NotificationPremarket ApprovalRegulation of Companion Diagnostic Devicesdetermination, submit a de novo request for the FDA to make a risk-based evaluation for classification of the device into Class I or II. Devices that are classified through the de novo process may be marketed and used as predicates for future 510(k) submissions. 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. In October 2017, the FDA published a final guidance entitled, “De Novo Classification Process (Evaluation of Automatic Class III Designation)” and in December 2018, the FDA issued a proposed rule which if finalized is intended to provide structure, clarity and transparency on the de novo classification process. We cannot predict what if any changes will occur or how they will affect our current or future products. . 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. 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 and on December 7, 2018, it published another draft guidance, “Developing and Labeling In Vitro Companion Diagnostic Devices for a Specific Group or Class of Oncology Therapeutic Products” which, if finalized, is intended to facilitate class labeling on diagnostic tests for oncology therapeutic products, where scientifically appropriate. The FDA also introduced the concept of complementary diagnostics that are distinct from companion diagnostics because they provide additional information about how a drug is used or identify patients who are likely to derive the greatest benefit from therapy without being required for the safe and effective use of that drug. The FDA has not yet provided much guidance on the regulation and use of complementary diagnostics, but several have been approved. 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 42 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. 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 Premarket ApprovalRegulation of Companion Diagnostic DevicesUnique Device Identifier RequirementsM A N A G E M E N T R E P O R T Business and Operating Environment The FDA also introduced the concept of complementary diagnostics that are distinct from companion diagnostics because they provide additional information about how a drug is used or identify patients who are likely to derive the greatest benefit from therapy without being required for the safe and effective use of that drug. The FDA has not yet provided much guidance on the regulation and use of complementary diagnostics, but several have been approved. 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. 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 43 Unique Device Identifier RequirementsThe FDA also introduced the concept of complementary diagnostics that are distinct from companion diagnostics because they provide additional information about how a drug is used or identify patients who are likely to derive the greatest benefit from therapy without being required for the safe and effective use of that drug. The FDA has not yet provided much guidance on the regulation and use of complementary diagnostics, but several have been approved. 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. 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. 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 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. 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 44 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. Unique Device Identifier RequirementsRegulation of Research Use Only ProductsHIPAA and Other Privacy and Security Laws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. 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 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. Business and Operating Environment 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 M A N A G E M E N T R E P O R T (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, which took effect on January 1, 2020, imposes 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 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. 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. 45 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. Regulation of Research Use Only ProductsHIPAA and Other Privacy and Security LawsCompliance with Fraud and Abuse LawsAnti-Kickback Statute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. genetic information. 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 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, which took effect on January 1, 2020, imposes 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 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. 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. 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. 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 46 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 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. Compliance with Fraud and Abuse LawsAnti-Kickback StatuteOther Fraud and Abuse Laws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 M A N A G E M E N T R E P O R T program but also with respect to other payors, including commercial insurance companies. Business and Operating Environment 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. 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 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 47 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. 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. 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. Other Fraud and Abuse LawsEnvironment, Health and SafetyOther Country Specific RequirementsReimbursement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. 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. 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. 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 care programs such as Medicare or Medicaid; and, in most cases the patients themselves. For many years, federal and state governments in the United States have pursued methods to reduce the cost of healthcare delivery. 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 payors. 48 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 identifies codes, along with descriptions, 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. Proprietary Laboratory Analyses (PLA) Codes are an addition to the CPT® code set approved by the AMA CPT® Editorial Panel. They are alpha-numeric CPT codes with a corresponding descriptor for labs or manufacturers that want to more specifically identify their test. 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 or the PLA Code or both. In addition, Z-Code identifiers are unique five- character alphanumeric tracking codes associated with a specific molecular diagnostic test. When a claim is submitted, it includes the associated CPT code and the Z-Code identifier is entered as a device code. Assignment of a specific CPT code ensures routine processing and payment for a diagnostic test by both private and government third-party payors. the test. 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 Environment, Health and SafetyOther Country Specific RequirementsReimbursementUnited StatesIn the United States, payments for diagnostic tests come from several sources, including third party payors such as Business and Operating Environment health maintenance organizations and preferred provider organizations; government health care programs such as Medicare or Medicaid; and, in most cases the patients themselves. For many years, federal and state governments in the United States have pursued methods to reduce the cost of healthcare delivery. For example, in 2010, the United M A N A G E M E N T R E P O R T 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 payors. 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 identifies codes, along with descriptions, 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. Proprietary Laboratory Analyses (PLA) Codes are an addition to the CPT® code set approved by the AMA CPT® Editorial Panel. They are alpha-numeric CPT codes with a corresponding descriptor for labs or manufacturers that want to more specifically identify their test. 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 or the PLA Code or both. In addition, Z-Code identifiers are unique five- character alphanumeric tracking codes associated with a specific molecular diagnostic test. When a claim is submitted, it includes the associated CPT code and the Z-Code identifier is entered as a device code. 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. CMS reimbursement rates for clinical diagnostic tests are defined by CPT and HCPS codes 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 49 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 insurers 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. On December 20, 2019, the President signed the Further Consolidated Appropriations Act, which included the Laboratory Access for Beneficiaries Act, or the LAB Act. The LAB Act delays by one year the reporting of payment data under PAMA for clinical laboratory diagnostic tests that are not advanced diagnostic laboratory tests. CDLT data for the collection period of January 1, 2019 through June 30, 2019, which was supposed to be reported in 2020, must now be reported between January 1, 2021 and March 31, 2021. Data reporting will then resume on a three-year cycle beginning in 2024. Under PAMA, as amended by the LAB Act, any reduction to a particular payment rate resulting from the new methodology is limited to 10% per test per year in 2020 and to 15% per test per year in each of the years 2021 through 2023. Coverage Decisions When deciding whether to cover a particular diagnostic test, private and government third-party payors generally consider whether the test is a medically necessary and, if so, whether the test will directly impact clinical decision making. For coverage, the testing method should be considered scientifically valid to identify the specific gene biomarker or gene mutation, and must have been demonstrated to improve clinical outcomes for the patient’s condition. Coverage of a drug therapy and its companion diagnostic are usually validated by a NCCN category 1, 2A or 2B recommendation. 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 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, establish fee schedule rates, 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 rates for diagnostic tests furnished to Medicare beneficiaries in outpatient settings are the lesser of the amount billed, the local fee for a geographic area, or a national limit. Each year, the fee schedule is updated for inflation and could be modified by Congress in accordance with the CLFS rules and provisions. Medicaid programs generally pay for diagnostic tests based on a fee schedule, but reimbursement varies by geographic region. United States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. CMS reimbursement rates for clinical diagnostic tests are defined by CPT and HCPS codes 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 insurers 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. On December 20, 2019, the President signed the Further Consolidated Appropriations Act, which included the Laboratory Access for Beneficiaries Act, or the LAB Act. The LAB Act delays by one year the reporting of payment data under PAMA for clinical laboratory diagnostic tests that are not advanced diagnostic laboratory tests. CDLT data for the collection period of January 1, 2019 through June 30, 2019, which was supposed to be reported in 2020, must now be reported between January 1, 2021 and March 31, 2021. Data reporting will then resume on a three-year cycle beginning in 2024. Under PAMA, as amended by the LAB Act, any reduction to a particular payment rate resulting from the new methodology is limited to 10% per test per year in 2020 and to 15% per test per year in each of the years 2021 through 2023. Coverage Decisions When deciding whether to cover a particular diagnostic test, private and government third-party payors generally consider whether the test is a medically necessary and, if so, whether the test will directly impact clinical decision making. For coverage, the testing method should be considered scientifically valid to identify the specific gene biomarker or gene mutation, and must have been demonstrated to improve clinical outcomes for the patient’s condition. Coverage of a drug therapy and its companion diagnostic are usually validated by a NCCN category 1, 2A or 2B recommendation. 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 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, establish fee schedule rates, 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 rates for diagnostic tests furnished to Medicare beneficiaries in outpatient settings are the lesser of the amount billed, the local fee for a geographic area, or a national limit. Each year, the fee schedule is updated for inflation and could be modified by Congress in accordance with the CLFS rules and provisions. Medicaid programs generally pay for diagnostic tests based on a fee schedule, but reimbursement varies by geographic region. 50 M A N A G E M E N T R E P O R T Business and Operating Environment 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. 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 Exhibit 8.1 to this Annual Report. 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 totaled $118.0 million, $109.8 million and $90.1 million for 2019, 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. We lease facilities in Frederick, Maryland comprising 42,000 square feet for manufacturing, warehousing, distribution and research operations and also facilities in Beverly, Massachusetts with 44,000 square feet for enzyme manufacturing. Additionally, we have leased facilities in Redwood City, California with 12,700 square feet for digital insights and 19,000 square feet in Minden, Nevada for Service Solutions. We have shared service centers which lease facilities in Wroclaw, Poland (48,600 square feet) and Manila, Philippines (29,300 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. 51 European UnionOrganizational StructureDescription of Property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. 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 Exhibit 8.1 to this Annual Report. 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 totaled $118.0 million, $109.8 million and $90.1 million for 2019, 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. We lease facilities in Frederick, Maryland comprising 42,000 square feet for manufacturing, warehousing, distribution and research operations and also facilities in Beverly, Massachusetts with 44,000 square feet for enzyme manufacturing. Additionally, we have leased facilities in Redwood City, California with 12,700 square feet for digital insights and 19,000 square feet in Minden, Nevada for Service Solutions. We have shared service centers which lease facilities in Wroclaw, Poland (48,600 square feet) and Manila, Philippines (29,300 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. 52 European UnionOrganizational StructureDescription of PropertyM A N A G E M E N T R E P O R T Business and Operating Environment 53 Management Report Management Report Opportunities and Risks Business and Operating Environment QIAGEN’s business, like that of any other company, involves significant opportunities and risks. Effective QIAGEN’s business, like that of any other company, involves significant opportunities QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular management is paramount in delivering sustainable value creation, and the central task of the leadership team. To and risks. Effective management is paramount in delivering sustainable value insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights sustain QIAGEN’s growth, effective execution is crucial in the development and commercialization of new products; faster, better and more efficiently - from the raw biological sample to the final interpreted result. structure and implementation of acquisitions and strategic partnerships; and response to the wide variety of creation, and the central task of the leadership team. To sustain QIAGEN’s growth, Management Report developments in markets where QIAGEN operates around the world. Managing opportunities and risks is an integral effective execution is crucial in the development and commercialization of new part of the corporate governance system in place throughout QIAGEN, not the task of one particular organizational We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) products; structure and implementation of acquisitions and strategic partnerships; and unit. Management systems are in place to aggregate all risks and opportunities for review at the Managing Board and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN response to the wide variety of developments in markets where QIAGEN operates and Supervisory Board levels of QIAGEN N.V., and these are reviewed on a routine basis. Based on our assessment solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the Opportunities and Risks at the end of 2019, we consider the opportunities and risks manageable and the survival of QIAGEN not in danger, increasing volumes and complexity of biological information, in keeping with our vision of making improvements in around the world. Managing opportunities and risks is an integral part of the corpo- the same position taken at year-end 2018. This assessment is supported by our strong balance sheet and the current life possible. rate governance system in place throughout QIAGEN, not the task of one particular business outlook, and further supported by the positive historical response to our external financing needs. As a QIAGEN’s business, like that of any other company, involves significant opportunities and risks. Effective organizational unit. Management systems are in place to aggregate all risks and result, QIAGEN has not sought an official rating by any of the leading rating agencies. We are confident in the QIAGEN began operations in 1986 as a pioneer in the emerging biotechnology sector, introducing a novel method management is paramount in delivering sustainable value creation, and the central task of the leadership team. To future earnings strength of QIAGEN and have access to the resources to pursue value-creating business opportunities for review at the Managing Board and Supervisory Board levels of that standardized and accelerated extraction and purification of nucleic acids from biological samples. As molecular sustain QIAGEN’s growth, effective execution is crucial in the development and commercialization of new products; opportunities. biology and genomic knowledge have grown to influence many areas of life, QIAGEN has expanded to serve the QIAGEN N.V., and these are reviewed on a routine basis. Based on our assessment structure and implementation of acquisitions and strategic partnerships; and response to the wide variety of full spectrum of market needs. We believe our sample technologies are unmatched in quality for isolating and developments in markets where QIAGEN operates around the world. Managing opportunities and risks is an integral at the end of 2019, we consider the opportunities and risks manageable and the preparing DNA (deoxyribonucleic acid), RNA (ribonucleic acid) and proteins from blood or other liquids, tissue, Opportunities part of the corporate governance system in place throughout QIAGEN, not the task of one particular organizational survival of QIAGEN not in danger, the same position taken at year-end 2018. This plants or other materials. Our assay technologies amplify, enrich and make these biomolecules accessible for unit. Management systems are in place to aggregate all risks and opportunities for review at the Managing Board Our mission is to make improvements in life possible by capturing growth opportunities as genomic and molecular analysis, such as identifying the genetic information of a pathogen or a gene mutation in a tumor. QIAGEN’s assessment is supported by our strong balance sheet and the current business out- and Supervisory Board levels of QIAGEN N.V., and these are reviewed on a routine basis. Based on our assessment technologies disseminate across two customer classes: Molecular Diagnostics and Life Science, including Academia industry-leading Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and at the end of 2019, we consider the opportunities and risks manageable and the survival of QIAGEN not in danger, look, and further supported by the positive historical response to our external financing and Applied Testing and Pharma. Due to increased life expectancies worldwide and the dynamic growth of knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in the same position taken at year-end 2018. This assessment is supported by our strong balance sheet and the current needs. As a result, QIAGEN has not sought an official rating by any of the leading healthcare both in developed and emerging markets, the need for innovative diagnostics is increasing. Diagnostics seamless and cost-effective molecular testing workflows - from Sample to Insight. business outlook, and further supported by the positive historical response to our external financing needs. As a offer proven benefits to improve healthcare outcomes, particularly the use of companion diagnostics in precision rating agencies. We are confident in the future earnings strength of QIAGEN and result, QIAGEN has not sought an official rating by any of the leading rating agencies. We are confident in the medicine, while still representing a small fraction of overall healthcare expenditures. Internal R&D activities of Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation have access to the resources to pursue value-creating business opportunities. future earnings strength of QIAGEN and have access to the resources to pursue value-creating business QIAGEN and partnerships with other companies present major opportunities to develop new products and improve systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and opportunities. existing ones across our portfolio of Sample to Insight solutions. We also continuously evaluate potential targeted 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. acquisition opportunities to add new technologies or enter growing markets. All of these factors represent future Opportunities growth opportunities for QIAGEN. QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and growing needs in the market, partnering with researchers and Pharma companies, and acquiring companies or technologies Our mission is to make improvements in life possible by capturing growth opportunities as genomic and molecular Senior management at QIAGEN focuses strategic attention on identifying and assessing opportunities as early as to complement our portfolio. We believe the addressable global market for QIAGEN's portfolio of molecular testing technologies disseminate across two customer classes: Molecular Diagnostics and Life Science, including Academia possible, taking actions to maximize the value of those opportunities and executing on initiatives to deliver business products for customers across the continuum of life science research and molecular diagnostics totals more than $10 and Applied Testing and Pharma. Due to increased life expectancies worldwide and the dynamic growth of success. QIAGEN evaluates organic growth opportunities each year as part of its annual budget planning process, billion. healthcare both in developed and emerging markets, the need for innovative diagnostics is increasing. Diagnostics and during the year, especially in dynamically changing areas of the business portfolio. These evaluations are based offer proven benefits to improve healthcare outcomes, particularly the use of companion diagnostics in precision on proposals for new products, services and technologies developed within QIAGEN. This cross-functional process medicine, while still representing a small fraction of overall healthcare expenditures. Internal R&D activities of We have funded our growth through internally generated funds, debt offerings, and private and public sales of involves a careful analysis of the market environment and competitive positioning, as well as factors such as QIAGEN and partnerships with other companies present major opportunities to develop new products and improve equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol expected development timelines, regulatory processes and reimbursement issues, when evaluating organic existing ones across our portfolio of Sample to Insight solutions. We also continuously evaluate potential targeted QGEN and on the Frankfurt Prime Standard as QIA. opportunities. Business plans include information about the product or service to be developed, along with profiles acquisition opportunities to add new technologies or enter growing markets. All of these factors represent future on target customers and competitors, market size and barriers to entry. It also outlines the resources required for growth opportunities for QIAGEN. The company is registered under its commercial and legal name QIAGEN N.V. with the trade register (kamer van implementation. As part of this process, these plans are subjected to a uniform profitability analysis to determine the koophandel) of the Dutch region Limburg Noord under file number 12036979. QIAGEN N.V. is a public limited net present value of an investment and the opportunities to create value (as measured with QIAGEN Value Added, or Senior management at QIAGEN focuses strategic attention on identifying and assessing opportunities as early as liability company (naamloze vennootschap) under Dutch law as a holding company. Our principal executive office is QVA) and generate returns that exceed the Group’s cost of capital after a multi-year period. The monitoring of possible, taking actions to maximize the value of those opportunities and executing on initiatives to deliver business located at Hulsterweg 82, 5912 PL Venlo, The Netherlands, and our telephone number is +31-77-355-6600. growth initiatives is accomplished through regular reporting to the Supervisory Board on the status and progress of success. QIAGEN evaluates organic growth opportunities each year as part of its annual budget planning process, key initiatives during the year. Project management and the supporting central functions report directly to the and during the year, especially in dynamically changing areas of the business portfolio. These evaluations are based Executive Committee. As a holding company, QIAGEN conducts business through subsidiaries located throughout the world. Further on proposals for new products, services and technologies developed within QIAGEN. This cross-functional process information about QIAGEN can be found at www.QIAGEN.com. By referring to our website, we do not incorporate involves a careful analysis of the market environment and competitive positioning, as well as factors such as the website or any portion of the website by reference into this Annual Report. Risk Factors expected development timelines, regulatory processes and reimbursement issues, when evaluating organic opportunities. Business plans include information about the product or service to be developed, along with profiles on target customers and competitors, market size and barriers to entry. It also outlines the resources required for implementation. As part of this process, these plans are subjected to a uniform profitability analysis to determine the 54 net present value of an investment and the opportunities to create value (as measured with QIAGEN Value Added, or QVA) and generate returns that exceed the Group’s cost of capital after a multi-year period. The monitoring of growth initiatives is accomplished through regular reporting to the Supervisory Board on the status and progress of key initiatives during the year. Project management and the supporting central functions report directly to the Executive Committee. Risk Factors Management Report Management Report Opportunities and Risks Opportunities and Risks QIAGEN’s business, like that of any other company, involves significant opportunities and risks. Effective management is paramount in delivering sustainable value creation, and the central task of the leadership team. To QIAGEN’s business, like that of any other company, involves significant opportunities and risks. Effective sustain QIAGEN’s growth, effective execution is crucial in the development and commercialization of new products; management is paramount in delivering sustainable value creation, and the central task of the leadership team. To structure and implementation of acquisitions and strategic partnerships; and response to the wide variety of sustain QIAGEN’s growth, effective execution is crucial in the development and commercialization of new products; developments in markets where QIAGEN operates around the world. Managing opportunities and risks is an integral structure and implementation of acquisitions and strategic partnerships; and response to the wide variety of part of the corporate governance system in place throughout QIAGEN, not the task of one particular organizational developments in markets where QIAGEN operates around the world. Managing opportunities and risks is an integral part of the corporate governance system in place throughout QIAGEN, not the task of one particular organizational unit. Management systems are in place to aggregate all risks and opportunities for review at the Managing Board unit. Management systems are in place to aggregate all risks and opportunities for review at the Managing Board and Supervisory Board levels of QIAGEN N.V., and these are reviewed on a routine basis. Based on our assessment and Supervisory Board levels of QIAGEN N.V., and these are reviewed on a routine basis. Based on our assessment at the end of 2019, we consider the opportunities and risks manageable and the survival of QIAGEN not in danger, at the end of 2019, we consider the opportunities and risks manageable and the survival of QIAGEN not in danger, the same position taken at year-end 2018. This assessment is supported by our strong balance sheet and the current the same position taken at year-end 2018. This assessment is supported by our strong balance sheet and the current business outlook, and further supported by the positive historical response to our external financing needs. As a business outlook, and further supported by the positive historical response to our external financing needs. As a result, QIAGEN has not sought an official rating by any of the leading rating agencies. We are confident in the result, QIAGEN has not sought an official rating by any of the leading rating agencies. We are confident in the future earnings strength of QIAGEN and have access to the resources to pursue value-creating business future earnings strength of QIAGEN and have access to the resources to pursue value-creating business opportunities. opportunities. Opportunities Opportunities Our mission is to make improvements in life possible by capturing growth opportunities as genomic and molecular Our mission is to make improvements in life possible by capturing growth opportunities as genomic and molecular technologies disseminate across two customer classes: Molecular Diagnostics and Life Science, including Academia technologies disseminate across two customer classes: Molecular Diagnostics and Life Science, including Academia and Applied Testing and Pharma. Due to increased life expectancies worldwide and the dynamic growth of and Applied Testing and Pharma. Due to increased life expectancies worldwide and the dynamic growth of healthcare both in developed and emerging markets, the need for innovative diagnostics is increasing. Diagnostics healthcare both in developed and emerging markets, the need for innovative diagnostics is increasing. Diagnostics offer proven benefits to improve healthcare outcomes, particularly the use of companion diagnostics in precision offer proven benefits to improve healthcare outcomes, particularly the use of companion diagnostics in precision medicine, while still representing a small fraction of overall healthcare expenditures. Internal R&D activities of medicine, while still representing a small fraction of overall healthcare expenditures. Internal R&D activities of QIAGEN and partnerships with other companies present major opportunities to develop new products and improve QIAGEN and partnerships with other companies present major opportunities to develop new products and improve existing ones across our portfolio of Sample to Insight solutions. We also continuously evaluate potential targeted existing ones across our portfolio of Sample to Insight solutions. We also continuously evaluate potential targeted acquisition opportunities to add new technologies or enter growing markets. All of these factors represent future acquisition opportunities to add new technologies or enter growing markets. All of these factors represent future growth opportunities for QIAGEN. growth opportunities for QIAGEN. Senior management at QIAGEN focuses strategic attention on identifying and assessing opportunities as early as Senior management at QIAGEN focuses strategic attention on identifying and assessing opportunities as early as possible, taking actions to maximize the value of those opportunities and executing on initiatives to deliver business M A N A G E M E N T R E P O R T Opportunities and Risks possible, taking actions to maximize the value of those opportunities and executing on initiatives to deliver business success. QIAGEN evaluates organic growth opportunities each year as part of its annual budget planning process, success. QIAGEN evaluates organic growth opportunities each year as part of its annual budget planning process, and during the year, especially in dynamically changing areas of the business portfolio. These evaluations are based and during the year, especially in dynamically changing areas of the business portfolio. These evaluations are based on proposals for new products, services and technologies developed within QIAGEN. This cross-functional process on proposals for new products, services and technologies developed within QIAGEN. This cross-functional process involves a careful analysis of the market environment and competitive positioning, as well as factors such as involves a careful analysis of the market environment and competitive positioning, as well as factors such as expected development timelines, regulatory processes and reimbursement issues, when evaluating organic expected development timelines, regulatory processes and reimbursement issues, when evaluating organic opportunities. Business plans include information about the product or service to be developed, along with profiles opportunities. Business plans include information about the product or service to be developed, along with profiles on target customers and competitors, market size and barriers to entry. It also outlines the resources required for on target customers and competitors, market size and barriers to entry. It also outlines the resources required for implementation. As part of this process, these plans are subjected to a uniform profitability analysis to determine the implementation. As part of this process, these plans are subjected to a uniform profitability analysis to determine the net present value of an investment and the opportunities to create value (as measured with QIAGEN Value Added, or net present value of an investment and the opportunities to create value (as measured with QIAGEN Value Added, or QVA) and generate returns that exceed the Group’s cost of capital after a multi-year period. The monitoring of QVA) and generate returns that exceed the Group’s cost of capital after a multi-year period. The monitoring of growth initiatives is accomplished through regular reporting to the Supervisory Board on the status and progress of growth initiatives is accomplished through regular reporting to the Supervisory Board on the status and progress of key initiatives during the year. Project management and the supporting central functions report directly to the key initiatives during the year. Project management and the supporting central functions report directly to the Executive Committee. Executive Committee. Risk Factors Risk Factors 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. These 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 (discussed in more detail in the “Corporate Governance” section below) and the function of the Audit Committee of the Supervisory Board (discussed in more detail in the “Corporate Governance” section below). We maintain adequate internal controls over financial reporting to ensure the integrity of financial reporting, which is described further in the “Corporate Governance” section below. 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 as described further in the “Human Resources” section below. 55 Risk Management:Base Business Risk Business Growth Risk Underlying Business Risk · · · · · · · · · · · · · Identification and monitoring of competitive business threats Monitoring complexity of product portfolio Monitoring dependence on key customers for single product groups Reviewing dependence on individual production sites or suppliers Evaluating purchasing initiatives, price controls and changes to reimbursements Monitoring production risks, including contamination prevention, high-quality product assurance Ensuring ability to defend against intellectual property infringements and maintain competitive advantage after expiration Managing development and success of key R&D projects Managing successful integration of acquisitions to achieve anticipated benefits 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 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. Risks: 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 after these efforts. 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 that would 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, or decisions to stop development of projects, and we may experience delays or make decisions to stop certain products 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 companies offering similar or new technologies. Some of the factors affecting 56 market acceptance of new products include: Our continued growth is dependent on the development and success of new products.Risk Types· · · · · · · · · · · · Base Business Risk Identification and monitoring of competitive business threats Monitoring complexity of product portfolio Monitoring dependence on key customers for single product groups Reviewing dependence on individual production sites or suppliers Evaluating purchasing initiatives, price controls and changes to reimbursements Monitoring production risks, including contamination prevention, high-quality product assurance · Ensuring ability to defend against intellectual property infringements and maintain competitive advantage after expiration Business Growth Risk Managing development and success of key R&D projects Managing successful integration of acquisitions to achieve anticipated benefits Underlying Business Risk Evaluating financial risks, including economic risks and currency rate fluctuations Monitoring financial reporting risks, including multi-jurisdiction tax compliance Reviewing possible asset impairment events Assessing compliance and legal risks, including safety in operations and environmental hazard risks, compliance with various regulatory bodies and pending 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. Risks: 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 after these efforts. To the extent that we fail to introduce new and innovative products, or such products suffer significant M A N A G E M E N T R E P O R T Opportunities and Risks delays in development or are not accepted in the market, we may lose market share to our competitors that would 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, or decisions to stop development of projects, and we may experience delays or make decisions to stop certain products 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 companies offering similar or new technologies. Some of the factors affecting market acceptance of new products include: › availability, quality and price relative to existing 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 solutions. 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 potentially 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, 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 PCR automation systems, sample and assay technologies designed either for use either with QIAGEN instruments or for "universal" automation systems and instruments, and bioinformatics solutions to analyze and interpret complex 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 for processing on QIAsymphony, QIAstat-Dx and NeuMoDx 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 QIAstat-Dx and NeuMoDx systems, and the planned digital PCR workflows, could significantly affect sales of products designed to run on these platforms. Our business has grown, with total net sales increasing to $1.53 billion in 2019 from $1.28 billion in 2015. We have made a series of acquisitions in recent years, including the acquisitions of N-of-One in January 2019, STAT-Dx Life, S.L. in 2018, and OmicSoft Corporation in 2017 to complement internal research and development activities. We intend to identify and acquire other businesses in the future that support our strategy to build on our global leadership position in Sample to Insight solutions focused on molecular testing. The successful integration of acquired businesses requires a significant effort and expense across all operational areas. We continue to make investments to expand our existing 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 57 processes to increase sales growth while also enhancing operational efficiencies. 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, as well as expand the geographic presence of our operations, we intend to continue to assess the need to reallocate existing resources or hire new employees, as well as increased responsibilities for both existing and new management personnel. Our continued growth is dependent on the development and success of new products.Risk TypesAn inability to manage our growth, manage the expansion of our operations, orsuccessfully integrate acquired businesses could adversely affect our business.› availability, quality and price relative to existing 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 solutions. 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 potentially 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, 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 PCR automation systems, sample and assay technologies designed either for use either with QIAGEN instruments or for "universal" automation systems and instruments, and bioinformatics solutions to analyze and interpret complex 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 for processing on QIAsymphony, QIAstat-Dx and NeuMoDx 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 QIAstat-Dx and NeuMoDx systems, and the planned digital PCR workflows, could significantly affect sales of products designed to run on these platforms. Our business has grown, with total net sales increasing to $1.53 billion in 2019 from $1.28 billion in 2015. We have made a series of acquisitions in recent years, including the acquisitions of N-of-One in January 2019, STAT-Dx Life, S.L. in 2018, and OmicSoft Corporation in 2017 to complement internal research and development activities. We intend to identify and acquire other businesses in the future that support our strategy to build on our global leadership position in Sample to Insight solutions focused on molecular testing. The successful integration of acquired businesses requires a significant effort and expense across all operational areas. We continue to make investments to expand our existing 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 sales growth while also enhancing operational efficiencies. 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, as well as expand the geographic presence of our operations, we intend to continue to assess the need to reallocate existing resources or hire 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. 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 financial 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; › exposure to pre-existing cyber security risks or compromise of acquired entities; › maintenance of relationships with employees, customers and suppliers, and integration of new management personnel; › 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, including patent litigation. 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. Our results of operations could be materially affected by adverse general conditions in the global economy and 58 financial markets. The global outbreak of COVID-19 will have a significant impact on QIAGEN in 2020. Extraordinary demand has emerged for molecular technologies involved in testing for the new pathogen. However, the total impact is not predictable at this point, as the spike in demand is challenging the company’s short-term capacity for certain products, while the pandemic also is disrupting broader economies and routine healthcare in 2020. 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 a risk of Our acquisitions expose us to new risks, and we may not achieve the anticipatedbenefits of acquisitions of technologies and businesses.Global economic conditions could adversely affect our business, results of operationsand financial condition.An inability to manage our growth, manage the expansion of our operations, orsuccessfully integrate acquired businesses could adversely affect our business.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. 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 financial 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; › exposure to pre-existing cyber security risks or compromise of acquired entities; › maintenance of relationships with employees, customers and suppliers, and integration of new management personnel; › issuance of dilutive equity securities; › incurrence or assumption of debt and contingent liabilities; M A N A G E M E N T R E P O R T Opportunities and Risks › amortization or impairment of acquired intangible assets or potential businesses; and › exposure to liabilities of and claims against acquired entities or personnel, including patent litigation. 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. Our results of operations could be materially affected by adverse general conditions in the global economy and financial markets. The global outbreak of COVID-19 will have a significant impact on QIAGEN in 2020. Extraordinary demand has emerged for molecular technologies involved in testing for the new pathogen. However, the total impact is not predictable at this point, as the spike in demand is challenging the company’s short-term capacity for certain products, while the pandemic also is disrupting broader economies and routine healthcare in 2020. 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 a 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, particularly in terms of federal government funding in the United States. 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. 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 59 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 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 Our acquisitions expose us to new risks, and we may not achieve the anticipatedbenefits of acquisitions of technologies and businesses.Global economic conditions could adversely affect our business, results of operationsand financial condition.We may encounter delays in receipt, or limits in the amount, of reimbursementapprovals and public health funding, which will impact our ability to grow revenuesin the healthcare market or may negatively impact our profitability.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, particularly in terms of federal government funding in the United States. 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. 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 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. In accordance with the Protecting Access to Medicare Act of 2014 (PAMA), the Centers for Medicare & Medicaid Services calculate 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 (CLFS). If there are not adequate reimbursement levels, our business and results of operations could be adversely affected. 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 25% of our sales are generated from demand for our products used at universities, government laboratories and private foundations, and whose funding is dependent upon grants from government agencies, such as the NIH (National Institutes of Health) in the United States. Although the level of research funding has been 60 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. The markets for most of our 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 our products 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 We may encounter delays in receipt, or limits in the amount, of reimbursementapprovals and public health funding, which will impact our ability to grow revenuesin the healthcare market or may negatively impact our profitability.Reduction in research and development budgets and government funding may resultin reduced sales.Competition could reduce our sales.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. In accordance with the Protecting Access to Medicare Act of 2014 (PAMA), the Centers for Medicare & Medicaid Services calculate 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 (CLFS). If there are not adequate reimbursement levels, our business and results of operations could be adversely affected. 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 M A N A G E M E N T R E P O R T Opportunities and Risks 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 25% of our sales are generated from demand for our products used at universities, government laboratories and private foundations, and whose funding is dependent upon grants from government agencies, such as the NIH (National Institutes of Health) in the United States. 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. The markets for most of our 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 our products 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 (LDTs) to commercial diagnostics assays can be challenging. 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 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, 61 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 having RUO status, we could be forced to stop selling it until appropriate regulatory clearance or approval has been obtained. Reduction in research and development budgets and government funding may resultin reduced sales.Competition could reduce our sales.The time and expense needed to obtain regulatory approval and respond to changesin regulatory requirements could adversely affect our ability to commerciallydistribute our products and generate sales.Changes in tax laws or their application or the termination or reduction of certaingovernment tax incentives, could adversely impact our overall effective tax rate,results of operations or financial flexibility.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 (LDTs) to commercial diagnostics assays can be challenging. 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 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 having RUO status, we could be forced to stop selling it until appropriate regulatory clearance or approval has been obtained. 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 income or loss in some jurisdictions 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. 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 62 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 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. 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. 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. The time and expense needed to obtain regulatory approval and respond to changesin regulatory requirements could adversely affect our ability to commerciallydistribute our products and generate sales.Changes in tax laws or their application or the termination or reduction of certaingovernment tax incentives, could adversely impact our overall effective tax rate,results of operations or financial flexibility.We are subject to risks associated with patent litigation.We rely on collaborative commercial relationships to develop and/or market some ofour products.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 income or loss in some jurisdictions 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 M A N A G E M E N T R E P O R T Opportunities and Risks 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. 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 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. 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. 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. 63 We are subject to risks associated with patent litigation.We rely on collaborative commercial relationships to develop and/or market some ofour products.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 2019. 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 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 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 own intellectual property and other proprietary business information and that of our 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 cyber security risks facing our company and how to prevent data breaches. We have modernized our cyber security tools, and are continually modernizing our cyber security processes, in an attempt to keep pace with evolving cyber security risks. In spite of our efforts, we are unable to completely eliminate these risks and occasionally experience minor cyber security 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 cyber security team works diligently with our employees around the world, as well as 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 cyber security 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 64 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 cyber terrorists. If we do experience a breach or failure of our systems, we could experience potentially significant operational delays resulting from the disruption of We have made investments in and are expanding our business into emergingmarkets, which exposes us to risks.Some of our customers are requiring us to change our sales arrangements to lowertheir costs, and this may limit our pricing flexibility and harm our business.We are subject to privacy and data security laws and rely on secure communicationand information systems which, in the event of a breach or failure, expose us tosignificant 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 2019. 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 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 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 own intellectual property and other proprietary business information and that of our 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 cyber security risks facing our company and how to prevent data breaches. We have modernized our cyber security tools, and are continually modernizing our cyber security processes, in an attempt to keep pace with evolving cyber security risks. In spite of our efforts, we are unable to completely eliminate these risks M A N A G E M E N T R E P O R T Opportunities and Risks and occasionally experience minor cyber security 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 cyber security team works diligently with our employees around the world, as well as 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 cyber security 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 cyber terrorists. If we do experience a breach or failure of our systems, we could experience potentially significant 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, which took 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. Given that 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 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 global footprint exposes us to unforeseen events, such as the January 2020 eruption of the Taal volcano in the Philippines or the December 2019 outbreak of COVID-19 in China. 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. 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. 65 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. We have made investments in and are expanding our business into emergingmarkets, which exposes us to risks.Some of our customers are requiring us to change our sales arrangements to lowertheir costs, and this may limit our pricing flexibility and harm our business.We are subject to privacy and data security laws and rely on secure communicationand information systems which, in the event of a breach or failure, expose us tosignificant risks.Exchange rate fluctuations may adversely affect our business and operating results.Our global operations may be affected by actions of governments, global or regionaleconomic or public health developments, weather or transportation delays, naturaldisasters or other force majeure events (collectively, unforeseen events) which maynegatively impact our suppliers, ostrong customers or us.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, which took 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. Given that 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 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 global footprint exposes us to unforeseen events, such as the January 2020 eruption of the Taal volcano in the Philippines or the December 2019 outbreak of COVID-19 in China. 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. 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 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. 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. 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. We may face difficulties in hiring and retaining qualified personnel following our March 3, 2020 announcement of the proposed merger with Thermo Fisher Scientific Inc. The markets we serve are typically characterized by a high percentage of purchase orders being received in the final 66 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 revenue 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 and economic 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 be 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 significantly affected. Exchange rate fluctuations may adversely affect our business and operating results.Our global operations may be affected by actions of governments, global or regionaleconomic or public health developments, weather or transportation delays, naturaldisasters or other force majeure events (collectively, unforeseen events) which maynegatively impact our suppliers, ostrong customers or us.We depend on suppliers for materials used to manufacture our products, and ifshipments from these suppliers are delayed or interrupted, we may be unable tomanufacture our products.We heavily rely on air cargo carriers and other overnight logistics services, andshipping delays or interruptions could harm our business.Our success depends on the continued employment of qualified personnel, any ofwhom we may lose at any time.Our ability to accurately forecast our results during each quarter may be negativelyimpacted by the fact that a substantial percentage of our sales may be recorded inthe final weeks or days of the quarter.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 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. 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. 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 M A N A G E M E N T R E P O R T Opportunities and Risks 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. We may face difficulties in hiring and retaining qualified personnel following our March 3, 2020 announcement of the proposed merger with Thermo Fisher Scientific Inc. 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 revenue 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 and economic 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 be 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 significantly affected. We have a significant amount of debt and debt service obligations and 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 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 that use LIBOR. While certain 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 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. 67 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, 2019, we had outstanding long-term debt of $1.7 billion, of which $285.2 million was current. 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. We have a significant amount of debt that may adversely affect our financialcondition and flexibility.Our business may require substantial additional capital, which we may not be able toobtain on terms acceptable to us, if at all.We depend on suppliers for materials used to manufacture our products, and ifshipments from these suppliers are delayed or interrupted, we may be unable tomanufacture our products.We heavily rely on air cargo carriers and other overnight logistics services, andshipping delays or interruptions could harm our business.Our success depends on the continued employment of qualified personnel, any ofwhom we may lose at any time.Our ability to accurately forecast our results during each quarter may be negativelyimpacted by the fact that a substantial percentage of our sales may be recorded inthe final weeks or days of the quarter.We have a significant amount of debt and debt service obligations and 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 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 that use LIBOR. While certain 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 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, 2019, we had outstanding long-term debt of $1.7 billion, of which $285.2 million was current. 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. 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 14 "Derivatives and Hedging" and Note 16 "Lines of Credit and Debt", 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. 68 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. At December 31, 2019, our consolidated balance sheet reflected $2.1 billion of goodwill and $632.4 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. U.S. generally accepted accounting principles (U.S. GAAP) 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. 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 We have a significant amount of debt that may adversely affect our financialcondition and flexibility.Our business may require substantial additional capital, which we may not be able toobtain on terms acceptable to us, if at all.The accounting for the cash convertible notes we have issued will result in recognitionof interest expense significantly greater than the stated interest rate of the notes andmay result in volatility to our Consolidated Statements of Income.The cash convertible note hedge and warrant transactions we entered into inconnection with the issuance of our Cash Convertible Notes may not provide thebenefits we anticipate, and may have a dilutive effect on our common stock.An impairment of goodwill and intangible assets could reduce our earnings.Our strategic equity investments may result in losses.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 14 "Derivatives and Hedging" and Note 16 "Lines of Credit and Debt", 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 M A N A G E M E N T R E P O R T Opportunities and Risks 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. 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. At December 31, 2019, our consolidated balance sheet reflected $2.1 billion of goodwill and $632.4 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. U.S. generally accepted accounting principles (U.S. GAAP) 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. 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. 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 the general economic and public health 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 69 manage our international operations could have a material adverse impact on our business and results of operations. 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 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. 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, 2019, we owned 352 issued patents in the United States, 275 issued patents in Germany and 1,700 issued patents in other major industrialized countries. In addition, at December 31, 2019, we had 558 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 The accounting for the cash convertible notes we have issued will result in recognitionof interest expense significantly greater than the stated interest rate of the notes andmay result in volatility to our Consolidated Statements of Income.The cash convertible note hedge and warrant transactions we entered into inconnection with the issuance of our Cash Convertible Notes may not provide thebenefits we anticipate, and may have a dilutive effect on our common stock.An impairment of goodwill and intangible assets could reduce our earnings.Our strategic equity investments may result in losses.Doing business internationally creates certain risks.Unethical behavior and non-compliance with laws by our sales representatives, otheremployees, consultants, commercial partners or distributors or employees couldseriously harm our business.We depend on patents and proprietary rights that may fail to protect our business.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. 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 the general economic and public health 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. 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 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. 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, 2019, we owned 352 issued patents in the United States, 275 issued patents in Germany and 1,700 issued patents in other major industrialized countries. In addition, at December 31, 2019, we had 558 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. 70 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. 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 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 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. Doing business internationally creates certain risks.Unethical behavior and non-compliance with laws by our sales representatives, otheremployees, consultants, commercial partners or distributors or employees couldseriously harm our business.We depend on patents and proprietary rights that may fail to protect our business.Our business exposes us to potential product liability.Our operating results may vary significantly from period to period and this mayaffect the market price of our Common Shares.Our holding company structure makes us dependent on the operations of oursubsidiaries.M A N A G E M E N T R E P O R T Opportunities and Risks 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. 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 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 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. 71 Our business exposes us to potential product liability.Our operating results may vary significantly from period to period and this mayaffect the market price of our Common Shares.Our holding company structure makes us dependent on the operations of oursubsidiaries.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. loss of 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 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. 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 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 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. 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. The market price of our Common Shares since our initial public offering in September 1996 has increased significantly and been highly volatile. Beginning January 10, 2018, our shares are listed on the New York Stock Exchange (NYSE). Before that, our shares were listed on the NASDAQ through January 9, 2018. In the last two years, the price of our Common Shares has ranged from a high of $43.16 to a low of $25.04. On the Frankfurt Stock Exchange our Common Shares have ranged from a high of €39.19 to a low of €22.54 during the last two years. 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. QIAGEN has not paid an annual dividend since its inception, nor intends to implement one at this time. At the same time, in January 2017 we completed a synthetic share repurchase that combined a direct capital repayment with a reverse stock split. Although we do not anticipate paying any cash dividends on a regular basis, the distribution of any cash dividends through another synthetic share repurchase 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. QIAGEN has conducted share repurchase programs in the past through open-market transactions. Additionally, in 72 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. Our business exposes us to potential product liability.Our operating results may vary significantly from period to period and this mayaffect the market price of our Common Shares.Our holding company structure makes us dependent on the operations of oursubsidiaries.Our Common Shares may have a volatile public trading price.Holders of our Common Shares should not expect to receive dividend income.Holders of our Common Shares may not benefit from continued stock repurchaseprograms.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. The market price of our Common Shares since our initial public offering in September 1996 has increased significantly and been highly volatile. Beginning January 10, 2018, our shares are listed on the New York Stock Exchange (NYSE). Before that, our shares were listed on the NASDAQ through January 9, 2018. In the last two years, the price of our Common Shares has ranged from a high of $43.16 to a low of $25.04. On the Frankfurt Stock Exchange our Common Shares have ranged from a high of €39.19 to a low of €22.54 during the last two years. 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. QIAGEN has not paid an annual dividend since its inception, nor intends to implement one at this time. At the same M A N A G E M E N T R E P O R T Opportunities and Risks time, in January 2017 we completed a synthetic share repurchase that combined a direct capital repayment with a reverse stock split. Although we do not anticipate paying any cash dividends on a regular basis, the distribution of any cash dividends through another synthetic share repurchase 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. QIAGEN has conducted share repurchase programs in the past through open-market transactions. Additionally, 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. In 2019, we began net share withholding on the vesting of stock- based awards and as a result, fewer shares are issued than the number of awards outstanding. 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. 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, 2019, a total of approximately 227.8 million Common Shares were outstanding along with approximately 6.0 million additional shares reserved for issuance upon exercise or release of outstanding stock options and awards, of which 0.8 million were vested. A total of approximately 15.7 million Common Shares are reserved and available for issuances under our stock plans as of December 31, 2019, 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 31.1 million shares of our common stock (subject to customary adjustments under certain circumstances). 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, 2019, 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. 73 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. Future sales and issuances of our Common Shares could adversely affect our stockprice.Shareholders who are United States residents could be subject to unfavorable taxtreatment.Provisions of our Articles of Association and Dutch law and an option we havegranted may make it difficult to replace or remove management and may inhibit ordelay a takeover.Our Common Shares may have a volatile public trading price.Holders of our Common Shares should not expect to receive dividend income.Holders of our Common Shares may not benefit from continued stock repurchaseprograms.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. In 2019, we began net share withholding on the vesting of stock- based awards and as a result, fewer shares are issued than the number of awards outstanding. 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. 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, 2019, a total of approximately 227.8 million Common Shares were outstanding along with approximately 6.0 million additional shares reserved for issuance upon exercise or release of outstanding stock options and awards, of which 0.8 million were vested. A total of approximately 15.7 million Common Shares are reserved and available for issuances under our stock plans as of December 31, 2019, 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 31.1 million shares of our common stock (subject to customary adjustments under certain circumstances). 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, 2019, 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. 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. Notwithstanding the foregoing, in connection with the Business Combination Agreement that we entered into with Thermo Fisher Scientific Inc. (Thermo) on March 3, 2020 (BCA), we and the Foundation have agreed that (i) the Foundation shall not exercise the option in a way that would reasonably be expected to adversely affect the timely consummation of the acquisition contemplated by the BCA, unless and until the BCA has been terminated, (ii) if the Foundation exercises the option during the term of the BCA, the Foundation shall not exercise its voting rights as a shareholder in a manner that would reasonably be expected to adversely affect the timely consummation of the acquisition, unless and until the BCA has been terminated, (iii) the option shall be terminated subject only to the closing of the public tender offer (the “Closing”) and (iv) to the extent any Preference Shares would be held by the Foundation as of the Closing, the Foundation shall transfer such shares to the wholly owned acquisition subsidiary of Thermo (Offeror) under the obligation for the Offeror to pay a cash consideration equal to the aggregate capital paid up on such Preference Shares plus any accrued dividends and to indemnify the Foundation for any claim by us. 74 Future sales and issuances of our Common Shares could adversely affect our stockprice.Shareholders who are United States residents could be subject to unfavorable taxtreatment.Provisions of our Articles of Association and Dutch law and an option we havegranted may make it difficult to replace or remove management and may inhibit ordelay a takeover.M A N A G E M E N T R E P O R T Opportunities and Risks 75 Management Report Management Report Performance Review Business and Operating Environment Our future operating results may be affected by various risk factors, many of which Our future operating results may be affected by various risk factors, many of which are beyond our control. Certain are beyond our control. Certain statements included in this Annual Report and the QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular statements included in this Annual Report and the documents incorporated herein by reference may be forward- insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section documents incorporated herein by reference may be forward-looking statements faster, better and more efficiently - from the raw biological sample to the final interpreted result. 21E of the U.S. Securities Exchange Act of 1934, as amended, including statements regarding potential future net within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, sales, gross profit, net income and liquidity. These statements can be identified by the use of forward-looking and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, including terminology such as “believe,” “hope,” “plan,” “intend,” “seek,” “may,” “will,” “could,” “should,” “would,” We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) Management Report statements regarding potential future net sales, gross profit, net income and liquidity. “expect,” “anticipate,” “estimate,” “continue” or other similar words. Reference is made in particular to the and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the These statements can be identified by the use of forward-looking terminology such other forward-looking statements. Such statements are based on management’s current expectations and are subject increasing volumes and complexity of biological information, in keeping with our vision of making improvements in as “believe,” “hope,” “plan,” “intend,” “seek,” “may,” “will,” “could,” “should,” to a number of factors and uncertainties that could cause actual results to differ materially from those described in the life possible. Performance Review “would,” “expect,” “anticipate,” “estimate,” “continue” or other similar words. 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 Reference is made in particular to the description of our plans and objectives for QIAGEN began operations in 1986 as a pioneer in the emerging biotechnology sector, introducing a novel method of various factors. Factors which could cause such results to differ materially from those described in the forward- that standardized and accelerated extraction and purification of nucleic acids from biological samples. As molecular future operations, assumptions underlying such plans and objectives, and other Our future operating results may be affected by various risk factors, many of which are beyond our control. Certain looking statements include those set forth in the risk factors below. As a result, our future success involves a high biology and genomic knowledge have grown to influence many areas of life, QIAGEN has expanded to serve the forward-looking statements. Such statements are based on management’s current statements included in this Annual Report and the documents incorporated herein by reference may be forward- degree of risk. When considering forward-looking statements, you should keep in mind that the risk factors could full spectrum of market needs. We believe our sample technologies are unmatched in quality for isolating and looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section cause our actual results to differ significantly from those contained in any forward-looking statement. expectations and are subject to a number of factors and uncertainties that could preparing DNA (deoxyribonucleic acid), RNA (ribonucleic acid) and proteins from blood or other liquids, tissue, 21E of the U.S. Securities Exchange Act of 1934, as amended, including statements regarding potential future net plants or other materials. Our assay technologies amplify, enrich and make these biomolecules accessible for cause actual results to differ materially from those described in the forward-looking sales, gross profit, net income and liquidity. These statements can be identified by the use of forward-looking analysis, such as identifying the genetic information of a pathogen or a gene mutation in a tumor. QIAGEN’s Results of Operations statements. We caution investors that there can be no assurance that actual results terminology such as “believe,” “hope,” “plan,” “intend,” “seek,” “may,” “will,” “could,” “should,” “would,” industry-leading Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and “expect,” “anticipate,” “estimate,” “continue” or other similar words. Reference is made in particular to the or business conditions will not differ materially from those projected or suggested in knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and seamless and cost-effective molecular testing workflows - from Sample to Insight. such forward-looking statements as a result of various factors. Factors which could other forward-looking statements. Such statements are based on management’s current expectations and are subject We are a leading global provider of Sample to Insight solutions to transform biological materials into valuable cause such results to differ materially from those described in the forward-looking to a number of factors and uncertainties that could cause actual results to differ materially from those described in the molecular insights. QIAGEN sample technologies isolate and process DNA, RNA and proteins from any biological Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation forward-looking statements. We caution investors that there can be no assurance that actual results or business statements include those set forth in the risk factors below. As a result, our future sample, such as blood or tissue. Assay technologies make these biomolecules visible and ready for analysis, such as systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and conditions will not differ materially from those projected or suggested in such forward-looking statements as a result identifying the DNA of a virus or a mutation of a gene. Digital insights integrate software and cloud-based resources success involves a high degree of risk. When considering forward-looking state- 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. of various factors. Factors which could cause such results to differ materially from those described in the forward- to interpret increasing volumes of biological data and report relevant, actionable insights. Our automation solutions ments, you should keep in mind that the risk factors could cause our actual results looking statements include those set forth in the risk factors below. As a result, our future success involves a high tie these together in seamless and cost-effective molecular testing workflows. degree of risk. When considering forward-looking statements, you should keep in mind that the risk factors could QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and growing to differ significantly from those contained in any forward-looking statement. cause our actual results to differ significantly from those contained in any forward-looking statement. needs in the market, partnering with researchers and Pharma companies, and acquiring companies or technologies We sell our products - consumables, automated instrumentation systems using those technologies, and digital insights to complement our portfolio. We believe the addressable global market for QIAGEN's portfolio of molecular testing to analyze and interpret the data - to two major customer classes: products for customers across the continuum of life science research and molecular diagnostics totals more than $10 Results of Operations billion. › - 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. We have funded our growth through internally generated funds, debt offerings, and private and public sales of Includes Precision Medicine and companion diagnostics. We are a leading global provider of Sample to Insight solutions to transform biological materials into valuable equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol molecular insights. QIAGEN sample technologies isolate and process DNA, RNA and proteins from any biological QGEN and on the Frankfurt Prime Standard as QIA. - customers including government, biotechnology companies and researchers who utilize molecular sample, such as blood or tissue. Assay technologies make these biomolecules visible and ready for analysis, such as testing and technologies who are generally served by public funding including areas such as medicine and clinical identifying the DNA of a virus or a mutation of a gene. Digital insights integrate software and cloud-based resources development efforts, forensics and exploring the secrets of life. Includes Pharma, Academia and Applied Testing The company is registered under its commercial and legal name QIAGEN N.V. with the trade register (kamer van to interpret increasing volumes of biological data and report relevant, actionable insights. Our automation solutions customers. koophandel) of the Dutch region Limburg Noord under file number 12036979. QIAGEN N.V. is a public limited tie these together in seamless and cost-effective molecular testing workflows. 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. We market products in more than 130 countries, mainly through subsidiaries in markets we believe have the greatest We sell our products - consumables, automated instrumentation systems using those technologies, and digital insights sales potential in Europe, Asia, the Americas and Australia. We also work with specialized independent distributors to analyze and interpret the data - to two major customer classes: and importers. As of December 31, 2019, we employed approximately 5,100 people in more than 35 locations As a holding company, QIAGEN conducts business through subsidiaries located throughout the world. Further worldwide. 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. - 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. Includes Precision Medicine and companion diagnostics. › 76 - customers including government, biotechnology companies and researchers who utilize molecular testing and technologies who are generally served by public funding including areas such as medicine and clinical development efforts, forensics and exploring the secrets of life. Includes Pharma, Academia and Applied Testing customers. 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, 2019, we employed approximately 5,100 people in more than 35 locations worldwide. OverviewRecent AcquisitionsMolecular DiagnosticsLife SciencesOverviewRecent AcquisitionsMolecular DiagnosticsLife SciencesManagement Report Management Report Performance Review Performance Review 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 Our future operating results may be affected by various risk factors, many of which are beyond our control. Certain 21E of the U.S. Securities Exchange Act of 1934, as amended, including statements regarding potential future net 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 sales, gross profit, net income and liquidity. These statements can be identified by the use of forward-looking 21E of the U.S. Securities Exchange Act of 1934, as amended, including statements regarding potential future net terminology such as “believe,” “hope,” “plan,” “intend,” “seek,” “may,” “will,” “could,” “should,” “would,” sales, gross profit, net income and liquidity. These statements can be identified by the use of forward-looking “expect,” “anticipate,” “estimate,” “continue” or other similar words. Reference is made in particular to the terminology such as “believe,” “hope,” “plan,” “intend,” “seek,” “may,” “will,” “could,” “should,” “would,” description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and “expect,” “anticipate,” “estimate,” “continue” or other similar words. Reference is made in particular to the other forward-looking statements. Such statements are based on management’s current expectations and are subject description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and to a number of factors and uncertainties that could cause actual results to differ materially from those described in the other forward-looking statements. Such statements are based on management’s current expectations and are subject forward-looking statements. We caution investors that there can be no assurance that actual results or business to a number of factors and uncertainties that could cause actual results to differ materially from those described in the conditions will not differ materially from those projected or suggested in such forward-looking statements as a result forward-looking statements. We caution investors that there can be no assurance that actual results or business of various factors. Factors which could cause such results to differ materially from those described in the forward- conditions will not differ materially from those projected or suggested in such forward-looking statements as a result looking statements include those set forth in the risk factors below. As a result, our future success involves a high of various factors. Factors which could cause such results to differ materially from those described in the forward- degree of risk. When considering forward-looking statements, you should keep in mind that the risk factors could looking statements include those set forth in the risk factors below. As a result, our future success involves a high cause our actual results to differ significantly from those contained in any forward-looking statement. 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. Results of Operations Results of Operations We are a leading global provider of Sample to Insight solutions to transform biological materials into valuable 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 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 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. Digital insights integrate software and cloud-based resources identifying the DNA of a virus or a mutation of a gene. Digital insights integrate software and cloud-based resources to interpret increasing volumes of biological data and report relevant, actionable insights. Our automation solutions 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. tie these together in seamless and cost-effective molecular testing workflows. M A N A G E M E N T R E P O R T Performance Review We sell our products - consumables, automated instrumentation systems using those technologies, and digital insights We sell our products - consumables, automated instrumentation systems using those technologies, and digital insights to analyze and interpret the data - to two major customer classes: to analyze and interpret the data - to two major customer classes: › › › › - healthcare providers engaged in many aspects of patient care requiring accurate - 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. diagnosis and insights to guide treatment decisions in oncology, infectious diseases and immune monitoring. Includes Precision Medicine and companion diagnostics. Includes Precision Medicine and companion diagnostics. - customers including government, biotechnology companies and researchers who utilize molecular - customers including government, biotechnology companies and researchers who utilize molecular testing and technologies who are generally served by public funding including areas such as medicine and clinical testing and technologies who are generally served by public funding including areas such as medicine and clinical development efforts, forensics and exploring the secrets of life. Includes Pharma, Academia and Applied Testing development efforts, forensics and exploring the secrets of life. Includes Pharma, Academia and Applied Testing customers. customers. We market products in more than 130 countries, mainly through subsidiaries in markets we believe have the greatest 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 sales potential in Europe, Asia, the Americas and Australia. We also work with specialized independent distributors and importers. As of December 31, 2019, we employed approximately 5,100 people in more than 35 locations and importers. As of December 31, 2019, we employed approximately 5,100 people in more than 35 locations worldwide. worldwide. We have made a number of strategic acquisitions and implemented other strategic transactions 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 January 2019, QIAGEN began developing next-generation systems for digital PCR and acquired the digital PCR assets of Formulatrix, Inc., a developer of laboratory automation solutions. We expect to begin commercializing fully integrated digital PCR solutions in 2020, combining QIAGEN technologies and automation with the Formulatrix assets we acquired. Known as QIAcuity, the system will offer highly automated workflows, quicker time-to-result, and higher multiplexing and throughput flexibility than current digital PCR platforms. Digital PCR is one of the fastest-growing molecular testing applications in the life sciences industry. 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 broadened the QIAGEN Digital Insights offering of software, content and service-based solutions. N-of-One’s services and content have been integrated into QIAGEN Clinical Insights (QCI), adding medical interpretation and real-world evidence insights. The N-of-One somatic cancer database, drawing upon more than 125,000 anonymized patient samples, has increased QIAGEN’s lead as the provider of the industry’s largest genomics knowledge base. In September 2018, QIAGEN announced a strategic partnership with NeuMoDx Molecular, Inc. to commercialize next-generation, fully integrated automation systems for PCR testing. The NeuMoDx 288 (high-throughput version) and NeuMoDx 96 (mid-throughput) systems help clinical laboratories process increasing molecular test volumes and deliver more rapid diagnostic insights. QIAGEN is initially distributing NeuMoDx systems and consumables in Europe and other markets outside the United States. The companies entered a merger agreement whereby QIAGEN will acquire remaining NeuMoDx shares that it does not currently own at a price of approximately $234 million (QIAGEN currently owns 19.9% of NeuMoDx), subject to the achievement of regulatory and operational milestones, by mid-2020. In April 2018, QIAGEN acquired STAT-Dx, a privately held company, and launched QIAstat-Dx, a next- generation multiplex PCR system developed by STAT-Dx, in Europe. The novel QIAstat-Dx system enables fast, cost- effective and flexible syndromic testing from Sample to Insight. The first two CE-IVD marked assays provide differential diagnosis of serious respiratory and gastrointestinal infections. In May 2019, we received FDA clearance and launched QIAstat-Dx in the United States with the respiratory panel. A broad menu of tests is under development 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. Our financial results include the impacts of recent acquisitions from their effective dates. In October 2019, QIAGEN announced a new orientation for its NGS-related activities that focuses development activities on maximizing the new Illumina partnership for IVD solutions, as well as expanding QIAGEN’s offering of universal NGS consumables solutions for use with any sequencer. QIAGEN intends to continue supporting and servicing customers of the GeneReader NGS System, which is commercialized worldwide as a complete system for 77 the processing of smaller targeted gene panels. However, QIAGEN discontinued development for new NGS instruments. Additionally, QIAGEN began implementing a set of initiatives to shift its Global Operations organization to a regional manufacturing structure and to expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland, and Manila, Philippines. QIAGEN currently anticipates further pre-tax charges of about $15-23 million in 2020 for these measures. We determined that we operate as one business segment in accordance with ASC Topic 280, Segment Reporting. 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 acquisitions made during 2019 together with recent changes in our management, we determined that we still operate as one business segment. We provide certain OverviewRecent AcquisitionsMolecular DiagnosticsLife SciencesNGS portfolio orientation and measures to prioritize resource allocationOverviewRecent AcquisitionsMolecular DiagnosticsLife SciencesWe have made a number of strategic acquisitions and implemented other strategic transactions 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 January 2019, QIAGEN began developing next-generation systems for digital PCR and acquired the digital PCR assets of Formulatrix, Inc., a developer of laboratory automation solutions. We expect to begin commercializing fully integrated digital PCR solutions in 2020, combining QIAGEN technologies and automation with the Formulatrix assets we acquired. Known as QIAcuity, the system will offer highly automated workflows, quicker time-to-result, and higher multiplexing and throughput flexibility than current digital PCR platforms. Digital PCR is one of the fastest-growing molecular testing applications in the life sciences industry. 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 broadened the QIAGEN Digital Insights offering of software, content and service-based solutions. N-of-One’s services and content have been integrated into QIAGEN Clinical Insights (QCI), adding medical interpretation and real-world evidence insights. The N-of-One somatic cancer database, drawing upon more than 125,000 anonymized patient samples, has increased QIAGEN’s lead as the provider of the industry’s largest genomics knowledge base. › In September 2018, QIAGEN announced a strategic partnership with NeuMoDx Molecular, Inc. to commercialize next-generation, fully integrated automation systems for PCR testing. The NeuMoDx 288 (high-throughput version) and NeuMoDx 96 (mid-throughput) systems help clinical laboratories process increasing molecular test volumes and deliver more rapid diagnostic insights. QIAGEN is initially distributing NeuMoDx systems and consumables in Europe and other markets outside the United States. The companies entered a merger agreement whereby QIAGEN will acquire remaining NeuMoDx shares that it does not currently own at a price of approximately $234 million (QIAGEN currently owns 19.9% of NeuMoDx), subject to the achievement of regulatory and operational milestones, by mid-2020. › In April 2018, QIAGEN acquired STAT-Dx, a privately held company, and launched QIAstat-Dx, a next- generation multiplex PCR system developed by STAT-Dx, in Europe. The novel QIAstat-Dx system enables fast, cost- effective and flexible syndromic testing from Sample to Insight. The first two CE-IVD marked assays provide differential diagnosis of serious respiratory and gastrointestinal infections. In May 2019, we received FDA clearance and launched QIAstat-Dx in the United States with the respiratory panel. A broad menu of tests is under development 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. Our financial results include the impacts of recent acquisitions from their effective dates. In October 2019, QIAGEN announced a new orientation for its NGS-related activities that focuses development activities on maximizing the new Illumina partnership for IVD solutions, as well as expanding QIAGEN’s offering of universal NGS consumables solutions for use with any sequencer. QIAGEN intends to continue supporting and servicing customers of the GeneReader NGS System, which is commercialized worldwide as a complete system for the processing of smaller targeted gene panels. However, QIAGEN discontinued development for new NGS instruments. Additionally, QIAGEN began implementing a set of initiatives to shift its Global Operations organization to a regional manufacturing structure and to expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland, and Manila, Philippines. QIAGEN currently anticipates further pre-tax charges of about $15-23 million in 2020 for these measures. We determined that we operate as one business segment in accordance with ASC Topic 280, Segment Reporting. 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 acquisitions made during 2019 together with recent changes in our management, 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, 2019, Compared to 2018 In 2019, net sales grew 2% to $1.53 billion compared to $1.50 billion in 2018 reflecting growth in consumables and related revenues which more than offset lower instrument revenues. Consumable and related revenues includes the contributions from our January 2019 acquisition of N-of-One, which provided net sales of approximately $5.0 million in 2019. We experienced increases across consumables and related revenues (+3% / 89% of sales) due to strong sales of the QuantiFERON-TB test as well as gains within the Life Sciences customer classes. This more than outweighed decreases across the instruments portfolio (-8% / 11% of sales) including lower sales of platforms for assay technologies and the GeneReader NGS Systems despite higher placements of the QIAcube Connect, QIASymphony and QIAstat-Dx systems. Net sales were negatively impacted by two percentage points from adverse currency movements against the U.S. dollar. An overview of net sales by product category and customer class: Consumables and related revenues Instruments Molecular Diagnostics(1) Life Sciences Academia / Applied Testing Pharma $ 1,354 $ 172 $ 737 $ 789 $ 487 $ 302 +3% -8% +1% +2% +2% +4% 89% 11% 48% 52% 32% 20% (1) Includes companion diagnostic co-development revenues ($42 million, -28%). Molecular Diagnostics grew 1% and represented 48% of sales in 2019. Molecular Diagnostics sales were adversely affected by three percentage points of adverse currency movements compared to 2018. Sales in 2019 included 78 gains in consumables, in particular for the QuantiFERON-TB test compared to 2018 that was partially offset by significantly lower revenues from companion diagnostic co-development projects and instruments. During 2019, Life Sciences sales grew 2% and reflected 52% of sales, while currency movements adversely impacted this customer class by three percentage point compared to 2018. Increased demand in consumables and related revenues across this customer class more than offset weaker instrument sales, which were affected by the focus on a new generation of products being prepared for launch and led by the new version of QIAcube Connect. Results for 2019 also absorbed the adverse effect of the April 2018 divestment of the Applied Testing veterinary testing assay portfolio. NGS portfolio orientation and measures to prioritize resource allocationNet SalesCustomer classes:Net sales by product category and customer classNet sales by geographic regionYear ended December 31, 2019Sales (In $ m)% change% of sales 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, 2019, Compared to 2018 In 2019, net sales grew 2% to $1.53 billion compared to $1.50 billion in 2018 reflecting growth in consumables and related revenues which more than offset lower instrument revenues. Consumable and related revenues includes the contributions from our January 2019 acquisition of N-of-One, which provided net sales of approximately $5.0 million in 2019. We experienced increases across consumables and related revenues (+3% / 89% of sales) due to strong sales of the QuantiFERON-TB test as well as gains within the Life Sciences customer classes. This more than outweighed decreases across the instruments portfolio (-8% / 11% of sales) including lower sales of platforms for assay technologies and the GeneReader NGS Systems despite higher placements of the QIAcube Connect, QIASymphony and QIAstat-Dx systems. Net sales were negatively impacted by two percentage points from adverse currency movements against the U.S. dollar. An overview of net sales by product category and customer class: Consumables and related revenues Instruments Molecular Diagnostics(1) Life Sciences M A N A G E M E N T R E P O R T Performance Review Academia / Applied Testing Pharma $ 1,354 $ 172 $ 737 $ 789 $ 487 $ 302 +3% -8% +1% +2% +2% +4% 89% 11% 48% 52% 32% 20% (1) Includes companion diagnostic co-development revenues ($42 million, -28%). Molecular Diagnostics grew 1% and represented 48% of sales in 2019. Molecular Diagnostics sales were adversely affected by three percentage points of adverse currency movements compared to 2018. Sales in 2019 included gains in consumables, in particular for the QuantiFERON-TB test compared to 2018 that was partially offset by significantly lower revenues from companion diagnostic co-development projects and instruments. During 2019, Life Sciences sales grew 2% and reflected 52% of sales, while currency movements adversely impacted this customer class by three percentage point compared to 2018. Increased demand in consumables and related revenues across this customer class more than offset weaker instrument sales, which were affected by the focus on a new generation of products being prepared for launch and led by the new version of QIAcube Connect. Results for 2019 also absorbed the adverse effect of the April 2018 divestment of the Applied Testing veterinary testing assay portfolio. Americas Americas Americas Americas Europe / Middle East / Africa Europe / Middle East / Africa Europe / Middle East / Africa Europe / Middle East / Africa Asia-Pacific / Japan Asia-Pacific / Japan Asia-Pacific / Japan Asia-Pacific / Japan $ 722 $ 722 $ 722 $ 722 $ 487 $ 487 $ 487 $ 487 $ 314 $ 314 $ 314 $ 314 +4% +4% +4% +4% 47% 47% 47% 47% -1% -1% -1% -1% 32% 32% 32% 32% 0% 0% 0% 0% 21% 21% 21% 21% Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey ($250 million, +2%, 16% of sales) Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey ($250 million, +2%, 16% of sales) Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey ($250 million, +2%, 16% of sales) Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey ($250 million, +2%, 16% of sales) Rest of world represented less than 1% of net sales. Rest of world represented less than 1% of net sales. Rest of world represented less than 1% of net sales. Rest of world represented less than 1% of net sales. The Americas led the geographic regions with 4% sales growth in 2019 with continued improvements within Life Sciences and overall gains in the United States, Brazil and Mexico against a decline in Canada. The Asia-Pacific / Japan region in 2019 was flat due primarily to the weaker results in China and Japan against gains in India. The EMEA region experienced a 1% decline due in part to declines in France and Italy against improving trends in Germany, Turkey and the United Kingdom. The Americas led the geographic regions with 4% sales growth in 2019 with continued improvements within Life The Americas led the geographic regions with 4% sales growth in 2019 with continued improvements within Life The Americas led the geographic regions with 4% sales growth in 2019 with continued improvements within Life Sciences and overall gains in the United States, Brazil and Mexico against a decline in Canada. The Asia-Pacific / Sciences and overall gains in the United States, Brazil and Mexico against a decline in Canada. The Asia-Pacific / Sciences and overall gains in the United States, Brazil and Mexico against a decline in Canada. The Asia-Pacific / Japan region in 2019 was flat due primarily to the weaker results in China and Japan against gains in India. The Japan region in 2019 was flat due primarily to the weaker results in China and Japan against gains in India. The Japan region in 2019 was flat due primarily to the weaker results in China and Japan against gains in India. The EMEA region experienced a 1% decline due in part to declines in France and Italy against improving trends in EMEA region experienced a 1% decline due in part to declines in France and Italy against improving trends in EMEA region experienced a 1% decline due in part to declines in France and Italy against improving trends in Germany, Turkey and the United Kingdom. Germany, Turkey and the United Kingdom. Germany, Turkey and the United Kingdom. Gross profit was $1.01 billion, or 66% of net sales, in 2019, compared with $1.00 billion, or 67% of net sales, in Gross profit was $1.01 billion, or 66% of net sales, in 2019, compared with $1.00 billion, or 67% of net sales, in Gross profit was $1.01 billion, or 66% of net sales, in 2019, compared with $1.00 billion, or 67% of net sales, in Gross profit was $1.01 billion, or 66% of net sales, in 2019, compared with $1.00 billion, or 67% of net sales, in 2018. Generally, our consumables and related products have a higher gross margin than our instrumentation 2018. Generally, our consumables and related products have a higher gross margin than our instrumentation 2018. Generally, our consumables and related products have a higher gross margin than our instrumentation 2018. 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 products and service arrangements. Fluctuations in the sales levels of these products and services can result in products and service arrangements. Fluctuations in the sales levels of these products and services can result in products and service arrangements. Fluctuations in the sales levels of these products and services can result in changes in gross margin between periods. The growth in consumables and related revenue during 2019 contributed changes in gross margin between periods. The growth in consumables and related revenue during 2019 contributed changes in gross margin between periods. The growth in consumables and related revenue during 2019 contributed changes in gross margin between periods. The growth in consumables and related revenue during 2019 contributed favorably to the margin, which was negatively impacted by higher amortization expenses related to developed favorably to the margin, which was negatively impacted by higher amortization expenses related to developed favorably to the margin, which was negatively impacted by higher amortization expenses related to developed favorably to the margin, which was negatively impacted by higher amortization expenses related to developed technology and patent and license rights that were acquired in business combinations or asset acquisitions. The technology and patent and license rights that were acquired in business combinations or asset acquisitions. The technology and patent and license rights that were acquired in business combinations or asset acquisitions. The technology and patent and license rights that were acquired in business combinations or asset acquisitions. The amortization expense on acquisition-related intangibles within cost of sales increased to $71.5 million in 2019 from amortization expense on acquisition-related intangibles within cost of sales increased to $71.5 million in 2019 from amortization expense on acquisition-related intangibles within cost of sales increased to $71.5 million in 2019 from amortization expense on acquisition-related intangibles within cost of sales increased to $71.5 million in 2019 from $56.7 million in 2018. The increase was due to the asset acquisition from Formulatrix as further discussed in Note 5 $56.7 million in 2018. The increase was due to the asset acquisition from Formulatrix as further discussed in Note 5 $56.7 million in 2018. The increase was due to the asset acquisition from Formulatrix as further discussed in Note 5 $56.7 million in 2018. The increase was due to the asset acquisition from Formulatrix as further discussed in Note 5 "Acquisitions and Divestitures". We expect that our acquisition-related intangible amortization will increase as a "Acquisitions and Divestitures". We expect that our acquisition-related intangible amortization will increase as a "Acquisitions and Divestitures". We expect that our acquisition-related intangible amortization will increase as a "Acquisitions and Divestitures". We expect that our acquisition-related intangible amortization will increase as a result of further acquisitions in the future. result of further acquisitions in the future. result of further acquisitions in the future. result of further acquisitions in the future. Research and development expenses fell by 3% to $157.4 million (10% of net sales) in 2019, from $161.9 million Research and development expenses fell by 3% to $157.4 million (10% of net sales) in 2019, from $161.9 million Research and development expenses fell by 3% to $157.4 million (10% of net sales) in 2019, from $161.9 million Research and development expenses fell by 3% to $157.4 million (10% of net sales) in 2019, from $161.9 million (11% of net sales) in 2018. The net decrease reflected higher investments in QIAstat-Dx and the planned launch of a (11% of net sales) in 2018. The net decrease reflected higher investments in QIAstat-Dx and the planned launch of a (11% of net sales) in 2018. The net decrease reflected higher investments in QIAstat-Dx and the planned launch of a (11% of net sales) in 2018. The net decrease reflected higher investments in QIAstat-Dx and the planned launch of a digital PCR system against the significant reduction in costs following the decision to discontinue development of digital PCR system against the significant reduction in costs following the decision to discontinue development of digital PCR system against the significant reduction in costs following the decision to discontinue development of digital PCR system against the significant reduction in costs following the decision to discontinue development of NGS-related instrument systems. As we continue to discover, develop and acquire new products and technologies, NGS-related instrument systems. As we continue to discover, develop and acquire new products and technologies, NGS-related instrument systems. As we continue to discover, develop and acquire new products and technologies, NGS-related instrument systems. 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 we expect to incur additional expenses related to facilities, licenses and employees engaged in research and we expect to incur additional expenses related to facilities, licenses and employees engaged in research and 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 development. Overall, research and development costs are expected to increase as a result of seeking regulatory development. Overall, research and development costs are expected to increase as a result of seeking regulatory 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 approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE approval of approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE approval of approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE approval of 79 certain assays or instruments, but to decline as a percentage of sales in 2020 compared to 2019. certain assays or instruments, but to decline as a percentage of sales in 2020 compared to 2019. certain assays or instruments, but to decline as a percentage of sales in 2020 compared to 2019. certain assays or instruments, but to decline as a percentage of sales in 2020 compared to 2019. Sales and marketing expenses were essentially unchanged at $391.9 million (26% of net sales) in 2019 compared Sales and marketing expenses were essentially unchanged at $391.9 million (26% of net sales) in 2019 compared Sales and marketing expenses were essentially unchanged at $391.9 million (26% of net sales) in 2019 compared Sales and marketing expenses were essentially unchanged at $391.9 million (26% of net sales) in 2019 compared to $392.3 million (26% of net sales) in 2018. Sales and marketing expenses were primarily associated with to $392.3 million (26% of net sales) in 2018. Sales and marketing expenses were primarily associated with to $392.3 million (26% of net sales) in 2018. Sales and marketing expenses were primarily associated with to $392.3 million (26% of net sales) in 2018. Sales and marketing expenses were primarily associated with personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional expense. Higher costs in 2019 related to an increase in sales personnel, which was partially offset by lower share- expense. Higher costs in 2019 related to an increase in sales personnel, which was partially offset by lower share- expense. Higher costs in 2019 related to an increase in sales personnel, which was partially offset by lower share- expense. Higher costs in 2019 related to an increase in sales personnel, which was partially offset by lower share- based compensation and reduced third-party marketing activities. We anticipate that absolute sales and marketing based compensation and reduced third-party marketing activities. We anticipate that absolute sales and marketing based compensation and reduced third-party marketing activities. We anticipate that absolute sales and marketing based compensation and reduced third-party marketing activities. 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 costs will increase along with new product introductions and growth in sales of our products, but decrease as a costs will increase along with new product introductions and growth in sales of our products, but decrease as a costs will increase along with new product introductions and growth in sales of our products, but decrease as a percentage of sales. percentage of sales. percentage of sales. percentage of sales. Net SalesCustomer classes:Net sales by product category and customer classNet sales by geographic regionYear ended December 31, 2019Sales (In $ m)% change% of salesGross ProfitResearch and DevelopmentSales and MarketingGeneral and AdministrativeYear ended December 31, 2019Sales (In $ m)% change% of salesGross ProfitResearch and DevelopmentSales and MarketingGeneral and AdministrativeYear ended December 31, 2019Sales (In $ m)% change% of salesGross ProfitResearch and DevelopmentSales and MarketingGeneral and AdministrativeYear ended December 31, 2019Sales (In $ m)% change% of salesGross ProfitResearch and DevelopmentSales and MarketingGeneral and AdministrativeYear ended December 31, 2019Sales (In $ m)% change% of sales Americas Europe / Middle East / Africa Asia-Pacific / Japan $ 722 $ 487 $ 314 +4% -1% 0% 47% 32% 21% Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey ($250 million, +2%, 16% of sales) Rest of world represented less than 1% of net sales. The Americas led the geographic regions with 4% sales growth in 2019 with continued improvements within Life Sciences and overall gains in the United States, Brazil and Mexico against a decline in Canada. The Asia-Pacific / Japan region in 2019 was flat due primarily to the weaker results in China and Japan against gains in India. The EMEA region experienced a 1% decline due in part to declines in France and Italy against improving trends in Germany, Turkey and the United Kingdom. Gross profit was $1.01 billion, or 66% of net sales, in 2019, compared with $1.00 billion, or 67% of net sales, in 2018. 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 changes in gross margin between periods. The growth in consumables and related revenue during 2019 contributed favorably to the margin, which was negatively impacted by higher amortization expenses related to developed technology and patent and license rights that were acquired in business combinations or asset acquisitions. The amortization expense on acquisition-related intangibles within cost of sales increased to $71.5 million in 2019 from $56.7 million in 2018. The increase was due to the asset acquisition from Formulatrix as further discussed in Note 5 "Acquisitions and Divestitures". We expect that our acquisition-related intangible amortization will increase as a result of further acquisitions in the future. Research and development expenses fell by 3% to $157.4 million (10% of net sales) in 2019, from $161.9 million (11% of net sales) in 2018. The net decrease reflected higher investments in QIAstat-Dx and the planned launch of a digital PCR system against the significant reduction in costs following the decision to discontinue development of NGS-related instrument systems. 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, but to decline as a percentage of sales in 2020 compared to 2019. Sales and marketing expenses were essentially unchanged at $391.9 million (26% of net sales) in 2019 compared to $392.3 million (26% of net sales) in 2018. Sales and marketing expenses were primarily associated with personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional expense. Higher costs in 2019 related to an increase in sales personnel, which was partially offset by lower share- based compensation and reduced third-party marketing activities. 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 expenses increased by 7% to $112.3 million (7% of net sales) in 2019 from $104.6 million (7% of net sales) in 2018. The increase in general and administrative expenses in 2019 was primarily due to higher licensing costs in connection with continued investments in information technology systems, including cyber security, across the organization as well as an increase in the number of administrative personnel and higher share- based compensation expenses. 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 operating expense under the caption “acquisition-related intangible amortization.” 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 use of the asset. During 2019, amortization expense on acquisition-related intangibles within operating expense decreased to $30.0 million, compared to $39.0 million in 2018. The decrease follows the full amortization of assets previously acquired in 2007. We expect acquisition-related intangible amortization will increase as a result of our future acquisitions. Restructuring, acquisition, integration and other, net was expense of $199.8 million in 2019 as compared to $28.7 million in 2018. During 2019, $163.0 million of charges are included in the 2019 Restructuring program as further discussed in Note 6 "Restructuring and Impairments". We expect to incur additional restructuring cost in 2020 as disclosed therein. In addition, during 2019, we continued to incur acquisition and integration costs related to the acquisitions discussed in Note 5 "Acquisitions and Divestitures". In addition, a $7.4 million gain from the reduction in the fair value of contingent consideration was recognized during 2019 discussed in Note 15 "Financial Instruments and Fair Value Measurements". Further, as we further integrate acquired companies and pursue opportunities to gain efficiencies, we expect to continue to incur additional business integration costs in 2019. 80 Impairments to intangible assets and property, plant and equipment in 2019 totaled $140.0 million, of which $138.8 million was incurred in connection with the 2019 restructuring measures as further discussed in Note 6 "Restructuring and Impairments". During 2018, impairments to property, plant and equipment included $1.6 million related to the 2017 Restructuring program also discussed in Note 6 and $6.3 million related to strategic shifts in our business. Total other expense, net was $51.6 million in 2019, compared to $40.8 million in 2018. Total other expense, net is primarily the result of interest expense, partially offset by interest income and other income (expense), net. For the year ended December 31, 2019, interest income increased to $22.1 million from $20.9 million in 2018. Interest income includes interest earned on cash, cash equivalents and short-term investments, income related to certain interest rate derivatives as discussed in Note 14 "Derivatives and Hedging" in the accompanying consolidated financial statements and other components including the interest portion of operating lease transactions. Interest income earned in 2019 includes interest on higher cash balances following the issuance of cash convertible notes in November 2018. Interest expense increased to $74.2 million in 2019, compared to $67.3 million in 2018. Interest costs primarily relate to debt, discussed in Note 16 "Lines of Credit and Debt" in the accompanying consolidated financial statements and the increase in interest expense reflects the issuance of cash convertible notes in November 2018 which bear interest at a higher rate than the notes that matured in 2019. Other income (expense), net was $0.4 million of income for the year ended December 31, 2019. Other income includes $7.8 million of upward adjustments resulting from observable price changes for non-marketable investments Gross ProfitResearch and DevelopmentSales and MarketingGeneral and AdministrativeYear ended December 31, 2019Sales (In $ m)% change% of salesAcquisition-Related Intangible AmortizationRestructuring, Acquisition, Integration and Other, netLong-lived Asset ImpairmentsOther Income (Expense)General and administrative expenses increased by 7% to $112.3 million (7% of net sales) in 2019 from $104.6 General and administrative expenses increased by 7% to $112.3 million (7% of net sales) in 2019 from $104.6 million (7% of net sales) in 2018. The increase in general and administrative expenses in 2019 was primarily due to million (7% of net sales) in 2018. The increase in general and administrative expenses in 2019 was primarily due to higher licensing costs in connection with continued investments in information technology systems, including cyber higher licensing costs in connection with continued investments in information technology systems, including cyber security, across the organization as well as an increase in the number of administrative personnel and higher share- security, across the organization as well as an increase in the number of administrative personnel and higher share- based compensation expenses. based compensation expenses. Amortization expense related to developed technology and patent and license rights acquired in a business 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 included in cost of sales. Amortization of trademarks and customer base acquired in a business combination is recorded in operating expense under the caption “acquisition-related intangible amortization.” combination is recorded in operating expense under the caption “acquisition-related intangible amortization.” Amortization expenses of intangible assets not acquired in a business combination are recorded within cost of sales, 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 use of the asset. research and development, or sales and marketing line items based on the use of the asset. During 2019, amortization expense on acquisition-related intangibles within operating expense decreased to $30.0 During 2019, amortization expense on acquisition-related intangibles within operating expense decreased to $30.0 million, compared to $39.0 million in 2018. The decrease follows the full amortization of assets previously acquired million, compared to $39.0 million in 2018. The decrease follows the full amortization of assets previously acquired in 2007. We expect acquisition-related intangible amortization will increase as a result of our future acquisitions. in 2007. We expect acquisition-related intangible amortization will increase as a result of our future acquisitions. M A N A G E M E N T R E P O R T Performance Review Restructuring, acquisition, integration and other, net was expense of $199.8 million in 2019 as compared to $28.7 Restructuring, acquisition, integration and other, net was expense of $199.8 million in 2019 as compared to $28.7 million in 2018. During 2019, $163.0 million of charges are included in the 2019 Restructuring program as further million in 2018. During 2019, $163.0 million of charges are included in the 2019 Restructuring program as further discussed in Note 6 "Restructuring and Impairments". We expect to incur additional restructuring cost in 2020 as discussed in Note 6 "Restructuring and Impairments". We expect to incur additional restructuring cost in 2020 as disclosed therein. In addition, during 2019, we continued to incur acquisition and integration costs related to the disclosed therein. In addition, during 2019, we continued to incur acquisition and integration costs related to the acquisitions discussed in Note 5 "Acquisitions and Divestitures". In addition, a $7.4 million gain from the reduction acquisitions discussed in Note 5 "Acquisitions and Divestitures". In addition, a $7.4 million gain from the reduction in the fair value of contingent consideration was recognized during 2019 discussed in Note 15 "Financial in the fair value of contingent consideration was recognized during 2019 discussed in Note 15 "Financial Instruments and Fair Value Measurements". Further, as we further integrate acquired companies and pursue Instruments and Fair Value Measurements". Further, as we further integrate acquired companies and pursue opportunities to gain efficiencies, we expect to continue to incur additional business integration costs in 2019. opportunities to gain efficiencies, we expect to continue to incur additional business integration costs in 2019. Impairments to intangible assets and property, plant and equipment in 2019 totaled $140.0 million, of which Impairments to intangible assets and property, plant and equipment in 2019 totaled $140.0 million, of which $138.8 million was incurred in connection with the 2019 restructuring measures as further discussed in Note 6 $138.8 million was incurred in connection with the 2019 restructuring measures as further discussed in Note 6 "Restructuring and Impairments". During 2018, impairments to property, plant and equipment included $1.6 million "Restructuring and Impairments". During 2018, impairments to property, plant and equipment included $1.6 million related to the 2017 Restructuring program also discussed in Note 6 and $6.3 million related to strategic shifts in our related to the 2017 Restructuring program also discussed in Note 6 and $6.3 million related to strategic shifts in our business. business. Total other expense, net was $51.6 million in 2019, compared to $40.8 million in 2018. Total other expense, net is Total other expense, net was $51.6 million in 2019, compared to $40.8 million in 2018. Total other expense, net is primarily the result of interest expense, partially offset by interest income and other income (expense), net. primarily the result of interest expense, partially offset by interest income and other income (expense), net. For the year ended December 31, 2019, interest income increased to $22.1 million from $20.9 million in 2018. For the year ended December 31, 2019, interest income increased to $22.1 million from $20.9 million in 2018. Interest income includes interest earned on cash, cash equivalents and short-term investments, income related to Interest income includes interest earned on cash, cash equivalents and short-term investments, income related to certain interest rate derivatives as discussed in Note 14 "Derivatives and Hedging" in the accompanying certain interest rate derivatives as discussed in Note 14 "Derivatives and Hedging" in the accompanying consolidated financial statements and other components including the interest portion of operating lease transactions. consolidated financial statements and other components including the interest portion of operating lease transactions. Interest income earned in 2019 includes interest on higher cash balances following the issuance of cash convertible Interest income earned in 2019 includes interest on higher cash balances following the issuance of cash convertible notes in November 2018. notes in November 2018. Interest expense increased to $74.2 million in 2019, compared to $67.3 million in 2018. Interest costs primarily Interest expense increased to $74.2 million in 2019, compared to $67.3 million in 2018. Interest costs primarily relate to debt, discussed in Note 16 "Lines of Credit and Debt" in the accompanying consolidated financial relate to debt, discussed in Note 16 "Lines of Credit and Debt" in the accompanying consolidated financial statements and the increase in interest expense reflects the issuance of cash convertible notes in November 2018 statements and the increase in interest expense reflects the issuance of cash convertible notes in November 2018 which bear interest at a higher rate than the notes that matured in 2019. which bear interest at a higher rate than the notes that matured in 2019. Other income (expense), net was $0.4 million of income for the year ended December 31, 2019. Other income Other income (expense), net was $0.4 million of income for the year ended December 31, 2019. Other income includes $7.8 million of upward adjustments resulting from observable price changes for non-marketable investments includes $7.8 million of upward adjustments resulting from observable price changes for non-marketable investments not accounted for under the equity method, $2.1 million in income from equity-method investments and a $0.7 million gain from receipt of shares in settlement of a zero-book value financial instrument held with a third party, all as discussed further in Note 10 "Investments". This income was partially offset by impairments, including $4.8 million of impairments in non-marketable investments accounted for under the equity method as discussed further in Note 10 "Investments", and net losses on foreign currency of $5.7 million for the year ended December 31, 2019. Other income (expense), net was $5.6 million of income for the year ended December 31, 2018. Other income includes $13.1 million of upward adjustments resulting from observable price changes for non-marketable investments not accounted for under the equity method, a $5.1 million gain from the sale of our interest in a non- publicly traded company and $2.6 million in income from equity-method investments, all as discussed further in Note 10 "Investments". Additionally in 2018, we recorded a divestiture gain of $8.0 million as discussed in Note 5 "Acquisitions and Divestitures". This income was partially offset by impairments, including $6.1 million of impairments in non-marketable investments accounted for under the equity method as discussed further in Note 10, and net losses on foreign currency of $12.3 million for the year ended December 31, 2019. Our effective tax rates differ from The Netherlands statutory tax rate of 25% due in part to our operating subsidiaries being exposed to tax rates ranging from zero to 35%. In 2019 and 2018, our effective tax rates were 46.7% and 15.7%, respectively. The comparison is impacted by pre-tax book income which was lower in 2019 at a pre-tax book loss of $77.8 million compared to pre-tax book income of $225.7 million in 2018. Fluctuations in the distribution of pre-tax (loss) income among our operating subsidiaries can lead to fluctuations of the effective tax rate 81 in the consolidated financial statements. In 2019 and 2018, 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, Switzerland, Ireland, Dubai and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions in these jurisdictions. In particular, intercompany foreign royalty income in Germany is statutorily exempt from trade tax. Further, we have intercompany financing arrangements through Luxembourg, Dubai and Ireland in which the intercompany income is partially See Note 17 "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 the “Risks” section exempt. above. Foreign Currencies QIAGEN N.V.’s reporting 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. The net loss on foreign currency transactions is included in other income (expense), net, and in 2019, 2018 and 2017 was $5.7 million, $12.3 million, and $3.3 million, respectively. 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 variable rate debt. 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 speculative purposes. We recognize all derivatives as either assets or liabilities on the balance sheet, 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 Acquisition-Related Intangible AmortizationRestructuring, Acquisition, Integration and Other, netLong-lived Asset ImpairmentsOther Income (Expense)Provision for Income TaxesDerivatives and HedgingAcquisition-Related Intangible AmortizationRestructuring, Acquisition, Integration and Other, netLong-lived Asset ImpairmentsOther Income (Expense)not accounted for under the equity method, $2.1 million in income from equity-method investments and a $0.7 million gain from receipt of shares in settlement of a zero-book value financial instrument held with a third party, all as discussed further in Note 10 "Investments". This income was partially offset by impairments, including $4.8 million of impairments in non-marketable investments accounted for under the equity method as discussed further in Note 10 "Investments", and net losses on foreign currency of $5.7 million for the year ended December 31, 2019. Other income (expense), net was $5.6 million of income for the year ended December 31, 2018. Other income includes $13.1 million of upward adjustments resulting from observable price changes for non-marketable investments not accounted for under the equity method, a $5.1 million gain from the sale of our interest in a non- publicly traded company and $2.6 million in income from equity-method investments, all as discussed further in Note 10 "Investments". Additionally in 2018, we recorded a divestiture gain of $8.0 million as discussed in Note 5 "Acquisitions and Divestitures". This income was partially offset by impairments, including $6.1 million of impairments in non-marketable investments accounted for under the equity method as discussed further in Note 10, and net losses on foreign currency of $12.3 million for the year ended December 31, 2019. Our effective tax rates differ from The Netherlands statutory tax rate of 25% due in part to our operating subsidiaries being exposed to tax rates ranging from zero to 35%. In 2019 and 2018, our effective tax rates were 46.7% and 15.7%, respectively. The comparison is impacted by pre-tax book income which was lower in 2019 at a pre-tax book loss of $77.8 million compared to pre-tax book income of $225.7 million in 2018. Fluctuations in the distribution of pre-tax (loss) income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements. In 2019 and 2018, 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, Switzerland, Ireland, Dubai and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions in these jurisdictions. In particular, intercompany foreign royalty income in Germany is statutorily exempt from trade tax. Further, we have intercompany financing arrangements through Luxembourg, Dubai and Ireland in which the intercompany income is partially exempt. See Note 17 "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 the “Risks” section above. Foreign Currencies QIAGEN N.V.’s reporting 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. The net loss on foreign currency transactions is included in other income (expense), net, and in 2019, 2018 and 2017 was $5.7 million, $12.3 million, and $3.3 million, respectively. 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 variable rate debt. 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 speculative purposes. We recognize all derivatives as either assets or liabilities on the balance sheet, 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. 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. To determine our own credit risk, we estimated our own credit rating by benchmarking the price of our outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, we quantify our credit risk by reference to publicly-traded debt with a corresponding rating. As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions including intercompany items. We manage our balance sheet exposure on a group-wide basis using foreign exchange forwards, options and cross-currency swaps. 82 We use interest rate derivative contracts on certain borrowing transactions to hedge interest rate exposures. We have entered into interest rate swaps in which we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. We also make use of economic hedges. Further details of our derivative and hedging activities can be found in Note 14 "Derivatives and Hedging" to the accompanying consolidated financial statements. 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, 2019 and 2018, we had cash and cash equivalents of $623.6 million and $1.16 billion, respectively. We also had restricted cash of $5.7 million and short-term investments of $129.6 million at December 31, 2019. 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, 2019, cash, cash equivalents and restricted cash had decreased by $529.7 million from December 31, 2018, primarily as a result of cash used financing activities of $639.1 million and cash used in investing activities of $222.3 million, partially offset by cash provided by operating activities of $330.8 million. As of December 31, 2019 and 2018, we had working capital of $618.9 million and $1.18 billion, respectively. For the years ended December 31, 2019 and 2018, we generated net cash from operating activities of $330.8 million and $359.5 million, respectively. While the net loss was $41.5 million in 2019, non-cash components in income included $231.5 million of depreciation and amortization and $144.8 million non-cash impairments primarily recorded in connection with the restructuring discussed in Note 6 "Restructuring and Impairments", $40.8 million of amortization of debt discount and issuance costs and $65.9 million of share-based compensation expense. Operating cash flows include a net decrease in working capital of $28.6 million excluding changes in fair value of derivative instruments. The current period change in working capital is primarily due to increased inventories and accounts receivable and decreased 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. Approximately $222.3 million of cash was used in investing activities during 2019, compared to $211.4 million during 2018. Investing activities during 2019 consisted principally of $294.0 million for purchases of short-term investments, $68.1 million in cash paid for acquisitions, net of cash acquired as discussed in Note 5 "Acquisitions and Divestitures", $118.0 million in cash paid for purchases of property and equipment, as well as $156.9 million paid for intangible assets and $5.2 million paid for strategic investments in privately and publicly held companies as discussed in Note 10 "Investments", partially offset by $396.1 million from the sale of short-term investments. Investing activities during 2018 consisted principally of $172.8 million of cash paid for acquisitions, net of cash Provision for Income TaxesDerivatives and HedgingForeign Currency DerivativesInterest Rate DerivativesOperating ActivitiesInvesting ActivitiesM A N A G E M E N T R E P O R T Performance Review 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 the respective counterparties. To determine our own credit risk, we estimated our own credit rating by benchmarking the price of our outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, we quantify our credit risk by reference to publicly-traded debt with a corresponding rating. As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions including intercompany items. We manage our balance sheet exposure on a group-wide basis using foreign exchange forwards, options and cross-currency swaps. We use interest rate derivative contracts on certain borrowing transactions to hedge interest rate exposures. We have entered into interest rate swaps in which we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. We also make use of economic hedges. Further details of our derivative and hedging activities can be found in Note 14 "Derivatives and Hedging" to the accompanying consolidated financial statements. 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, 2019 and 2018, we had cash and cash equivalents of $623.6 million and $1.16 billion, respectively. We also had restricted cash of $5.7 million and short-term investments of $129.6 million at December 31, 2019. 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, 2019, cash, cash equivalents and restricted cash had decreased by $529.7 million from December 31, 2018, primarily as a result of cash used financing activities of $639.1 million and cash used in investing activities of $222.3 million, partially offset by cash provided by operating activities of $330.8 million. As of December 31, 2019 and 2018, we had working capital of $618.9 million and $1.18 billion, respectively. For the years ended December 31, 2019 and 2018, we generated net cash from operating activities of $330.8 million and $359.5 million, respectively. While the net loss was $41.5 million in 2019, non-cash components in income included $231.5 million of depreciation and amortization and $144.8 million non-cash impairments primarily recorded in connection with the restructuring discussed in Note 6 "Restructuring and Impairments", $40.8 million of amortization of debt discount and issuance costs and $65.9 million of share-based compensation expense. Operating cash flows include a net decrease in working capital of $28.6 million excluding changes in fair value of derivative instruments. The current period change in working capital is primarily due to increased inventories and accounts receivable and decreased 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. Approximately $222.3 million of cash was used in investing activities during 2019, compared to $211.4 million during 2018. Investing activities during 2019 consisted principally of $294.0 million for purchases of short-term investments, $68.1 million in cash paid for acquisitions, net of cash acquired as discussed in Note 5 "Acquisitions and Divestitures", $118.0 million in cash paid for purchases of property and equipment, as well as $156.9 million paid for intangible assets and $5.2 million paid for strategic investments in privately and publicly held companies as discussed in Note 10 "Investments", partially offset by $396.1 million from the sale of short-term investments. Investing activities during 2018 consisted principally of $172.8 million of cash paid for acquisitions, net of cash 83 Foreign Currency DerivativesInterest Rate DerivativesOperating ActivitiesInvesting Activities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 the respective counterparties. To determine our own credit risk, we estimated our own credit rating by benchmarking the price of our outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, we quantify our credit risk by reference to publicly-traded debt with a corresponding rating. As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions including intercompany items. We manage our balance sheet exposure on a group-wide basis using foreign exchange forwards, options and cross-currency swaps. We use interest rate derivative contracts on certain borrowing transactions to hedge interest rate exposures. We have entered into interest rate swaps in which we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. We also make use of economic hedges. Further details of our derivative and hedging activities can be found in Note 14 "Derivatives and Hedging" to the accompanying consolidated financial statements. 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, 2019 and 2018, we had cash and cash equivalents of $623.6 million and $1.16 billion, respectively. We also had restricted cash of $5.7 million and short-term investments of $129.6 million at December 31, 2019. 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, 2019, cash, cash equivalents and restricted cash had decreased by $529.7 million from December 31, 2018, primarily as a result of cash used financing activities of $639.1 million and cash used in investing activities of $222.3 million, partially offset by cash provided by operating activities of $330.8 million. As of December 31, 2019 and 2018, we had working capital of $618.9 million and $1.18 billion, respectively. For the years ended December 31, 2019 and 2018, we generated net cash from operating activities of $330.8 million and $359.5 million, respectively. While the net loss was $41.5 million in 2019, non-cash components in income included $231.5 million of depreciation and amortization and $144.8 million non-cash impairments primarily recorded in connection with the restructuring discussed in Note 6 "Restructuring and Impairments", $40.8 million of amortization of debt discount and issuance costs and $65.9 million of share-based compensation expense. Operating cash flows include a net decrease in working capital of $28.6 million excluding changes in fair value of derivative instruments. The current period change in working capital is primarily due to increased inventories and accounts receivable and decreased 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. Approximately $222.3 million of cash was used in investing activities during 2019, compared to $211.4 million during 2018. Investing activities during 2019 consisted principally of $294.0 million for purchases of short-term investments, $68.1 million in cash paid for acquisitions, net of cash acquired as discussed in Note 5 "Acquisitions and Divestitures", $118.0 million in cash paid for purchases of property and equipment, as well as $156.9 million paid for intangible assets and $5.2 million paid for strategic investments in privately and publicly held companies as discussed in Note 10 "Investments", partially offset by $396.1 million from the sale of short-term investments. Investing activities during 2018 consisted principally of $172.8 million of cash paid for acquisitions, net of cash acquired, $568.0 million for purchases of short-term investments, partially offset by $691.8 million from the sale of short-term investments. For the year ended December 31, 2019, cash used in financing activities was $639.1 million compared to cash provided by financing activities of $360.4 million in 2018. Financing activities during 2019 consisted primarily of $506.4 million repayments of long-term debt including $430.0 million for the amount due for the 2019 Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed further in Note 16 "Lines of Credit and Debt". In addition, repurchases of QIAGEN shares totaled $74.5 million during 2019. In 2018, cash provided from financing activities totaled $360.4 million primarily due to $494.9 million net cash proceeds from the 2018 cash convertible offering. We used $97.3 million of the proceeds from the 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. Cash provided in 2018 was further offset by the repurchase of QIAGEN shares totaling $104.7 million. Cash used in other financing activities during the year ended December 31, 2019 and 2018 consisted primarily of $10.5 million and $5.5 million paid for contingent consideration, respectively, together with $0.4 million cash received and $2.0 million cash paid in connection with derivative collateral arrangements, respectively. 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, 2019 as described more fully in Note 16 "Lines of Credit and Debt". 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 16 "Lines of Credit and Debt". 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 16 "Lines of Credit and Debt". 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, 2019. The facility can be utilized in Euro, 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, 2019. In March 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes of which $433.4 million was paid in 2019 and $296.6 million is due in 2021 (2021 Notes). Interest on the 2021 Notes is payable semiannually in arrears on September 19 of each year, at rate of 0.875% per annum. The 2021 Notes will mature on March 19, 2021, unless repurchased or converted in accordance with their terms prior to such date. 84 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 Foreign Currency DerivativesInterest Rate DerivativesOperating ActivitiesInvesting ActivitiesFinancing Activitiesacquired, $568.0 million for purchases of short-term investments, partially offset by $691.8 million from the sale of short-term investments. For the year ended December 31, 2019, cash used in financing activities was $639.1 million compared to cash provided by financing activities of $360.4 million in 2018. Financing activities during 2019 consisted primarily of $506.4 million repayments of long-term debt including $430.0 million for the amount due for the 2019 Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed further in Note 16 "Lines of Credit and Debt". In addition, repurchases of QIAGEN shares totaled $74.5 million during 2019. In 2018, cash provided from financing activities totaled $360.4 million primarily due to $494.9 million net cash proceeds from the 2018 cash convertible offering. We used $97.3 million of the proceeds from the 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. Cash provided in 2018 was further offset by the repurchase of QIAGEN shares totaling $104.7 million. Cash used in other financing activities during the year ended December 31, 2019 and 2018 consisted primarily of $10.5 million and $5.5 million paid for contingent consideration, respectively, together with $0.4 million cash received and $2.0 million cash paid in connection with derivative collateral arrangements, respectively. 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, 2019 as described more fully in Note 16 "Lines of Credit and Debt". 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 16 "Lines of Credit and Debt". 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 16 "Lines of Credit and Debt". Performance Review M A N A G E M E N T R E P O R T 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, 2019. The facility can be utilized in Euro, 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, 2019. In March 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes of which $433.4 million was paid in 2019 and $296.6 million is due in 2021 (2021 Notes). Interest on the 2021 Notes is payable semiannually in arrears on September 19 of each year, at rate of 0.875% per annum. 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 and paid 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%). As of December 31, 2019, we carry $1.7 billion of long-term debt, of which $285.2 million is current. We did not hold any material finance leases as of December 31, 2019. In connection with certain acquisitions, we could be required to make additional contingent cash payments totaling up to $179.4 million based on the achievement of certain revenue and operating results milestones as further discussed in Note 20 "Commitments and Contingencies". In January 2018, we announced our fifth share repurchase program of up to $200 million of our common shares. During 2019, we repurchased 2.0 million QIAGEN shares for $74.5 million (including transaction costs) bringing the total shares repurchased under this program to 4.9 million for $179.1 million (including transaction costs). Repurchased shares will be held in treasury in order to satisfy various obligations, which include employee share- based remuneration plans. 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 18 "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. Off-Balance Sheet Arrangements Other than our former arrangements with QIAGEN Finance as discussed in Note 16 "Lines of Credit and Debt" to the consolidated financial statements, we did not use special purpose entities and do not have off-balance sheet financing arrangements as of and during the years ended December 31, 2019, 2018 and 2017. 85 As of December 31, 2019, our future contractual cash obligations are as follows: Financing ActivitiesContractual Obligationsnotes were issued in three series: (1) $73 million 7-year term due and paid 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%). As of December 31, 2019, we carry $1.7 billion of long-term debt, of which $285.2 million is current. We did not hold any material finance leases as of December 31, 2019. In connection with certain acquisitions, we could be required to make additional contingent cash payments totaling up to $179.4 million based on the achievement of certain revenue and operating results milestones as further discussed in Note 20 "Commitments and Contingencies". In January 2018, we announced our fifth share repurchase program of up to $200 million of our common shares. During 2019, we repurchased 2.0 million QIAGEN shares for $74.5 million (including transaction costs) bringing the total shares repurchased under this program to 4.9 million for $179.1 million (including transaction costs). Repurchased shares will be held in treasury in order to satisfy various obligations, which include employee share- based remuneration plans. 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 18 "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. Off-Balance Sheet Arrangements Other than our former arrangements with QIAGEN Finance as discussed in Note 16 "Lines of Credit and Debt" to the consolidated financial statements, we did not use special purpose entities and do not have off-balance sheet financing arrangements as of and during the years ended December 31, 2019, 2018 and 2017. As of December 31, 2019, our future contractual cash obligations are as follows: Long-term debt(1) Long-term debt(1) Long-term debt(1) Long-term debt(1) Long-term debt(1) Long-term debt(1) Long-term debt(1) Long-term debt(1) Long-term debt(1) Purchase obligations Purchase obligations Purchase obligations Purchase obligations Purchase obligations Purchase obligations Purchase obligations Purchase obligations Purchase obligations Operating leases Operating leases Operating leases Operating leases Operating leases Operating leases Operating leases Operating leases Operating leases License and royalty payments (2) License and royalty payments (2) License and royalty payments (2) License and royalty payments (2) License and royalty payments (2) License and royalty payments (2) License and royalty payments (2) License and royalty payments (2) License and royalty payments (2) $1,790,350 $1,790,350 $1,790,350 $1,790,350 $1,790,350 $1,790,350 $1,790,350 $1,790,350 $1,790,350 194,596 194,596 194,596 194,596 194,596 194,596 194,596 194,596 194,596 61,520 61,520 61,520 61,520 61,520 61,520 61,520 61,520 61,520 37,455 37,455 37,455 37,455 37,455 37,455 37,455 37,455 37,455 $25,438 $25,438 $25,438 $25,438 $25,438 $25,438 $25,438 $25,438 $25,438 $347,230 $347,230 $347,230 $347,230 $347,230 $347,230 $347,230 $347,230 $347,230 $491,356 $491,356 $491,356 $491,356 $491,356 $491,356 $491,356 $491,356 $491,356 $356,738 $356,738 $356,738 $356,738 $356,738 $356,738 $356,738 $356,738 $356,738 $552,636 $552,636 $552,636 $552,636 $552,636 $552,636 $552,636 $552,636 $552,636 $16,952 $16,952 $16,952 $16,952 $16,952 $16,952 $16,952 $16,952 $16,952 126,121 126,121 126,121 126,121 126,121 126,121 126,121 126,121 126,121 19,914 19,914 19,914 19,914 19,914 19,914 19,914 19,914 19,914 11,434 11,434 11,434 11,434 11,434 11,434 11,434 11,434 11,434 35,915 35,915 35,915 35,915 35,915 35,915 35,915 35,915 35,915 26,337 26,337 26,337 26,337 26,337 26,337 26,337 26,337 26,337 16,009 16,009 16,009 16,009 16,009 16,009 16,009 16,009 16,009 11,885 11,885 11,885 11,885 11,885 11,885 11,885 11,885 11,885 9,012 9,012 9,012 9,012 9,012 9,012 9,012 9,012 9,012 6,507 6,507 6,507 6,507 6,507 6,507 6,507 6,507 6,507 3,223 3,223 3,223 3,223 3,223 3,223 3,223 3,223 3,223 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 — — — — — — — — — 7,119 7,119 7,119 7,119 7,119 7,119 7,119 7,119 7,119 3,391 3,391 3,391 3,391 3,391 3,391 3,391 3,391 3,391 3,202 3,202 3,202 3,202 3,202 3,202 3,202 3,202 3,202 4,382 4,382 4,382 4,382 4,382 4,382 4,382 4,382 4,382 1,823 1,823 1,823 1,823 1,823 1,823 1,823 1,823 1,823 4,297 4,297 4,297 4,297 4,297 4,297 4,297 4,297 4,297 $2,083,921 $2,083,921 $2,083,921 $2,083,921 $2,083,921 $2,083,921 $2,083,921 $2,083,921 $2,083,921 $182,907 $182,907 $182,907 $182,907 $182,907 $182,907 $182,907 $182,907 $182,907 $408,166 $408,166 $408,166 $408,166 $408,166 $408,166 $408,166 $408,166 $408,166 $536,085 $536,085 $536,085 $536,085 $536,085 $536,085 $536,085 $536,085 $536,085 $371,462 $371,462 $371,462 $371,462 $371,462 $371,462 $371,462 $371,462 $371,462 $560,850 $560,850 $560,850 $560,850 $560,850 $560,850 $560,850 $560,850 $560,850 $24,451 $24,451 $24,451 $24,451 $24,451 $24,451 $24,451 $24,451 $24,451 (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2021 date in the table above. 2021 date in the table above. 2021 date in the table above. 2021 date in the table above. 2021 date in the table above. 2021 date in the table above. 2021 date in the table above. 2021 date in the table above. 2021 date in the table above. (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and other long-term liabilities, respectively, associated to future license payments. other long-term liabilities, respectively, associated to future license payments. other long-term liabilities, respectively, associated to future license payments. (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and other long-term liabilities, respectively, associated to future license payments. other long-term liabilities, respectively, associated to future license payments. other long-term liabilities, respectively, associated to future license payments. other long-term liabilities, respectively, associated to future license payments. other long-term liabilities, respectively, associated to future license payments. other long-term liabilities, respectively, associated to future license payments. In addition to the above, and pursuant to the purchase agreements for certain acquisitions and other contractual In addition to the above, and pursuant to the purchase agreements for certain acquisitions and other contractual In addition to the above, and 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 $179.4 million arrangements, we could be required to make additional contingent cash payments totaling up to $179.4 million arrangements, we could be required to make additional contingent cash payments totaling up to $179.4 million based on the achievement of certain revenue and operating results milestones as follows: based on the achievement of certain revenue and operating results milestones as follows: based on the achievement of certain revenue and operating results milestones as follows: In addition to the above, and pursuant to the purchase agreements for certain acquisitions and other contractual In addition to the above, and pursuant to the purchase agreements for certain acquisitions and other contractual In addition to the above, and pursuant to the purchase agreements for certain acquisitions and other contractual In addition to the above, and pursuant to the purchase agreements for certain acquisitions and other contractual In addition to the above, and pursuant to the purchase agreements for certain acquisitions and other contractual In addition to the above, and 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 $179.4 million arrangements, we could be required to make additional contingent cash payments totaling up to $179.4 million arrangements, we could be required to make additional contingent cash payments totaling up to $179.4 million arrangements, we could be required to make additional contingent cash payments totaling up to $179.4 million arrangements, we could be required to make additional contingent cash payments totaling up to $179.4 million arrangements, we could be required to make additional contingent cash payments totaling up to $179.4 million based on the achievement of certain revenue and operating results milestones as follows: based on the achievement of certain revenue and operating results milestones as follows: based on the achievement of certain revenue and operating results milestones as follows: based on the achievement of certain revenue and operating results milestones as follows: based on the achievement of certain revenue and operating results milestones as follows: based on the achievement of certain revenue and operating results milestones as follows: 2020 2020 2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 2022 2022 2022 2022 2024 2024 2024 2024 2024 2024 2024 2024 2024 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 Anytime 12-month period from now until 2028 $ 152,750 $ 152,750 $ 152,750 $ 152,750 $ 152,750 $ 152,750 $ 152,750 $ 152,750 $ 152,750 11,800 11,800 11,800 11,800 11,800 11,800 11,800 11,800 11,800 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 5,900 300 300 300 300 300 300 300 300 300 $ 179,350 $ 179,350 $ 179,350 $ 179,350 $ 179,350 $ 179,350 $ 179,350 $ 179,350 $ 179,350 Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet. included in other long-term liabilities in the accompanying consolidated balance sheet. included in other long-term liabilities in the accompanying consolidated balance sheet. Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet. included in other long-term liabilities in the accompanying consolidated balance sheet. included in other long-term liabilities in the accompanying consolidated balance sheet. included in other long-term liabilities in the accompanying consolidated balance sheet. included in other long-term liabilities in the accompanying consolidated balance sheet. included in other long-term liabilities in the accompanying consolidated balance sheet. Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for 86 assessment of additional taxes. assessment of additional taxes. assessment of additional taxes. assessment of additional taxes. assessment of additional taxes. assessment of additional taxes. assessment of additional taxes. assessment of additional taxes. assessment of additional taxes. Dividend Dividend Dividend Dividend Dividend Dividend Dividend Dividend Dividend QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. foreseeable future. We intend to retain any earnings for the development of the business. Credit Rating Credit Rating Credit Rating Credit Rating Credit Rating Credit Rating Credit Rating Credit Rating Credit Rating QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. QIAGEN is currently not rated by any credit rating agency. Contractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual ObligationsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsContractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsLong-term debt(1) Purchase obligations Operating leases $1,790,350 $25,438 $347,230 $491,356 $356,738 $552,636 $16,952 194,596 126,121 35,915 26,337 3,000 — 61,520 19,914 16,009 11,885 3,391 3,202 License and royalty payments (2) 37,455 11,434 9,012 6,507 1,823 4,297 3,223 7,119 4,382 $2,083,921 $182,907 $408,166 $536,085 $371,462 $560,850 $24,451 (1) Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2021 date in the table above. (2) As of December 31, 2019, $10.0 million and $14.5 million are included in accrued and other current liabilities and other long-term liabilities, respectively, associated to future license payments. In addition to the above, and 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 $179.4 million based on the achievement of certain revenue and operating results milestones as follows: 2020 M A N A G E M E N T R E P O R T Performance Review 2021 2022 2024 Anytime 12-month period from now until 2028 $ 152,750 11,800 5,900 5,900 300 $ 179,350 Of the $179.4 million total contingent obligation, we have assessed the fair value at December 31, 2019 to be $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet. Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at $60.6 million as of December 31, 2019 and are not included in the table above, as we cannot reasonably estimate when, if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for assessment of additional taxes. Dividend QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the foreseeable future. We intend to retain any earnings for the development of the business. Credit Rating QIAGEN is currently not rated by any credit rating agency. 87 Contractual Obligations(in thousands)Payments Due by PeriodTotal20202021202220232024ThereafterTotal contractual cash obligations(in thousands)Contingent Cash PaymentsManagement Report Management Report Business and Operating Environment Human Resources QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular Overview insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights faster, better and more efficiently - from the raw biological sample to the final interpreted result. The skills, knowledge, dedication and passion of our employees are critical for the success of QIAGEN. We want to recruit, support and retain the best employees, offering performance-based remuneration, development opportunities and measures to balance work and family life. We are committed to diversity in our teams, fueling innovation and We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) engagement with our customers and business partners. In a fast-changing, competitive business environment, and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN QIAGEN has a significant commitment to being an employer of choice and further enhancing our position as a great solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the place to work. At the end of 2019, QIAGEN had 5,096 full-time equivalent employees, an increase of 3% from increasing volumes and complexity of biological information, in keeping with our vision of making improvements in 4,952 at the end of 2018. Total personnel expenses including share-based compensation in 2019 were $484.7 life possible. million compared to $483.6 million in 2018. QIAGEN began operations in 1986 as a pioneer in the emerging biotechnology sector, introducing a novel method Code of Ethics that standardized and accelerated extraction and purification of nucleic acids from biological samples. As molecular biology and genomic knowledge have grown to influence many areas of life, QIAGEN has expanded to serve the QIAGEN has in place a Code of Conduct which qualifies as a code of ethics, as required by SEC and the New York full spectrum of market needs. We believe our sample technologies are unmatched in quality for isolating and Stock Exchange (NYSE) Listed Company Manual. The Code of Conduct applies to all of QIAGEN’s employees, preparing DNA (deoxyribonucleic acid), RNA (ribonucleic acid) and proteins from blood or other liquids, tissue, including our principal executive officer, principal financial officer, principal accounting officer or controller and plants or other materials. Our assay technologies amplify, enrich and make these biomolecules accessible for other persons performing similar functions. The full text of the Code of Conduct is available on our website at analysis, such as identifying the genetic information of a pathogen or a gene mutation in a tumor. QIAGEN’s www.QIAGEN.com. industry-leading Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in seamless and cost-effective molecular testing workflows - from Sample to Insight. Training and Retention At QIAGEN, we recognize that employees are our most important resource. Their exceptional talent, skill, and Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation passion are key to our long-term success and corporate value. Employee development is therefore viewed as an systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and integral success factor in creating lasting value for our customers, patients, colleagues, partners, and shareholders. 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. QIAGEN maintains a transparent framework, the QIAGEN Profile Navigator (QPN), to make career paths, job QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and growing requirements and performance expectations clear based on objective criteria for all positions across our growing needs in the market, partnering with researchers and Pharma companies, and acquiring companies or technologies global organization. Our global Performance Enhancement System (PES) provides all employees and their managers to complement our portfolio. We believe the addressable global market for QIAGEN's portfolio of molecular testing with regular, one-on-one review sessions to discuss career development topics. PES sessions include discussion of an products for customers across the continuum of life science research and molecular diagnostics totals more than $10 employee’s goals and achievements, training needs and interests, career planning drawing upon the QPN role billion. profile system, organizational development, and results of regular “180° surveys.” Professional training and development are an ongoing process for all employees, tailored to different career paths. An employee’s pursuit of We have funded our growth through internally generated funds, debt offerings, and private and public sales of training cycles from PES session to training participation, review, follow-up, and back to PES review. QIAGEN’s equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol compensation structure (see below) ties in with the QPN role profiles and PES performance evaluations. QGEN and on the Frankfurt Prime Standard as QIA. Management & Leadership Campus (MC & LC) 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 This program, composed of two components, is designed to ensure the ongoing development of QIAGEN’s future liability company (naamloze vennootschap) under Dutch law as a holding company. Our principal executive office is management generations. Management Campus prepares high-performing employees to take an initial leadership located at Hulsterweg 82, 5912 PL Venlo, The Netherlands, and our telephone number is +31-77-355-6600. position. The program provides management basics and an overview of relevant business management topics. Leadership Campus accelerates the careers of our professionals by providing further insights into advanced As a holding company, QIAGEN conducts business through subsidiaries located throughout the world. Further leadership and management topics while focusing on individual development and business-related innovative information about QIAGEN can be found at www.QIAGEN.com. By referring to our website, we do not incorporate actions. It is a senior executive program that is designed to increase the leadership skills and management the website or any portion of the website by reference into this Annual Report. knowledge of outstanding QIAGEN senior managers by a more individual development approach. The program 88 Management Report Human Resources Overview The skills, knowledge, dedication and passion of our employees are critical for the success of QIAGEN. We want to recruit, support and retain the best employees, offering performance-based remuneration, development opportunities and measures to balance work and family life. We are committed to diversity in our teams, fueling innovation and engagement with our customers and business partners. In a fast-changing, competitive business environment, QIAGEN has a significant commitment to being an employer of choice and further enhancing our position as a great place to work. At the end of 2019, QIAGEN had 5,096 full-time equivalent employees, an increase of 3% from 4,952 at the end of 2018. Total personnel expenses including share-based compensation in 2019 were $484.7 million compared to $483.6 million in 2018. QIAGEN has in place a Code of Conduct which qualifies as a code of ethics, as required by SEC and the New York Stock Exchange (NYSE) Listed Company Manual. The Code of Conduct applies to all of QIAGEN’s employees, including our principal executive officer, principal financial officer, principal accounting officer or controller and other persons performing similar functions. The full text of the Code of Conduct is available on our website at Code of Ethics www.QIAGEN.com. Training and Retention At QIAGEN, we recognize that employees are our most important resource. Their exceptional talent, skill, and passion are key to our long-term success and corporate value. Employee development is therefore viewed as an integral success factor in creating lasting value for our customers, patients, colleagues, partners, and shareholders. QIAGEN maintains a transparent framework, the QIAGEN Profile Navigator (QPN), to make career paths, job requirements and performance expectations clear based on objective criteria for all positions across our growing global organization. Our global Performance Enhancement System (PES) provides all employees and their managers M A N A G E M E N T R E P O R T Human Resources with regular, one-on-one review sessions to discuss career development topics. PES sessions include discussion of an employee’s goals and achievements, training needs and interests, career planning drawing upon the QPN role profile system, organizational development, and results of regular “180° surveys.” Professional training and development are an ongoing process for all employees, tailored to different career paths. An employee’s pursuit of training cycles from PES session to training participation, review, follow-up, and back to PES review. QIAGEN’s compensation structure (see below) ties in with the QPN role profiles and PES performance evaluations. Management & Leadership Campus (MC & LC) This program, composed of two components, is designed to ensure the ongoing development of QIAGEN’s future management generations. Management Campus prepares high-performing employees to take an initial leadership position. The program provides management basics and an overview of relevant business management topics. Leadership Campus accelerates the careers of our professionals by providing further insights into advanced leadership and management topics while focusing on individual development and business-related innovative actions. It is a senior executive program that is designed to increase the leadership skills and management knowledge of outstanding QIAGEN senior managers by a more individual development approach. The program mainly focuses on change management and leadership coaching sessions, as well as on business-related innovative actions. Tuition Reimbursement / External Professional Programs To support our future growth, QIAGEN managers are encouraged to support external training programs and courses that their employees need to attend in order to prepare for new tasks or an expanded role. Employees can apply for tuition reimbursement before they join an external program if the QIAGEN Academy does not offer a suitable internal course option. Courses range from Business Administration for scientists to tailored training options for specialists. QIAGEN Academy To support all QIAGEN employees in individual development, QIAGEN has an online learning management system (LMS), the QIAGEN Academy. It manages the entire training process from enrollment to certificate conveniently in one platform. The QIAGEN Academy is available to every employee 24/7 via the internet. Continual and flexible access to all training materials at any time allows employees to blend different learning methods such as virtual classrooms, web-based training, videos or classroom training into holistic and sustainable learning concepts. We offer a huge training catalog with a wide range of development options aligned to QIAGEN’s competency model. The training catalog is frequently reviewed with the commercial training team to align with trainings offered in the areas of sales and products. For more information about our training system, please also refer to the section “Employee matters” in our non- financial statement included in this report. Compensation System Since the creation of QIAGEN, management has formed a culture that seeks to attract and retain the best talent worldwide and reward associates for performance. This compensation system fosters a focus on achieving corporate strategic initiatives as well as personal accountability. It is critical for QIAGEN to offer attractive compensation packages on a global basis. According to the QIAGEN philosophy, an employee who achieves his or her performance objectives should generally be awarded compensation comparable to the median levels of compensation provided by relevant benchmark companies. QIAGEN participates in various compensation benchmarking surveys that provide information on the level and mix of compensation awarded by various companies and industries for a broad range of positions around the world. In the case of QIAGEN, these include many peer life science and diagnostics companies based in the U.S. QIAGEN has a “pay for performance” culture, with the compensation of employees linked to the achievement of corporate financial and individual performance goals. Business goals are established by senior management. These goals are set at ambitious levels each year to motivate and drive performance, with a focus on both short-term and long-term quantifiable objectives. Performance metrics used for these goals include the achievement of targets for net sales, adjusted operating income and free cash flow. In 2019, the payments for short-term variable compensation were based on 90% achievement of the business goals. Compensation for a significant majority of employees 89 worldwide includes fixed base compensation and benefits, which vary according to local market customs, as well as a short-term variable cash bonus. The level of fixed compensation is paid in cash, usually on a monthly basis, and is designed to provide the employee with a reasonable standard of living relative to the compensation offered by peer companies. The amount of short-term variable cash bonus is designed to reward performance, with the payout amount based on the achievement of overall corporate financial results as well as individual performance against a written set of objectives. For the Interim Chief Executive Officer, the target annual short-term variable cash bonus is set at 100% of the annual base salary and the maximum is equivalent to 175% of the annual base salary. The Chief Financial Officer has a target annual short-term variable cash bonus set at 48% with the maximum being equivalent to 74% of the annual fixed salary. Furthermore, to align our compensation programs with the interests of shareholders, senior executives mainly focuses on change management and leadership coaching sessions, as well as on business-related innovative actions. Tuition Reimbursement / External Professional Programs To support our future growth, QIAGEN managers are encouraged to support external training programs and courses that their employees need to attend in order to prepare for new tasks or an expanded role. Employees can apply for tuition reimbursement before they join an external program if the QIAGEN Academy does not offer a suitable internal course option. Courses range from Business Administration for scientists to tailored training options for specialists. QIAGEN Academy To support all QIAGEN employees in individual development, QIAGEN has an online learning management system (LMS), the QIAGEN Academy. It manages the entire training process from enrollment to certificate conveniently in one platform. The QIAGEN Academy is available to every employee 24/7 via the internet. Continual and flexible access to all training materials at any time allows employees to blend different learning methods such as virtual classrooms, web-based training, videos or classroom training into holistic and sustainable learning concepts. We offer a huge training catalog with a wide range of development options aligned to QIAGEN’s competency model. The training catalog is frequently reviewed with the commercial training team to align with trainings offered in the areas of sales and products. For more information about our training system, please also refer to the section “Employee matters” in our non- financial statement included in this report. Compensation System Since the creation of QIAGEN, management has formed a culture that seeks to attract and retain the best talent worldwide and reward associates for performance. This compensation system fosters a focus on achieving corporate strategic initiatives as well as personal accountability. It is critical for QIAGEN to offer attractive compensation packages on a global basis. According to the QIAGEN philosophy, an employee who achieves his or her performance objectives should generally be awarded compensation comparable to the median levels of compensation provided by relevant benchmark companies. QIAGEN participates in various compensation benchmarking surveys that provide information on the level and mix of compensation awarded by various companies and industries for a broad range of positions around the world. In the case of QIAGEN, these include many peer life science and diagnostics companies based in the U.S. QIAGEN has a “pay for performance” culture, with the compensation of employees linked to the achievement of corporate financial and individual performance goals. Business goals are established by senior management. These goals are set at ambitious levels each year to motivate and drive performance, with a focus on both short-term and long-term quantifiable objectives. Performance metrics used for these goals include the achievement of targets for net sales, adjusted operating income and free cash flow. In 2019, the payments for short-term variable compensation were based on 90% achievement of the business goals. Compensation for a significant majority of employees worldwide includes fixed base compensation and benefits, which vary according to local market customs, as well as a short-term variable cash bonus. The level of fixed compensation is paid in cash, usually on a monthly basis, and is designed to provide the employee with a reasonable standard of living relative to the compensation offered by peer companies. The amount of short-term variable cash bonus is designed to reward performance, with the payout amount based on the achievement of overall corporate financial results as well as individual performance against a written set of objectives. For the Interim Chief Executive Officer, the target annual short-term variable cash bonus is set at 100% of the annual base salary and the maximum is equivalent to 175% of the annual base salary. The Chief Financial Officer has a target annual short-term variable cash bonus set at 48% with the maximum being equivalent to 74% of the annual fixed salary. Furthermore, to align our compensation programs with the interests of shareholders, senior executives receive a portion of their total compensation in the form of long-term compensation, which is granted as equity as a reward for performance. These grants are determined on an individual basis and approved by the Compensation Committee. These equity grants are made in the form of Performance Stock Units (PSUs) with a staggered vesting period typically over three (40%) and five years (60%) . For enhanced Work-Life Balance, QIAGEN offers services to help employees balance their personal life with our dynamic and driven work environment, including in-house corporate childcare and sabbatical programs, as well as company-sponsored fitness and health facilities, and programs. Flexible working hours apply to all employees except for functions that require critical on-time presence. Workplace Health In today’s business climate, the health of employees is often directly related to the health of the company. Increased job satisfaction, improved morale, reduced injuries, and increased productivity are just some of the benefits which a healthy work environment can have. At its headquarters, QIAGEN regularly offers “health days” where all employees are invited to receive free counsel and to participate in screening and nutrition programs, medical check- ups, etc. At its major locations, QIAGEN provides in-house gyms open to all employees. All female employees have free access to screening for HPV, the primary cause of cervical cancer. Employees worldwide Americas EMEA APAC & RoW 2017 Production R&D Sales Marketing 90 Admin 1245 2567 876 4688 1230 2670 1052 4952 2018 2019 23% Production 22% Production 20% R&D 40% Sales 6% Marketing 11% Admin 21% R&D 40% Sales 6% Marketing 11% Admin 1132 2820 1144 5096 23% 19% 40% 6% 12% 201720182019Totalreceive a portion of their total compensation in the form of long-term compensation, which is granted as equity as a receive a portion of their total compensation in the form of long-term compensation, which is granted as equity as a reward for performance. These grants are determined on an individual basis and approved by the Compensation reward for performance. These grants are determined on an individual basis and approved by the Compensation Committee. These equity grants are made in the form of Performance Stock Units (PSUs) with a staggered vesting Committee. These equity grants are made in the form of Performance Stock Units (PSUs) with a staggered vesting period typically over three (40%) and five years (60%) . period typically over three (40%) and five years (60%) . For enhanced Work-Life Balance, QIAGEN offers services to help employees balance their personal life with our For enhanced Work-Life Balance, QIAGEN offers services to help employees balance their personal life with our dynamic and driven work environment, including in-house corporate childcare and sabbatical programs, as well as dynamic and driven work environment, including in-house corporate childcare and sabbatical programs, as well as company-sponsored fitness and health facilities, and programs. Flexible working hours apply to all employees except company-sponsored fitness and health facilities, and programs. Flexible working hours apply to all employees except for functions that require critical on-time presence. for functions that require critical on-time presence. Workplace Health Workplace Health M A N A G E M E N T R E P O R T Human Resources In today’s business climate, the health of employees is often directly related to the health of the company. Increased job satisfaction, improved morale, reduced injuries, and increased productivity are just some of the benefits which a healthy work environment can have. At its headquarters, QIAGEN regularly offers “health days” where all employees are invited to receive free counsel and to participate in screening and nutrition programs, medical check- ups, etc. At its major locations, QIAGEN provides in-house gyms open to all employees. All female employees have receive a portion of their total compensation in the form of long-term compensation, which is granted as equity as a free access to screening for HPV, the primary cause of cervical cancer. reward for performance. These grants are determined on an individual basis and approved by the Compensation Committee. These equity grants are made in the form of Performance Stock Units (PSUs) with a staggered vesting Employees worldwide period typically over three (40%) and five years (60%) . In today’s business climate, the health of employees is often directly related to the health of the company. Increased job satisfaction, improved morale, reduced injuries, and increased productivity are just some of the benefits which a healthy work environment can have. At its headquarters, QIAGEN regularly offers “health days” where all employees are invited to receive free counsel and to participate in screening and nutrition programs, medical check- ups, etc. At its major locations, QIAGEN provides in-house gyms open to all employees. All female employees have free access to screening for HPV, the primary cause of cervical cancer. Employees worldwide Americas For enhanced Work-Life Balance, QIAGEN offers services to help employees balance their personal life with our dynamic and driven work environment, including in-house corporate childcare and sabbatical programs, as well as 1132 company-sponsored fitness and health facilities, and programs. Flexible working hours apply to all employees except 2820 for functions that require critical on-time presence. APAC & RoW APAC & RoW Americas EMEA EMEA 1245 1230 2670 1052 1144 2567 2567 1245 876 876 Workplace Health 4688 4952 4688 5096 Production 2017 2018 2017 In today’s business climate, the health of employees is often directly related to the health of the company. Increased job satisfaction, improved morale, reduced injuries, and increased productivity are just some of the benefits which a healthy work environment can have. At its headquarters, QIAGEN regularly offers “health days” where all 23% employees are invited to receive free counsel and to participate in screening and nutrition programs, medical check- 19% 21% ups, etc. At its major locations, QIAGEN provides in-house gyms open to all employees. All female employees have 40% 40% 40% free access to screening for HPV, the primary cause of cervical cancer. 6% 2018 2019 Production Production Production Production Marketing Marketing Marketing Marketing Marketing Sales Sales Sales Sales Sales R&D R&D R&D R&D R&D 20% 23% 22% 21% 40% 20% 23% 40% 22% 6% 6% 6% 6% 2019 Production R&D Sales Marketing Employees worldwide Admin 11% Admin Admin 11% 11% Admin Admin 11% 12% Admin Americas EMEA APAC & RoW 2017 Production R&D Sales Marketing Admin 1245 2567 876 4688 1230 2670 1052 4952 2018 2019 23% Production 22% Production 20% R&D 40% Sales 6% Marketing 11% Admin 21% R&D 40% Sales 6% Marketing 11% Admin 1132 2820 1144 5096 23% 19% 40% 6% 12% 91 1230 2670 1052 4952 1132 2820 1144 5096 23% 19% 40% 6% 12% 201720182019Total23%20%40%6%2%11%22%21%40%6%2%11%23%19%40%6%2%12%20%40%6%ProductionR&DSalesMarketingAdminProductionR&DSalesMarketingAdmin21%40%6%ProductionR&DSalesMarketingAdmin19%40%6%201720182019Total1,1441,13201000200030004000600050002019AmericasEMEAAPAC & RoW2,8208761,0521,2451,230201820172,6702,567201720182019TotalManagement Report Management Report Business and Operating Environment Non-Financial Statement QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular Our Approach to Sustainability insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights faster, better and more efficiently - from the raw biological sample to the final interpreted result. 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. We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the Our commitment to sustainability goes beyond formal regulations. As a market and innovation leader in life sciences increasing volumes and complexity of biological information, in keeping with our vision of making improvements in and molecular diagnostics, we believe there is room for innovation in driving sustainable development in our life possible. industry, and we are resolved to continue moving forward. QIAGEN began operations in 1986 as a pioneer in the emerging biotechnology sector, introducing a novel method In order to continuously address, monitor, and manage sustainability topics, QIAGEN has implemented a global that standardized and accelerated extraction and purification of nucleic acids from biological samples. As molecular function within our operations structure in 2019. This function will head QIAGEN’s global environmental, health and biology and genomic knowledge have grown to influence many areas of life, QIAGEN has expanded to serve the security topics. This position has responsibility and oversight for sustainability at QIAGEN and reports to the Head of full spectrum of market needs. We believe our sample technologies are unmatched in quality for isolating and Global Operations, which is part of QIAGEN’s Executive Board. 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 We pledge to continually evaluate the potential environmental impact of our business, saving energy and reducing analysis, such as identifying the genetic information of a pathogen or a gene mutation in a tumor. QIAGEN’s negative environmental impacts of our operations. We look after the welfare of our employees, taking care of their industry-leading Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and developmental needs and supporting them in every way to become and remain committed and responsible. We knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in extend our commitment to sustainability into the supply chain, committing our business partners to sign up to our seamless and cost-effective molecular testing workflows - from Sample to Insight. environmental, social and human-rights related standards. Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation We recognize that ongoing success for QIAGEN also depends on the sustainability of society’s resources. This is systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and why we engage in dialogue with our various stakeholders – employees, customers, patients, suppliers, shareholders, 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. non-governmental organizations (NGOs) and communities – to gain a better understanding of our operating environment, including market developments and cultural dynamics through approaches ranging from standard QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and growing questionnaires to one-on-one conversations. Our employee-led volunteer sustainability committees drive progress by needs in the market, partnering with researchers and Pharma companies, and acquiring companies or technologies identifying areas for environmental improvement at all levels of the company, initiating projects, and providing input to complement our portfolio. We believe the addressable global market for QIAGEN's portfolio of molecular testing on environmental topics. products for customers across the continuum of life science research and molecular diagnostics totals more than $10 billion. 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. We have funded our growth through internally generated funds, debt offerings, and private and public sales of equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol QGEN and on the Frankfurt Prime Standard as QIA. 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 relevant The company is registered under its commercial and legal name QIAGEN N.V. with the trade register (kamer van sustainability accounting standards as issued by the Sustainability Accounting Standards Board (SASB). 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. In the reporting period, we reviewed the materiality analysis first conducted in 2017. As a first step, a long list of potentially relevant topics was drawn up, based on relevant sustainability frameworks, rating requirements and a competitive analysis. The five non-financial aspects prescribed in the European Commission’s CSR Directive As a holding company, QIAGEN conducts business through subsidiaries located throughout the world. Further 2014/95/EU (environmental, social and employee matters, respect for human rights, anti-corruption and bribery) information about QIAGEN can be found at www.QIAGEN.com. By referring to our website, we do not incorporate were also taken into account. In a second step, the topics were consolidated into a list of 17 topics and evaluated in the website or any portion of the website by reference into this Annual Report. an online survey of QIAGEN representatives with regard to their business relevance and their impact on the non- 92 Material non-financial informationManagement Report 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. In order to continuously address, monitor, and manage sustainability topics, QIAGEN has implemented a global function within our operations structure in 2019. This function will head QIAGEN’s global environmental, health and security topics. This position has responsibility and oversight for sustainability at QIAGEN and reports to the Head of Global Operations, which is part of QIAGEN’s Executive Board. 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 – to gain a better understanding of our operating environment, including market developments and cultural dynamics through approaches ranging from standard questionnaires to one-on-one conversations. Our employee-led volunteer sustainability committees drive progress by identifying areas for environmental improvement at all levels of the company, initiating projects, and providing input on environmental topics. 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. M A N A G E M E N T R E P O R T Non-Financial Statement 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 relevant sustainability accounting standards as issued by the Sustainability Accounting Standards Board (SASB). In the reporting period, we reviewed the materiality analysis first conducted in 2017. As a first step, a long list of potentially relevant topics was drawn up, based on relevant sustainability frameworks, rating requirements and a competitive analysis. The five non-financial aspects prescribed in the European Commission’s CSR Directive 2014/95/EU (environmental, social and employee matters, respect for human rights, anti-corruption and bribery) were also taken into account. In a second step, the topics were consolidated into a list of 17 topics and evaluated in an online survey of QIAGEN representatives with regard to their business relevance and their impact on the non- financial aspects. In a joint workshop with representatives from our different departments, the results of the survey were discussed and the various perspectives assessed. The final materiality matrix was validated by our senior management and resulted in the following material topics: › Environmental matters: energy and emissions, water consumption, resource efficiency, sustainable procurement › Employee matters: employee satisfaction, occupational safety and health protection, employee development, responsible employer, equal opportunities › Social matters: access to healthcare, quality and product safety, customer satisfaction, data and cyber security › Respect for human rights: conflict minerals › Anti-corruption and bribery matters: antitrust, anti-corruption Environment At QIAGEN, we aim to save energy and reduce the environmental impact of our operations by driving long-term economic success with healthy, high performance workplaces and make improvements in life possible as a good corporate citizen. Reducing our environmental impact is a key corporate goal for 2020 and beyond that all employees are actively engaged in working towards. 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. To support this commitment a new Global Environment, Health and Safety (EHS) function was initiated in 2019 to drive the implementation of international environmental management systems in our production and research and development facilitates, to set goals and objectives to set limits to reduce the consumption of energy and water and to reduce the amount of plastic used in our packaging, during transportation. With these efforts, we aim to operate in the most cost-efficient and environmentally friendly way possible. QIAGEN recognizes risks resulting from climate change such as extreme weather events, changes in regulation or customer behavior. Operations could for example 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. To proactively minimize our contribution to climate change, QIAGEN has committed to reducing emissions in line with a 1.5 degree Celsius climate target. Our 2019 carbon footprint, which was calculated with market-based emissions factors, will serve as the base year. By the year 2022, QIAGEN will reduce scope 1 and 2 emissions by 12.6% and business travel emissions by 3.7% below the base year. QIAGEN will achieve these reductions by establishing an energy efficiency task force that will identify areas for energy efficiency across the company and through purchasing green energy attributed certificates and high-quality carbon credits. To increase transparency regarding our own global energy consumption and greenhouse gas emissions, QIAGEN has extended the coverage of the energy consumption data by the integration of a centralized data collection process management for all production sites, research centers and major offices. 93 The expansion in the collection of our energy data enabled us to calculate our corporate carbon footprint (CCF) for scope 1, 2 and 3 emissions more accurately in the reporting year and report it following a location-based and market-based approach for our scope 2 emissions. 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. A location-based calculation method for scope 2 emissions reflects the average emissions intensity of grids on which energy consumption occurs; a market-based method reflects emissions calculated with the particular energy source mix used by each QIAGEN site. Material non-financial informationEnvironmental Performancefinancial aspects. In a joint workshop with representatives from our different departments, the results of the survey were discussed and the various perspectives assessed. The final materiality matrix was validated by our senior management and resulted in the following material topics: › Environmental matters: energy and emissions, water consumption, resource efficiency, sustainable procurement › Employee matters: employee satisfaction, occupational safety and health protection, employee development, responsible employer, equal opportunities › Social matters: access to healthcare, quality and product safety, customer satisfaction, data and cyber security › Respect for human rights: conflict minerals › Anti-corruption and bribery matters: antitrust, anti-corruption Environment At QIAGEN, we aim to save energy and reduce the environmental impact of our operations by driving long-term economic success with healthy, high performance workplaces and make improvements in life possible as a good corporate citizen. Reducing our environmental impact is a key corporate goal for 2020 and beyond that all employees are actively engaged in working towards. 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. To support this commitment a new Global Environment, Health and Safety (EHS) function was initiated in 2019 to drive the implementation of international environmental management systems in our production and research and development facilitates, to set goals and objectives to set limits to reduce the consumption of energy and water and to reduce the amount of plastic used in our packaging, during transportation. With these efforts, we aim to operate in the most cost-efficient and environmentally friendly way possible. QIAGEN recognizes risks resulting from climate change such as extreme weather events, changes in regulation or customer behavior. Operations could for example 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. To proactively minimize our contribution to climate change, QIAGEN has committed to reducing emissions in line with a 1.5 degree Celsius climate target. Our 2019 carbon footprint, which was calculated with market-based emissions factors, will serve as the base year. By the year 2022, QIAGEN will reduce scope 1 and 2 emissions by 12.6% and business travel emissions by 3.7% below the base year. QIAGEN will achieve these reductions by establishing an energy efficiency task force that will identify areas for energy efficiency across the company and through purchasing green energy attributed certificates and high-quality carbon credits. To increase transparency regarding our own global energy consumption and greenhouse gas emissions, QIAGEN has extended the coverage of the energy consumption data by the integration of a centralized data collection process management for all production sites, research centers and major offices. The expansion in the collection of our energy data enabled us to calculate our corporate carbon footprint (CCF) for scope 1, 2 and 3 emissions more accurately in the reporting year and report it following a location-based and market-based approach for our scope 2 emissions. 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. A location-based calculation method for scope 2 emissions reflects the average emissions intensity of grids on which energy consumption occurs; a market-based method reflects emissions calculated with the particular energy source mix used by each QIAGEN site. As of 2018, all relevant scope 1 and 2 emissions are included following a location-based approach. The additional As of 2018, all relevant scope 1 and 2 emissions are included following a location-based approach. The additional As of 2018, all relevant scope 1 and 2 emissions are included following a location-based approach. The additional As of 2018, all relevant scope 1 and 2 emissions are included following a location-based approach. The additional As of 2018, all relevant scope 1 and 2 emissions are included following a location-based approach. The additional calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate strategy. Accordingly, we will report our KPIs for GHG emissions using the market-based approach from next strategy. Accordingly, we will report our KPIs for GHG emissions using the market-based approach from next strategy. Accordingly, we will report our KPIs for GHG emissions using the market-based approach from next strategy. Accordingly, we will report our KPIs for GHG emissions using the market-based approach from next strategy. Accordingly, we will report our KPIs for GHG emissions using the market-based approach from next reporting year on. In addition, we have started to collect data for calculating GHG emissions in scope 3. These reporting year on. In addition, we have started to collect data for calculating GHG emissions in scope 3. These reporting year on. In addition, we have started to collect data for calculating GHG emissions in scope 3. These reporting year on. In addition, we have started to collect data for calculating GHG emissions in scope 3. These reporting year on. 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. emissions occur along our value chain, for example through transport services, suppliers or the use of our products. emissions occur along our value chain, for example through transport services, suppliers or the use of our products. emissions occur along our value chain, for example through transport services, suppliers or the use of our products. emissions occur along our value chain, for example through transport services, suppliers or the use of our products. As a first Scope 3 category, we have integrated emissions resulting from business travel into our CCF for 2019. As a first Scope 3 category, we have integrated emissions resulting from business travel into our CCF for 2019. As a first Scope 3 category, we have integrated emissions resulting from business travel into our CCF for 2019. As a first Scope 3 category, we have integrated emissions resulting from business travel into our CCF for 2019. As a first Scope 3 category, we have integrated emissions resulting from business travel into our CCF for 2019. In addition to our energy and climate management activities, we collect data regarding fresh water consumption and In addition to our energy and climate management activities, we collect data regarding fresh water consumption and In addition to our energy and climate management activities, we collect data regarding fresh water consumption and In addition to our energy and climate management activities, we collect data regarding fresh water consumption and In addition to our energy and climate management activities, we collect data regarding fresh water consumption and waste for all our production sites. The table below lists figures from 2019 and 2018, and expresses our consolidated waste for all our production sites. The table below lists figures from 2019 and 2018, and expresses our consolidated waste for all our production sites. The table below lists figures from 2019 and 2018, and expresses our consolidated waste for all our production sites. The table below lists figures from 2019 and 2018, and expresses our consolidated waste for all our production sites. The table below lists figures from 2019 and 2018, and expresses our consolidated environmental data in relation to our production volume sold to establish a basis for a long-term monitoring system. environmental data in relation to our production volume sold to establish a basis for a long-term monitoring system. environmental data in relation to our production volume sold to establish a basis for a long-term monitoring system. environmental data in relation to our production volume sold to establish a basis for a long-term monitoring system. environmental data in relation to our production volume sold to establish a basis for a long-term monitoring system. Energy Energy (in MWh) (in MWh) Energy Energy Energy (in MWh) (in MWh) (in MWh) GHG emissions Scope 1 + GHG emissions Scope 1 + 2 2 (in tCO2 ; location-based) (in tCO2; location-based) GHG emissions Scope 1 + 2 (in tCO2; location-based) GHG emissions Scope 1 + GHG emissions Scope 1 + 2 2 (in tCO2; location-based) (in tCO2; location-based) Freshwater use (in m3 ) Freshwater use (in m3 ) Freshwater use (in m3 ) Freshwater use (in m3 ) Freshwater use (in m3 ) Total waste (in t) Total waste (in t) Total waste (in t) Total waste (in t) Total waste (in t) Hazardous waste (in t) Hazardous waste (in t) Hazardous waste (in t) Hazardous waste (in t) Hazardous waste (in t) 86,158 86,158 86,158 86,158 86,158 0.0188 0.0188 0.0188 0.0188 0.0188 MWh/unit MWh/unit MWh/unit MWh/unit MWh/unit 29,347 29,347 29,347 29,347 29,347 474,335 474,335 474,335 474,335 474,335 1,155 1,155 1,155 1,155 1,155 330 330 330 330 330 6,429 6,429 6,429 6,429 6,429 g/unit g/unit g/unit g/unit g/unit 104 104 104 104 104 253 253 253 253 253 72.3 72.3 72.3 72.3 72.3 l/unit l/unit l/unit l/unit l/unit g/unit g/unit g/unit g/unit g/unit g/unit g/unit g/unit g/unit g/unit 86,5492 86,5492 86,5492 86,5492 86,5492 28,8982 28,8982 28,8982 28,8982 28,8982 0.0248 0.0248 0.0248 0.0248 0.0248 MWh/unit MWh/unit MWh/unit MWh/unit MWh/unit 8,294 8,294 8,294 8,294 8,294 g/unit g/unit g/unit g/unit g/unit 119,621 119,621 119,621 119,621 119,621 34 34 34 34 34 l/unit l/unit l/unit l/unit l/unit 633 633 633 633 633 182 182 182 182 182 250 250 250 250 250 71.7 71.7 71.7 71.7 71.7 g/unit g/unit g/unit g/unit g/unit g/unit g/unit g/unit g/unit g/unit (1) Extension of the scope in 2019: All sites reported energy and emissions data. 25 sites reported water consumption data. (1) Extension of the scope in 2019: All sites reported energy and emissions data. 25 sites reported water consumption data. (2) Figures for 2018 were adjusted due to improved data availability. (2) Figures for 2018 were adjusted due to improved data availability. (1) Extension of the scope in 2019: All sites reported energy and emissions data. 25 sites reported water consumption data. (2) Figures for 2018 were adjusted due to improved data availability. (1) Extension of the scope in 2019: All sites reported energy and emissions data. 25 sites reported water consumption data. (1) Extension of the scope in 2019: All sites reported energy and emissions data. 25 sites reported water consumption data. (2) Figures for 2018 were adjusted due to improved data availability. (2) Figures for 2018 were adjusted due to improved data availability. Our global data collection coverage of energy and emissions was increased from 30% in 2017 to 100 % in 2019. Our global data collection coverage of energy and emissions was increased from 30% in 2017 to 100 % in 2019. Our global data collection coverage of energy and emissions was increased from 30% in 2017 to 100 % in 2019. Our global data collection coverage of energy and emissions was increased from 30% in 2017 to 100 % in 2019. Our global data collection coverage of energy and emissions was increased from 30% in 2017 to 100 % in 2019. In 2019, we achieved a decrease of 0.3 GWh in our total energy consumption to 86.2 GWh compared to 86.5 In 2019, we achieved a decrease of 0.3 GWh in our total energy consumption to 86.2 GWh compared to 86.5 In 2019, we achieved a decrease of 0.3 GWh in our total energy consumption to 86.2 GWh compared to 86.5 In 2019, we achieved a decrease of 0.3 GWh in our total energy consumption to 86.2 GWh compared to 86.5 In 2019, we achieved a decrease of 0.3 GWh in our total energy consumption to 86.2 GWh compared to 86.5 GWh in 2018 as detailed in the table below. GWh in 2018 as detailed in the table below. GWh in 2018 as detailed in the table below. GWh in 2018 as detailed in the table below. GWh in 2018 as detailed in the table below. Natural gas Natural gas Natural gas Natural gas Natural gas 34,679,620 34,679,620 34,679,620 34,679,620 34,679,620 38,627,496 38,627,496 38,627,496 38,627,496 38,627,496 Petrol Petrol Petrol Petrol Petrol Diesel Diesel Diesel Diesel Diesel Liquefied Petroleum Gas (LPG) Liquefied Petroleum Gas (LPG) Liquefied Petroleum Gas (LPG) Liquefied Petroleum Gas (LPG) Liquefied Petroleum Gas (LPG) Electricity procurement from conventional tariffs Electricity procurement from conventional tariffs Electricity procurement from conventional tariffs Electricity procurement from conventional tariffs Electricity procurement from conventional tariffs 94 Electricity procurement from green tariffs Electricity procurement from green tariffs Electricity procurement from green tariffs Electricity procurement from green tariffs Electricity procurement from green tariffs Consumption from district heating, district cooling and steam Consumption from district heating, district cooling and steam Consumption from district heating, district cooling and steam Consumption from district heating, district cooling and steam Consumption from district heating, district cooling and steam 8,677,185 8,677,185 8,677,185 8,677,185 8,677,185 5,255,293 5,255,293 5,255,293 5,255,293 5,255,293 7,910,565 7,910,565 7,910,565 7,910,565 7,910,565 8,160,611 8,160,611 8,160,611 8,160,611 8,160,611 50,179 50,179 50,179 50,179 50,179 72,702 72,702 72,702 72,702 72,702 36,130,248 36,130,248 36,130,248 36,130,248 36,130,248 30,346,347 30,346,347 30,346,347 30,346,347 30,346,347 1,142,240 1,142,240 1,142,240 1,142,240 1,142,240 1,238,345 1,238,345 1,238,345 1,238,345 1,238,345 223,000 223,000 223,000 223,000 223,000 193,000 193,000 193,000 193,000 193,000 Total energy consumption Total energy consumption Total energy consumption Total energy consumption Total energy consumption 86,157,765 86,157,765 86,157,765 86,157,765 86,157,765 86,549,066 86,549,066 86,549,066 86,549,066 86,549,066 Scope 1: Direct emissions Scope 1: Direct emissions Scope 1: Direct emissions Scope 1: Direct emissions Scope 1: Direct emissions Scope 2: Indirect emissions Scope 2: Indirect emissions Scope 2: Indirect emissions Scope 2: Indirect emissions Scope 2: Indirect emissions Scope 3: Business travel Scope 3: Business travel Scope 3: Business travel Scope 3: Business travel Scope 3: Business travel 10,808 10,808 10,808 10,808 10,808 18,540 18,540 18,540 18,540 18,540 19,431 19,431 19,431 19,431 19,431 10,808 10,808 10,808 10,808 10,808 10,870 10,870 10,870 10,870 10,870 19,431 19,431 19,431 19,431 19,431 With the help of these key performance indicators (KPIs), we are able to create reduction targets for energy and With the help of these key performance indicators (KPIs), we are able to create reduction targets for energy and With the help of these key performance indicators (KPIs), we are able to create reduction targets for energy and With the help of these key performance indicators (KPIs), we are able to create reduction targets for energy and With the help of these key performance indicators (KPIs), we are able to create reduction targets for energy and CO2-emissions. We are furthermore working towards creating targets for fresh water and waste. CO2 -emissions. We are furthermore working towards creating targets for fresh water and waste. CO2-emissions. We are furthermore working towards creating targets for fresh water and waste. CO2-emissions. We are furthermore working towards creating targets for fresh water and waste. CO2-emissions. We are furthermore working towards creating targets for fresh water and waste. Environmental Performance20191KPI 20192018KPI 2018Energy consumption by source (in kWh)20192018Footprint 2019Emission category (in tCO2)Location-basedMarket-based20191KPI 20192018KPI 2018Energy consumption by source (in kWh)20192018Footprint 2019Emission category (in tCO2)Location-basedMarket-based20191KPI 20192018KPI 2018Energy consumption by source (in kWh)20192018Footprint 2019Emission category (in tCO2)Location-basedMarket-based20191KPI 20192018KPI 2018Energy consumption by source (in kWh)20192018Footprint 2019Emission category (in tCO2)Location-basedMarket-based20191KPI 20192018KPI 2018Energy consumption by source (in kWh)20192018Footprint 2019Emission category (in tCO2)Location-basedMarket-basedAs of 2018, all relevant scope 1 and 2 emissions are included following a location-based approach. The additional As of 2018, all relevant scope 1 and 2 emissions are included following a location-based approach. The additional calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate calculation using a market-based approach for scope 2 emissions was introduced for 2019 as part of our climate strategy. Accordingly, we will report our KPIs for GHG emissions using the market-based approach from next strategy. Accordingly, we will report our KPIs for GHG emissions using the market-based approach from next reporting year on. In addition, we have started to collect data for calculating GHG emissions in scope 3. These reporting year on. 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. emissions occur along our value chain, for example through transport services, suppliers or the use of our products. As a first Scope 3 category, we have integrated emissions resulting from business travel into our CCF for 2019. As a first Scope 3 category, we have integrated emissions resulting from business travel into our CCF for 2019. In addition to our energy and climate management activities, we collect data regarding fresh water consumption and In addition to our energy and climate management activities, we collect data regarding fresh water consumption and waste for all our production sites. The table below lists figures from 2019 and 2018, and expresses our consolidated waste for all our production sites. The table below lists figures from 2019 and 2018, and expresses our consolidated environmental data in relation to our production volume sold to establish a basis for a long-term monitoring system. environmental data in relation to our production volume sold to establish a basis for a long-term monitoring system. Energy Energy (in MWh) (in MWh) GHG emissions Scope 1 + GHG emissions Scope 1 + 2 2 (in tCO2 ; location-based) (in tCO2; location-based) 86,158 86,158 0.0188 0.0188 MWh/unit MWh/unit 86,5492 86,5492 0.0248 0.0248 MWh/unit MWh/unit 29,347 29,347 6,429 6,429 g/unit g/unit 28,8982 28,8982 8,294 8,294 g/unit g/unit M A N A G E M E N T R E P O R T Non-Financial Statement Freshwater use (in m3 ) Freshwater use (in m3 ) 474,335 474,335 Total waste (in t) Total waste (in t) Hazardous waste (in t) Hazardous waste (in t) 1,155 1,155 330 330 104 104 253 253 72.3 72.3 l/unit l/unit g/unit g/unit g/unit g/unit 119,621 119,621 633 633 250 250 34 34 182 182 71.7 71.7 l/unit l/unit g/unit g/unit g/unit g/unit (1) Extension of the scope in 2019: All sites reported energy and emissions data. 25 sites reported water consumption data. (1) Extension of the scope in 2019: All sites reported energy and emissions data. 25 sites reported water consumption data. (2) Figures for 2018 were adjusted due to improved data availability. (2) Figures for 2018 were adjusted due to improved data availability. Our global data collection coverage of energy and emissions was increased from 30% in 2017 to 100 % in 2019. Our global data collection coverage of energy and emissions was increased from 30% in 2017 to 100 % in 2019. In 2019, we achieved a decrease of 0.3 GWh in our total energy consumption to 86.2 GWh compared to 86.5 In 2019, we achieved a decrease of 0.3 GWh in our total energy consumption to 86.2 GWh compared to 86.5 GWh in 2018 as detailed in the table below. GWh in 2018 as detailed in the table below. Natural gas Natural gas Petrol Petrol Diesel Diesel Liquefied Petroleum Gas (LPG) Liquefied Petroleum Gas (LPG) Electricity procurement from conventional tariffs Electricity procurement from conventional tariffs Electricity procurement from green tariffs Electricity procurement from green tariffs Consumption from district heating, district cooling and steam Consumption from district heating, district cooling and steam Total energy consumption Total energy consumption 34,679,620 34,679,620 8,677,185 8,677,185 5,255,293 5,255,293 50,179 50,179 36,130,248 36,130,248 1,142,240 1,142,240 223,000 223,000 86,157,765 86,157,765 38,627,496 38,627,496 7,910,565 7,910,565 8,160,611 8,160,611 72,702 72,702 30,346,347 30,346,347 1,238,345 1,238,345 193,000 193,000 86,549,066 86,549,066 Scope 1: Direct emissions Scope 1: Direct emissions Scope 2: Indirect emissions Scope 2: Indirect emissions Scope 3: Business travel Scope 3: Business travel 10,808 10,808 18,540 18,540 19,431 19,431 10,808 10,808 10,870 10,870 19,431 19,431 With the help of these key performance indicators (KPIs), we are able to create reduction targets for energy and With the help of these key performance indicators (KPIs), we are able to create reduction targets for energy and CO2 -emissions. We are furthermore working towards creating targets for fresh water and waste. CO2-emissions. We are furthermore working towards creating targets for fresh water and waste. QIAGEN conducted a life cycle assessment (LCA) for one of its best-selling – and therefore representative – products, the QIAamp DNA Mini Kit. The studied product is part of the portfolio category “consumables & bioinformatics”, which about 90% of QIAGEN’s sales (by turnover) are filed under. At about 2.5 kg, the kit is marginally heavier than an “average” QIAGEN kit. The scope of the study has been the full life cycle of the product, including extraction and processing of raw materials, transport to the customer, energy and material input required when using the product, as well as transport to the disposal facility and incineration of remaining materials. These system boundary settings are called “cradle to grave”. The assessment was carried out in accordance to ISO 14040/14044 but has not been certified by an independent third party. The results of the LCA show that the largest relative impacts result from the production of plastic, transport and electricity during production and use. Furthermore, cardboard and paper production play a role, as well as the incineration of plastics and the evaporation of alcohol during use. A very relevant issue is ecotoxicity impacts to marine aquatic systems due to the production of polypropylene as well as electricity generation. The depletion of fossil resources is rated second in relevance since plastics have multifold impacts being made from fossil resources and depleting a large amount of fossil resources for meeting the energy demand during their production. Transport and electricity generation both use large amounts of fossil resources for fuel as well. Global Warming Potential is rated third in relevance and similarly is closely linked to energy demand due to transport, plastics and electricity production. Plastics also have multi-fold impacts here, since their embodied carbon is released to the atmosphere during incineration. Different assumptions regarding disposal could significantly change the overall impacts of the product system, ranging from recycling (likely to have beneficial impact) to landfilling (likely to have adverse impact). Although open dumps and landfills are the most prevalent form 95 of solid waste disposal globally, incineration at the end of life is deemed an accepted and reasonably conservative approach for this product. Overview of impact results Product life cycle assessment20191KPI 20192018KPI 2018Energy consumption by source (in kWh)20192018Footprint 2019Emission category (in tCO2)Location-basedMarket-based20191KPI 20192018KPI 2018Energy consumption by source (in kWh)20192018Footprint 2019Emission category (in tCO2)Location-basedMarket-basedQIAGEN conducted a life cycle assessment (LCA) for one of its best-selling – and therefore representative – products, the QIAamp DNA Mini Kit. The studied product is part of the portfolio category “consumables & bioinformatics”, which about 90% of QIAGEN’s sales (by turnover) are filed under. At about 2.5 kg, the kit is marginally heavier than an “average” QIAGEN kit. The scope of the study has been the full life cycle of the product, including extraction and processing of raw materials, transport to the customer, energy and material input required when using the product, as well as transport to the disposal facility and incineration of remaining materials. These system boundary settings are called “cradle to grave”. The assessment was carried out in accordance to ISO 14040/14044 but has not been certified by an independent third party. The results of the LCA show that the largest relative impacts result from the production of plastic, transport and electricity during production and use. Furthermore, cardboard and paper production play a role, as well as the incineration of plastics and the evaporation of alcohol during use. A very relevant issue is ecotoxicity impacts to marine aquatic systems due to the production of polypropylene as well as electricity generation. The depletion of fossil resources is rated second in relevance since plastics have multifold impacts being made from fossil resources and depleting a large amount of fossil resources for meeting the energy demand during their production. Transport and electricity generation both use large amounts of fossil resources for fuel as well. Global Warming Potential is rated third in relevance and similarly is closely linked to energy demand due to transport, plastics and electricity production. Plastics also have multi-fold impacts here, since their embodied carbon is released to the atmosphere during incineration. Different assumptions regarding disposal could significantly change the overall impacts of the product system, ranging from recycling (likely to have beneficial impact) to landfilling (likely to have adverse impact). Although open dumps and landfills are the most prevalent form of solid waste disposal globally, incineration at the end of life is deemed an accepted and reasonably conservative approach for this product. Overview of impact results 96 Product life cycle assessmentQIAGEN conducted a life cycle assessment (LCA) for one of its best-selling – and therefore representative – products, the QIAamp DNA Mini Kit. The studied product is part of the portfolio category “consumables & bioinformatics”, which about 90% of QIAGEN’s sales (by turnover) are filed under. At about 2.5 kg, the kit is marginally heavier than an “average” QIAGEN kit. The scope of the study has been the full life cycle of the product, including extraction and processing of raw materials, transport to the customer, energy and material input required when using the product, as well as transport to the disposal facility and incineration of remaining materials. These system boundary settings are called “cradle to grave”. The assessment was carried out in accordance to ISO 14040/14044 but has not been certified by an independent third party. The results of the LCA show that the largest relative impacts result from the production of plastic, transport and electricity during production and use. Furthermore, cardboard and paper production play a role, as well as the incineration of plastics and the evaporation of alcohol during use. A very relevant issue is ecotoxicity impacts to marine aquatic systems due to the production of polypropylene as well as electricity generation. The depletion of fossil resources is rated second in relevance since plastics have multifold impacts being made from fossil resources and depleting a large amount of fossil resources for meeting the energy demand during their production. Transport and electricity generation both use large amounts of fossil resources for fuel as well. Global Warming Potential is rated third in relevance and similarly is closely linked to energy demand due to transport, plastics and electricity production. Plastics also have multi-fold impacts here, since their embodied M A N A G E M E N T R E P O R T Non-Financial Statement carbon is released to the atmosphere during incineration. Different assumptions regarding disposal could significantly change the overall impacts of the product system, ranging from recycling (likely to have beneficial impact) to landfilling (likely to have adverse impact). Although open dumps and landfills are the most prevalent form of solid waste disposal globally, incineration at the end of life is deemed an accepted and reasonably conservative approach for this product. Overview of impact results Toxic effects on marine water systems (MAETP) Toxic effects on marine water systems (MAETP) 941 941 kg DCB eq. kg DCB eq. Polypropylene Polypropylene Electricity Electricity Transport Transport Polyethylene Polyethylene Rest Rest Depletion of fossil resources (ADP fossil) Depletion of fossil resources (ADP fossil) 289,0 289,0 MJ MJ Polypropylene Polypropylene Transport Transport Electricity Electricity Polyethylene Polyethylene Rest Rest Global warming potential, excluding biogenic carbon (GWPe) Global warming potential, excluding biogenic carbon (GWPe) 21,7 21,7 kg CO2 eq. kg CO2 eq. Transport Transport Polypropylene Polypropylene PP incineration PP incineration Electricity Electricity Rest Rest Photochemical creation of ozone Photochemical creation of ozone ("summer smog") (POCP) ("summer smog") (POCP) 0,00638 0,00638 kg Ethene eq. kg Ethene eq. Polypropylene Polypropylene Alc. evaporation Alc. evaporation Transport Transport Electricity Electricity Rest Rest Acidification of soil and water bodies (AP) Acidification of soil and water bodies (AP) 0,0549 0,0549 kg SO2 eq. kg SO2 eq. Polypropylene Polypropylene Transport Transport Electricity Electricity Polyethylene Polyethylene Rest Rest Toxic effect on humans (HTP inf) Toxic effect on humans (HTP inf) 0,643 0,643 kg DCB eq. kg DCB eq. Electricity Electricity Transport Transport Polyethylene Polyethylene Polypropylene Polypropylene Rest Rest Depletion of abiotic resources, e.g. minerals (ADP elements) Depletion of abiotic resources, e.g. minerals (ADP elements) 1,69E-06 1,69E-06 kg Sb eq. Electricity kg Sb eq. Electricity Rest Rest Eutrophication (over-enrichment of nutrients in water bodies) (EP) Eutrophication (over-enrichment of nutrients in water bodies) (EP) 0,00744 0,00744 kg Phosphate eq. Transport kg Phosphate eq. Transport Rest Rest Toxicity to freshwater ecosystems (FAETP) Toxicity to freshwater ecosystems (FAETP) 0,0731 0,0731 kg DCB eq. Transport kg DCB eq. Transport Rest Rest Depletion of ozone (i.e. the ozone layer) (ODP) Depletion of ozone (i.e. the ozone layer) (ODP) 8,37E-11 8,37E-11 kg R11 eq. Paper kg R11 eq. Paper Rest Rest Toxic effects on terrestric systems, i.e. soil (TETP) Toxic effects on terrestric systems, i.e. soil (TETP) 0,00563 0,00563 kg DCB eq. Electricity kg DCB eq. Electricity Rest Rest * Relevance is calculated as the share of weights and normalized impact of the respective category. * Relevance is calculated as the share of weights and normalized impact of the respective category. 44% 44% 43% 43% 9% 1% 2% 9% 1% 2% 44% 44% 31% 31% 13% 13% 4% 8% 4% 8% 30% 30% 27% 27% 19% 19% 16% 16% 8% 8% 37% 37% 30% 30% 23% 23% 9% 2% 9% 2% 43% 43% 35% 35% 16% 16% 2% 4% 2% 4% 34% 34% 23% 23% 20% 20% 7% 7% 15% 15% 57% 57% 43% 43% 54% 54% 46% 46% 41% 41% 59% 59% 94% 94% 6% 6% 52% 52% 48% 48% 97 Impact CategoryResultUnitProcessesShareProduct life cycle assessmentImpact CategoryResultUnitProcessesShareThe detailed report on the LCA results can be found on QIAGEN's website in the Sustainability section. The environmental impact of plastic materials is increasingly becoming a major concern for customers. QIAGEN currently uses plastics in many of its products and production support materials, as well as for transport and packaging purposes. This year, QIAGEN has set the goal of reducing Plastic Transportation Packaging Material by 3% vs 2019 for 2020. 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 for “Plastic Footprint Reduction” 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 alternative materials, and where possible, optimize recyclability. Completed initiatives include reducing the thickness of blister film in packaging from 10 ml to 8 ml (reduction of 2.8 tonnes/year), reducing the number of gel packs used in cold shipment of our products (reduction of 33.4 tonnes/year), reducing the size of polystyrene foam boxes by optimizing how the contents are structured, and developing a digital recycling card that explains to customers how to properly dispose of packaging components. To identify starting points within our supply chain, we have initiated a query with suppliers about their use of plastic materials. We are still in the process of exploring a “box cycle” where supplies are packaged directly by our suppliers and the packaging material is returned to them, with results expected in 2020. In addition, we are in discussions with suppliers in order to achieve a better recyclability of their products. Scrap plastics produced as part of the component production process are already recycled at major supplier sites. 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 (more than 100 employees) 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. 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. 98 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 2019, we Plastic Footprint ReductionThe detailed report on the LCA results can be found on QIAGEN's website in the Sustainability section. The environmental impact of plastic materials is increasingly becoming a major concern for customers. QIAGEN currently uses plastics in many of its products and production support materials, as well as for transport and packaging purposes. This year, QIAGEN has set the goal of reducing Plastic Transportation Packaging Material by 3% vs 2019 for 2020. 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 for “Plastic Footprint Reduction” 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 alternative materials, and where possible, optimize recyclability. Completed initiatives include reducing the thickness of blister film in packaging from 10 ml to 8 ml (reduction of 2.8 tonnes/year), reducing the number of gel packs used in cold shipment of our products (reduction of 33.4 tonnes/year), reducing the size of polystyrene foam boxes by optimizing how the contents are structured, and developing a digital recycling card that explains to customers how to properly dispose of packaging components. To identify starting points within our supply chain, we have initiated a query with suppliers about their use of plastic materials. We are still in the process of exploring a “box cycle” where supplies are packaged directly by our suppliers and the packaging material is returned to them, with results expected in 2020. In addition, we are in discussions with suppliers in order to achieve a better recyclability of their products. Scrap plastics produced as part of the component production process are already recycled at major supplier sites. 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 (more than 100 employees) 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 M A N A G E M E N T R E P O R T Non-Financial Statement 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. 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 2019, we employed 3.03% part-time employees (2018: 5.57%) and 1.24 % temporary employees with QIAGEN contract / fixed-term work contract (2018: 1.26%). 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 use our global e-learning portfolio or to participate in personal trainings usually offered in a blended format. The focus is on job-specific skills, competencies and leadership development. In 2019, we ran a mix of internal instructor-led, virtual instructor-led and e-learning courses attended by 3,951 of 4,193 employees. 12% of these courses were attended by management level employees. In addition, 46 employees participated in our advanced leadership development programs. 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 2019, as in previous years, employees provided overall very positive feedback. Our Diversity & Inclusion Philosophy: At QIAGEN, we are committed to creating an environment rich in 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, one of our goals is to maintain an environment where all individuals have the opportunity to grow and contribute to our progress. We are committed to providing an environment where all individuals have the equal opportunity to grow and contribute to our progress; regardless of their age, educational background, sex (including gender identity and sexual orientation), nationality, veteran status, physical abilities, neurotype, race, ethnic background, or religion. 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. As in 2018, the gender split across the whole company remained at 51% men and 49% women. The participation of women in leadership roles was at 29% (2018: 28%). We aim to achieve 30% women in leadership roles in 2020. 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 2019, we launched the QIAGEN Executive Council of Equal Opportunity, made up of senior representatives from different sectors across the company. The committee works closely with the Diversity Ambassador program, that was set up in 2018 and includes more than 20 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 99 assessment, and is aimed at all managers of people. 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. In 2019, this included an update to our parental leave in the United States, which was a direct result of the diversity forums led by our ambassadors in conjunction with the executive committee members. Plastic Footprint ReductionEmployee trainingDiversity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. 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 27,000 applications in 2019 (2018: > 40,000). At the same time, the average voluntary annual turnover rate has decreased year over year. QIAGEN recognizes its responsibilities with respect to health and occupational safety in all our operations and meets all applicable regulatory requirements. In the third quarter of 2019, a leading position for EHS (environment, health, safety) was appointed to provide direction and implementation of a global health and safety management system compliant with ISO45001, which will be implemented within the manufacturing facilities, research and development as well as business service centers over the next three years. All QIAGEN facilities operate health and safety procedures at local level, which include accident reporting, risk assessments and hazard analyses, and occupational safety and health audits, which lead to the implementation of improvement measures. All employees of the company are required to adhere to local health and safety procedures and practices. Safety, orderliness and cleanliness are demanded by management as a key success factor. QIAGEN committed to an all company goal to reduce the number of lost days due to injuries by 10% vs 2019 over 2020, to drive and encourage initiatives to improve the safety culture in QIAGEN. The table below table shows the total number of recordable incidents, (recordable accidents include lost workdays, restricted work, and medical treatment beyond first aid) and lost workdays for 2019, 2018 and 2017. The data is obtained from key QIAGEN manufacturing sites in Germany, US, China, Sweden and Tokyo. It also includes the research and development site in Manchester UK and the large business service center located in Poland. Thus data is equates to 60% of the total average number of employees. There were no reported fatalities for 2019 at any of the QIAGEN sites. Europe / Middle East / Africa 100 Americas Asia-Pacific / Japan 17 3 0 28 26 0 21 23 0 121 5 0 261 16 0 52 18 0 Employee satisfaction and retentionOccupational safety and health protectionTotal Recordable IncidentsDays Lost due to Injuries201920182017201920182017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. 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 27,000 applications in 2019 (2018: > 40,000). At the same time, the average voluntary annual turnover rate has decreased year over year. QIAGEN recognizes its responsibilities with respect to health and occupational safety in all our operations and meets all applicable regulatory requirements. In the third quarter of 2019, a leading position for EHS (environment, health, safety) was appointed to provide direction and implementation of a global health and safety management system compliant with ISO45001, which will be implemented within the manufacturing facilities, research and development as well as business service centers over the next three years. All QIAGEN facilities operate health and safety procedures at local level, which include accident reporting, risk assessments and hazard analyses, and occupational safety and health audits, which lead to the implementation of improvement measures. All employees of the company are required to adhere to local health and safety procedures and practices. Safety, orderliness and cleanliness are demanded by management as a key success factor. QIAGEN committed to an all company goal to reduce the number of lost days due to injuries by 10% vs 2019 over 2020, to drive and encourage initiatives to improve the safety culture in QIAGEN. The table below table shows the total number of recordable incidents, (recordable accidents include lost workdays, restricted work, and medical treatment beyond first aid) and lost workdays for 2019, 2018 and 2017. The data is obtained from key QIAGEN manufacturing sites in Germany, US, China, Sweden and Tokyo. It also includes the M A N A G E M E N T R E P O R T Non-Financial Statement research and development site in Manchester UK and the large business service center located in Poland. Thus data is equates to 60% of the total average number of employees. There were no reported fatalities for 2019 at any of the QIAGEN sites. Europe / Middle East / Africa Americas Asia-Pacific / Japan Human Rights 17 3 0 28 26 0 21 23 0 121 5 0 261 16 0 52 18 0 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 Organisation for Economic Cooperation and Development (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 2019, QIAGEN adopted a new Human Rights Policy, which is designed to provide guidance on all human rights issues in our sphere of influence such as in our relationship with customers, on the employee level, and in our supply chain. For more information on our due diligence processes with regard to human rights in our supply chain, please refer to the "Sustainable supply chain management" section. Sustainable Supply Chain Management QIAGEN strives to ensure that its quality standards, compliance with laws and regulations as well as environmental and social standards are maintained along the entire value chain of suppliers and partners. We demand the same from our business partners. Our procurement policy includes specific requirements for corporate governance, environmental and social standards, which we expect from our suppliers as minimum standards. Among other issues, it includes the obligations to reduce the use of substances of concern, to ensure collective bargaining and freedom of association among employees, fair wages, and regulations concerning maximum working time. 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. Regular online training in the QIA- Academy ensures that employees in the procurement organization understand our guidelines and comply with them. 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 2019, 83% of our overall purchasing volume came from OECD countries. Europe North America Asia Australia South America Africa Total 101 53% 24% 19% 3% 1% 0% 100% Structure of our supply chainRegion of origin of suppliersDue diligence processRegion of origin%Employee satisfaction and retentionOccupational safety and health protectionTotal Recordable IncidentsDays Lost due to Injuries201920182017201920182017Human Rights Human Rights QIAGEN believes that the respect for human rights is an essential component of promoting sustainability in our 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 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 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. 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 In this sense, we acknowledge and endorse the UN Universal Declaration of Human Rights, the European Convention on Human Rights, and the business-related Organisation for Economic Cooperation and Development Convention on Human Rights, and the business-related Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, the ILO Declaration on Fundamental Principles and Rights at Work, (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 and the UN Guiding Principles on Business and Human Rights and its application in National Actions Plans of our relevant jurisdictions. relevant jurisdictions. In 2019, QIAGEN adopted a new Human Rights Policy, which is designed to provide guidance on all human rights In 2019, QIAGEN adopted a new Human Rights Policy, which is designed to provide guidance on all human rights issues in our sphere of influence such as in our relationship with customers, on the employee level, and in our supply issues in our sphere of influence such as in our relationship with customers, on the employee level, and in our supply chain. For more information on our due diligence processes with regard to human rights in our supply chain, please chain. For more information on our due diligence processes with regard to human rights in our supply chain, please refer to the "Sustainable supply chain management" section. refer to the "Sustainable supply chain management" section. Sustainable Supply Chain Management Sustainable Supply Chain Management QIAGEN strives to ensure that its quality standards, compliance with laws and regulations as well as environmental QIAGEN strives to ensure that its quality standards, compliance with laws and regulations as well as environmental and social standards are maintained along the entire value chain of suppliers and partners. We demand the same and social standards are maintained along the entire value chain of suppliers and partners. We demand the same from our business partners. Our procurement policy includes specific requirements for corporate governance, from our business partners. Our procurement policy includes specific requirements for corporate governance, environmental and social standards, which we expect from our suppliers as minimum standards. Among other issues, environmental and social standards, which we expect from our suppliers as minimum standards. Among other issues, it includes the obligations to reduce the use of substances of concern, to ensure collective bargaining and freedom of it includes the obligations to reduce the use of substances of concern, to ensure collective bargaining and freedom of association among employees, fair wages, and regulations concerning maximum working time. The policy is publicly association among employees, fair wages, and regulations concerning maximum working time. The policy is publicly available on the QIAGEN Website. available on the QIAGEN Website. In alignment with QIAGEN’s Compliance Program (especially QIAGEN’s Corporate Code of Conduct and Ethics), 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 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. Regular online training in the QIA- suppliers and all others with whom QIAGEN maintains business relationships. Regular online training in the QIA- Academy ensures that employees in the procurement organization understand our guidelines and comply with them. Academy ensures that employees in the procurement organization understand our guidelines and comply with them. 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 2019, 83% of our overall purchasing volume came from OECD countries. 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 2019, 83% of our overall purchasing volume came from OECD countries. Europe Europe North America North America Asia Asia Australia Australia South America South America Africa Africa Total Total 53% 24% 19% 3% 1% 0% 53% 24% 19% 3% 1% 0% 100% 100% In order to minimize compliance, environmental and social risks in our supply chain, we apply a multi-stage vendor selection process. Suppliers are subjected to a risk analysis with regard to environmental 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’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. In 2019 all identified suppliers have signed QIAGEN’s procurement policy. All new suppliers will need to sign the policy as part of the contracting process. 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. QIAGEN provides a whistleblower hotline which can be used by all employees. The contact details can be found on QIAGEN’s website within the section Corporate Code of Conduct and Ethics.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. Audits are conducted on-site, at least every three years for all “A”-categorized direct suppliers. Audits are documented and results are being shared with audited suppliers. To our knowledge, there were no violations regarding corporate governance, environmental and social standards in the reporting period. 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, 2019, on Form SD on March 27, 2020, and will provide updated disclosure to the SEC annually. Data and Cyber Security 102 As the external threat landscape continues to evolve, managing cyber security risk is a priority for QIAGEN. The company continues to make investments in its capabilities to enhance cyber resilience of our organization, products, services and preserve the trust of our customers, partners and employees. In 2019, QIAGEN further improved cyber security governance by establishing a dedicated cyber security function with global responsibilities and leadership. Building on our Information Security Framework, QIAGEN's cyber security program continues to ensure that security governance efforts and initiatives reflect evolving business requirements, regulatory guidance, and emerging threats. Our membership in private and public cyber security organizations (such as Health Information Sharing and Analysis Center, BSI Alliance for Cyber Security) facilitates close collaboration with peer organizations and government authorities to share industry-relevant best practices and threat information. 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 Structure of our supply chainRegion of origin of suppliersDue diligence processRegion of origin%Conflict mineralsStructure of our supply chainRegion of origin of suppliersDue diligence processRegion of origin%In order to minimize compliance, environmental and social risks in our supply chain, we apply a multi-stage vendor selection process. Suppliers are subjected to a risk analysis with regard to environmental 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’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. In 2019 all identified suppliers have signed QIAGEN’s procurement policy. All new suppliers will need to sign the policy as part of the contracting process. 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. QIAGEN provides a whistleblower hotline which can be used by all employees. The contact details can be found on QIAGEN’s website within the section Corporate Code of Conduct and Ethics.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. Audits are conducted on-site, at least every three years for all “A”-categorized direct suppliers. Audits are documented and results are being shared with audited suppliers. To our knowledge, there were no violations regarding corporate governance, environmental and social standards in the reporting period. 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 M A N A G E M E N T R E P O R T Non-Financial Statement 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, 2019, on Form SD on March 27, 2020, and will provide updated disclosure to the SEC annually. Data and Cyber Security As the external threat landscape continues to evolve, managing cyber security risk is a priority for QIAGEN. The company continues to make investments in its capabilities to enhance cyber resilience of our organization, products, services and preserve the trust of our customers, partners and employees. In 2019, QIAGEN further improved cyber security governance by establishing a dedicated cyber security function with global responsibilities and leadership. Building on our Information Security Framework, QIAGEN's cyber security program continues to ensure that security governance efforts and initiatives reflect evolving business requirements, regulatory guidance, and emerging threats. Our membership in private and public cyber security organizations (such as Health Information Sharing and Analysis Center, BSI Alliance for Cyber Security) facilitates close collaboration with peer organizations and government authorities to share industry-relevant best practices and threat information. 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. QIAGEN occasionally received grants for specified development activities from governments to support research and development activities. These grants are further discussed in section 3.7 Government Grants of Note 3 "Summary of Significant Accounting Policies, Estimates and Judgments" of the 2019 IFRS Annual Report. We pay income tax related to the value added by QIAGEN's operational activities to the governments in the global regions of operations as follows:
 Europe / Middle East / Africa $ 18,186 $ 14,120 $ 19,595 Americas Asia-Pacific / Japan 10,346 12,942 4,025 11,172 11,767 9,137 Total income taxes paid, net $ 41,474 $ 29,317 $ 40,499 Income taxes paid exclude government incentives due to favorable tax regulations in the U.S., Spain and the U.K. relating to research and development expense. We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in the Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other states and foreign jurisdictions. Governments and public institutions do not hold any major shares in QIAGEN. For additional information on the Group’s income taxes please refer to Note 17 Income Tax. Compliance 103 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 in 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. QIAGEN does not make any payments to political parties or political action committees. Special attention is paid to antitrust and anti-corruption laws (see http://financialreport.qiagen.com/management- report/opportunities-and-risks). 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: Conflict mineralsPayments received from governmentPayments to governmentsFinancial assistance from governmentsYear ended December 31,($ in thousands)201920182017compliant business behavior. QIAGEN occasionally received grants for specified development activities from governments to support research and development activities. These grants are further discussed in section 3.7 Government Grants of Note 3 "Summary of Significant Accounting Policies, Estimates and Judgments" of the 2019 IFRS Annual Report. We pay income tax related to the value added by QIAGEN's operational activities to the governments in the global regions of operations as follows:
 Europe / Middle East / Africa $ 18,186 $ 14,120 $ 19,595 Americas Asia-Pacific / Japan 10,346 12,942 4,025 11,172 11,767 9,137 Total income taxes paid, net $ 41,474 $ 29,317 $ 40,499 Income taxes paid exclude government incentives due to favorable tax regulations in the U.S., Spain and the U.K. relating to research and development expense. We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in the Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other states and foreign jurisdictions. Governments and public institutions do not hold any major shares in QIAGEN. For additional information on the Group’s income taxes please refer to Note 17 Income Tax. 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 in 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. QIAGEN does not make any payments to political parties or political action committees. Special attention is paid to antitrust and anti-corruption laws (see http://financialreport.qiagen.com/management- report/opportunities-and-risks). 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. Anti-corruption questionnaire and certification for new distributors, resellers and agents; 2. Annual 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; 3. Training; 4. Contractual obligations; 5. Due diligence (including selected background checks); also including payment monitoring. All our policies are available to employees through the company’s Compliance@QIAGEN intranet pages. Compliance awareness of our employees in all areas of the world is increased by regular trainings, which are held by external as well as inhouse legal and regulatory experts. In addition, QIAGEN has entered into a long-term online training program focusing on topics such as antitrust and competition, bribery and corruption, conflicts of interest, data protection, gifts and entertainment, harassment, insider trading, reporting as well as respectful communication. Online training reaches all employees in local language, supported by multiple communication resources. 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. Employees in Sales and Marketing as well as Upper Management are required to take training on anti-corruption and antitrust laws. These basic trainings are followed by refresher courses on a regular basis. In 2019, our employees completed more than 10,000 online training modules. 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. In accordance with the U.S. Sarbanes-Oxley Act of 2002 and the listing standards of NYSE, QIAGEN follows as strict non-retaliation policy. QIAGEN will diligently investigate all such complaints and will protect the anonymity of the complainant. We also offer a direct e-mail and telephone hotline for employees to address questions or make suggestions for our Compliance Program. 104 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. Social Matters 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 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.) and external customer feedback that are directly linked to customer experience in our transactions. Thus, we are able to identify quickly and systematically Payments received from governmentPayments to governmentsFinancial assistance from governmentsYear ended December 31,($ in thousands)201920182017Customer satisfaction1. Anti-corruption questionnaire and certification for new distributors, resellers and agents; 2. Annual 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; 3. Training; 4. Contractual obligations; 5. Due diligence (including selected background checks); also including payment monitoring. All our policies are available to employees through the company’s Compliance@QIAGEN intranet pages. Compliance awareness of our employees in all areas of the world is increased by regular trainings, which are held by external as well as inhouse legal and regulatory experts. In addition, QIAGEN has entered into a long-term online training program focusing on topics such as antitrust and competition, bribery and corruption, conflicts of interest, data protection, gifts and entertainment, harassment, insider trading, reporting as well as respectful communication. Online training reaches all employees in local language, supported by multiple communication resources. New employees are required to take online training on our Corporate Code of Conduct and Ethics at a minimum. M A N A G E M E N T R E P O R T Non-Financial Statement Additional trainings which are customized to the specific area of responsibility are mandatory. Employees in Sales and Marketing as well as Upper Management are required to take training on anti-corruption and antitrust laws. These basic trainings are followed by refresher courses on a regular basis. In 2019, our employees completed more than 10,000 online training modules. 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. In accordance with the U.S. Sarbanes-Oxley Act of 2002 and the listing standards of NYSE, QIAGEN follows as strict non-retaliation policy. QIAGEN will diligently investigate all such complaints and will protect the anonymity of the complainant. We also offer a direct e-mail 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. Social Matters 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 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.) and external customer feedback 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. Departmental and employee contribution to the CEI performance is embedded into our annual goal setting process. After a reworking of the CEI logic and KPI definitions in 2018 and the launch of a revised CEI 2.0 in January 2019, a Full Year score of 96.331 points (out of a maximum 100 points) was achieved. This corresponds to 1,517 points with the former CEI logic (2018 score was 1,515 points out of 2,000 maximum). It is a testimony to our continued efforts to increase customer satisfaction. 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. Therefore, we offer a 100% satisfaction guarantee to all our customers. It means that if our customers are not entirely satisfied with the performance of a QIAGEN product we will exchange or refund it free of charge for the customer. 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 section “Government Regulations” in the Management Report). 105 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 that aim at avoiding the further use of the product and at guaranteeing cost-neutral procedures for our customers. Processes, responsibilities and improvement 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: 2019 (3), 2018 (4), 2017 (0), 2016 (3), 2015 (1). The percentage of affected product is low as well: 2019 (15%), 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. 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. One example is our global 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. In October 2019, we also announced the addition of QuantiFERON TB Gold Plus (QFT-Plus) to the diagnostic catalogue of the Stop TB Partnership’s Global Drug Facility (GDF). The GDF facilitates access and Customer satisfactionQuality and product safetyAccess to healthcareareas for improvement while staying closely connected with our customers. Departmental and employee contribution to the CEI performance is embedded into our annual goal setting process. After a reworking of the CEI logic and KPI definitions in 2018 and the launch of a revised CEI 2.0 in January 2019, a Full Year score of 96.331 points (out of a maximum 100 points) was achieved. This corresponds to 1,517 points with the former CEI logic (2018 score was 1,515 points out of 2,000 maximum). It is a testimony to our continued efforts to increase customer satisfaction. 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. Therefore, we offer a 100% satisfaction guarantee to all our customers. It means that if our customers are not entirely satisfied with the performance of a QIAGEN product we will exchange or refund it free of charge for the customer. 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 section “Government Regulations” 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 that aim at avoiding the further use of the product and at guaranteeing cost-neutral procedures for our customers. Processes, responsibilities and improvement 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: 2019 (3), 2018 (4), 2017 (0), 2016 (3), 2015 (1). The percentage of affected product is low as well: 2019 (15%), 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. 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. One example is our global 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. In October 2019, we also announced the addition of QuantiFERON TB Gold Plus (QFT-Plus) to the diagnostic catalogue of the Stop TB Partnership’s Global Drug Facility (GDF). The GDF facilitates access and 106 Quality and product safetyAccess to healthcareM A N A G E M E N T R E P O R T Non-Financial Statement helps match demand for TB diagnostics and drugs with funding from donors, governments and NGOs on a global scale. The acceptance of QFT-Plus to the GDF catalogue advances our strategy to help expand screening with modern blood-based assays for latent TB infection in regions with high disease burden but limited resources. To reach the highest risk populations needing TB testing, QIAGEN is building upon our high-volume state-of-the-art QuantiFERON-TB Gold Plus assay with the development QuantiFERON-TB Access, a field-friendly test with ultrasensitive digital detection on a portable device. Launching in 2020, this public health solution has already gained recognition by the Joint United Nations Program on HIV/AIDS. A further 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 2019, more than 3 million tests have been distributed. 107 Management Report Management Report Business and Operating Environment Future Perspectives QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular QIAGEN Perspectives for 2020 insights. Our mission is to enable customers across the continuum of molecular testing to unlock valuable insights faster, better and more efficiently - from the raw biological sample to the final interpreted result. The COVID-19 pandemic will have a significant impact on QIAGEN in 2020. Exatrordinary demand has emerged for molecular technologies involved in the testing for the new pathogen. However, the overall impact is not predictable at this point, as the spike in demand comes at the same time as demand for other products has waned We serve more than 500,000 customers in two broad customer groups: Molecular Diagnostics (human healthcare) due to the quarantines and other actions in many countries around the world that have disrupted the broader and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN economy and routine healthcare. solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the increasing volumes and complexity of biological information, in keeping with our vision of making improvements in life possible. Global Economic Perspectives for 2020 The world's economic perspectives for 2020 are impossible to predict at this time given the COVID-19 pandemic. 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 and genomic knowledge have grown to influence many areas of life, QIAGEN has expanded to serve the Industry Perspectives for 2020 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, Molecular testing solutions are seen as an essential component of the broad medical response to the COVID-19 plants or other materials. Our assay technologies amplify, enrich and make these biomolecules accessible for pandemic. QIAGEN is committed to dramatically ramping up production capacity of its solutions that can be used analysis, such as identifying the genetic information of a pathogen or a gene mutation in a tumor. QIAGEN’s for SARS-CoV-2 testing and support the overall response to this public health emergency. industry-leading Digital Insights solutions allow users to analyze and interpret data with bioinformatics software and knowledge bases to provide relevant, actionable insights. Our automation systems tie these technologies together in Subsequent Events seamless and cost-effective molecular testing workflows - from Sample to Insight. On March 3, 2020, QIAGEN and Thermo Fisher Scientific Inc. (NYSE: TMO) announced that their boards of Net sales of $1.53 billion in 2019 consisted of consumable kits and other revenues (89% of sales) and automation directors, as well as the managing board of QIAGEN N.V., unanimously approved Thermo Fisher’s proposal to systems and instruments (11% of sales). Approximately 48% of net sales in 2019 were in Molecular Diagnostics, and acquire QIAGEN for €39 per share in cash. The offer price represents a premium of approximately 23% to the 52% in Life Sciences customer classes in the Academia / Applied Testing and Pharma markets. closing price of QIAGEN’s common stock on the Frankfurt Prime Standard on March 2, 2020, the last trading day prior to the announcement of the transaction. Thermo Fisher will commence a tender offer to acquire all of the ordinary shares of QIAGEN. The transaction values QIAGEN at approximately $11.5 billion at current exchange QIAGEN has grown by developing new instruments, consumables and digital solutions to meet diverse and growing rates, which includes the assumption of approximately $1.4 billion of net debt. The transaction, which is expected to needs in the market, partnering with researchers and Pharma companies, and acquiring companies or technologies be completed in the first half of 2021, is subject to the satisfaction of customary closing conditions, including the to complement our portfolio. We believe the addressable global market for QIAGEN's portfolio of molecular testing receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an products for customers across the continuum of life science research and molecular diagnostics totals more than $10 Extraordinary General Meeting of QIAGEN’s shareholders, and completion of the tender offer. Thermo Fisher has billion. obtained committed bridge financing. Permanent funding is expected to come from cash on hand and the issuance of new debt. The transaction is not subject to any financing condition. We have funded our growth through internally generated funds, debt offerings, and private and public sales of equity securities. QIAGEN’s global shares are listed on the New York Stock Exchange under the ticker symbol In March 2020, the Supervisory Board and the Managing Board resolved in a Joint Meeting to propose Thierry QGEN and on the Frankfurt Prime Standard as QIA. Bernard, who has been with QIAGEN since 2015, for election as Chief Executive Officer and a Managing Director at the next Annual General Meeting, which is set to take place in June 2020, along with the re-election of Roland The company is registered under its commercial and legal name QIAGEN N.V. with the trade register (kamer van Sackers as Chief Financial Officer and a Managing Director. The Joint Meeting further resolved to propose the koophandel) of the Dutch region Limburg Noord under file number 12036979. QIAGEN N.V. is a public limited current members of the Supervisory Board to all stand for re-election: Håkan Björklund, Stéphane Bancel, Metin liability company (naamloze vennootschap) under Dutch law as a holding company. Our principal executive office is Colpan, Elaine Mardis, Lawrence Rosen and Elizabeth Tallett. 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. 108 M A N A G E M E N T R E P O R T Future Perspectives 109 M A N A G E M E N T R E P O R T Future Perspectives Corporate Governance and Compensation 106 Corporate Structure 107 Managing Board 108 Supervisory Board 118 Share Ownership 119 Additional Information 111 Governance Governance Corporate Governance Report Corporate Governance Report We recognize the importance of clear and straightforward rules on corporate We recognize the importance of clear and straightforward rules on corporate governance and, where appropriate, governance and, where appropriate, have adapted our internal organization have adapted our internal organization and processes to these rules. This section provides an overview of QIAGEN’s We recognize the importance of clear and straightforward rules on corporate governance and, where appropriate, 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 have adapted our internal organization and processes to these rules. This section provides an overview of QIAGEN’s Governance Code (the Dutch Code). The Dutch Code is applicable to QIAGEN N.V. (in the following also referred corporate governance structure and includes details of the information required under the Dutch Corporate corporate governance structure and includes details of the information required Governance to as the “Company”), as it is a publicly listed company incorporated under the laws of The Netherlands with a Governance Code (the Dutch Code). The Dutch Code is applicable to QIAGEN N.V. (in the following also referred under the Dutch Corporate Governance Code (the Dutch Code). The Dutch registered seat in Venlo, The Netherlands. The Dutch Code contains the principles and concrete provisions which the to as the “Company”), as it is a publicly listed company incorporated under the laws of The Netherlands with a Code is applicable to QIAGEN N.V. (in the following also referred to as the persons involved in a listed company (including Managing Board members and Supervisory Board members) and registered seat in Venlo, The Netherlands. The Dutch Code contains the principles and concrete provisions which the “Company”), as it is a publicly listed company incorporated under the laws of stakeholders should observe in relation to one another. persons involved in a listed company (including Managing Board members and Supervisory Board members) and Corporate Governance Report stakeholders should observe in relation to one another. The Netherlands with a registered seat in Venlo, The Netherlands. The Dutch Our corporate governance practices generally derive from the provisions of the Dutch Civil Code and the Dutch Code contains the principles and concrete provisions which the persons involved Corporate Governance Code. Further, due to our listing on the New York Stock Exchange in the U.S., the Managing Our corporate governance practices generally derive from the provisions of the Dutch Civil Code and the Dutch We recognize the importance of clear and straightforward rules on corporate governance and, where appropriate, in a listed company (including Managing Board members and Supervisory Board and the Supervisory Board of QIAGEN N.V. declared their intention to disclose in QIAGEN’s Annual Reports Corporate Governance Code. Further, due to our listing on the New York Stock Exchange in the U.S., the Managing have adapted our internal organization and processes to these rules. This section provides an overview of QIAGEN’s Board members) and stakeholders should observe in relation to one another. the Company’s compliance with the corporate governance practices followed by U.S. companies under the New Board and the Supervisory Board of QIAGEN N.V. declared their intention to disclose in QIAGEN’s Annual Reports corporate governance structure and includes details of the information required under the Dutch Corporate York Stock Exchange listing standards or state the deviations recorded in the period. the Company’s compliance with the corporate governance practices followed by U.S. companies under the New 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 York Stock Exchange listing standards or state the deviations recorded in the period. Our corporate governance practices generally derive from the provisions of the registered seat in Venlo, The Netherlands. The Dutch Code contains the principles and concrete provisions which the A brief summary of the principal differences follows. Dutch Civil Code and the Dutch Corporate Governance Code. Further, due to persons involved in a listed company (including Managing Board members and Supervisory Board members) and A brief summary of the principal differences follows. our listing on the New York Stock Exchange in the U.S., the Managing Board stakeholders should observe in relation to one another. Corporate Structure and the Supervisory Board of QIAGEN N.V. declared their intention to disclose Corporate Structure Our corporate governance practices generally derive from the provisions of the Dutch Civil Code and the Dutch in QIAGEN’s Annual Reports the Company’s compliance with the corporate QIAGEN is a ‘Naamloze Vennootschap,’ or N.V., a Dutch public limited liability company similar to a corporation Corporate Governance Code. Further, due to our listing on the New York Stock Exchange in the U.S., the Managing in the United States. QIAGEN has a two-tier board structure. QIAGEN is managed by a Managing Board consisting QIAGEN is a ‘Naamloze Vennootschap,’ or N.V., a Dutch public limited liability company similar to a corporation governance practices followed by U.S. companies under the New York Stock Board and the Supervisory Board of QIAGEN N.V. declared their intention to disclose in QIAGEN’s Annual Reports of executive management acting under the supervision of a Supervisory Board (non-executives), similar to a Board of in the United States. QIAGEN has a two-tier board structure. QIAGEN is managed by a Managing Board consisting the Company’s compliance with the corporate governance practices followed by U.S. companies under the New Exchange listing standards or state the deviations recorded in the period. Directors in a U.S. corporation. It is in the interest of QIAGEN and all its stakeholders that each Board performs its of executive management acting under the supervision of a Supervisory Board (non-executives), similar to a Board of York Stock Exchange listing standards or state the deviations recorded in the period. functions appropriately and that there is a clear division of responsibilities between the Managing Board, the Directors in a U.S. corporation. It is in the interest of QIAGEN and all its stakeholders that each Board performs its A brief summary of the principal differences follows. Supervisory Board, the general meeting of shareholders (General Meeting) and the external auditor in a well- functions appropriately and that there is a clear division of responsibilities between the Managing Board, the A brief summary of the principal differences follows. functioning system of checks and balances. Supervisory Board, the general meeting of shareholders (General Meeting) and the external auditor in a well- functioning system of checks and balances. Corporate Structure Managing Board Managing Board 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 The Managing Board manages QIAGEN and is responsible for defining and achieving QIAGEN’s aims, strategy, Directors in a U.S. corporation. It is in the interest of QIAGEN and all its stakeholders that each Board performs its policies and results and is expected to act in a sustainable manner by focusing on long-term value creation in the The Managing Board manages QIAGEN and is responsible for defining and achieving QIAGEN’s aims, strategy, functions appropriately and that there is a clear division of responsibilities between the Managing Board, the performance of their work. The Managing Board is also responsible for complying with all relevant legislation and policies and results and is expected to act in a sustainable manner by focusing on long-term value creation in the Supervisory Board, the general meeting of shareholders (General Meeting) and the external auditor in a well- regulations as well as for managing the risks associated with the business activities and the financing of QIAGEN. It performance of their work. The Managing Board is also responsible for complying with all relevant legislation and functioning system of checks and balances. reports related developments to and discusses the internal risk management and control systems with the Supervisory regulations as well as for managing the risks associated with the business activities and the financing of QIAGEN. It Board and the Audit Committee. Under Dutch Law, QIAGEN's Managing Board, which has two members, has reports related developments to and discusses the internal risk management and control systems with the Supervisory Managing Board chosen to work with an Executive Committee and is accountable for the actions and decisions of the Executive Board and the Audit Committee. Under Dutch Law, QIAGEN's Managing Board, which has two members, has Committee, which is comprised of the CEO, the CFO and certain experienced leaders who have responsibilities for chosen to work with an Executive Committee and is accountable for the actions and decisions of the Executive the operational management of the Company and the achievement of its objectives and results. The Managing Board Committee, which is comprised of the CEO, the CFO and certain experienced leaders who have responsibilities for The Managing Board manages QIAGEN and is responsible for defining and achieving QIAGEN’s aims, strategy, has ultimate responsibility for the Company’s external reporting and is answerable to shareholders of the Company the operational management of the Company and the achievement of its objectives and results. The Managing Board policies and results and is expected to act in a sustainable manner by focusing on long-term value creation in the at the Annual General Meeting of Shareholders. Pursuant to the two-tier corporate structure, the Managing Board is has ultimate responsibility for the Company’s external reporting and is answerable to shareholders of the Company performance of their work. The Managing Board is also responsible for complying with all relevant legislation and required to render account for the performance of its duties to the Supervisory Board and the General Meeting of at the Annual General Meeting of Shareholders. Pursuant to the two-tier corporate structure, the Managing Board is regulations as well as for managing the risks associated with the business activities and the financing of QIAGEN. It Shareholders (General Meeting). The Managing Board provides the Supervisory Board with timely information required to render account for the performance of its duties to the Supervisory Board and the General Meeting of reports related developments to and discusses the internal risk management and control systems with the Supervisory necessary for the exercise of the duties of the Supervisory Board. In discharging its duties, the Managing Board takes Shareholders (General Meeting). The Managing Board provides the Supervisory Board with timely information Board and the Audit Committee. Under Dutch Law, QIAGEN's Managing Board, which has two members, has necessary for the exercise of the duties of the Supervisory Board. In discharging its duties, the Managing Board takes 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 112 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 GeneralGeneralGeneralGovernance 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 Corporate Governance Report C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N 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. 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 and interim CEO for the year ended December 31, 2019 and their ages as of January 31, 2020, are as follows: Thierry Bernard Roland Sackers 55 51 Interim Chief Executive Officer and Senior Vice President, Head of Molecular Diagnostics Business Area Managing Director, Chief Financial Officer (1) The contract for Peer M. Schatz as Managing Director and Chief Executive Officer concluded effective September 30, 2019. Mr. Schatz continues as a Senior Advisor until June 30, 2021. 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: , 55, joined QIAGEN in February 2015 to lead QIAGEN’s growing presence in Molecular Diagnostics, the application of Sample to Insight solutions for molecular testing in human healthcare. In October 2019, Mr. Bernard was named Interim Chief Executive Officer in addition to his prior role as Senior Vice President, Head of Molecular Diagnostics Business Area. In March 2020, Mr. Bernard was named Chief Executive Officer. Mr. Bernard previously worked at bioMérieux, where he served in roles of increasing responsibility for 15 years, most recently as Corporate Vice President, Global Commercial Operations, Investor Relations and the Greater China Region. Prior to joining bioMérieux, he served in management roles in multiple international environments. Mr. Bernard is a member of the boards of directors of three privately held U.S. companies, First Light Biosciences, HepatoChem and more recently, Daktari Diagnostics, where he also served as CEO. He has earned degrees from Sciences Po (Paris), Harvard Business School, London School of Economics and the College of Europe and is a member of French Foreign Trade Advisors. , 51, joined QIAGEN 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. In 2019, he joined the supervisory board of Evotec SE and is chairman of the audit committee. He is a former member of the supervisory board and audit committee of IBS AG 113 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. GeneralComposition and AppointmentManaging Directors and Interim Chief Executive Officer:Thierry BernardRoland SackershName (1)AgePositioninto account the interests of QIAGEN, its enterprises and all parties involved in QIAGEN, including shareholders and other stakeholders. 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 and interim CEO for the year ended December 31, 2019 and their ages as of January 31, 2020, are as follows: Thierry Bernard Interim Chief Executive Officer and Senior Vice President, Head of Molecular Diagnostics Business Area Roland Sackers Managing Director, Chief Financial Officer 55 51 (1) The contract for Peer M. Schatz as Managing Director and Chief Executive Officer concluded effective September 30, 2019. Mr. Schatz continues as a Senior Advisor until June 30, 2021. 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: , 55, joined QIAGEN in February 2015 to lead QIAGEN’s growing presence in Molecular Diagnostics, the application of Sample to Insight solutions for molecular testing in human healthcare. In October 2019, Mr. Bernard was named Interim Chief Executive Officer in addition to his prior role as Senior Vice President, Head of Molecular Diagnostics Business Area. In March 2020, Mr. Bernard was named Chief Executive Officer. Mr. Bernard previously worked at bioMérieux, where he served in roles of increasing responsibility for 15 years, most recently as Corporate Vice President, Global Commercial Operations, Investor Relations and the Greater China Region. Prior to joining bioMérieux, he served in management roles in multiple international environments. Mr. Bernard is a member of the boards of directors of three privately held U.S. companies, First Light Biosciences, HepatoChem and more recently, Daktari Diagnostics, where he also served as CEO. He has earned degrees from Sciences Po (Paris), Harvard Business School, London School of Economics and the College of Europe and is a member of French Foreign Trade Advisors. , 51, joined QIAGEN 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. In 2019, he joined the supervisory board of Evotec SE and is chairman of the audit committee. 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. , 54, joined QIAGEN in 1993 and served as Chief Executive Officer from January 1, 2004 until September 30, 2019. He was Chief Financial Officer between 1993 and 2003 and became a member of the Managing Board in 1998. Mr. Schatz’s contract as Managing Director and Chief Executive Officer concluded effective September 30, 2019 and he continues as a Senior Advisor until June 30, 2021. 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. QIAGEN has not entered into any such transactions in 2019. 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 The Supervisory Board supervises the policies of the Managing Board, the general course of QIAGEN’s affairs and the manner in which the Managing 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 December 31, 2019, 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. 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 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 114 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. Composition and AppointmentManaging Directors and Interim Chief Executive Officer:Thierry BernardRoland SackershName (1)AgePositionPeer M. SchatzConflicts of Interest, Loans or Similar BenefitsGeneralComposition and Appointment, 54, joined QIAGEN in 1993 and served as Chief Executive Officer from January 1, 2004 until September 30, 2019. He was Chief Financial Officer between 1993 and 2003 and became a member of the Managing Board in 1998. Mr. Schatz’s contract as Managing Director and Chief Executive Officer concluded effective September 30, 2019 and he continues as a Senior Advisor until June 30, 2021. 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. QIAGEN has not entered into any such transactions in 2019. 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 The Supervisory Board supervises the policies of the Managing Board, the general course of QIAGEN’s affairs and the manner in which the Managing 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 December 31, 2019, 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. C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N Corporate Governance Report 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 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, 2019 and their ages as of January 31, 2020, are as follows: Stéphane Bancel 47 French Male Supervisory Director, Member of the Compensation Committee, Audit Committee and Science and Technology Committee Dr. Håkan Björklund 63 Swedish Male Chair of the Supervisory Board, Member of the Compensation Committee and Selection and Appointment Committee Dr. Metin Colpan 65 German Male Supervisory Director, Chair of the Science and Technology Committee and Member of the Selection and Appointment Committee Dr. Ross L. Levine 48 U.S. Male Supervisory Director and Member of the Science and Technology Committee Dr. Elaine Mardis 57 U.S. Female Supervisory Director and Member of the Science and Technology Committee Lawrence A. Rosen 62 U.S. Male Supervisory Director and Chair of the Audit Committee Elizabeth E. Tallett 70 U.S. Female Supervisory Director, Chair of the Compensation Committee, Member of the Audit Committee and Member of the Selection and Appointment Committee 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: , 47, joined the 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, Inc., a clinical-stage biotechnology company based in Cambridge, Massachusetts, which is advancing 24 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. , 63, was appointed as a Supervisory Board Member in March 2017 and as Chair 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 115 AstraZeneca), President of Astra Draco and Operating Executive at Avista Capital Partners. Under Dr. 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 of OneMed Top Holding AB and Swedish Orphan Biovitrum AB (Sobi) and as a Member of the Board of Directors of BONESUPPORT AB and Tellacq AB. Dr. Björklund earlier served as Chairman of the Board of Directors of Acino International AG and 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. , 65, is a co-founder of QIAGEN and was the 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 Chair 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 CGR GmbH in Mettmann, Peer M. SchatzConflicts of Interest, Loans or Similar BenefitsGeneralComposition and AppointmentSupervisory DirectorsStéphane BancelDr. Håkan BjörklundDr. Metin ColpanNameAgeNationalityGenderPositionOur Supervisory Directors for the year ended December 31, 2019 and their ages as of January 31, 2020, are as follows: Stéphane Bancel 47 French Male Supervisory Director, Member of the Compensation Committee, Audit Committee and Science and Dr. Håkan Björklund 63 Swedish Male Chair of the Supervisory Board, Member of the Compensation Committee and Selection and Technology Committee Appointment Committee Dr. Metin Colpan 65 German Male Supervisory Director, Chair of the Science and Technology Committee and Member of the Selection and Appointment Committee Dr. Ross L. Levine 48 U.S. Male Supervisory Director and Member of the Science and Technology Committee Dr. Elaine Mardis 57 U.S. Female Supervisory Director and Member of the Science and Technology Committee Lawrence A. Rosen 62 U.S. Male Supervisory Director and Chair of the Audit Committee Elizabeth E. Tallett 70 U.S. Female Supervisory Director, Chair of the Compensation Committee, Member of the Audit Committee and Member of the Selection and Appointment Committee 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: , 47, joined the 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, Inc., a clinical-stage biotechnology company based in Cambridge, Massachusetts, which is advancing 24 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. , 63, was appointed as a Supervisory Board Member in March 2017 and as Chair 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), President of Astra Draco and Operating Executive at Avista Capital Partners. Under Dr. 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 of OneMed Top Holding AB and Swedish Orphan Biovitrum AB (Sobi) and as a Member of the Board of Directors of BONESUPPORT AB and Tellacq AB. Dr. Björklund earlier served as Chairman of the Board of Directors of Acino International AG and 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. , 65, is a co-founder of QIAGEN and was the 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 Chair 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 CGR GmbH in Mettmann, Germany and Heilpflanzenwohl AG in Baar, 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 and Qalovis Farmer Automatic Energy GmbH, in Laer, Germany. , 48, 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 Chief of Molecular Cancer Medicine, 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. , 57, joined the 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 Kiadis Pharmaceuticals N.V., PACT Pharma LLC, and Interpreta LLC. 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. , 62, joined the Supervisory Board as well as the Audit Committee in 2013, and has served as the committee's Chair 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 116 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. , 70, joined the Supervisory Board, as well as the Audit Committee and Compensation Committee, in 2011. She has served since 2016 as Chair 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 Anthem, Inc. (where she is currently Chair), Principal Financial Group, Inc., and Meredith Corp. 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 Chair of the Trustees of Solebury School in Pennsylvania. Supervisory DirectorsStéphane BancelDr. Håkan BjörklundDr. Metin ColpanNameAgeNationalityGenderPositionDr. Ross L. LevineDr. Elaine MardisLawrence A. RosenElizabeth E. TallettConflicts of Interest, Loans or Similar BenefitsGermany and Heilpflanzenwohl AG in Baar, 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 and Qalovis Farmer Automatic Energy GmbH, in Laer, Germany. , 48, 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 Chief of Molecular Cancer Medicine, 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. , 57, joined the 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 C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N 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 Kiadis Pharmaceuticals N.V., PACT Pharma LLC, and Interpreta LLC. 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. Corporate Governance Report , 62, joined the Supervisory Board as well as the Audit Committee in 2013, and has served as the committee's Chair 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. , 70, joined the Supervisory Board, as well as the Audit Committee and Compensation Committee, in 2011. She has served since 2016 as Chair 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 Anthem, Inc. (where she is currently Chair), Principal Financial Group, Inc., and Meredith Corp. 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 Chair of the Trustees of Solebury School in Pennsylvania. 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 December 31, 2019 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. 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: Stéphane Bancel • Dr. Håkan Björklund • • Dr. Metin Colpan Dr. Ross L. Levine Dr. Elaine Mardis Lawrence A. Rosen • (Chairman) Elizabeth E. Tallett • • (Chairwoman) • (Chairman) • • • • (Chairman) • • 117 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. The Audit Committee currently consists of three members, Mr. Rosen (Chair), 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 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 Managing 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 Dr. Ross L. LevineDr. Elaine MardisLawrence A. RosenElizabeth E. TallettConflicts of Interest, Loans or Similar BenefitsCommittees of the Supervisory BoardAudit CommitteeName of SupervisoryDirectorMember of AuditCommitteeMember of CompensationCommitteeMember of Selection and AppointmentCommitteeMember of Science and TechnologyCommitteeResolutions to enter into transactions under which members of the Supervisory Board could have a conflict of interest Resolutions to enter into transactions under which members of the Supervisory Board could have a conflict of interest Resolutions to enter into transactions under which members of the Supervisory Board could have a conflict of interest Resolutions to enter into transactions under which members of the Supervisory Board could have a conflict of interest 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 with QIAGEN, and which are of material significance to QIAGEN and/or the relevant member of the Supervisory with QIAGEN, and which are of material significance to QIAGEN and/or the relevant member of the Supervisory with QIAGEN, and which are of material significance to QIAGEN and/or the relevant member of the Supervisory 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 Board, must be reported and require the approval of the Supervisory Board plenum. A Supervisory Director that has Board, must be reported and require the approval of the Supervisory Board plenum. A Supervisory Director that has Board, must be reported and require the approval of the Supervisory Board plenum. A Supervisory Director that has 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 December a personal conflict of interest will not participate in the decision making process regarding such item. In December a personal conflict of interest will not participate in the decision making process regarding such item. In December a personal conflict of interest will not participate in the decision making process regarding such item. In December a personal conflict of interest will not participate in the decision making process regarding such item. In December 31, 2019 neither QIAGEN nor its Supervisory Board members have entered into any such transactions. No credit, 31, 2019 neither QIAGEN nor its Supervisory Board members have entered into any such transactions. No credit, 31, 2019 neither QIAGEN nor its Supervisory Board members have entered into any such transactions. No credit, 31, 2019 neither QIAGEN nor its Supervisory Board members have entered into any such transactions. No credit, 31, 2019 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 loans or similar benefits were granted to members of the Supervisory Board. Additionally, the Supervisory Board loans or similar benefits were granted to members of the Supervisory Board. Additionally, the Supervisory Board loans or similar benefits were granted to members of the Supervisory Board. Additionally, the Supervisory Board 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 Members did not receive any benefits from third parties that were either promised or granted in view of their position Members did not receive any benefits from third parties that were either promised or granted in view of their position Members did not receive any benefits from third parties that were either promised or granted in view of their position 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. as members of the Supervisory Board. as members of the Supervisory Board. as members of the Supervisory Board. as members of the Supervisory Board. The Supervisory Board has established an Audit Committee, a Compensation Committee, a Selection and The Supervisory Board has established an Audit Committee, a Compensation Committee, a Selection and The Supervisory Board has established an Audit Committee, a Compensation Committee, a Selection and The Supervisory Board has established an Audit Committee, a Compensation Committee, a Selection and 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 Appointment Committee and a Science and Technology Committee from among its members and can establish other Appointment Committee and a Science and Technology Committee from among its members and can establish other Appointment Committee and a Science and Technology Committee from among its members and can establish other 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 committees as deemed beneficial. The Supervisory Board has approved charters under which each of the committees committees as deemed beneficial. The Supervisory Board has approved charters under which each of the committees committees as deemed beneficial. The Supervisory Board has approved charters under which each of the committees 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 operates. These charters are published on our website www.QIAGEN.com. The committees are comprised of the operates. These charters are published on our website www.QIAGEN.com. The committees are comprised of the operates. These charters are published on our website www.QIAGEN.com. The committees are comprised of the operates. These charters are published on our website www.QIAGEN.com. The committees are comprised of the following members: following members: following members: following members: following members: • • • • • • • • • • • • • • • Stéphane Bancel Stéphane Bancel Stéphane Bancel Stéphane Bancel Stéphane Bancel Dr. Håkan Björklund Dr. Håkan Björklund Dr. Håkan Björklund Dr. Håkan Björklund Dr. Håkan Björklund Dr. Metin Colpan Dr. Metin Colpan Dr. Metin Colpan Dr. Metin Colpan Dr. Metin Colpan Dr. Ross L. Levine Dr. Ross L. Levine Dr. Ross L. Levine Dr. Ross L. Levine Dr. Ross L. Levine Dr. Elaine Mardis Dr. Elaine Mardis Dr. Elaine Mardis Dr. Elaine Mardis Dr. Elaine Mardis Lawrence A. Rosen Lawrence A. Rosen Lawrence A. Rosen Lawrence A. Rosen Lawrence A. Rosen • (Chairman) • • • (Chairman) (Chairman) (Chairman) • (Chairman) Elizabeth E. Tallett Elizabeth E. Tallett Elizabeth E. Tallett Elizabeth E. Tallett Elizabeth E. Tallett • • • • • • (Chairwoman) • (Chairwoman) • • (Chairwoman) (Chairwoman) • (Chairwoman) • • • • • • (Chairman) • • • (Chairman) (Chairman) (Chairman) • (Chairman) • • • • • • • • • • • (Chairman) • • • (Chairman) (Chairman) (Chairman) • (Chairman) • • • • • • • • • • We believe that all of our Supervisory Directors meet the independence requirements set forth in the Dutch Corporate We believe that all of our Supervisory Directors meet the independence requirements set forth in the Dutch Corporate We believe that all of our Supervisory Directors meet the independence requirements set forth in the Dutch Corporate We believe that all of our Supervisory Directors meet the independence requirements set forth in the Dutch Corporate 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 Governance Code (the Dutch Code). We further believe that all Supervisory Board Directors qualify as independent Governance Code (the Dutch Code). We further believe that all Supervisory Board Directors qualify as independent Governance Code (the Dutch Code). We further believe that all Supervisory Board Directors qualify as independent 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. under the independence standards set forth in the New York Stock Exchange (NYSE) Listed Company Manual. under the independence standards set forth in the New York Stock Exchange (NYSE) Listed Company Manual. under the independence standards set forth in the New York Stock Exchange (NYSE) Listed Company Manual. 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 Pursuant to the NYSE rules, a majority of the Supervisory Directors must qualify as independent, as defined in the Pursuant to the NYSE rules, a majority of the Supervisory Directors must qualify as independent, as defined in the Pursuant to the NYSE rules, a majority of the Supervisory Directors must qualify as independent, as defined in the Pursuant to the NYSE rules, a majority of the Supervisory Directors must qualify as independent, as defined in the Rules. Rules. Rules. Rules. Rules. The Audit Committee currently consists of three members, Mr. Rosen (Chair), Ms. Tallett and Mr. Bancel, and meets The Audit Committee currently consists of three members, Mr. Rosen (Chair), Ms. Tallett and Mr. Bancel, and meets The Audit Committee currently consists of three members, Mr. Rosen (Chair), Ms. Tallett and Mr. Bancel, and meets The Audit Committee currently consists of three members, Mr. Rosen (Chair), Ms. Tallett and Mr. Bancel, and meets The Audit Committee currently consists of three members, Mr. Rosen (Chair), 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 at least quarterly. The Audit Committee members are appointed by the Supervisory Board and serve for a term of at least quarterly. The Audit Committee members are appointed by the Supervisory Board and serve for a term of at least quarterly. The Audit Committee members are appointed by the Supervisory Board and serve for a term of 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 one year. We believe that all members of our Audit Committee meet the independence requirements as set forth in one year. We believe that all members of our Audit Committee meet the independence requirements as set forth in one year. We believe that all members of our Audit Committee meet the independence requirements as set forth in 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 Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and the New York Stock Exchange Listed Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and the New York Stock Exchange Listed Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and the New York Stock Exchange Listed 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 Company Manual. The Board has designated Mr. Rosen as an “audit committee financial expert” as that term is Company Manual. The Board has designated Mr. Rosen as an “audit committee financial expert” as that term is Company Manual. The Board has designated Mr. Rosen as an “audit committee financial expert” as that term is 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 Exchange Commission rules adopted pursuant to the Sarbanes-Oxley Act defined in the United States Securities and Exchange Commission rules adopted pursuant to the Sarbanes-Oxley Act defined in the United States Securities and Exchange Commission rules adopted pursuant to the Sarbanes-Oxley Act defined in the United States Securities and Exchange Commission rules adopted pursuant to the Sarbanes-Oxley Act defined in the United States Securities and 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- of 2002 and as defined in provisions III.3.2 and III.5.7 of the Dutch Code. The Audit Committee performs a self- of 2002 and as defined in provisions III.3.2 and III.5.7 of the Dutch Code. The Audit Committee performs a self- of 2002 and as defined in provisions III.3.2 and III.5.7 of the Dutch Code. The Audit Committee performs a self- 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. evaluation of its activities on an annual basis. evaluation of its activities on an annual basis. evaluation of its activities on an annual basis. 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 The Audit Committee's primary duties and responsibilities include, among other things, to serve as an independent The Audit Committee's primary duties and responsibilities include, among other things, to serve as an independent The Audit Committee's primary duties and responsibilities include, among other things, to serve as an independent 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, and objective party to monitor QIAGEN's accounting and financial reporting process and internal risk management, and objective party to monitor QIAGEN's accounting and financial reporting process and internal risk management, and objective party to monitor QIAGEN's accounting and financial reporting process and internal risk management, 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 control and compliance systems. The Audit Committee also is directly responsible for proposing the external auditor control and compliance systems. The Audit Committee also is directly responsible for proposing the external auditor control and compliance systems. The Audit Committee also is directly responsible for proposing the external auditor 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. to the Supervisory Board, which then proposes the appointment of the external auditor to the General Meeting. to the Supervisory Board, which then proposes the appointment of the external auditor to the General Meeting. to the Supervisory Board, which then proposes the appointment of the external auditor to the General Meeting. 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 Further, the Audit Committee is responsible for the compensation and oversight of QIAGEN’s external auditor and for Further, the Audit Committee is responsible for the compensation and oversight of QIAGEN’s external auditor and for Further, the Audit Committee is responsible for the compensation and oversight of QIAGEN’s external auditor and for 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 Managing Board and the providing an open avenue of communication among the external auditor as well as the Managing Board and the providing an open avenue of communication among the external auditor as well as the Managing Board and the providing an open avenue of communication among the external auditor as well as the Managing Board and the providing an open avenue of communication among the external auditor as well as the Managing Board and the Supervisory Board. Our Internal Audit department operates under the direct responsibility of the Audit Committee. Supervisory Board. Our Internal Audit department operates under the direct responsibility of the Audit Committee. Supervisory Board. Our Internal Audit department operates under the direct responsibility of the Audit Committee. Supervisory Board. Our Internal Audit department operates under the direct responsibility of the Audit Committee. 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 Further, the Audit Committee is responsible to establish procedures to allow for the confidential and or anonymous Further, the Audit Committee is responsible to establish procedures to allow for the confidential and or anonymous Further, the Audit Committee is responsible to establish procedures to allow for the confidential and or anonymous 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 as well as the half-year and annual reports filed with The Netherlands Authority for the Financial Markets. The Audit Committee met seven times in 2019 and met with the external auditor excluding members of the Managing Board in July and October 2019. 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. 118 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 (Chair), 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 December 31, 2019. 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 (Chair), Dr. Colpan and Ms. Tallett. Members are appointed by the Supervisory Board and serve for a one-year term. In the context of the 2019 departure of the Chief Executive Officer, the Chair of the Supervisory Board invited all members of the Supervisory Board to participate in the resulting succession process. Consequently, these matters were discussed during Supervisory Board meetings and teleconferences and not in the forum of the Selection and Appointment committee, which did not formally meet in December 31, 2019. 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 (Chair), 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 December 31, 2019. Committees of the Supervisory BoardAudit CommitteeName of SupervisoryDirectorMember of AuditCommitteeMember of CompensationCommitteeMember of Selection and AppointmentCommitteeMember of Science and TechnologyCommitteeCompensation CommitteeSelection and Appointment CommitteeScience and Technology CommitteeCommittees of the Supervisory BoardAudit CommitteeName of SupervisoryDirectorMember of AuditCommitteeMember of CompensationCommitteeMember of Selection and AppointmentCommitteeMember of Science and TechnologyCommitteeCommittees of the Supervisory BoardAudit CommitteeName of SupervisoryDirectorMember of AuditCommitteeMember of CompensationCommitteeMember of Selection and AppointmentCommitteeMember of Science and TechnologyCommitteeCommittees of the Supervisory BoardAudit CommitteeName of SupervisoryDirectorMember of AuditCommitteeMember of CompensationCommitteeMember of Selection and AppointmentCommitteeMember of Science and TechnologyCommitteeCommittees of the Supervisory BoardAudit CommitteeName of SupervisoryDirectorMember of AuditCommitteeMember of CompensationCommitteeMember of Selection and AppointmentCommitteeMember of Science and TechnologyCommittee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 as well as the half-year and annual reports filed with The Netherlands C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N Authority for the Financial Markets. The Audit Committee met seven times in 2019 and met with the external auditor excluding members of the Managing Board in July and October 2019. 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. Corporate Governance Report 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 (Chair), 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 December 31, 2019. 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 (Chair), Dr. Colpan and Ms. Tallett. Members are appointed by the Supervisory Board and serve for a one-year term. In the context of the 2019 departure of the Chief Executive Officer, the Chair of the Supervisory Board invited all members of the Supervisory Board to participate in the resulting succession process. Consequently, these matters were discussed during Supervisory Board meetings and teleconferences and not in the forum of the Selection and Appointment committee, which did not formally meet in December 31, 2019. 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 (Chair), 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 December 31, 2019. 119 Compensation CommitteeSelection and Appointment CommitteeScience and Technology CommitteeThe Dutch Civil Code provided for statutory provisions to ensure a balanced representation of men and women on the Managing 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 Managing 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 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 regularly reviewed by an independent compensation consulting firm and benchmarked, 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 120 factors which includes external and internal equity, experience, complexity of the position, scope and Diversity within the Management Board and Supervisory BoardRemuneration policyThe Dutch Civil Code provided for statutory provisions to ensure a balanced representation of men and women on the Managing 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 Managing 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 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 regularly reviewed by an independent compensation consulting firm and benchmarked, 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 Corporate Governance Report C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N 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. The compensation granted to the members of the Managing Board in December 31, 2019 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 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 and interim CEO for the year ended December 31, 2019. Fixed Salary Other(3) Short-term variable cash bonus(2) Defined contribution on benefit plan Total cash remuneration $ 910 6,571 $ 560 121 40 $ 650 34 500 24 $ 684 $ 7,481 $ 600 $ 1,184 $ 7,481 $ 849 — 65 249 76 $ 1,208 $ 7,546 $ 925 ( ) M h M d h f ff l d d ff b d h Diversity within the Management Board and Supervisory BoardRemuneration policyManaging Board compensationFor the year ended December 31, 2019 (in US$ thousands, except for number of award grants)ThierryBernard(1)Peer M.Schatz(1)RolandSackersTotal fixed income 2019Total short-term income 2019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. The compensation granted to the members of the Managing Board in December 31, 2019 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 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 and interim CEO for the year ended December 31, 2019. Fixed Salary Other(3) Short-term variable cash bonus(2) Defined contribution on benefit plan Total cash remuneration $ 650 34 $ 910 6,571 $ 560 40 $ 684 $ 7,481 $ 600 500 — 249 $ 1,184 $ 7,481 $ 849 24 65 76 $ 1,208 $ 7,546 $ 925 h d h ( ) M (1) Mr. Schatz’s contract as Managing Director and Chief Executive Officer concluded effective September 30, 2019 and he continues as a Senior Advisor until June 30, 2021. In October 2019, Mr. Bernard was named Interim Chief Executive Officer in addition to his prior role as Senior Vice President, Head of Molecular Diagnostics Business Area. Mr. Bernard is not a statutory director under Dutch law. l d d ff d h f M b ff (2) The Performance Stock Units Granted amount includes the number of performance share units granted to each Managing Board member in 2019 for the conversion of 2018 cash bonus earned by each Managing Board member in 2018. In 2019, Mr. Schatz received 60,982 performance stock units and Mr. Sackers received 21,131 performance stock units. (3) Amounts include, among others, car lease and reimbursed personal expenses such as tax consulting. Additionally, the amount for Mr. Schatz includes separation payments due upon the conclusion of his agreement. 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. Compensation for Mr. Schatz for 2019 is excluding EUR 0.7 million to account for the tax levy payable to the Dutch tax authorities by the Company on termination benefits pursuant to Article 32bb of the Dutch wage tax act. The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year December 31, 2019 (2018) for long-term compensation of stock units amounted to $1.7 million for Mr. Bernard, $37.4 million ($12.3 million) for Mr. Schatz and $4.7 million ($3.6 million) for Mr. Sackers. Based on such valuations, the total compensation including share-based compensation expenses in the year 2019 (2018) for members of the Managing Board and interim CEO was $53.5 million ($18.0 million), and amounts to $2.9 million for Mr. Bernard, $44.9 million ($13.7 million) for Mr. Schatz and $5.6 million ($4.3 million) for Mr. Sackers. Further details on the composition of remuneration for the Managing Board, and the implementation of the Remuneration Policy during December 31, 2019, are disclosed in the Remuneration Report of the Compensation Committee as published on our website at www.QIAGEN.com. 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 2019 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 each member of the Supervisory Board Additional compensation payable to members holding the following positions: Chairman of the Audit Committee 122 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 $57,500 $25,000 $18,000 $12,000 $15,000 $11,000 $6,000 Further, the Supervisory Board members will be reimbursed for tax consulting costs incurred in connection with the preparation of their tax returns up to an amount of €5,000 per person per fiscal year. Supervisory board members also receive a variable component, in the form of share-based compensation. We did not pay any agency or advisory service fees to members of the Supervisory Board. The following table summarizes the total compensation paid to the members of the Supervisory Board in December 31, 2019: Supervisory Board compensationManaging Board compensationFor the year ended December 31, 2019 (in US$ thousands, except for number of award grants)ThierryBernard(1)Peer M.Schatz(1)RolandSackersTotal fixed income 2019Total short-term income 2019(1) Mr. Schatz’s contract as Managing Director and Chief Executive Officer concluded effective September 30, 2019 and he continues as a Senior Advisor until June 30, 2021. In October 2019, Mr. Bernard was named Interim Chief Executive Officer in addition to his prior role as Senior Vice President, Head of Molecular Diagnostics Business Area. Mr. Bernard is not a statutory director under Dutch law. (2) The Performance Stock Units Granted amount includes the number of performance share units granted to each Managing Board member in 2019 for the conversion of 2018 cash bonus earned by each Managing Board member in 2018. In 2019, Mr. Schatz received 60,982 performance stock units and Mr. Sackers received 21,131 performance stock units. (3) Amounts include, among others, car lease and reimbursed personal expenses such as tax consulting. Additionally, the amount for Mr. Schatz includes separation payments due upon the conclusion of his agreement. 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. Compensation for Mr. Schatz for 2019 is excluding EUR 0.7 million to account for the tax levy payable to the Dutch tax authorities by the Company on termination benefits pursuant to Article 32bb of the Dutch wage tax act. The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year December 31, 2019 (2018) for long-term compensation of stock units amounted to $1.7 million for Mr. Bernard, $37.4 million ($12.3 million) for Mr. Schatz and $4.7 million ($3.6 million) for Mr. Sackers. Based on such valuations, the total compensation including share-based compensation expenses in the year 2019 (2018) for members of the Managing Board and interim CEO was $53.5 million ($18.0 million), and amounts to $2.9 million for Mr. Bernard, $44.9 million ($13.7 million) for Mr. Schatz and $5.6 million ($4.3 million) for Mr. Sackers. Further details on the composition of remuneration for the Managing Board, and the implementation of the Remuneration Policy during December 31, 2019, are disclosed in the Remuneration Report of the Compensation Committee as published on our website at www.QIAGEN.com. C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N Corporate Governance Report 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 2019 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 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 $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 December 31, 2019: Stéphane Bancel Dr. Håkan Björklund Dr. Metin Colpan Dr. Ross L. Levine Dr. Elaine Mardis Lawrence A. Rosen Elizabeth E. Tallett $ 57.5 $ 150.0 $ 57.5 $ 57.5 $ 57.5 $ 57.5 $ 57.5 — 12.0 12.0 — — 25.0 18.0 32.0 $ 89.5 11.0 $ 173.0 6.0 $ 75.5 6.0 $ 63.5 6.0 $ 63.5 — $ 82.5 21.0 $ 96.5 9,331 9,331 9,331 9,331 9,331 9,331 9,331 (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. The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year 2019 (2018) for long-term compensation of restricted stock units amounted to $1.9 million ($1.5 million) and includes $321.3 thousand ($259.0 thousand) for Mr. Bancel, $150.8 thousand ($58.3 thousand) for Mr. Björklund, $327.6 thousand ($270.6 thousand) for Mr. Colpan, $235.8 thousand ($128.0 thousand) for Mr. Levine, $315.7 thousand ($227.6 thousand) for Ms. Mardis, $321.3 thousand ($259.0 thousand) for Mr. Rosen and $229.0 thousand ($201.4 thousand) for Ms. Tallett. $120.2 thousand in 2018 for Mr. Karobath, who did not stand for re- election at the Company’s Annual General Meeting in June 2018. The total recognized compensation expense, including share-based compensation expenses, for members of the Supervisory Board in 2019 (2018) totaled $2.5 million ($2.2 million) and includes amounts of $410.8 thousand ($348.5 thousand) for Mr. Bancel, $323.8 thousand ($182.1 thousand) for Mr. Björklund, $403.1 thousand ($346.1 thousand) for Mr. Colpan, $299.3 thousand ($191.5 thousand) for Mr. Levine, $379.2 thousand ($291.1 thousand) for Ms. Mardis, $403.8 thousand ($341.5 thousand) for Mr. Rosen, $325.5 thousand ($297.9 thousand) for Ms. Tallett and $209.7 thousand in 2018 for Mr. Karobath. The following table sets forth certain information as of January 31, 2020 concerning the ownership of Common Shares by our directors and officers. In preparing the following table, we have relied on information furnished by such persons. 123 * * * — — — — * Thierry Bernard, United States Roland Sackers, Germany Stéphane Bancel, United States Dr. Håkan Björklund, Sweden Dr. Metin Colpan, Germany Dr. Ross L. Levine, United States Dr. Elaine Mardis, United States Lawrence A. Rosen, United States Elizabeth Tallett, United States 2020. 3,550,617 1.56 % 47,526 139,476 9,975 — — — — (3) (4) (5) (6) (7) (8) (9) 22,167 (10) * Indicates that the person beneficially owns less than 0.5% of the Common Shares issued and outstanding as of January 31, (1) The number of Common Shares outstanding as of January 31, 2020 was 227,626,974. The persons and entities named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them and have the h h h ld h h Supervisory Board compensationShare OwnershipFor the year ended December 31, 2019 (in US$ thousands, exceptfor number of share grants)FixedremunerationChairman /ChairwomanCommitteemembershipTotal(1)Number of restrictedstock units grantedName and Country of ResidenceShares Beneficially Owned(1)Number (2)PercentOwnershipStéphane Bancel Stéphane Bancel Stéphane Bancel Stéphane Bancel Dr. Håkan Björklund Dr. Håkan Björklund Dr. Håkan Björklund Dr. Håkan Björklund Dr. Metin Colpan Dr. Metin Colpan Dr. Metin Colpan Dr. Metin Colpan Dr. Ross L. Levine Dr. Ross L. Levine Dr. Ross L. Levine Dr. Ross L. Levine Dr. Elaine Mardis Dr. Elaine Mardis Dr. Elaine Mardis Dr. Elaine Mardis Lawrence A. Rosen Lawrence A. Rosen Lawrence A. Rosen Lawrence A. Rosen Elizabeth E. Tallett Elizabeth E. Tallett Elizabeth E. Tallett Elizabeth E. Tallett $ 57.5 $ 57.5 $ 57.5 $ 57.5 — — — — 32.0 32.0 32.0 32.0 $ 89.5 $ 89.5 $ 89.5 $ 89.5 $ 150.0 $ 150.0 $ 150.0 $ 150.0 12.0 12.0 12.0 12.0 11.0 $ 173.0 11.0 $ 173.0 11.0 $ 173.0 11.0 $ 173.0 $ 57.5 $ 57.5 $ 57.5 $ 57.5 12.0 12.0 12.0 12.0 6.0 6.0 6.0 6.0 $ 75.5 $ 75.5 $ 75.5 $ 75.5 $ 57.5 $ 57.5 $ 57.5 $ 57.5 — — — — 6.0 6.0 6.0 6.0 $ 63.5 $ 63.5 $ 63.5 $ 63.5 $ 57.5 $ 57.5 $ 57.5 $ 57.5 — — — — 6.0 6.0 6.0 6.0 $ 63.5 $ 63.5 $ 63.5 $ 63.5 $ 57.5 $ 57.5 $ 57.5 $ 57.5 25.0 25.0 25.0 25.0 — $ 82.5 — $ 82.5 — $ 82.5 — $ 82.5 $ 57.5 $ 57.5 $ 57.5 $ 57.5 18.0 18.0 18.0 18.0 21.0 21.0 21.0 21.0 $ 96.5 $ 96.5 $ 96.5 $ 96.5 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 9,331 (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. (1) Supervisory Directors are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These (1) Supervisory Directors are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These (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. reimbursements are excluded from the amounts presented herein. reimbursements are excluded from the amounts presented herein. The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year 2019 (2018) for long-term compensation of restricted stock units amounted to $1.9 million ($1.5 million) and 2019 (2018) for long-term compensation of restricted stock units amounted to $1.9 million ($1.5 million) and 2019 (2018) for long-term compensation of restricted stock units amounted to $1.9 million ($1.5 million) and 2019 (2018) for long-term compensation of restricted stock units amounted to $1.9 million ($1.5 million) and includes $321.3 thousand ($259.0 thousand) for Mr. Bancel, $150.8 thousand ($58.3 thousand) for Mr. Björklund, includes $321.3 thousand ($259.0 thousand) for Mr. Bancel, $150.8 thousand ($58.3 thousand) for Mr. Björklund, includes $321.3 thousand ($259.0 thousand) for Mr. Bancel, $150.8 thousand ($58.3 thousand) for Mr. Björklund, includes $321.3 thousand ($259.0 thousand) for Mr. Bancel, $150.8 thousand ($58.3 thousand) for Mr. Björklund, $327.6 thousand ($270.6 thousand) for Mr. Colpan, $235.8 thousand ($128.0 thousand) for Mr. Levine, $315.7 $327.6 thousand ($270.6 thousand) for Mr. Colpan, $235.8 thousand ($128.0 thousand) for Mr. Levine, $315.7 $327.6 thousand ($270.6 thousand) for Mr. Colpan, $235.8 thousand ($128.0 thousand) for Mr. Levine, $315.7 $327.6 thousand ($270.6 thousand) for Mr. Colpan, $235.8 thousand ($128.0 thousand) for Mr. Levine, $315.7 thousand ($227.6 thousand) for Ms. Mardis, $321.3 thousand ($259.0 thousand) for Mr. Rosen and $229.0 thousand ($227.6 thousand) for Ms. Mardis, $321.3 thousand ($259.0 thousand) for Mr. Rosen and $229.0 thousand ($227.6 thousand) for Ms. Mardis, $321.3 thousand ($259.0 thousand) for Mr. Rosen and $229.0 thousand ($227.6 thousand) for Ms. Mardis, $321.3 thousand ($259.0 thousand) for Mr. Rosen and $229.0 thousand ($201.4 thousand) for Ms. Tallett. $120.2 thousand in 2018 for Mr. Karobath, who did not stand for re- thousand ($201.4 thousand) for Ms. Tallett. $120.2 thousand in 2018 for Mr. Karobath, who did not stand for re- thousand ($201.4 thousand) for Ms. Tallett. $120.2 thousand in 2018 for Mr. Karobath, who did not stand for re- thousand ($201.4 thousand) for Ms. Tallett. $120.2 thousand in 2018 for Mr. Karobath, who did not stand for re- election at the Company’s Annual General Meeting in June 2018. election at the Company’s Annual General Meeting in June 2018. election at the Company’s Annual General Meeting in June 2018. election at the Company’s Annual General Meeting in June 2018. The total recognized compensation expense, including share-based compensation expenses, for members of the The total recognized compensation expense, including share-based compensation expenses, for members of the The total recognized compensation expense, including share-based compensation expenses, for members of the The total recognized compensation expense, including share-based compensation expenses, for members of the Supervisory Board in 2019 (2018) totaled $2.5 million ($2.2 million) and includes amounts of $410.8 thousand Supervisory Board in 2019 (2018) totaled $2.5 million ($2.2 million) and includes amounts of $410.8 thousand Supervisory Board in 2019 (2018) totaled $2.5 million ($2.2 million) and includes amounts of $410.8 thousand Supervisory Board in 2019 (2018) totaled $2.5 million ($2.2 million) and includes amounts of $410.8 thousand ($348.5 thousand) for Mr. Bancel, $323.8 thousand ($182.1 thousand) for Mr. Björklund, $403.1 thousand ($348.5 thousand) for Mr. Bancel, $323.8 thousand ($182.1 thousand) for Mr. Björklund, $403.1 thousand ($348.5 thousand) for Mr. Bancel, $323.8 thousand ($182.1 thousand) for Mr. Björklund, $403.1 thousand ($348.5 thousand) for Mr. Bancel, $323.8 thousand ($182.1 thousand) for Mr. Björklund, $403.1 thousand ($346.1 thousand) for Mr. Colpan, $299.3 thousand ($191.5 thousand) for Mr. Levine, $379.2 thousand ($291.1 ($346.1 thousand) for Mr. Colpan, $299.3 thousand ($191.5 thousand) for Mr. Levine, $379.2 thousand ($291.1 ($346.1 thousand) for Mr. Colpan, $299.3 thousand ($191.5 thousand) for Mr. Levine, $379.2 thousand ($291.1 ($346.1 thousand) for Mr. Colpan, $299.3 thousand ($191.5 thousand) for Mr. Levine, $379.2 thousand ($291.1 thousand) for Ms. Mardis, $403.8 thousand ($341.5 thousand) for Mr. Rosen, $325.5 thousand ($297.9 thousand) thousand) for Ms. Mardis, $403.8 thousand ($341.5 thousand) for Mr. Rosen, $325.5 thousand ($297.9 thousand) thousand) for Ms. Mardis, $403.8 thousand ($341.5 thousand) for Mr. Rosen, $325.5 thousand ($297.9 thousand) thousand) for Ms. Mardis, $403.8 thousand ($341.5 thousand) for Mr. Rosen, $325.5 thousand ($297.9 thousand) for Ms. Tallett and $209.7 thousand in 2018 for Mr. Karobath. for Ms. Tallett and $209.7 thousand in 2018 for Mr. Karobath. for Ms. Tallett and $209.7 thousand in 2018 for Mr. Karobath. for Ms. Tallett and $209.7 thousand in 2018 for Mr. Karobath. The following table sets forth certain information as of January 31, 2020 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. The following table sets forth certain information as of January 31, 2020 concerning the ownership of Common The following table sets forth certain information as of January 31, 2020 concerning the ownership of Common The following table sets forth certain information as of January 31, 2020 concerning the ownership of Common Shares by our directors and officers. In preparing the following table, we have relied on information furnished by Shares by our directors and officers. In preparing the following table, we have relied on information furnished by Shares by our directors and officers. In preparing the following table, we have relied on information furnished by such persons. such persons. such persons. Thierry Bernard, United States Thierry Bernard, United States Thierry Bernard, United States Thierry Bernard, United States Roland Sackers, Germany Roland Sackers, Germany Roland Sackers, Germany Roland Sackers, Germany Stéphane Bancel, United States Stéphane Bancel, United States Stéphane Bancel, United States Stéphane Bancel, United States Dr. Håkan Björklund, Sweden Dr. Håkan Björklund, Sweden Dr. Håkan Björklund, Sweden Dr. Håkan Björklund, Sweden Dr. Metin Colpan, Germany Dr. Metin Colpan, Germany Dr. Metin Colpan, Germany Dr. Metin Colpan, Germany 47,526 47,526 47,526 47,526 139,476 139,476 139,476 139,476 9,975 9,975 9,975 9,975 — — — — 3,550,617 3,550,617 3,550,617 3,550,617 (3) (3) (3) (3) (4) (4) (4) (4) (5) (5) (5) (5) (6) (6) (6) (6) Dr. Ross L. Levine, United States Dr. Ross L. Levine, United States Dr. Ross L. Levine, United States Dr. Ross L. Levine, United States Dr. Elaine Mardis, United States Dr. Elaine Mardis, United States Dr. Elaine Mardis, United States Dr. Elaine Mardis, United States Lawrence A. Rosen, United States Lawrence A. Rosen, United States Lawrence A. Rosen, United States Lawrence A. Rosen, United States — — — — (7) (7) (7) (7) — — — — (8) (8) (8) (8) — — — — (9) (9) (9) (9) Elizabeth Tallett, United States Elizabeth Tallett, United States Elizabeth Tallett, United States Elizabeth Tallett, United States 22,167 22,167 22,167 22,167 (10) (10) (10) (10) * * * * * * * * * * * * — — — — 1.56 % 1.56 % 1.56 % 1.56 % — — — — — — — — — — — — * * * * * Indicates that the person beneficially owns less than 0.5% of the Common Shares issued and outstanding as of January 31, 2020. * Indicates that the person beneficially owns less than 0.5% of the Common Shares issued and outstanding as of January 31, * Indicates that the person beneficially owns less than 0.5% of the Common Shares issued and outstanding as of January 31, * Indicates that the person beneficially owns less than 0.5% of the Common Shares issued and outstanding as of January 31, 2020. 2020. 2020. (1) The number of Common Shares outstanding as of January 31, 2020 was 227,626,974. 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 (1) The number of Common Shares outstanding as of January 31, 2020 was 227,626,974. The persons and entities named in (1) The number of Common Shares outstanding as of January 31, 2020 was 227,626,974. The persons and entities named in (1) The number of Common Shares outstanding as of January 31, 2020 was 227,626,974. 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 the table have sole voting and investment power with respect to all shares shown as beneficially owned by them and have the 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. h h ld h ld h h ld h ld h h h h h h h h h h h h h h (2) Does not include Common Shares subject to options or awards held by such persons at January 31, 2020. 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 20,010 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (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 88,917 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (5) Does not include 11,037 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 4,567 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 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 11,479 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 4,292 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 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. 124 (9) Does not include 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (10) 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 11,037 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, 2020: Roland Sackers Dr. Metin Colpan Elizabeth E. Tallett 135,739 4,567 1,563 2/26/2021 to 2/28/2023 $15.59 to $22.25 2/26/2021 to 2/28/2022 $15.59 to $22.25 2/28/2022 $15.59 Additional Information Our shareholders exercise their voting rights through Annual and Extraordinary General Meetings. Resolutions of the General Meeting are adopted by an absolute majority of votes cast, unless a different majority of votes or quorum is required by Dutch law or the Articles of Association. Each common share confers the right to cast one vote. Furthermore, the Managing Board, or where appropriate, the Supervisory Board, shall provide all shareholders and other parties in the financial markets with equal and simultaneous information about matters that may influence QIAGEN's share price. QIAGEN is required to convene an Annual General Meeting in the Netherlands no later than six months following the end of each year. The agenda for the Annual General Meeting must contain certain matters as specified in QIAGEN's Articles of Association and under Dutch law, including, among other things, the adoption of QIAGEN's annual financial statements. Additional Extraordinary General Meetings may be convened at any time by the Managing Board, the Supervisory Board or by one or more shareholders jointly representing at least 40% of QIAGEN's issued share capital. Furthermore, one or more shareholders, who jointly represent at least 10% of QIAGEN's issued share capital may, on their application, be authorized by the district court judge having applications for interim relief, to convene a General Meeting. Shareholders are entitled to propose items for the agenda of the General Meeting provided that Share OwnershipFor the year ended December 31, 2019 (in US$ thousands, exceptfor number of share grants)FixedremunerationChairman /ChairwomanCommitteemembershipTotal(1)Number of restrictedstock units grantedName and Country of ResidenceShares Beneficially Owned(1)Number (2)PercentOwnershipShareholdersNameNumber of OptionsExpiration DatesExercise PricesShare OwnershipFor the year ended December 31, 2019 (in US$ thousands, exceptfor number of share grants)FixedremunerationChairman /ChairwomanCommitteemembershipTotal(1)Number of restrictedstock units grantedName and Country of ResidenceShares Beneficially Owned(1)Number (2)PercentOwnershipShare OwnershipFor the year ended December 31, 2019 (in US$ thousands, exceptfor number of share grants)FixedremunerationChairman /ChairwomanCommitteemembershipTotal(1)Number of restrictedstock units grantedName and Country of ResidenceShares Beneficially Owned(1)Number (2)PercentOwnershipShare OwnershipFor the year ended December 31, 2019 (in US$ thousands, exceptfor number of share grants)FixedremunerationChairman /ChairwomanCommitteemembershipTotal(1)Number of restrictedstock units grantedName and Country of ResidenceShares Beneficially Owned(1)Number (2)PercentOwnershipsame voting rights as shareholders with respect to Common Shares. same voting rights as shareholders with respect to Common Shares. same voting rights as shareholders with respect to Common Shares. 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, 2020. See footnotes (2) Does not include Common Shares subject to options or awards held by such persons at January 31, 2020. See footnotes (2) Does not include Common Shares subject to options or awards held by such persons at January 31, 2020. See footnotes (2) Does not include Common Shares subject to options or awards held by such persons at January 31, 2020. See footnotes below for information regarding options now exercisable or that could become exercisable within 60 days of the date of this below for information regarding options now exercisable or that could become exercisable within 60 days of the date of this below for information regarding options now exercisable or that could become exercisable within 60 days of the date of this below for information regarding options now exercisable or that could become exercisable within 60 days of the date of this table. table. table. table. days from the date of this table. days from the date of this table. days from the date of this table. days from the date of this table. (3) Does not include 20,010 shares issuable upon the release of unvested stock awards that could become releasable within 60 (3) Does not include 20,010 shares issuable upon the release of unvested stock awards that could become releasable within 60 (3) Does not include 20,010 shares issuable upon the release of unvested stock awards that could become releasable within 60 (3) Does not include 20,010 shares issuable upon the release of unvested stock awards that could become releasable within 60 (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 88,917 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N the date of this table. (4) Does not include 135,739 shares issuable upon the exercise of options now exercisable having exercise prices ranging from (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 $15.59 to $22.25 per share. Options expire in increments during the period between February 2020 and February 2023. Does not include 88,917 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from not include 88,917 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. the date of this table. (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 88,917 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. Corporate Governance Report (5) Does not include 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (5) Does not include 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (5) Does not include 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (5) Does not include 11,037 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 4,567 shares issuable upon the exercise of options now exercisable having exercise prices ranging from (6) Does not include 4,567 shares issuable upon the exercise of options now exercisable having exercise prices ranging from (6) Does not include 4,567 shares issuable upon the exercise of options now exercisable having exercise prices ranging from (6) Does not include 4,567 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 2022. $15.59 to $22.25 per share. Options expire in increments during the period between February 2020 and February 2022. $15.59 to $22.25 per share. Options expire in increments during the period between February 2020 and February 2022. $15.59 to $22.25 per share. Options expire in increments during the period between February 2020 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 Includes 2,741,579 shares held by CC Verwaltungs GmbH, of which Dr. Colpan is the sole stockholder and 770,370 shares held Includes 2,741,579 shares held by CC Verwaltungs GmbH, of which Dr. Colpan is the sole stockholder and 770,370 shares held 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 11,479 shares issuable upon the release of unvested stock awards that could become by Colpan GbR. Does not include 11,479 shares issuable upon the release of unvested stock awards that could become by Colpan GbR. Does not include 11,479 shares issuable upon the release of unvested stock awards that could become by Colpan GbR. Does not include 11,479 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. releasable within 60 days from the date of this table. releasable within 60 days from the date of this table. releasable within 60 days from the date of this table. (7) Does not include 4,292 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 4,292 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 4,292 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 4,292 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 11,037 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 11,037 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 11,037 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 11,037 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 11,037 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 11,037 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 11,037 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 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (10) 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 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. (10) Does not include 1,563 shares issuable upon the exercise of options now exercisable having exercise prices of $15.59 per (10) 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 11,037 shares issuable upon the release of unvested stock awards share. Options expire on February 2022. Does not include 11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table. that could become releasable within 60 days from the date of this table. (10) 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 11,037 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, 2020: The following table sets forth the options of our officers and directors as of January 31, 2020: The following table sets forth the options of our officers and directors as of January 31, 2020: The following table sets forth the options of our officers and directors as of January 31, 2020: Roland Sackers Roland Sackers Roland Sackers Roland Sackers 135,739 135,739 135,739 135,739 Dr. Metin Colpan Dr. Metin Colpan Dr. Metin Colpan Dr. Metin Colpan Elizabeth E. Tallett Elizabeth E. Tallett Elizabeth E. Tallett Elizabeth E. Tallett 4,567 4,567 4,567 4,567 1,563 1,563 1,563 1,563 2/26/2021 to 2/28/2023 2/26/2021 to 2/28/2023 2/26/2021 to 2/28/2023 2/26/2021 to 2/28/2023 2/26/2021 to 2/28/2022 2/26/2021 to 2/28/2022 2/26/2021 to 2/28/2022 2/26/2021 to 2/28/2022 $15.59 to $22.25 $15.59 to $22.25 $15.59 to $22.25 $15.59 to $22.25 $15.59 to $22.25 $15.59 to $22.25 $15.59 to $22.25 $15.59 to $22.25 2/28/2022 2/28/2022 2/28/2022 2/28/2022 $15.59 $15.59 $15.59 $15.59 Additional Information Additional Information Additional Information Additional Information 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. Our shareholders exercise their voting rights through Annual and Extraordinary General Meetings. Resolutions of the Our shareholders exercise their voting rights through Annual and Extraordinary General Meetings. Resolutions of the 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 General Meeting are adopted by an absolute majority of votes cast, unless a different majority of votes or quorum is 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. required by Dutch law or the Articles of Association. Each common share confers the right to cast one vote. 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 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 other parties in the financial markets with equal and simultaneous information about matters that may influence QIAGEN's share price. QIAGEN's share price. Furthermore, the Managing Board, or where appropriate, the Supervisory Board, shall provide all shareholders and 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 other parties in the financial markets with equal and simultaneous information about matters that may influence QIAGEN's share price. 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. QIAGEN is required to convene an Annual General Meeting in the Netherlands no later than six months following QIAGEN is required to convene an Annual General Meeting in the Netherlands no later than six months following 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 the end of each year. The agenda for the Annual General Meeting must contain certain matters as specified in 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 QIAGEN's Articles of Association and under Dutch law, including, among other things, the adoption of QIAGEN's QIAGEN's Articles of Association and under Dutch law, including, among other things, the adoption of QIAGEN's annual financial statements. annual financial statements. annual financial statements. Additional Extraordinary General Meetings may be convened at any time by the Managing Board, the Supervisory Additional Extraordinary General Meetings may be convened at any time by the Managing Board, the Supervisory Additional Extraordinary General Meetings may be convened at any time by the Managing Board, the Supervisory Additional Extraordinary General Meetings may be 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. Board or by one or more shareholders jointly representing at least 40% of QIAGEN's issued share capital. Board or by one or more shareholders jointly representing at least 40% of QIAGEN's issued share capital. 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, Furthermore, one or more shareholders, who jointly represent at least 10% of QIAGEN's issued share capital may, Furthermore, one or more shareholders, who jointly represent at least 10% of QIAGEN's issued share capital may, 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 on their application, be authorized by the district court judge having applications for interim relief, to convene a on their application, be authorized by the district court judge having applications for interim relief, to convene a 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 General Meeting. Shareholders are entitled to propose items for the agenda of the General Meeting provided that General Meeting. Shareholders are entitled to propose items for the agenda of the General Meeting provided that 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 2019. 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 125 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 Plan, subject to certain antidilution adjustments. We issue Treasury Shares to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at December 31, 2019. 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, the stock rights and incentive stock options, as well as non-qualified options, stock grants and stock-based awards have terms of up to five or 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, 2020, there were 0.7 million options outstanding with exercise prices ranging between $14.91 and $22.25 and expiring between May 31, 2020 and May 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 5.2 million stock unit awards outstanding as of January 31, 2020. These awards will be released between February 26, 2020 and May 31, 2028. As of January 31, 2020, options to purchase 0.1 million Common Shares and 1.0 million stock unit awards were held by the officers and directors of QIAGEN, as a group. ShareholdersNameNumber of OptionsExpiration DatesExercise PricesStock PlansShareholdersNameNumber of OptionsExpiration DatesExercise PricesShareholdersNameNumber of OptionsExpiration DatesExercise PricesShareholdersNameNumber of OptionsExpiration DatesExercise Prices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 2019. 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 2014 Plan, subject to certain antidilution adjustments. We issue Treasury Shares to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at December 31, 2019. 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, the stock rights and incentive stock options, as well as non-qualified options, stock grants and stock-based awards have terms of up to five or 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, 2020, there were 0.7 million options outstanding with exercise prices ranging between $14.91 and $22.25 and expiring between May 31, 2020 and May 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 5.2 million stock unit awards outstanding as of January 31, 2020. These awards will be released between February 26, 2020 and May 31, 2028. As of January 31, 2020, options to purchase 0.1 million Common Shares and 1.0 million stock unit awards were held by the officers and directors of QIAGEN, as a group. 126 Stock PlansC O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N Corporate Governance Report Further detailed information regarding stock options and awards granted under the plan can be found in Note 22 included in the Consolidated Financial Statements. 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. Reference is made to the discussion in the “Risk Management” and “Risks” section above. Our Managing Director, 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, 2019, 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 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. 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 International Financial Reporting Standards. 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, 2019. 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. 127 Based on our assessment under the COSO Internal Control-Integrated Framework, management believes that, as of December 31, 2019, our internal control over financial reporting is effective. IndependenceRisk ManagementDisclosure Controls and ProceduresReport of Management on Internal Control over Financial ReportingFurther detailed information regarding stock options and awards granted under the plan can be found in Note 22 included in the Consolidated Financial Statements. 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. Reference is made to the discussion in the “Risk Management” and “Risks” section above. Our Managing Director, 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, 2019, 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 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. 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 International Financial Reporting Standards. 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, 2019. 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, 2019, 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 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 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 as adopted by the European Union 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 2019, KPMG Accountants N.V. was appointed as external auditor for the Company for 2019 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. Following the appointment of KPMG Accountants N.V. for the audit of our statutory consolidated financial statements, the external auditor for our consolidated financial statements prepared under U.S. generally accepted accounting principles is KPMG AG Wirtschaftsprüfungsgesellschaft who audited the consolidated financial statements as of and for the year ended December 31, 2019 contained in this annual report. 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. 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. 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 128 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. 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 can be found at www.commissiecorporategovernance.nl. Independent AuditorsWhistleblower Policy and Code of ConductAnti-Takeover MeasuresDutch Corporate Governance Code — Comply or ExplainIndependenceRisk ManagementDisclosure Controls and ProceduresReport of Management on Internal Control over Financial ReportingChanges in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting during 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 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 as adopted by the European Union 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 2019, KPMG Accountants N.V. was appointed as external auditor for the Company for 2019 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. Following the appointment of KPMG Accountants N.V. for the audit of our statutory consolidated financial statements, the external auditor for our consolidated financial statements prepared under U.S. generally accepted accounting principles is KPMG AG Wirtschaftsprüfungsgesellschaft who audited the consolidated financial statements as of and for the year ended December 31, 2019 contained in this annual report. 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. C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N Corporate Governance Report 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. 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. 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 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. 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 2019, our multicultural workforce was composed of at least 70 nationalities with an 129 average age of 40.3. With 49% women, we are well balanced in terms of gender on an aggregate levelInformation 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 Managing 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. Independent AuditorsWhistleblower Policy and Code of ConductAnti-Takeover MeasuresDutch Corporate Governance Code — Comply or Explain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. 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 2019, our multicultural workforce was composed of at least 70 nationalities with an average age of 40.3. With 49% women, we are well balanced in terms of gender on an aggregate levelInformation 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 Managing 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. 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 130 compensation to Supervisory Board members is a common practice in our industry. 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. NYSE Exemptions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. Corporate Governance Report C O R P O R AT E G O V E R N A N C E A N D C O M P E N S AT I O N 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. 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. 131 NYSE ExemptionsFinancial Results 134 Consolidated Financial Statements 142 Notes to Consolidated Financial Statements 206 Auditor’s Report 212 List of Subsidiaries Financial Results Financial Results Financial Results Financial Results Financial Results Financial Results Auditor’s Report Consolidated Financial Statements Financial Results Financial Results Financial Results QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) Report of independent registered public accounting firm To the Shareholders and Supervisory Board QIAGEN N.V.: Current assets: Current assets: Current assets: Current assets: Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents (3) (3) (3) (3) $ 623,647 $ 623,647 $ 623,647 $ 623,647 $ 1,159,079 $ 1,159,079 $ 1,159,079 $ 1,159,079 Restricted cash Restricted cash Restricted cash Restricted cash Short-term investments Short-term investments Short-term investments Short-term investments We have audited the accompanying consolidated balance sheets of QIAGEN N.V. and subsidiaries (the 5,743 5,743 “Company”) as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, 234,606 129,586 234,606 129,586 comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the 351,612 351,612 consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its 42,119 42,119 operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles. Accounts receivable, net of allowance for doubtful accounts of $12,115 and $9,270 in 2019 and Accounts receivable, net of allowance for doubtful accounts of $12,115 and $9,270 in 2019 and 2018, respectively 2018, respectively Accounts receivable, net of allowance for doubtful accounts of $12,115 and $9,270 in 2019 and Accounts receivable, net of allowance for doubtful accounts of $12,115 and $9,270 in 2019 and 2018, respectively 2018, respectively Income taxes receivable Income taxes receivable Income taxes receivable Income taxes receivable Inventories, net Inventories, net Inventories, net Inventories, net 170,704 170,704 129,586 129,586 385,117 385,117 385,117 385,117 170,704 170,704 162,912 162,912 42,119 42,119 34,936 34,936 (3, 24) (3, 24) 5,743 5,743 (3, 24) (3, 24) (7) (7) (3) (3) (3) (3) (7) (7) (3) (3) (3) (3) — — 234,606 234,606 351,612 351,612 162,912 162,912 34,936 34,936 — — Fair value of derivative instruments — current Fair value of derivative instruments — current Fair value of derivative instruments — current Fair value of derivative instruments — current (14) (14) (14) (14) 107,868 107,868 107,868 107,868 102,754 102,754 102,754 102,754 Prepaid expenses and other current assets (of which $13,697 and $3,873 in 2019 and 2018 due from Prepaid expenses and other current assets (of which $13,697 and $3,873 in 2019 and 2018 due related parties, respectively) from related parties, respectively) Prepaid expenses and other current assets (of which $13,697 and $3,873 in 2019 and 2018 due Prepaid expenses and other current assets (of which $13,697 and $3,873 in 2019 and 2018 due from related parties, respectively) from related parties, respectively) We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. (9) Property, plant and equipment, net of accumulated depreciation of $699,130 and $603,430 in Property, plant and equipment, net of accumulated depreciation of $699,130 and $603,430 in (9) 2019 and 2018, respectively 2019 and 2018, respectively Property, plant and equipment, net of accumulated depreciation of $699,130 and $603,430 in 2019 Property, plant and equipment, net of accumulated depreciation of $699,130 and $603,430 in and 2018, respectively 2019 and 2018, respectively Long-term assets: Long-term assets: Long-term assets: Long-term assets: 1,570,248 1,570,248 2,155,060 2,155,060 1,570,248 1,570,248 105,464 105,464 455,243 455,243 455,243 455,243 511,659 511,659 105,464 105,464 109,161 109,161 (8) (8) (9) (9) (8) (8) 2,155,060 2,155,060 109,161 109,161 511,659 511,659 Goodwill Goodwill Goodwill Goodwill (11) (11) (11) (11) 2,140,503 2,140,503 2,140,503 2,140,503 2,108,536 2,108,536 2,108,536 2,108,536 Intangible assets, net of accumulated amortization of $776,520 and $1,194,679 in 2019 and Intangible assets, net of accumulated amortization of $776,520 and $1,194,679 in 2019 and 2018, respectively 2018, respectively Intangible assets, net of accumulated amortization of $776,520 and $1,194,679 in 2019 and 2018, Intangible assets, net of accumulated amortization of $776,520 and $1,194,679 in 2019 and respectively 2018, respectively 475,043 475,043 As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842 - Leases. In 2018, the Company has changed its method of accounting for revenue from contracts with customers due to the adoption of Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers. (14) (14) Fair value of derivative instruments — long-term Fair value of derivative instruments — long-term Fair value of derivative instruments — long-term Fair value of derivative instruments — long-term Deferred income tax assets Deferred income tax assets Deferred income tax assets Deferred income tax assets 632,434 632,434 192,266 192,266 632,434 632,434 192,266 192,266 295,363 295,363 56,542 56,542 56,542 56,542 42,896 42,896 (17) (17) (11) (11) (14) (14) (17) (17) (11) (11) 42,896 42,896 295,363 295,363 475,043 475,043 Other long-term assets (of which $16,830 and $24,300 in 2019 and 2018 due from related parties, Other long-term assets (of which $16,830 and $24,300 in 2019 and 2018 due from related Other long-term assets (of which $16,830 and $24,300 in 2019 and 2018 due from related Other long-term assets (of which $16,830 and $24,300 in 2019 and 2018 due from related respectively) parties, respectively) parties, respectively) parties, respectively) (10, 12, 24) (10, 12, 24) (10, 12, 24) (10, 12, 24) 188,380 188,380 188,380 188,380 159,775 159,775 159,775 159,775 3,593,272 3,593,272 These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to $ 5,748,332 $ 5,748,332 express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. $ 5,235,616 $ 5,235,616 $ 5,235,616 $ 5,235,616 3,665,368 3,665,368 3,665,368 3,665,368 $ 5,748,332 $ 5,748,332 3,593,272 3,593,272 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting 134 NoteAs of December 31,20192018AssetsTotal current assetsTotal long-term assetsTotal assetsOpinion on the Consolidated Financial StatementsChange in Accounting PrincipleBasis for OpinionNoteAs of December 31,20192018AssetsTotal current assetsTotal long-term assetsTotal assetsNoteAs of December 31,20192018AssetsTotal current assetsTotal long-term assetsTotal assetsNoteAs of December 31,20192018AssetsTotal current assetsTotal long-term assetsTotal assetsF I N A N C I A L R E S U LT S Consolidated Financial Statements Financial Results Financial Results Financial Results Financial Results Financial Results Financial Results QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except par value) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) Current liabilities: Current assets: Current assets: Current assets: Current portion of long-term debt Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents Accounts payable Restricted cash Restricted cash Restricted cash Fair value of derivative instruments — current Short-term investments Short-term investments Short-term investments (16) (3) (3) (3) $ 285,244 $ 623,647 $ 623,647 $ 623,647 $ 503,116 $ 1,159,079 $ 1,159,079 $ 1,159,079 (24) (3) (3) (3) 84,767 5,743 5,743 5,743 69,415 — — — (14) (7) (7) (7) 103,175 129,586 129,586 129,586 106,594 234,606 234,606 234,606 Accrued and other current liabilities (of which $15,404 and $5,488 due to related parties in 2019 and Accounts receivable, net of allowance for doubtful accounts of $12,115 and $9,270 in 2019 and 2018, respectively) 2018, respectively Accounts receivable, net of allowance for doubtful accounts of $12,115 and $9,270 in 2019 and Accounts receivable, net of allowance for doubtful accounts of $12,115 and $9,270 in 2019 and 2018, respectively 2018, respectively (10, 13, 22) (3, 24) (3, 24) (3, 24) 444,303 385,117 385,117 385,117 263,017 351,612 351,612 351,612 33,856 42,119 42,119 42,119 30,047 34,936 34,936 34,936 Income taxes payable Income taxes receivable Income taxes receivable Income taxes receivable Inventories, net Inventories, net Inventories, net Long-term liabilities: Fair value of derivative instruments — current Fair value of derivative instruments — current Fair value of derivative instruments — current Prepaid expenses and other current assets (of which $13,697 and $3,873 in 2019 and 2018 due Prepaid expenses and other current assets (of which $13,697 and $3,873 in 2019 and 2018 due Prepaid expenses and other current assets (of which $13,697 and $3,873 in 2019 and 2018 due Long-term debt, net of current portion from related parties, respectively) from related parties, respectively) from related parties, respectively) Deferred income tax liabilities Long-term assets: Fair value of derivative instruments — long-term Long-term assets: Long-term assets: Other long-term liabilities Property, plant and equipment, net of accumulated depreciation of $699,130 and $603,430 in 2019 and 2018, respectively Property, plant and equipment, net of accumulated depreciation of $699,130 and $603,430 in Property, plant and equipment, net of accumulated depreciation of $699,130 and $603,430 in 2019 and 2018, respectively 2019 and 2018, respectively Commitments and contingencies Goodwill Goodwill Goodwill Equity: Intangible assets, net of accumulated amortization of $776,520 and $1,194,679 in 2019 and Intangible assets, net of accumulated amortization of $776,520 and $1,194,679 in 2019 and 2018, respectively 2018, respectively Intangible assets, net of accumulated amortization of $776,520 and $1,194,679 in 2019 and 2018, respectively Preference shares, 0.01 EUR par value, authorized—450,000 shares, no shares issued and outstanding Deferred income tax assets Financing preference shares, 0.01 EUR par value, authorized—40,000 shares, no shares issued and outstanding Fair value of derivative instruments — long-term Fair value of derivative instruments — long-term Fair value of derivative instruments — long-term Deferred income tax assets Deferred income tax assets (3) (3) (3) 170,704 951,345 170,704 170,704 162,912 972,189 162,912 162,912 (14) (14) (14) 107,868 107,868 107,868 102,754 102,754 102,754 (8) (16) (8) (8) 105,464 1,421,108 105,464 105,464 109,161 1,671,090 109,161 109,161 (16) (14) (12, 15) (9) (9) (9) 23,442 1,570,248 1,570,248 1,570,248 196,929 63,411 2,155,060 2,155,060 2,155,060 317,393 106,201 455,243 1,747,680 455,243 455,243 89,279 511,659 2,141,173 511,659 511,659 (20) (11) (11) (11) 2,140,503 2,140,503 2,140,503 2,108,536 2,108,536 2,108,536 (11) (11) (11) 632,434 632,434 632,434 475,043 475,043 475,043 (17) (17) (17) (14) (14) (14) — 56,542 56,542 56,542 — 192,266 192,266 192,266 — 42,896 42,896 42,896 — 295,363 295,363 295,363 Common Shares, 0.01 EUR par value, authorized—410,000 shares, issued — 230,829 shares in Other long-term assets (of which $16,830 and $24,300 in 2019 and 2018 due from related Other long-term assets (of which $16,830 and $24,300 in 2019 and 2018 due from related Other long-term assets (of which $16,830 and $24,300 in 2019 and 2018 due from related 2019 and 2018, respectively parties, respectively) parties, respectively) parties, respectively) (10, 12, 24) (10, 12, 24) (10, 12, 24) 2,702 188,380 188,380 188,380 2,702 159,775 159,775 159,775 Additional paid-in capital Retained earnings The accompanying notes are an integral part of these consolidated financial statements. Accumulated other comprehensive loss The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. Less treasury shares, at cost— 3,077 and 5,320 shares in 2019 and 2018, respectively (18) (18) The accompanying notes are an integral part of these consolidated financial statements. 1,777,017 3,665,368 3,665,368 3,665,368 1,742,191 3,593,272 3,593,272 3,593,272 1,178,457 $ 5,235,616 $ 5,235,616 $ 5,235,616 1,379,624 $ 5,748,332 $ 5,748,332 $ 5,748,332 (309,619) (310,644) (111,966) (178,903) 2,536,591 2,634,970 $ 5,235,616 $ 5,748,332 135 NoteAs of December 31,20192018Liabilities and equityTotal current liabilitiesTotal long-term liabilitiesTotal equityTotal liabilities and equityNoteAs of December 31,20192018AssetsTotal current assetsTotal long-term assetsTotal assetsNoteAs of December 31,20192018AssetsTotal current assetsTotal long-term assetsTotal assetsNoteAs of December 31,20192018AssetsTotal current assetsTotal long-term assetsTotal assets(in thousands, except per share data) Net sales Cost of sales Cost of sales Acquisition-related intangible amortization Operating expenses: Research and development Sales and marketing General and administrative Acquisition-related intangible amortization Restructuring, acquisition, integration and other, net Long-lived asset impairments Other income (expense): Interest income Interest expense Other income (expense), net (Loss) income before income tax (benefit) expense Income tax (benefit) expense Weighted-average common shares outstanding Basic Diluted QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS) INCOME QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS) INCOME QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS) INCOME (in thousands, except per share data) (in thousands, except per share data) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS) INCOME (in thousands, except per share data) QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS) INCOME (in thousands, except per share data) Net sales Net sales Net sales Net sales (3, 4, 24) (3, 4, 24) (3, 4, 24) (3, 4, 24) (3, 4, 24) $ 1,526,424 $ 1,501,848 $ 1,526,424 $ 1,501,848 $ 1,417,536 $ 1,417,536 $ 1,417,536 $ 1,526,424 $ 1,417,536 $ 1,501,848 $ 1,526,424 $ 1,501,848 $ 1,526,424 $ 1,501,848 Cost of sales Cost of sales Cost of sales Cost of sales Cost of sales Cost of sales Cost of sales Cost of sales Acquisition-related intangible amortization Acquisition-related intangible amortization Acquisition-related intangible amortization Acquisition-related intangible amortization Operating expenses: Operating expenses: Operating expenses: Operating expenses: Research and development Research and development Research and development Research and development Sales and marketing Sales and marketing Sales and marketing Sales and marketing General and administrative General and administrative General and administrative General and administrative (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) Acquisition-related intangible amortization Acquisition-related intangible amortization Acquisition-related intangible amortization Acquisition-related intangible amortization Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net (6) Restructuring, acquisition, integration and other, net Long-lived asset impairments Long-lived asset impairments Long-lived asset impairments Long-lived asset impairments (6) (6) (6) (6) (6) (6) (6) (6) (6) Other income (expense): Other income (expense): Other income (expense): Other income (expense): Interest income Interest income Interest income Interest income Interest expense Interest expense Interest expense Interest expense Other income (expense), net Other income (expense), net Other income (expense), net Other income (expense), net (6) (6) (6) (6) (6) 449,651 449,651 449,651 449,651 422,226 449,651 444,165 422,226 444,165 444,165 444,165 422,226 422,226 71,511 71,511 71,511 71,511 56,723 72,749 71,511 72,749 56,723 56,723 56,723 72,749 72,749 521,162 521,162 521,162 521,162 494,975 521,162 500,888 494,975 500,888 500,888 500,888 494,975 494,975 1,005,262 922,561 1,000,960 1,005,262 1,005,262 1,000,960 1,000,960 1,005,262 1,000,960 1,005,262 922,561 922,561 922,561 157,448 157,448 157,448 157,448 154,084 157,448 161,852 154,084 161,852 161,852 161,852 154,084 154,084 391,906 391,906 391,906 391,906 375,562 391,906 392,281 375,562 392,281 392,281 392,281 375,562 375,562 112,262 112,262 112,262 112,262 102,080 112,262 104,568 102,080 104,568 104,568 104,568 102,080 102,080 29,973 29,973 29,973 29,973 39,032 39,398 29,973 39,032 39,398 39,032 39,032 39,398 39,398 199,778 199,778 199,778 199,778 98,018 199,778 98,018 28,659 28,659 28,659 28,659 98,018 98,018 1,031,398 769,142 734,379 1,031,398 1,031,398 1,031,398 1,031,398 734,379 769,142 734,379 734,379 769,142 769,142 (26,136) (26,136) (26,136) (26,136) 153,419 (26,136) 153,419 266,581 266,581 266,581 266,581 153,419 153,419 22,113 22,113 22,113 22,113 20,851 10,645 22,113 20,851 10,645 20,851 20,851 10,645 10,645 (74,185) (74,185) (74,185) (74,185) (49,685 (74,185) (67,293) (67,293) (67,293) (67,293) (49,685 (49,685 (49,685 140,031 140,031 140,031 140,031 — 140,031 7,987 7,987 7,987 7,987 — — — 7,987 — 432 432 432 432 5,598 5,598 5,598 5,598 (4) 432 (4) (4) (4) 5,598 (4) 444,165 422,226 56,723 72,749 500,888 494,975 1,000,960 922,561 $ 1,417,536 161,852 154,084 392,281 375,562 104,568 102,080 39,032 39,398 28,659 98,018 734,379 769,142 266,581 153,419 20,851 10,645 (67,293) (49,685 (40,844) (39,044) 225,737 114,375 35,357 73,981 190,380 40,394 $ 0.84 $ 0.18 $ 0.82 $ 0.17 226,640 228,074 233,456 233,009 The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. 136 Diluted Diluted Diluted Diluted (19) (19) (19) (19) (19) 226,777 226,777 226,777 226,777 233,009 226,777 233,456 233,009 233,456 233,456 233,456 233,009 233,009 (Loss) income before income tax (benefit) expense (Loss) income before income tax (benefit) expense (Loss) income before income tax (benefit) expense (Loss) income before income tax (benefit) expense Income tax (benefit) expense Income tax (benefit) expense Income tax (benefit) expense Income tax (benefit) expense (3, 17) (3, 17) (3, 17) (3, 17) (3, 17) (19) (19) (19) (19) (19) (19) (19) (19) (19) (19) Weighted-average common shares outstanding Weighted-average common shares outstanding Weighted-average common shares outstanding Weighted-average common shares outstanding Basic Basic Basic Basic (19) (19) (19) (19) (19) (51,640) (51,640) (51,640) (51,640) (39,044) (51,640) (40,844) (39,044) (40,844) (40,844) (40,844) (39,044) (39,044) (77,776) (77,776) (77,776) (77,776) 114,375 (77,776) 225,737 114,375 225,737 225,737 225,737 114,375 114,375 (36,321) (36,321) (36,321) (36,321) 73,981 (36,321) 35,357 73,981 35,357 35,357 35,357 73,981 73,981 (41,455) (41,455) (41,455) (41,455) 40,394 (41,455) 190,380 190,380 190,380 190,380 40,394 40,394 40,394 $ (0.18) $ (0.18) $ (0.18) $ (0.18) $ 0.18 $ (0.18) $ 0.84 $ 0.18 $ 0.84 $ 0.84 $ 0.84 $ 0.18 $ 0.18 $ (0.18) $ (0.18) $ (0.18) $ (0.18) $ 0.17 $ (0.18) $ 0.82 $ 0.17 $ 0.82 $ 0.82 $ 0.82 $ 0.17 $ 0.17 226,777 226,777 226,777 226,777 228,074 226,777 226,640 228,074 226,640 226,640 226,640 228,074 228,074 NoteYears ended December 31,201920182017Total cost of salesGross profitTotal operating expenses(Loss) income from operationsTotal other expense, netNet (loss) incomeBasic (loss) earnings per common shareDiluted (loss) earnings per common shareNoteYears ended December 31,201920182017Total cost of salesGross profitTotal operating expenses(Loss) income from operationsTotal other expense, netNet (loss) incomeBasic (loss) earnings per common shareDiluted (loss) earnings per common shareNoteYears ended December 31,201920182017Total cost of salesGross profitTotal operating expenses(Loss) income from operationsTotal other expense, netNet (loss) incomeBasic (loss) earnings per common shareDiluted (loss) earnings per common shareNoteYears ended December 31,201920182017Total cost of salesGross profitTotal operating expenses(Loss) income from operationsTotal other expense, netNet (loss) incomeBasic (loss) earnings per common shareDiluted (loss) earnings per common shareNoteYears ended December 31,201920182017Total cost of salesGross profitTotal operating expenses(Loss) income from operationsTotal other expense, netNet (loss) incomeBasic (loss) earnings per common shareDiluted (loss) earnings per common share F I N A N C I A L R E S U LT S Consolidated Financial Statements QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) (LOSS) INCOME (in thousands) Other comprehensive income (loss) to be reclassified to profit or loss in subsequent Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods: periods: Gains (losses) on cash flow hedges, before tax Gains (losses) on cash flow hedges, before tax Cash flow hedges, before tax Cash flow hedges, before tax Losses on marketable securities, before tax Losses on marketable securities, before tax Gains on pensions, before tax Gains on pensions, before tax $ (41,455) $ (41,455) $ 190,380 $ 190,380 $ 40,394 $ 40,394 (14) (14) (14) (14) 17,052 17,052 25,207 25,207 (50,067) (50,067) (3,888) (3,888) (9,774) (9,774) 26,136 26,136 13,164 13,164 15,433 15,433 (23,931) (23,931) — — — — (796) (796) 1,325 1,325 (854) (854) 886 886 Foreign currency translation adjustments, before tax Foreign currency translation adjustments, before tax (12,156) (12,156) (108,045) (108,045) 135,945 135,945 Other comprehensive income (loss), before tax Other comprehensive income (loss), before tax Income tax relating to components of other comprehensive income (loss) Income tax relating to components of other comprehensive income (loss) 212 212 813 813 (91,287) (91,287) 112,046 112,046 460 460 1,034 1,034 1,025 1,025 (90,827) (90,827) 113,080 113,080 Comprehensive (loss) income Comprehensive (loss) income $ (40,430) $ (40,430) $ 99,553 $ 99,553 $ 153,474 $ 153,474 The accompanying notes are an integral part of these consolidated financial statements. The accompanying notes are an integral part of these consolidated financial statements. QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN 137 EQUITY NoteYears ended December 31,201920182017Net (loss) incomeReclassification adjustments on cash flow hedges, before taxTotal other comprehensive income (loss), after taxNoteYears ended December 31,201920182017Net (loss) incomeReclassification adjustments on cash flow hedges, before taxTotal other comprehensive income (loss), after taxQIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods: Gains (losses) on cash flow hedges, before tax Cash flow hedges, before tax Losses on marketable securities, before tax Gains on pensions, before tax Other comprehensive income (loss), before tax Income tax relating to components of other comprehensive income (loss) Comprehensive (loss) income $ (41,455) $ 190,380 $ 40,394 (14) (14) 17,052 25,207 (50,067) (3,888) (9,774) 26,136 13,164 15,433 (23,931) — (796) 212 813 — 1,325 (854) 886 (91,287) 112,046 460 1,034 1,025 (90,827) 113,080 $ (40,430) $ 99,553 $ 153,474 Foreign currency translation adjustments, before tax (12,156) (108,045) 135,945 The accompanying notes are an integral part of these consolidated financial statements. QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment (18) (18) (18) (18) (18) (18) (18) (18) (8,878) (8,878) (8,878) (8,878) (18) (8,878) (8,878) (8,878) (8,878) (110) (110) (110) (110) (8,878) (110) (110) (110) (110) Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants — — — — — — — — — — — — — — — — — (110) (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) — 45,307 45,307 45,307 45,307 45,307 45,307 45,307 45,307 45,307 — — — — — — — — — — — — — — — — — — — — — — — — — — 191 191 191 191 — 191 191 191 191 191 — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — — — — — — — — — — — — — — — — — — — — — — — — — — 45,307 45,307 45,307 45,307 — 45,307 45,307 45,307 45,307 45,307 Net income Net income Net income Net income Net income Net income Net income Net income Net income Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on pension pension pension pension pension pension pension pension pension — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 40,394 40,394 40,394 40,394 — 40,394 40,394 40,394 40,394 40,394 — — — — — — — — — — — — — — — — — — — — — — — — — — 40,394 40,394 40,394 40,394 — 40,394 40,394 40,394 40,394 40,394 — — — — — — — — — — — — — — — — — — 620 620 620 620 620 620 620 620 — — — — 620 — — — — — — — — — — — — — — 620 620 620 620 620 620 620 620 620 Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts Unrealized loss, net on hedging contracts (14) (14) (14) (14) (14) (14) (14) (14) (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (42,489) (42,489) (42,489) (42,489) (42,489) (42,489) (42,489) (42,489) — — — — (42,489) — — — — — — — — — — — — — (42,489) (42,489) (42,489) (42,489) — (42,489) (42,489) (42,489) (42,489) (42,489) (14) (14) Realized loss, net on hedging Realized loss, net on hedging (14) (14) Realized loss, net on hedging Realized loss, net on hedging Realized loss, net on hedging (14) (14) (14) (14) Realized loss, net on hedging Realized loss, net on hedging Realized loss, net on hedging Realized loss, net on hedging contracts contracts contracts contracts contracts contracts contracts contracts contracts (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 19,602 19,602 19,602 19,602 19,602 19,602 19,602 19,602 — — — — 19,602 — — — — — — — — — — — — — 19,602 19,602 19,602 19,602 — 19,602 19,602 19,602 19,602 19,602 Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on marketable securities marketable securities marketable securities marketable securities marketable securities marketable securities marketable securities marketable securities Unrealized loss, net on marketable securities (7) (7) (7) (7) (7) (7) (7) (7) (7) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (786) (786) (786) (786) (786) (786) (786) (786) — — — — (786) — — — — — — — — — — — — — — (786) (786) (786) (786) (786) (786) (786) (786) (786) Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net — — — — — — — — — — — — — — — — — Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares (18) (18) (18) (18) (18) (18) (18) (18) Purchase of treasury shares (18) — — — — — — — — — — — — — — — — — Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan Issuance of common shares in (22) (22) (22) (22) (22) (22) (22) (22) connection with stock plan (22) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (55,913) (55,913) (55,913) (55,913) — (55,913) (55,913) (55,913) (55,913) (55,913) 136,133 136,133 136,133 136,133 136,133 136,133 136,133 136,133 — — — — 136,133 — — — — — — — — — — — — — 136,133 136,133 136,133 136,133 — 136,133 136,133 136,133 136,133 136,133 — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 61,989 61,989 61,989 61,989 61,989 61,989 61,989 61,989 61,989 6,076 6,076 6,076 6,076 6,076 6,076 6,076 6,076 6,076 Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation (22) (22) (22) (22) Share-based compensation (22) (22) (22) (22) (22) — — — — — — — — — — — — — — — — — — 34,442 34,442 34,442 34,442 34,442 34,442 34,442 34,442 34,442 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 34,442 34,442 34,442 34,442 — 34,442 34,442 34,442 34,442 34,442 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy ASU 2016-01 impact of change in accounting policy ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy ASU 2016-16 impact of change in accounting policy ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy — — — — — — — — — — — — — — — — — — — — — — — — — — — (942) (942) (942) (942) (942) (942) (942) (942) (942) 942 942 942 942 942 942 942 942 — — — — 942 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (16,096) (16,096) (16,096) (16,096) — (16,096) (16,096) (16,096) (16,096) (16,096) — — — — — — — — — — — — — — — — — — — — — — — — — — (16,096) (16,096) (16,096) (16,096) — (16,096) (16,096) (16,096) (16,096) (16,096) — — — — — — — — — — — — — — — — — — — — — — — — — — (1,306) (1,306) (1,306) (1,306) — (1,306) (1,306) (1,306) (1,306) (1,306) — — — — — — — — — — — — — — — — — — — — — — — — — — (1,306) (1,306) (1,306) (1,306) — (1,306) (1,306) (1,306) (1,306) (1,306) Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants (18) (18) (18) (18) (18) (18) (18) (18) (18) — — — — — — — — — — — — — — — — — — 71,983 71,983 71,983 71,983 71,983 71,983 71,983 71,983 71,983 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 71,983 71,983 71,983 71,983 — 71,983 71,983 71,983 71,983 71,983 Net income Net income Net income Net income Net income Net income Net income Net income Net income Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on pension pension pension pension pension pension pension pension pension — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 190,380 190,380 190,380 190,380 — 190,380 190,380 190,380 190,380 190,380 — — — — — — — — — — — — — — — — — — — — — — — — — — 190,380 190,380 190,380 190,380 — 190,380 190,380 190,380 190,380 190,380 — — — — — — — — — — — — — — — — — — 754 754 754 754 754 754 754 754 — — — — 754 — — — — — — — — — — — — — — 754 754 754 754 754 754 754 754 754 Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts (14) (14) (14) (14) (14) (14) (14) (14) (14) (14) Realized gain, net on hedging Realized gain, net on hedging (14) (14) Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging (14) (14) (14) (14) Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging contracts contracts contracts contracts contracts contracts contracts contracts contracts (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 22,365 22,365 22,365 22,365 22,365 22,365 22,365 22,365 — — — — 22,365 — — — — — — — — — — — — — 22,365 22,365 22,365 22,365 — 22,365 22,365 22,365 22,365 22,365 (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (7,331) (7,331) (7,331) (7,331) (7,331) (7,331) (7,331) (7,331) — — — — (7,331) — — — — — — — — — — — — — (7,331) (7,331) (7,331) (7,331) — (7,331) (7,331) (7,331) (7,331) (7,331) Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net — — — — — — — — — — — — — — — — — Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares (18) (18) (18) (18) Purchase of treasury shares (18) (18) (18) (18) (18) — — — — — — — — — — — — — — — — — Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan (22) (22) (22) (22) (22) (22) (22) (22) Issuance of common shares in connection with stock plan (22) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (40,357) (40,357) (40,357) (40,357) — (40,357) (40,357) (40,357) (40,357) (40,357) (106,615) (106,615) (106,615) (106,615) (106,615) (106,615) (106,615) (106,615) — — — — (106,615) — — — — — — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 44,769 44,769 44,769 44,769 44,769 44,769 44,769 44,769 44,769 4,412 4,412 4,412 4,412 4,412 4,412 4,412 4,412 4,412 Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation (22) (22) (22) (22) Share-based compensation (22) (22) (22) (22) (22) — — — — — — — — — — — — — — — — — — 40,113 40,113 40,113 40,113 40,113 40,113 40,113 40,113 40,113 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 40,113 40,113 40,113 40,113 — 40,113 40,113 40,113 40,113 40,113 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy 138 Net loss Net loss Net loss Net loss Net loss Net loss Net loss Net loss Net loss — — — — — — — — — — — — — — — — — — — — — — — — — — — (316) (316) (316) (316) (316) (316) (316) (316) (316) — — — — — — — — — — — — — — — — — — — — — — — — — — — (316) (316) (316) (316) (316) (316) (316) (316) (316) — — — — — — — — — — — — — — — — — — — — — — — — — — (41,455) (41,455) (41,455) (41,455) — (41,455) (41,455) (41,455) (41,455) (41,455) — — — — — — — — — — — — — — — — — — — — — — — — — — (41,455) (41,455) (41,455) (41,455) — (41,455) (41,455) (41,455) (41,455) (41,455) Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants (18) (18) (18) (18) (18) (18) (18) (18) (18) — — — — — — — — — — — — — — — — — (31,067) (31,067) (31,067) (31,067) — (31,067) (31,067) (31,067) (31,067) (31,067) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 68,761 68,761 68,761 68,761 68,761 68,761 68,761 68,761 68,761 (4) (4) (4) (4) (4) (4) (4) (4) (4) Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (437) (437) (437) (437) (437) (437) (437) (437) (437) — — — — — — — — — — — — — — — — — — (437) (437) (437) (437) (437) (437) (437) (437) (437) Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on (14) (14) (14) (14) (14) (14) (14) (14) (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 17,052 17,052 17,052 17,052 17,052 17,052 17,052 17,052 17,052 — — — — — — — — — — — — — — — — — 17,052 17,052 17,052 17,052 17,052 17,052 17,052 17,052 — 17,052 pension pension pension pension pension pension pension pension pension hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts (in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018NoteYears ended December 31,201920182017Net (loss) incomeReclassification adjustments on cash flow hedges, before taxTotal other comprehensive income (loss), after tax(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018239,707 $ 2,812 $ 1,794,665 $ 1,263,464 $ (333,839) (5,147) $ (120,006) $ 2,607,096 Capital repayment (18) (8,878) (110) (244,319) 191 — (244,429) (42,489) — (42,489) 136,133 — 136,133 — (1,909) (60,970) (60,970) (55,913) — 2,593 61,989 6,076 Share-based compensation (22) 34,442 — — — 34,442 230,829 $ 2,702 $ 1,630,095 $ 1,247,945 $ (220,759) (4,272) $ (118,987) $ 2,540,996 — (942) 942 — — — (16,096) Issuance of warrants Net income Unrealized gain, net on pension Unrealized loss, net on (14) hedging contracts Realized loss, net on hedging (14) contracts Unrealized loss, net on marketable securities (7) Translation adjustment, net Purchase of treasury shares (18) Issuance of common shares in (22) connection with stock plan ASU 2016-01 impact of change in accounting policy ASU 2016-16 impact of change in accounting policy ASC 606 impact of change in accounting policy Issuance of warrants (18) — — — — — — — — — — — — — — — — — — — — — — — — — — — — 45,307 40,394 — — — — — — — — — — — — — — — — — — (16,096) — (1,306) 71,983 — — — — 620 19,602 (786) — — — — 754 22,365 (7,331) (106,615) — — — — — — — — — — — — — — — — — — — — — — — — — — — 45,307 40,394 620 19,602 (786) (1,306) 71,983 190,380 754 22,365 (7,331) — (106,615) — (2,871) (104,685) (104,685) Unrealized gain, net on pension Unrealized gain, net on hedging contracts (14) Realized gain, net on hedging contracts (14) Translation adjustment, net Purchase of treasury shares (18) Issuance of common shares in connection with stock plan (22) Share-based compensation (22) — — — — — — — — — — — — — — 190,380 — — — — — 40,113 — — — — 40,113 (40,357) — 1,823 44,769 4,412 Consolidated Financial Statements — — — — — — — — — Net income F I N A N C I A L R E S U LT S 230,829 $ 2,702 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 239,707 $ 2,812 $ 1,742,191 $ 1,379,624 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ 1,794,665 $ 1,263,464 $ (310,644) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) $ (333,839) (5,320) $ (178,903) $ 2,634,970 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (5,147) $ (120,006) $ 2,607,096 (18) (18) (18) (18) (18) (18) (18) (18) (18) Net income Capital repayment Issuance of warrants ASC 842 impact of change in Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment accounting policy Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Net loss Net income Net income Net income Net income Net income Net income Net income Net income Conversion of warrants Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized loss, net on pension pension pension pension pension pension pension pension pension pension Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized gain, net on hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts (14) (14) Realized loss, net on hedging Realized loss, net on hedging (14) Realized loss, net on hedging Realized loss, net on hedging (14) (14) (14) (14) Realized loss, net on hedging Realized loss, net on hedging Realized loss, net on hedging Realized loss, net on hedging (14) Realized loss, net on hedging (14) Realized gain, net on hedging contracts contracts contracts contracts contracts contracts contracts contracts contracts contracts Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Translation adjustment, net marketable securities marketable securities marketable securities marketable securities marketable securities marketable securities marketable securities marketable securities Unrealized loss, net on marketable securities Unrealized loss, net on hedging contracts (14) (14) (14) (14) (14) (14) (14) (14) (14) (7) (7) (7) (7) (7) (7) (7) (7) — (8,878) (8,878) (18) (8,878) (8,878) (8,878) (8,878) (8,878) (8,878) — (110) (110) (8,878) (110) (110) (110) (110) (110) (110) — — — — — — — — — — — — — — — — — — — — — — — — — — — (14) — — — — — — — — — — — — (14) — — — — — — (7) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Purchase of treasury shares Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net (18) Translation adjustment, net — — — — — — — — — — — — — — — — — — — (22) (18) (18) (18) (18) (18) (18) (18) Purchase of treasury shares (18) Issuance of common shares in Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares connection with stock plan Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Tax withholding related to connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan vesting of stock awards Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation (22) (22) (22) (22) (22) (22) (22) Issuance of common shares in (22) (22) connection with stock plan (22) (22) (22) Share-based compensation (22) (22) (22) (22) (22) (22) — — — — (18) — — — — — — — — — — — — — — — — — — (22) — — — — — — — — — — — — — — — — (110) — (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) (244,319) (316) — — — — — — — — — 45,307 45,307 45,307 45,307 45,307 45,307 45,307 45,307 — — — — — — — — — — (31,067) — — — — — — — — — — 45,307 — — — — — — — — (41,455) 40,394 40,394 40,394 — 40,394 40,394 40,394 40,394 40,394 (37,698) — — — — — — — — — — 40,394 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (121,698) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 191 191 — 191 191 191 191 191 191 191 — (316) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — (244,429) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,056 — — 620 — 620 620 — — 620 — 620 — 620 620 620 — 620 (437) — — — — — — — — — — — — — — — — — — — — 68,761 — — — — — — — — — — 45,307 45,307 45,307 — 45,307 45,307 45,307 45,307 45,307 (41,455) 40,394 40,394 — 40,394 40,394 40,394 40,394 40,394 40,394 (4) 620 620 620 620 620 620 620 620 (437) — 45,307 40,394 620 (42,489) (42,489) (42,489) (42,489) (42,489) (42,489) (42,489) (42,489) 17,052 — — — (42,489) — — — — — — 19,602 19,602 19,602 19,602 19,602 19,602 19,602 19,602 (3,888) — — — 19,602 — — — — — — (786) (786) (786) (786) (786) (786) (786) (786) (11,702) — — — (786) — — — — — — — — — — — — — — — — — — (42,489) (42,489) (42,489) — (42,489) (42,489) (42,489) (42,489) (42,489) 17,052 (42,489) — — — — — — — — — 19,602 19,602 19,602 — 19,602 19,602 19,602 19,602 19,602 (3,888) 19,602 — — — — — — — — — — (786) (786) (786) (786) (786) (786) (786) (786) (11,702) (786) 136,133 136,133 136,133 136,133 136,133 136,133 136,133 136,133 — (1,987) — — — 136,133 — — — — — (74,450) — — — — — — — — — (74,450) 136,133 136,133 136,133 — 136,133 136,133 136,133 136,133 136,133 136,133 — 3,622 — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) — (1,909) 123,773 (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) 2,075 (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) (60,970) — — — — — — — — — (55,913) (55,913) — (55,913) (55,913) (55,913) (55,913) (55,913) (55,913) — (55,913) — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — 2,593 — (1,448) — 2,593 61,989 61,989 61,989 61,989 61,989 61,989 61,989 61,989 (51,147) 61,989 6,076 6,076 6,076 6,076 6,076 6,076 6,076 6,076 (51,147) 6,076 (22) — — — — — — — — — — — — — — — — — — — 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 — 34,442 34,442 34,442 34,442 34,442 34,442 34,442 34,442 34,442 65,893 — — — — — — — — — $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,630,095 $ 1,247,945 $ 1,777,017 $ 1,178,457 $ 1,630,095 $ 1,247,945 — 230,829 $ 2,702 — — — — — — — — — — — — — — — — — — — $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (220,759) $ (309,619) 34,442 34,442 — — 34,442 — — 34,442 34,442 — — 34,442 — 34,442 — 34,442 — 65,893 — (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (4,272) $ (118,987) $ 2,540,996 (3,077) $ (111,966) $ 2,536,591 (4,272) $ (118,987) $ 2,540,996 34,442 — ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of ASU 2016-01 impact of change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy ASU 2016-01 impact of change in accounting policy The accompanying notes are an integral part of these consolidated financial statements. — — — — — — — — — — — — — — — — — — — — — — — — — — — (942) (942) (942) (942) (942) (942) (942) (942) (942) 942 942 942 942 942 942 942 942 — — — 942 — — — — — — — — — — — — — — — — — — — — — — — — ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of ASU 2016-16 impact of change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy change in accounting policy ASU 2016-16 impact of change in accounting policy ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in ASC 606 impact of change in accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy — — — — — — — — — — — — — — — — — — — — — — — — — — (16,096) (16,096) (16,096) — (16,096) (16,096) (16,096) (16,096) (16,096) (16,096) — — — — — — — — — — — — — — — — — — — — — — — — — — (16,096) (16,096) (16,096) — (16,096) (16,096) (16,096) (16,096) (16,096) (16,096) — — — — — — — — — — — — — — — — — — — — — — — — — — (1,306) (1,306) (1,306) — (1,306) (1,306) (1,306) (1,306) (1,306) (1,306) — — — — — — — — — — — — — — — — — — — — — — — — — — (1,306) (1,306) (1,306) — (1,306) (1,306) (1,306) (1,306) (1,306) (1,306) Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants Issuance of warrants (18) (18) (18) (18) (18) (18) (18) (18) (18) — — — — — — — — — — — — — — — — — — 71,983 71,983 71,983 71,983 71,983 71,983 71,983 71,983 71,983 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 71,983 71,983 71,983 — 71,983 71,983 71,983 71,983 71,983 71,983 Net income Net income Net income Net income Net income Net income Net income Net income Net income Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on pension pension pension pension pension pension pension pension pension — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 190,380 190,380 190,380 — 190,380 190,380 190,380 190,380 190,380 190,380 — — — — — — — — — — — — — — — — — — — — — — — — — — 190,380 190,380 190,380 — 190,380 190,380 190,380 190,380 190,380 190,380 — — — — — — — — — — — — — — — — — — 754 754 754 754 754 754 754 754 — — — 754 — — — — — — — — — — — — — — — 754 754 754 754 754 754 754 754 754 Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts (14) (14) (14) (14) (14) (14) (14) (14) (14) (14) Realized gain, net on hedging (14) Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging Realized gain, net on hedging (14) (14) (14) (14) (14) Realized gain, net on hedging contracts contracts contracts contracts contracts contracts contracts contracts contracts — — — (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 22,365 22,365 22,365 22,365 22,365 22,365 22,365 22,365 — — — 22,365 — — — — — — — — — — — — — — 22,365 22,365 22,365 — 22,365 22,365 22,365 22,365 22,365 22,365 — — — (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (7,331) (7,331) (7,331) (7,331) (7,331) (7,331) (7,331) (7,331) — — — (7,331) — — — — — — — — — — — — — — (7,331) (7,331) (7,331) — (7,331) (7,331) (7,331) (7,331) (7,331) (7,331) Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net Translation adjustment, net — — — — — — — — — — — — — — — — — Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares (18) (18) (18) Purchase of treasury shares (18) (18) (18) (18) (18) (18) — — — — — — — — — — — — — — — — — Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in Issuance of common shares in connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan connection with stock plan (22) (22) (22) Issuance of common shares in (22) (22) (22) (22) (22) connection with stock plan (22) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (40,357) (40,357) (40,357) — (40,357) (40,357) (40,357) (40,357) (40,357) (40,357) (106,615) (106,615) (106,615) (106,615) (106,615) (106,615) (106,615) (106,615) — — — (106,615) — — — — — — — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (106,615) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) — (2,871) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) (104,685) — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 — 1,823 44,769 44,769 44,769 44,769 44,769 44,769 44,769 44,769 44,769 4,412 4,412 4,412 4,412 4,412 4,412 4,412 4,412 4,412 Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation (22) (22) (22) Share-based compensation (22) (22) (22) (22) (22) (22) — — — — — — — — — — — — — — — — — — 40,113 40,113 40,113 40,113 40,113 40,113 40,113 40,113 40,113 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 40,113 40,113 40,113 — 40,113 40,113 40,113 40,113 40,113 40,113 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 230,829 $ 2,702 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ 1,742,191 $ 1,379,624 $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) $ (310,644) (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 (5,320) $ (178,903) $ 2,634,970 ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in ASC 842 impact of change in accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy accounting policy — — — — — — — — — — — — — — — — — — — — — — — — — — — (316) (316) (316) (316) (316) (316) (316) (316) (316) — — — — — — — — — — — — — — — — — — — — — — — — — — — (316) (316) (316) (316) (316) (316) (316) (316) (316) Net loss Net loss Net loss Net loss Net loss Net loss Net loss Net loss Net loss — — — — — — — — — — — — — — — — — — — — — — — — — — (41,455) (41,455) (41,455) — (41,455) (41,455) (41,455) (41,455) (41,455) (41,455) — — — — — — — — — — — — — — — — — — — — — — — — — — (41,455) (41,455) (41,455) — (41,455) (41,455) (41,455) (41,455) (41,455) (41,455) Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants Conversion of warrants (18) (18) (18) (18) (18) (18) (18) (18) — — — (18) — — — — — — — — — — — — — — (31,067) (31,067) (31,067) — (31,067) (31,067) (31,067) (31,067) (31,067) (31,067) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) (37,698) — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 — 2,056 68,761 68,761 68,761 68,761 68,761 68,761 68,761 68,761 68,761 (4) (4) (4) (4) (4) (4) (4) (4) (4) Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on Unrealized loss, net on pension pension pension pension pension pension pension pension pension — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (437) (437) (437) (437) (437) (437) (437) (437) — — — (437) — — — — — — — — — — — — — — 139 (437) (437) (437) (437) (437) (437) (437) (437) — (437) Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on Unrealized gain, net on (14) (14) (14) (14) (14) (14) (14) (14) (14) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 17,052 17,052 17,052 17,052 17,052 17,052 17,052 17,052 17,052 — — — — — — — — — — — — — — — — — 17,052 17,052 17,052 17,052 17,052 17,052 17,052 17,052 — 17,052 hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts hedging contracts QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Balance at December 31,2019(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018(in thousands)NoteCommon SharesAdditionalPaid-In CapitalRetainedEarningsAccumulated OtherComprehensive Income(Loss)Treasury SharesTotal EquitySharesAmountSharesAmountBalance at December 31,2016Balance at December 31,2017Balance at December 31,2018Realized gain, net on hedging (14) contracts Translation adjustment, net Purchase of treasury shares (18) Issuance of common shares in (22) connection with stock plan Tax withholding related to (22) vesting of stock awards — — — — — — — — — — — — — — — — — — — — — — (121,698) — 3,622 123,773 2,075 — — (3,888) — (3,888) (11,702) — (11,702) — (1,987) (74,450) (74,450) — (1,448) (51,147) (51,147) Share-based compensation (22) 65,893 — — — 65,893 230,829 $ 2,702 $ 1,777,017 $ 1,178,457 $ (309,619) (3,077) $ (111,966) $ 2,536,591 The accompanying notes are an integral part of these consolidated financial statements. QIAGEN N.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects of.active Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects businesses acquired: of.active businesses acquired: of.active businesses acquired: of.active businesses acquired: of.active businesses acquired: Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Cash flows from operating activities: Cash flows from operating activities: Cash flows from operating activities: Cash flows from operating activities: Net (loss) income Net (loss) income Net (loss) income Net (loss) income Depreciation and amortization Non-cash impairments Amortization of debt discount and issuance costs Share-based compensation expense Deferred income tax (benefit) expense Loss (gain) on marketable securities Reversals of contingent consideration Net changes in operating assets and liabilities: Accounts receivable Inventories Other long-term assets Accounts payable Prepaid expenses and other current assets Accrued and other current liabilities Income taxes Other long-term liabilities Cash flows from operating activities: Net (loss) income Proceeds from divestiture Cash received (paid) for collateral asset Other investing activities Cash flows from financing activities: Cash flows from investing activities: Purchases of property, plant and equipment Proceeds from sale of equipment Purchases of intangible assets Purchases of investments, net Cash paid for acquisitions, net of cash acquired Purchases of short-term investments Proceeds from redemptions of short-term investments Depreciation and amortization Depreciation and amortization Depreciation and amortization Depreciation and amortization Non-cash impairments Non-cash impairments Non-cash impairments Non-cash impairments Amortization of debt discount and issuance costs Amortization of debt discount and issuance costs Amortization of debt discount and issuance costs Amortization of debt discount and issuance costs Share-based compensation expense Share-based compensation expense Share-based compensation expense Share-based compensation expense Deferred income tax (benefit) expense Deferred income tax (benefit) expense Deferred income tax (benefit) expense Deferred income tax (benefit) expense Loss (gain) on marketable securities Loss (gain) on marketable securities Loss (gain) on marketable securities Loss (gain) on marketable securities Reversals of contingent consideration Reversals of contingent consideration Reversals of contingent consideration Reversals of contingent consideration Net changes in operating assets and liabilities: Net changes in operating assets and liabilities: Net changes in operating assets and liabilities: Net changes in operating assets and liabilities: Accounts receivable Accounts receivable Accounts receivable Accounts receivable Inventories Inventories Inventories Inventories Prepaid expenses and other current assets Prepaid expenses and other current assets Prepaid expenses and other current assets Prepaid expenses and other current assets Other long-term assets Other long-term assets Other long-term assets Other long-term assets Accounts payable Accounts payable Accounts payable Accounts payable Accrued and other current liabilities Accrued and other current liabilities Accrued and other current liabilities Accrued and other current liabilities Income taxes Income taxes Income taxes Income taxes Other long-term liabilities Other long-term liabilities Other long-term liabilities Other long-term liabilities Cash flows from investing activities: Cash flows from investing activities: Cash flows from investing activities: Cash flows from investing activities: Purchases of property, plant and equipment Purchases of property, plant and equipment Purchases of property, plant and equipment Purchases of property, plant and equipment Proceeds from sale of equipment Proceeds from sale of equipment Proceeds from sale of equipment Proceeds from sale of equipment Purchases of intangible assets Purchases of intangible assets Purchases of intangible assets Purchases of intangible assets Purchases of investments, net Purchases of investments, net Purchases of investments, net Purchases of investments, net Cash paid for acquisitions, net of cash acquired Cash paid for acquisitions, net of cash acquired Cash paid for acquisitions, net of cash acquired Cash paid for acquisitions, net of cash acquired Purchases of short-term investments Purchases of short-term investments Purchases of short-term investments Purchases of short-term investments Proceeds from redemptions of short-term investments Proceeds from redemptions of short-term investments Proceeds from redemptions of short-term investments Proceeds from redemptions of short-term investments Proceeds from divestiture Proceeds from divestiture Proceeds from divestiture Proceeds from divestiture Cash received (paid) for collateral asset Cash received (paid) for collateral asset Cash received (paid) for collateral asset Cash received (paid) for collateral asset Other investing activities Other investing activities Other investing activities Other investing activities Cash flows from financing activities: Cash flows from financing activities: Cash flows from financing activities: Cash flows from financing activities: Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs 140 Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes $ (41,455) $ (41,455) $ (41,455) $ (41,455) $ (41,455) $ 190,380 $ 190,380 $ 190,380 $ 190,380 $ 40,394 $ 190,380 $ 40,394 $ 40,394 $ 40,394 231,458 231,458 231,458 231,458 231,458 206,436 206,436 206,436 206,436 216,448 216,448 206,436 216,448 216,448 $ 40,394 216,448 (6) (6) (6) (6) (6) 144,830 144,830 144,830 144,830 144,830 17,020 17,020 17,020 17,020 5,137 17,020 5,137 5,137 5,137 5,137 40,763 40,763 40,763 40,763 40,763 35,537 35,537 35,537 35,537 65,893 65,893 65,893 65,893 65,893 40,113 40,113 40,113 40,113 24,773 24,773 24,773 24,773 35,537 34,442 34,442 34,442 40,113 34,442 (55,362) (55,362) (55,362) (55,362) (55,362) (23,272) (23,272) (23,272) (23,272) 60,176 60,176 60,176 (23,272) 60,176 24,773 34,442 60,176 (22) (22) (22) (22) (22) (17) (17) (17) (17) (17) 2,867 2,867 2,867 2,867 2,867 (2,725) (2,725) (2,725) (2,725) (15) (15) (15) (15) (15) (10,433) (10,433) (10,433) (10,433) (10,433) — — — — 1,055 (2,725) 1,055 1,055 1,055 1,055 (3,269) (3,269) (3,269) (3,269) — (3,269) (3,394) (3,394) (3,394) (3,394) (3,394) (8,834) (8,834) (8,834) (8,834) (4,521) (4,521) (4,521) (8,834) (4,521) (39,578) (39,578) (39,578) (39,578) (39,578) (41,813) (41,813) (41,813) (41,813) (34,165) (34,165) (41,813) (34,165) (34,165) (30,028) (30,028) (30,028) (30,028) (30,028) (36,918) (36,918) (36,918) (36,918) (21,633) (36,918) (21,633) (21,633) (21,633) 18,626 18,626 18,626 18,626 18,626 (9,942) (9,942) (9,942) (9,942) (5,245) (5,245) (5,245) (9,942) (5,245) (1,406) (1,406) (1,406) (1,406) (1,406) (30,312) (30,312) (30,312) (30,312) (16,786) (16,786) (30,312) (16,786) (16,786) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (8) (8) (8) (8) (8) 9,252 9,252 9,252 9,252 9,252 6,993 6,993 6,993 6,993 4,321 4,321 4,321 4,321 6,993 19,913 19,913 19,913 19,913 19,913 (13,317) (13,317) (13,317) (13,317) 2,828 (13,317) 2,828 2,828 2,828 (6,782) (6,782) (6,782) (6,782) (6,782) 14,239 14,239 14,239 14,239 (41,266) (41,266) (41,266) (41,266) 14,239 (14,321) (14,321) (14,321) (14,321) (14,321) 15,911 15,911 15,911 15,911 24,090 24,090 24,090 15,911 24,090 330,843 330,843 330,843 330,843 330,843 359,496 359,496 359,496 359,496 286,779 359,496 286,779 286,779 286,779 (117,950) (117,950) (117,950) (117,950) (117,950) (109,773) (109,773) (109,773) (109,773) (90,081) (109,773) (90,081) (90,081) (90,081) (4,521) (34,165) (21,633) (5,245) (16,786) 4,321 2,828 (41,266) 24,090 286,779 (90,081) — — — — — — — — — 42 42 42 42 — 42 (156,934) (156,934) (156,934) (156,934) (156,934) (40,990) (40,990) (40,990) (40,990) (34,324) (34,324) (40,990) (34,324) (34,324) (5,170) (5,170) (5,170) (5,170) (5,170) (9,398) (9,398) (9,398) (9,398) (4,777) (4,777) (4,777) (4,777) (9,398) (68,058) (68,058) (68,058) (68,058) (68,058) (172,832) (172,832) (172,832) (172,832) (50,549) (172,832) (50,549) (50,549) (50,549) (293,959) (293,959) (293,959) (293,959) (293,959) (568,002) (568,002) (568,002) (568,002) (450,564) (450,564) (450,564) (568,002) (450,564) 396,098 396,098 396,098 396,098 396,098 691,765 691,765 691,765 691,765 189,006 691,765 189,006 189,006 189,006 1,000 1,000 1,000 1,000 1,000 16,394 16,394 16,394 16,394 — 16,394 — — — 22,685 22,685 22,685 22,685 22,685 (3,461) (3,461) (3,461) (3,461) (20,707) (20,707) (20,707) (20,707) (3,461) 10 10 10 10 (15,059) 10 (15,059) (15,059) (15,059) (2,310) (15,059) (2,310) (2,310) (2,310) (222,278) (222,278) (222,278) (222,278) (222,278) (211,356) (211,356) (211,356) (211,356) (464,264) (211,356) (464,264) (464,264) (464,264) (34,324) (4,777) (50,549) (450,564) 189,006 — (20,707) (2,310) (464,264) — — — — — — — — — — — — — — 329,875 — 329,875 — 329,875 — 329,875 — 329,875 494,879 — 494,879 494,879 494,879 394,391 494,879 394,391 394,391 394,391 (97,277) — (97,277) (97,277) (97,277) (73,646) (97,277) (73,646) (73,646) (73,646) 394,391 (73,646) (13) (13) (13) (13) (13) (17) (17) (17) (17) (17) (5) (5) (5) (5) (5) (7) (7) (7) (7) (7) (7) (7) (7) (7) (7) (5) (5) (5) (5) (5) (14) (14) (14) (14) (14) (16) (16) (16) (16) (16) (16) (16) (16) (16) (16) (16) (16) (16) (16) (16) Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs (18) (18) (18) (18) (18) — — — — — 72,406 72,406 72,406 72,406 45,396 45,396 45,396 45,396 72,406 45,396 Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment (18) (18) (18) (18) (18) — — — — — — (243,945) — (243,945) — (243,945) — (243,945) — (243,945) Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes (16) (16) (16) (16) (16) 134,737 134,737 134,737 134,737 134,737 — — — — — — — — — — (in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activitiesBalance at December 31,2019(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activities(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activities(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activities(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activitiesOther items, net including fair value changes in derivatives (3,394) (8,834) (4,521) Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects of.active Cash flows from operating activities: Net (loss) income businesses acquired: Depreciation and amortization Non-cash impairments Amortization of debt discount and issuance costs Share-based compensation expense Deferred income tax (benefit) expense Loss (gain) on marketable securities Reversals of contingent consideration Net changes in operating assets and liabilities: Accounts receivable Inventories Other long-term assets Accounts payable Prepaid expenses and other current assets Accrued and other current liabilities Income taxes Other long-term liabilities Cash flows from investing activities: Purchases of property, plant and equipment Proceeds from sale of equipment F I N A N C I A L R E S U LT S Consolidated Financial Statements Purchases of intangible assets Purchases of investments, net Cash paid for acquisitions, net of cash acquired Purchases of short-term investments Proceeds from redemptions of short-term investments Proceeds from divestiture Cash received (paid) for collateral asset Other investing activities Cash flows from operating activities: Cash flows from operating activities: Cash flows from operating activities: Cash flows from operating activities: Cash flows from operating activities: Net (loss) income Net (loss) income Net (loss) income Net (loss) income Cash flows from financing activities: Net (loss) income Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects of.active Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects Proceeds from long-term debt, net of issuance costs businesses acquired: of.active businesses acquired: of.active businesses acquired: of.active businesses acquired: Proceeds from issuance of cash convertible notes, net of issuance costs of.active businesses acquired: $ (41,455) $ 190,380 $ 40,394 231,458 206,436 216,448 (6) 144,830 17,020 5,137 40,763 35,537 24,773 (22) 65,893 40,113 34,442 (17) (55,362) (23,272) 60,176 2,867 (2,725) 1,055 (15) (10,433) — (3,269) (4) (4) (8) (13) (17) (39,578) (41,813) (34,165) (30,028) (36,918) (21,633) 18,626 (9,942) (5,245) (1,406) (30,312) (16,786) 9,252 6,993 4,321 19,913 (13,317) 2,828 (6,782) 14,239 (41,266) (14,321) 15,911 24,090 330,843 359,496 286,779 (117,950) (109,773) (90,081) — — 42 (156,934) (40,990) (34,324) (5,170) (9,398) (4,777) (5) (68,058) (172,832) (50,549) (7) (293,959) (568,002) (450,564) (7) (5) 396,098 691,765 189,006 1,000 16,394 — (14) 22,685 (3,461) (20,707) 10 (15,059) (2,310) (222,278) (211,356) (464,264) $ (41,455) $ (41,455) $ (41,455) $ (41,455) $ (41,455) $ 190,380 $ 190,380 $ 190,380 $ 190,380 $ 40,394 $ 190,380 $ 40,394 $ 40,394 $ 40,394 Depreciation and amortization Non-cash impairments Depreciation and amortization Depreciation and amortization Depreciation and amortization Depreciation and amortization Purchase of call option related to cash convertible notes Non-cash impairments Non-cash impairments Non-cash impairments Non-cash impairments Amortization of debt discount and issuance costs Proceeds from issuance of warrants, net of issuance costs Amortization of debt discount and issuance costs Amortization of debt discount and issuance costs Amortization of debt discount and issuance costs Amortization of debt discount and issuance costs Share-based compensation expense Share-based compensation expense Share-based compensation expense Share-based compensation expense Share-based compensation expense Capital repayment Proceeds from exercise of call option related to cash convertible notes Deferred income tax (benefit) expense Loss (gain) on marketable securities Reversals of contingent consideration Deferred income tax (benefit) expense Deferred income tax (benefit) expense Deferred income tax (benefit) expense Deferred income tax (benefit) expense Payment of intrinsic value of cash convertible notes Loss (gain) on marketable securities Loss (gain) on marketable securities Loss (gain) on marketable securities Loss (gain) on marketable securities Repayment of long-term debt Reversals of contingent consideration Reversals of contingent consideration Reversals of contingent consideration Reversals of contingent consideration Principal payments on capital leases Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Other items, net including fair value changes in derivatives Net changes in operating assets and liabilities: Proceeds from issuance of common shares Net changes in operating assets and liabilities: Net changes in operating assets and liabilities: Net changes in operating assets and liabilities: Net changes in operating assets and liabilities: Tax withholding related to vesting of stock awards Accounts receivable Purchase of treasury shares Accounts receivable Accounts receivable Accounts receivable Inventories Other financing activities Inventories Inventories Inventories Prepaid expenses and other current assets Prepaid expenses and other current assets Prepaid expenses and other current assets Prepaid expenses and other current assets Prepaid expenses and other current assets Other long-term assets Other long-term assets Other long-term assets Other long-term assets Accounts payable Accounts payable Accounts payable Accounts payable Accounts receivable Inventories Other long-term assets Accounts payable Accrued and other current liabilities Income taxes Other long-term liabilities Cash flows from investing activities: Purchases of property, plant and equipment Proceeds from sale of equipment Purchases of intangible assets Purchases of investments, net Net (decrease) increase in cash, cash equivalents and restricted cash Accrued and other current liabilities Accrued and other current liabilities Accrued and other current liabilities Accrued and other current liabilities Cash and cash equivalents, beginning of period Income taxes Income taxes Income taxes Income taxes Other long-term liabilities Other long-term liabilities Other long-term liabilities Other long-term liabilities Supplemental cash flow disclosures: Cash paid for interest Cash flows from investing activities: Cash flows from investing activities: Cash flows from investing activities: Cash flows from investing activities: Cash paid for income taxes Purchases of property, plant and equipment Purchases of property, plant and equipment Purchases of property, plant and equipment Purchases of property, plant and equipment Supplemental disclosure of non-cash investing activities: Proceeds from sale of equipment Proceeds from sale of equipment Proceeds from sale of equipment Proceeds from sale of equipment Equipment purchased through capital lease Purchases of intangible assets Purchases of intangible assets Purchases of intangible assets Purchases of intangible assets The accompanying notes are an integral part of these consolidated financial statements. Purchases of investments, net Purchases of investments, net Purchases of investments, net Purchases of investments, net Cash paid for acquisitions, net of cash acquired Cash paid for acquisitions, net of cash acquired Cash paid for acquisitions, net of cash acquired Cash paid for acquisitions, net of cash acquired Cash paid for acquisitions, net of cash acquired Purchases of short-term investments Purchases of short-term investments Purchases of short-term investments Purchases of short-term investments Purchases of short-term investments Proceeds from redemptions of short-term investments Proceeds from redemptions of short-term investments Proceeds from redemptions of short-term investments Proceeds from redemptions of short-term investments Proceeds from redemptions of short-term investments Proceeds from divestiture Proceeds from divestiture Proceeds from divestiture Proceeds from divestiture Proceeds from divestiture Cash received (paid) for collateral asset Cash received (paid) for collateral asset Cash received (paid) for collateral asset Cash received (paid) for collateral asset Cash received (paid) for collateral asset (5) (5) (5) (5) (5) (7) (7) (7) (7) (7) (7) (7) (7) (7) (7) (5) (5) (5) (5) (5) (14) (14) (14) (14) (14) $ 29,721 $ 25,902 $ 20,252 $ 41,474 (117,950) (117,950) (117,950) (117,950) (117,950) $ 29,317 (109,773) (109,773) (109,773) (109,773) $ 40,499 (90,081) (109,773) (90,081) (90,081) (90,081) — — — — — — — — — 42 42 42 42 — 42 $ — (156,934) (156,934) (156,934) (156,934) (156,934) $ — (40,990) (40,990) (40,990) (40,990) $ 88 (34,324) (40,990) (34,324) (34,324) (34,324) (5,170) (5,170) (5,170) (5,170) (5,170) (9,398) (9,398) (9,398) (9,398) (4,777) (9,398) (4,777) (4,777) (4,777) (4,777) (68,058) (68,058) (68,058) (68,058) (68,058) (172,832) (172,832) (172,832) (172,832) (50,549) (172,832) (50,549) (50,549) (50,549) (293,959) (293,959) (293,959) (293,959) (293,959) (568,002) (568,002) (568,002) (568,002) (450,564) (568,002) (450,564) (450,564) (450,564) 396,098 396,098 396,098 396,098 396,098 691,765 691,765 691,765 691,765 189,006 691,765 189,006 189,006 189,006 1,000 1,000 1,000 1,000 1,000 16,394 16,394 16,394 16,394 — 16,394 — — — — 22,685 22,685 22,685 22,685 22,685 (3,461) (3,461) (3,461) (3,461) (20,707) (20,707) (20,707) (20,707) (3,461) Other investing activities Other investing activities Other investing activities Other investing activities Other investing activities 10 10 10 10 (15,059) 10 (15,059) (15,059) (15,059) (2,310) (15,059) (2,310) (2,310) (2,310) (2,310) (222,278) (222,278) (222,278) (222,278) (222,278) (211,356) (211,356) (211,356) (211,356) (464,264) (464,264) (464,264) (464,264) (211,356) Cash flows from financing activities: Cash flows from financing activities: Cash flows from financing activities: Cash flows from financing activities: Cash flows from financing activities: Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs Proceeds from long-term debt, net of issuance costs (16) (16) (16) (16) (16) — — — — — — 329,875 — 329,875 — 329,875 — 329,875 — 329,875 Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Proceeds from issuance of cash convertible notes, net of issuance costs Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes Purchase of call option related to cash convertible notes Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs Proceeds from issuance of warrants, net of issuance costs (16) (16) (16) (16) (16) (16) (16) (16) (16) (16) (18) (18) (18) (18) (18) — — — — — — — — — — — — 494,879 — 494,879 494,879 494,879 394,391 494,879 394,391 394,391 394,391 (97,277) — (97,277) (97,277) (97,277) (73,646) (97,277) (73,646) (73,646) (73,646) — 72,406 72,406 72,406 72,406 45,396 72,406 45,396 45,396 45,396 45,396 Capital repayment Capital repayment Capital repayment Capital repayment Capital repayment (18) (18) (18) (18) (18) — — — — — — (243,945) — (243,945) — (243,945) — (243,945) 141 — (243,945) Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes Proceeds from exercise of call option related to cash convertible notes (16) (16) (16) (16) (16) 134,737 134,737 134,737 134,737 134,737 — — — — — — — — — — (16) (16) (16) (6) (6) (6) (6) (18) (6) (22) (17) (18) (22) (22) (22) (22) (16) (17) (17) (17) (17) (16) (16) (15) (15) (15) (15) (15) (4) (4) (4) (4) (4) (4) (18) (4) (4) (4) (4) (8) (8) (8) (8) (8) (13) (13) (13) (13) (13) — — 329,875 35,537 35,537 35,537 17,020 17,020 17,020 206,436 206,436 206,436 17,020 5,137 5,137 5,137 35,537 24,773 24,773 24,773 206,436 216,448 216,448 216,448 494,879 206,436 (97,277) 17,020 72,406 35,537 — 231,458 231,458 231,458 231,458 231,458 — 144,830 144,830 144,830 144,830 144,830 — 40,763 40,763 40,763 40,763 40,763 — 65,893 65,893 65,893 65,893 65,893 134,737 (55,362) (55,362) (55,362) (55,362) (55,362) (133,763) 2,867 2,867 2,867 2,867 (506,400) (10,433) (10,433) (10,433) (10,433) (10,433) — (3,394) (3,394) (3,394) (3,394) (3,394) 2,075 394,391 216,448 (73,646) 5,137 45,396 24,773 — (243,945) 34,442 40,113 34,442 34,442 34,442 — 60,176 (23,272) 60,176 60,176 60,176 — 1,055 (2,725) 1,055 1,055 1,055 — (3,269) (3,269) (3,269) (3,269) (1,402) (4,521) (8,834) (4,521) (4,521) (4,521) 6,075 40,113 40,113 40,113 40,113 — (23,272) (23,272) (23,272) (23,272) — (2,725) (2,725) (2,725) (2,725) — — (1,308) (8,834) (8,834) (8,834) (8,834) 4,412 2,867 — — — — (49,998) (39,578) (39,578) (39,578) (39,578) (39,578) (74,450) (30,028) (30,028) (30,028) (30,028) (30,028) (11,281) 18,626 18,626 18,626 18,626 18,626 (639,080) (1,406) (1,406) (1,406) (1,406) (1,406) 826 9,252 9,252 9,252 9,252 — (41,813) (41,813) (41,813) (41,813) (104,685) (36,918) (36,918) (36,918) (36,918) (8,019) (9,942) 360,408 (30,312) (30,312) (30,312) (30,312) (7,183) 6,993 9,252 (9,942) (9,942) (9,942) 6,993 6,993 6,993 — (34,165) (41,813) (34,165) (34,165) (34,165) (60,970) (21,633) (36,918) (21,633) (21,633) (21,633) (8,587) (5,245) 387,187 (16,786) (30,312) (16,786) (16,786) (16,786) 8,832 4,321 (9,942) (5,245) (5,245) (5,245) 6,993 4,321 4,321 4,321 (529,689) 19,913 19,913 19,913 19,913 19,913 501,365 (13,317) (13,317) (13,317) (13,317) 218,534 2,828 (13,317) 2,828 2,828 2,828 (17) (17) (17) (17) (17) 1,159,079 (6,782) (6,782) (6,782) (6,782) (6,782) 657,714 14,239 14,239 14,239 14,239 439,180 (41,266) (41,266) (41,266) (41,266) 14,239 $ 629,390 $ 1,159,079 $ 657,714 24,090 (14,321) (14,321) (14,321) (14,321) (14,321) 15,911 15,911 15,911 15,911 15,911 24,090 24,090 24,090 330,843 330,843 330,843 330,843 330,843 359,496 359,496 359,496 359,496 286,779 359,496 286,779 286,779 286,779 $ 40,394 216,448 5,137 24,773 34,442 60,176 1,055 (3,269) (4,521) (34,165) (21,633) (5,245) (16,786) 4,321 2,828 (41,266) 24,090 286,779 (90,081) (34,324) (50,549) (450,564) 189,006 (20,707) (464,264) 394,391 (73,646) (in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activities(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activitiesNet cash (used in) provided by financing activitiesEffect of exchange rate changes on cash, cash equivalents and restricted cashCash, cash equivalents and restricted cash, end of period(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activities(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activities(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activities(in thousands)NoteYears ended December 31,201920182017Net cash provided by operating activitiesNet cash used in investing activitiesFinancial Results Financial Results Auditor’s Report Notes to consolidated financial statements December 31, 2019 Report of independent registered public accounting firm To the Shareholders and Supervisory Board 1. Corporate Information and Basis of Presentation QIAGEN N.V.: 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 We have audited the accompanying consolidated balance sheets of QIAGEN N.V. and subsidiaries (the over 500,000 customers worldwide to transform biological samples into valuable molecular insights. Our sample “Company”) as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, technologies are used to isolate and process DNA, RNA and proteins - the building blocks of life - from blood, tissue comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended and other materials. Assay technologies are used to make these biomolecules visible and ready for analysis. December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the Bioinformatics software and knowledge bases are used to analyze and interpret complex genomic data to report consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material relevant, actionable insights. Automation solutions are used to tie these technologies together in seamless and cost- respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its effective workflows. We provide this portfolio to two major customer classes: Molecular Diagnostics (human operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity healthcare) and Life Sciences comprised of Academia / Applied Testing (life sciences research, forensics and food with U.S. generally accepted accounting principles. safety) and Pharma. With approximately 5,100 employees in over 35 locations worldwide, we market our products in more than 130 countries. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2020 expressed an unqualified The accompanying consolidated financial statements were prepared in accordance with U.S. generally accepted opinion on the effectiveness of the Company’s internal control over financial reporting. accounting principles (GAAP) and all amounts are presented in U.S. dollars rounded to the nearest thousand, unless otherwise indicated. The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments, contingent consideration and available-for-sale financial instruments that have been measured at fair value. As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842 - Leases. In 2018, the We undertake acquisitions to complement our own internal product development activities. In 2019, we completed Company has changed its method of accounting for revenue from contracts with customers due to the adoption of three immaterial acquisitions, including the January 2019 acquisition of N-of-One, Inc., a privately-held U.S. Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers. molecular decision support company and pioneer in clinical interpretation services for complex genomic data located in Concord, Massachusetts. 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 These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to Cary, North Carolina (U.S.). Accordingly, at their respective acquisition dates, all the assets acquired and liabilities express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm assumed were recorded at their respective fair values and our consolidated results of operations include the registered with the PCAOB and are required to be independent with respect to the Company in accordance with the operating results from the acquired companies from the acquisition dates. U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. Certain prior year amounts have been reclassified to conform to the current year presentation. Beginning in 2019 in the Consolidated Statements of (Loss) Income, the line item "Acquisition-related intangible amortization" in cost of We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and sales is presented separately. Previously, these amounts were presented together in one line in cost of sales. perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of Additionally beginning in 2019, "Restructuring, acquisition, integration and other, net" and "Long-lived asset material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks impairments" within operating expenses are presented separately. Previously, these amounts were presented together of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing with general and administrative expenses in one line as "General and administrative, restructuring, integration and procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the other, net." These reclassifications had no effect on (loss) income from operations. amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting 142 Corporate InformationBasis of PresentationOpinion on the Consolidated Financial StatementsChange in Accounting PrincipleBasis for OpinionF I N A N C I A L R E S U LT S Notes to consolidated financial statements 2. Effects of New Accounting Pronouncements The following new Financial Accounting Standards Board (FASB) Accounting Standards Updates (ASU) were adopted in 2019, 2018 and 2017: The FASB issued guidance codified in Accounting Standards Codification (ASC) Topic 842, Leases (Topic 842), which supersedes the lease requirements in ASC Topic 840 and aims to increase transparency and comparability among organizations and requires disclosure of key information about leasing arrangements. The main principle of ASC 842 requires lessees to recognize the assets and liabilities that arise from nearly all leases on the consolidated balance sheet. Lessor accounting remains mainly consistent with the former guidance, with the majority of changes allowing for better alignment with the new lessee model and ASC Topic 606. We adopted these standards as per the effective date of January 1, 2019, using the modified retrospective approach and did not restate comparative periods. Under this approach, the cumulative effect of initially applying the standard was recognized as an adjustment to the opening balance of retained earnings on the date of initial application. As a lessee, the classification of our leases did not change, but we recognized a lease liability and corresponding right-of-use asset on our consolidated balance sheets for all our operating leases. We have 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 to ASC 842. Our initial lease liabilities and right-of-use assets totaled $57.7 million and $57.4 million, respectively, as recorded in our consolidated balance sheet as of January 1, 2019, primarily relating to leased office space. The difference between the additional lease assets and lease liabilities was recorded as a $0.3 million adjustment to retained earnings. Further disclosure is found in Note 12 "Leases". ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The new guidance became effective for public entities beginning on January 1, 2019 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. Under the modified retrospective approach, entities with cash flow or net investment hedges will make (1) a cumulative-effect adjustment to accumulated other comprehensive income so that the adjusted amount represents the cumulative change in the hedging instruments’ fair value since hedge inception (less any amounts that should have been recognized in earnings under the new accounting model) and (2) a corresponding adjustment to opening retained earnings as of the most recent period presented on the date of adoption. We adopted ASU 2017-12 on January 1, 2019 without any cumulative effect. ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for public entities for annual periods beginning January 1, 2020 and early adoption is permitted. The new guidance is required to be applied on a prospective basis. We adopted ASU 2017-04 on January 1, 2019 and applied the new guidance prospectively as required. ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework, provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for public entities for annual periods beginning January 1, 2020. Entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. We adopted ASU 2018-13 on January 1, 2019 and applied the entire standard to disclosures as required beginning in 2019. ASU 2018-15, Intangibles--Goodwill and Other--Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, provides guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor, i.e. a service contract. Under the new guidance, customers will apply the 143 Adoption of New Accounting Standards in 20192. Effects of New Accounting Pronouncements The following new Financial Accounting Standards Board (FASB) Accounting Standards Updates (ASU) were adopted in 2019, 2018 and 2017: The FASB issued guidance codified in Accounting Standards Codification (ASC) Topic 842, Leases (Topic 842), which supersedes the lease requirements in ASC Topic 840 and aims to increase transparency and comparability among organizations and requires disclosure of key information about leasing arrangements. The main principle of ASC 842 requires lessees to recognize the assets and liabilities that arise from nearly all leases on the consolidated balance sheet. Lessor accounting remains mainly consistent with the former guidance, with the majority of changes allowing for better alignment with the new lessee model and ASC Topic 606. We adopted these standards as per the effective date of January 1, 2019, using the modified retrospective approach and did not restate comparative periods. Under this approach, the cumulative effect of initially applying the standard was recognized as an adjustment to the opening balance of retained earnings on the date of initial application. As a lessee, the classification of our leases did not change, but we recognized a lease liability and corresponding right-of-use asset on our consolidated balance sheets for all our operating leases. We have 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 to ASC 842. Our initial lease liabilities and right-of-use assets totaled $57.7 million and $57.4 million, respectively, as recorded in our consolidated balance sheet as of January 1, 2019, primarily relating to leased office space. The difference between the additional lease assets and lease liabilities was recorded as a $0.3 million adjustment to retained earnings. Further disclosure is found in Note 12 "Leases". ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The new guidance became effective for public entities beginning on January 1, 2019 by applying a modified retrospective approach to existing hedging relationships as of the adoption date. Under the modified retrospective approach, entities with cash flow or net investment hedges will make (1) a cumulative-effect adjustment to accumulated other comprehensive income so that the adjusted amount represents the cumulative change in the hedging instruments’ fair value since hedge inception (less any amounts that should have been recognized in earnings under the new accounting model) and (2) a corresponding adjustment to opening retained earnings as of the most recent period presented on the date of adoption. We adopted ASU 2017-12 on January 1, 2019 without any cumulative effect. ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for public entities for annual periods beginning January 1, 2020 and early adoption is permitted. The new guidance is required to be applied on a prospective basis. We adopted ASU 2017-04 on January 1, 2019 and applied the new guidance prospectively as required. ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework, provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for public entities for annual periods beginning January 1, 2020. Entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. We adopted ASU 2018-13 on January 1, 2019 and applied the entire standard to disclosures as required beginning in 2019. ASU 2018-15, Intangibles--Goodwill and Other--Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, provides guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor, i.e. a service contract. Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. ASU 2018-15 is effective for public entities for annual periods beginning January 1, 2020, and early adoption is permitted and should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We adopted ASU 2018-15 on January 1, 2019 and applied the guidance to all implementation costs prospectively. ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, amends how a decision maker or service provider determines whether its fee is a variable interest entity (VIE) when a related party under common control also has an interest in the VIE. We adopted ASU 2018-17 on January 1, 2019, on a prospective basis. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and additional related accounting standard updates to clarify and provide implementation guidance were adopted with a date of initial application of January 1, 2018. The comparative information for 2017 has not been adjusted and continues to be reported under ASC Topic 605 Revenue Recognition. As a result, we changed our accounting policy for revenue recognition as further discussed in the Notes below. We applied the Topic 606 using the "modified retrospective method" by recognizing the effect of initially applying Topic 606 as an $1.3 million decrease to the opening balance of retained earnings at January 1, 2018, for all contracts not completed at January 1, 2018. ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities as well as an additional clarifying accounting standard update became effective for our financial statements beginning in the first quarter of 2018. This ASU makes targeted improvements to existing U.S. GAAP for both the recognition and measurement of financial assets and financial liabilities. Changes in accounting to our equity investments as a result of this standard are further discussed in Notes below. As required, we adopted using a cumulative-effect adjustment to the balance sheet as of the beginning of 2018 and recorded an adjustment to decrease opening retained earnings at January 1, 2018 by $0.9 million as required for our equity investments recorded at fair value. ASU 2016-05, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments and ASU 2016-18, Statement of Cash Flows (Topic 320): Restricted Cash, addresses classification issues and presentation related to the statement of cash flows and was adopted on January 1, 2018 without any impact from the adoption. ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, aims to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This standard was adopted on a modified retrospective basis resulting in a decrease to opening retained earnings of $16.1 million at January 1, 2018. ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. We adopted this update beginning January 1, 2018, without impact. ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, clarifies when to account for a change to the terms and conditions of a share-based payment award as a modification. This guidance is effective prospectively and was adopted as of January 1, 2018. 144 ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, permits reclassification of stranded tax effects of the U.S. Tax Cuts and Jobs Act (Tax Act). We adopted this standard as of April 1, 2018 with no impact as we had no stranded tax effects. This guidance only relates to the effects of the Tax Act. For all other tax law changes that have occurred or may occur in the future, we reclassify the tax effects to the consolidated statement of income (loss) on an item-by-item basis when the pre-tax item in accumulated other comprehensive income (loss) is reclassified to income. Adoption of New Accounting Standards in 2019Adoption of New Accounting Standards in 2018same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. ASU 2018-15 is effective for public entities for annual periods beginning January 1, 2020, and early adoption is permitted and should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We adopted ASU 2018-15 on January 1, 2019 and applied the guidance to all implementation costs prospectively. ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, amends how a decision maker or service provider determines whether its fee is a variable interest entity (VIE) when a related party under common control also has an interest in the VIE. We adopted ASU 2018-17 on January 1, 2019, on a prospective basis. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and additional related accounting standard updates to clarify and provide implementation guidance were adopted with a date of initial application of January 1, 2018. The comparative information for 2017 has not been adjusted and continues to be reported under ASC Topic 605 Revenue Recognition. As a result, we changed our accounting policy for revenue recognition as further discussed in the Notes below. We applied the Topic 606 using the "modified retrospective method" by recognizing the effect of initially applying Topic 606 as an $1.3 million decrease to the opening balance of retained earnings at January 1, 2018, for all contracts not completed at January 1, 2018. ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities as well as an additional clarifying accounting standard update became effective for our financial statements beginning in the first quarter of 2018. This ASU makes targeted improvements to existing U.S. GAAP for both the recognition and measurement of financial assets and financial liabilities. Changes in accounting to our equity investments as a result of this standard are further discussed in Notes below. As required, we adopted using a cumulative-effect adjustment to the balance sheet as of the beginning of 2018 and recorded an adjustment to decrease opening retained earnings at January 1, 2018 by $0.9 million as required for our equity investments recorded at fair value. ASU 2016-05, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments and ASU 2016-18, Statement of Cash Flows (Topic 320): Restricted Cash, addresses classification issues and presentation related to the statement of cash flows and was adopted on January 1, 2018 without any impact from the adoption. ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, aims to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This standard was F I N A N C I A L R E S U LT S Notes to consolidated financial statements adopted on a modified retrospective basis resulting in a decrease to opening retained earnings of $16.1 million at January 1, 2018. ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. We adopted this update beginning January 1, 2018, without impact. ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, clarifies when to account for a change to the terms and conditions of a share-based payment award as a modification. This guidance is effective prospectively and was adopted as of January 1, 2018. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, permits reclassification of stranded tax effects of the U.S. Tax Cuts and Jobs Act (Tax Act). We adopted this standard as of April 1, 2018 with no impact as we had no stranded tax effects. This guidance only relates to the effects of the Tax Act. For all other tax law changes that have occurred or may occur in the future, we reclassify the tax effects to the consolidated statement of income (loss) on an item-by-item basis when the pre-tax item in accumulated other comprehensive income (loss) is reclassified to income. ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, aligns most of the accounting for share-based payment awards issued to employees and non- employees. We early adopted this standard as of July 1, 2018, without material impact. ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, requires in scope inventory to be measured at the lower of cost and net realizable value. We adopted this standard without material impact. ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting, eliminates the requirement to retroactively adopt the equity method of accounting when an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. We adopted this standard without impact. ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, simplifies several aspects of accounting for share-based payment transactions, including income tax consequences. We adopted this standard on January 1, 2017 on a prospective basis. The following new FASB Accounting Standards Updates, which are not yet adopted as of December 31, 2019, have been grouped by their required effective dates: ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses under Topic 326 is applicable to financial assets measured at amortized cost, including loan receivables and held-to- maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, Topic 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes is more likely than not they will be required to sell. Topic 326 is effective for us for annual periods beginning on January 1, 2020 and we will adopt using the modified retrospective approach. Under this approach, the cumulative effect of initially applying the standard is recognized as adjustment to the opening balance of retained earnings on the date of initial application. We currently expect a transition adjustment of approximately $14.0 million due primarily to expected credit losses on loans, notes and accounts receivable. 145 ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer of that transaction. The guidance amends ASC 808 to refer to unit-of-account guidance in ASC 606 and requires it to be used only when assessing whether a transaction is in the scope of ASC 606. ASU 2018-18 is effective for us for annual periods beginning on January 1, 2020. Entities are required to apply the amendments retrospectively to the date they initially applied ASC 606. We adopted ASU 2018-18 on January 1, 2020 without any cumulative effect. ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod tax allocations and calculating income taxes in Adoption of New Accounting Standards in 2018Adoption of New Accounting Standards in 2017New Accounting Standards Not Yet AdoptedFirst Quarter of 2020First Quarter of 2021ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, aligns most of the accounting for share-based payment awards issued to employees and non- employees. We early adopted this standard as of July 1, 2018, without material impact. ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, requires in scope inventory to be measured at the lower of cost and net realizable value. We adopted this standard without material impact. ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting, eliminates the requirement to retroactively adopt the equity method of accounting when an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. We adopted this standard without impact. ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, simplifies several aspects of accounting for share-based payment transactions, including income tax consequences. We adopted this standard on January 1, 2017 on a prospective basis. The following new FASB Accounting Standards Updates, which are not yet adopted as of December 31, 2019, have been grouped by their required effective dates: ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses under Topic 326 is applicable to financial assets measured at amortized cost, including loan receivables and held-to- maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, Topic 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes is more likely than not they will be required to sell. Topic 326 is effective for us for annual periods beginning on January 1, 2020 and we will adopt using the modified retrospective approach. Under this approach, the cumulative effect of initially applying the standard is recognized as adjustment to the opening balance of retained earnings on the date of initial application. We currently expect a transition adjustment of approximately $14.0 million due primarily to expected credit losses on loans, notes and accounts receivable. ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer of that transaction. The guidance amends ASC 808 to refer to unit-of-account guidance in ASC 606 and requires it to be used only when assessing whether a transaction is in the scope of ASC 606. ASU 2018-18 is effective for us for annual periods beginning on January 1, 2020. Entities are required to apply the amendments retrospectively to the date they initially applied ASC 606. We adopted ASU 2018-18 on January 1, 2020 without any cumulative effect. ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod tax allocations and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating income taxes to members of a consolidated group. ASU 2019-12 is effective for annual periods beginning on January 1, 2021, with earlier adoption permitted. We intend to adopt the ASU on the effective date of January 1, 2021 and are evaluating the potential impact ASU 2019-12 may have on our consolidated financial statements. ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, addresses accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. We intend to adopt the ASU on the effective date of January 1, 2021 and are evaluating the potential impact ASU 2020-01 may have on our consolidated financial statements. 3. Summary of Significant Accounting Policies The consolidated financial statements include the accounts of QIAGEN N.V. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Investments in either common stock or in- substance common stock of companies where we exercise significant influence over the operations but do not have control, and where we are not the primary beneficiary, are accounted for using the equity method. All other investments are accounted for as discussed under "Non-marketable Investments" below. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the Company, we record the fair value of the noncontrolling interests at the acquisition date and classify the amounts attributable to noncontrolling interests separately in equity in the consolidated financial statements. Any subsequent changes in the Company's ownership interest while the Company retains its controlling financial interest in its subsidiary are accounted for as equity transactions. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 146 We buy materials for products from many suppliers, and are not dependent on any one supplier or group of suppliers for the business as a whole. However, key components of certain products, including certain instrumentation components and chemicals, are available only from a single source. If supplies from these vendors were delayed or interrupted for any reason, we may not be able to obtain these materials timely or in sufficient quantities in order to produce certain products and sales levels could be negatively affected. Additionally, our customers include researchers at pharmaceutical and biotechnology companies, academic institutions, and government and private laboratories. Fluctuations in the research and development budgets of these researchers and their organizations for applications in which our products are used could have a significant effect on the demand for our products. The financial instruments used in managing our foreign currency, equity and interest rate exposures have an element of risk in that the counterparties may be unable to meet the terms of the agreements. We attempt to minimize this risk by limiting the counterparties to a diverse group of highly-rated international financial institutions. The carrying values of our financial instruments incorporate the non-performance risk by using market pricing for credit risk. However, we have no reason to believe that any counterparties will default on their obligations. In order to minimize our exposure with any single counterparty, we have entered into master agreements which allow us to manage the exposure with the respective counterparty on a net basis. Other financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents, short-term investments, and accounts receivable. We attempt to minimize the risks related to cash and cash Adoption of New Accounting Standards in 2017New Accounting Standards Not Yet AdoptedFirst Quarter of 2020First Quarter of 2021Principles of ConsolidationUse of EstimatesConcentrations of Riskinterim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating income taxes to members of a consolidated group. ASU 2019-12 is effective for annual periods beginning on January 1, 2021, with earlier adoption permitted. We intend to adopt the ASU on the effective date of January 1, 2021 and are evaluating the potential impact ASU 2019-12 may have on our consolidated financial statements. ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, addresses accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. We intend to adopt the ASU on the effective date of January 1, 2021 and are evaluating the potential impact ASU 2020-01 may have on our consolidated financial statements. 3. Summary of Significant Accounting Policies The consolidated financial statements include the accounts of QIAGEN N.V. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Investments in either common stock or in- substance common stock of companies where we exercise significant influence over the operations but do not have control, and where we are not the primary beneficiary, are accounted for using the equity method. All other F I N A N C I A L R E S U LT S Notes to consolidated financial statements investments are accounted for as discussed under "Non-marketable Investments" below. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the Company, we record the fair value of the noncontrolling interests at the acquisition date and classify the amounts attributable to noncontrolling interests separately in equity in the consolidated financial statements. Any subsequent changes in the Company's ownership interest while the Company retains its controlling financial interest in its subsidiary are accounted for as equity transactions. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We buy materials for products from many suppliers, and are not dependent on any one supplier or group of suppliers for the business as a whole. However, key components of certain products, including certain instrumentation components and chemicals, are available only from a single source. If supplies from these vendors were delayed or interrupted for any reason, we may not be able to obtain these materials timely or in sufficient quantities in order to produce certain products and sales levels could be negatively affected. Additionally, our customers include researchers at pharmaceutical and biotechnology companies, academic institutions, and government and private laboratories. Fluctuations in the research and development budgets of these researchers and their organizations for applications in which our products are used could have a significant effect on the demand for our products. The financial instruments used in managing our foreign currency, equity and interest rate exposures have an element of risk in that the counterparties may be unable to meet the terms of the agreements. We attempt to minimize this risk by limiting the counterparties to a diverse group of highly-rated international financial institutions. The carrying values of our financial instruments incorporate the non-performance risk by using market pricing for credit risk. However, we have no reason to believe that any counterparties will default on their obligations. In order to minimize our exposure with any single counterparty, we have entered into master agreements which allow us to manage the exposure with the respective counterparty on a net basis. Other financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents, short-term investments, and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and diverse range of financial instruments. We have established guidelines related to credit quality and maturities of investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances are maintained for potential credit losses and such losses have historically been within expected ranges. Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local currency of the respective countries in which they are headquartered. All amounts in the financial statements of entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, and is included in other income (expense), net. The exchange rates of key currencies were as follows: Euro (EUR) Pound Sterling (GBP) Swiss Franc (CHF) Australian Dollar (AUD) Canadian Dollar (CAD) Japanese Yen (JPY) Chinese Yuan (CNY) 147 1.1234 1.1450 1.1196 1.1813 1.1292 1.3204 1.2800 1.2768 1.3356 1.2882 1.0350 1.0161 1.0062 1.0228 1.0156 0.7023 0.7059 0.6954 0.7478 0.7666 0.7696 0.7337 0.7535 0.7719 0.7710 0.0092 0.0091 0.0092 0.0091 0.0089 0.1437 0.1454 0.1448 0.1514 0.1480 We determined that we operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of organization and types of products and services which derive revenues and consistent product margins. Accordingly, we operate and make decisions as one reporting unit. Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement of substantive and at-risk performance criteria, were recognized in full at such time as the specified milestone had been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. Principles of ConsolidationUse of EstimatesConcentrations of RiskForeign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and equivalents and short-term investments by dealing with highly-rated financial institutions and investing in a broad and diverse range of financial instruments. We have established guidelines related to credit quality and maturities of diverse range of financial instruments. We have established guidelines related to credit quality and maturities of diverse range of financial instruments. We have established guidelines related to credit quality and maturities of diverse range of financial instruments. We have established guidelines related to credit quality and maturities of diverse range of financial instruments. We have established guidelines related to credit quality and maturities of diverse range of financial instruments. We have established guidelines related to credit quality and maturities of diverse range of financial instruments. We have established guidelines related to credit quality and maturities of 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 investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable investments intended to maintain safety and liquidity. Concentration of credit risk with respect to accounts receivable 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 is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances 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. are maintained for potential credit losses and such losses have historically been within expected ranges. are maintained for potential credit losses and such losses have historically been within expected ranges. are maintained for potential credit losses and such losses have historically been within expected ranges. are maintained for potential credit losses and such losses have historically been within expected ranges. are maintained for potential credit losses and such losses have historically been within expected ranges. are maintained for potential credit losses and such losses have historically been within expected ranges. are maintained for potential credit losses and such losses have historically been within expected ranges. Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local Our reporting currency is the U.S. dollar and the functional currencies of our subsidiaries are generally the local currency of the respective countries in which they are headquartered. All amounts in the financial statements of currency of the respective countries in which they are headquartered. All amounts in the financial statements of currency of the respective countries in which they are headquartered. All amounts in the financial statements of currency of the respective countries in which they are headquartered. All amounts in the financial statements of currency of the respective countries in which they are headquartered. All amounts in the financial statements of currency of the respective countries in which they are headquartered. All amounts in the financial statements of currency of the respective countries in which they are headquartered. All amounts in the financial statements of entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates 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 as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, and is included in other income (expense), net. and is included in other income (expense), net. currency of the respective countries in which they are headquartered. All amounts in the financial statements of entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates 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 as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and the period, and (3) components of equity at historical rates. Translation gains or losses are recorded in equity, and transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or transaction gains and losses are reflected in net income as a component of other expense, net. Realized gains or losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and losses on the value of derivative contracts entered into to hedge the exchange rate exposure of receivables and payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign payables are also included in net (loss) income as a component of other expense, net. The net loss on foreign currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, currency transactions was $5.7 million, $12.3 million, and $3.3 million in 2019, 2018 and 2017, respectively, and is included in other income (expense), net. and is included in other income (expense), net. and is included in other income (expense), net. and is included in other income (expense), net. and is included in other income (expense), net. and is included in other income (expense), net. The exchange rates of key currencies were as follows: The exchange rates of key currencies were as follows: The exchange rates of key currencies were as follows: The exchange rates of key currencies were as follows: The exchange rates of key currencies were as follows: The exchange rates of key currencies were as follows: The exchange rates of key currencies were as follows: The exchange rates of key currencies were as follows: Euro (EUR) Euro (EUR) Euro (EUR) Euro (EUR) Euro (EUR) Euro (EUR) Euro (EUR) Euro (EUR) 1.1234 1.1234 1.1450 1.1450 1.1234 1.1234 1.1234 1.1196 1.1234 1.1234 1.1196 1.1234 1.1450 1.1450 1.1450 1.1813 1.1450 1.1450 1.1813 1.1450 1.1196 1.1196 1.1196 1.1292 1.1196 1.1196 1.1292 1.1196 1.1813 1.1813 1.1813 1.1813 1.1813 1.1813 1.1292 1.1292 1.1292 1.1292 1.1292 1.1292 Pound Sterling (GBP) Pound Sterling (GBP) Pound Sterling (GBP) Pound Sterling (GBP) Pound Sterling (GBP) Pound Sterling (GBP) Pound Sterling (GBP) Pound Sterling (GBP) 1.3204 1.3204 1.2800 1.2800 1.3204 1.3204 1.3204 1.2768 1.3204 1.3204 1.2768 1.3204 1.2800 1.2800 1.2800 1.3356 1.2800 1.2800 1.3356 1.2800 1.2768 1.2768 1.2768 1.2882 1.2768 1.2768 1.2882 1.2768 1.3356 1.3356 1.3356 1.3356 1.3356 1.3356 1.2882 1.2882 1.2882 1.2882 1.2882 1.2882 Swiss Franc (CHF) Swiss Franc (CHF) Swiss Franc (CHF) Swiss Franc (CHF) Swiss Franc (CHF) Swiss Franc (CHF) Swiss Franc (CHF) Swiss Franc (CHF) 1.0350 1.0350 1.0161 1.0161 1.0350 1.0350 1.0350 1.0062 1.0350 1.0350 1.0062 1.0350 1.0161 1.0161 1.0161 1.0228 1.0161 1.0161 1.0228 1.0161 1.0062 1.0062 1.0062 1.0156 1.0062 1.0062 1.0156 1.0062 1.0228 1.0228 1.0228 1.0228 1.0228 1.0228 1.0156 1.0156 1.0156 1.0156 1.0156 1.0156 Australian Dollar (AUD) Australian Dollar (AUD) Australian Dollar (AUD) Australian Dollar (AUD) Australian Dollar (AUD) Australian Dollar (AUD) Australian Dollar (AUD) Australian Dollar (AUD) 0.7023 0.7023 0.7059 0.7059 0.7023 0.7023 0.7023 0.6954 0.7023 0.7023 0.6954 0.7023 0.7059 0.7059 0.7059 0.7478 0.7059 0.7059 0.7478 0.7059 0.6954 0.6954 0.6954 0.7666 0.6954 0.6954 0.7666 0.6954 0.7478 0.7478 0.7478 0.7478 0.7478 0.7478 0.7666 0.7666 0.7666 0.7666 0.7666 0.7666 Canadian Dollar (CAD) Canadian Dollar (CAD) Canadian Dollar (CAD) Canadian Dollar (CAD) Canadian Dollar (CAD) Canadian Dollar (CAD) Canadian Dollar (CAD) Canadian Dollar (CAD) 0.7696 0.7696 0.7337 0.7337 0.7696 0.7696 0.7696 0.7535 0.7696 0.7696 0.7535 0.7696 0.7337 0.7337 0.7337 0.7719 0.7337 0.7337 0.7719 0.7337 0.7535 0.7535 0.7535 0.7710 0.7535 0.7535 0.7710 0.7535 0.7719 0.7719 0.7719 0.7719 0.7719 0.7719 0.7710 0.7710 0.7710 0.7710 0.7710 0.7710 Japanese Yen (JPY) Japanese Yen (JPY) Japanese Yen (JPY) Japanese Yen (JPY) Japanese Yen (JPY) Japanese Yen (JPY) Japanese Yen (JPY) Japanese Yen (JPY) 0.0092 0.0092 0.0091 0.0091 0.0092 0.0092 0.0092 0.0092 0.0092 0.0092 0.0092 0.0092 0.0091 0.0091 0.0091 0.0091 0.0091 0.0091 0.0091 0.0091 0.0092 0.0092 0.0092 0.0089 0.0092 0.0092 0.0089 0.0092 0.0091 0.0091 0.0091 0.0091 0.0091 0.0091 0.0089 0.0089 0.0089 0.0089 0.0089 0.0089 Chinese Yuan (CNY) Chinese Yuan (CNY) Chinese Yuan (CNY) Chinese Yuan (CNY) Chinese Yuan (CNY) Chinese Yuan (CNY) Chinese Yuan (CNY) Chinese Yuan (CNY) 0.1437 0.1437 0.1454 0.1454 0.1437 0.1437 0.1437 0.1448 0.1437 0.1437 0.1448 0.1437 0.1454 0.1454 0.1454 0.1514 0.1454 0.1454 0.1514 0.1454 0.1448 0.1448 0.1448 0.1480 0.1448 0.1448 0.1480 0.1448 0.1514 0.1514 0.1514 0.1514 0.1514 0.1514 0.1480 0.1480 0.1480 0.1480 0.1480 0.1480 We determined that we operate as one operating segment in accordance with the Financial Accounting Standards We determined that we operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of 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, organization and types of products and services which derive revenues and consistent product margins. Accordingly, we operate and make decisions as one reporting unit. we operate and make decisions as one reporting unit. We determined that we operate as one operating segment in accordance with the Financial Accounting Standards We determined that we operate as one operating segment in accordance with the Financial Accounting Standards We determined that we operate as one operating segment in accordance with the Financial Accounting Standards We determined that we operate as one operating segment in accordance with the Financial Accounting Standards We determined that we operate as one operating segment in accordance with the Financial Accounting Standards We determined that we operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. Our chief operating decision maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of maker (CODM) makes decisions based on the Company as a whole. In addition, we have a common basis of 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, organization and types of products and services which derive revenues and consistent product margins. Accordingly, organization and types of products and services which derive revenues and consistent product margins. Accordingly, organization and types of products and services which derive revenues and consistent product margins. Accordingly, organization and types of products and services which derive revenues and consistent product margins. Accordingly, organization and types of products and services which derive revenues and consistent product margins. Accordingly, we operate and make decisions as one reporting unit. we operate and make decisions as one reporting unit. we operate and make decisions as one reporting unit. we operate and make decisions as one reporting unit. we operate and make decisions as one reporting unit. we operate and make decisions as one reporting unit. Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our Beginning January 1, 2018, we recognize revenues when control of promised goods or services transfers to our 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 customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or 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 at services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at services. The majority of our sales revenue continues to be recognized when products are shipped to the customers at which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement which point control transfers. Prior to January 1, 2018, payments for milestones, generally based on the achievement which point control transfers. 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 of substantive and at-risk performance criteria, were recognized in full at such time as the specified milestone had of substantive and at-risk performance criteria, were recognized in full at such time as the specified milestone had of substantive and at-risk performance criteria, were recognized in full at such time as the specified milestone had of substantive and at-risk performance criteria, were recognized in full at such time as the specified milestone had of substantive and at-risk performance criteria, were recognized in full at such time as the specified milestone had of substantive and at-risk performance criteria, were recognized in full at such time as the specified milestone had 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" for further discussion of accounting been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting been achieved according to the terms of the agreement. See Note 4 "Revenue" for further discussion of accounting for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. for milestone payments after adoption of ASC 606 Revenue from Contracts with Customers. We provide warranties on our products against defects in materials and workmanship for a period of 1 year. A provision for estimated future warranty costs is recorded in cost of sales at the time product revenue is recognized. Product warranty obligations are included in accrued and other current liabilities in the accompanying consolidated balance sheets. Research and product development costs are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses, facility costs, and amounts paid to contract research organizations and laboratories for the provision of services and materials as well as costs for internal use or clinical trials. 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 148 recorded as liabilities in the balance sheet. When the grant relates to an asset, the nominal amount of the grant is deducted from the carrying amount of the asset and recognized over the same period that the related asset is depreciated. they occur. 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 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, 2019, 2018 and 2017, shipping and handling costs totaled $27.9 million, $28.4 million and $28.6 million, respectively. 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, 2019, 2018 and 2017 were $8.1 million, $8.1 million and $7.2 million, respectively. General and administrative expenses primarily represent the costs required to support administrative infrastructure. These costs include licensing costs in connection with continued investments information technology improvements, including cyber security, across the organization as well as personnel in administrative functions. We incur indirect acquisition and business integration costs in connection with business combinations. These costs represent incremental costs that we believe would not have been incurred absent the business combinations. Major components of these costs include consulting and related fees incurred to integrate or restructure the acquired operations, payroll and related costs for employees remaining with the Company on a transitional basis and public relations, advertising and media costs for re-branding of the combined organization. Foreign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017Research and DevelopmentGovernment GrantsBorrowing CostsShipping and Handling Income and CostsAdvertising CostsGeneral and AdministrativeRestructuring, Acquisition, Integration and OtherForeign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017Foreign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017Foreign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017Foreign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017Foreign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017Foreign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017Foreign Currency TranslationSegment InformationRevenue RecognitionWarranty(US$ equivalent for one)Closing rate atDecember 31,Annual average rate20192018201920182017We provide warranties on our products against defects in materials and workmanship for a period of 1 year. A provision for estimated future warranty costs is recorded in cost of sales at the time product revenue is recognized. Product warranty obligations are included in accrued and other current liabilities in the accompanying consolidated balance sheets. F I N A N C I A L R E S U LT S Notes to consolidated financial statements Research and product development costs are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses, facility costs, and amounts paid to contract research organizations and laboratories for the provision of services and materials as well as costs for internal use or clinical trials. We recognize government grants when there is reasonable assurance that all conditions will be complied with and the grant will be received. Our government grants generally represent subsidies for specified activities and are therefore recognized when earned as a reduction of the expenses recorded for the activity that the grants are intended to compensate. Thus, when the grant relates to research and development expense, the grant is recognized over the same period that the related costs are incurred. Otherwise, amounts received under government grants are recorded as liabilities in the balance sheet. When the grant relates to an asset, the nominal amount of the grant is deducted from the carrying amount of the asset and recognized over the same period that the related asset is depreciated. Borrowing costs directly attributable to the acquisition, construction or production of an asset that takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets (qualifying asset) when such borrowing costs are significant. All other borrowing costs are expensed in the period they occur. Shipping and handling 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, 2019, 2018 and 2017, shipping and handling costs totaled $27.9 million, $28.4 million and $28.6 million, respectively. 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, 2019, 2018 and 2017 were $8.1 million, $8.1 million and $7.2 million, respectively. General and administrative expenses primarily represent the costs required to support administrative infrastructure. These costs include licensing costs in connection with continued investments information technology improvements, including cyber security, across the organization as well as personnel in administrative functions. 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 consulting and related fees incurred to integrate or restructure the acquired operations, payroll and related costs for employees remaining with the Company on a transitional basis and public relations, advertising and media costs for re-branding of the combined organization. 149 Research and DevelopmentGovernment GrantsBorrowing CostsShipping and Handling Income and CostsAdvertising CostsGeneral and AdministrativeRestructuring, Acquisition, Integration and OtherRestructuring costs include personnel costs (principally termination benefits) as well as contract and other costs, primarily contract termination costs. Termination benefits are accounted for in accordance with FASB ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, and are recorded when it is probable that employees will be entitled to benefits and the amounts can be reasonably estimated. Estimates of termination benefits are based on the frequency of past termination benefits, the similarity of benefits under the current plan and prior plans, and the existence of statutory required minimum benefits. Contract and other costs are accounted for in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations and are recorded when the liability is incurred. The specific restructuring measures and associated estimated costs are based on management's best business judgment under the existing circumstances at the time the estimates are made. If future events require changes to these estimates, such adjustments will be reflected in the period of the revised estimate. We account for income taxes under the liability method. Under this method, total income tax expense is the amount of income taxes expected to be payable for the current year plus the change from the beginning of the year for deferred income tax assets and liabilities established for the expected further tax consequences resulting from differences in the financial statement carrying amount and the tax basis of assets and liabilities. Deferred tax assets and/or liabilities are determined by multiplying the differences between the financial statement carrying amount and the tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. Deferred tax assets are reduced by a valuation allowance to the amount more likely than not to be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Tax benefits are initially recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the taxing authority using the cumulative probability method, assuming the tax authority has full knowledge of the position and all relevant facts. Our policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties within the income tax expense. We enter into derivative financial instrument contracts to minimize the variability of cash flows or income statement impact associated with the anticipated transactions being hedged or to hedge fluctuating interest rates. As changes in foreign currency or interest rate impact the value of anticipated transactions, the fair value of the forward or swap contracts also changes, offsetting foreign currency or interest rate fluctuations. Derivative instruments are recorded on the balance sheet at fair value. Changes in fair value of derivatives are recorded in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction. Compensation cost for all share-based payments is recorded based on the grant date fair value, less an estimate for pre-vesting forfeitures, recognized in expense over the service period using an accelerated method. Forfeiture Rate — This is the estimated percentage of grants that are expected to be forfeited or canceled on an annual basis before becoming fully vested. We estimated the forfeiture rate based on historical forfeiture experience. Restricted Stock Units and Performance Stock Units: Restricted stock units and performance stock units represent rights to receive Common Shares at a future date. The fair market value of restricted and performance stock units is determined based on the number of stock units granted and the fair market value of our shares on the grant date. The fair market value at the time of the grant, less an estimate for pre-vesting forfeitures, is recognized in expense over the vesting period. At each reporting period, the estimated performance achievement of the performance stock units is assessed and any change in the estimated achievement is recorded on a cumulative basis in the period of 150 adjustment. Income TaxesDerivative InstrumentsShare-Based PaymentsRestructuring costs include personnel costs (principally termination benefits) as well as contract and other costs, primarily contract termination costs. Termination benefits are accounted for in accordance with FASB ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, and are recorded when it is probable that employees will be entitled to benefits and the amounts can be reasonably estimated. Estimates of termination benefits are based on the frequency of past termination benefits, the similarity of benefits under the current plan and prior plans, and the existence of statutory required minimum benefits. Contract and other costs are accounted for in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations and are recorded when the liability is incurred. The specific restructuring measures and associated estimated costs are based on management's best business judgment under the existing circumstances at the time the estimates are made. If future events require changes to these estimates, such adjustments will be reflected in the period of the revised estimate. We account for income taxes under the liability method. Under this method, total income tax expense is the amount of income taxes expected to be payable for the current year plus the change from the beginning of the year for deferred income tax assets and liabilities established for the expected further tax consequences resulting from differences in the financial statement carrying amount and the tax basis of assets and liabilities. Deferred tax assets and/or liabilities are determined by multiplying the differences between the financial statement carrying amount and the tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. Deferred tax assets are reduced by a valuation allowance to the amount more likely than not to be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Tax benefits are initially recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the taxing authority using the cumulative probability method, assuming the tax authority has full knowledge of the position and all relevant facts. Our policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties within the income tax expense. We enter into derivative financial instrument contracts to minimize the variability of cash flows or income statement impact associated with the anticipated transactions being hedged or to hedge fluctuating interest rates. As changes in foreign currency or interest rate impact the value of anticipated transactions, the fair value of the forward or swap contracts also changes, offsetting foreign currency or interest rate fluctuations. Derivative instruments are recorded on the balance sheet at fair value. Changes in fair value of derivatives are recorded in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction. F I N A N C I A L R E S U LT S Notes to consolidated financial statements Compensation cost for all share-based payments is recorded based on the grant date fair value, less an estimate for pre-vesting forfeitures, recognized in expense over the service period using an accelerated method. Forfeiture Rate — This is the estimated percentage of grants that are expected to be forfeited or canceled on an annual basis before becoming fully vested. We estimated the forfeiture rate based on historical forfeiture experience. Restricted Stock Units and Performance Stock Units: Restricted stock units and performance stock units represent rights to receive Common Shares at a future date. The fair market value of restricted and performance stock units is determined based on the number of stock units granted and the fair market value of our shares on the grant date. The fair market value at the time of the grant, less an estimate for pre-vesting forfeitures, is recognized in expense over the vesting period. At each reporting period, the estimated performance achievement of the performance stock units is assessed and any change in the estimated achievement is recorded on a cumulative basis in the period of adjustment. Cash and cash equivalents consist of cash on deposit in banks and other cash invested temporarily in various Cash and cash equivalents consist of cash on deposit in banks and other cash invested temporarily in various 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 instruments that are short-term and highly liquid, and having an original maturity of less than 90 days at the date of instruments that are short-term and highly liquid, and having an original maturity of less than 90 days at the date of purchase. purchase. purchase. 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. Cash at bank and on hand Cash at bank and on hand Cash at bank and on hand Cash at bank and on hand Short-term bank deposits Short-term bank deposits Short-term bank deposits Short-term bank deposits Cash and Cash Equivalents Cash and Cash Equivalents Cash and Cash Equivalents Cash and Cash Equivalents $ 189,569 $ 189,569 $ 189,569 $ 189,569 $ 208,083 $ 208,083 $ 208,083 $ 208,083 434,078 434,078 434,078 434,078 950,996 950,996 950,996 950,996 $ 623,647 $ 623,647 $ 623,647 $ 623,647 $ 1,159,079 $ 1,159,079 $ 1,159,079 $ 1,159,079 Restricted cash includes cash that is subject to legal restriction in connection with a tender offer and not available for Restricted cash includes cash that is subject to legal restriction in connection with a tender offer and not available for Restricted cash includes cash that is subject to legal restriction in connection with a tender offer and not available for Restricted cash includes cash that is subject to legal restriction in connection with a tender offer and not available for general operating purposes. As of December 31, 2019, we have $5.7 million of restricted cash. general operating purposes. As of December 31, 2019, we have $5.7 million of restricted cash. general operating purposes. As of December 31, 2019, we have $5.7 million of restricted cash. general operating purposes. As of December 31, 2019, we have $5.7 million of restricted cash. Short-term investments are classified as “available for sale” and stated at fair value, which is equivalent to the Short-term investments are classified as “available for sale” and stated at fair value, which is equivalent to the Short-term investments are classified as “available for sale” and stated at fair value, which is equivalent to the amortized cost, in the accompanying balance sheet. Interest income is accrued when earned and changes in fair amortized cost, in the accompanying balance sheet. Interest income is accrued when earned and changes in fair amortized cost, in the accompanying balance sheet. Interest income is accrued when earned and changes in fair market values are reflected in other income (expense), net. The amortization of premiums and accretion of discounts market values are reflected in other income (expense), net. The amortization of premiums and accretion of discounts market values are reflected in other income (expense), net. The amortization of premiums and accretion of discounts to maturity arising from acquisition is included in interest income. A decline in fair value that is judged to be other- to maturity arising from acquisition is included in interest income. A decline in fair value that is judged to be other- to maturity arising from acquisition is included in interest income. A decline in fair value that is judged to be other- than-temporary is accounted for as a realized loss and the write-down is included in the consolidated statements of than-temporary is accounted for as a realized loss and the write-down is included in the consolidated statements of than-temporary is accounted for as a realized loss and the write-down is included in the consolidated statements of income. Realized gains and losses, determined on a specific identification basis on the sale of short-term investments, income. Realized gains and losses, determined on a specific identification basis on the sale of short-term investments, income. Realized gains and losses, determined on a specific identification basis on the sale of short-term investments, are included in income. are included in income. are included in income. Short-term investments are classified as “available for sale” and stated at fair value, which is equivalent to the amortized cost, in the accompanying balance sheet. Interest income is accrued when earned and changes in fair market values are reflected in other income (expense), net. The amortization of premiums and accretion of discounts to maturity arising from acquisition is included in interest income. A decline in fair value that is judged to be other- than-temporary is accounted for as a realized loss and the write-down is included in the consolidated statements of income. Realized gains and losses, determined on a specific identification basis on the sale of short-term investments, are included in income. The carrying amount of cash and cash equivalents, notes receivable, accounts receivable, accounts payable and The carrying amount of cash and cash equivalents, notes receivable, accounts receivable, accounts payable and The carrying amount of cash and cash equivalents, notes receivable, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying value of our variable rate debt and capital leases approximates their fair values because of the short maturities value of our variable rate debt and capital leases approximates their fair values because of the short maturities value of our variable rate debt and capital leases approximates their fair values because of the short maturities and/or interest rates which are comparable to those available to us on similar terms. The fair values of the Cash and/or interest rates which are comparable to those available to us on similar terms. The fair values of the Cash and/or interest rates which are comparable to those available to us on similar terms. The fair values of the Cash Convertible Notes are based on an estimation using available over-the-counter market information. The fair values of Convertible Notes are based on an estimation using available over-the-counter market information. The fair values of Convertible Notes are based on an estimation using available over-the-counter market information. The fair values of the Private Placement Senior Notes were estimated using the changes in the U.S. Treasury rates and the fair value of the Private Placement Senior Notes were estimated using the changes in the U.S. Treasury rates and the fair value of the Private Placement Senior Notes were estimated using the changes in the U.S. Treasury rates and the fair value of the German Private Placement is based on an estimation using changes in the euro swap rates the German Private Placement is based on an estimation using changes in the euro swap rates the German Private Placement is based on an estimation using changes in the euro swap rates The carrying amount of cash and cash equivalents, notes receivable, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying value of our variable rate debt and capital leases approximates their fair values because of the short maturities and/or interest rates which are comparable to those available to us on similar terms. The fair values of the Cash Convertible Notes are based on an estimation using available over-the-counter market information. The fair values of the Private Placement Senior Notes were estimated using the changes in the U.S. Treasury rates and the fair value of the German Private Placement is based on an estimation using changes in the euro swap rates Our accounts receivable are unsecured and we are at risk to the extent such amounts become uncollectible. We Our accounts receivable are unsecured and we are at risk to the extent such amounts become uncollectible. We Our accounts receivable are unsecured and we are at risk to the extent such amounts become uncollectible. We Our accounts receivable are unsecured and we are at risk to the extent such amounts become uncollectible. We continually monitor accounts receivable balances, and provide for an allowance for doubtful accounts at the time continually monitor accounts receivable balances, and provide for an allowance for doubtful accounts at the time continually monitor accounts receivable balances, and provide for an allowance for doubtful accounts at the time continually monitor accounts receivable balances, and provide for an allowance for doubtful accounts at the time collection becomes questionable based on payment history or age of the receivable. Amounts determined to be collection becomes questionable based on payment history or age of the receivable. Amounts determined to be collection becomes questionable based on payment history or age of the receivable. Amounts determined to be collection becomes questionable based on payment history or age of the receivable. Amounts determined to be uncollectible are written off against the allowance. For the years ended December 31, 2019, 2018 and 2017, uncollectible are written off against the allowance. For the years ended December 31, 2019, 2018 and 2017, uncollectible are written off against the allowance. For the years ended December 31, 2019, 2018 and 2017, uncollectible are written off against the allowance. For the years ended December 31, 2019, 2018 and 2017, write-offs of accounts receivable totaled $5.8 million, $2.8 million and $3.2 million, respectively, while provisions write-offs of accounts receivable totaled $5.8 million, $2.8 million and $3.2 million, respectively, while provisions write-offs of accounts receivable totaled $5.8 million, $2.8 million and $3.2 million, respectively, while provisions write-offs of accounts receivable totaled $5.8 million, $2.8 million and $3.2 million, respectively, while provisions for doubtful accounts which were charged to expense totaled $8.7 million, $4.4 million and $3.1 million, for doubtful accounts which were charged to expense totaled $8.7 million, $4.4 million and $3.1 million, for doubtful accounts which were charged to expense totaled $8.7 million, $4.4 million and $3.1 million, for doubtful accounts which were charged to expense totaled $8.7 million, $4.4 million and $3.1 million, 151 respectively. For all years presented, no single customer represented more than ten percent of accounts receivable or respectively. For all years presented, no single customer represented more than ten percent of accounts receivable or respectively. For all years presented, no single customer represented more than ten percent of accounts receivable or respectively. For all years presented, no single customer represented more than ten percent of accounts receivable or consolidated net sales. consolidated net sales. consolidated net sales. consolidated net sales. Inventories are stated at the lower of cost or net realizable value, determined on either a weighted average cost Inventories are stated at the lower of cost or net realizable value, determined on either a weighted average cost Inventories are stated at the lower of cost or net realizable value, determined on either a weighted average cost Inventories are stated at the lower of cost or net realizable value, determined on either a weighted average cost basis or a standard cost basis which is regularly adjusted to actual. Inventories include material, direct labor and basis or a standard cost basis which is regularly adjusted to actual. Inventories include material, direct labor and basis or a standard cost basis which is regularly adjusted to actual. Inventories include material, direct labor and basis or a standard cost basis which is regularly adjusted to actual. Inventories include material, direct labor and overhead costs and are reduced for estimated obsolescence. Inventories consisted of the following as of December overhead costs and are reduced for estimated obsolescence. Inventories consisted of the following as of December overhead costs and are reduced for estimated obsolescence. Inventories consisted of the following as of December overhead costs and are reduced for estimated obsolescence. Inventories consisted of the following as of December 31, 2019 and 2018: 31, 2019 and 2018: 31, 2019 and 2018: 31, 2019 and 2018: Income TaxesDerivative InstrumentsShare-Based PaymentsCash and Cash EquivalentsRestricted CashShort-Term InvestmentsFair Value of Financial InstrumentsAccounts Receivable and Allowance for Doubtful AccountsInventories(in thousands)20192018Cash and Cash EquivalentsRestricted CashShort-Term InvestmentsFair Value of Financial InstrumentsAccounts Receivable and Allowance for Doubtful AccountsInventories(in thousands)20192018Cash and Cash EquivalentsRestricted CashShort-Term InvestmentsFair Value of Financial InstrumentsAccounts Receivable and Allowance for Doubtful AccountsInventories(in thousands)20192018Cash and Cash EquivalentsRestricted CashShort-Term InvestmentsFair Value of Financial InstrumentsAccounts Receivable and Allowance for Doubtful AccountsInventories(in thousands)20192018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. Cash at bank and on hand Short-term bank deposits Cash and Cash Equivalents $ 189,569 $ 208,083 434,078 950,996 $ 623,647 $ 1,159,079 Restricted cash includes cash that is subject to legal restriction in connection with a tender offer and not available for general operating purposes. As of December 31, 2019, we have $5.7 million of restricted cash. Short-term investments are classified as “available for sale” and stated at fair value, which is equivalent to the amortized cost, in the accompanying balance sheet. Interest income is accrued when earned and changes in fair market values are reflected in other income (expense), net. The amortization of premiums and accretion of discounts to maturity arising from acquisition is included in interest income. A decline in fair value that is judged to be other- than-temporary is accounted for as a realized loss and the write-down is included in the consolidated statements of income. Realized gains and losses, determined on a specific identification basis on the sale of short-term investments, are included in income. The carrying amount of cash and cash equivalents, notes receivable, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying value of our variable rate debt and capital leases approximates their fair values because of the short maturities and/or interest rates which are comparable to those available to us on similar terms. The fair values of the Cash Convertible Notes are based on an estimation using available over-the-counter market information. The fair values of the Private Placement Senior Notes were estimated using the changes in the U.S. Treasury rates and the fair value of the German Private Placement is based on an estimation using changes in the euro swap rates Our accounts receivable are unsecured and we are at risk to the extent such amounts become uncollectible. We continually monitor accounts receivable balances, and provide for an allowance for doubtful accounts at the time collection becomes questionable based on payment history or age of the receivable. Amounts determined to be uncollectible are written off against the allowance. For the years ended December 31, 2019, 2018 and 2017, write-offs of accounts receivable totaled $5.8 million, $2.8 million and $3.2 million, respectively, while provisions for doubtful accounts which were charged to expense totaled $8.7 million, $4.4 million and $3.1 million, respectively. For all years presented, no single customer represented more than ten percent of accounts receivable or consolidated net sales. Inventories are stated at the lower of cost or net realizable value, determined on either a weighted average cost basis or a standard cost basis which is regularly adjusted to actual. Inventories include material, direct labor and overhead costs and are reduced for estimated obsolescence. Inventories consisted of the following as of December 31, 2019 and 2018: Raw materials Raw materials Raw materials Raw materials Work in process Work in process Work in process Work in process Finished goods Finished goods Finished goods Finished goods $ 26,077 $ 26,077 $ 26,077 $ 26,077 $ 25,819 $ 25,819 $ 25,819 $ 25,819 45,729 45,729 45,729 45,729 38,659 38,659 38,659 38,659 98,898 98,898 98,898 98,898 98,434 98,434 98,434 98,434 $ 170,704 $ 170,704 $ 170,704 $ 170,704 $ 162,912 $ 162,912 $ 162,912 $ 162,912 Property, plant and equipment, including equipment acquired under capital lease obligations, are stated at cost less Property, plant and equipment, including equipment acquired under capital lease obligations, are stated at cost less Property, plant and equipment, including equipment acquired under capital lease obligations, are stated at cost less Property, plant and equipment, including equipment acquired under capital lease obligations, are stated at cost less accumulated amortization. Capitalized internal-use software costs include only those direct costs associated with the accumulated amortization. Capitalized internal-use software costs include only those direct costs associated with the accumulated amortization. Capitalized internal-use software costs include only those direct costs associated with the accumulated amortization. Capitalized internal-use software costs include only those direct costs associated with the actual development or acquisition of computer software solely to meet internal needs and cloud-based applications to actual development or acquisition of computer software solely to meet internal needs and cloud-based applications to actual development or acquisition of computer software solely to meet internal needs and cloud-based applications to actual development or acquisition of computer software solely to meet internal needs and cloud-based applications to deliver our service and comprise costs associated with the design, coding, installation and testing of the system. deliver our service and comprise costs associated with the design, coding, installation and testing of the system. deliver our service and comprise costs associated with the design, coding, installation and testing of the system. deliver our service and comprise costs associated with the design, coding, installation and testing of the system. Costs associated with preliminary development, such as the evaluation and selection of alternatives, as well as Costs associated with preliminary development, such as the evaluation and selection of alternatives, as well as Costs associated with preliminary development, such as the evaluation and selection of alternatives, as well as Costs associated with preliminary development, such as the evaluation and selection of alternatives, as well as training, maintenance and support are expensed as incurred. Costs for software to be sold, leased or otherwise training, maintenance and support are expensed as incurred. Costs for software to be sold, leased or otherwise training, maintenance and support are expensed as incurred. Costs for software to be sold, leased or otherwise training, maintenance and support are expensed as incurred. Costs for software to be sold, leased or otherwise marketed that are related to the conceptual formulation and design are expensed as incurred. Costs incurred to marketed that are related to the conceptual formulation and design are expensed as incurred. Costs incurred to marketed that are related to the conceptual formulation and design are expensed as incurred. Costs incurred to marketed that are related to the conceptual formulation and design are expensed as incurred. Costs incurred to produce software products and the software components of products to be sold, leased or marketed after produce software products and the software components of products to be sold, leased or marketed after produce software products and the software components of products to be sold, leased or marketed after produce software products and the software components of products to be sold, leased or marketed after technological feasibility is established are capitalized and amortized in accordance with the accounting standards technological feasibility is established are capitalized and amortized in accordance with the accounting standards technological feasibility is established are capitalized and amortized in accordance with the accounting standards technological feasibility is established are capitalized and amortized in accordance with the accounting standards for the costs of software to be sold, leased, or otherwise marketed. All other depreciation is computed using the for the costs of software to be sold, leased, or otherwise marketed. All other depreciation is computed using the for the costs of software to be sold, leased, or otherwise marketed. All other depreciation is computed using the for the costs of software to be sold, leased, or otherwise marketed. All other depreciation is computed using the straight-line method over the estimated useful lives of the assets (3 to 40 years). Amortization of leasehold straight-line method over the estimated useful lives of the assets (3 to 40 years). Amortization of leasehold straight-line method over the estimated useful lives of the assets (3 to 40 years). Amortization of leasehold straight-line method over the estimated useful lives of the assets (3 to 40 years). Amortization of leasehold improvements is computed on a straight-line basis over the lesser of the remaining life of the lease or the estimated improvements is computed on a straight-line basis over the lesser of the remaining life of the lease or the estimated improvements is computed on a straight-line basis over the lesser of the remaining life of the lease or the estimated improvements is computed on a straight-line basis over the lesser of the remaining life of the lease or the estimated useful life of the improvement asset. We have a policy of capitalizing expenditures that materially increase assets’ useful life of the improvement asset. We have a policy of capitalizing expenditures that materially increase assets’ useful life of the improvement asset. We have a policy of capitalizing expenditures that materially increase assets’ useful life of the improvement asset. We have a policy of capitalizing expenditures that materially increase assets’ useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and is disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and is disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and is disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in earnings. any gain or loss is included in earnings. any gain or loss is included in earnings. any gain or loss is included in earnings. We include the results of operations of the businesses that we acquire as of the acquisition date. The purchase price We include the results of operations of the businesses that we acquire as of the acquisition date. The purchase price We include the results of operations of the businesses that we acquire as of the acquisition date. The purchase price We include the results of operations of the businesses that we acquire as of the acquisition date. The purchase price of an acquired business is allocated to the individual assets acquired and liabilities assumed based on their fair of an acquired business is allocated to the individual assets acquired and liabilities assumed based on their fair of an acquired business is allocated to the individual assets acquired and liabilities assumed based on their fair of an acquired business is allocated to the individual assets acquired and liabilities assumed based on their fair values at the date of acquisition. Those fair values are determined using income, cost and market approaches, most values at the date of acquisition. Those fair values are determined using income, cost and market approaches, most values at the date of acquisition. Those fair values are determined using income, cost and market approaches, most values at the date of acquisition. Those fair values are determined using income, cost and market approaches, most of which depend upon significant inputs that are not observable in the market, or level 3 measurements. The excess of which depend upon significant inputs that are not observable in the market, or level 3 measurements. The excess of which depend upon significant inputs that are not observable in the market, or level 3 measurements. The excess of which depend upon significant inputs that are not observable in the market, or level 3 measurements. The excess of purchase price over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. of purchase price over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. of purchase price over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. of purchase price over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combinations and are expensed as Acquisition-related expenses are recognized separately from the business combinations and are expensed as Acquisition-related expenses are recognized separately from the business combinations and are expensed as Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. incurred. incurred. incurred. 152 The purchase price for some business combinations includes consideration that is contingent on the achievement of The purchase price for some business combinations includes consideration that is contingent on the achievement of The purchase price for some business combinations includes consideration that is contingent on the achievement of The purchase price for some business combinations includes consideration that is contingent on the achievement of net sales or earnings targets by the acquired business. Contingent consideration is measured initially and on a net sales or earnings targets by the acquired business. Contingent consideration is measured initially and on a net sales or earnings targets by the acquired business. Contingent consideration is measured initially and on a net sales or earnings targets by the acquired business. Contingent consideration is measured initially and on a recurring basis at fair value. Payments to settle the acquisition-date fair value of contingent consideration are recurring basis at fair value. Payments to settle the acquisition-date fair value of contingent consideration are recurring basis at fair value. Payments to settle the acquisition-date fair value of contingent consideration are recurring basis at fair value. Payments to settle the acquisition-date fair value of contingent consideration are presented as financing activities on the statement of cash flows; any payments in excess of the acquisition-date fair presented as financing activities on the statement of cash flows; any payments in excess of the acquisition-date fair presented as financing activities on the statement of cash flows; any payments in excess of the acquisition-date fair presented as financing activities on the statement of cash flows; any payments in excess of the acquisition-date fair value are presented as operating activities. value are presented as operating activities. value are presented as operating activities. value are presented as operating activities. Acquired intangibles with alternative future uses are carried at cost less accumulated amortization and consist of Acquired intangibles with alternative future uses are carried at cost less accumulated amortization and consist of Acquired intangibles with alternative future uses are carried at cost less accumulated amortization and consist of Acquired intangibles with alternative future uses are carried at cost less accumulated amortization and consist of licenses to technology held by third parties and other acquired intangible assets. Amortization is computed over the licenses to technology held by third parties and other acquired intangible assets. Amortization is computed over the licenses to technology held by third parties and other acquired intangible assets. Amortization is computed over the licenses to technology held by third parties and other acquired intangible assets. Amortization is computed over the estimated useful life of the underlying patents, which has historically ranged from 1 to 20 years. Purchased estimated useful life of the underlying patents, which has historically ranged from 1 to 20 years. Purchased estimated useful life of the underlying patents, which has historically ranged from 1 to 20 years. Purchased estimated useful life of the underlying patents, which has historically ranged from 1 to 20 years. Purchased intangible assets acquired in business combinations, other than goodwill, are amortized over their estimated useful intangible assets acquired in business combinations, other than goodwill, are amortized over their estimated useful intangible assets acquired in business combinations, other than goodwill, are amortized over their estimated useful intangible assets acquired in business combinations, other than goodwill, are amortized over their estimated useful lives unless these lives are determined to be indefinite. Intangibles are assessed for recoverability considering the lives unless these lives are determined to be indefinite. Intangibles are assessed for recoverability considering the lives unless these lives are determined to be indefinite. Intangibles are assessed for recoverability considering the lives unless these lives are determined to be indefinite. Intangibles are assessed for recoverability considering the contract life and the period of time over which the intangible will contribute to future cash flow. The unamortized cost contract life and the period of time over which the intangible will contribute to future cash flow. The unamortized cost contract life and the period of time over which the intangible will contribute to future cash flow. The unamortized cost contract life and the period of time over which the intangible will contribute to future cash flow. The unamortized cost of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount has occurred. Intangible asset impairments recorded during the year ended December 31, 2019 are further has occurred. Intangible asset impairments recorded during the year ended December 31, 2019 are further has occurred. Intangible asset impairments recorded during the year ended December 31, 2019 are further has occurred. Intangible asset impairments recorded during the year ended December 31, 2019 are further discussed in Note 6 "Restructuring". discussed in Note 6 "Restructuring". discussed in Note 6 "Restructuring". discussed in Note 6 "Restructuring". Cash and Cash EquivalentsRestricted CashShort-Term InvestmentsFair Value of Financial InstrumentsAccounts Receivable and Allowance for Doubtful AccountsInventories(in thousands)20192018Property, Plant and EquipmentBusiness CombinationsAcquired Intangibles and Goodwill(in thousands)20192018Total inventories, netProperty, Plant and EquipmentBusiness CombinationsAcquired Intangibles and Goodwill(in thousands)20192018Total inventories, netProperty, Plant and EquipmentBusiness CombinationsAcquired Intangibles and Goodwill(in thousands)20192018Total inventories, netProperty, Plant and EquipmentBusiness CombinationsAcquired Intangibles and Goodwill(in thousands)20192018Total inventories, netRaw materials Work in process Finished goods $ 26,077 $ 25,819 45,729 38,659 98,898 98,434 $ 170,704 $ 162,912 Property, plant and equipment, including equipment acquired under capital lease obligations, are stated at cost less accumulated amortization. Capitalized internal-use software costs include only those direct costs associated with the actual development or acquisition of computer software solely to meet internal needs and cloud-based applications to deliver our service and comprise costs associated with the design, coding, installation and testing of the system. Costs associated with preliminary development, such as the evaluation and selection of alternatives, as well as training, maintenance and support are expensed as incurred. Costs for software to be sold, leased or otherwise marketed that are related to the conceptual formulation and design are expensed as incurred. Costs incurred to produce software products and the software components of products to be sold, leased or marketed after technological feasibility is established are capitalized and amortized in accordance with the accounting standards F I N A N C I A L R E S U LT S Notes to consolidated financial statements for the costs of software to be sold, leased, or otherwise marketed. All other depreciation is computed using the straight-line method over the estimated useful lives of the assets (3 to 40 years). Amortization of leasehold improvements is computed on a straight-line basis over the lesser of the remaining life of the lease or the estimated useful life of the improvement asset. We have a policy of capitalizing expenditures that materially increase assets’ useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in earnings. We include the results of operations of the businesses that we acquire as of the acquisition date. The purchase price of an acquired business is allocated to the individual assets acquired and liabilities assumed based on their fair values at the date of acquisition. Those fair values are determined using income, cost and market approaches, most of which depend upon significant inputs that are not observable in the market, or level 3 measurements. The excess of purchase price over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. The purchase price for some business combinations includes consideration that is contingent on the achievement of net sales or earnings targets by the acquired business. Contingent consideration is measured initially and on a recurring basis at fair value. Payments to settle the acquisition-date fair value of contingent consideration are presented as financing activities on the statement of cash flows; any payments in excess of the acquisition-date fair value are presented as operating activities. Acquired intangibles with alternative future uses are carried at cost less accumulated amortization and consist of licenses to technology held by third parties and other acquired intangible assets. Amortization is computed over the estimated useful life of the underlying patents, which has historically ranged from 1 to 20 years. Purchased intangible assets acquired in business combinations, other than goodwill, are amortized over their estimated useful lives unless these lives are determined to be indefinite. Intangibles are assessed for recoverability considering the contract life and the period of time over which the intangible will contribute to future cash flow. The unamortized cost of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount has occurred. Intangible asset impairments recorded during the year ended December 31, 2019 are further discussed in Note 6 "Restructuring". Amortization expense related to developed technology and patent and license rights which have been acquired in a business combination is included in cost of sales. Amortization of trademarks, customer base and non-compete agreements which have been acquired in a business combination is recorded in operating expense under the caption 'acquisition-related intangible amortization'. Amortization expenses of intangible assets not acquired in a business combination are recorded within either the cost of sales, research and development or sales and marketing line items based on the use of the asset. We dispose the gross carrying amount and accumulated amortization of fully amortized intangible assets from historic business combinations once they are considered fully integrated into our business. The fair value of in-process research and development (IPR&D) acquired in a business combination is capitalized as an indefinite-lived intangible asset until completion or abandonment of the related research and development activities. IPR&D is tested for impairment annually or when any event or circumstance indicates that the fair value may be below the carrying value. If and when research and development is complete, the associated asset is amortized over the estimated useful life. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired arising from business combinations. Goodwill is subject to impairment tests annually or earlier if indicators of potential impairment exist, using a fair-value-based approach. We have elected to perform our annual test for indications of impairment as of October 1st of each year. Following the annual impairment tests for the years ended December 31, 2019, 2018 and 2017, goodwill has not been impaired. 153 We have investments in non-marketable equity securities issued by privately held companies. These investments are included in other long-term assets in the accompanying consolidated balance sheets. Non-marketable investments through which we exercise significant influence but do not have control are accounted for using the equity method. We monitor for changes in circumstances that may require a reassessment of the level of influence. Following the adoption of ASU 2016-01 on January 1, 2018, our non-marketable equity securities not accounted for under the equity method are either carried at fair value or under the measurement alternative. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date. Investments are evaluated periodically, or when impairment indicators are noted, to determine if declines in value are other-than-temporary. In making that determination, we consider all available evidence relating to the realizable value of a security. This evidence includes, but is not limited to, the following: › adverse financial conditions of a specific issuer, segment, industry, region or other variables; › the length of time and the extent to which the fair value has been less than cost; and › the financial condition and near-term prospects of the issuer. We consider whether the fair values of any of our non-marketable investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If any such decline is considered to be other than temporary (based on various factors, including historical financial results, product development activities and the overall health of the affiliate’s industry), then a write-down of the investment would be recorded in operating expense to its estimated fair value. We evaluate at the inception of each arrangement whether we have made an investment in an entity that is considered a variable interest entity (VIE) or if we hold other variable interests in an arrangement that is considered a variable interest entity (VIE). We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly Property, Plant and EquipmentBusiness CombinationsAcquired Intangibles and Goodwill(in thousands)20192018Total inventories, netNon-Marketable InvestmentsVariable Interest EntitiesAmortization expense related to developed technology and patent and license rights which have been acquired in a business combination is included in cost of sales. Amortization of trademarks, customer base and non-compete agreements which have been acquired in a business combination is recorded in operating expense under the caption 'acquisition-related intangible amortization'. Amortization expenses of intangible assets not acquired in a business combination are recorded within either the cost of sales, research and development or sales and marketing line items based on the use of the asset. We dispose the gross carrying amount and accumulated amortization of fully amortized intangible assets from historic business combinations once they are considered fully integrated into our business. The fair value of in-process research and development (IPR&D) acquired in a business combination is capitalized as an indefinite-lived intangible asset until completion or abandonment of the related research and development activities. IPR&D is tested for impairment annually or when any event or circumstance indicates that the fair value may be below the carrying value. If and when research and development is complete, the associated asset is amortized over the estimated useful life. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired arising from business combinations. Goodwill is subject to impairment tests annually or earlier if indicators of potential impairment exist, using a fair-value-based approach. We have elected to perform our annual test for indications of impairment as of October 1st of each year. Following the annual impairment tests for the years ended December 31, 2019, 2018 and 2017, goodwill has not been impaired. We have investments in non-marketable equity securities issued by privately held companies. These investments are included in other long-term assets in the accompanying consolidated balance sheets. Non-marketable investments through which we exercise significant influence but do not have control are accounted for using the equity method. We monitor for changes in circumstances that may require a reassessment of the level of influence. Following the adoption of ASU 2016-01 on January 1, 2018, our non-marketable equity securities not accounted for under the equity method are either carried at fair value or under the measurement alternative. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date. Investments are evaluated periodically, or when impairment indicators are noted, to determine if declines in value are other-than-temporary. In making that determination, we consider all available evidence relating to the realizable value of a security. This evidence includes, but is not limited to, the following: › adverse financial conditions of a specific issuer, segment, industry, region or other variables; › the length of time and the extent to which the fair value has been less than cost; and › the financial condition and near-term prospects of the issuer. We consider whether the fair values of any of our non-marketable investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If any such decline is considered to be other than temporary (based on various factors, including historical financial results, product development activities and the overall health of the affiliate’s industry), then a write-down of the investment would be recorded in operating expense to its estimated fair value. We evaluate at the inception of each arrangement whether we have made an investment in an entity that is considered a variable interest entity (VIE) or if we hold other variable interests in an arrangement that is considered a variable interest entity (VIE). We consolidate VIEs when we are the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in our interest or relationship with the entity affect our determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE as an investment in a non-marketable investment or in accordance with other applicable GAAP. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. We consider, amongst other indicators, a history of operating losses or a change in expected sales levels to be indicators of potential impairment. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. If an asset is determined to be impaired, the loss is 154 measured as the amount by which the carrying amount of the asset exceeds fair value which is determined by applicable market prices, when available. When market prices are not available, we generally measure fair value by discounting projected future cash flows of the asset. Considerable judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could differ from such estimates. 4. Revenue 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 Topic 606, 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. : 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. 10% of our net sales. : 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 8- Non-Marketable InvestmentsVariable Interest EntitiesImpairment of Long-Lived AssetsNature of Goods and ServicesConsumable and Related RevenueConsumable ProductsRelated RevenueF I N A N C I A L R E S U LT S Notes to consolidated financial statements affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we assess whether any changes in our interest or relationship with the entity affect our determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE as an investment in a non-marketable investment or in accordance with other applicable GAAP. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. We consider, amongst other indicators, a history of operating losses or a change in expected sales levels to be indicators of potential impairment. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. If an asset is determined to be impaired, the loss is measured as the amount by which the carrying amount of the asset exceeds fair value which is determined by applicable market prices, when available. When market prices are not available, we generally measure fair value by discounting projected future cash flows of the asset. Considerable judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could differ from such estimates. 4. Revenue 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 Topic 606, 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. : 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. : 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 8- 10% of our net sales. 155 Impairment of Long-Lived AssetsNature of Goods and ServicesConsumable and Related RevenueConsumable ProductsRelated Revenue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 term licenses. 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. 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 11-12% 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. 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. However, we have certain companion diagnostic co-development contracts in which our performance obligations extend over multiple years. As of December 31, 2019, we had $20.4 million of remaining performance obligations for which the transaction price is not constrained related to these contracts of which we expect to recognize over the next 12 to 18 months. 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 and contracts with variable consideration related to undelivered performance obligations, 156 is not material. InstrumentsContract Estimates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 term licenses. 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. 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 11-12% 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. F I N A N C I A L R E S U LT S Notes to consolidated financial statements 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. However, we have certain companion diagnostic co-development contracts in which our performance obligations extend over multiple years. As of December 31, 2019, we had $20.4 million of remaining performance obligations for which the transaction price is not constrained related to these contracts of which we expect to recognize over the next 12 to 18 months. 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 and contracts with variable consideration related to undelivered performance obligations, is not material. 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, 2019 and 2018 totaled $5.5 million and $6.9 million, respectively, and are included in prepaid expenses and other current assets in the accompanying consolidated balance sheets and relate to the companion diagnostic co-development contracts discussed above. 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, 2019 and 2018, contract liabilities totaled $56.2 million and $54.3 million, respectively, of which $48.5 million and $45.3 million is included in accrued and other current liabilities, respectively, and $7.7 million and $9.0 million in included in other long-term liabilities, respectively. During the twelve months ended December 31, 2019 and 2018, we satisfied the associated performance obligations and recognized revenue of $48.3 million and $44.5 million, respectively, related to advance customer payments previously received. We disaggregate our revenue based on product categories and customer class as shown in the tables below for the years ended December 31, 2019, 2018 and 2017: Molecular Diagnostics Life Sciences Academia / Applied Testing Pharma Molecular Diagnostics Life Sciences Academia / Applied Testing Pharma Total $ 665,866 688,281 418,518 269,763 $ 71,266 101,011 69,114 31,897 $ 737,132 789,292 487,632 301,660 $ 1,354,147 $ 172,277 $ 1,526,424 $ 649,602 665,857 407,370 258,487 $ 82,197 104,192 72,131 32,061 $ 731,799 770,049 479,501 157 290,548 $ 1,315,459 $ 186,389 $ 1,501,848 InstrumentsContract EstimatesContract BalancesDisaggregation of Revenue(in thousands)2019Consumablesand relatedInstrumentsTotalTotal2018Consumablesand relatedInstrumentsTotal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, 2019 and 2018 totaled $5.5 million and $6.9 million, respectively, and are included in prepaid expenses and other current assets in the accompanying consolidated balance sheets and relate to the companion diagnostic co-development contracts discussed above. 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, 2019 and 2018, contract liabilities totaled $56.2 million and $54.3 million, respectively, of which $48.5 million and $45.3 million is included in accrued and other current liabilities, respectively, and $7.7 million and $9.0 million in included in other long-term liabilities, respectively. During the twelve months ended December 31, 2019 and 2018, we satisfied the associated performance obligations and recognized revenue of $48.3 million and $44.5 million, respectively, related to advance customer payments previously received. We disaggregate our revenue based on product categories and customer class as shown in the tables below for the years ended December 31, 2019, 2018 and 2017: Molecular Diagnostics Life Sciences Academia / Applied Testing Pharma Molecular Diagnostics Life Sciences Academia / Applied Testing Pharma Total Molecular Diagnostics Life Sciences Academia / Applied Testing Pharma $ 665,866 688,281 418,518 269,763 $ 71,266 101,011 69,114 31,897 $ 737,132 789,292 487,632 301,660 $ 1,354,147 $ 172,277 $ 1,526,424 $ 649,602 665,857 407,370 258,487 $ 82,197 104,192 72,131 32,061 $ 731,799 770,049 479,501 290,548 $ 1,315,459 $ 186,389 $ 1,501,848 $ 605,462 $ 77,702 $ 683,164 637,253 392,066 245,187 97,119 67,477 29,642 734,372 459,543 274,829 $ 1,242,715 $ 174,821 $ 1,417,536 Refer to Note 21 "Segment Information" for disclosure of revenue by geographic region. 5. Acquisitions and Divestitures For acquisitions which have been accounted for as business combinations, the acquired companies’ results have been included in the accompanying consolidated statements of income from their respective dates of acquisition. Our acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to expectations of synergies of combining the businesses. These synergies include use of our existing infrastructure, such as sales force, shared service centers, distribution channels and customer relations, to expand sales of an acquired business' 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. 158 If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to expense at the acquisition date. In January 2019, we completed 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 located in Concord, Massachusetts. The cash consideration, net of cash acquired, was $24.5 million. This acquisition was not significant to the overall consolidated financial statements and as of December 31, 2019, 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. In the third quarter of 2019, we acquired two additional companies for total cash consideration, net of cash acquired, of $43.5 million. The purchase price allocations for these acquisitions are preliminary and are 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 assets and liabilities acquired, including the acquired tax balance. These acquisitions were not significant to the overall consolidated financial statements and the acquisitions did not have a material impact to net sales, net income or earnings per share. Thus, no pro forma information has been provided herein. 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. Contract BalancesDisaggregation of Revenue(in thousands)2019Consumablesand relatedInstrumentsTotalTotal2018Consumablesand relatedInstrumentsTotalBusiness Combinations and Asset Acquisitions2019 Business Combinations2018 Business Combination(in thousands)2017Consumablesand relatedInstrumentsTotalTotalMolecular Diagnostics Life Sciences F I N A N C I A L R E S U LT S Notes to consolidated financial statements Academia / Applied Testing Pharma $ 605,462 $ 77,702 $ 683,164 637,253 392,066 245,187 97,119 67,477 29,642 734,372 459,543 274,829 $ 1,242,715 $ 174,821 $ 1,417,536 Refer to Note 21 "Segment Information" for disclosure of revenue by geographic region. 5. Acquisitions and Divestitures For acquisitions which have been accounted for as business combinations, the acquired companies’ results have been included in the accompanying consolidated statements of income from their respective dates of acquisition. Our acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to expectations of synergies of combining the businesses. These synergies include use of our existing infrastructure, such as sales force, shared service centers, distribution channels and customer relations, to expand sales of an acquired business' 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. If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to expense at the acquisition date. In January 2019, we completed 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 located in Concord, Massachusetts. The cash consideration, net of cash acquired, was $24.5 million. This acquisition was not significant to the overall consolidated financial statements and as of December 31, 2019, 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. In the third quarter of 2019, we acquired two additional companies for total cash consideration, net of cash acquired, of $43.5 million. The purchase price allocations for these acquisitions are preliminary and are 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 assets and liabilities acquired, including the acquired tax balance. These acquisitions were not significant to the overall consolidated financial statements and the acquisitions did not have a material impact to net sales, net income or earnings per share. Thus, no pro forma information has been provided herein. 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. 159 Business Combinations and Asset Acquisitions2019 Business Combinations2018 Business Combination(in thousands)2017Consumablesand relatedInstrumentsTotalTotal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. Potential contingent payments through 2024 under the purchase agreement 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%. Direct acquisition costs totaled $2.0 million. The final purchase price allocation differed from the initial preliminary purchase price allocation as follows: Purchase Price: Cash consideration Fair value of contingent consideration Final 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 Deferred tax liability on fair value of identifiable intangible assets acquired $ 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 (3,043) 1,432 1,868 2,213 (1,412) (560) 6,434 80,100 — 97,268 (9,169) $ — 626 $ 626 $ — — — — — (1,225) (128) (48,800) 24,300 20,353 6,126 The changes in the values of in-process research and development assets and developed technology relate to new information obtained, that existed at the acquisition date, regarding key assumptions in the valuation model since the initial purchase price allocation. The weighted average amortization period for the developed technology is 10 years. The goodwill acquired is not deductible for tax purposes. $ 186,157 $ 185,531 $ 626 In-process research and development relates to technologies that remain in development at the time of acquisition and which had not yet obtained regulatory approval. During 2019, one development project was completed and a portion of in-process research and development costs were reclassified into developed technology as further discussed in Note 11 "Goodwill and Intangible Assets". The remaining technologies within in-process research and development are expected to be completed within the next two years. 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 our net sales, net income or earnings per share on a pro forma basis. In April 2018, we acquired all remaining shares of a privately held entity in which we held a minority interest. The 160 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. This acquisition was not Other 2018 Business Combination(in thousands)FinalPreliminary As of April 27,2018DifferenceTotal 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. Potential contingent payments through 2024 under the purchase agreement 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%. Direct acquisition costs totaled $2.0 million. The final purchase price allocation differed from the initial preliminary purchase price allocation as follows: Purchase Price: Cash consideration Fair value of contingent consideration Final 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 $ 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 (3,043) 1,432 1,868 2,213 (1,412) (560) 6,434 80,100 — 97,268 (9,169) $ — 626 $ 626 $ — — — — — (1,225) (128) (48,800) 24,300 20,353 6,126 Goodwill acquired Deferred tax liability on fair value of identifiable intangible assets The changes in the values of in-process research and development assets and developed technology relate to new information obtained, that existed at the acquisition date, regarding key assumptions in the valuation model since the initial purchase price allocation. The weighted average amortization period for the developed technology is 10 years. The goodwill acquired is not deductible for tax purposes. $ 186,157 $ 185,531 $ 626 In-process research and development relates to technologies that remain in development at the time of acquisition and which had not yet obtained regulatory approval. During 2019, one development project was completed and a portion of in-process research and development costs were reclassified into developed technology as further discussed in Note 11 "Goodwill and Intangible Assets". The remaining technologies within in-process research and F I N A N C I A L R E S U LT S Notes to consolidated financial statements development are expected to be completed within the next two years. 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 our net sales, net income or earnings per share on a pro forma basis. 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. This acquisition was not significant to the overall consolidated financial statements. 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. On January 31, 2019, we acquired the digital PCR asset of Formulatrix, Inc., a developer of laboratory automation solutions. We paid Formulatrix $125.0 million in cash upon closing and will pay future milestone payments of $135.9 million in 2020. As of December 31, 2019, $134.3 million is included in accrued and other current liabilities in the accompanying consolidated balance sheet for the present value of the future expected payments. In 2019, we sold a portfolio of protein catalysation products for $1.0 million. An immaterial gain was recorded on the sale. In 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 income (expense), net in the accompanying consolidated statements of income for the year- ended December 31, 2018. 6. Restructuring and Impairments As part of our restructuring activities, we incur expenses that qualify as exit and disposal costs under U.S. GAAP including severance and employee costs as well as contract and other costs, primarily contract termination costs, as well as inventory write-offs and other implementation costs primarily related to consulting fees. Personnel related costs primarily relate to cash severance and other termination benefits including accelerated share-based compensation. We also incur expenses that are an integral component of, and are directly attributable to, our restructuring activities which do not qualify as exit and disposal costs under U.S. GAAP, which consist of asset-related costs such as intangible asset impairments and other asset related write-offs. Personnel costs are primarily determined based on established benefit arrangements, local statutory requirements, or historical benefit practices. We recognize these benefits when payment is probable and estimable. Other benefits which require future service and are associated to non-recurring benefits are recognized ratably over the future service period. Other assets, including inventory, are impaired or written-off if the carrying value exceeds the fair value. All other costs are recognized as incurred. In the second half of 2019, we decided to suspend development of NGS-related instrument systems and entered into a new strategic partnership with Illumina to commercialize IVD kits worldwide on Illumina's diagnostic sequencers. In order to align our business with this new strategy, we began restructuring initiatives to target resource allocation to growth opportunities in our Sample to Insight portfolio. Impairments to property, plant and equipment primarily impacted computer software and machinery and equipment. Costs incurred to either purchase software or produce software products and the software components of products to be sold, leased or marketed after technological feasibility is established were previously capitalized during the development of certain NGS-related instrument systems. These long-lived assets were fully impaired due to the decision to suspend further development. In addition to computer software, certain machinery and equipment assets were fully impaired given that these assets had no alternative use following the changes announced for this program and it was estimated that no value was recoverable in a market disposal. 161 Due to the suspended development, intangible assets were also assessed for recoverability. The abandoned assets include developed technology related to the suspended projects as well as the termination of licenses which were used exclusively in connection with this program. As a result, we recorded intangible asset impairment charges due to the conclusion that the identified assets have no alternative use outside of the suspended program and thus are fully impaired. Other 2018 Business Combination(in thousands)FinalPreliminary As of April 27,2018DifferenceTotal2019 Asset AcquisitionDivestitures2019 Restructuring significant to the overall consolidated financial statements. 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. On January 31, 2019, we acquired the digital PCR asset of Formulatrix, Inc., a developer of laboratory automation solutions. We paid Formulatrix $125.0 million in cash upon closing and will pay future milestone payments of $135.9 million in 2020. As of December 31, 2019, $134.3 million is included in accrued and other current liabilities in the accompanying consolidated balance sheet for the present value of the future expected payments. In 2019, we sold a portfolio of protein catalysation products for $1.0 million. An immaterial gain was recorded on the sale. In 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 income (expense), net in the accompanying consolidated statements of income for the year- ended December 31, 2018. 6. Restructuring and Impairments As part of our restructuring activities, we incur expenses that qualify as exit and disposal costs under U.S. GAAP including severance and employee costs as well as contract and other costs, primarily contract termination costs, as well as inventory write-offs and other implementation costs primarily related to consulting fees. Personnel related costs primarily relate to cash severance and other termination benefits including accelerated share-based compensation. We also incur expenses that are an integral component of, and are directly attributable to, our restructuring activities which do not qualify as exit and disposal costs under U.S. GAAP, which consist of asset-related costs such as intangible asset impairments and other asset related write-offs. Personnel costs are primarily determined based on established benefit arrangements, local statutory requirements, or historical benefit practices. We recognize these benefits when payment is probable and estimable. Other benefits which require future service and are associated to non-recurring benefits are recognized ratably over the future service period. Other assets, including inventory, are impaired or written-off if the carrying value exceeds the fair value. All other costs are recognized as incurred. In the second half of 2019, we decided to suspend development of NGS-related instrument systems and entered into a new strategic partnership with Illumina to commercialize IVD kits worldwide on Illumina's diagnostic sequencers. In order to align our business with this new strategy, we began restructuring initiatives to target resource allocation to growth opportunities in our Sample to Insight portfolio. Impairments to property, plant and equipment primarily impacted computer software and machinery and equipment. Costs incurred to either purchase software or produce software products and the software components of products to be sold, leased or marketed after technological feasibility is established were previously capitalized during the development of certain NGS-related instrument systems. These long-lived assets were fully impaired due to the decision to suspend further development. In addition to computer software, certain machinery and equipment assets were fully impaired given that these assets had no alternative use following the changes announced for this program and it was estimated that no value was recoverable in a market disposal. Due to the suspended development, intangible assets were also assessed for recoverability. The abandoned assets include developed technology related to the suspended projects as well as the termination of licenses which were used exclusively in connection with this program. As a result, we recorded intangible asset impairment charges due to the conclusion that the identified assets have no alternative use outside of the suspended program and thus are fully impaired. We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further development of NGS-related instrument systems and are not related to external market factors, the impairment charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued development and related actions discussed above. In addition, we have initiated measures to: › shift Commercial Operations activities into Business Areas; › transition manufacturing activities into a regional structure; and › expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, Philippines The following is a summary of the charges recorded during the year ended December 31, 2019. Personnel related (of which $2,956 due to related parties) (22) $ 70,578 Contract termination costs (of which $15,676 due to related parties) Consulting fees Accounts receivable (of which $5,984 due from related parties) Inventories Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Property, plant and equipment Intangible assets 162 Equity method investment impairment Total 42,099 10,150 10,825 12,336 17,012 163,000 98,472 40,301 138,773 4,799 $ 306,572 (9) (11) (10) Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the cash components of the restructuring activity. Costs incurred in 2019 Payments $ 44,640 $ 42,099 $ 10,150 $ 96,889 (17,272) (18,294) (2,162) (37,728) Foreign currency translation adjustment 631 493 (53) 1,071 $ 27,999 $ 24,298 $ 7,935 $ 60,232 Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 20192019 Asset AcquisitionDivestitures2019 Restructuring We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. development and related actions discussed above. In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: In addition, we have initiated measures to: F I N A N C I A L R E S U LT S Notes to consolidated financial statements › › › › › › shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; › › › › › › › › › transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and › › › › › › › › › › › › › › › › › › expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, Philippines Philippines expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, Philippines Philippines Philippines Philippines Philippines Philippines Philippines expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, Philippines Philippines The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Personnel related (of which $2,956 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Contract termination costs (of which $15,676 due to related parties) Consulting fees Consulting fees Consulting fees Consulting fees Consulting fees Consulting fees Consulting fees Consulting fees Consulting fees Consulting fees Consulting fees Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) Inventories Inventories Inventories Inventories Inventories Inventories Inventories Inventories Inventories Inventories Inventories Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Equity method investment impairment Total Total Total Total Total Total Total Total Total Total Total (22) (22) (22) (22) (22) (22) (22) (22) (22) (22) (22) (9) (9) (9) (9) (9) (9) (9) (9) (9) (9) (9) (11) (11) (11) (11) (11) (11) (11) (11) (11) (11) (11) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) $ 70,578 $ 70,578 $ 70,578 $ 70,578 $ 70,578 $ 70,578 $ 70,578 $ 70,578 $ 70,578 $ 70,578 $ 70,578 42,099 42,099 42,099 42,099 42,099 42,099 42,099 42,099 42,099 42,099 42,099 10,150 10,150 10,150 10,150 10,150 10,150 10,150 10,150 10,150 10,150 10,150 10,825 10,825 10,825 10,825 10,825 10,825 10,825 10,825 10,825 10,825 10,825 12,336 12,336 12,336 12,336 12,336 12,336 12,336 12,336 12,336 12,336 12,336 17,012 17,012 17,012 17,012 17,012 17,012 17,012 17,012 17,012 17,012 17,012 163,000 163,000 163,000 163,000 163,000 163,000 163,000 163,000 163,000 163,000 163,000 98,472 98,472 98,472 98,472 98,472 98,472 98,472 98,472 98,472 98,472 98,472 40,301 40,301 40,301 40,301 40,301 40,301 40,301 40,301 40,301 40,301 40,301 138,773 138,773 138,773 138,773 138,773 138,773 138,773 138,773 138,773 138,773 138,773 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 $ 306,572 $ 306,572 $ 306,572 $ 306,572 $ 306,572 $ 306,572 $ 306,572 $ 306,572 $ 306,572 $ 306,572 $ 306,572 Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. cash components of the restructuring activity. Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 Costs incurred in 2019 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 44,640 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 42,099 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 10,150 $ 96,889 $ 96,889 $ 96,889 $ 96,889 $ 96,889 $ 96,889 $ 96,889 $ 96,889 $ 96,889 $ 96,889 $ 96,889 Payments Payments Payments Payments Payments Payments Payments Payments Payments Payments Payments Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment (17,272) (17,272) (17,272) (17,272) (17,272) (17,272) (17,272) (17,272) (17,272) (17,272) (17,272) (18,294) (18,294) (18,294) (18,294) (18,294) (18,294) (18,294) (18,294) (18,294) (18,294) (18,294) (2,162) (2,162) (2,162) (2,162) (2,162) (2,162) (2,162) (2,162) (2,162) (2,162) (2,162) (37,728) (37,728) (37,728) (37,728) (37,728) (37,728) (37,728) (37,728) (37,728) (37,728) (37,728) 631 631 631 631 631 631 631 631 631 631 631 493 493 493 493 493 493 493 493 493 493 493 (53) (53) (53) (53) (53) (53) (53) (53) (53) (53) (53) 1,071 1,071 1,071 1,071 1,071 1,071 1,071 1,071 1,071 1,071 1,071 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 27,999 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 24,298 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 7,935 $ 60,232 $ 60,232 $ 60,232 $ 60,232 $ 60,232 $ 60,232 $ 60,232 $ 60,232 $ 60,232 $ 60,232 $ 60,232 Future pre-tax costs between $15 - $23 million are expected to be incurred primarily related to personnel, consulting and contract termination costs before completion of the program in 2020. We initiated restructuring initiatives in 2017 to mitigate the negative impacts stemming from the U.S. tax reform. Total pre-tax costs for the initiatives, which were concluded in 2018, were $24 million and no additional costs will be incurred related to this program. Cumulative costs for this program were as follows: The following table summarizes the cash components of the restructuring activity. $ 9,705 $ 10,008 $ 4,649 $ 24,362 Restructuring, acquisition, integration and other, net Cost of sales Cost of sales Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Total 2019 releases $ — 6,174 6,174 424 4,207 4,631 (1,100) (1,100) Liability at December 31, 2017 Additional costs in 2018 Release of excess accrual Payments Foreign currency translation adjustment Release of excess accrual Payments Foreign currency translation adjustment 163 $ 3,039 $ 3,039 3,039 1,610 1,610 — — — — 10,757 13,796 1,617 10,049 11,666 (1,100) (1,100) $ — 4,583 4,583 1,193 4,232 5,425 — — 6,468 (1,837) (6,892) (141) (1,100) (2,269) (49) $ 402 $ 6,222 $ 4,585 $ 10,807 $ 3,820 $ 2,844 $ 6,664 5,554 (129) 12,022 (1,966) (7,149) (14,041) (17) (158) — (2,828) (16) $ — (1,100) (5,097) (65) $ 402 During 2018, fixed asset impairments of $1.6 million were recorded in connection with this initiative and are included within restructuring, acquisition, integration and other, net in the accompanying consolidated statements of income. As of December 31, 2019 and 2018, liabilities of $0.4 million and $6.7 million, respectively, are included in accrued and other current liabilities in the accompanying consolidated balance sheets. During 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. Measures included simplifying our geographic presence with site reductions, focusing resources to shared service centers, and streamlining selected organizational structures. The cumulative cost for this program was $97.1 million and no additional costs will be incurred related to this program. During the year ended December 31, 2017, we incurred $19.7 million of costs, of which $1.4 million was included in cost of sales and $18.3 million was included in restructuring, acquisition, integration and other, net. During the years ended December 31, 2019 and 2018, Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 20192017 Restructuring2016 Restructuring(in thousands)PersonnelRelatedContract andOther CostsInventory Write-offs & AssetImpairmentsTotalTotal 2017 costsTotal 2018 costsTotal cumulative costs(in thousands)PersonnelRelatedConsulting CostsTotalLiability at December 31, 2018Liability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019 Future pre-tax costs between $15 - $23 million are expected to be incurred primarily related to personnel, consulting and contract termination costs before completion of the program in 2020. We initiated restructuring initiatives in 2017 to mitigate the negative impacts stemming from the U.S. tax reform. Total pre-tax costs for the initiatives, which were concluded in 2018, were $24 million and no additional costs will be incurred related to this program. Cumulative costs for this program were as follows: Cost of sales Restructuring, acquisition, integration and other, net Cost of sales Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Total 2019 releases $ — 6,174 6,174 424 4,207 4,631 (1,100) (1,100) $ — 4,583 4,583 1,193 4,232 5,425 — — $ 3,039 $ 3,039 — 3,039 — 1,610 1,610 — — 10,757 13,796 1,617 10,049 11,666 (1,100) (1,100) $ 9,705 $ 10,008 $ 4,649 $ 24,362 The following table summarizes the cash components of the restructuring activity. Liability at December 31, 2017 Additional costs in 2018 Release of excess accrual Payments Foreign currency translation adjustment Release of excess accrual Payments Foreign currency translation adjustment $ 6,222 $ 4,585 $ 10,807 6,468 (1,837) (6,892) (141) 5,554 (129) 12,022 (1,966) (7,149) (14,041) (17) (158) $ 3,820 $ 2,844 $ 6,664 (1,100) (2,269) (49) $ 402 — (2,828) (16) $ — (1,100) (5,097) (65) $ 402 During 2018, fixed asset impairments of $1.6 million were recorded in connection with this initiative and are included within restructuring, acquisition, integration and other, net in the accompanying consolidated statements of income. As of December 31, 2019 and 2018, liabilities of $0.4 million and $6.7 million, respectively, are included in accrued and other current liabilities in the accompanying consolidated balance sheets. During 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. Measures included simplifying our geographic presence with site reductions, focusing resources to shared service centers, and streamlining selected organizational structures. The cumulative cost for this program was $97.1 million and no additional costs will be incurred related to this program. During the year ended December 31, 2017, we incurred $19.7 million of costs, of which $1.4 million was included in cost of sales and $18.3 million was included in restructuring, acquisition, integration and other, net. During the years ended December 31, 2019 and 2018, 164 2017 Restructuring2016 Restructuring(in thousands)PersonnelRelatedContract andOther CostsInventory Write-offs & AssetImpairmentsTotalTotal 2017 costsTotal 2018 costsTotal cumulative costs(in thousands)PersonnelRelatedConsulting CostsTotalLiability at December 31, 2018Liability at December 31, 2019releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and other, net. The following table summarizes the cash components of the restructuring activity. Liability at December 31, 2017 Release of excess accrual Payments Foreign currency translation adjustment Release of excess accrual Payments Foreign currency translation adjustment $ 4,294 $ 1,052 (343) (3,648) (48) $ 255 (31) (225) 1 $ — (838) (214) — $ — $ — $ — $ — $ — Future pre-tax costs between $15 - $23 million are expected to be incurred primarily related to personnel, consulting and contract termination costs before completion of the program in 2020. We initiated restructuring initiatives in 2017 to mitigate the negative impacts stemming from the U.S. tax reform. Total pre-tax costs for the initiatives, which were concluded in 2018, were $24 million and no additional costs will be incurred related to this program. Cumulative costs for this program were as follows: The following table summarizes the cash components of the restructuring activity. $ 9,705 $ 10,008 $ 4,649 $ 24,362 Restructuring, acquisition, integration and other, net Cost of sales Cost of sales Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Total 2019 releases Liability at December 31, 2017 Additional costs in 2018 Release of excess accrual Payments Foreign currency translation adjustment Release of excess accrual Payments Foreign currency translation adjustment F I N A N C I A L R E S U LT S Notes to consolidated financial statements $ — 6,174 6,174 424 4,207 4,631 (1,100) (1,100) $ — 4,583 4,583 1,193 4,232 5,425 — — 6,468 (1,837) (6,892) (141) (1,100) (2,269) (49) $ 402 $ 3,039 $ 3,039 3,039 1,610 1,610 — — — — 10,757 13,796 1,617 10,049 11,666 (1,100) (1,100) 5,554 (129) 12,022 (1,966) (7,149) (14,041) (17) (158) — (2,828) (16) $ — (1,100) (5,097) (65) $ 402 $ 6,222 $ 4,585 $ 10,807 $ 3,820 $ 2,844 $ 6,664 During 2018, fixed asset impairments of $1.6 million were recorded in connection with this initiative and are included within restructuring, acquisition, integration and other, net in the accompanying consolidated statements of income. As of December 31, 2019 and 2018, liabilities of $0.4 million and $6.7 million, respectively, are included in accrued and other current liabilities in the accompanying consolidated balance sheets. During 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. Measures included simplifying our geographic presence with site reductions, focusing resources to shared service centers, and streamlining selected organizational structures. The cumulative cost for this program was $97.1 million and no additional costs will be incurred related to this program. During the year ended December 31, 2017, we incurred $19.7 million of costs, of which $1.4 million was included in cost of sales and $18.3 million was included in restructuring, acquisition, integration and other, net. During the years ended December 31, 2019 and 2018, releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and other, net. other, net. releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and other, net. other, net. releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and other, net. other, net. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. Liability at December 31, 2017 Liability at December 31, 2017 Liability at December 31, 2017 Liability at December 31, 2017 Liability at December 31, 2017 Liability at December 31, 2017 Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual Payments Payments Payments Payments Payments Payments Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual Payments Payments Payments Payments Payments Payments $ 1,066 $ 6,412 $ 6,412 $ 1,066 $ 1,066 $ 4,294 $ 4,294 $ 1,052 $ 1,052 $ 6,412 $ 6,412 $ 4,294 $ 4,294 $ 1,052 $ 1,052 $ 1,066 $ 1,066 $ 6,412 $ 6,412 $ 1,066 $ 1,066 $ 1,052 $ 1,052 $ 4,294 $ 4,294 (343) (343) (343) (343) (343) (343) (3,648) (3,648) (3,648) (3,648) (3,648) (3,648) (838) (838) (838) (546) (838) (1,727) (1,727) (1,727) (1,727) (1,727) (1,727) (838) (838) (546) (546) (546) (546) (546) (546) (214) (214) (214) (494) (214) (4,356) (4,356) (4,356) (4,356) (4,356) (4,356) (214) (214) (494) (494) (494) (494) (494) (494) (48) (48) (48) (48) (48) (48) — — — — — — (26) (74) (74) (26) (26) (26) (26) (74) (74) (74) (74) (26) (26) $ 255 $ 255 $ 255 $ 255 $ 255 $ 255 $ — $ — $ — $ — $ — $ — $ — $ 255 $ 255 $ 255 $ 255 $ 255 $ 255 $ — $ — $ — $ — $ — $ — (31) (31) (31) (31) (31) (31) (225) (225) (225) (225) (225) (225) — $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — (31) (31) (31) (31) (31) (31) $ — (225) (225) (225) (225) — $ — $ — $ — (225) (225) $ — $ — Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment 1 1 1 1 1 1 — $ — $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — 1 1 1 1 1 1 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. Money market deposits Commercial paper Loans receivable Prepaid expenses Other receivables Value added tax Cash collateral 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: 165 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ 234,256 Prepaid expenses Prepaid expenses Prepaid expenses Prepaid expenses Prepaid expenses Prepaid expenses $ 45,409 $ 45,409 $ 45,409 $ 45,409 $ 45,409 $ 45,409 $ 45,409 $ 48,250 $ 48,250 $ 48,250 $ 48,250 $ 48,250 $ 48,250 9. Property, Plant and Equipment Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as follows as of December 31, 2019 and 2018: 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: (14) Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Value added tax Value added tax Value added tax Value added tax Value added tax Value added tax Cash collateral Cash collateral Cash collateral Cash collateral Cash collateral Cash collateral 37,025 37,025 37,025 37,025 37,025 37,025 37,025 11,127 11,127 11,127 11,127 11,127 11,127 20,347 20,347 20,347 20,347 20,347 20,347 20,347 24,416 24,416 24,416 24,416 24,416 24,416 2,683 2,683 2,683 2,683 2,683 2,683 2,683 (14) (14) (14) (14) (14) (14) 25,368 25,368 25,368 25,368 25,368 25,368 $ 105,464 $ 105,464 $ 105,464 $ 105,464 $ 105,464 $ 105,464 $ 105,464 $ 109,161 $ 109,161 $ 109,161 $ 109,161 $ 109,161 $ 109,161 $ 109,161 Money market deposits Money market deposits Money market deposits Money market deposits Money market deposits Money market deposits Commercial paper Commercial paper Commercial paper Commercial paper Commercial paper Commercial paper Loans receivable Loans receivable Loans receivable Loans receivable Loans receivable Loans receivable $ 87,468 $ 87,468 $ 87,468 $ 87,468 $ 87,468 $ 87,468 $ 87,468 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 22,459 22,459 22,459 22,459 22,459 22,459 22,459 179,219 179,219 179,219 179,219 179,219 179,219 19,659 19,659 19,659 19,659 19,659 19,659 19,659 35,037 35,037 35,037 35,037 35,037 35,037 $ 6,412 (1,727) (4,356) (74) $ 255 (31) (225) 1 $ — $ 20,000 179,219 35,037 $ 234,256 $ 48,250 11,127 24,416 25,368 2017 Restructuring2016 Restructuring(in thousands)PersonnelRelatedContract andOther CostsInventory Write-offs & AssetImpairmentsTotalTotal 2017 costsTotal 2018 costsTotal cumulative costs(in thousands)PersonnelRelatedConsulting CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assetsreleases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and other, net. other, net. other, net. other, net. other, net. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. Liability at December 31, 2017 Release of excess accrual Payments Foreign currency translation adjustment (48) Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment — (48) (48) (48) (48) — — — — (26) (26) (26) (26) (26) (74) (74) (74) (74) (74) releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and (31) Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual $ — (31) (31) (31) (31) $ — — $ — $ — $ — $ — $ — $ — — (31) (31) (31) (31) Release of excess accrual other, net. Payments Foreign currency translation adjustment (225) Payments Payments other, net. other, net. other, net. Payments Payments $ — (225) (225) (225) (225) $ — — $ — $ — $ — $ — $ — $ — — (225) (225) (225) (225) 1 Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment $ — 1 1 1 1 $ — — $ — $ — $ — $ — $ — $ — — 1 1 1 1 The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — (31) (225) 1 $ — 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables $ 4,294 Liability at December 31, 2017 Liability at December 31, 2017 Liability at December 31, 2017 $ 1,052 $ 4,294 $ 4,294 $ 4,294 $ 1,052 $ 1,066 $ 1,066 $ 1,066 $ 1,052 $ 1,052 $ 1,066 $ 6,412 $ 6,412 $ 6,412 $ 6,412 Liability at December 31, 2017 due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial Release of excess accrual (1,727) Release of excess accrual Release of excess accrual Release of excess accrual (343) (838) (546) (1,727) (1,727) (1,727) (343) (838) (546) (838) (546) (343) (838) (546) (343) assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market (214) (3,648) (3,648) (3,648) (214) (214) (214) (494) (494) (494) (494) (4,356) (4,356) (4,356) (4,356) (3,648) Payments Payments Payments Payments value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets Foreign currency translation adjustment as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is (48) Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment — (48) (48) (48) — — — (26) (26) (26) (26) (74) (74) (74) (74) determined using the effective interest rate method. $ 255 determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. $ — $ 255 $ 255 $ 255 $ — $ — $ — $ — $ — $ — $ — $ 255 $ 255 $ 255 $ 255 $ 4,294 Liability at December 31, 2017 Liability at December 31, 2017 Liability at December 31, 2017 Liability at December 31, 2017 $ 1,052 $ 4,294 $ 4,294 $ 4,294 $ 4,294 $ 1,052 $ 1,052 $ 1,066 $ 1,066 $ 1,066 $ 1,052 $ 1,052 $ 1,066 $ 1,066 $ 6,412 $ 6,412 $ 6,412 $ 6,412 $ 6,412 (343) Release of excess accrual Release of excess accrual Release of excess accrual Release of excess accrual (838) (343) (343) (343) (343) (838) (838) (838) (838) (546) (546) (546) (546) (546) (1,727) (1,727) (1,727) (1,727) (1,727) (3,648) Payments Payments Payments Payments (214) (3,648) (3,648) (3,648) (3,648) (214) (214) (214) (214) (494) (494) (494) (494) (494) (4,356) (4,356) (4,356) (4,356) (4,356) $ 255 $ — $ 255 $ 255 $ 255 $ 255 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 255 $ 255 $ 255 $ 255 $ 255 At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables 8. Prepaid Expenses and Other Current Assets due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is $ 234,256 $ 234,256 $ 234,256 $ 234,256 At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is determined using the effective interest rate method. determined using the effective interest rate method. determined using the effective interest rate method. $ 234,256 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 9. Property, Plant and Equipment 8. Prepaid Expenses and Other Current Assets Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: Prepaid expenses Prepaid expenses Prepaid expenses Prepaid expenses Other receivables Other receivables Other receivables Other receivables Money market deposits Money market deposits Money market deposits Value added tax Value added tax Value added tax Value added tax Commercial paper Cash collateral (14) Cash collateral Commercial paper Commercial paper Cash collateral Cash collateral Loans receivable Loans receivable Loans receivable $ 45,409 $ 45,409 $ 45,409 $ 45,409 $ 45,409 37,025 37,025 37,025 37,025 37,025 $ 87,468 20,347 $ 87,468 20,347 20,347 $ 87,468 $ 87,468 20,347 20,347 (14) (14) 22,459 2,683 22,459 2,683 2,683 22,459 22,459 2,683 2,683 (14) (14) 19,659 $ 105,464 19,659 $ 105,464 $ 105,464 19,659 19,659 $ 105,464 $ 105,464 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 48,250 $ 48,250 $ 48,250 $ 48,250 11,127 11,127 11,127 11,127 $ 20,000 24,416 24,416 $ 20,000 $ 20,000 24,416 24,416 179,219 25,368 25,368 179,219 179,219 25,368 25,368 $ 48,250 11,127 $ 20,000 24,416 179,219 25,368 35,037 $ 109,161 $ 109,161 35,037 35,037 $ 109,161 $ 109,161 $ 109,161 35,037 $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ — Money market deposits Money market deposits Money market deposits Money market deposits $ — Commercial paper Commercial paper Commercial paper Commercial paper 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments Loans receivable Loans receivable Loans receivable Loans receivable $ 87,468 $ 87,468 $ 87,468 $ — $ — $ — $ — $ 87,468 $ 87,468 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ — $ — $ — $ — $ — $ — $ — $ — $ — 22,459 22,459 22,459 22,459 22,459 19,659 19,659 19,659 19,659 19,659 179,219 179,219 179,219 179,219 35,037 35,037 35,037 35,037 (31) Release of excess accrual Release of excess accrual Release of excess accrual (225) Payments Payments Payments 1 Foreign currency translation adjustment Foreign currency translation adjustment Foreign currency translation adjustment $ — (31) (31) (31) $ — $ — $ — $ — $ — $ — $ — (31) (31) (31) $ — (225) (225) (225) $ — $ — $ — $ — $ — $ — $ — (225) (225) (225) $ — 1 1 1 $ — $ — $ — $ — $ — $ — $ — 1 1 1 (31) (225) 1 $ 20,000 $ — 179,219 35,037 Release of excess accrual Payments Foreign currency translation adjustment Money market deposits Commercial paper 7. Short-Term Investments Loans receivable determined using the effective interest rate method. Prepaid expenses Other receivables Money market deposits Value added tax Commercial paper Cash collateral Loans receivable Prepaid expenses Other receivables Value added tax Cash collateral follows as of December 31, 2019 and 2018: 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment 9. Property, Plant and Equipment Furniture and office equipment Furniture and office equipment Furniture and office equipment Construction in progress Construction in progress Construction in progress Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Less: Accumulated depreciation and amortization Less: Accumulated depreciation and amortization Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as follows as of December 31, 2019 and 2018: Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Less: Accumulated depreciation and amortization (603,430) (603,430) follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: Property, plant and equipment, net Property, plant and equipment, net Property, plant and equipment, net $ 455,243 $ 455,243 $ 511,659 $ 511,659 $ 455,243 $ 511,659 (699,130) (699,130) (699,130) (603,430) Amortization of assets acquired under capital lease obligations is included within accumulated depreciation and Amortization of assets acquired under capital lease obligations is included within accumulated depreciation and Amortization of assets acquired under capital lease obligations is included within accumulated depreciation and amortization above for the years ended December 31, 2019 and 2018, respectively.Amortization of assets amortization above for the years ended December 31, 2019 and 2018, respectively.Amortization of assets amortization above for the years ended December 31, 2019 and 2018, respectively.Amortization of assets acquired under capital lease obligations is included within accumulated depreciation and amortization above for the acquired under capital lease obligations is included within accumulated depreciation and amortization above for the acquired under capital lease obligations is included within accumulated depreciation and amortization above for the years ended December 31, 2019 and 2018, respectively. years ended December 31, 2019 and 2018, respectively. years ended December 31, 2019 and 2018, respectively. We recorded asset impairment charges as follows below for the years ended December 31, 2019 and 2018. We recorded asset impairment charges as follows below for the years ended December 31, 2019 and 2018. We recorded asset impairment charges as follows below for the years ended December 31, 2019 and 2018. Buildings and improvements Other receivables Buildings and improvements Other receivables Other receivables Buildings and improvements Machinery and equipment Value added tax Machinery and equipment Value added tax Value added tax Machinery and equipment 341,032 37,025 341,032 341,032 37,025 37,025 37,025 5-40 5-40 5-40 292,294 20,347 292,294 292,294 20,347 20,347 20,347 3-10 3-10 3-10 Computer software Computer software Computer software Cash collateral (14) Cash collateral Cash collateral (14) 3-7 3-7 301,604 2,683 (14) (14) 301,604 301,604 2,683 2,683 2,683 3-7 $ 48,250 11,127 24,416 25,368 $ 109,161 $ 17,938 $ 48,250 $ 17,938 $ 17,938 $ 48,250 $ 48,250 322,751 322,751 11,127 322,751 11,127 11,127 306,750 306,750 24,416 306,750 24,416 24,416 277,006 277,006 25,368 277,006 25,368 25,368 98,858 98,858 98,858 80,874 80,874 80,874 1,154,373 1,154,373 1,154,373 1,115,089 1,115,089 1,115,089 102,901 3-10 3-10 $ 105,464 $ 105,464 $ 105,464 102,901 $ 105,464 102,901 3-10 109,770 $ 109,161 109,770 109,770 $ 109,161 $ 109,161 $ 17,684 — $ 45,409 $ 17,684 $ 45,409 $ 17,684 $ 45,409 $ 45,409 Land Prepaid expenses Prepaid expenses Prepaid expenses Land Land — — — — — Machinery and equipment Machinery and equipment Machinery and equipment Computer software Computer software Computer software Furniture and office equipment Furniture and office equipment Furniture and office equipment Construction in progress Construction in progress Construction in progress $ 9,177 $ 9,177 $ 9,177 44,649 44,649 44,649 4,030 4,030 4,030 41,870 41,870 41,870 $ — $ — $ — 2,911 2,911 2,911 — — — 4,979 4,979 4,979 $ 99,726 $ 99,726 $ 99,726 $ 7,890 $ 7,890 $ 7,890 During the year ended December 31, 2019, $98.5 million of impairments were related to the 2019 Restructuring During the year ended December 31, 2019, $98.5 million of impairments were related to the 2019 Restructuring During the year ended December 31, 2019, $98.5 million of impairments were related to the 2019 Restructuring 166 program discussed in Note 6 "Restructuring" while the remaining $1.2 million were related to other identified program discussed in Note 6 "Restructuring" while the remaining $1.2 million were related to other identified program discussed in Note 6 "Restructuring" while the remaining $1.2 million were related to other identified impairments during the year. In 2018, we recorded asset impairment charges of $7.9 million of internal-use software impairments during the year. In 2018, we recorded asset impairment charges of $7.9 million of internal-use software impairments during the year. In 2018, we recorded asset impairment charges of $7.9 million of internal-use software of which $1.6 million related to the 2017 Restructuring program discussed in Note 6 "Restructuring" and $6.3 of which $1.6 million related to the 2017 Restructuring program discussed in Note 6 "Restructuring" and $6.3 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. No impairments to property, plant and equipment were recognized million related to strategic shifts in our business. No impairments to property, plant and equipment were recognized million related to strategic shifts in our business. No impairments to property, plant and equipment were recognized during the year ended December 31, 2017. during the year ended December 31, 2017. during the year ended December 31, 2017. For the years ended December 31, 2019, 2018 and 2017 depreciation and amortization expense totaled $86.0 For the years ended December 31, 2019, 2018 and 2017 depreciation and amortization expense totaled $86.0 For the years ended December 31, 2019, 2018 and 2017 depreciation and amortization expense totaled $86.0 million, $87.9 million and $82.5 million, respectively. For the years ended December 31, 2019, 2018 and 2017 million, $87.9 million and $82.5 million, respectively. For the years ended December 31, 2019, 2018 and 2017 million, $87.9 million and $82.5 million, respectively. For the years ended December 31, 2019, 2018 and 2017 amortization related to computer software to be sold, leased or marketed totaled $18.3 million, $17.2 million and amortization related to computer software to be sold, leased or marketed totaled $18.3 million, $17.2 million and amortization related to computer software to be sold, leased or marketed totaled $18.3 million, $17.2 million and $13.9 million, respectively. Impairment charges related to computer software to be sold, leased or marketed are $13.9 million, respectively. Impairment charges related to computer software to be sold, leased or marketed are $13.9 million, respectively. Impairment charges related to computer software to be sold, leased or marketed are included in computer software and construction in progress in the table above and totaled $65.9 million for the year included in computer software and construction in progress in the table above and totaled $65.9 million for the year included in computer software and construction in progress in the table above and totaled $65.9 million for the year ended December 31, 2019. As of December 31, 2019 and 2018, the unamortized balance of computer software ended December 31, 2019. As of December 31, 2019 and 2018, the unamortized balance of computer software ended December 31, 2019. As of December 31, 2019 and 2018, the unamortized balance of computer software to be sold, leased or marketed was $36.6 million and $100.5 million, respectively. to be sold, leased or marketed was $36.6 million and $100.5 million, respectively. to be sold, leased or marketed was $36.6 million and $100.5 million, respectively. Repairs and maintenance expense was $10.7 million, $12.1 million and $12.7 million in 2019, 2018 and 2017, Repairs and maintenance expense was $10.7 million, $12.1 million and $12.7 million in 2019, 2018 and 2017, Repairs and maintenance expense was $10.7 million, $12.1 million and $12.7 million in 2019, 2018 and 2017, respectively. For the year ended December 31, 2019 and 2018, construction in progress primarily includes amounts respectively. For the year ended December 31, 2019 and 2018, construction in progress primarily includes amounts respectively. For the year ended December 31, 2019 and 2018, construction in progress primarily includes amounts related to ongoing software development projects. For the years ended December 31, 2019, 2018 and 2017, related to ongoing software development projects. For the years ended December 31, 2019, 2018 and 2017, related to ongoing software development projects. For the years ended December 31, 2019, 2018 and 2017, interest capitalized in connection with construction projects was not significant. interest capitalized in connection with construction projects was not significant. interest capitalized in connection with construction projects was not significant. 10. Investments 10. Investments 10. Investments (in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)Estimated usefullife(in years)20192018($ in thousands)Year ended December 31,20192018Total impairment in property, plant and equipment(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)Estimated usefullife(in years)20192018($ in thousands)Year ended December 31,20192018Total impairment in property, plant and equipment(in thousands)Estimated usefullife(in years)20192018($ in thousands)Year ended December 31,20192018Total impairment in property, plant and equipmentreleases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and other, net. other, net. other, net. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. Foreign currency translation adjustment (48) Foreign currency translation adjustment Foreign currency translation adjustment — (48) (48) — — (26) (26) (26) (74) (74) (74) Foreign currency translation adjustment 1 Foreign currency translation adjustment Foreign currency translation adjustment $ — 1 1 $ — $ — $ — $ — $ — 1 1 7. Short-Term Investments 7. Short-Term Investments 7. Short-Term Investments Land — $ 17,684 $ 17,938 At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million Buildings and improvements 341,032 322,751 5-40 We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges We also conducted an impairment review of inventory and prepaid and other assets and recorded the charges ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables Machinery and equipment noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further noted in the table below. As these charges, including inventory, are a direct result of the decision to suspend further 292,294 306,750 3-10 due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets Furniture and office equipment 102,901 109,770 3-10 development of NGS-related instrument systems and are not related to external market factors, the impairment development of NGS-related instrument systems and are not related to external market factors, the impairment 3-7 301,604 277,006 Computer software charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated charges were recorded in the line item restructuring, acquisition, integration and other, net in the consolidated statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued statements of (loss) income due to the assets being deemed excess and no longer utilized due to the discontinued as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is — 98,858 80,874 determined using the effective interest rate method. Construction in progress development and related actions discussed above. development and related actions discussed above. determined using the effective interest rate method. determined using the effective interest rate method. In addition, we have initiated measures to: In addition, we have initiated measures to: Less: Accumulated depreciation and amortization Property, plant and equipment, net 1,154,373 1,115,089 (699,130) (603,430) $ 455,243 $ 511,659 $ 4,294 Liability at December 31, 2017 Liability at December 31, 2017 $ 1,052 $ 4,294 $ 4,294 $ 1,052 $ 1,066 $ 1,066 $ 1,066 $ 1,052 $ 6,412 $ 6,412 $ 6,412 (343) Release of excess accrual Release of excess accrual (838) (343) (343) (838) (838) (546) (546) (546) (1,727) (1,727) (1,727) (3,648) Payments Payments (214) (3,648) (3,648) (214) (214) (494) (494) (494) (4,356) (4,356) (4,356) $ 255 $ — $ 255 $ 255 $ — $ — $ — $ — $ — $ 255 $ 255 $ 255 (31) Release of excess accrual Release of excess accrual $ — (31) (31) $ — $ — $ — $ — $ — (31) (31) (225) Payments Payments $ — (225) (225) $ — $ — $ — $ — $ — (225) (225) (31) (225) 1 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — › › › › Money market deposits shift Commercial Operations activities into Business Areas; shift Commercial Operations activities into Business Areas; Money market deposits transition manufacturing activities into a regional structure; and transition manufacturing activities into a regional structure; and Commercial paper expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland and Manila, Loans receivable Philippines Philippines Amortization of assets acquired under capital lease obligations is included within accumulated depreciation and F I N A N C I A L R E S U LT S Notes to consolidated financial statements amortization above for the years ended December 31, 2019 and 2018, respectively.Amortization of assets 22,459 acquired under capital lease obligations is included within accumulated depreciation and amortization above for the years ended December 31, 2019 and 2018, respectively. $ 87,468 $ 87,468 22,459 22,459 19,659 19,659 Commercial paper Loans receivable $ 87,468 19,659 › › $ 20,000 $ 20,000 179,219 179,219 35,037 35,037 $ 129,586 $ 129,586 $ 129,586 $ 234,256 $ 234,256 8. Prepaid Expenses and Other Current Assets We recorded asset impairment charges as follows below for the years ended December 31, 2019 and 2018. The following is a summary of the charges recorded during the year ended December 31, 2019. The following is a summary of the charges recorded during the year ended December 31, 2019. 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Machinery and equipment Prepaid expenses Prepaid expenses $ 9,177 $ 45,409 $ 45,409 $ 45,409 $ — $ 48,250 $ 48,250 Computer software Other receivables Personnel related (of which $2,956 due to related parties) Other receivables Personnel related (of which $2,956 due to related parties) 37,025 37,025 (22) 44,649 37,025 (22) 2,911 $ 70,578 11,127 $ 70,578 11,127 Furniture and office equipment Value added tax Contract termination costs (of which $15,676 due to related parties) Value added tax Contract termination costs (of which $15,676 due to related parties) 4,030 20,347 20,347 20,347 — 42,099 24,416 42,099 24,416 Construction in progress Cash collateral (14) Cash collateral Consulting fees Consulting fees (14) (14) 2,683 2,683 41,870 2,683 4,979 10,150 25,368 10,150 25,368 Accounts receivable (of which $5,984 due from related parties) Accounts receivable (of which $5,984 due from related parties) $ 99,726 $ 105,464 $ 105,464 $ 105,464 $ 7,890 $ 109,161 $ 109,161 10,825 10,825 $ 109,161 $ 20,000 179,219 35,037 $ 234,256 $ 48,250 11,127 24,416 25,368 Liability at December 31, 2017 Release of excess accrual Payments Release of excess accrual Payments Money market deposits Commercial paper Loans receivable Prepaid expenses Other receivables Value added tax Cash collateral 9. Property, Plant and Equipment follows as of December 31, 2019 and 2018: Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Inventories Inventories 12,336 12,336 Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) Prepaid expenses and other assets (of which $12,915 was long-term and $2,270 due from related parties) 9. Property, Plant and Equipment 9. Property, Plant and Equipment During the year ended December 31, 2019, $98.5 million of impairments were related to the 2019 Restructuring program discussed in Note 6 "Restructuring" while the remaining $1.2 million were related to other identified impairments during the year. In 2018, we recorded asset impairment charges of $7.9 million of internal-use 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. No impairments to property, plant and equipment were recognized during the year ended December 31, 2017. Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as 163,000 follows as of December 31, 2019 and 2018: Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as 163,000 follows as of December 31, 2019 and 2018: Property, plant and equipment Property, plant and equipment 98,472 17,012 17,012 98,472 (9) (9) Intangible assets Intangible assets (11) (11) 40,301 40,301 Equity method investment impairment Equity method investment impairment For the years ended December 31, 2019, 2018 and 2017 depreciation and amortization expense totaled $86.0 million, $87.9 million and $82.5 million, respectively. For the years ended December 31, 2019, 2018 and 2017 amortization related to computer software to be sold, leased or marketed totaled $18.3 million, $17.2 million and $13.9 million, respectively. Impairment charges related to computer software to be sold, leased or marketed are included in computer software and construction in progress in the table above and totaled $65.9 million for the year ended December 31, 2019. As of December 31, 2019 and 2018, the unamortized balance of computer software to be sold, leased or marketed was $36.6 million and $100.5 million, respectively. Total Total (10) (10) 138,773 138,773 4,799 4,799 $ 306,572 $ 306,572 Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current Of the total costs incurred, $60.2 million are accrued as of December 31, 2019 in accrued and other current liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the liabilities in the accompanying consolidated balance sheet as summarized in the following table that includes the cash components of the restructuring activity. cash components of the restructuring activity. Repairs and maintenance expense was $10.7 million, $12.1 million and $12.7 million in 2019, 2018 and 2017, respectively. For the year ended December 31, 2019 and 2018, construction in progress primarily includes amounts related to ongoing software development projects. For the years ended December 31, 2019, 2018 and 2017, interest capitalized in connection with construction projects was not significant. 10. Investments Costs incurred in 2019 Costs incurred in 2019 $ 44,640 $ 44,640 $ 42,099 $ 42,099 $ 10,150 $ 10,150 $ 96,889 $ 96,889 Payments Payments The following discusses our marketable investments, non-marketable investments and the realized and unrealized Foreign currency translation adjustment gains and losses on these investments. Foreign currency translation adjustment (53) (53) 631 493 493 631 (17,272) (17,272) (18,294) (18,294) (2,162) (2,162) (37,728) (37,728) 1,071 1,071 $ 27,999 $ 27,999 $ 24,298 $ 24,298 $ 7,935 $ 7,935 $ 60,232 $ 60,232 A summary of our investments in marketable equity securities that have readily determinable fair values that are classified as available-for-sale follows below. These investments are reported at fair value with gains and losses recorded in earnings beginning in January 2018 upon adoption of ASU 2016-01. 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. Total cumulative unrealized (loss) gain Shares held Cost basis Fair value Shares held Cost basis Fair value 833,333 $ 2,000 $ 585 $ (1,415) 560,416 167 — $ 285 $ 285 833,333 $ 2,000 $ 2,117 204,000 $ 1,444 $ 350 $ 117 $ (1,094) Total cumulative unrealized gain (loss) During 2019, we received 560,416 shares in Oncimmune in settlement of a zero-book value financial instrument held with a third party. On the date of receipt, these shares held a fair value of $0.7 million which was recorded as a gain in other income (expense), net in the accompanying statements of (loss) income. Also during 2019, we sold the remaining 204,000 Curetis shares and recognized an immaterial loss in other income (expense), net. During the year ended December 31, 2018, we sold 116,424 shares of Curetis and recognized a gain of $0.3 million in other income (expense), net in the accompanying statements of (loss) income. During the years ended December 31, 2019 and 2018, losses recognized for the change in fair market value of all marketable equity securities totaled $2.1 million and $0.1 million, respectively. As of December 31, 2019 and 2018, these marketable securities are included in other long-term assets in the accompanying consolidated balance sheets. We have made strategic investments in certain privately-held companies without readily determinable market values. A summary of our non-marketable investments accounted for as equity method investments is as follows: (in thousands)Estimated usefullife(in years)20192018($ in thousands)Year ended December 31,20192018Total impairment in property, plant and equipmentMarketable Equity SecuritiesNon-Marketable InvestmentsNon-Marketable Investments Accounted for Under the Equity Method(in thousands, except shares held)As of December 31, 2019HTG MolecularDiagnostics, Inc(HTGM)OncimmuneHoldingsplc(Oncimmune)(in thousands)As of December 31, 2018HTGMCuretis N.V.(Curetis)(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assetsConsolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019Consolidated Statement of (Loss) Income Classification and Type of Charge (in thousands)Year endedDecember 31, 2019NoteTotalRestructuring, acquisition, integration and other, netLong-lived asset impairmentsOther (expense) income, net(in thousands)PersonnelRelatedContract TerminationConsultingFeesTotalLiability at December 31, 2019 The following discusses our marketable investments, non-marketable investments and the realized and unrealized gains and losses on these investments. A summary of our investments in marketable equity securities that have readily determinable fair values that are classified as available-for-sale follows below. These investments are reported at fair value with gains and losses recorded in earnings beginning in January 2018 upon adoption of ASU 2016-01. 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. Shares held Cost basis Fair value Total cumulative unrealized (loss) gain Shares held Cost basis Fair value Total cumulative unrealized gain (loss) 833,333 $ 2,000 $ 585 $ (1,415) 560,416 — $ 285 $ 285 833,333 $ 2,000 $ 2,117 204,000 $ 1,444 $ 350 $ 117 $ (1,094) During 2019, we received 560,416 shares in Oncimmune in settlement of a zero-book value financial instrument held with a third party. On the date of receipt, these shares held a fair value of $0.7 million which was recorded as a gain in other income (expense), net in the accompanying statements of (loss) income. Also during 2019, we sold the remaining 204,000 Curetis shares and recognized an immaterial loss in other income (expense), net. During the year ended December 31, 2018, we sold 116,424 shares of Curetis and recognized a gain of $0.3 million in other income (expense), net in the accompanying statements of (loss) income. During the years ended December 31, 2019 and 2018, losses recognized for the change in fair market value of all marketable equity securities totaled $2.1 million and $0.1 million, respectively. As of December 31, 2019 and 2018, these marketable securities are included in other long-term assets in the accompanying consolidated balance sheets. We have made strategic investments in certain privately-held companies without readily determinable market values. A summary of our non-marketable investments accounted for as equity method investments is as follows: 168 Marketable Equity SecuritiesNon-Marketable InvestmentsNon-Marketable Investments Accounted for Under the Equity Method(in thousands, except shares held)As of December 31, 2019HTG MolecularDiagnostics, Inc(HTGM)OncimmuneHoldingsplc(Oncimmune)(in thousands)As of December 31, 2018HTGMCuretis N.V.(Curetis)releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and releases of excess accruals as included in the table below were included in restructuring, acquisition, integration and other, net. other, net. The following table summarizes the cash components of the restructuring activity. The following table summarizes the cash components of the restructuring activity. Liability at December 31, 2017 Liability at December 31, 2017 $ 4,294 $ 4,294 $ 1,052 $ 1,052 $ 1,066 $ 1,066 $ 6,412 $ 6,412 Foreign currency translation adjustment Foreign currency translation adjustment (48) (48) — — (26) (26) (74) (74) Release of excess accrual Release of excess accrual Payments Payments Release of excess accrual Release of excess accrual Payments Payments Foreign currency translation adjustment Foreign currency translation adjustment 1 1 Total cumulative unrealized gain (loss) $ — $ — $ — $ 117 $ — $ (1,094) 1 1 7. Short-Term Investments 7. Short-Term Investments At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million At December 31, 2019 and 2018, we had $129.6 million ($65.0 million and €57.5 million) and $234.3 million ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables ($134.1 million and €87.5 million), respectively, of money market deposits, commercial paper and loan receivables due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial due from financial and nonfinancial institutions as summarized below. These instruments are non-derivative financial During the year ended December 31, 2018, we sold 116,424 shares of Curetis and recognized a gain of $0.3 assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market assets with fixed or determinable payments that are not quoted in an active market and are carried at fair market million in other income (expense), net in the accompanying statements of (loss) income. value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets value, which is equal to the cost. All instruments are classified as current assets in the accompanying balance sheets (343) (343) (838) (838) (546) (546) (1,727) (1,727) (3,648) (3,648) (214) (214) (494) (494) (4,356) (4,356) $ 255 $ 255 Shares held $ — $ — $ — 833,333 $ — 204,000 $ 255 $ 255 (31) (31) Cost basis $ — $ — $ — $ 2,000 $ — $ 1,444 (31) (31) (225) (225) Fair value $ — $ — $ — $ 2,117 $ — $ 350 (225) (225) $ — $ — $ — $ — $ — $ — $ — $ — During 2019, we received 560,416 shares in Oncimmune in settlement of a zero-book value financial instrument held with a third party. On the date of receipt, these shares held a fair value of $0.7 million which was recorded as a gain in other income (expense), net in the accompanying statements of (loss) income. Also during 2019, we sold the remaining 204,000 Curetis shares and recognized an immaterial loss in other income (expense), net. The following discusses our marketable investments, non-marketable investments and the realized and unrealized gains and losses on these investments. A summary of our investments in marketable equity securities that have readily determinable fair values that are classified as available-for-sale follows below. These investments are reported at fair value with gains and losses recorded in earnings beginning in January 2018 upon adoption of ASU 2016-01. 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. Shares held Cost basis Fair value Total cumulative unrealized (loss) gain 833,333 $ 2,000 $ 585 $ (1,415) 560,416 — $ 285 $ 285 as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is as they either have a maturity of less than one year or are redeemable at our discretion. Interest income is During the years ended December 31, 2019 and 2018, losses recognized for the change in fair market value of all marketable equity securities totaled $2.1 million and $0.1 million, respectively. As of December 31, 2019 and F I N A N C I A L R E S U LT S Notes to consolidated financial statements 2018, these marketable securities are included in other long-term assets in the accompanying consolidated balance sheets. $ 87,468 $ 87,468 $ 20,000 $ 20,000 8. Prepaid Expenses and Other Current Assets 8. Prepaid Expenses and Other Current Assets A summary of our non-marketable investments accounted for as equity method investments is as follows: 19,659 19,659 35,037 35,037 $ 129,586 $ 129,586 $ 234,256 $ 234,256 Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: Prepaid expenses and other current assets are summarized as follows as of December 31, 2019 and 2018: We have made strategic investments in certain privately-held companies without readily determinable market values. 22,459 22,459 179,219 179,219 9. Property, Plant and Equipment 9. Property, Plant and Equipment Biotype Innovation GmbH Biotype Innovation GmbH Biotype Innovation GmbH Biotype Innovation GmbH Biotype Innovation GmbH Biotype Innovation GmbH Biotype Innovation GmbH 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % — — — — — — — — 0.00 % — — 0.00 % — — — — — — — (123) (123) (123) — (123) (123) — 39 39 39 — 39 39 — (123) (123) Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as Property, plant and equipment, including equipment acquired under capital lease obligations, are summarized as 19.00 % 19.00 % 19.00 % 19.00 % 19.00 % — — — — — 19.00 % — — — 19.00 % — — — — — — — — — Pyrobett Pyrobett Pyrobett Pyrobett Pyrobett Pyrobett Pyrobett PreAnalytiX GmbH PreAnalytiX GmbH PreAnalytiX GmbH PreAnalytiX GmbH PreAnalytiX GmbH PreAnalytiX GmbH PreAnalytiX GmbH 50.00 % 50.00 % 50.00 % $ 45,409 $ 5,405 50.00 % $ 5,405 $ 5,452 50.00 % $ 5,405 $ 5,452 $ 45,409 $ 3,971 $ 5,452 $ 3,971 $ 3,971 $ 5,452 $ 5,452 $ 5,452 $ 5,452 50.00 % 50.00 % $ 3,971 $ 3,971 $ 5,405 $ 5,405 $ 4,062 $ 4,062 $ 4,062 $ 5,405 $ 4,062 $ 4,062 $ 5,405 Suzhou Fuda Business Management and Consulting Partnership Suzhou Fuda Business Management and Consulting Partnership Suzhou Fuda Business Management and Consulting Partnership Suzhou Fuda Business Management and Consulting Partnership Suzhou Fuda Business Management and Consulting Partnership 33.67 % Suzhou Fuda Business Management and Consulting Partnership 33.67 % 33.67 % Suzhou Fuda Business Management and Consulting Partnership 37,025 33.67 % 33.67 % 3,100 3,100 3,100 3,100 3,100 37,025 33.67 % 3,138 3,138 3,138 33.67 % 3,138 3,138 — 3,100 — — — 3,100 — TVM Life Science Ventures III TVM Life Science Ventures III TVM Life Science Ventures III TVM Life Science Ventures III TVM Life Science Ventures III TVM Life Science Ventures III TVM Life Science Ventures III (14) Apis Assay Technologies Ltd Apis Assay Technologies Ltd Apis Assay Technologies Ltd Apis Assay Technologies Ltd Apis Assay Technologies Ltd (14) Apis Assay Technologies Ltd Apis Assay Technologies Ltd 20,347 4.80 % 4.80 % 4.80 % 4.80 % 4.80 % 1,219 1,219 1,219 1,219 1,219 20,347 — — — 4.80 % — — 4.80 % (330) 1,219 (330) (330) 1,219 (330) (330) 19.00 % 19.00 % 19.00 % 19.00 % 19.00 % 2,683 719 719 719 719 719 19.00 % 770 770 770 19.00 % 770 770 2,683 (51) 719 (51) (51) 719 (51) (51) Hombrechtikon Systems Engineering AG Hombrechtikon Systems Engineering AG Hombrechtikon Systems Engineering AG Hombrechtikon Systems Engineering AG Hombrechtikon Systems Engineering AG Hombrechtikon Systems Engineering AG Hombrechtikon Systems Engineering AG 19.00 % 19.00 % $ 105,464 378 378 378 19.00 % 378 378 19.00 % $ 105,464 19.00 % 19.00 % 19.00 % (1,124) (761) (1,124) (1,124) (761) (1,124) (1,124) (761) (761) (761) (761) (761) MAQGEN Biotechnology Co., Ltd MAQGEN Biotechnology Co., Ltd MAQGEN Biotechnology Co., Ltd MAQGEN Biotechnology Co., Ltd MAQGEN Biotechnology Co., Ltd MAQGEN Biotechnology Co., Ltd MAQGEN Biotechnology Co., Ltd 40.00 % 40.00 % 40.00 % 40.00 % 40.00 % — — — — — 40.00 % 5,154 5,154 5,154 40.00 % 5,154 5,154 (383) (383) (383) — (383) (383) — (579) (579) (579) 5,154 (579) (579) 5,154 (542) (542) (542) (383) (542) (542) (383) (579) (579) (542) (542) $ 3,818 $ 3,818 $ 4,062 $ 4,062 $ 3,818 $ 3,971 $ 3,818 $ 3,818 $ 3,971 $ 48,250 — 3,138 — — — 3,138 — — — — — — — — 11,127 — 11,127 — — — — — — — — — — — 770 — — — 770 — — (330) — — — (330) — 24,416 — 24,416 — — — — (51) — — — (51) — 25,368 — 25,368 — — — (668) (668) (668) 378 (668) (668) 378 (346) (1,124) (346) (346) (346) (1,124) (346) $ 109,161 (668) (668) $ 109,161 (346) (346) $ 3,818 $ 3,818 $ 48,250 39 39 195 195 (100) — (100) (100) — (100) (100) (100) (100) 195 — 195 195 — 195 195 $ 9,729 $ 9,729 $ 9,729 $ 9,729 $ 9,729 $ 14,845 $ 14,845 $ 14,845 $ 14,845 $ 14,845 $ 2,083 $ 2,083 $ 2,083 $ 9,729 $ 2,083 $ 2,083 $ 9,729 $ 2,592 $ 14,845 $ 2,592 $ 2,592 $ 2,592 $ 14,845 $ 2,592 $ 3,164 $ 3,164 $ 3,164 $ 2,083 $ 3,164 $ 3,164 $ 2,083 $ 2,592 $ 2,592 $ 3,164 $ 3,164 Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value was no longer recoverable. Accordingly, the investment was fully impaired. was no longer recoverable. Accordingly, the investment was fully impaired. was no longer recoverable. Accordingly, the investment was fully impaired. was no longer recoverable. Accordingly, the investment was fully impaired. was no longer recoverable. Accordingly, the investment was fully impaired. was no longer recoverable. Accordingly, the investment was fully impaired. was no longer recoverable. Accordingly, the investment was fully impaired. In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying value was no longer recoverable. During 2017, we sold our interest in QIAGEN (Suzhou) Institute of Translation value was no longer recoverable. During 2017, we sold our interest in QIAGEN (Suzhou) Institute of Translation value was no longer recoverable. During 2017, we sold our interest in QIAGEN (Suzhou) Institute of Translation value was no longer recoverable. During 2017, we sold our interest in QIAGEN (Suzhou) Institute of Translation value was no longer recoverable. During 2017, we sold our interest in QIAGEN (Suzhou) Institute of Translation value was no longer recoverable. During 2017, we sold our interest in QIAGEN (Suzhou) Institute of Translation value was no longer recoverable. 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 Research Co., Ltd., which had no book value at the time of sale, for $3.5 million and recorded a corresponding gain Research Co., Ltd., which had no book value at the time of sale, for $3.5 million and recorded a corresponding gain Research Co., Ltd., which had no book value at the time of sale, for $3.5 million and recorded a corresponding gain Research Co., Ltd., which had no book value at the time of sale, for $3.5 million and recorded a corresponding gain Research Co., Ltd., which had no book value at the time of sale, for $3.5 million and recorded a corresponding gain 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 (expense), net in the accompanying statements of income. in other income (expense), net in the accompanying statements of income. in other income (expense), net in the accompanying statements of income. in other income (expense), net in the accompanying statements of income. in other income (expense), net in the accompanying statements of income. in other income (expense), net in the accompanying statements of income. in other income (expense), net in the accompanying statements of income. Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These balances represent our maximum exposure to loss. balances represent our maximum exposure to loss. balances represent our maximum exposure to loss. balances represent our maximum exposure to loss. balances represent our maximum exposure to loss. Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These balances represent our maximum exposure to loss. balances represent our maximum exposure to loss. At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The changes in these investments which are measured at cost, less any impairment, plus or minus changes resulting from changes in these investments which are measured at cost, less any impairment, plus or minus changes resulting from changes in these investments which are measured at cost, less any impairment, plus or minus changes resulting from changes in these investments which are measured at cost, less any impairment, plus or minus changes resulting from changes in these investments which are measured at 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 for the observable price changes in orderly transactions for the identical or a similar investment of the same issuer for the observable price changes in orderly transactions for the identical or a similar investment of the same issuer for the observable price changes in orderly transactions for the identical or a similar investment of the same issuer for the observable price changes in orderly transactions for the identical or a similar investment of the same issuer for the years ended December 31, 2019 and 2018 are as follows: years ended December 31, 2019 and 2018 are as follows: years ended December 31, 2019 and 2018 are as follows: years ended December 31, 2019 and 2018 are as follows: years ended December 31, 2019 and 2018 are as follows: At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The changes in these investments which are measured at cost, less any impairment, plus or minus changes resulting from changes in these investments which are measured at 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 for the observable price changes in orderly transactions for the identical or a similar investment of the same issuer for the years ended December 31, 2019 and 2018 are as follows: years ended December 31, 2019 and 2018 are as follows: 169 determined using the effective interest rate method. determined using the effective interest rate method. Money market deposits Money market deposits Commercial paper Commercial paper Loans receivable Loans receivable Prepaid expenses Prepaid expenses Other receivables Other receivables Value added tax Value added tax Cash collateral Cash collateral follows as of December 31, 2019 and 2018: follows as of December 31, 2019 and 2018: Non-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017Marketable Equity SecuritiesNon-Marketable InvestmentsNon-Marketable Investments Accounted for Under the Equity Method(in thousands, except shares held)As of December 31, 2019HTG MolecularDiagnostics, Inc(HTGM)OncimmuneHoldingsplc(Oncimmune)(in thousands)As of December 31, 2018HTGMCuretis N.V.(Curetis)Non-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assets(in thousands)PersonnelRelatedFacility RelatedContract andOther CostsTotalLiability at December 31, 2018Liability at December 31, 2019(in thousands)December 31,2019December 31,2018Total(in thousands)Notes20192018Total prepaid expenses and other current assetsNon-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017Non-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017Non-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017Non-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017Non-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017PreAnalytiX GmbH 50.00 % $ 5,452 $ 5,405 $ 3,971 $ 4,062 $ 3,818 Suzhou Fuda Business Management and Consulting Partnership 33.67 % 3,100 3,138 Hombrechtikon Systems Engineering AG 19.00 % (761) (1,124) 4.80 % 1,219 19.00 % 719 40.00 % 0.00 % 19.00 % — — — — 770 378 — — 5,154 (383) — (330) (51) — — — — — (668) (579) (123) (100) — — — (346) (542) 39 195 $ 9,729 $ 14,845 $ 2,083 $ 2,592 $ 3,164 TVM Life Science Ventures III Apis Assay Technologies Ltd MAQGEN Biotechnology Co., Ltd Biotype Innovation GmbH Pyrobett Of the $9.7 million of non-marketable investments accounted for as equity method investments, $10.5 million is included in other long-term assets and $0.8 million, where we are committed to fund losses, is included in other long- term liabilities in the accompanying consolidated balance sheets as of December 31, 2019. During 2019, we made an investment in TVM Life Science Ventures III and as of December 31, 2019 we hold a 4.8% ownership stake in this limited partnership that is accounted for under the equity method as we have the ability to exercise significant influence over the limited partnership. Also during the year ended December 31, 2019, we recorded an impairment of $4.8 million in other income (expense), net in the accompanying consolidated statements of income, following changes in circumstances of MAQGEN Biotechnology Co., Ltd that indicated the carrying value was no longer recoverable. Accordingly, the investment was fully impaired. In 2018, we recorded impairments totaling $6.1 million in other (expense) income, net in the accompanying consolidated statements of income, following changes in the investees' circumstances that indicated the carrying value was no longer recoverable. 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 (expense), net in the accompanying statements of income. Three of our equity method investments are variable interest entities and we are not the primary beneficiary as we do not hold the power to direct the activities that most significantly impact the economic performance. Therefore, these investments are not consolidated. As of December 31, 2019 and 2018, these investments had a total net carrying value of $1.2 million, of which $1.9 million is included in other long-term assets and $0.8 million is included in other long-term liabilities in the accompanying consolidated balance sheet. As of December 31, 2018, these investments held a balance of $1.1 million which is included in other long-term assets in the consolidated balance sheet. These balances represent our maximum exposure to loss. At December 31, 2019 and 2018, we had investments in non-publicly traded companies that do not have readily determinable fair values with carrying amounts that totaled $70.8 million and $59.5 million, respectively. The changes in these investments which are measured at 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 for the years ended December 31, 2019 and 2018 are as follows: Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 33,605 $ 33,605 $ 33,605 $ 33,605 Cash investments in equity securities, net Cash investments in equity securities, net Cash investments in equity securities, net Cash investments in equity securities, net 3,619 3,619 3,619 3,619 9,633 9,633 9,633 9,633 Net increases due to observable price changes Net increases due to observable price changes Net increases due to observable price changes Net increases due to observable price changes Conversion of note receivable to equity securities Conversion of note receivable to equity securities Conversion of note receivable to equity securities Conversion of note receivable to equity securities Sale of equity securities Sale of equity securities Sale of equity securities Sale of equity securities Full acquisition of equity securities Full acquisition of equity securities Full acquisition of equity securities Full acquisition of equity securities 7,760 7,760 7,760 7,760 — — — — — — — — — — — — 13,104 13,104 13,104 13,104 11,369 11,369 11,369 11,369 (5,400) (5,400) (5,400) (5,400) (2,710) (2,710) (2,710) (2,710) Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments (14) (14) (14) (14) (117) (117) (117) (117) Balance at end of year Balance at end of year Balance at end of year Balance at end of year $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 59,484 $ 59,484 $ 59,484 $ 59,484 During 2019, we made additional investments of $3.6 million in non-marketable investments not accounted for under During 2019, we made additional investments of $3.6 million in non-marketable investments not accounted for under the equity method. As of December 31, 2019 and December 31, 2018, investments in variable interest entities had the equity method. As of December 31, 2019 and December 31, 2018, investments in variable interest entities had a total carrying value of $41.0 million which is included in other long-term assets in the consolidated balance sheets, a total carrying value of $41.0 million which is included in other long-term assets in the consolidated balance sheets, representing our maximum exposure to loss. representing our maximum exposure to loss. During 2019, we made additional investments of $3.6 million in non-marketable investments not accounted for under During 2019, we made additional investments of $3.6 million in non-marketable investments not accounted for under the equity method. As of December 31, 2019 and December 31, 2018, investments in variable interest entities had the equity method. As of December 31, 2019 and December 31, 2018, investments in variable interest entities had a total carrying value of $41.0 million which is included in other long-term assets in the consolidated balance sheets, a total carrying value of $41.0 million which is included in other long-term assets in the consolidated balance sheets, representing our maximum exposure to loss. representing our maximum exposure to loss. Since adoption of ASU 2016-01, upward adjustments in the carrying value of these investments have been Since adoption of ASU 2016-01, upward adjustments in the carrying value of these investments have been Since adoption of ASU 2016-01, upward adjustments in the carrying value of these investments have been Since adoption of ASU 2016-01, upward adjustments in the carrying value of these investments have been recognized for observable price changes totaling $20.9 million, of which $7.8 million occurred in 2019 and $13.1 recognized for observable price changes totaling $20.9 million, of which $7.8 million occurred in 2019 and $13.1 recognized for observable price changes totaling $20.9 million, of which $7.8 million occurred in 2019 and $13.1 recognized for observable price changes totaling $20.9 million, of which $7.8 million occurred in 2019 and $13.1 million was recognized in 2018 in other income (expense), net in the accompanying consolidated statements of million was recognized in 2018 in other income (expense), net in the accompanying consolidated statements of million was recognized in 2018 in other income (expense), net in the accompanying consolidated statements of million was recognized in 2018 in other income (expense), net in the accompanying consolidated statements of income. These adjustments were due to equity offerings at a higher price from the issuer in orderly transactions for income. These adjustments were due to equity offerings at a higher price from the issuer in orderly transactions for income. These adjustments were due to equity offerings at a higher price from the issuer in orderly transactions for income. 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. identical or similar investments as those we hold. identical or similar investments as those we hold. identical or similar investments as those we hold. During 2018, we made investments of $9.6 million in equity securities, of which $9.3 million was an additional During 2018, we made investments of $9.6 million in equity securities, of which $9.3 million was an additional During 2018, we made investments of $9.6 million in equity securities, of which $9.3 million was an additional 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 investment in NeuMoDx Molecular, Inc. (NeuMoDx). The investment is part of a strategic partnership with NeuMoDx investment in NeuMoDx Molecular, Inc. (NeuMoDx). The investment is part of a strategic partnership with NeuMoDx investment in NeuMoDx Molecular, Inc. (NeuMoDx). The investment is part of a strategic partnership with NeuMoDx to commercialize two new fully integrated systems for automation of PCR (polymerase chain reaction) testing. Under to commercialize two new fully integrated systems for automation of PCR (polymerase chain reaction) testing. Under to commercialize two new fully integrated systems for automation of PCR (polymerase chain reaction) testing. Under to commercialize two 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- the agreement, we will initially distribute the NeuMoDx™ 288 (high-throughput version) and NeuMoDx™ 96 (mid- the agreement, we will initially distribute the NeuMoDx™ 288 (high-throughput version) and NeuMoDx™ 96 (mid- 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 throughput version) in Europe and other major markets worldwide outside of the United States. NeuMoDx will throughput version) in Europe and other major markets worldwide outside of the United States. NeuMoDx will 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 distribute these instruments within the United States directly. The two companies have also entered into an agreement distribute these instruments within the United States directly. The two companies have also entered into an agreement 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 under which we can acquire all NeuMoDx shares not currently owned by QIAGEN at a predetermined price of under which we can acquire all NeuMoDx shares not currently owned by QIAGEN at a predetermined price of 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. approximately $234 million, subject to the achievement of certain regulatory and operational milestones. approximately $234 million, subject to the achievement of certain regulatory and operational milestones. approximately $234 million, subject to the achievement of certain regulatory and operational milestones. During 2018, we converted a note receivable from a non-publicly traded company, considered a related party, into During 2018, we converted a note receivable from a non-publicly traded company, considered a related party, into During 2018, we converted a note receivable from a non-publicly traded company, considered a related party, into 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 an equity interest in that company. This note held a balance of $11.4 million including principal balance and an equity interest in that company. This note held a balance of $11.4 million including principal balance and an equity interest in that company. 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 accrued interest at conversion which was a non-cash investing activity and is therefore not included in the accrued interest at conversion which was a non-cash investing activity and is therefore not included in the 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 consolidated statement of cash flows. Also during 2018, we sold our interest in a non-publicly traded company consolidated statement of cash flows. Also during 2018, we sold our interest in a non-publicly traded company 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 which had a book value of $5.4 million. Proceeds from the sale totaled $10.5 million in cash resulting in a which had a book value of $5.4 million. Proceeds from the sale totaled $10.5 million in cash resulting in a 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 income (expense), net in the accompanying consolidated corresponding gain of $5.1 million recorded in other income (expense), net in the accompanying consolidated corresponding gain of $5.1 million recorded in other income (expense), net in the accompanying consolidated corresponding gain of $5.1 million recorded in other income (expense), net in the accompanying consolidated statement of income. Additionally during 2018, we acquired all remaining shares of a privately held entity in which statement of income. Additionally during 2018, we acquired all remaining shares of a privately held entity in which statement of income. Additionally during 2018, we acquired all remaining shares of a privately held entity in which 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". we held a minority interest as discussed in Note 5 "Acquisitions and Divestitures". we held a minority interest as discussed in Note 5 "Acquisitions and Divestitures". we held a minority interest as discussed in Note 5 "Acquisitions and Divestitures". In 2017, we recorded total impairments to non-marketable investments not accounted for under the equity method of In 2017, we recorded total impairments to non-marketable investments not accounted for under the equity method of $5.1 million in other income (expense), net in the accompanying consolidated statement of income. $5.1 million in other income (expense), net in the accompanying consolidated statement of income. In 2017, we recorded total impairments to non-marketable investments not accounted for under the equity method of In 2017, we recorded total impairments to non-marketable investments not accounted for under the equity method of $5.1 million in other income (expense), net in the accompanying consolidated statement of income. $5.1 million in other income (expense), net in the accompanying consolidated statement of income. 170 11. Goodwill and Intangible Assets 11. Goodwill and Intangible Assets 11. Goodwill and Intangible Assets 11. Goodwill and Intangible Assets The following sets forth the intangible assets by major asset class as of December 31, 2019 and 2018: The following sets forth the intangible assets by major asset class as of December 31, 2019 and 2018: The following sets forth the intangible assets by major asset class as of December 31, 2019 and 2018: The following sets forth the intangible assets by major asset class as of December 31, 2019 and 2018: Non-Marketable Investments Not Accounted for Under the Equity Method(in thousands)OwnershipPercentageEquity investments as ofDecember 31,Share of income (loss)for the yearsended December 31,20192018201920182017(in thousands)20192018(in thousands)20192018(in thousands)20192018(in thousands)20192018Balance at beginning of year Cash investments in equity securities, net Net increases due to observable price changes Conversion of note receivable to equity securities Sale of equity securities Full acquisition of equity securities Foreign currency translation adjustments Balance at end of year $ 59,484 $ 33,605 3,619 7,760 — — — (14) 9,633 13,104 11,369 (5,400) (2,710) (117) $ 70,849 $ 59,484 During 2019, we made additional investments of $3.6 million in non-marketable investments not accounted for under the equity method. As of December 31, 2019 and December 31, 2018, investments in variable interest entities had a total carrying value of $41.0 million which is included in other long-term assets in the consolidated balance sheets, representing our maximum exposure to loss. Since adoption of ASU 2016-01, upward adjustments in the carrying value of these investments have been recognized for observable price changes totaling $20.9 million, of which $7.8 million occurred in 2019 and $13.1 million was recognized in 2018 in other income (expense), net in the accompanying consolidated statements of income. 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 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 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. 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 F I N A N C I A L R E S U LT S Notes to consolidated financial statements 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 income (expense), net 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". In 2017, we recorded total impairments to non-marketable investments not accounted for under the equity method of $5.1 million in other income (expense), net in the accompanying consolidated statement of income. 11. Goodwill and Intangible Assets The following sets forth the intangible assets by major asset class as of December 31, 2019 and 2018: Amortized Intangible Assets: Amortized Intangible Assets: Amortized Intangible Assets: Patent and license rights Patent and license rights Patent and license rights 10.19 10.19 10.19 $ 320,406 $ 320,406 $ 320,406 $ (216,554) $ (216,554) $ (216,554) $ 448,220 $ 448,220 $ 448,220 $ (310,040) $ (310,040) $ (310,040) Developed technology Developed technology Developed technology 10.96 10.96 10.96 766,966 766,966 766,966 (346,085) (346,085) (346,085) 770,955 770,955 770,955 (561,615) (561,615) (561,615) Customer base, trademarks, and non-compete Customer base, trademarks, and non-compete agreements agreements Customer base, trademarks, and non-compete agreements 11.68 11.68 11.68 314,638 314,638 314,638 (213,881) (213,881) (213,881) 427,512 427,512 427,512 (323,024) (323,024) (323,024) 10.95 10.95 10.95 $ 1,402,010 $ 1,402,010 $ 1,402,010 $ (776,520) $ (776,520) $ (776,520) $ 1,646,687 $ 1,646,687 $ 1,646,687 $ (1,194,679) $ (1,194,679) $ (1,194,679) Unamortized Intangible Assets: Unamortized Intangible Assets: Unamortized Intangible Assets: In-process research and development In-process research and development In-process research and development Goodwill Goodwill Goodwill $ 6,944 $ 6,944 $ 6,944 2,140,503 2,140,503 2,140,503 $ 23,035 $ 23,035 $ 23,035 2,108,536 2,108,536 2,108,536 $ 2,147,447 $ 2,147,447 $ 2,147,447 $ 2,131,571 $ 2,131,571 $ 2,131,571 The in-process research and development is associated to the acquisition of STAT-Dx as further discussed in Note 5 The in-process research and development is associated to the acquisition of STAT-Dx as further discussed in Note 5 The in-process research and development is associated to the acquisition of STAT-Dx as further discussed in Note 5 "Acquisitions and Divestitures". The estimated fair value of acquired in-process research and development projects "Acquisitions and Divestitures". The estimated fair value of acquired in-process research and development projects "Acquisitions and Divestitures". The estimated fair value of acquired in-process research and development projects which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested for impairment through completion of the development process, at which point the capitalized amounts are for impairment through completion of the development process, at which point the capitalized amounts are for impairment through completion of the development process, at which point the capitalized amounts are amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts are written-off immediately. During 2019, one development project was completed and, after testing for impairment, are written-off immediately. During 2019, one development project was completed and, after testing for impairment, are written-off immediately. During 2019, one development project was completed and, after testing for impairment, $15.9 million of in-process research and development costs were reclassified into developed technology. $15.9 million of in-process research and development costs were reclassified into developed technology. $15.9 million of in-process research and development costs were reclassified into developed technology. Developed technology includes the digital PCR asset from Formulatrix as discussed in Note 5 "Acquisitions and Developed technology includes the digital PCR asset from Formulatrix as discussed in Note 5 "Acquisitions and Divestitures" which is being amortized over 10 years. Divestitures" which is being amortized over 10 years. Developed technology includes the digital PCR asset from Formulatrix as discussed in Note 5 "Acquisitions and Divestitures" which is being amortized over 10 years. The changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows: The changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows: The changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows: Balance at beginning of year Balance at beginning of year Balance at beginning of year Additions Additions Additions Additions from acquisitions Additions from acquisitions Additions from acquisitions Amortization Amortization Amortization Disposals Disposals Disposals Impairments Impairments Impairments Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments Balance at end of year Balance at end of year Balance at end of year $ 475,043 $ 475,043 $ 475,043 $ 499,318 $ 499,318 $ 499,318 286,159 286,159 286,159 32,159 32,159 32,159 36,458 36,458 36,458 81,200 81,200 81,200 (122,560) (122,560) (122,560) (118,576) (118,576) (118,576) — — — (4,426) (4,426) (4,426) (40,301) (40,301) (40,301) — — — (2,365) (2,365) (2,365) (14,632) (14,632) (14,632) $ 632,434 $ 632,434 $ 632,434 $ 475,043 $ 475,043 $ 475,043 During the year ended December 31, 2019, we recorded an impairment charge of $40.3 million related to the During the year ended December 31, 2019, we recorded an impairment charge of $40.3 million related to the During the year ended December 31, 2019, we recorded an impairment charge of $40.3 million related to the 171 restructuring activities discussed further in Note 6 "Restructuring and Impairments" of which $28.1 million is related restructuring activities discussed further in Note 6 "Restructuring and Impairments" of which $28.1 million is related restructuring activities discussed further in Note 6 "Restructuring and Impairments" of which $28.1 million is related to patent and license rights and $12.1 million is related to developed technology. Amortization expense on to patent and license rights and $12.1 million is related to developed technology. Amortization expense on to patent and license rights and $12.1 million is related to developed technology. Amortization expense on intangible assets totaled approximately $122.6 million, $118.6 million and $133.8 million, respectively, for the intangible assets totaled approximately $122.6 million, $118.6 million and $133.8 million, respectively, for the intangible assets totaled approximately $122.6 million, $118.6 million and $133.8 million, respectively, for the years ended December 31, 2019, 2018 and 2017. years ended December 31, 2019, 2018 and 2017. years ended December 31, 2019, 2018 and 2017. Cash paid for purchases of intangible assets during the year ended December 31, 2019 totaled $156.9 million, of Cash paid for purchases of intangible assets during the year ended December 31, 2019 totaled $156.9 million, of Cash paid for purchases of intangible assets during the year ended December 31, 2019 totaled $156.9 million, of which $11.5 million is related to current year payments for licenses that were accrued as of December 31, 2018 which $11.5 million is related to current year payments for licenses that were accrued as of December 31, 2018 which $11.5 million is related to current year payments for licenses that were accrued as of December 31, 2018 and $0.5 million is related to prepayments recorded in other long-term assets in the accompanying consolidated and $0.5 million is related to prepayments recorded in other long-term assets in the accompanying consolidated and $0.5 million is related to prepayments recorded in other long-term assets in the accompanying consolidated balance sheet. Intangible asset additions of $286.2 million includes $144.9 million of cash paid during the year balance sheet. Intangible asset additions of $286.2 million includes $144.9 million of cash paid during the year balance sheet. Intangible asset additions of $286.2 million includes $144.9 million of cash paid during the year (in thousands)20192018(in thousands)Weighted AverageLife(in years)20192018Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortization(in thousands)20192018(in thousands)WeightedAverage Life(inyears)20192018Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortization(in thousands)20192018(in thousands)Weighted AverageLife(in years)20192018Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortization(in thousands)20192018Amortized Intangible Assets: Amortized Intangible Assets: Amortized Intangible Assets: Amortized Intangible Assets: agreements agreements agreements agreements Unamortized Intangible Assets: Unamortized Intangible Assets: Unamortized Intangible Assets: Unamortized Intangible Assets: Patent and license rights Patent and license rights Patent and license rights Patent and license rights 10.19 10.19 10.19 10.19 $ 320,406 $ 320,406 $ 320,406 $ 320,406 $ (216,554) $ (216,554) $ (216,554) $ (216,554) $ 448,220 $ 448,220 $ 448,220 $ 448,220 $ (310,040) $ (310,040) $ (310,040) $ (310,040) Developed technology Developed technology Developed technology Developed technology 10.96 10.96 10.96 10.96 766,966 766,966 766,966 766,966 (346,085) (346,085) (346,085) (346,085) 770,955 770,955 770,955 770,955 (561,615) (561,615) (561,615) (561,615) Customer base, trademarks, and non-compete Customer base, trademarks, and non-compete Customer base, trademarks, and non-compete Customer base, trademarks, and non-compete 11.68 11.68 11.68 11.68 314,638 314,638 314,638 314,638 (213,881) (213,881) (213,881) (213,881) 427,512 427,512 427,512 427,512 (323,024) (323,024) (323,024) (323,024) 10.95 10.95 10.95 10.95 $ 1,402,010 $ 1,402,010 $ 1,402,010 $ 1,402,010 $ (776,520) $ (776,520) $ (776,520) $ (776,520) $ 1,646,687 $ 1,646,687 $ 1,646,687 $ 1,646,687 $ (1,194,679) $ (1,194,679) $ (1,194,679) $ (1,194,679) In-process research and development In-process research and development In-process research and development In-process research and development $ 6,944 $ 6,944 $ 6,944 $ 6,944 $ 23,035 $ 23,035 $ 23,035 $ 23,035 Goodwill Goodwill Goodwill Goodwill 2,140,503 2,140,503 2,140,503 2,140,503 2,108,536 2,108,536 2,108,536 2,108,536 $ 2,147,447 $ 2,147,447 $ 2,147,447 $ 2,147,447 $ 2,131,571 $ 2,131,571 $ 2,131,571 $ 2,131,571 The in-process research and development is associated to the acquisition of STAT-Dx as further discussed in Note 5 The in-process research and development is associated to the acquisition of STAT-Dx as further discussed in Note 5 The in-process research and development is associated to the acquisition of STAT-Dx as further discussed in Note 5 The in-process research and development is associated to the acquisition of STAT-Dx as further discussed in Note 5 "Acquisitions and Divestitures". The estimated fair value of acquired in-process research and development projects "Acquisitions and Divestitures". The estimated fair value of acquired in-process research and development projects "Acquisitions and Divestitures". The estimated fair value of acquired in-process research and development projects "Acquisitions and Divestitures". The estimated fair value of acquired in-process research and development projects which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested for impairment through completion of the development process, at which point the capitalized amounts are for impairment through completion of the development process, at which point the capitalized amounts are for impairment through completion of the development process, at which point the capitalized amounts are for impairment through completion of the development process, at which point the capitalized amounts are amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts are written-off immediately. During 2019, one development project was completed and, after testing for impairment, are written-off immediately. During 2019, one development project was completed and, after testing for impairment, are written-off immediately. During 2019, one development project was completed and, after testing for impairment, are written-off immediately. During 2019, one development project was completed and, after testing for impairment, $15.9 million of in-process research and development costs were reclassified into developed technology. $15.9 million of in-process research and development costs were reclassified into developed technology. $15.9 million of in-process research and development costs were reclassified into developed technology. $15.9 million of in-process research and development costs were reclassified into developed technology. Developed technology includes the digital PCR asset from Formulatrix as discussed in Note 5 "Acquisitions and Developed technology includes the digital PCR asset from Formulatrix as discussed in Note 5 "Acquisitions and Divestitures" which is being amortized over 10 years. Divestitures" which is being amortized over 10 years. Developed technology includes the digital PCR asset from Formulatrix as discussed in Note 5 "Acquisitions and Developed technology includes the digital PCR asset from Formulatrix as discussed in Note 5 "Acquisitions and Divestitures" which is being amortized over 10 years. Divestitures" which is being amortized over 10 years. The changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows: The changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows: The changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows: The changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows: Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year $ 475,043 $ 475,043 $ 475,043 $ 475,043 $ 499,318 $ 499,318 $ 499,318 $ 499,318 Additions Additions Additions Additions Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions Amortization Amortization Amortization Amortization Disposals Disposals Disposals Disposals Impairments Impairments Impairments Impairments Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments Balance at end of year Balance at end of year Balance at end of year Balance at end of year 286,159 286,159 286,159 286,159 36,458 36,458 36,458 36,458 32,159 32,159 32,159 32,159 81,200 81,200 81,200 81,200 (122,560) (122,560) (122,560) (122,560) (118,576) (118,576) (118,576) (118,576) — — — — (4,426) (4,426) (4,426) (4,426) (40,301) (40,301) (40,301) (40,301) — — — — (2,365) (2,365) (2,365) (2,365) (14,632) (14,632) (14,632) (14,632) $ 632,434 $ 632,434 $ 632,434 $ 632,434 $ 475,043 $ 475,043 $ 475,043 $ 475,043 During the year ended December 31, 2019, we recorded an impairment charge of $40.3 million related to the During the year ended December 31, 2019, we recorded an impairment charge of $40.3 million related to the During the year ended December 31, 2019, we recorded an impairment charge of $40.3 million related to the During the year ended December 31, 2019, we recorded an impairment charge of $40.3 million related to the restructuring activities discussed further in Note 6 "Restructuring and Impairments" of which $28.1 million is related restructuring activities discussed further in Note 6 "Restructuring and Impairments" of which $28.1 million is related restructuring activities discussed further in Note 6 "Restructuring and Impairments" of which $28.1 million is related restructuring activities discussed further in Note 6 "Restructuring and Impairments" of which $28.1 million is related to patent and license rights and $12.1 million is related to developed technology. Amortization expense on to patent and license rights and $12.1 million is related to developed technology. Amortization expense on to patent and license rights and $12.1 million is related to developed technology. Amortization expense on to patent and license rights and $12.1 million is related to developed technology. Amortization expense on intangible assets totaled approximately $122.6 million, $118.6 million and $133.8 million, respectively, for the intangible assets totaled approximately $122.6 million, $118.6 million and $133.8 million, respectively, for the intangible assets totaled approximately $122.6 million, $118.6 million and $133.8 million, respectively, for the intangible assets totaled approximately $122.6 million, $118.6 million and $133.8 million, respectively, for the years ended December 31, 2019, 2018 and 2017. years ended December 31, 2019, 2018 and 2017. years ended December 31, 2019, 2018 and 2017. years ended December 31, 2019, 2018 and 2017. Cash paid for purchases of intangible assets during the year ended December 31, 2019 totaled $156.9 million, of Cash paid for purchases of intangible assets during the year ended December 31, 2019 totaled $156.9 million, of which $11.5 million is related to current year payments for licenses that were accrued as of December 31, 2018 which $11.5 million is related to current year payments for licenses that were accrued as of December 31, 2018 and $0.5 million is related to prepayments recorded in other long-term assets in the accompanying consolidated and $0.5 million is related to prepayments recorded in other long-term assets in the accompanying consolidated balance sheet. Intangible asset additions of $286.2 million includes $144.9 million of cash paid during the year balance sheet. Intangible asset additions of $286.2 million includes $144.9 million of cash paid during the year Cash paid for purchases of intangible assets during the year ended December 31, 2019 totaled $156.9 million, of Cash paid for purchases of intangible assets during the year ended December 31, 2019 totaled $156.9 million, of which $11.5 million is related to current year payments for licenses that were accrued as of December 31, 2018 which $11.5 million is related to current year payments for licenses that were accrued as of December 31, 2018 and $0.5 million is related to prepayments recorded in other long-term assets in the accompanying consolidated and $0.5 million is related to prepayments recorded in other long-term assets in the accompanying consolidated balance sheet. Intangible asset additions of $286.2 million includes $144.9 million of cash paid during the year balance sheet. Intangible asset additions of $286.2 million includes $144.9 million of cash paid during the year ended December 31, 2019, together with $137.8 million of additions that were accrued as of December 31, 2019 and $3.5 million of additions which were previously recorded as prepayments. Cash paid for intangible assets during the year ended December 31, 2018 totaled $41.0 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 long-term assets in accompanying consolidated balance sheet. Intangible asset additions of $32.2 million includes $25.8 million of cash paid during the year ended December 31, 2018, together with $4.2 million of additions that were accrued as of December 31, 2018 and $2.2 million of additions which were previously recorded as prepayments. Amortization of intangibles for the next five years is expected to be approximately: Years ended December 31: 2020 2021 2022 2023 2024 $ 100,891 $ 92,512 $ 78,454 $ 76,239 $ 71,910 The changes in goodwill for the years ended December 31, 2019 and 2018 are as follows: 172 Balance at beginning of year Business combinations Purchase adjustments Disposals Foreign currency translation adjustments Balance at end of year $ 2,108,536 $ 2,012,904 34,807 142,287 (236) (225) — (5,682) (2,379) (40,973) $ 2,140,503 $ 2,108,536 The changes in the carrying amount of goodwill during the year ended December 31, 2019 resulted primarily from the acquisition of N-of-One, Inc. 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, 2018 resulted primarily from the acquisition of STAT-Dx and other acquisitions and divestitures also discussed in Note 5 Note 5 "Acquisitions and Divestitures". 12. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and additionally in July 2018, the ASU 2018- 11, Leases (Topic 842) Targeted Improvements, which superseded ASC Topic 840, Leases. The new standard increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted Topic 842 Leases on its effective date on January 1, 2019 and the comparative information has not been adjusted and continues to be reported under ASC Topic 840 Leases. As a result, we changed our accounting policy for leases as detailed below. (in thousands)Weighted AverageLife(in years)20192018Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortization(in thousands)20192018Accounting Policies(in thousands)Amortization(in thousands)20192018(in thousands)WeightedAverage Life(inyears)20192018Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortization(in thousands)20192018(in thousands)WeightedAverage Life(inyears)20192018Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortization(in thousands)20192018(in thousands)WeightedAverage Life(inyears)20192018Gross CarryingAmountAccumulatedAmortizationGross CarryingAmountAccumulatedAmortization(in thousands)20192018ended December 31, 2019, together with $137.8 million of additions that were accrued as of December 31, 2019 ended December 31, 2019, together with $137.8 million of additions that were accrued as of December 31, 2019 ended December 31, 2019, together with $137.8 million of additions that were accrued as of December 31, 2019 ended December 31, 2019, together with $137.8 million of additions that were accrued as of December 31, 2019 ended December 31, 2019, together with $137.8 million of additions that were accrued as of December 31, 2019 and $3.5 million of additions which were previously recorded as prepayments. and $3.5 million of additions which were previously recorded as prepayments. and $3.5 million of additions which were previously recorded as prepayments. and $3.5 million of additions which were previously recorded as prepayments. and $3.5 million of additions which were previously recorded as prepayments. F I N A N C I A L R E S U LT S Notes to consolidated financial statements Cash paid for intangible assets during the year ended December 31, 2018 totaled $41.0 million of which $11.9 Cash paid for intangible assets during the year ended December 31, 2018 totaled $41.0 million of which $11.9 Cash paid for intangible assets during the year ended December 31, 2018 totaled $41.0 million of which $11.9 Cash paid for intangible assets during the year ended December 31, 2018 totaled $41.0 million of which $11.9 Cash paid for intangible assets during the year ended December 31, 2018 totaled $41.0 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 million is related to current year payments for licenses that were accrued as of December 31, 2017 and $3.3 million million is related to current year payments for licenses that were accrued as of December 31, 2017 and $3.3 million million is related to current year payments for licenses that were accrued as of December 31, 2017 and $3.3 million 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 long-term assets in accompanying consolidated balance sheet. Intangible is related to prepayments recorded in other long-term assets in accompanying consolidated balance sheet. Intangible is related to prepayments recorded in other long-term assets in accompanying consolidated balance sheet. Intangible is related to prepayments recorded in other long-term assets in accompanying consolidated balance sheet. Intangible is related to prepayments recorded in other long-term assets in accompanying consolidated balance sheet. Intangible asset additions of $32.2 million includes $25.8 million of cash paid during the year ended December 31, 2018, asset additions of $32.2 million includes $25.8 million of cash paid during the year ended December 31, 2018, asset additions of $32.2 million includes $25.8 million of cash paid during the year ended December 31, 2018, asset additions of $32.2 million includes $25.8 million of cash paid during the year ended December 31, 2018, asset additions of $32.2 million includes $25.8 million of cash paid during the year ended December 31, 2018, together with $4.2 million of additions that were accrued as of December 31, 2018 and $2.2 million of additions together with $4.2 million of additions that were accrued as of December 31, 2018 and $2.2 million of additions together with $4.2 million of additions that were accrued as of December 31, 2018 and $2.2 million of additions together with $4.2 million of additions that were accrued as of December 31, 2018 and $2.2 million of additions together with $4.2 million of additions that were accrued as of December 31, 2018 and $2.2 million of additions which were previously recorded as prepayments. which were previously recorded as prepayments. which were previously recorded as prepayments. which were previously recorded as prepayments. which were previously recorded as prepayments. Amortization of intangibles for the next five years is expected to be approximately: Amortization of intangibles for the next five years is expected to be approximately: Amortization of intangibles for the next five years is expected to be approximately: Amortization of intangibles for the next five years is expected to be approximately: Amortization of intangibles for the next five years is expected to be approximately: Years ended December 31: Years ended December 31: Years ended December 31: Years ended December 31: Years ended December 31: 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 2023 2023 2023 2023 2023 2024 2024 2024 2024 2024 $ 100,891 $ 100,891 $ 100,891 $ 100,891 $ 100,891 $ 92,512 $ 92,512 $ 92,512 $ 92,512 $ 92,512 $ 78,454 $ 78,454 $ 78,454 $ 78,454 $ 78,454 $ 76,239 $ 76,239 $ 76,239 $ 76,239 $ 76,239 $ 71,910 $ 71,910 $ 71,910 $ 71,910 $ 71,910 The changes in goodwill for the years ended December 31, 2019 and 2018 are as follows: The changes in goodwill for the years ended December 31, 2019 and 2018 are as follows: The changes in goodwill for the years ended December 31, 2019 and 2018 are as follows: The changes in goodwill for the years ended December 31, 2019 and 2018 are as follows: The changes in goodwill for the years ended December 31, 2019 and 2018 are as follows: Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Business combinations Business combinations Business combinations Business combinations Business combinations Purchase adjustments Purchase adjustments Purchase adjustments Purchase adjustments Purchase adjustments Disposals Disposals Disposals Disposals Disposals Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments Foreign currency translation adjustments Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year $ 2,108,536 $ 2,108,536 $ 2,108,536 $ 2,108,536 $ 2,108,536 $ 2,012,904 $ 2,012,904 $ 2,012,904 $ 2,012,904 $ 2,012,904 34,807 34,807 34,807 34,807 34,807 (236) (236) (236) (236) (236) (225) (225) (225) (225) (225) 142,287 142,287 142,287 142,287 142,287 — — — — — (5,682) (5,682) (5,682) (5,682) (5,682) (2,379) (2,379) (2,379) (2,379) (2,379) (40,973) (40,973) (40,973) (40,973) (40,973) $ 2,140,503 $ 2,140,503 $ 2,140,503 $ 2,140,503 $ 2,140,503 $ 2,108,536 $ 2,108,536 $ 2,108,536 $ 2,108,536 $ 2,108,536 The changes in the carrying amount of goodwill during the year ended December 31, 2019 resulted primarily from The changes in the carrying amount of goodwill during the year ended December 31, 2019 resulted primarily from The changes in the carrying amount of goodwill during the year ended December 31, 2019 resulted primarily from The changes in the carrying amount of goodwill during the year ended December 31, 2019 resulted primarily from The changes in the carrying amount of goodwill during the year ended December 31, 2019 resulted primarily from the acquisition of N-of-One, Inc. and other acquisitions and divestitures discussed in Note 5 "Acquisitions and the acquisition of N-of-One, Inc. and other acquisitions and divestitures discussed in Note 5 "Acquisitions and the acquisition of N-of-One, Inc. and other acquisitions and divestitures discussed in Note 5 "Acquisitions and the acquisition of N-of-One, Inc. and other acquisitions and divestitures discussed in Note 5 "Acquisitions and the acquisition of N-of-One, Inc. 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 Divestitures" and changes in foreign currency translation. The changes in goodwill during the year ended December Divestitures" and changes in foreign currency translation. The changes in goodwill during the year ended December Divestitures" and changes in foreign currency translation. The changes in goodwill during the year ended December Divestitures" and changes in foreign currency translation. The changes in goodwill during the year ended December 31, 2018 resulted primarily from the acquisition of STAT-Dx and other acquisitions and divestitures also discussed in 31, 2018 resulted primarily from the acquisition of STAT-Dx and other acquisitions and divestitures also discussed in 31, 2018 resulted primarily from the acquisition of STAT-Dx and other acquisitions and divestitures also discussed in 31, 2018 resulted primarily from the acquisition of STAT-Dx and other acquisitions and divestitures also discussed in 31, 2018 resulted primarily from the acquisition of STAT-Dx and other acquisitions and divestitures also discussed in Note 5 Note 5 "Acquisitions and Divestitures". Note 5 Note 5 "Acquisitions and Divestitures". Note 5 Note 5 "Acquisitions and Divestitures". Note 5 Note 5 "Acquisitions and Divestitures". Note 5 Note 5 "Acquisitions and Divestitures". 12. Leases 12. Leases 12. Leases 12. Leases 12. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and additionally in July 2018, the ASU 2018- In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and additionally in July 2018, the ASU 2018- In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and additionally in July 2018, the ASU 2018- In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and additionally in July 2018, the ASU 2018- In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and additionally in July 2018, the ASU 2018- 11, Leases (Topic 842) Targeted Improvements, which superseded ASC Topic 840, Leases. The new standard 11, Leases (Topic 842) Targeted Improvements, which superseded ASC Topic 840, Leases. The new standard 11, Leases (Topic 842) Targeted Improvements, which superseded ASC Topic 840, Leases. The new standard 11, Leases (Topic 842) Targeted Improvements, which superseded ASC Topic 840, Leases. The new standard 11, Leases (Topic 842) Targeted Improvements, which superseded ASC Topic 840, Leases. The new standard increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and increases transparency and comparability by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures lease liabilities on the balance sheet for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and are required to meet the objective of enabling users of financial statements to assess the amount, timing and are required to meet the objective of enabling users of financial statements to assess the amount, timing and are required to meet the objective of enabling users of financial statements to assess the amount, timing and are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. uncertainty of cash flows arising from leases. uncertainty of cash flows arising from leases. uncertainty of cash flows arising from leases. uncertainty of cash flows arising from leases. We adopted Topic 842 Leases on its effective date on January 1, 2019 and the comparative information has not We adopted Topic 842 Leases on its effective date on January 1, 2019 and the comparative information has not We adopted Topic 842 Leases on its effective date on January 1, 2019 and the comparative information has not We adopted Topic 842 Leases on its effective date on January 1, 2019 and the comparative information has not We adopted Topic 842 Leases on its effective date on January 1, 2019 and the comparative information has not been adjusted and continues to be reported under ASC Topic 840 Leases. As a result, we changed our accounting been adjusted and continues to be reported under ASC Topic 840 Leases. As a result, we changed our accounting been adjusted and continues to be reported under ASC Topic 840 Leases. As a result, we changed our accounting been adjusted and continues to be reported under ASC Topic 840 Leases. As a result, we changed our accounting been adjusted and continues to be reported under ASC Topic 840 Leases. As a result, we changed our accounting policy for leases as detailed below. policy for leases as detailed below. policy for leases as detailed below. policy for leases as detailed below. policy for leases as detailed below. 173 Accounting Policies(in thousands)Amortization(in thousands)20192018Accounting Policies(in thousands)Amortization(in thousands)20192018Accounting Policies(in thousands)Amortization(in thousands)20192018Accounting Policies(in thousands)Amortization(in thousands)20192018Accounting Policies(in thousands)Amortization(in thousands)20192018We implemented the standard using the required modified retrospective approach and have also elected to utilize We implemented the standard using the required modified retrospective approach and have also elected to utilize the package of practical expedients, which permitted us to not reassess (1) whether any expired or existing contracts the package of practical expedients, which permitted us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We also elected the practical expedient to use hindsight in determining any existing leases as of the effective date. We also elected the practical expedient to use hindsight in determining the appropriate lease term and in assessing impairment of its right-of-use assets. In using the modified retrospective the appropriate lease term and in assessing impairment of its right-of-use assets. In using the modified retrospective approach, we were required to recognize and measure leases existing at, or entered into after, the beginning of the approach, we were required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented. earliest comparative period presented. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of approximately $57.4 million and $57.7 million, respectively as of January 1, 2019. The difference between the approximately $57.4 million and $57.7 million, respectively as of January 1, 2019. The difference between the additional lease assets and lease liabilities was recorded as a $0.3 million adjustment to retained earnings. The additional lease assets and lease liabilities was recorded as a $0.3 million adjustment to retained earnings. The standard did not materially impact our consolidated income statements and had no impact on cash flows. standard did not materially impact our consolidated income statements and had no impact on cash flows. We have operating and finance leases for equipment, cars, machinery, other equipment, office and buildings. Our We have operating and finance leases for equipment, cars, machinery, other equipment, office and buildings. Our leases have remaining lease terms of 1 year to 9 years, some of which include options to extend or early renew the leases have remaining lease terms of 1 year to 9 years, some of which include options to extend or early renew the leases, and some of which include options to early terminate the leases. As of December 31, 2019, no such options leases, and some of which include options to early terminate the leases. As of December 31, 2019, no such options have been recognized as part of the right-of-use assets and lease liabilities. have been recognized as part of the right-of-use assets and lease liabilities. Operating leases can contain variable lease charges based on an index like consumer prices or rates. During 2019, amounts recorded as variable lease payments not included in the operating lease liability were not material. Operating leases can contain variable lease charges based on an index like consumer prices or rates. During 2019, amounts recorded as variable lease payments not included in the operating lease liability were not material. When we cannot readily determine the interest rate implicit in the operating lease contracts, we apply our incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. We use the implicit rate when it is readily determinable. When we cannot readily determine the interest rate implicit in the operating lease contracts, we apply our incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. We use the implicit rate when it is readily determinable. Supplemental balance sheet and other information related to leases was as follows: Supplemental balance sheet and other information related to leases was as follows: Operating lease right-of-use assets Operating lease right-of-use assets Current operating lease liabilities Current operating lease liabilities Long-term operating lease liabilities Long-term operating lease liabilities Other long-term assets Other long-term assets $ 57,305 $ 57,305 Accrued and other current liabilities Accrued and other current liabilities $ 18,739 $ 18,739 Other long-term liabilities Other long-term liabilities $ 39,631 $ 39,631 Weighted average remaining lease term - operating leases (in years) Weighted average remaining lease term - operating leases (in years) Weighted average discount rate - operating leases Weighted average discount rate - operating leases The components of lease expense were as follows: The components of lease expense were as follows: 3.71 3.71 2.39 % 2.39 % Operating lease cost Operating lease cost $ 24,378 $ 24,378 Supplemental cash flow information related to leases was as follows: Supplemental cash flow information related to leases was as follows: 174 Nature of Existing Leases(in thousands, except lease term and discount rate)Location in balance sheetDecember 31, 2019(in thousands)Year Ended December31, 2019Nature of Existing Leases(in thousands, except lease term and discount rate)Location in balance sheetDecember 31, 2019(in thousands)Year Ended December31, 2019 F I N A N C I A L R E S U LT S Notes to consolidated financial statements Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases Right-of-use assets obtained in exchange for lease obligations: Operating leases Maturities of lease liabilities were as follows: 2020 2021 2022 2023 2024 Thereafter Total lease payments(1) Less imputed interest Total $ (26,113) $ 24,670 $ 19,914 16,009 11,885 7,119 3,391 3,202 61,520 (3,150) $ 58,370 (1) Total lease payments exclude payments associated to the lease agreement discussed below that has not yet commenced. As of December 31, 2019, we had an additional operating lease for a facility related primarily to research and development that has not yet commenced but will create significant rights and obligations for the Company. The agreement commences in 2020 with future undiscounted aggregate lease payments of $44.5 million to be paid over a lease term of 15 years. We did not hold any material finance leases as of December 31, 2019 or January 1, 2019. 13. Accrued and Other Current Liabilities Accrued and other current liabilities at December 31, 2019 and 2018 consist of the following: Accrued contingent consideration and milestone payments (15) $ 142,604 $ 27,820 Accrued expenses and other liabilities Payroll and related accruals Restructuring Deferred revenue Operating lease liabilities Accrued royalties Accrued interest on long-term debt Cash collateral Total accrued and other current liabilities (6) (4) (12) (22) (16) (14) 93,204 66,866 62,227 48,525 18,739 5,481 5,257 1,400 103,449 66,871 6,850 45,358 — 5,469 6,200 1,000 175 $ 444,303 $ 263,017 (in thousands)Year EndedDecember 31, 2019(in thousands)Operating Leases(in thousands)Note20192018 Cash paid for amounts included in the measurement of lease liabilities: Cash paid for amounts included in the measurement of lease liabilities: Cash paid for amounts included in the measurement of lease liabilities: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases Operating cash flows from operating leases Operating cash flows from operating leases Operating cash flows from operating leases $ (26,113) $ (26,113) $ (26,113) $ (26,113) Right-of-use assets obtained in exchange for lease obligations: Right-of-use assets obtained in exchange for lease obligations: Right-of-use assets obtained in exchange for lease obligations: Right-of-use assets obtained in exchange for lease obligations: Operating leases Operating leases Operating leases Operating leases $ 24,670 $ 24,670 $ 24,670 $ 24,670 Maturities of lease liabilities were as follows: Maturities of lease liabilities were as follows: Maturities of lease liabilities were as follows: Maturities of lease liabilities were as follows: 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 2024 Thereafter Thereafter Thereafter Thereafter Total lease payments(1) Total lease payments(1) Total lease payments(1) Total lease payments(1) Less imputed interest Less imputed interest Less imputed interest Less imputed interest Total Total Total Total $ 19,914 $ 19,914 $ 19,914 $ 19,914 16,009 16,009 16,009 16,009 11,885 11,885 11,885 11,885 7,119 7,119 7,119 7,119 3,391 3,391 3,391 3,391 3,202 3,202 3,202 3,202 61,520 61,520 61,520 61,520 (3,150) (3,150) (3,150) (3,150) $ 58,370 $ 58,370 $ 58,370 $ 58,370 (1) Total lease payments exclude payments associated to the lease agreement discussed below that has not yet commenced. (1) Total lease payments exclude payments associated to the lease agreement discussed below that has not yet commenced. (1) Total lease payments exclude payments associated to the lease agreement discussed below that has not yet commenced. (1) Total lease payments exclude payments associated to the lease agreement discussed below that has not yet commenced. As of December 31, 2019, we had an additional operating lease for a facility related primarily to research and As of December 31, 2019, we had an additional operating lease for a facility related primarily to research and As of December 31, 2019, we had an additional operating lease for a facility related primarily to research and As of December 31, 2019, we had an additional operating lease for a facility related primarily to research and development that has not yet commenced but will create significant rights and obligations for the Company. The development that has not yet commenced but will create significant rights and obligations for the Company. The development that has not yet commenced but will create significant rights and obligations for the Company. The development that has not yet commenced but will create significant rights and obligations for the Company. The agreement commences in 2020 with future undiscounted aggregate lease payments of $44.5 million to be paid over agreement commences in 2020 with future undiscounted aggregate lease payments of $44.5 million to be paid over agreement commences in 2020 with future undiscounted aggregate lease payments of $44.5 million to be paid over agreement commences in 2020 with future undiscounted aggregate lease payments of $44.5 million to be paid over a lease term of 15 years. a lease term of 15 years. a lease term of 15 years. a lease term of 15 years. We did not hold any material finance leases as of December 31, 2019 or January 1, 2019. We did not hold any material finance leases as of December 31, 2019 or January 1, 2019. We did not hold any material finance leases as of December 31, 2019 or January 1, 2019. We did not hold any material finance leases as of December 31, 2019 or January 1, 2019. 13. Accrued and Other Current Liabilities 13. Accrued and Other Current Liabilities 13. Accrued and Other Current Liabilities 13. Accrued and Other Current Liabilities Accrued and other current liabilities at December 31, 2019 and 2018 consist of the following: Accrued and other current liabilities at December 31, 2019 and 2018 consist of the following: Accrued and other current liabilities at December 31, 2019 and 2018 consist of the following: Accrued and other current liabilities at December 31, 2019 and 2018 consist of the following: Accrued contingent consideration and milestone payments Accrued contingent consideration and milestone payments Accrued contingent consideration and milestone payments Accrued contingent consideration and milestone payments (15) (15) (15) (15) $ 142,604 $ 142,604 $ 142,604 $ 142,604 $ 27,820 $ 27,820 $ 27,820 $ 27,820 Accrued expenses and other liabilities Accrued expenses and other liabilities Accrued expenses and other liabilities Accrued expenses and other liabilities Payroll and related accruals Payroll and related accruals Payroll and related accruals Payroll and related accruals Restructuring Restructuring Restructuring Restructuring Deferred revenue Deferred revenue Deferred revenue Deferred revenue Operating lease liabilities Operating lease liabilities Operating lease liabilities Operating lease liabilities Accrued royalties Accrued royalties Accrued royalties Accrued royalties Accrued interest on long-term debt Accrued interest on long-term debt Accrued interest on long-term debt Accrued interest on long-term debt Cash collateral Cash collateral Cash collateral Cash collateral 93,204 93,204 93,204 93,204 103,449 103,449 103,449 103,449 66,866 66,866 66,866 66,866 66,871 66,871 66,871 66,871 62,227 62,227 62,227 62,227 6,850 6,850 6,850 6,850 48,525 48,525 48,525 48,525 45,358 45,358 45,358 45,358 (6) (6) (4) (4) (6) (6) (4) (4) (12) (12) (12) (12) 18,739 18,739 18,739 18,739 — — — — (22) (22) (22) (22) (16) (16) (16) (16) (14) (14) (14) (14) 5,481 5,481 5,481 5,481 5,469 5,469 5,469 5,469 5,257 5,257 5,257 5,257 6,200 6,200 6,200 6,200 1,400 1,400 1,400 1,400 1,000 1,000 1,000 1,000 Total accrued and other current liabilities Total accrued and other current liabilities Total accrued and other current liabilities Total accrued and other current liabilities $ 444,303 $ 444,303 $ 444,303 $ 444,303 $ 263,017 $ 263,017 $ 263,017 $ 263,017 14. 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 had entered into cross-currency swaps, interest rate swaps or foreign exchange contracts, to enter into bilateral collateralization contracts under which we will receive or provide cash collateral, as the case may be, for the net position with each of these counterparties. As of December 31, 2019, cash collateral positions consisted of $1.4 million recorded in accrued and other current liabilities and $2.7 million recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheet. As of December 31, 2018, we had a liability position of $1.0 million recorded in accrued and other current liabilities and $25.4 million recorded in prepaid expenses and 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 16 "Lines of Credit and Debt". 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 176 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, 2019 and 2018 is $0.4 million and $5.9 million, respectively. 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, 2019 and 2018. As of December 31, 2019 and 2018, 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 (loss) income 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 2019 and in 2018, we did not record any hedge ineffectiveness related to any cash-flow hedges in earnings. Based on their valuation as of December 31, 2019, we expect approximately $1.9 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. 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, 2019 and 2018, interest receivables of $1.5 million and $1.4 million, respectively are recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheet. Objective and StrategyNon-Derivative Hedging InstrumentNet Investment HedgeDerivatives Designated as Hedging InstrumentsCash Flow Hedges(in thousands)Year EndedDecember 31, 2019(in thousands)Operating Leases(in thousands)Note20192018(in thousands)Year EndedDecember 31, 2019(in thousands)Operating Leases(in thousands)Note20192018(in thousands)Year EndedDecember 31, 2019(in thousands)Operating Leases(in thousands)Note20192018(in thousands)Year EndedDecember 31, 2019(in thousands)Operating Leases(in thousands)Note20192018 14. 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 F I N A N C I A L R E S U LT S Notes to consolidated financial statements derivative qualifies as an effective hedge that offsets certain exposures. We have agreed with almost all of our counterparties with whom we had entered into cross-currency swaps, interest rate swaps or foreign exchange contracts, to enter into bilateral collateralization contracts under which we will receive or provide cash collateral, as the case may be, for the net position with each of these counterparties. As of December 31, 2019, cash collateral positions consisted of $1.4 million recorded in accrued and other current liabilities and $2.7 million recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheet. As of December 31, 2018, we had a liability position of $1.0 million recorded in accrued and other current liabilities and $25.4 million recorded in prepaid expenses and 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 16 "Lines of Credit and Debt". 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, 2019 and 2018 is $0.4 million and $5.9 million, respectively. 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, 2019 and 2018. As of December 31, 2019 and 2018, 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 (loss) income 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 2019 and in 2018, we did not record any hedge ineffectiveness related to any cash-flow hedges in earnings. Based on their valuation as of December 31, 2019, we expect approximately $1.9 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. 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, 2019 and 2018, interest receivables of $1.5 million and $1.4 million, respectively are recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheet. 177 Objective and StrategyNon-Derivative Hedging InstrumentNet Investment HedgeDerivatives Designated as Hedging InstrumentsCash Flow HedgesAs of December 31, 2019 and 2018, 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 effect on earnings 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 2019 and 2018, 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. We hold interest rate swaps which effectively fixed the fair value of a portion of our fixed rate private placement debt and qualify for hedge accounting as fair value hedges. We determined that no ineffectiveness exists related to these swaps. As of December 31, 2019, an interest receivable of $0.1 million is recorded in prepaid and other current assets, and as of December 31, 2018, accrued and unpaid interest of $0.1 million is recorded in accrued and other current liabilities, respectively, in the accompanying balance sheet. We entered into Call Options which, along with the sale of the Warrants, represent the Call Spread Overlay entered into in connection with the Cash Convertible Notes and which are more fully described in Note 16 "Lines of Credit and Debt". 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 premiums 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 derivative assets 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 15 "Financial Instruments and Fair Value Measurements". The Call Options do not qualify for hedge accounting treatment. Therefore, the change in fair value of these instruments is recognized immediately in our consolidated statements of income in other income (expense), net. 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 the two derivative instruments to mostly offset each other. The embedded cash conversion option within the Cash Convertible Notes discussed in Note 16 "Lines of Credit and Debt" is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income in other income (expense), net until the cash conversion option settles or expires. 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 15 "Financial Instruments and Fair Value Measurements". 178 During 2017, we purchased a convertible note for $3.0 million from a publicly listed company considered a related party. The embedded conversion option within the convertible note is required to be separated from the convertible note and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated Fair Value HedgesDerivatives Not Designated as Hedging InstrumentsCall OptionsCash Convertible Notes Embedded Cash Conversion OptionEmbedded Conversion OptionAs of December 31, 2019 and 2018, 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 effect on earnings 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 2019 and 2018, 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. We hold interest rate swaps which effectively fixed the fair value of a portion of our fixed rate private placement debt and qualify for hedge accounting as fair value hedges. We determined that no ineffectiveness exists related to these swaps. As of December 31, 2019, an interest receivable of $0.1 million is recorded in prepaid and other current assets, and as of December 31, 2018, accrued and unpaid interest of $0.1 million is recorded in accrued and other current liabilities, respectively, in the accompanying balance sheet. We entered into Call Options which, along with the sale of the Warrants, represent the Call Spread Overlay entered into in connection with the Cash Convertible Notes and which are more fully described in Note 16 "Lines of Credit and Debt". 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 premiums 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 derivative assets 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 15 "Financial Instruments and Fair Value Measurements". The Call Options do not qualify for hedge accounting treatment. Therefore, the change in fair value of these instruments is recognized immediately in our consolidated statements of income in other income (expense), net. 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 the two derivative instruments to mostly offset each other. The embedded cash conversion option within the Cash Convertible Notes discussed in Note 16 "Lines of Credit and F I N A N C I A L R E S U LT S Notes to consolidated financial statements Debt" is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income in other income (expense), net until the cash conversion option settles or expires. 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 15 "Financial Instruments and Fair Value Measurements". During 2017, we purchased a convertible note for $3.0 million from a publicly listed company considered a related party. The embedded conversion option within the convertible note is required to be separated from the convertible note and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income in other income (expense), net. The embedded cash conversion option is measured and statements of income in other income (expense), net. The embedded cash conversion option is measured and statements of income in other income (expense), net. The embedded cash conversion option is measured and statements of income in other income (expense), net. The embedded cash conversion option is measured and statements of income in other income (expense), net. 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 reported at fair value on a recurring basis, within Level 2 of the fair value hierarchy. For further discussion of the reported at fair value on a recurring basis, within Level 2 of the fair value hierarchy. For further discussion of the reported at fair value on a recurring basis, within Level 2 of the fair value hierarchy. For further discussion of the 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 15 "Financial inputs used to determine the fair value of the embedded cash conversion option, refer to Note 15 "Financial inputs used to determine the fair value of the embedded cash conversion option, refer to Note 15 "Financial inputs used to determine the fair value of the embedded cash conversion option, refer to Note 15 "Financial inputs used to determine the fair value of the embedded cash conversion option, refer to Note 15 "Financial Instruments and Fair Value Measurements". Instruments and Fair Value Measurements". Instruments and Fair Value Measurements". Instruments and Fair Value Measurements". Instruments and Fair Value Measurements". As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our 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 ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance ordinary operations. This includes foreign currency-denominated receivables, payables, debt, and other balance sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis using sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis using sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis using sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis using sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis using foreign exchange forward contracts, foreign exchange options and cross-currency swaps. foreign exchange forward contracts, foreign exchange options and cross-currency swaps. foreign exchange forward contracts, foreign exchange options and cross-currency swaps. foreign exchange forward contracts, foreign exchange options and cross-currency swaps. 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, We are party to various foreign exchange forward, option and swap arrangements which had, at December 31, We are party to various foreign exchange forward, option and swap arrangements which had, at December 31, We are party to various foreign exchange forward, option and swap arrangements which had, at December 31, We are party to various foreign exchange forward, option and swap arrangements which had, at December 31, 2019 and December 31, 2018, aggregate notional values of $701.4 million and $792.7 million which expire at 2019 and December 31, 2018, aggregate notional values of $701.4 million and $792.7 million which expire at 2019 and December 31, 2018, aggregate notional values of $701.4 million and $792.7 million which expire at 2019 and December 31, 2018, aggregate notional values of $701.4 million and $792.7 million which expire at 2019 and December 31, 2018, aggregate notional values of $701.4 million and $792.7 million which expire at various dates through March 2020. The transactions have been entered into to offset the effects from short-term various dates through March 2020. The transactions have been entered into to offset the effects from short-term various dates through March 2020. The transactions have been entered into to offset the effects from short-term various dates through March 2020. The transactions have been entered into to offset the effects from short-term various dates through March 2020. 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 balance sheet exposure to foreign currency exchange risk. Changes in the fair value of these arrangements have balance sheet exposure to foreign currency exchange risk. Changes in the fair value of these arrangements have balance sheet exposure to foreign currency exchange risk. Changes in the fair value of these arrangements have balance sheet exposure to foreign currency exchange risk. Changes in the fair value of these arrangements have been recognized in other income (expense), net. been recognized in other income (expense), net. been recognized in other income (expense), net. been recognized in other income (expense), net. been recognized in other income (expense), net. The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance sheets as of December 31, 2019 and 2018: The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance sheets as of December 31, 2019 and 2018: sheets as of December 31, 2019 and 2018: The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance sheets as of December 31, 2019 and 2018: sheets as of December 31, 2019 and 2018: Interest rate contracts - fair value hedge (1) Interest rate contracts - fair value hedge (1) Interest rate contracts - fair value hedge (1) Interest rate contracts - fair value hedge (1) Interest rate contracts - fair value hedge (1) Total derivative instruments designated as hedges Total derivative instruments designated as hedges Total derivative instruments designated as hedges Total derivative instruments designated as hedges Total derivative instruments designated as hedges Embedded conversion option Embedded conversion option Embedded conversion option Embedded conversion option Embedded conversion option Call options Call options Call options Call options Call options Foreign exchange contracts Foreign exchange contracts Foreign exchange contracts Foreign exchange contracts Foreign exchange contracts Total undesignated derivative instruments Total undesignated derivative instruments Total undesignated derivative instruments Total undesignated derivative instruments Total undesignated derivative instruments $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 349 $ 349 $ 349 $ 349 $ 349 101,179 101,179 101,179 101,179 101,179 189,792 189,792 189,792 189,792 189,792 100,081 100,081 100,081 100,081 100,081 295,014 295,014 295,014 295,014 295,014 6,689 6,689 6,689 6,689 6,689 — — — — — 2,673 2,673 2,673 2,673 2,673 — — — — — $ 107,868 $ 107,868 $ 107,868 $ 107,868 $ 107,868 $ 189,792 $ 189,792 $ 189,792 $ 189,792 $ 189,792 $ 102,754 $ 102,754 $ 102,754 $ 102,754 $ 102,754 $ 295,363 $ 295,363 $ 295,363 $ 295,363 $ 295,363 $ 107,868 $ 107,868 $ 107,868 $ 107,868 $ 107,868 $ 192,266 $ 192,266 $ 192,266 $ 192,266 $ 192,266 $ 102,754 $ 102,754 $ 102,754 $ 102,754 $ 102,754 $ 295,363 $ 295,363 $ 295,363 $ 295,363 $ 295,363 179 Fair Value HedgesDerivatives Not Designated as Hedging InstrumentsCall OptionsCash Convertible Notes Embedded Cash Conversion OptionEmbedded Conversion OptionForeign Exchange ContractsFair Values of Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current AssetLong-Term AssetCurrent AssetLong-Term AssetAssets:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative AssetsForeign Exchange ContractsFair Values of Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current AssetLong-Term AssetCurrent AssetLong-Term AssetAssets:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative AssetsForeign Exchange ContractsFair Values of Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current AssetLong-Term AssetCurrent AssetLong-Term AssetAssets:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative AssetsForeign Exchange ContractsFair Values of Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current AssetLong-Term AssetCurrent AssetLong-Term AssetAssets:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative AssetsForeign Exchange ContractsFair Values of Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current AssetLong-Term AssetCurrent AssetLong-Term AssetAssets:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative Assets Interest rate contracts - cash flow hedge (1) Interest rate contracts - cash flow hedge (1) Interest rate contracts - cash flow hedge (1) Interest rate contracts - cash flow hedge (1) Interest rate contracts - fair value hedge (1) Interest rate contracts - fair value hedge (1) Interest rate contracts - fair value hedge (1) Interest rate contracts - fair value hedge (1) $ — $ — $ — $ — $ (6,027) $ (6,027) $ (6,027) $ (6,027) $ — $ — $ — $ — $ (17,574) $ (17,574) $ (17,574) $ (17,574) — — — — — — — — (473) (473) (473) (473) (721) (721) (721) (721) Total derivative instruments designated as hedges Total derivative instruments designated as hedges Total derivative instruments designated as hedges Total derivative instruments designated as hedges $ — $ — $ — $ — $ (6,027) $ (6,027) $ (6,027) $ (6,027) $ (473) $ (473) $ (473) $ (473) $ (18,295) $ (18,295) $ (18,295) $ (18,295) Cash convertible notes embedded conversion option Cash convertible notes embedded conversion option Cash convertible notes embedded conversion option Cash convertible notes embedded conversion option $ (101,361) $ (101,361) $ (101,361) $ (101,361) $ (190,902) $ (190,902) $ (190,902) $ (190,902) $ (100,164) $ (100,164) $ (100,164) $ (100,164) $ (299,098) $ (299,098) $ (299,098) $ (299,098) Foreign exchange contracts Foreign exchange contracts Foreign exchange contracts Foreign exchange contracts (1,814) (1,814) (1,814) (1,814) — — — — (5,957) (5,957) (5,957) (5,957) — — — — Total undesignated derivative instruments Total undesignated derivative instruments Total undesignated derivative instruments Total undesignated derivative instruments $ (103,175) $ (103,175) $ (103,175) $ (103,175) $ (190,902) $ (190,902) $ (190,902) $ (190,902) $ (106,121) $ (106,121) $ (106,121) $ (106,121) $ (299,098) $ (299,098) $ (299,098) $ (299,098) $ (103,175) $ (103,175) $ (103,175) $ (103,175) $ (196,929) $ (196,929) $ (196,929) $ (196,929) $ (106,594) $ (106,594) $ (106,594) $ (106,594) $ (317,393) $ (317,393) $ (317,393) $ (317,393) (1) The fair value amounts for the interest rate contracts do not include accrued interest. (1) The fair value amounts for the interest rate contracts do not include accrued interest. (1) The fair value amounts for the interest rate contracts do not include accrued interest. (1) The fair value amounts for the interest rate contracts do not include accrued interest. The following tables summarize the gains and losses on derivative instruments for the years ended December 31, The following tables summarize the gains and losses on derivative instruments for the years ended December 31, 2019, 2018 and 2017: 2019, 2018 and 2017: The following tables summarize the gains and losses on derivative instruments for the years ended December 31, The following tables summarize the gains and losses on derivative instruments for the years ended December 31, 2019, 2018 and 2017: 2019, 2018 and 2017: 180 Gains and Losses on Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current LiabilityLong-Term LiabilityCurrent LiabilityLong-Term LiabilityLiabilities:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative LiabilitiesGains and Losses on Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current LiabilityLong-Term LiabilityCurrent LiabilityLong-Term LiabilityLiabilities:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative LiabilitiesGains and Losses on Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current LiabilityLong-Term LiabilityCurrent LiabilityLong-Term LiabilityLiabilities:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative LiabilitiesGains and Losses on Derivative Instruments(in thousands)As of December 31, 2019As of December 31, 2018Current LiabilityLong-Term LiabilityCurrent LiabilityLong-Term LiabilityLiabilities:Derivative instruments designated as hedgesUndesignated derivative instrumentsTotal Derivative Liabilities F I N A N C I A L R E S U LT S Notes to consolidated financial statements Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow and fair value hedges are recorded Total amounts presented in the Consolidated Statements of Income in which the Total amounts presented in the Consolidated Statements of Income in which the Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow and fair value hedges are recorded effects of cash flow and fair value hedges are recorded effects of cash flow and fair value hedges are recorded Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow and fair value hedges are recorded $ 432 $ 432 $ 432 $ 432 $ 432 $ 5,598 $ 5,598 $ 5,598 $ 5,598 $ 5,598 $ (4) $ (4) $ (4) $ (4) $ (4) Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow and fair value hedges are recorded Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow and fair value hedges are recorded $ 432 $ 432 $ 5,598 $ 5,598 $ (4) $ (4) Interest rate contracts Interest rate contracts Interest rate contracts Interest rate contracts Interest rate contracts Amount of (loss) gain reclassified from accumulated other comprehensive income Amount of (loss) gain reclassified from accumulated other comprehensive income Amount of (loss) gain reclassified from accumulated other comprehensive income Amount of (loss) gain reclassified from accumulated other comprehensive income Amount of (loss) gain reclassified from accumulated other comprehensive income Interest rate contracts Interest rate contracts $ (3,888) $ (3,888) $ (3,888) $ (3,888) $ (3,888) $ (9,774) $ (9,774) $ (9,774) $ (9,774) $ (9,774) $ 26,136 $ 26,136 $ 26,136 $ 26,136 $ 26,136 Amounts excluded from effectiveness testing Amount of (loss) gain reclassified from accumulated other comprehensive income Amounts excluded from effectiveness testing Amounts excluded from effectiveness testing Amounts excluded from effectiveness testing Amount of (loss) gain reclassified from accumulated other comprehensive income Amounts excluded from effectiveness testing — — — — $ (3,888) $ (3,888) — — — — — $ (9,774) $ (9,774) — — — — — $ 26,136 $ 26,136 — Amounts excluded from effectiveness testing Amounts excluded from effectiveness testing — — — — — — Interest rate contracts Interest rate contracts Interest rate contracts Interest rate contracts Interest rate contracts Hedged item Hedged item Hedged item Hedged item Hedged item Interest rate contracts Interest rate contracts Derivatives designated as hedging instruments Hedged item Derivatives designated as hedging instruments Derivatives designated as hedging instruments Derivatives designated as hedging instruments Hedged item Derivatives designated as hedging instruments (3,668) (3,668) (3,668) (3,668) (3,668) 2,051 2,051 2,051 2,051 2,051 2,199 2,199 2,199 2,199 2,199 3,668 (3,668) 3,668 3,668 3,668 (3,668) 3,668 (2,051) 2,051 (2,051) (2,051) (2,051) 2,051 (2,051) (2,199) 2,199 (2,199) (2,199) (2,199) 2,199 (2,199) Derivatives designated as hedging instruments Derivatives designated as hedging instruments 3,668 3,668 (2,051) (2,051) (2,199) (2,199) Embedded conversion option Embedded conversion option Embedded conversion option Embedded conversion option Embedded conversion option (349) (349) (349) (349) (349) 131 131 131 131 131 217 217 217 217 217 Call options Call options Embedded conversion option Call options Call options Call options Embedded conversion option (104,125) (104,125) (104,125) (104,125) (104,125) (349) (349) 74,682 74,682 74,682 74,682 131 131 74,682 37,414 37,414 37,414 37,414 217 217 37,414 Cash convertible notes embedded cash conversion option Call options Cash convertible notes embedded cash conversion option Cash convertible notes embedded cash conversion option Cash convertible notes embedded cash conversion option Call options Cash convertible notes embedded cash conversion option Foreign exchange contracts Cash convertible notes embedded cash conversion option Foreign exchange contracts Foreign exchange contracts Foreign exchange contracts Cash convertible notes embedded cash conversion option Foreign exchange contracts 106,998 (104,125) 106,998 106,998 106,998 (104,125) 106,998 (76,500) 74,682 (76,500) (76,500) (76,500) 74,682 (76,500) (36,741) 37,414 (36,741) (36,741) (36,741) 37,414 (36,741) 1,835 106,998 1,835 1,835 1,835 106,998 1,835 (19,857) (76,500) (19,857) (19,857) (19,857) (76,500) (19,857) 11,813 (36,741) 11,813 11,813 11,813 (36,741) 11,813 Foreign exchange contracts Foreign exchange contracts 1,835 1,835 (19,857) (19,857) 11,813 11,813 $ 471 $ 471 $ 471 $ 471 $ 471 $ (31,318) $ (31,318) $ (31,318) $ (31,318) $ (31,318) $ 38,839 $ 38,839 $ 38,839 $ 38,839 $ 38,839 The following tables summarizes the balance sheet line items in which the hedged item is included as of December 31, 2019 and 2018: The following tables summarizes the balance sheet line items in which the hedged item is included as of December 31, 2019 and 2018: The following tables summarizes the balance sheet line items in which the hedged item is included as of December 31, 2019 and 2018: The following tables summarizes the balance sheet line items in which the hedged item is included as of December The following tables summarizes the balance sheet line items in which the hedged item is included as of December The following tables summarizes the balance sheet line items in which the hedged item is included as of December 31, 2019 and 2018: 31, 2019 and 2018: 31, 2019 and 2018: The following tables summarizes the balance sheet line items in which the hedged item is included as of December 31, 2019 and 2018: $ 471 $ 471 $ (31,318) $ (31,318) $ 38,839 $ 38,839 Current portion of long-term debt Current portion of long-term debt Current portion of long-term debt Current portion of long-term debt Current portion of long-term debt $ — $ — $ — $ — $ — $ (72,483) $ (72,483) $ (72,483) $ (72,483) $ (72,483) $ — $ — $ — $ — $ — $ (473) $ (473) $ (473) $ (473) $ (473) Long-term debt Long-term debt Current portion of long-term debt Long-term debt Long-term debt Long-term debt Current portion of long-term debt $ (129,290) $ (129,290) $ (129,290) $ (129,290) $ (129,290) $ — $ — $ (126,030) $ (72,483) $ (126,030) $ (126,030) $ (126,030) $ (72,483) $ (126,030) $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ 2,474 $ — $ — $ (721) $ (473) $ (721) $ (721) $ (721) $ (473) $ (721) Long-term debt Long-term debt $ (129,290) $ (129,290) $ (126,030) $ (126,030) $ 2,474 $ 2,474 $ (721) $ (721) 15. Financial Instruments and Fair Value Measurements 15. Financial Instruments and Fair Value Measurements 15. Financial Instruments and Fair Value Measurements Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1. Observable inputs, such as quoted prices in active markets; 15. Financial Instruments and Fair Value Measurements 15. Financial Instruments and Fair Value Measurements 15. Financial Instruments and Fair Value Measurements 15. Financial Instruments and Fair Value Measurements Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: inputs used in measuring fair value as follows: inputs used in measuring fair value as follows: Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1. Observable inputs, such as quoted prices in active markets; Level 1. Observable inputs, such as quoted prices in active markets; Level 1. Observable inputs, such as quoted prices in active markets; Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1. Observable inputs, such as quoted prices in active markets; Level 1. Observable inputs, such as quoted prices in active markets; Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Level 1. Observable inputs, such as quoted prices in active markets; Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and 181 Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018 Total amounts presented in the Consolidated Statements of Income in which the $ 432 $ 5,598 $ (4) effects of cash flow and fair value hedges are recorded Interest rate contracts Amount of (loss) gain reclassified from accumulated other comprehensive income $ (3,888) $ (9,774) $ 26,136 Amounts excluded from effectiveness testing — — — Interest rate contracts Hedged item Derivatives designated as hedging instruments Embedded conversion option Call options Cash convertible notes embedded cash conversion option Foreign exchange contracts (3,668) 3,668 2,051 (2,051) 2,199 (2,199) (349) (104,125) 106,998 1,835 131 74,682 (76,500) (19,857) 217 37,414 (36,741) 11,813 $ 471 $ (31,318) $ 38,839 The following tables summarizes the balance sheet line items in which the hedged item is included as of December 31, 2019 and 2018: Current portion of long-term debt $ — $ (72,483) Long-term debt $ (129,290) $ (126,030) $ — $ 2,474 $ (473) $ (721) 15. Financial Instruments and Fair Value Measurements Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1. Observable inputs, such as quoted prices in active markets; Level 2. Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Our assets and liabilities measured at fair value on a recurring basis consist of short-term investments, which are classified in Level 1 and Level 2 of the fair value hierarchy, marketable securities discussed in Note 10 "Investments", which are classified in Level 1, derivative contracts used to hedge currency and interest rate risk and derivative financial instruments entered into in connection with the Cash Convertible Notes discussed in Note 16 "Lines of Credit and Debt", 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. Non-marketable equity securities remeasured during the year ended December 31, 2019 and 2018 are classified within Level 3 in the fair value hierarchy following the adoption of ASU 2016-01. There were no transfers between levels for the year ended December 31, 2019. In determining fair value for Level 2 instruments, we apply a market approach, using quoted active market prices relevant to the particular instrument under valuation, giving consideration to the credit risk of both the respective counterparty to the contract and the Company. To determine our credit risk, we estimated our credit rating by benchmarking the price of outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, our credit risk was quantified by reference to publicly-traded debt with a corresponding rating. The Level 2 derivative financial instruments include the Call Options asset and the embedded conversion option liability. See Note 16 "Lines of Credit and Debt", and Note 14 "Derivatives and Hedging", for further information. The derivatives are not actively traded and are valued based on an option pricing model that uses observable market data for inputs. Significant market data inputs used to determine fair values 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 non-marketable equity security investments 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 or under the measurement alternative. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date. Our Level 3 instruments also 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 2.4% and 6.9%), 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. 182 The following table presents our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis: Balance Sheet Line Items in which the Hedged Item is included(in thousands)Year ended December 31,201920182017Other income(expense), netOther income(expense), netOther income(expense), netGains (Losses) on Derivatives in Cash Flow HedgesGains (Losses) on Derivatives in Fair Value HedgesGains (Losses) Derivatives Not Designated as Hedging InstrumentsTotal gains (losses)(in thousands)Carrying Amount of the Hedged Assets(Liabilities)Cumulative Amount of Fair Value HedgingAdjustment Included in the Carrying Amount ofHedged Assets (Liabilities)December 31, 2019December 31, 2018December 31, 2019December 31, 2018 Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Our assets and liabilities measured at fair value on a recurring basis consist of short-term investments, which are classified in Level 1 and Level 2 of the fair value hierarchy, marketable securities discussed in Note 10 "Investments", which are classified in Level 1, derivative contracts used to hedge currency and interest rate risk and derivative financial instruments entered into in connection with the Cash Convertible Notes discussed in Note 16 "Lines of Credit and Debt", 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. Non-marketable equity securities remeasured during the year ended December 31, 2019 and 2018 are classified within Level 3 in the fair value hierarchy following the adoption of ASU 2016-01. There were no transfers between levels for the year ended December 31, 2019. In determining fair value for Level 2 instruments, we apply a market approach, using quoted active market prices relevant to the particular instrument under valuation, giving consideration to the credit risk of both the respective counterparty to the contract and the Company. To determine our credit risk, we estimated our credit rating by benchmarking the price of outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, our credit risk was quantified by reference to publicly-traded debt with a corresponding rating. The Level 2 derivative financial instruments include the Call Options asset and the embedded conversion option liability. See Note 16 "Lines of Credit and Debt", and Note 14 "Derivatives and Hedging", for further information. The derivatives are not actively traded and are valued based on an option pricing model that uses observable market data for inputs. Significant market data inputs used to determine fair values 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. F I N A N C I A L R E S U LT S Notes to consolidated financial statements Our Level 3 instruments include non-marketable equity security investments 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 or under the measurement alternative. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date. Our Level 3 instruments also 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 2.4% and 6.9%), to represent the non-performing risk factors and time value when applying the income approach. We regularly review the fair value of the contingent consideration, and reflect any change in the accrual in the consolidated statements of income in the line items commensurate with the underlying nature of milestone arrangements. The following table presents our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis: Short-term investments Short-term Short-term Short-term Short-term Short-term Marketable equity Short-term Short-term Short-term Short-term Short-term investments investments investments investments investments securities investments investments investments investments investments Marketable equity Marketable equity Marketable equity Marketable equity Marketable equity Non-marketable Marketable equity Marketable equity Marketable equity Marketable equity Marketable equity securities securities securities securities securities equity securities securities securities securities securities securities Non-marketable Non-marketable Non-marketable Non-marketable Non-marketable Call option Non-marketable Non-marketable Non-marketable Non-marketable Non-marketable equity securities equity securities equity securities equity securities equity securities equity securities equity securities equity securities equity securities equity securities Foreign exchange Call option Call option Call option Call option Call option contracts Call option Call option Call option Call option Call option Foreign exchange Foreign exchange Foreign exchange Foreign exchange Foreign exchange Embedded Foreign exchange Foreign exchange Foreign exchange Foreign exchange Foreign exchange contracts contracts contracts contracts contracts conversion option contracts contracts contracts contracts contracts Embedded Embedded Embedded Embedded Embedded Interest rate Embedded Embedded Embedded Embedded Embedded conversion option conversion option conversion option conversion option conversion option contracts conversion option conversion option conversion option conversion option conversion option Interest rate Interest rate Interest rate Interest rate Interest rate Interest rate Interest rate Interest rate Interest rate Interest rate contracts contracts contracts contracts contracts contracts contracts contracts contracts contracts Foreign exchange contracts Foreign exchange Foreign exchange Foreign exchange Foreign exchange Foreign exchange Interest rate Foreign exchange Foreign exchange Foreign exchange Foreign exchange Foreign exchange contracts contracts contracts contracts contracts contracts contracts contracts contracts contracts contracts Interest rate Interest rate Interest rate Interest rate Interest rate Cash conversion Interest rate Interest rate Interest rate Interest rate Interest rate contracts contracts contracts contracts contracts option contracts contracts contracts contracts contracts Cash conversion Cash conversion Cash conversion Cash conversion Cash conversion Contingent Cash conversion Cash conversion Cash conversion Cash conversion Cash conversion option option option option option consideration option option option option option Contingent Contingent Contingent Contingent Contingent Contingent Contingent Contingent Contingent Contingent consideration consideration consideration consideration consideration consideration consideration consideration consideration consideration $ — $ 129,586 $ — $ 129,586 $ 350 $ 234,256 $ — $ 234,606 $ — 870 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 — $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 870 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 350 2,117 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 350 $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ 234,256 — $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — $ 234,606 $ 234,606 $ 234,606 $ 234,606 $ 234,606 2,117 $ 234,606 $ 234,606 $ 234,606 $ 234,606 $ 234,606 870 870 870 870 870 — 870 870 870 870 870 — — — — — — — — — — — — 70,849 — — — — — — — — — 870 70,849 870 870 870 870 870 870 870 870 870 2,117 2,117 2,117 2,117 2,117 — 2,117 2,117 2,117 2,117 2,117 — — — — — — — — — — — — 59,484 — — — — — — — — — 2,117 59,484 2,117 2,117 2,117 2,117 2,117 2,117 2,117 2,117 2,117 — — — — — — — — — — — — 290,971 — — — — — — — — — 70,849 70,849 70,849 70,849 70,849 — 70,849 70,849 70,849 70,849 70,849 70,849 290,971 70,849 70,849 70,849 70,849 70,849 70,849 70,849 70,849 70,849 — — — — — — — — — — — — 395,095 — — — — — — — — — 59,484 59,484 59,484 59,484 59,484 — 59,484 59,484 59,484 59,484 59,484 59,484 395,095 59,484 59,484 59,484 59,484 59,484 59,484 59,484 59,484 59,484 — — — — — — — — — — — 6,689 290,971 290,971 290,971 290,971 290,971 290,971 290,971 290,971 290,971 290,971 — — — — — — — — — — — 6,689 290,971 290,971 290,971 290,971 290,971 290,971 290,971 290,971 290,971 290,971 — — — — — — — — — — — 2,673 395,095 395,095 395,095 395,095 395,095 395,095 395,095 395,095 395,095 395,095 — — — — — — — — — — — 2,673 395,095 395,095 395,095 395,095 395,095 395,095 395,095 395,095 395,095 395,095 — — — — — — — — — — — 6,689 6,689 6,689 6,689 6,689 — 6,689 6,689 6,689 6,689 6,689 — — — — — — — — — — — 6,689 6,689 6,689 6,689 6,689 — 6,689 6,689 6,689 6,689 6,689 — — — — — — — — — — — 2,673 2,673 2,673 2,673 2,673 349 2,673 2,673 2,673 2,673 2,673 — — — — — — — — — — — 2,673 2,673 2,673 2,673 2,673 349 2,673 2,673 2,673 2,673 2,673 — — — — — — — — — — — — 2,474 — — — — — — — — — — — — — — — — — — — — — 2,474 — — — — — — — — — — — — — — — — — — — — 349 349 349 349 349 — 349 349 349 349 349 — — — — — — — — — — — 349 349 349 349 349 — 349 349 349 349 349 — — $ 870 — — — — — — — — 2,474 2,474 $ 429,720 2,474 2,474 2,474 2,474 2,474 2,474 2,474 2,474 — — $ 70,849 — — — — — — — — 2,474 2,474 $ 501,439 2,474 2,474 2,474 2,474 2,474 2,474 2,474 2,474 — — $ 2,467 — — — — — — — — — — $ 632,373 — — — — — — — — — — $ 59,484 — — — — — — — — — — $ 694,324 — — — — — — — — $ 870 $ 870 $ 870 $ 870 $ 870 $ 870 $ 870 $ 870 $ 870 $ 870 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ — $ (1,814) $ — $ (1,814) $ — $ (5,957) $ — $ (5,957) $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ (1,814) (6,027) $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ (1,814) (6,027) $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — $ (5,957) (18,768) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ — $ — $ — $ — $ — — $ — $ — $ — $ — $ — $ (5,957) (18,768) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) — — — — — — — — — — — (6,027) (292,263) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) — — — — — — — — — — — (6,027) (292,263) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) (6,027) — — — — — — — — — — — (18,768) (399,262) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) — — — — — — — — — — — (18,768) (399,262) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) (18,768) — — — — — — — — — — — (292,263) (292,263) (292,263) (292,263) (292,263) — (292,263) (292,263) (292,263) (292,263) (292,263) — (162,160) — — — — — — — — — (292,263) (162,160) (292,263) (292,263) (292,263) (292,263) (292,263) (292,263) (292,263) (292,263) (292,263) — — — — — — — — — — — (399,262) (399,262) (399,262) (399,262) (399,262) — (399,262) (399,262) (399,262) (399,262) (399,262) — (48,971) — — — — — — — — — (399,262) (399,262) (399,262) (399,262) (399,262) (48,971) (399,262) (399,262) (399,262) (399,262) (399,262) — — $ — $ (300,104) — — — — — — — — — — — — — — — — — — (162,160) (162,160) $ (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) $ (462,264) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) — — — — — $ (423,987) — — — — — — — — — — — — — — — — (48,971) (48,971) $ (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) $ (472,958) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) $ (300,104) $ — $ (300,104) $ (300,104) $ — $ — $ (300,104) $ — $ (300,104) $ — $ — $ (300,104) $ — $ (300,104) $ — $ (300,104) $ — $ (300,104) $ — $ (300,104) Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year $ (472,958) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (472,958) $ (48,971) $ (48,971) $ (48,971) $ (48,971) ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table summarizes the activity for the years ended December 31, 2019 and 2018: Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: — — $ (423,987) $ (423,987) — $ (423,987) — $ (423,987) — $ (423,987) — $ (423,987) — $ (423,987) — $ (423,987) — $ (423,987) — $ (423,987) $ (462,264) $ (462,264) $ (462,264) $ (462,264) $ (462,264) $ (462,264) $ (462,264) $ (462,264) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (472,958) $ (472,958) $ (472,958) $ (472,958) $ (472,958) $ (472,958) $ (472,958) $ (472,958) $ (462,264) $ (462,264) $ (162,160) $ (162,160) $ (48,971) $ (48,971) Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Additions from acquisitions Balance at beginning of year Balance at beginning of year Payments Additions from acquisitions Additions from acquisitions Gain included in earnings Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions $ (48,971) $ (11,539 ) (132,422) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) 11,800 (132,422) (132,422) (132,422) (132,422) (132,422) (132,422) (132,422) (132,422) (132,422) (132,422) 7,433 11,800 11,800 11,800 11,800 11,800 11,800 11,800 11,800 11,800 11,800 $ (162,160) 7,433 7,433 7,433 7,433 7,433 7,433 7,433 7,433 7,433 7,433 (53,962) $ (11,539) $ (11,539) $ (11,539) $ (11,539) $ (11,539) $ (11,539 ) $ (11,539 ) $ (11,539 ) $ (11,539 ) $ (11,539 ) 183 16,530 (53,962) (53,962) (53,962) (53,962) (53,962) (53,962) (53,962) (53,962) (53,962) (53,962) — 16,530 16,530 16,530 16,530 16,530 16,530 16,530 16,530 16,530 16,530 $ (48,971) — — — — — — — — — — Payments Payments Payments Payments Payments Payments Payments Payments Payments Payments Balance at end of year Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, "Acquisitions and Divestitures". the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". (in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018 $ — $ — $ — $ — $ — $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ — $ — $ — $ — $ — $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 129,586 $ 350 $ 350 $ 350 $ 350 $ 350 $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ 234,256 $ — $ — $ — $ — $ — $ 234,606 $ 234,606 $ 234,606 $ 234,606 $ 234,606 Marketable equity Marketable equity Marketable equity Marketable equity Marketable equity 870 870 870 870 870 — — — — — — — — — — 870 870 870 870 870 2,117 2,117 2,117 2,117 2,117 — — — — — — — — — — 2,117 2,117 2,117 2,117 2,117 — — — — — — — — — — 70,849 70,849 70,849 70,849 70,849 70,849 70,849 70,849 70,849 70,849 — — — — — — — — — — 59,484 59,484 59,484 59,484 59,484 59,484 59,484 59,484 59,484 59,484 Call option Call option Call option Call option Call option — — 290,971 290,971 290,971 290,971 290,971 — — 290,971 290,971 290,971 290,971 290,971 — — 395,095 395,095 395,095 395,095 395,095 — — 395,095 395,095 395,095 395,095 395,095 Foreign exchange Foreign exchange Foreign exchange Foreign exchange Foreign exchange — — 6,689 6,689 6,689 6,689 6,689 — — 6,689 6,689 6,689 6,689 6,689 — — 2,673 2,673 2,673 2,673 2,673 — — 2,673 2,673 2,673 2,673 2,673 Embedded Embedded Embedded Embedded Embedded — — — — — — — — — — — — — — — — — — — — — — — — — 349 349 349 349 349 — — — — — 349 349 349 349 349 — — — — — 2,474 2,474 2,474 2,474 2,474 — — — — — 2,474 2,474 2,474 2,474 2,474 — — — — — — — — — — — — — — — — — — — — $ 870 $ 870 $ 870 $ 870 $ 870 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 429,720 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 70,849 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 501,439 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 632,373 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 59,484 $ 694,324 $ 694,324 $ 694,324 $ 694,324 $ 694,324 Short-term Short-term Short-term Short-term Short-term investments investments investments investments investments securities securities securities securities securities Non-marketable Non-marketable Non-marketable Non-marketable Non-marketable equity securities equity securities equity securities equity securities equity securities contracts contracts contracts contracts contracts conversion option conversion option conversion option conversion option conversion option Interest rate Interest rate Interest rate Interest rate Interest rate contracts contracts contracts contracts contracts — — — — — — Foreign exchange Foreign exchange Foreign exchange Foreign exchange contracts contracts contracts contracts Foreign exchange contracts $ — $ — $ — — — — — — — $ — $ — $ — $ — $ — $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ — $ — $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ — $ — $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (5,957) $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ (1,814) $ — $ — Interest rate Interest rate Interest rate contracts contracts contracts Interest rate Interest rate contracts contracts — — — — — (6,027) (6,027) (6,027) (6,027) (6,027) — — — — — (6,027) (6,027) (6,027) (6,027) (6,027) Cash conversion Cash conversion Cash conversion Cash conversion option option option option Cash conversion option — — — — (292,263) — (292,263) (292,263) (292,263) (292,263) — — — — (292,263) — (292,263) (292,263) (292,263) (292,263) — — (18,768) (18,768) (18,768) (18,768) (18,768) — (399,262) — (399,262) (399,262) (399,262) (399,262) — — (18,768) (18,768) (18,768) (18,768) (18,768) — (399,262) — (399,262) (399,262) (399,262) (399,262) — — — — — — $ — $ — $ — — — — — — — — — — — — — $ — $ — $ — — — — — — — Contingent Contingent Contingent consideration consideration consideration Contingent Contingent consideration consideration — — — — — — — — — (162,160) — (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) (162,160) — — — — — — — — — — (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) (48,971) $ (300,104) $ — $ — $ (300,104) $ — $ (300,104) $ — $ (300,104) $ — $ (300,104) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (462,264) $ (462,264) $ (462,264) $ (462,264) $ (462,264) $ (423,987) — — $ (423,987) — $ (423,987) — $ (423,987) — $ (423,987) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (472,958) $ (472,958) $ (472,958) $ (472,958) $ (472,958) Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year Refer to Note 10 "Investments" for the change in non-marketable equity securities with Level 3 inputs during the year ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table ended December 31, 2019. For contingent consideration liabilities with Level 3 inputs, the following table summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: summarizes the activity for the years ended December 31, 2019 and 2018: Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions Additions from acquisitions Payments Payments Payments Payments Payments $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (11,539) $ (11,539 ) $ (11,539 ) $ (11,539 ) $ (11,539 ) (132,422) (132,422) (132,422) (132,422) (132,422) (53,962) (53,962) (53,962) (53,962) (53,962) 11,800 11,800 11,800 11,800 11,800 16,530 16,530 16,530 16,530 16,530 Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings Gain included in earnings 7,433 7,433 7,433 7,433 7,433 — — — — — Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (162,160) $ (48,971) $ (48,971) $ (48,971) $ (48,971) $ (48,971) As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is As of December 31, 2019, of the total $162.2 million accrued for contingent consideration, $142.6 million is included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the accompanying consolidated balance sheet. For the year ended December 31, 2019 the gain for the reduction in the fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, fair value of contingent consideration related to unmet milestones of $7.4 million was recognized in restructuring, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, acquisition, integration and other, net in the accompanying consolidated statements of income. December 31, 2019, the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 the $132.4 million of additions is primarily related to the asset acquisition of Formulatrix discussed in Note 5 "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". "Acquisitions and Divestitures". The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not accounted for under the equity method as discussed in Note 10. accounted for under the equity method as discussed in Note 10. accounted for under the equity method as discussed in Note 10. accounted for under the equity method as discussed in Note 10. accounted for under the equity method as discussed in Note 10. accounted for under the equity method as discussed in Note 10. accounted for under the equity method as discussed in Note 10. The table below presents the carrying values and the estimated fair values of financial instruments not presented in The table below presents the carrying values and the estimated fair values of financial instruments not presented in the tables above. the tables above. The table below presents the carrying values and the estimated fair values of financial instruments not presented in The table below presents the carrying values and the estimated fair values of financial instruments not presented in The table below presents the carrying values and the estimated fair values of financial instruments not presented in The table below presents the carrying values and the estimated fair values of financial instruments not presented in The table below presents the carrying values and the estimated fair values of financial instruments not presented in the tables above. the tables above. the tables above. the tables above. the tables above. U.S. Private placement U.S. Private placement U.S. Private placement U.S. Private placement U.S. Private placement Cash convertible notes Cash convertible notes Cash convertible notes Cash convertible notes Cash convertible notes Cash convertible notes Cash convertible notes U.S. Private placement U.S. Private placement German private placement German private placement German private placement German private placement German private placement German private placement German private placement 328,984 328,984 328,984 328,984 328,984 $ 1,046,511 $ 1,046,511 $ 1,046,511 $ 1,046,511 $ 1,046,511 $ 1,046,511 $ 1,046,511 328,984 328,984 330,857 330,857 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 330,857 330,857 330,857 330,857 330,857 — — — — — $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 — — — — $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 $ 1,296,334 — — — — — $ — $ — $ — $ — $ — $ — $ — 329,157 329,157 329,157 329,157 329,157 329,157 329,157 334,371 334,371 $ 663,528 $ 663,528 $ 663,528 $ 663,528 $ 663,528 $ 663,528 $ 663,528 334,371 334,371 334,371 334,371 334,371 398,107 398,107 398,107 398,107 398,107 $ 1,439,931 $ 1,439,931 $ 1,439,931 $ 1,439,931 $ 1,439,931 $ 1,439,931 $ 1,439,931 398,107 398,107 336,168 336,168 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 2,174,206 336,168 336,168 336,168 336,168 336,168 — — — — — $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 — — — — $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 $ 1,794,000 — — — — — $ — $ — $ — $ — $ — $ — $ — 391,700 391,700 391,700 391,700 391,700 391,700 391,700 337,768 337,768 $ 729,468 $ 729,468 $ 729,468 $ 729,468 $ 729,468 $ 729,468 $ 729,468 337,768 337,768 337,768 337,768 337,768 The fair values of the financial instruments presented in the tables above were determined as follows: The fair values of the financial instruments presented in the tables above were determined as follows: The fair values of the financial instruments presented in the tables above were determined as follows: The fair values of the financial instruments presented in the tables above were determined as follows: The fair values of the financial instruments presented in the tables above were determined as follows: The fair values of the financial instruments presented in the tables above were determined as follows: 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 Cash Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on Cash Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on Cash Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on Cash Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on the Cash Convertible Notes due in 2021, 2023 and 2024. the Cash Convertible Notes due in 2021, 2023 and 2024. the Cash Convertible Notes due in 2021, 2023 and 2024. the Cash Convertible Notes due in 2021, 2023 and 2024. the Cash Convertible Notes due in 2021, 2023 and 2024. Cash Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on Cash Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on the Cash Convertible Notes due in 2021, 2023 and 2024. the Cash Convertible Notes due in 2021, 2023 and 2024. U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. Treasury rates. Treasury rates. Treasury rates. Treasury rates. Treasury rates. U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. Treasury rates. 184 Treasury rates. German Private Placement: Fair value is based on an estimation using changes in the euro swap rates. German Private Placement: Fair value is based on an estimation using changes in the euro swap rates. German Private Placement: Fair value is based on an estimation using changes in the euro swap rates. German Private Placement: Fair value is based on an estimation using changes in the euro swap rates. German Private Placement: Fair value is based on an estimation using changes in the euro swap rates. German Private Placement: Fair value is based on an estimation using changes in the euro swap rates. German Private Placement: Fair value is based on an estimation using changes in the euro swap rates. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the The estimated fair values may not represent actual values of the financial instruments that could be realized as of the The estimated fair values may not represent actual values of the financial instruments that could be realized as of the The estimated fair values may not represent actual values of the financial instruments that could be realized as of the The estimated fair values may not represent actual values of the financial instruments that could be realized as of the The estimated fair values may not represent actual values of the financial instruments that could be realized as of the The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis. nonrecurring basis. nonrecurring basis. nonrecurring basis. nonrecurring basis. nonrecurring basis. nonrecurring basis. 16. Lines of Credit and Debt 16. Lines of Credit and Debt 16. Lines of Credit and Debt 16. Lines of Credit and Debt 16. Lines of Credit and Debt 16. Lines of Credit and Debt 16. Lines of Credit and Debt Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 million). This includes a €400.0 million syndicated multi-currency revolving credit facility expiring December 2021 of million). This includes a €400.0 million syndicated multi-currency revolving credit facility expiring December 2021 of million). This includes a €400.0 million syndicated multi-currency revolving credit facility expiring December 2021 of million). This includes a €400.0 million syndicated multi-currency revolving credit facility expiring December 2021 of million). This includes a €400.0 million syndicated multi-currency revolving credit facility expiring December 2021 of million). This includes a €400.0 million syndicated multi-currency revolving credit facility expiring December 2021 of 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, 2019 or at December 31, 2018, and three other lines of credit which no amounts were utilized at December 31, 2019 or at December 31, 2018, and three other lines of credit which no amounts were utilized at December 31, 2019 or at December 31, 2018, and three other lines of credit which no amounts were utilized at December 31, 2019 or at December 31, 2018, and three other lines of credit which no amounts were utilized at December 31, 2019 or at December 31, 2018, and three other lines of credit which no amounts were utilized at December 31, 2019 or at December 31, 2018, and three other lines of credit which no amounts were utilized at December 31, 2019 or at December 31, 2018, and three other lines of credit amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of December 31, 2018. The €400.0 million facility can be utilized in Euro, British pounds sterling, Swiss franc or U.S. December 31, 2018. The €400.0 million facility can be utilized in Euro, British pounds sterling, Swiss franc or U.S. December 31, 2018. The €400.0 million facility can be utilized in Euro, British pounds sterling, Swiss franc or U.S. December 31, 2018. The €400.0 million facility can be utilized in Euro, British pounds sterling, Swiss franc or U.S. December 31, 2018. The €400.0 million facility can be utilized in Euro, British pounds sterling, Swiss franc or U.S. December 31, 2018. The €400.0 million facility can be utilized in Euro, British pounds sterling, Swiss franc or U.S. December 31, 2018. 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, dollar and bears interest of 0.4% to 1.2% above three months EURIBOR, or LIBOR in relation to any loan not in euro, dollar and bears interest of 0.4% to 1.2% above three months EURIBOR, or LIBOR in relation to any loan not in euro, dollar and bears interest of 0.4% to 1.2% above three months EURIBOR, or LIBOR in relation to any loan not in euro, dollar and bears interest of 0.4% to 1.2% above three months EURIBOR, or LIBOR in relation to any loan not in euro, dollar and bears interest of 0.4% to 1.2% above three months EURIBOR, or LIBOR in relation to any loan not in euro, 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% and is offered with interest periods of one, two, three or six months. The commitment fee is calculated based on 35% and is offered with interest periods of one, two, three or six months. The commitment fee is calculated based on 35% and is offered with interest periods of one, two, three or six months. The commitment fee is calculated based on 35% and is offered with interest periods of one, two, three or six months. The commitment fee is calculated based on 35% and is offered with interest periods of one, two, three or six months. The commitment fee is calculated based on 35% 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 2019 and 2018, $1.0 million of commitment fees were paid, respectively. The of the applicable margin. In 2019 and 2018, $1.0 million of commitment fees were paid, respectively. The of the applicable margin. In 2019 and 2018, $1.0 million of commitment fees were paid, respectively. The of the applicable margin. In 2019 and 2018, $1.0 million of commitment fees were paid, respectively. The of the applicable margin. In 2019 and 2018, $1.0 million of commitment fees were paid, respectively. The of the applicable margin. In 2019 and 2018, $1.0 million of commitment fees were paid, respectively. The of the applicable margin. In 2019 and 2018, $1.0 million of commitment fees were paid, respectively. The revolving facility agreement contains certain financial and non-financial covenants, including but not limited to, revolving facility agreement contains certain financial and non-financial covenants, including but not limited to, revolving facility agreement contains certain financial and non-financial covenants, including but not limited to, revolving facility agreement contains certain financial and non-financial covenants, including but not limited to, revolving facility agreement contains certain financial and non-financial covenants, including but not limited to, revolving facility agreement contains certain financial and non-financial covenants, including but not limited to, 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 restrictions on the encumbrance of assets and the maintenance of certain financial ratios. We were in compliance restrictions on the encumbrance of assets and the maintenance of certain financial ratios. We were in compliance restrictions on the encumbrance of assets and the maintenance of certain financial ratios. We were in compliance restrictions on the encumbrance of assets and the maintenance of certain financial ratios. We were in compliance restrictions on the encumbrance of assets and the maintenance of certain financial ratios. We were in compliance restrictions on the encumbrance of assets and the maintenance of certain financial ratios. We were in compliance with these covenants at December 31, 2019. The credit facilities are for general corporate purposes. with these covenants at December 31, 2019. The credit facilities are for general corporate purposes. with these covenants at December 31, 2019. The credit facilities are for general corporate purposes. with these covenants at December 31, 2019. The credit facilities are for general corporate purposes. with these covenants at December 31, 2019. The credit facilities are for general corporate purposes. with these covenants at December 31, 2019. The credit facilities are for general corporate purposes. with these covenants at December 31, 2019. The credit facilities are for general corporate purposes. During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion (in thousands)As of December 31, 2019As of December 31, 2018Carrying AmountLevel 1Level 2Carrying AmountLevel 1Level 2Long-term debt including currentportion:(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Liabilities:(in thousands)20192018(in thousands)As of December 31, 2019As of December 31, 2018CarryingAmountLevel 1Level 2CarryingAmountLevel 1Level 2Long-term debt including current portion:(in thousands)As of December 31, 2019As of December 31, 2018CarryingAmountLevel 1Level 2CarryingAmountLevel 1Level 2Long-term debt including current portion:(in thousands)As of December 31, 2019As of December 31, 2018CarryingAmountLevel 1Level 2CarryingAmountLevel 1Level 2Long-term debt including current portion:(in thousands)As of December 31, 2019As of December 31, 2018CarryingAmountLevel 1Level 2CarryingAmountLevel 1Level 2Long-term debt including current portion:(in thousands)As of December 31, 2019As of December 31, 2018CarryingAmountLevel 1Level 2CarryingAmountLevel 1Level 2Long-term debt including current portion:(in thousands)As of December 31, 2019As of December 31, 2018CarryingAmountLevel 1Level 2CarryingAmountLevel 1Level 2Long-term debt including current portion: The carrying values of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities, approximate their fair values due to their short-term maturities. The estimated fair value of long-term debt as disclosed in Note 16 "Lines of Credit and Debt" was based on current interest rates for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value differences in the years ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis other than the impairment of non-marketable investments not accounted for under the equity method as discussed in Note 10. The table below presents the carrying values and the estimated fair values of financial instruments not presented in the tables above. F I N A N C I A L R E S U LT S Notes to consolidated financial statements Cash convertible notes $ 1,046,511 $ 1,296,334 $ — $ 1,439,931 $ 1,794,000 $ — U.S. Private placement German private placement 328,984 330,857 — — 329,157 398,107 334,371 336,168 — — 391,700 337,768 $ 1,706,352 $ 1,296,334 $ 663,528 $ 2,174,206 $ 1,794,000 $ 729,468 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 2021, 2023 and 2024. 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 estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. There were no adjustments in the twelve-month periods ended December 31, 2019 and 2018 for nonfinancial assets or liabilities required to be measured at fair value on a nonrecurring basis. 16. Lines of Credit and Debt Our credit facilities available and undrawn at December 31, 2019 total €426.6 million (approximately $479.2 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, 2019 or at December 31, 2018, and three other lines of credit amounting to €26.6 million with no expiration date, none of which were utilized as of December 31, 2019 or as of December 31, 2018. 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 2019 and 2018, $1.0 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, 2019. The credit facilities are for general corporate purposes. During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed further below. At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and $14.2 million, respectively, consists of the following: 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 long-term debt Less current portion Long-term portion 2020 2021 2022 2023 2024 thereafter 285,244 347,995 413,272 — 302,040 26,944 330,857 279,492 335,201 397,793 72,483 298,691 26,933 336,168 $ 1,706,352 $ 2,174,206 285,244 503,116 185 $ 1,421,108 $ 1,671,090 $ 285,244 38,716 471,432 347,995 546,716 16,249 $ 1,706,352 Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million 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. During the first quarter of 2019, $430.0 million was paid at maturity (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. 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 (in thousands)As of December 31, 2019As of December 31, 2018Carrying AmountLevel 1Level 2Carrying AmountLevel 1Level 2Long-term debt including currentportion:Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion further below. further below. further below. further below. further below. further below. of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed further below. At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and $14.2 million, respectively, consists of the following: At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and $14.2 million, respectively, consists of the following: $14.2 million, respectively, consists of the following: At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and $14.2 million, respectively, consists of the following: $14.2 million, respectively, consists of the following: $14.2 million, respectively, consists of the following: At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and $14.2 million, respectively, consists of the following: 0.375% Senior Unsecured Cash Convertible Notes due 2019 0.375% Senior Unsecured Cash Convertible Notes due 2019 0.375% Senior Unsecured Cash Convertible Notes due 2019 0.375% Senior Unsecured Cash Convertible Notes due 2019 0.375% Senior Unsecured Cash Convertible Notes due 2019 0.375% Senior Unsecured Cash Convertible Notes due 2019 0.375% Senior Unsecured Cash Convertible Notes due 2019 0.875% Senior Unsecured Cash Convertible Notes due 2021 0.875% Senior Unsecured Cash Convertible Notes due 2021 0.875% Senior Unsecured Cash Convertible Notes due 2021 0.875% Senior Unsecured Cash Convertible Notes due 2021 0.875% Senior Unsecured Cash Convertible Notes due 2021 0.875% Senior Unsecured Cash Convertible Notes due 2021 0.875% Senior Unsecured Cash Convertible Notes due 2021 0.500% Senior Unsecured Cash Convertible Notes due 2023 0.500% Senior Unsecured Cash Convertible Notes due 2023 0.500% Senior Unsecured Cash Convertible Notes due 2023 0.500% Senior Unsecured Cash Convertible Notes due 2023 0.500% Senior Unsecured Cash Convertible Notes due 2023 0.500% Senior Unsecured Cash Convertible Notes due 2023 0.500% Senior Unsecured Cash Convertible Notes due 2023 1.000% Senior Unsecured Cash Convertible Notes due 2024 1.000% Senior Unsecured Cash Convertible Notes due 2024 1.000% Senior Unsecured Cash Convertible Notes due 2024 1.000% Senior Unsecured Cash Convertible Notes due 2024 1.000% Senior Unsecured Cash Convertible Notes due 2024 1.000% Senior Unsecured Cash Convertible Notes due 2024 1.000% Senior Unsecured Cash Convertible Notes due 2024 3.19% Series A Senior Notes due October 16, 2019 3.19% Series A Senior Notes due October 16, 2019 3.19% Series A Senior Notes due October 16, 2019 3.19% Series A Senior Notes due October 16, 2019 3.19% Series A Senior Notes due October 16, 2019 3.19% Series A Senior Notes due October 16, 2019 3.19% Series A Senior Notes due October 16, 2019 3.75% Series B Senior Notes due October 16, 2022 3.75% Series B Senior Notes due October 16, 2022 3.75% Series B Senior Notes due October 16, 2022 3.75% Series B Senior Notes due October 16, 2022 3.75% Series B Senior Notes due October 16, 2022 3.75% Series B Senior Notes due October 16, 2022 3.75% Series B Senior Notes due October 16, 2022 3.90% Series C Senior Notes due October 16, 2024 3.90% Series C Senior Notes due October 16, 2024 3.90% Series C Senior Notes due October 16, 2024 3.90% Series C Senior Notes due October 16, 2024 3.90% Series C Senior Notes due October 16, 2024 3.90% Series C Senior Notes due October 16, 2024 3.90% Series C Senior Notes due October 16, 2024 German Private Placement (Schuldschein) German Private Placement (Schuldschein) German Private Placement (Schuldschein) German Private Placement (Schuldschein) German Private Placement (Schuldschein) German Private Placement (Schuldschein) German Private Placement (Schuldschein) Total long-term debt Total long-term debt Total long-term debt Total long-term debt Total long-term debt Total long-term debt Total long-term debt Less current portion Less current portion Less current portion Less current portion Less current portion Less current portion Less current portion Long-term portion Long-term portion Long-term portion Long-term portion Long-term portion Long-term portion $ — $ — $ — $ — $ — $ — $ 427,445 $ 427,445 $ 427,445 $ 427,445 $ 427,445 $ 427,445 $ — 285,244 285,244 285,244 285,244 285,244 285,244 $ 427,445 279,492 279,492 279,492 279,492 279,492 279,492 285,244 347,995 347,995 347,995 347,995 347,995 347,995 279,492 335,201 335,201 335,201 335,201 335,201 335,201 347,995 413,272 413,272 413,272 413,272 413,272 413,272 335,201 397,793 397,793 397,793 397,793 397,793 397,793 413,272 — — — — — — — 302,040 302,040 302,040 302,040 302,040 302,040 302,040 26,944 26,944 26,944 26,944 26,944 26,944 397,793 72,483 72,483 72,483 72,483 72,483 72,483 72,483 298,691 298,691 298,691 298,691 298,691 298,691 298,691 26,933 26,933 26,933 26,933 26,933 26,933 26,944 330,857 330,857 330,857 330,857 330,857 330,857 26,933 336,168 336,168 336,168 336,168 336,168 336,168 330,857 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 336,168 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 2,174,206 $ 1,706,352 285,244 285,244 285,244 285,244 285,244 285,244 $ 2,174,206 503,116 503,116 503,116 503,116 503,116 503,116 285,244 $ 1,421,108 $ 1,421,108 $ 1,421,108 $ 1,421,108 $ 1,421,108 $ 1,421,108 503,116 $ 1,671,090 $ 1,671,090 $ 1,671,090 $ 1,671,090 $ 1,671,090 $ 1,671,090 Long-term portion $ 1,671,090 Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari December 31, 2019, 2018 and 2017, respectively. December 31, 2019, 2018 and 2017, respectively. December 31, 2019, 2018 and 2017, respectively. December 31, 2019, 2018 and 2017, respectively. December 31, 2019, 2018 and 2017, respectively. December 31, 2019, 2018 and 2017, respectively. passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. $ 1,421,108 Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: 2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 2022 2022 2023 2023 2023 2023 2023 2023 2023 2024 2024 2024 2024 2024 2024 2024 thereafter thereafter thereafter thereafter thereafter thereafter $ 285,244 $ 285,244 $ 285,244 $ 285,244 $ 285,244 $ 285,244 $ 285,244 38,716 38,716 38,716 38,716 38,716 38,716 38,716 471,432 471,432 471,432 471,432 471,432 471,432 471,432 347,995 347,995 347,995 347,995 347,995 347,995 347,995 546,716 546,716 546,716 546,716 546,716 546,716 546,716 16,249 16,249 16,249 16,249 16,249 16,249 thereafter 16,249 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 $ 1,706,352 On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million due in 2021 (2021 two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million due in 2021 (2021 two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million due in 2021 (2021 two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million due in 2021 (2021 two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million due in 2021 (2021 two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million due in 2021 (2021 On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million due in 2021 (2021 of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes 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 which is due in 2023 (2023 Notes). The net proceeds of the 2023 Notes were $365.6 million, after payment of the which is due in 2023 (2023 Notes). The net proceeds of the 2023 Notes were $365.6 million, after payment of the On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes net cost of the Call Spread Overlay described below and transaction costs paid. net cost of the Call Spread Overlay described below and transaction costs paid. which is due in 2023 (2023 Notes). The net proceeds of the 2023 Notes were $365.6 million, after payment of the 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. On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes 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 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. net cost of the Call Spread Overlay described below and transaction costs paid. 186 Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)During 2019, we repaid $506.4 million of long-term debt including $430.0 million for the amount due for the 2019 Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed further below. At December 31, 2019 and 2018, total current long-term debt, net of debt issuance costs of $10.8 million and $14.2 million, respectively, consists of the following: 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 long-term debt Less current portion Long-term portion 2020 2021 2022 2023 2024 thereafter 285,244 347,995 413,272 — 302,040 26,944 330,857 279,492 335,201 397,793 72,483 298,691 26,933 336,168 $ 1,706,352 $ 2,174,206 285,244 503,116 $ 1,421,108 $ 1,671,090 $ 285,244 38,716 471,432 347,995 546,716 16,249 $ 1,706,352 Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, the 2021 Notes became convertible pursuant to the indenture as discussed below. The notes are all unsecured obligations that rank pari passu. Interest expense on long-term debt was $68.0 million, $61.2 million and $43.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. Future maturities (stated at the carrying values) of long-term debt as of December 31, 2019, are as follows: F I N A N C I A L R E S U LT S Notes to consolidated financial statements On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in two tranches consisting of $430.0 million due in 2019 (2019 Notes) and $300.0 million 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. During the first quarter of 2019, $430.0 million was paid at maturity (2019 Notes) and $3.4 million of the 2021 Notes was redeemed. 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. 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 $468.9 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs paid through December 31, 2019. 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 in the table below. 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 contingent conversion periods as shown in the table below. 2021 Notes 0.875% 2023 Notes 0.500% 2024 Notes 1.000% March 19 and September 19 March 13 and September 13 May 13 and November 13 March 19, 2021 From April 29, 2014 to September 18, 2020 7,063.1647 September 13, 2023 From October 24, 2017 to March 13, 2023 4,829.7279 November 13, 2024 From December 24, 2018 to August 2, 2024 4,360.3098 Additionally, conversion may occur at any time following a Contingent Conversion Period through the fifth business day immediately preceding the applicable maturity date. Upon conversion, noteholders will receive an amount in cash equal to the Cash Settlement Amount, calculated as described below. The Cash Convertible Notes are not convertible into shares of our common stock or any other securities. Noteholders may convert 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): › if the last reported sale price of our common stock for at least 20-consecutive 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 2021 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; if parity event or trading price unavailability event, as the case maybe occurs for the 2023 Notes and 2024 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 187 › 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. Cash Convertible Notes due 2019, 2021, 2023 and 2024(in thousands)20192018Year ending December 31,(in thousands)Cash ConvertibleNotesAnnualInterest RateDate of InterestPaymentsMaturity DateContingent Conversion PeriodConversion Rate per$200,000 PrincipalAmountnet cost of the Call Spread Overlay described below and transaction costs paid. 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 $468.9 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs paid through December 31, 2019. 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 in the table below. 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 contingent conversion periods as shown in the table below. 2021 Notes 0.875% March 19, 2021 From April 29, 2014 to September 18, 2020 7,063.1647 2023 Notes 0.500% March 13 and September 13, 2023 From October 24, 2017 to March 13, 2023 4,829.7279 2024 Notes 1.000% May 13 and November 13, 2024 From December 24, 2018 to August 2, 2024 4,360.3098 March 19 and September 19 September 13 November 13 Additionally, conversion may occur at any time following a Contingent Conversion Period through the fifth business day immediately preceding the applicable maturity date. Upon conversion, noteholders will receive an amount in cash equal to the Cash Settlement Amount, calculated as described below. The Cash Convertible Notes are not convertible into shares of our common stock or any other securities. Noteholders may convert 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): › if the last reported sale price of our common stock for at least 20-consecutive 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 2021 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; if parity event or trading price unavailability event, as the case maybe occurs for the 2023 Notes and 2024 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 2021, 2023 and 2024 Notes noted above have been analyzed under ASC 815, Derivatives and Hedging, and, based on our analysis, we determined that each of the embedded features listed above are clearly and closely related to the 2021, 2023 and 2024 Notes (i.e., the host contracts). As a result, pursuant to the accounting provisions of ASC 815, Derivatives and Hedging, these features noted above are not required to be bifurcated as separate instruments. Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, 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. No Contingent Conversion Conditions were triggered for the 2023 Notes and 2024 Notes as of December 31, 2019. 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 for the 2019 and 2021 Notes was $51.2 million and $54.0 million, respectively, $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 14 "Derivatives and Hedging". 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 188 Convertible Notes. 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 $0.2 million was accrued as of December 31, 2019. 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: Cash ConvertibleNotesAnnualInterest RateDate of InterestPaymentsMaturity DateContingent Conversion PeriodConversion Rate per$200,000 PrincipalAmountThe Contingent Conversion Conditions in the 2021, 2023 and 2024 Notes noted above have been analyzed under ASC 815, Derivatives and Hedging, and, based on our analysis, we determined that each of the embedded features listed above are clearly and closely related to the 2021, 2023 and 2024 Notes (i.e., the host contracts). As a result, pursuant to the accounting provisions of ASC 815, Derivatives and Hedging, these features noted above are not required to be bifurcated as separate instruments. Beginning on January 1, 2020 and ending at the close of business on March 31, 2020, 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. No Contingent Conversion Conditions were triggered for the 2023 Notes and 2024 Notes as of December 31, 2019. event. 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 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 F I N A N C I A L R E S U LT S Notes to consolidated financial statements value liability of the embedded cash conversion option for the 2019 and 2021 Notes was $51.2 million and $54.0 million, respectively, $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 14 "Derivatives and Hedging". 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. 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 $0.2 million was accrued as of December 31, 2019. 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: Coupon interest Coupon interest Coupon interest Coupon interest Coupon interest Amortization of original issuance discount Amortization of original issuance discount Amortization of original issuance discount Amortization of original issuance discount Amortization of original issuance discount Amortization of debt issuance costs Amortization of debt issuance costs Amortization of debt issuance costs Amortization of debt issuance costs Amortization of debt issuance costs Total interest expense related to the Cash Convertible Notes Total interest expense related to the Cash Convertible Notes Total interest expense related to the Cash Convertible Notes Total interest expense related to the Cash Convertible Notes $ 9,954 $ 9,954 $ 9,954 $ 9,954 $ 6,890 $ 6,890 $ 6,890 $ 6,890 $ 9,954 36,966 36,966 36,966 36,966 $ 6,890 32,114 32,114 32,114 32,114 36,966 3,014 3,014 3,014 3,014 32,114 3,485 3,485 3,485 3,485 3,014 $ 49,934 $ 49,934 $ 49,934 $ 49,934 3,485 $ 42,489 $ 42,489 $ 42,489 $ 42,489 Total interest expense related to the Cash Convertible Notes $ 49,934 $ 42,489 Concurrent with the issuance of the Cash Convertible Notes, we entered into privately negotiated hedge transactions 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 (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 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 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. During 2014, we used $105.2 million of the proceeds from the issuance of the 2019 of the Cash Convertible Notes. During 2014, 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 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. sale of the Warrants, for a net cash outlay of $35.8 million for the Call Spread Overlay. Concurrent with the issuance of the Cash Convertible Notes, we entered into privately negotiated hedge transactions 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 (Call Options) with, and issued warrants to purchase shares of our common stock (Warrants) to, certain financial Concurrent with the issuance of the Cash Convertible Notes, we entered into privately negotiated hedge transactions institutions. We refer to the Call Options and Warrants collectively as the “Call Spread Overlay”. The Call Options institutions. We refer to the Call Options and Warrants collectively as the “Call Spread Overlay”. The Call Options (Call Options) with, and issued warrants to purchase shares of our common stock (Warrants) to, certain financial are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion institutions. We refer to the Call Options and Warrants collectively as the “Call Spread Overlay”. The Call Options of the Cash Convertible Notes. During 2014, we used $105.2 million of the proceeds from the issuance of the 2019 of the Cash Convertible Notes. During 2014, we used $105.2 million of the proceeds from the issuance of the 2019 are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion and 2021 Cash Convertible Notes to pay for the Call Options, and simultaneously received $69.4 million from the and 2021 Cash Convertible Notes to pay for the Call Options, and simultaneously received $69.4 million from the of the Cash Convertible Notes. During 2014, we used $105.2 million of the proceeds from the issuance of the 2019 sale of the Warrants, for a net cash outlay of $35.8 million for the Call Spread Overlay. sale of the Warrants, for a net cash outlay of $35.8 million for the Call Spread Overlay. 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 During 2017, we used $73.7 million of the proceeds from the from the issuance of the 2023 Cash Convertible During 2017, we used $73.7 million of the proceeds from the from the issuance of the 2023 Cash Convertible 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 Notes to pay for the premium for the Call Option, and simultaneously received $45.3 million from the sale of Notes to pay for the premium for the Call Option, and simultaneously received $45.3 million from the sale of Notes to pay for the premium for the Call Option, and simultaneously received $45.3 million from the sale of During 2017, we used $73.7 million of the proceeds from the from the issuance of the 2023 Cash Convertible Warrants, for a net cash outlay of $28.3 million for the Call Spread Overlay. Issuance costs incurred in connection Warrants, for a net cash outlay of $28.3 million for the Call Spread Overlay. Issuance costs incurred in connection Warrants, for a net cash outlay of $28.3 million for the Call Spread Overlay. Issuance costs incurred in connection Warrants, for a net cash outlay of $28.3 million for the Call Spread Overlay. Issuance costs incurred in connection Notes to pay for the premium for the Call Option, and simultaneously received $45.3 million from the sale of with the Warrant and the Call Option were $0.3 million and $0.1 million respectively. with the Warrant and the Call Option were $0.3 million and $0.1 million respectively. with the Warrant and the Call Option were $0.3 million and $0.1 million respectively. with the Warrant and the Call Option were $0.3 million and $0.1 million respectively. 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 from the issuance of the 2024 Cash Convertible In November 2018, we used $97.3 million of the proceeds from the from the issuance of the 2024 Cash Convertible In November 2018, we used $97.3 million of the proceeds from the from the issuance of the 2024 Cash Convertible 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 Notes to pay for the premium for the Call Option, and simultaneously received $72.4 million from the sale of Notes to pay for the premium for the Call Option, and simultaneously received $72.4 million from the sale of Notes to pay for the premium for the Call Option, and simultaneously received $72.4 million from the sale of In November 2018, we used $97.3 million of the proceeds from the from the issuance of the 2024 Cash Convertible Warrants, for a net cash outlay of $24.9 million for the Call Spread Overlay. Issuance costs incurred in connection Warrants, for a net cash outlay of $24.9 million for the Call Spread Overlay. Issuance costs incurred in connection Warrants, for a net cash outlay of $24.9 million for the Call Spread Overlay. Issuance costs incurred in connection Warrants, for a net cash outlay of $24.9 million for the Call Spread Overlay. Issuance costs incurred in connection Notes to pay for the premium for the Call Option, and simultaneously received $72.4 million from the sale of with the Warrant and the Call Option were $0.5 million and $0.5 million respectively, of which $48.0 thousand with the Warrant and the Call Option were $0.5 million and $0.5 million respectively, of which $48.0 thousand with the Warrant and the Call Option were $0.5 million and $0.5 million respectively, of which $48.0 thousand with the Warrant and the Call Option were $0.5 million and $0.5 million respectively, of which $48.0 thousand Warrants, for a net cash outlay of $24.9 million for the Call Spread Overlay. Issuance costs incurred in connection was accrued as of December 31, 2019. was accrued as of December 31, 2019. was accrued as of December 31, 2019. was accrued as of December 31, 2019. with the Warrant and the Call Option were $0.5 million and $0.5 million respectively, of which $48.0 thousand was accrued as of December 31, 2019. The Call Options are derivative financial instruments and are discussed further in Note 14 "Derivatives and The Call Options are derivative financial instruments and are discussed further in Note 14 "Derivatives and The Call Options are derivative financial instruments and are discussed further in Note 14 "Derivatives and The Call Options are derivative financial instruments and are discussed further in Note 14 "Derivatives and Hedging". The Warrants are equity instruments and are further discussed in Note 18 "Equity". Hedging". The Warrants are equity instruments and are further discussed in Note 18 "Equity". Hedging". The Warrants are equity instruments and are further discussed in Note 18 "Equity". Hedging". The Warrants are equity instruments and are further discussed in Note 18 "Equity". The Call Options are derivative financial instruments and are discussed further in Note 14 "Derivatives and Hedging". The Warrants are equity instruments and are further discussed in Note 18 "Equity". Aside from the initial payment of a premium of $105.2 million (2019 and 2021 Notes), $73.7 million (2023 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 Notes), and $97.3 million (2024 Notes) for the Call Option, we will not be required to make any cash payments Aside from the initial payment of a premium of $105.2 million (2019 and 2021 Notes), $73.7 million (2023 under the Call Options, and will be entitled to receive an amount of cash, generally equal to the amount by which under the Call Options, and will be entitled to receive an amount of cash, generally equal to the amount by which Notes), and $97.3 million (2024 Notes) for the Call Option, we will not be required to make any cash payments Aside from the initial payment of a premium of $105.2 million (2019 and 2021 Notes), $73.7 million (2023 Aside from the initial payment of a premium of $105.2 million (2019 and 2021 Notes), $73.7 million (2023 189 Notes), and $97.3 million (2024 Notes) for the Call Option, we will not be required to make any cash payments 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 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 the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant under the Call Options, and will be entitled to receive an amount of cash, generally equal to the amount by which valuation period. The exercise price under the Call Options is initially equal to the conversion price of the Cash valuation period. The exercise price under the Call Options is initially equal to the conversion price of the Cash valuation period. The exercise price under the Call Options is initially equal to the conversion price of the Cash valuation period. The exercise price under the Call Options is initially equal to the conversion price of the Cash the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant Convertible Notes. Convertible Notes. Convertible Notes. Convertible Notes. valuation period. The exercise price under the Call Options is initially equal to the conversion price of the Cash Convertible Notes. During the first quarter of 2019, we received $133.2 million in cash upon the exercise of the call options in During the first quarter of 2019, we received $133.2 million in cash upon the exercise of the call options in During the first quarter of 2019, we received $133.2 million in cash upon the exercise of the call options in During the first quarter of 2019, we received $133.2 million in cash upon the exercise of the call options in connection with the repayment of the 2019 Notes. In the same transaction, we paid $132.7 million for the intrinsic connection with the repayment of the 2019 Notes. In the same transaction, we paid $132.7 million for the intrinsic connection with the repayment of the 2019 Notes. In the same transaction, we paid $132.7 million for the intrinsic connection with the repayment of the 2019 Notes. In the same transaction, we paid $132.7 million for the intrinsic During the first quarter of 2019, we received $133.2 million in cash upon the exercise of the call options in value of the 2019 Notes' embedded cash conversion option. Not all of the 2019 Note holders tendered the value of the 2019 Notes' embedded cash conversion option. Not all of the 2019 Note holders tendered the value of the 2019 Notes' embedded cash conversion option. Not all of the 2019 Note holders tendered the value of the 2019 Notes' embedded cash conversion option. Not all of the 2019 Note holders tendered the connection with the repayment of the 2019 Notes. In the same transaction, we paid $132.7 million for the intrinsic required conversion notice, and as a result the net effect of the cash paid and received of $0.5 million was required conversion notice, and as a result the net effect of the cash paid and received of $0.5 million was required conversion notice, and as a result the net effect of the cash paid and received of $0.5 million was required conversion notice, and as a result the net effect of the cash paid and received of $0.5 million was value of the 2019 Notes' embedded cash conversion option. Not all of the 2019 Note holders tendered the recognized as a gain in other income, net. recognized as a gain in other income, net. recognized as a gain in other income, net. recognized as a gain in other income, net. required conversion notice, and as a result the net effect of the cash paid and received of $0.5 million was recognized as a gain in other income, net. In connection with the early conversion of a portion of the 2021 Notes during the first quarter of 2019, we received In connection with the early conversion of a portion of the 2021 Notes during the first quarter of 2019, we received In connection with the early conversion of a portion of the 2021 Notes during the first quarter of 2019, we received In connection with the early conversion of a portion of the 2021 Notes during the first quarter of 2019, we received $0.4 million in cash and recorded an other receivable of $0.7 million upon the exercise of the related call options. $0.4 million in cash and recorded an other receivable of $0.7 million upon the exercise of the related call options. $0.4 million in cash and recorded an other receivable of $0.7 million upon the exercise of the related call options. $0.4 million in cash and recorded an other receivable of $0.7 million upon the exercise of the related call options. In connection with the early conversion of a portion of the 2021 Notes during the first quarter of 2019, we received In the same transaction, we paid $1.1 million for the intrinsic value of the 2021 Notes' embedded cash conversion In the same transaction, we paid $1.1 million for the intrinsic value of the 2021 Notes' embedded cash conversion In the same transaction, we paid $1.1 million for the intrinsic value of the 2021 Notes' embedded cash conversion In the same transaction, we paid $1.1 million for the intrinsic value of the 2021 Notes' embedded cash conversion $0.4 million in cash and recorded an other receivable of $0.7 million upon the exercise of the related call options. option. During the second quarter of 2019, we collected the $0.7 million receivable balance and received $0.4 option. During the second quarter of 2019, we collected the $0.7 million receivable balance and received $0.4 option. During the second quarter of 2019, we collected the $0.7 million receivable balance and received $0.4 option. During the second quarter of 2019, we collected the $0.7 million receivable balance and received $0.4 In the same transaction, we paid $1.1 million for the intrinsic value of the 2021 Notes' embedded cash conversion million in cash upon the exercise of additional call options. As a result of these early conversions, we have million in cash upon the exercise of additional call options. As a result of these early conversions, we have million in cash upon the exercise of additional call options. As a result of these early conversions, we have million in cash upon the exercise of additional call options. As a result of these early conversions, we have option. During the second quarter of 2019, we collected the $0.7 million receivable balance and received $0.4 recognized a $0.4 million gain in other income, net. recognized a $0.4 million gain in other income, net. recognized a $0.4 million gain in other income, net. recognized a $0.4 million gain in other income, net. million in cash upon the exercise of additional call options. As a result of these early conversions, we have recognized a $0.4 million gain in other income, net. Cash Convertible Notes Call Spread Overlay(in thousands)Year-Ended December 3120192018Cash Convertible Notes Call Spread Overlay(in thousands)Year-Ended December 3120192018Cash Convertible Notes Call Spread Overlay(in thousands)Year-Ended December 3120192018Cash Convertible Notes Call Spread Overlay(in thousands)Year-Ended December 3120192018Cash Convertible Notes Call Spread Overlay(in thousands)Year-Ended December 3120192018Coupon interest Amortization of original issuance discount Amortization of debt issuance costs $ 9,954 36,966 3,014 $ 6,890 32,114 3,485 Total interest expense related to the Cash Convertible Notes $ 49,934 $ 42,489 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. During 2014, 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 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 $48.0 thousand was accrued as of December 31, 2019. The Call Options are derivative financial instruments and are discussed further in Note 14 "Derivatives and Hedging". The Warrants are equity instruments and are further discussed in Note 18 "Equity". 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. During the first quarter of 2019, we received $133.2 million in cash upon the exercise of the call options in connection with the repayment of the 2019 Notes. In the same transaction, we paid $132.7 million for the intrinsic value of the 2019 Notes' embedded cash conversion option. Not all of the 2019 Note holders tendered the required conversion notice, and as a result the net effect of the cash paid and received of $0.5 million was recognized as a gain in other income, net. In connection with the early conversion of a portion of the 2021 Notes during the first quarter of 2019, we received $0.4 million in cash and recorded an other receivable of $0.7 million upon the exercise of the related call options. In the same transaction, we paid $1.1 million for the intrinsic value of the 2021 Notes' embedded cash conversion option. During the second quarter of 2019, we collected the $0.7 million receivable balance and received $0.4 million in cash upon the exercise of additional call options. As a result of these early conversions, we have recognized a $0.4 million gain in other income, net. The Warrants that were issued with our Cash Convertible Notes, 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. We will not receive any proceeds if the Warrants are exercised. 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 and paid 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 issuance costs which will be amortized through interest expense using the effective interest method 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. We were in compliance with these covenants at December 31, 2019. 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, 2019 and December 31, 2018 was approximately $329.2 million and $391.7 million, respectively. During 2014, we entered into interest rate swaps, which effectively fixed the fair value of $200.0 million of this debt, which was reduced to $127.0 million following the 2019 $73.0 million repayment. These interest rate swaps qualify for hedge accounting as fair value hedges as described in Note 14 "Derivatives and Hedging". 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 Euro tranches are designated as a foreign currency non-derivative hedging instrument that qualifies as a net investment hedge as described in Note 14 "Derivatives and Hedging". 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, 2019 totaled $0.4 million of unrealized loss and is recorded in equity. We paid $1.2 million in 190 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, 2019 and December 31, 2018 is as follows: €11.5 million €23.0 million €21.5 million €64.5 million $45.0 million €25.0 million €64.0 million €31.0 million €14.5 million EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR Fixed 0.4% March 2021 $ 12,905 $ 13,143 Floating EURIBOR + 0.4% March 2021 Fixed 0.68% October 2022 Floating EURIBOR + 0.5% October 2022 Floating LIBOR + 1.2% October 2022 Floating EURIBOR + 0.5% October 2022 Fixed 1.09% June 2024 Floating EURIBOR + 0.7% June 2024 Fixed 1.61% June 2027 25,811 24,112 72,335 44,919 28,026 71,747 34,753 16,249 26,286 24,561 73,684 44,891 28,543 73,097 35,406 16,557 $ 330,857 $ 336,168 The financial markets regulators in the United Kingdom and the Eurozone have passed regulations that will become effective in 2021 under which LIBOR and EURIBOR in their current form will not be compliant. Market participants and regulators are working on establishing new interest rate benchmarks. While the outcome of this work is not clear yet, the Schuldschein our syndicated loan facility, and our interest rate swaps continue to make reference to the current LIBOR and EURIBOR benchmark rates. These agreements contain language for the determination of interest Cash Convertible Notes Call Spread Overlay(in thousands)Year-Ended December 3120192018U.S. Private PlacementGerman Private Placement (Schuldschein)CurrencyNotional AmountInterest RateMaturityCarrying Value (in thousands) as ofDecember 31, 2019December 31, 2018F I N A N C I A L R E S U LT S Notes to consolidated financial statements The Warrants that were issued with our Cash Convertible Notes, 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. We will not receive any proceeds if the Warrants are exercised. 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 and paid 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 issuance costs which will be amortized through interest expense using the effective interest method 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. We were in compliance with these covenants at December 31, 2019. 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, 2019 and December 31, 2018 was approximately $329.2 million and $391.7 million, respectively. During 2014, we entered into interest rate swaps, which effectively fixed the fair value of $200.0 million of this debt, which was reduced to $127.0 million following the 2019 $73.0 million repayment. These interest rate swaps qualify for hedge accounting as fair value hedges as described in Note 14 "Derivatives and Hedging". 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 Euro tranches are designated as a foreign currency non-derivative hedging instrument that qualifies as a net investment hedge as described in Note 14 "Derivatives and Hedging". 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, 2019 totaled $0.4 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, 2019 and December 31, 2018 is as follows: €11.5 million €23.0 million €21.5 million €64.5 million $45.0 million €25.0 million €64.0 million €31.0 million €14.5 million EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR Fixed 0.4% March 2021 $ 12,905 $ 13,143 Floating EURIBOR + 0.4% March 2021 Fixed 0.68% October 2022 Floating EURIBOR + 0.5% October 2022 Floating LIBOR + 1.2% October 2022 Floating EURIBOR + 0.5% October 2022 Fixed 1.09% June 2024 Floating EURIBOR + 0.7% June 2024 Fixed 1.61% June 2027 25,811 24,112 72,335 44,919 28,026 71,747 34,753 16,249 26,286 24,561 73,684 44,891 28,543 73,097 35,406 16,557 $ 330,857 $ 336,168 The financial markets regulators in the United Kingdom and the Eurozone have passed regulations that will become effective in 2021 under which LIBOR and EURIBOR in their current form will not be compliant. Market participants and regulators are working on establishing new interest rate benchmarks. While the outcome of this work is not clear yet, the Schuldschein our syndicated loan facility, and our interest rate swaps continue to make reference to the current LIBOR and EURIBOR benchmark rates. These agreements contain language for the determination of interest 191 U.S. Private PlacementGerman Private Placement (Schuldschein)CurrencyNotional AmountInterest RateMaturityCarrying Value (in thousands) as ofDecember 31, 2019December 31, 2018rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be adjusted in line with still to be developed market practice once new benchmark rates become available. adjusted in line with still to be developed market practice once new benchmark rates become available. adjusted in line with still to be developed market practice once new benchmark rates become available. adjusted in line with still to be developed market practice once new benchmark rates become available. adjusted in line with still to be developed market practice once new benchmark rates become available. 17. Income Taxes 17. Income Taxes 17. Income Taxes 17. Income Taxes 17. Income Taxes (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be rates in case the benchmark rate is not available. However, it appears likely that the agreements will need to be $ 17,455 Pretax income in The Netherlands $ 17,455 adjusted in line with still to be developed market practice once new benchmark rates become available. adjusted in line with still to be developed market practice once new benchmark rates become available. adjusted in line with still to be developed market practice once new benchmark rates become available. adjusted in line with still to be developed market practice once new benchmark rates become available. Pretax income in The Netherlands Pretax income in The Netherlands Pretax income in The Netherlands Pretax income in The Netherlands $ (1,675) $ (1,675) $ 42,220 $ 42,220 $ 17,455 $ 17,455 $ 17,455 $ (1,675) $ (1,675) $ (1,675) $ 42,220 $ 42,220 $ 42,220 Pretax (loss) income from foreign operations Pretax (loss) income from foreign operations Pretax (loss) income from foreign operations Pretax (loss) income from foreign operations Pretax (loss) income from foreign operations (95,231) (95,231) (95,231) (95,231) (95,231) 227,412 227,412 227,412 227,412 227,412 72,155 72,155 72,155 72,155 72,155 17. Income Taxes 17. Income Taxes 17. Income Taxes 17. Income Taxes $ (77,776) $ (77,776) $ (77,776) $ (77,776) $ (77,776) $ 225,737 $ 225,737 $ 225,737 $ 225,737 $ 225,737 $ 114,375 $ 114,375 $ 114,375 $ 114,375 $ 114,375 Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: (Loss) income before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of: Current—The Netherlands Pretax income in The Netherlands Current—The Netherlands Pretax income in The Netherlands Current—The Netherlands Pretax income in The Netherlands Pretax income in The Netherlands Current—The Netherlands Current—The Netherlands Pretax (loss) income from foreign operations Pretax (loss) income from foreign operations Pretax (loss) income from foreign operations Pretax (loss) income from foreign operations —Foreign —Foreign —Foreign —Foreign —Foreign $ 5,670 $ 17,455 $ 5,670 $ 17,455 $ 17,455 $ 17,455 $ 5,670 $ 5,670 $ 5,670 $ 5,794 $ (1,675) $ 5,794 $ (1,675) $ (1,675) $ (1,675) $ 5,794 $ 5,794 $ 5,794 $ 3,430 $ 42,220 $ 3,430 $ 42,220 $ 42,220 $ 42,220 $ 3,430 $ 3,430 $ 3,430 13,371 (95,231) 13,371 (95,231) (95,231) (95,231) 13,371 13,371 13,371 52,835 227,412 52,835 227,412 227,412 227,412 52,835 52,835 52,835 10,375 72,155 10,375 72,155 10,375 72,155 72,155 10,375 10,375 $ (77,776) 19,041 19,041 $ (77,776) $ (77,776) $ (77,776) 19,041 19,041 19,041 $ 225,737 58,629 58,629 $ 225,737 $ 225,737 $ 225,737 58,629 58,629 58,629 $ 114,375 13,805 13,805 $ 114,375 $ 114,375 $ 114,375 13,805 13,805 13,805 Deferred—The Netherlands Deferred—The Netherlands Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: Deferred—The Netherlands Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: Income tax (benefit) expense for the years ended December 31, 2019, 2018 and 2017 are as follows: Deferred—The Netherlands Deferred—The Netherlands 4,177 4,177 2,551 2,551 2,551 2,551 4,177 4,177 2,551 4,177 151 151 151 151 151 —Foreign —Foreign —Foreign —Foreign —Foreign (59,539) (59,539) (59,539) (59,539) (59,539) (25,823) (25,823) (25,823) (25,823) (25,823) 60,025 60,025 60,025 60,025 60,025 (55,362) (55,362) (55,362) (55,362) (55,362) (23,272) (23,272) (23,272) (23,272) (23,272) 60,176 60,176 60,176 60,176 60,176 Total income tax (benefit) expense Total income tax (benefit) expense Total income tax (benefit) expense Total income tax (benefit) expense Total income tax (benefit) expense $ (36,321) $ (36,321) $ (36,321) $ (36,321) $ (36,321) $ 35,357 $ 35,357 $ 35,357 $ 35,357 $ 35,357 $ 73,981 $ 73,981 $ 73,981 $ 73,981 $ 73,981 —Foreign —Foreign —Foreign —Foreign Current—The Netherlands Current—The Netherlands Current—The Netherlands Current—The Netherlands $ 5,670 The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. 13,371 Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective countries of domicile. The principal items comprising the differences between income taxes computed at The countries of domicile. The principal items comprising the differences between income taxes computed at The countries of domicile. The principal items comprising the differences between income taxes computed at The countries of domicile. The principal items comprising the differences between income taxes computed at The countries of domicile. The principal items comprising the differences between income taxes computed at The 13,805 13,805 19,041 Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, Deferred—The Netherlands Deferred—The Netherlands Deferred—The Netherlands 151 4,177 2019, 2018 and 2017 are as follows: 2019, 2018 and 2017 are as follows: 2019, 2018 and 2017 are as follows: 2019, 2018 and 2017 are as follows: 2019, 2018 and 2017 are as follows: Deferred—The Netherlands $ 5,794 $ 5,794 $ 5,670 $ 5,670 $ 3,430 $ 5,794 $ 5,670 $ 5,794 $ 3,430 13,371 13,371 52,835 52,835 19,041 19,041 58,629 58,629 10,375 19,041 58,629 13,371 52,835 58,629 52,835 10,375 4,177 4,177 2,551 2,551 2,551 4,177 2,551 151 $ 3,430 $ 3,430 10,375 10,375 13,805 13,805 151 151 —Foreign —Foreign —Foreign —Foreign (59,539) (59,539) (59,539) (59,539) (25,823) (25,823) (25,823) (25,823) 60,025 60,025 60,025 60,025 (55,362) (55,362) (55,362) (55,362) (23,272) (23,272) (23,272) (23,272) 60,176 60,176 60,176 60,176 Total income tax (benefit) expense Total income tax (benefit) expense Total income tax (benefit) expense Total income tax (benefit) expense $ (36,321) $ (36,321) $ (36,321) $ (36,321) $ 35,357 $ 35,357 $ 35,357 $ 35,357 $ 73,981 $ 73,981 $ 73,981 $ 73,981 The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective countries of domicile. The principal items comprising the differences between income taxes computed at The Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, 2019, 2018 and 2017 are as follows: The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. The Netherlands statutory income tax rate was 25% for the years ended December 31, 2019, 2018 and 2017. Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective countries of domicile. The principal items comprising the differences between income taxes computed at The countries of domicile. The principal items comprising the differences between income taxes computed at The countries of domicile. The principal items comprising the differences between income taxes computed at The Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, 2019, 2018 and 2017 are as follows: 2019, 2018 and 2017 are as follows: 2019, 2018 and 2017 are as follows: 192 (in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017(in thousands)201920182017F I N A N C I A L R E S U LT S Notes to consolidated financial statements Income taxes at The Netherlands statutory rate Income taxes at The Netherlands statutory rate Income taxes at The Netherlands statutory rate Income taxes at The Netherlands statutory rate Income taxes at The Netherlands statutory rate $ (19,444) $ (19,444 ) $ (19,444 ) $ (19,444 ) $ (19,444 ) 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % $ 56,434 $ 56,434 $ 56,434 $ 56,434 $ 56,434 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % $ 28,594 $ 28,594 $ 28,594 $ 28,594 $ 28,594 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % Income taxes at The Netherlands statutory rate Taxation of foreign operations, net(1) Taxation of foreign operations, net(1) Taxation of foreign operations, net(1) Taxation of foreign operations, net(1) Taxation of foreign operations, net(1) Taxation of foreign operations, net(1) Tax impact from intangible property transfer Tax impact from intangible property transfer Tax impact from intangible property transfer Tax impact from intangible property transfer Tax impact from intangible property transfer Unrecognized tax benefits(2) Unrecognized tax benefits(2) Unrecognized tax benefits(2) Tax impact from intangible property transfer Unrecognized tax benefits(2) Unrecognized tax benefits(2) Unrecognized tax benefits(2) Tax impact from nondeductible items Tax impact from nondeductible items Tax impact from nondeductible items Tax impact from nondeductible items Tax impact from nondeductible items Tax impact from nondeductible items Excess tax benefit related to share-based compensation Excess tax benefit related to share-based compensation Excess tax benefit related to share-based compensation Excess tax benefit related to share-based compensation Excess tax benefit related to share-based compensation Excess tax benefit related to share-based compensation Government incentives and other deductions(4) Government incentives and other deductions(4) Government incentives and other deductions(4) Government incentives and other deductions(4) Government incentives and other deductions(4) Government incentives and other deductions(4) Changes in tax laws and rates(3) Changes in tax laws and rates(3) Changes in tax laws and rates(3) Other items, net Other items, net Changes in tax laws and rates(3) Changes in tax laws and rates(3) Changes in tax laws and rates(3) Other items, net Other items, net Other items, net Valuation allowance(3) Valuation allowance(3) Valuation allowance(3) Other items, net Valuation allowance(3) Valuation allowance(3) Valuation allowance(3) $ (19,444) (25,720) (25,720) (25,720) (25,720) (25,720) 25.0 % 33.1 33.1 33.1 33.1 33.1 $ 56,434 (33,994) (33,994) (33,994) (33,994) (33,994) 25.0 % (15.1) (15.1) (15.1) (15.1) (15.1) $ 28,594 (38,635) (38,635) (38,635) (38,635) (38,635) (25,720) (21,122) (21,122) (21,122) (21,122) (21,122) (21,122) 10,962 10,962 10,962 10,962 10,962 10,962 7,986 7,986 7,986 7,986 7,986 7,986 (3,989) (3,989) (3,989) (3,989) (3,989) (3,989) (7,516) (7,516) (7,516) (7,516) (7,516) (7,516) 331 331 331 331 331 331 1,306 1,306 1,306 1,306 1,306 1,306 20,885 20,885 20,885 20,885 20,885 33.1 27.2 27.2 27.2 27.2 27.2 (33,994) — — — — — (15.1) — — — — — (38,635) — — — — — 27.2 (14.1) (14.1) (14.1) (14.1) (14.1) (14.1) (10.3) (10.3) (10.3) (10.3) (10.3) (10.3) 5.1 5.1 5.1 5.1 5.1 5.1 9.7 9.7 9.7 9.7 9.7 9.7 (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) (1.7) (1.7) (1.7) (1.7) (1.7) (1.7) (26.9) (26.9) (26.9) (26.9) (26.9) — 13,570 13,570 13,570 13,570 13,570 13,570 2,949 2,949 2,949 2,949 2,949 2,949 (4,740) (4,740) (4,740) (4,740) (4,740) (4,740) (2,892) (2,892) (2,892) (2,892) (2,892) (2,892) 1,907 1,907 1,907 1,907 1,907 1,907 (1,170) (1,170) (1,170) (1,170) (1,170) (1,170) 3,293 3,293 3,293 3,293 3,293 — 6.0 6.0 6.0 6.0 6.0 6.0 1.3 1.3 1.3 1.3 1.3 1.3 (2.1) (2.1) (2.1) (2.1) (2.1) (2.1) (1.2) (1.2) (1.2) (1.2) (1.2) (1.2) 0.8 0.8 0.8 0.8 0.8 0.8 (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) 1.5 1.5 1.5 1.5 1.5 — 23,189 23,189 23,189 23,189 23,189 23,189 2,645 2,645 2,645 2,645 2,645 2,645 (5,237) (5,237) (5,237) (5,237) (5,237) (5,237) (6,519) (6,519) (6,519) (6,519) (6,519) (6,519) 12,958 12,958 12,958 12,958 12,958 12,958 (5,658) (5,658) (5,658) (5,658) (5,658) (5,658) 62,644 62,644 62,644 62,644 62,644 25.0 % (33.8) (33.8) (33.8) (33.8) (33.8) (33.8) — — — — — — 20.3 20.3 20.3 20.3 20.3 20.3 2.3 2.3 2.3 2.3 2.3 2.3 (4.6) (4.6) (4.6) (4.6) (4.6) (4.6) (5.7) (5.7) (5.7) (5.7) (5.7) (5.7) 11.3 11.3 11.3 11.3 11.3 11.3 (4.9) (4.9) (4.9) (4.9) (4.9) (4.9) 54.8 54.8 54.8 54.8 54.8 20,885 $ (36,321) $ (36,321) $ (36,321) $ (36,321) $ (36,321) (26.9) 46.7 % 46.7 % 46.7 % 46.7 % 46.7 % 3,293 $ 35,357 $ 35,357 $ 35,357 $ 35,357 $ 35,357 1.5 15.7 % 15.7 % 15.7 % 15.7 % 15.7 % 62,644 $ 73,981 $ 73,981 $ 73,981 $ 73,981 $ 73,981 54.8 64.7 % 64.7 % 64.7 % 64.7 % 64.7 % 46.7 % 15.7 % $ 73,981 $ 35,357 64.7 % $ (36,321) (1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher or (1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher (1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher (1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher (1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from income or lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from or lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from or lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from or lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from (1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher or taxes due to various intercompany operating and financing activities. The most significant tax benefits from these foreign income taxes due to various intercompany operating and financing activities. The most significant tax benefits from these income taxes due to various intercompany operating and financing activities. The most significant tax benefits from these income taxes due to various intercompany operating and financing activities. The most significant tax benefits from these income taxes due to various intercompany operating and financing activities. The most significant tax benefits from these lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from income operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland, Dubai, and foreign operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland, foreign operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland, foreign operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland, foreign operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland, taxes due to various intercompany operating and financing activities. The most significant tax benefits from these foreign Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions Dubai, and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, Dubai, and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, Dubai, and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, Dubai, and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland, Dubai, and in these jurisdictions. and exemptions in these jurisdictions. and exemptions in these jurisdictions. and exemptions in these jurisdictions. and exemptions in these jurisdictions. Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions in these jurisdictions. (2) During 2019, we reassessed accruals for tax contingencies, primarily related to ongoing income tax audits. (2) During 2019, we reassessed accruals for tax contingencies, primarily related to ongoing income tax audits. (2) During 2019, we reassessed accruals for tax contingencies, primarily related to ongoing income tax audits. (3) The Netherlands' top statutory corporate income tax rate will be reduced to 21.7% from 25% beginning in 2021. Valuation (3) The Netherlands' top statutory corporate income tax rate will be reduced to 21.7% from 25% beginning in 2021. (3) The Netherlands' top statutory corporate income tax rate will be reduced to 21.7% from 25% beginning in 2021. (3) The Netherlands' top statutory corporate income tax rate will be reduced to 21.7% from 25% beginning in 2021. (3) The Netherlands' top statutory corporate income tax rate will be reduced to 21.7% from 25% beginning in 2021. allowance related to U.S. disallowed interest totaled $12.7 million in 2019 and $60.5 million in 2017. Valuation allowance related to U.S. disallowed interest totaled $12.7 million in 2019 and $60.5 million in 2017. Valuation allowance related to U.S. disallowed interest totaled $12.7 million in 2019 and $60.5 million in 2017. Valuation allowance related to U.S. disallowed interest totaled $12.7 million in 2019 and $60.5 million in 2017. Valuation allowance related to U.S. disallowed interest totaled $12.7 million in 2019 and $60.5 million in 2017. (3) The Netherlands' top statutory corporate income tax rate will be reduced to 21.7% from 25% beginning in 2021. Valuation allowance related to U.S. disallowed interest totaled $12.7 million in 2019 and $60.5 million in 2017. (4) Government incentives include favorable tax regulations in the U.S., Spain and the U.K. relating to research and (4) Government incentives include favorable tax regulations in the U.S., Spain and the U.K. relating to research and development expense and other government incentives. development expense and other government incentives. (4) Government incentives include favorable tax regulations in the U.S., Spain and the U.K. relating to research and development expense and other government incentives. (4) Government incentives include favorable tax regulations in the U.S., Spain and the U.K. relating to research and (4) Government incentives include favorable tax regulations in the U.S., Spain and the U.K. relating to research and (4) Government incentives include favorable tax regulations in the U.S., Spain and the U.K. relating to research and development expense and other government incentives. development expense and other government incentives. development expense and other government incentives. (2) During 2019, we reassessed accruals for tax contingencies, primarily related to ongoing income tax audits. (2) During 2019, we reassessed accruals for tax contingencies, primarily related to ongoing income tax audits. (2) During 2019, we reassessed accruals for tax contingencies, primarily related to ongoing income tax audits. We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other state and foreign jurisdictions. In Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other state and foreign jurisdictions. In Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other state and foreign jurisdictions. In Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other state and foreign jurisdictions. In Netherlands, Germany, and the U.S. federal jurisdiction, as well as in various other state and foreign jurisdictions. In Netherlands, Germany, 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 normal course of business, we are subject to examination by taxing authorities throughout the world. Tax years in the normal course of business, we are subject to examination by taxing authorities throughout the world. Tax years in the normal course of business, we are subject to examination by taxing authorities throughout the world. Tax years in the normal course of business, we are subject to examination by taxing authorities throughout the world. Tax years 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 2007 for income tax examinations by tax authorities. The German The Netherlands are potentially open back to 2007 for income tax examinations by tax authorities. The German The Netherlands are potentially open back to 2007 for income tax examinations by tax authorities. The German The Netherlands are potentially open back to 2007 for income tax examinations by tax authorities. The German The Netherlands are potentially open back to 2007 for income tax examinations by tax authorities. The German The Netherlands are potentially open back to 2007 for income tax examinations by tax authorities. The German group is open to audit for the tax years starting in 2014 and in 2019, the German tax authority commenced an group is open to audit for the tax years starting in 2014 and in 2019, the German tax authority commenced an group is open to audit for the tax years starting in 2014 and in 2019, the German tax authority commenced an group is open to audit for the tax years starting in 2014 and in 2019, the German tax authority commenced an group is open to audit for the tax years starting in 2014 and in 2019, the German tax authority commenced an group is open to audit for the tax years starting in 2014 and in 2019, the German tax authority commenced an audit for the 2014-2016 tax years. The U.S. consolidated group is subject to federal and most state income tax audit for the 2014-2016 tax years. The U.S. consolidated group is subject to federal and most state income tax audit for the 2014-2016 tax years. The U.S. consolidated group is subject to federal and most state income tax audit for the 2014-2016 tax years. The U.S. consolidated group is subject to federal and most state income tax audit for the 2014-2016 tax years. The U.S. consolidated group is subject to federal and most state income tax audit for the 2014-2016 tax years. The U.S. consolidated group is subject to federal and most state income tax examinations by tax authorities beginning with the year ending December 31, 2016 through the current period. Our examinations by tax authorities beginning with the year ending December 31, 2016 through the current period. Our examinations by tax authorities beginning with the year ending December 31, 2016 through the current period. Our examinations by tax authorities beginning with the year ending December 31, 2016 through the current period. Our examinations by tax authorities beginning with the year ending December 31, 2016 through the current period. Our examinations by tax authorities beginning with the year ending December 31, 2016 through the current period. Our other subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities for years other subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities for years other subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities for years other subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities for years other subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities for years other subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities for years before 2015. before 2015. before 2015. before 2015. before 2015. before 2015. Changes in the amount of unrecognized tax benefits for the years ended December 31, 2019, 2018, and 2017 are Changes in the amount of unrecognized tax benefits for the years ended December 31, 2019, 2018, and 2017 are Changes in the amount of unrecognized tax benefits for the years ended December 31, 2019, 2018, and 2017 are as follows: as follows: as follows: Changes in the amount of unrecognized tax benefits for the years ended December 31, 2019, 2018, and 2017 are Changes in the amount of unrecognized tax benefits for the years ended December 31, 2019, 2018, and 2017 are Changes in the amount of unrecognized tax benefits for the years ended December 31, 2019, 2018, and 2017 are as follows: as follows: as follows: 193 (in thousands)201920182017AmountPercentAmountPercentAmountPercentTotal income tax (benefit) expense(in thousands)201920182017AmountPercentAmountPercentAmountPercentTotal income tax (benefit) expense(in thousands)201920182017AmountPercentAmountPercentAmountPercentTotal income tax (benefit) expense(in thousands)201920182017AmountPercentAmountPercentAmountPercentTotal income tax (benefit) expense(in thousands)201920182017AmountPercentAmountPercentAmountPercentTotal income tax (benefit) expense(in thousands)201920182017AmountPercentAmountPercentAmountPercentTotal income tax (benefit) expenseBalance at beginning of year Balance at beginning of year Additions based on tax positions related to the current year Additions based on tax positions related to the current year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Additions for tax positions of prior years Additions for tax positions of prior years Additions based on tax positions related to the current year Additions based on tax positions related to the current year Additions based on tax positions related to the current year Additions based on tax positions related to the current year Additions based on tax positions related to the current year Decrease for tax position of prior years Decrease for tax position of prior years Additions for tax positions of prior years Additions for tax positions of prior years Additions for tax positions of prior years Additions for tax positions of prior years Additions for tax positions of prior years Decrease related to settlements Decrease related to settlements Decrease for tax position of prior years Decrease for tax position of prior years Decrease for tax position of prior years Decrease for tax position of prior years Decrease for tax position of prior years Decrease due to lapse of statute of limitations Decrease due to lapse of statute of limitations Decrease related to settlements Decrease related to settlements Decrease related to settlements Decrease related to settlements Decrease related to settlements (Decrease) increase from currency translation (Decrease) increase from currency translation Decrease due to lapse of statute of limitations Decrease due to lapse of statute of limitations Decrease due to lapse of statute of limitations Decrease due to lapse of statute of limitations Decrease due to lapse of statute of limitations Balance at end of year Balance at end of year (Decrease) increase from currency translation (Decrease) increase from currency translation (Decrease) increase from currency translation (Decrease) increase from currency translation (Decrease) increase from currency translation $ 55,780 $ 55,780 $ 44,033 $ 44,033 $ 18,294 $ 18,294 5,770 5,770 $ 55,780 $ 55,780 $ 55,780 $ 55,780 $ 55,780 3,359 3,359 $ 44,033 $ 44,033 $ 44,033 $ 44,033 $ 44,033 12,212 12,212 $ 18,294 $ 18,294 $ 18,294 $ 18,294 $ 18,294 14,532 14,532 5,770 5,770 5,770 5,770 5,770 11,984 11,984 3,359 3,359 3,359 3,359 3,359 9,933 9,933 12,212 12,212 12,212 12,212 12,212 (9,073) (9,073) 14,532 14,532 14,532 14,532 14,532 — — 11,984 11,984 11,984 11,984 11,984 — — 9,933 9,933 9,933 9,933 9,933 (7,605) (7,605) (9,073) (9,073) (9,073) (9,073) (9,073) — — — — — — — (409) (409) (7,605) (7,605) (7,605) (7,605) (7,605) (1,238) (1,238) — — — — — — — — — — — — — — — — — — — (993) (993) (409) (409) (409) (409) (409) (2,358) (2,358) (1,238) (1,238) (1,238) (1,238) (1,238) 3,594 3,594 — — — — — $ 58,002 $ 58,002 (993) (993) (993) (993) (993) $ 55,780 $ 55,780 (2,358) (2,358) (2,358) (2,358) (2,358) $ 44,033 $ 44,033 3,594 3,594 3,594 3,594 3,594 Balance at end of year Balance at end of year Balance at end of year Balance at end of year Balance at end of year $ 58,002 $ 58,002 $ 58,002 $ 58,002 $ 58,002 $ 55,780 $ 55,780 $ 55,780 $ 55,780 $ 55,780 $ 44,033 $ 44,033 $ 44,033 $ 44,033 $ 44,033 At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various recognized in the financial statements, would be recorded in the statements of income as part of the income tax recognized in the financial statements, would be recorded in the statements of income as part of the income tax events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever expense. expense. recognized in the financial statements, would be recorded in the statements of income as part of the income tax recognized in the financial statements, would be recorded in the statements of income as part of the income tax recognized in the financial statements, would be recorded in the statements of income as part of the income tax recognized in the financial statements, would be recorded in the statements of income as part of the income tax recognized in the financial statements, would be recorded in the statements of income as part of the income tax expense. expense. expense. expense. expense. Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, the table above. the table above. 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in the table above. the table above. the table above. the table above. the table above. We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of December 31, 2019 and 2018 are as follows: December 31, 2019 and 2018 are as follows: $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at December 31, 2019 and 2018 are as follows: December 31, 2019 and 2018 are as follows: December 31, 2019 and 2018 are as follows: December 31, 2019 and 2018 are as follows: December 31, 2019 and 2018 are as follows: Net operating loss and tax credit carryforward Net operating loss and tax credit carryforward $ 50,274 $ 50,274 $ — $ — $ 27,293 $ 27,293 $ — $ — Accrued and other liabilities Accrued and other liabilities Net operating loss and tax credit carryforward Net operating loss and tax credit carryforward Net operating loss and tax credit carryforward Net operating loss and tax credit carryforward Net operating loss and tax credit carryforward Inventory Inventory Accrued and other liabilities Accrued and other liabilities Accrued and other liabilities Accrued and other liabilities Accrued and other liabilities Unrealized gain (loss) on investments Unrealized gain (loss) on investments Inventory Inventory Inventory Inventory Inventory Property, plant and equipment Property, plant and equipment Unrealized gain (loss) on investments Unrealized gain (loss) on investments Unrealized gain (loss) on investments Unrealized gain (loss) on investments Unrealized gain (loss) on investments Intangible assets Intangible assets Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment Share-based compensation Share-based compensation Intangible assets Intangible assets Intangible assets Intangible assets Intangible assets Disallowed interest carryforwards Disallowed interest carryforwards Share-based compensation Share-based compensation Share-based compensation Share-based compensation Share-based compensation Convertible notes Convertible notes Disallowed interest carryforwards Disallowed interest carryforwards Disallowed interest carryforwards Disallowed interest carryforwards Disallowed interest carryforwards Other Other Convertible notes Convertible notes Convertible notes Convertible notes Convertible notes Other Other Other Other Other Valuation allowance Valuation allowance Valuation allowance Valuation allowance Valuation allowance Valuation allowance Valuation allowance Net deferred tax assets (liabilities) Net deferred tax assets (liabilities) 17,977 17,977 $ 50,274 $ 50,274 $ 50,274 $ 50,274 $ 50,274 4,726 4,726 17,977 17,977 17,977 17,977 17,977 — — 4,726 4,726 4,726 4,726 4,726 5,297 5,297 — — — — — 1,078 1,078 5,297 5,297 5,297 5,297 5,297 13,787 13,787 1,078 1,078 1,078 1,078 1,078 73,690 73,690 13,787 13,787 13,787 13,787 13,787 7,104 7,104 73,690 73,690 73,690 73,690 73,690 5,998 5,998 7,104 7,104 7,104 7,104 7,104 179,931 179,931 5,998 5,998 5,998 5,998 5,998 (87,619) (87,619) 179,931 179,931 179,931 179,931 179,931 — — $ — $ — $ — $ — $ — (1,439) (1,439) — — — — — (4,973) (4,973) (1,439) (1,439) (1,439) (1,439) (1,439) (20,332) (20,332) (4,973) (4,973) (4,973) (4,973) (4,973) (26,294) (26,294) (20,332) (20,332) (20,332) (20,332) (20,332) — — (26,294) (26,294) (26,294) (26,294) (26,294) — — — — — — — — — — — — — — (6,174) (6,174) — — — — — (59,212) (59,212) (6,174) (6,174) (6,174) (6,174) (6,174) — — (59,212) (59,212) (59,212) (59,212) (59,212) 15,480 15,480 $ 27,293 $ 27,293 $ 27,293 $ 27,293 $ 27,293 3,978 3,978 15,480 15,480 15,480 15,480 15,480 3,280 3,280 3,978 3,978 3,978 3,978 3,978 3,604 3,604 3,280 3,280 3,280 3,280 3,280 1,721 1,721 3,604 3,604 3,604 3,604 3,604 17,998 17,998 1,721 1,721 1,721 1,721 1,721 60,458 60,458 17,998 17,998 17,998 17,998 17,998 8,102 8,102 60,458 60,458 60,458 60,458 60,458 5,854 5,854 8,102 8,102 8,102 8,102 8,102 147,768 147,768 5,854 5,854 5,854 5,854 5,854 (68,651) (68,651) 147,768 147,768 147,768 147,768 147,768 — — $ — $ — $ — $ — $ — (1,725) (1,725) — — — — — (4,855) (4,855) (1,725) (1,725) (1,725) (1,725) (1,725) (25,448) (25,448) (4,855) (4,855) (4,855) (4,855) (4,855) (63,990) (63,990) (25,448) (25,448) (25,448) (25,448) (25,448) — — (63,990) (63,990) (63,990) (63,990) (63,990) — — — — — — — — — — — — — — (3,614) (3,614) — — — — — (99,632) (99,632) (3,614) (3,614) (3,614) (3,614) (3,614) — — (99,632) (99,632) (99,632) (99,632) (99,632) $ 92,312 $ 92,312 (87,619) (87,619) (87,619) (87,619) (87,619) $ (59,212) $ (59,212) — — — — — $ 79,117 $ 79,117 (68,651) (68,651) (68,651) (68,651) (68,651) $ (99,632) $ (99,632) — — — — — $ 92,312 $ 92,312 $ 92,312 $ 92,312 $ 92,312 $ 33,100 $ 33,100 $ (59,212) $ (59,212) $ (59,212) $ (59,212) $ (59,212) $ 79,117 $ 79,117 $ 79,117 $ 79,117 $ 79,117 $ (20,515) $ (20,515) $ (99,632) $ (99,632) $ (99,632) $ (99,632) $ (99,632) Net deferred tax assets (liabilities) Net deferred tax assets (liabilities) Net deferred tax assets (liabilities) Net deferred tax assets (liabilities) Net deferred tax assets (liabilities) $ 33,100 $ 33,100 $ 33,100 $ 33,100 $ 33,100 $ (20,515) $ (20,515) $ (20,515) $ (20,515) $ (20,515) 194 (in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiability(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiability(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiability(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiability(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiability(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiability(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiabilityF I N A N C I A L R E S U LT S Notes to consolidated financial statements At December 31, 2019, we had $682.5 million in total net operating loss (NOL) carryforwards which included $394.0 million for Germany, $133.8 million for the U.S., $52.4 million for The Netherlands and $102.3 million for other foreign jurisdictions. Of the total $394.0 million NOL in Germany, there is no expiration and expect to be fully utilized in future years. The entire NOL in the U.S. is subject to limitations under Section 382 of the U.S. Internal Revenue Code. The NOLs in the U.S. will expire between 2024 through 2034. At December 31, 2019, we have $52.4 million of Netherlands net operating loss carryforwards before valuation allowance, which will expire in the year 2027. Of the total $102.3 million foreign NOL carryforwards, $25.4 million will expire between 2020 and 2028 while the rest of the NOLs can be carried forward indefinitely. At December 31, 2019, we had $280.0 million of disallowed interest carryforwards which can be carried forward indefinitely. At December 31, 2019, tax credits total $1.3 million which expire between 2030 and 2039. For the years ended December 31, 2019, 2018 and 2017, the changes in the valuation allowance charged to income tax expense totaled $19.0 million, $0.8 million and $62.3 million, respectively. The valuation allowance relates to disallowed interest carryforwards and net operating loss carryforwards. The Company can only recognize a deferred tax asset to the extent it is "more likely than not" that these assets will be realized. Judgments around realizability depend on the availability and weight of both positive and negative evidence. As of December 31, 2019, a deferred tax liability has not been recognized for residual income taxes in The Netherlands on the undistributed earnings of the majority of our foreign subsidiaries as these earnings are considered to be either indefinitely reinvested or can be repatriated tax free under the Dutch participation exemption. The indefinitely reinvested earnings retained of our subsidiaries that would be subject to tax if distributed amounted to $699.0 million at December 31, 2019. Estimating the amount of the unrecognized deferred tax liability on indefinitely reinvested foreign earnings is not practicable. Should the earnings be remitted as dividends, we may be subject to taxes including withholding tax. We have $26.4 million of undistributed earnings that we do not consider indefinitely reinvested and have recorded a deferred tax liability at December 31, 2019 and December 31, 2018, of $1.5 million and $0.9 million, respectively. 18. Equity 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. In connection with the issuance of the Cash Convertible Notes as described in Note 16 "Lines of Credit and Debt", 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. 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 $40.6 $28.3 $45.3 $72.4 December 27, 2018 December 29, 2020 June 26, 2023 August 27, 2024 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 195 SharesIssuance and Conversion of WarrantsCash convertible notesIssued onNumber of sharewarrants(in millions)Exercise price pershareProceeds from issuanceof warrants, net ofissuance costs (in millions)Warrants expire over aperiod of 50 tradingdays beginning onAt December 31, 2019, we had $682.5 million in total net operating loss (NOL) carryforwards which included $394.0 million for Germany, $133.8 million for the U.S., $52.4 million for The Netherlands and $102.3 million for other foreign jurisdictions. Of the total $394.0 million NOL in Germany, there is no expiration and expect to be fully utilized in future years. The entire NOL in the U.S. is subject to limitations under Section 382 of the U.S. Internal Revenue Code. The NOLs in the U.S. will expire between 2024 through 2034. At December 31, 2019, we have $52.4 million of Netherlands net operating loss carryforwards before valuation allowance, which will expire in the year 2027. Of the total $102.3 million foreign NOL carryforwards, $25.4 million will expire between 2020 and 2028 while the rest of the NOLs can be carried forward indefinitely. At December 31, 2019, we had $280.0 million of disallowed interest carryforwards which can be carried forward indefinitely. At December 31, 2019, tax credits total $1.3 million which expire between 2030 and 2039. For the years ended December 31, 2019, 2018 and 2017, the changes in the valuation allowance charged to income tax expense totaled $19.0 million, $0.8 million and $62.3 million, respectively. The valuation allowance relates to disallowed interest carryforwards and net operating loss carryforwards. The Company can only recognize a deferred tax asset to the extent it is "more likely than not" that these assets will be realized. Judgments around realizability depend on the availability and weight of both positive and negative evidence. As of December 31, 2019, a deferred tax liability has not been recognized for residual income taxes in The Netherlands on the undistributed earnings of the majority of our foreign subsidiaries as these earnings are considered to be either indefinitely reinvested or can be repatriated tax free under the Dutch participation exemption. The indefinitely reinvested earnings retained of our subsidiaries that would be subject to tax if distributed amounted to $699.0 million at December 31, 2019. Estimating the amount of the unrecognized deferred tax liability on indefinitely reinvested foreign earnings is not practicable. Should the earnings be remitted as dividends, we may be subject to taxes including withholding tax. We have $26.4 million of undistributed earnings that we do not consider indefinitely reinvested and have recorded a deferred tax liability at December 31, 2019 and December 31, 2018, of $1.5 million and $0.9 million, respectively. 18. Equity 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. In connection with the issuance of the Cash Convertible Notes as described in Note 16 "Lines of Credit and Debt", 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. 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 $40.6 $28.3 $45.3 $72.4 December 27, 2018 December 29, 2020 June 26, 2023 August 27, 2024 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). During 2019, 2.1 million common shares were issued in connection with the conversion of the 15.2 million warrants related to the 2019 Notes which resulted in a $31.1 million decrease to additional paid in capital, a $37.7 million decrease in retained earnings, a decrease of 68.8 million in treasury shares and an approximately $4 thousand cash payment for fractional shares. On May 6, 2019, we announced our sixth share repurchase program of up to $100 million of our common shares. During 2019, no shares were repurchased under this program. 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). During 2019, we repurchased 2.0 million QIAGEN shares for $74.5 million (including transaction costs), bringing the total shares repurchased under this program to 4.9 million for $179.1 million (including transaction costs). On April 27, 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). 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. 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 million, 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. 196 The following table is a summary of the components of accumulated other comprehensive loss as of December 31, 2019 and 2018: Foreign currency effects from intercompany long-term investment transactions, net of tax of $9.7 million and (22,587) (21,662) Net unrealized loss on hedging contracts, net of tax Net unrealized loss on pension, net of tax $9.3 million in 2019 and 2018, respectively Foreign currency translation adjustments Accumulated other comprehensive loss $ (2,289) $ (15,453) (561) (124) (284,182) (273,405) $ (309,619) $ (310,644) SharesIssuance and Conversion of WarrantsCash convertible notesIssued onNumber of sharewarrants(in millions)Exercise price pershareProceeds from issuanceof warrants, net ofissuance costs (in millions)Warrants expire over aperiod of 50 tradingdays beginning onShare Repurchase ProgramsSynthetic Share RepurchaseAccumulated Other Comprehensive Loss(in thousands)20192018a dilutive effect on shares of our common stock to the extent that the market value per share of our common stock 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). exceeds the applicable exercise price of the Warrants (as measured under the terms of the Warrants). During 2019, 2.1 million common shares were issued in connection with the conversion of the 15.2 million warrants During 2019, 2.1 million common shares were issued in connection with the conversion of the 15.2 million warrants related to the 2019 Notes which resulted in a $31.1 million decrease to additional paid in capital, a $37.7 million related to the 2019 Notes which resulted in a $31.1 million decrease to additional paid in capital, a $37.7 million decrease in retained earnings, a decrease of 68.8 million in treasury shares and an approximately $4 thousand decrease in retained earnings, a decrease of 68.8 million in treasury shares and an approximately $4 thousand cash payment for fractional shares. cash payment for fractional shares. On May 6, 2019, we announced our sixth share repurchase program of up to $100 million of our common shares. On May 6, 2019, we announced our sixth share repurchase program of up to $100 million of our common shares. During 2019, no shares were repurchased under this program. During 2019, no shares were repurchased under this program. On January 31, 2018, we announced our fifth share repurchase program of up to $200 million of our common 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). shares. During 2018, we repurchased 2.9 million QIAGEN shares for $104.7 million (including transaction costs). During 2019, we repurchased 2.0 million QIAGEN shares for $74.5 million (including transaction costs), bringing During 2019, we repurchased 2.0 million QIAGEN shares for $74.5 million (including transaction costs), bringing the total shares repurchased under this program to 4.9 million for $179.1 million (including transaction costs). the total shares repurchased under this program to 4.9 million for $179.1 million (including transaction costs). Balance at beginning of year Balance at beginning of year $ 55,780 $ 55,780 $ 44,033 $ 44,033 $ 18,294 $ 18,294 Additions based on tax positions related to the current year On April 27, 2016, we announced the launch of our fourth $100 million share repurchase program. During 2017, On April 27, 2016, we announced the launch of our fourth $100 million share repurchase program. During 2017, Additions based on tax positions related to the current year 5,770 5,770 3,359 3,359 12,212 12,212 Additions for tax positions of prior years Additions for tax positions of prior years 1.9 million QIAGEN shares were repurchased for $61.0 million (including transaction costs). 1.9 million QIAGEN shares were repurchased for $61.0 million (including transaction costs). 14,532 14,532 11,984 11,984 9,933 9,933 Decrease for tax position of prior years Decrease for tax position of prior years (9,073) (9,073) The cost of repurchased shares is included in treasury stock and reported as a reduction in total equity when a The cost of repurchased shares is included in treasury stock and reported as a reduction in total equity when a Decrease related to settlements repurchase occurs. Repurchased shares will be held in treasury in order to satisfy various obligations, which include repurchase occurs. Repurchased shares will be held in treasury in order to satisfy various obligations, which include Decrease related to settlements (7,605) (7,605) Decrease due to lapse of statute of limitations exchangeable debt instruments, warrants and employee share-based remuneration plans. exchangeable debt instruments, warrants and employee share-based remuneration plans. Decrease due to lapse of statute of limitations (409) (409) (1,238) (1,238) — — — — — — — — — — (Decrease) increase from currency translation (Decrease) increase from currency translation (993) (993) (2,358) (2,358) 3,594 3,594 Balance at end of year Balance at end of year $ 58,002 $ 58,002 $ 55,780 $ 55,780 $ 44,033 $ 44,033 At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and At December 31, 2019 and 2018, our net unrecognized tax benefits totaled approximately $58.0 million and In August 2016, we announced our plan to return approximately $250.0 million to shareholders through a synthetic 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 share repurchase program that combines a direct capital repayment with a reverse stock split. The synthetic share $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It $55.8 million, respectively, which, if recognized, would favorably affect our effective tax rate in any future period. It repurchase was implemented through a series of amendments to our Articles of Association which were approved by repurchase was implemented through a series of amendments to our Articles of Association which were approved by is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized is reasonably possible that approximately $31.4 million of the unrecognized tax benefits may be released or utilized during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various 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 events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever involved an increase in share capital by an increase in the nominal value per common share from EUR 0.01 to EUR involved an increase in share capital by an increase in the nominal value per common share from EUR 0.01 to EUR our shareholders at an Extraordinary General Meeting (EGM) held on October 26, 2016. The first amendment our shareholders at an Extraordinary General Meeting (EGM) held on October 26, 2016. The first amendment recognized in the financial statements, would be recorded in the statements of income as part of the income tax expense. 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 Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and synthetic share buyback, $243.9 million was repaid to our shareholders and the outstanding number of common penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a shares was reduced by 8.9 million, or 3.7%. The capital repayment program was completed in January 2017. net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, Expenses incurred related to the capital repayment and share consolidation amounted to $0.5 million and were 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in charged to equity. the table above. 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 F I N A N C I A L R E S U LT S Notes to consolidated financial statements 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 million, 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. Our policy is to recognize interest accrued related to an underpayment of income taxes in interest expense and penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, we recognized a net expense for interest and penalties of $1.6 million, $1.1 million and $1.5 million, respectively. At December 31, 2019 and 2018, we have accrued interest of $2.5 million and $4.1 million, respectively, which are not included in the table above. recognized in the financial statements, would be recorded in the statements of income as part of the income tax expense. We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of The following table is a summary of the components of accumulated other comprehensive loss as of December 31, The following table is a summary of the components of accumulated other comprehensive loss as of December 31, $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at 2019 and 2018: 2019 and 2018: December 31, 2019 and 2018 are as follows: We have recorded net deferred tax assets of $33.1 million at December 31, 2019 and net deferred tax liabilities of $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at December 31, 2019 and 2018 are as follows: Net unrealized loss on hedging contracts, net of tax Net unrealized loss on hedging contracts, net of tax Net unrealized loss on pension, net of tax Net unrealized loss on pension, net of tax $ (2,289) $ (2,289) $ (15,453) $ (15,453) (561) (561) (124) (124) $ — $ — (1,725) (1,725) (4,855) (4,855) — — — — — — (3,614) (3,614) (99,632) (99,632) Net operating loss and tax credit carryforward Foreign currency effects from intercompany long-term investment transactions, net of tax of $9.7 million and $9.3 million in 2019 and 2018, respectively Foreign currency effects from intercompany long-term investment transactions, net of tax of $9.7 million and $9.3 million in 2019 and 2018, respectively Net operating loss and tax credit carryforward $ 50,274 Accrued and other liabilities Accrued and other liabilities 17,977 Inventory Foreign currency translation adjustments Foreign currency translation adjustments Inventory Unrealized gain (loss) on investments Unrealized gain (loss) on investments Accumulated other comprehensive loss Accumulated other comprehensive loss Property, plant and equipment Property, plant and equipment Intangible assets 19. Earnings per Common Share 19. Earnings per Common Share 19. Earnings per Common Share 19. Earnings per Common Share Intangible assets 4,726 — 5,297 1,078 $ 50,274 (22,587) $ — (22,587) $ — (21,662) $ 27,293 $ 27,293 (21,662) 17,977 — — 15,480 15,480 — — (284,182) 4,726 (1,439) (284,182) $ (309,619) — (4,973) $ (309,619) (273,405) (273,405) (1,439) 3,978 3,978 $ (310,644) (4,973) $ (310,644) 3,280 3,280 5,297 (20,332) (20,332) 3,604 3,604 (25,448) (25,448) 1,078 (26,294) (26,294) 1,721 1,721 (63,990) (63,990) Share-based compensation Share-based compensation 13,787 13,787 — — 17,998 17,998 Disallowed interest carryforwards Convertible notes Other Disallowed interest carryforwards We present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net (loss) We present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net (loss) We present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net (loss) We present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net (loss) income by the weighted average number of common shares outstanding. Diluted earnings per share reflect the income by the weighted average number of common shares outstanding. Diluted earnings per share reflect the income by the weighted average number of common shares outstanding. Diluted earnings per share reflect the income 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. Due to the potential dilution that would occur if all “in the money” securities to issue common shares were exercised. Due to the potential dilution that would occur if all “in the money” securities to issue common shares were exercised. Due to the potential dilution that would occur if all “in the money” securities to issue common shares were exercised. Due to the net loss for the year ended December 31, 2019, stock options and restricted stock units representing approximately net loss for the year ended December 31, 2019, stock options and restricted stock units representing approximately net loss for the year ended December 31, 2019, stock options and restricted stock units representing approximately net loss for the year ended December 31, 2019, stock options and restricted stock units representing approximately 3.9 million weighted-average shares of common stock and warrants representing 1.7 million shares of common stock 3.9 million weighted-average shares of common stock and warrants representing 1.7 million shares of common stock 3.9 million weighted-average shares of common stock and warrants representing 1.7 million shares of common stock 3.9 million weighted-average shares of common stock and warrants representing 1.7 million shares of common stock were excluded from the computation of diluted net loss because the impact would have been antidilutive. were excluded from the computation of diluted net loss because the impact would have been antidilutive. were excluded from the computation of diluted net loss because the impact would have been antidilutive. were excluded from the computation of diluted net loss because the impact would have been antidilutive. Convertible notes 179,931 (59,212) 73,690 (6,174) 7,104 5,998 179,931 (59,212) 73,690 (6,174) 7,104 5,998 Other — — — — 60,458 60,458 8,102 8,102 5,854 5,854 147,768 147,768 Valuation allowance Valuation allowance (87,619) (87,619) — — (68,651) (68,651) — — The following schedule summarizes the information used to compute earnings per common share: The following schedule summarizes the information used to compute earnings per common share: $ (59,212) The following schedule summarizes the information used to compute earnings per common share: The following schedule summarizes the information used to compute earnings per common share: $ 92,312 $ 92,312 $ (59,212) $ 79,117 $ 79,117 $ (99,632) $ (99,632) Net deferred tax assets (liabilities) Net deferred tax assets (liabilities) $ 33,100 $ 33,100 $ (20,515) $ (20,515) Net (loss) income Net (loss) income Net (loss) income Net (loss) income $ (41,455) $ (41,455) $ (41,455) $ (41,455) $ 190,380 $ 190,380 $ 190,380 $ 190,380 $ 40,394 $ 40,394 $ 40,394 $ 40,394 Weighted average number of common shares used to compute basic net income per Weighted average number of common shares used to compute basic net income per common share common share Weighted average number of common shares used to compute basic net income per Weighted average number of common shares used to compute basic net income per common share common share 226,777 226,777 226,777 226,777 226,640 226,640 226,640 226,640 228,074 228,074 228,074 228,074 Dilutive effect of stock options and restrictive stock units Dilutive effect of stock options and restrictive stock units Dilutive effect of stock options and restrictive stock units Dilutive effect of stock options and restrictive stock units Dilutive effect of outstanding warrants Dilutive effect of outstanding warrants Dilutive effect of outstanding warrants Dilutive effect of outstanding warrants — — — — — — — — 4,613 4,613 4,613 4,613 4,760 4,760 4,760 4,760 2,203 2,203 2,203 2,203 175 175 175 175 Weighted average number of common shares used to compute diluted net income per Weighted average number of common shares used to compute diluted net income per common share common share Weighted average number of common shares used to compute diluted net income per Weighted average number of common shares used to compute diluted net income per common share common share 226,777 226,777 226,777 226,777 233,456 233,456 233,456 233,456 233,009 233,009 233,009 233,009 Outstanding options and awards having no dilutive effect, not included in above Outstanding options and awards having no dilutive effect, not included in above calculation calculation Outstanding options and awards having no dilutive effect, not included in above Outstanding options and awards having no dilutive effect, not included in above calculation calculation 107 107 107 107 272 272 272 272 52 52 52 52 Outstanding warrants having no dilutive effect, not included in above calculation Outstanding warrants having no dilutive effect, not included in above calculation Outstanding warrants having no dilutive effect, not included in above calculation Outstanding warrants having no dilutive effect, not included in above calculation 32,938 32,938 32,938 32,938 35,939 35,939 35,939 35,939 30,434 30,434 30,434 30,434 Basic (loss) earnings per common share Basic (loss) earnings per common share Basic (loss) earnings per common share Basic (loss) earnings per common share $ (0.18) $ (0.18 ) $ (0.18 ) $ (0.18 ) $ 0.84 $ 0.84 $ 0.84 $ 0.84 $ 0.18 $ 0.18 $ 0.18 $ 0.18 Diluted (loss) earnings per common share Diluted (loss) earnings per common share Diluted (loss) earnings per common share Diluted (loss) earnings per common share $ (0.18) $ (0.18 ) $ (0.18 ) $ (0.18 ) $ 0.82 $ 0.82 $ 0.82 $ 0.82 $ 0.17 $ 0.17 $ 0.17 $ 0.17 20. Commitments and Contingencies 20. Commitments and Contingencies 20. Commitments and Contingencies 20. Commitments and Contingencies We have licensing agreements with companies, universities and individuals, some of which require certain up-front We have licensing agreements with companies, universities and individuals, some of which require certain up-front We have licensing agreements with companies, universities and individuals, some of which require certain up-front 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 payments. Royalty payments are required on net product sales ranging from 0.45 percent to 25 percent of covered payments. Royalty payments are required on net product sales ranging from 0.45 percent to 25 percent of covered 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 products or based on quantities sold. Several of these agreements have minimum royalty requirements. The products or based on quantities sold. Several of these agreements have minimum royalty requirements. The products or based on quantities sold. Several of these agreements have minimum royalty requirements. The 197 accompanying consolidated balance sheets include accrued royalties relating to these agreements in the amount of accompanying consolidated balance sheets include accrued royalties relating to these agreements in the amount of accompanying consolidated balance sheets include accrued royalties relating to these agreements in the amount of accompanying consolidated balance sheets include accrued royalties relating to these agreements in the amount of $5.5 million at December 31, 2019 and 2018. Royalty expense relating to these agreements amounted to $13.5 $5.5 million at December 31, 2019 and 2018. Royalty expense relating to these agreements amounted to $13.5 $5.5 million at December 31, 2019 and 2018. Royalty expense relating to these agreements amounted to $13.5 $5.5 million at December 31, 2019 and 2018. Royalty expense relating to these agreements amounted to $13.5 million, $14.0 million, and $16.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. million, $14.0 million, and $16.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. million, $14.0 million, and $16.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. million, $14.0 million, and $16.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. Royalty expense is primarily recorded in cost of sales, with a small portion recorded as research and development Royalty expense is primarily recorded in cost of sales, with a small portion recorded as research and development Royalty expense is primarily recorded in cost of sales, with a small portion recorded as research and development 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 expense depending on the use of the technology under license. Some of these agreements also have minimum raw expense depending on the use of the technology under license. Some of these agreements also have minimum raw 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. material purchase requirements and requirements to perform specific types of research. material purchase requirements and requirements to perform specific types of research. material purchase requirements and requirements to perform specific types of research. At December 31, 2019, we had commitments to purchase goods or services, and for future license and royalty At December 31, 2019, we had commitments to purchase goods or services, and for future license and royalty At December 31, 2019, we had commitments to purchase goods or services, and for future license and royalty At December 31, 2019, we had commitments to purchase goods or services, and for future license and royalty payments. They are as follows: payments. They are as follows: payments. They are as follows: payments. They are as follows: Licensing and Purchase Commitments(in thousands, except per share data)Years ended December 31,201920182017Share Repurchase ProgramsSynthetic Share RepurchaseAccumulated Other Comprehensive Loss(in thousands)20192018(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiability(in thousands)201920182017(in thousands)20192018Deferred Tax AssetDeferred TaxLiabilityDeferred Tax AssetDeferred TaxLiabilityShare Repurchase ProgramsSynthetic Share RepurchaseAccumulated Other Comprehensive Loss(in thousands)20192018Licensing and Purchase Commitments(in thousands, except per share data)Years ended December 31,201920182017Licensing and Purchase Commitments(in thousands, except per share data)Years ended December 31,201920182017Licensing and Purchase Commitments(in thousands, except per share data)Years ended December 31,201920182017 19. Earnings per Common Share We present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net (loss) income 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. Due to the net loss for the year ended December 31, 2019, stock options and restricted stock units representing approximately 3.9 million weighted-average shares of common stock and warrants representing 1.7 million shares of common stock were excluded from the computation of diluted net loss because the impact would have been antidilutive. The following schedule summarizes the information used to compute earnings per common share: Net (loss) income $ (41,455) $ 190,380 $ 40,394 Weighted average number of common shares used to compute basic net income per 226,777 226,640 228,074 Dilutive effect of stock options and restrictive stock units Dilutive effect of outstanding warrants — — 4,613 2,203 4,760 175 Weighted average number of common shares used to compute diluted net income per 226,777 233,456 233,009 common share common share Outstanding options and awards having no dilutive effect, not included in above calculation 107 272 52 Outstanding warrants having no dilutive effect, not included in above calculation 32,938 35,939 30,434 Basic (loss) earnings per common share Diluted (loss) earnings per common share $ (0.18) $ (0.18) $ 0.84 $ 0.82 $ 0.18 $ 0.17 20. Commitments and Contingencies 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 balance sheets include accrued royalties relating to these agreements in the amount of $5.5 million at December 31, 2019 and 2018. Royalty expense relating to these agreements amounted to $13.5 million, $14.0 million, and $16.8 million for the years ended December 31, 2019, 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, 2019, we had commitments to purchase goods or services, and for future license and royalty payments. They are as follows: 2020 2021 2022 2023 2024 Thereafter $ 126,121 $ 11,434 35,915 26,337 3,223 3,000 — 9,012 6,507 4,382 1,823 4,297 $ 194,596 $ 37,455 As of December 31, 2019, future license payments of $10.0 million and $14.5 million are included in accrued and other current liabilities and other long-term liabilities, respectively. 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 $179.4 million based on the achievement of certain revenue and operating results milestones as follows: 2020 2021 2022 2024 Anytime 12-month period from now until 2028 $ 152,750 11,800 5,900 5,900 3,000 $ 179,350 Of the $179.4 million total contingent obligation as discussed further in Note 15 "Financial Instruments and Fair Value Measurements", we have assessed the fair value at December 31, 2019 to be $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet. 198 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, 2019, the commitment under these agreements totaled $6.2 million. In the ordinary course of business, we provide a warranty to customers that our products are free of defects and will conform to published specifications. Generally, the applicable product warranty period is one year from the date of delivery of the product to the customer or of site acceptance, if required. Additionally, we typically provide limited warranties with respect to our services. From time to time, we also make other warranties to customers, including warranties that our products are manufactured in accordance with applicable laws and not in violation of third-party rights. We provide for estimated warranty costs at the time of the product sale. We believe our warranty reserves as of December 31, 2019 and 2018 appropriately reflect the estimated cost of such warranty obligations. The changes in the carrying amount of warranty obligations for the years ended December 31, 2019 and 2018 are as follows: Licensing and Purchase Commitments(in thousands, except per share data)Years ended December 31,201920182017Contingent Consideration CommitmentsEmployment AgreementsContingencies(in thousands)PurchaseCommitmentsLicense & RoyaltyCommitments(in thousands)Contingent CashPayments 2020 2021 2022 2023 2024 Thereafter As of December 31, 2019, future license payments of $10.0 million and $14.5 million are included in accrued and other current liabilities and other long-term liabilities, respectively. 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 $179.4 million based on the achievement of certain revenue and operating results milestones as follows: $ 126,121 $ 11,434 35,915 26,337 3,223 3,000 — 9,012 6,507 4,382 1,823 4,297 $ 194,596 $ 37,455 $ 152,750 11,800 5,900 5,900 3,000 $ 179,350 2020 2021 F I N A N C I A L R E S U LT S Notes to consolidated financial statements 2022 2024 Anytime 12-month period from now until 2028 Of the $179.4 million total contingent obligation as discussed further in Note 15 "Financial Instruments and Fair Value Measurements", we have assessed the fair value at December 31, 2019 to be $162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet. 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, 2019, the commitment under these agreements totaled $6.2 million. In the ordinary course of business, we provide a warranty to customers that our products are free of defects and will conform to published specifications. Generally, the applicable product warranty period is one year from the date of delivery of the product to the customer or of site acceptance, if required. Additionally, we typically provide limited warranties with respect to our services. From time to time, we also make other warranties to customers, including warranties that our products are manufactured in accordance with applicable laws and not in violation of third-party rights. We provide for estimated warranty costs at the time of the product sale. We believe our warranty reserves as of December 31, 2019 and 2018 appropriately reflect the estimated cost of such warranty obligations. The changes in the carrying amount of warranty obligations for the years ended December 31, 2019 and 2018 are as follows: Balance at beginning of year Balance at beginning of year Balance at beginning of year Balance at beginning of year Provision charged to cost of sales Provision charged to cost of sales Provision charged to cost of sales Provision charged to cost of sales Usage Usage Usage Usage Adjustments to previously provided warranties, net Adjustments to previously provided warranties, net Adjustments to previously provided warranties, net Adjustments to previously provided warranties, net Currency translation Currency translation Currency translation Currency translation Balance at end of year Balance at end of year Balance at end of year Balance at end of year $ 2,848 $ 2,848 $ 2,848 $ 2,848 $ 3,051 $ 3,051 $ 3,051 $ 3,051 3,229 3,229 3,229 3,229 2,892 2,892 2,892 2,892 (2,921) (2,921) (2,921) (2,921) (2,760) (2,760) (2,760) (2,760) (1) (1) (1) (1) (243) (243) (243) (243) (14) (14) (14) (14) (92) (92) (92) (92) $ 3,141 $ 3,141 $ 3,141 $ 3,141 $ 2,848 $ 2,848 $ 2,848 $ 2,848 From time to time, we may be party to legal proceedings incidental to our business. As of December 31, 2019, From time to time, we may be party to legal proceedings incidental to our business. As of December 31, 2019, From time to time, we may be party to legal proceedings incidental to our business. As of December 31, 2019, From time to time, we may be party to legal proceedings incidental to our business. As of December 31, 2019, certain claims, suits or legal proceedings arising out of the normal course of business have been filed or were certain claims, suits or legal proceedings arising out of the normal course of business have been filed or were certain claims, suits or legal proceedings arising out of the normal course of business have been filed or were 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 pending against QIAGEN or our subsidiaries. These matters have arisen in the ordinary course and conduct of pending against QIAGEN or our subsidiaries. These matters have arisen in the ordinary course and conduct of 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 business, as well as through acquisition. Although it is not possible to predict the outcome of such litigation, we business, as well as through acquisition. Although it is not possible to predict the outcome of such litigation, we 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 assess the degree of probability and evaluate the reasonably possible losses that we could incur as a result of these assess the degree of probability and evaluate the reasonably possible losses that we could incur as a result of these 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 matters. We accrue for any estimated loss when it is probable that a liability has been incurred and the amount of matters. We accrue for any estimated loss when it is probable that a liability has been incurred and the amount of 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. probable loss can be estimated. probable loss can be estimated. probable loss can be estimated. Litigation accruals recorded in accrued and other current liabilities totaled $0.8 million and $6.0 million as of Litigation accruals recorded in accrued and other current liabilities totaled $0.8 million and $6.0 million as of Litigation accruals recorded in accrued and other current liabilities totaled $0.8 million and $6.0 million as of Litigation accruals recorded in accrued and other current liabilities totaled $0.8 million and $6.0 million as of December 31, 2019 and 2018, respectively. The estimated amount of a range of possible losses is between $0.3 December 31, 2019 and 2018, respectively. The estimated amount of a range of possible losses is between $0.3 December 31, 2019 and 2018, respectively. The estimated amount of a range of possible losses is between $0.3 December 31, 2019 and 2018, respectively. The estimated amount of a range of possible losses is between $0.3 million and $2.2 million. During the year ended December 31, 2019, payments of $5.4 million related to previous million and $2.2 million. During the year ended December 31, 2019, payments of $5.4 million related to previous million and $2.2 million. During the year ended December 31, 2019, payments of $5.4 million related to previous million and $2.2 million. During the year ended December 31, 2019, payments of $5.4 million related to previous matters were made. Based on the facts known to QIAGEN and after consultation with legal counsel, management matters were made. Based on the facts known to QIAGEN and after consultation with legal counsel, management matters were made. Based on the facts known to QIAGEN and after consultation with legal counsel, management matters were made. 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 believes that such litigation will not have a material adverse effect on our financial position or results of operations believes that such litigation will not have a material adverse effect on our financial position or results of operations 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 above the amounts accrued. However, the outcome of these matters is ultimately uncertain, thus any settlements or above the amounts accrued. However, the outcome of these matters is ultimately uncertain, thus any settlements or 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 judgments against us in excess of management's expectations could have a material adverse effect on our financial judgments against us in excess of management's expectations could have a material adverse effect on our financial 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. position, results of operations or cash flows. position, results of operations or cash flows. position, results of operations or cash flows. For the year ended December 31, 2017, we had settlement amounts related to various acquisition-related litigation 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 matters totaling $49.2 million, primarily related to PCR-based biomarker disputes and patent litigation, which were 199 settled during 2017 of which $45.3 million was recorded to restructuring, acquisition, integration and other, net and settled during 2017 of which $45.3 million was recorded to restructuring, acquisition, integration and other, net and $3.9 million was recorded as a license right. $44.8 million of the settlement amounts were paid during 2017 and as $3.9 million was recorded as a license right. $44.8 million of the settlement amounts were paid during 2017 and as For the year ended December 31, 2017, we had settlement amounts related to various acquisition-related litigation 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 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 restructuring, acquisition, integration and other, net and settled during 2017 of which $45.3 million was recorded to restructuring, acquisition, integration and other, net and $3.9 million was recorded as a license right. $44.8 million of the settlement amounts were paid during 2017 and as $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 accrued and other current liabilities. of December 31, 2017, $4.4 million was accrued in accrued and other current liabilities. of December 31, 2017, $4.4 million was accrued in accrued and other current liabilities. of December 31, 2017, $4.4 million was accrued in accrued and other current liabilities. 21. Segment Information 21. Segment Information 21. Segment Information 21. Segment Information We operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) We operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) We operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) We operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. We have a common basis of organization Accounting Standards Codification (ASC) Topic 280, Segment Reporting. We have a common basis of organization Accounting Standards Codification (ASC) Topic 280, Segment Reporting. We have a common basis of organization Accounting Standards Codification (ASC) Topic 280, Segment Reporting. We have a common basis of organization and our products and services are offered globally. Considering the acquisitions made during 2019 and our and our products and services are offered globally. Considering the acquisitions made during 2019 and our and our products and services are offered globally. Considering the acquisitions made during 2019 and our and our products and services are offered globally. Considering the acquisitions made during 2019 and our continued restructuring and streamlining of the growing organization, our chief operating decision maker (CODM) continued restructuring and streamlining of the growing organization, our chief operating decision maker (CODM) continued restructuring and streamlining of the growing organization, our chief operating decision maker (CODM) 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 continues to make decisions with regards to business operations and resource allocation based on evaluations of continues to make decisions with regards to business operations and resource allocation based on evaluations of continues to make decisions with regards to business operations and resource allocation based on evaluations of QIAGEN as a whole. Accordingly, we operate and make decisions as one business segment. Product category and QIAGEN as a whole. Accordingly, we operate and make decisions as one business segment. Product category and QIAGEN as a whole. Accordingly, we operate and make decisions as one business segment. Product category and QIAGEN as a whole. Accordingly, we operate and make decisions as one business segment. Product category and geographic information follows below. geographic information follows below. geographic information follows below. geographic information follows below. Net sales for the product categories are attributed based on those revenues related to sample and assay products Net sales for the product categories are attributed based on those revenues related to sample and assay products Net sales for the product categories are attributed based on those revenues related to sample and assay products 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. and similarly related revenues including bioinformatics solutions, and revenues derived from instrumentation sales. and similarly related revenues including bioinformatics solutions, and revenues derived from instrumentation sales. 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. Refer to Note 4 "Revenue" for disaggregation of revenue based on product categories and customer class. Refer to Note 4 "Revenue" for disaggregation of revenue based on product categories and customer class. Refer to Note 4 "Revenue" for disaggregation of revenue based on product categories and customer class. Net sales are attributed to countries based on the location of the customer. QIAGEN operates manufacturing Net sales are attributed to countries based on the location of the customer. QIAGEN operates manufacturing Net sales are attributed to countries based on the location of the customer. QIAGEN operates manufacturing 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 facilities in Germany, China, and the United States that supply products to customers as well as QIAGEN facilities in Germany, China, and the United States that supply products to customers as well as QIAGEN facilities in Germany, China, and the United States that supply products to customers as well as QIAGEN Contingent Consideration CommitmentsEmployment AgreementsContingencies(in thousands)PurchaseCommitmentsLicense & RoyaltyCommitments(in thousands)Contingent CashPaymentsLitigationProduct Category InformationGeographical Information(in thousands)20192018LitigationProduct Category InformationGeographical Information(in thousands)20192018LitigationProduct Category InformationGeographical Information(in thousands)20192018LitigationProduct Category InformationGeographical Information(in thousands)20192018Balance at beginning of year Provision charged to cost of sales Usage Currency translation Balance at end of year Adjustments to previously provided warranties, net $ 2,848 3,229 (2,921) (1) (14) $ 3,051 2,892 (2,760) (243) (92) $ 3,141 $ 2,848 From time to time, we may be party to legal proceedings incidental to our business. As of December 31, 2019, 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 $0.8 million and $6.0 million as of December 31, 2019 and 2018, respectively. The estimated amount of a range of possible losses is between $0.3 million and $2.2 million. During the year ended December 31, 2019, payments of $5.4 million related to previous matters were made. 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 restructuring, acquisition, integration and other, net 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 accrued and other current liabilities. 21. Segment Information We operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. We have a common basis of organization and our products and services are offered globally. Considering the acquisitions made during 2019 and 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 and make decisions as one business segment. Product category and geographic information follows below. 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. 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 subsidiaries in other countries. The intersegment portions of such net sales are excluded to derive consolidated net 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 sales. No single customer represents more than ten percent of consolidated net sales. Our country of domicile is the 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 $15.8 million, $15.9 million and $15.0 million for the years ended 2019, Netherlands, which reported net sales of $15.8 million, $15.9 million and $15.0 million for the years ended 2019, Netherlands, which reported net sales of $15.8 million, $15.9 million and $15.0 million for the years ended 2019, 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as shown in the table below. shown in the table below. shown in the table below. subsidiaries in other countries. The intersegment portions of such net sales are excluded to derive consolidated net 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 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 $15.8 million, $15.9 million and $15.0 million for the years ended 2019, Netherlands, which reported net sales of $15.8 million, $15.9 million and $15.0 million for the years ended 2019, 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as shown in the table below. shown in the table below. Americas: Americas: Americas: Americas: Americas: United States United States United States United States United States Other Americas Other Americas Other Americas Other Americas Other Americas Total Americas Total Americas Total Americas Total Americas Total Americas $ 663,869 $ 663,869 $ 663,869 $ 663,869 $ 663,869 $ 632,660 $ 632,660 $ 632,660 $ 632,660 $ 632,660 $ 579,906 $ 579,906 $ 579,906 $ 579,906 $ 579,906 58,121 58,121 58,121 58,121 58,121 60,359 60,359 60,359 60,359 60,359 73,478 73,478 73,478 73,478 73,478 721,990 721,990 721,990 721,990 721,990 693,019 693,019 693,019 693,019 693,019 653,384 653,384 653,384 653,384 653,384 Europe, Middle East and Africa Europe, Middle East and Africa Europe, Middle East and Africa Europe, Middle East and Africa Europe, Middle East and Africa 487,476 487,476 487,476 487,476 487,476 490,301 490,301 490,301 490,301 490,301 462,980 462,980 462,980 462,980 462,980 Asia Pacific, Japan and Rest of World Asia Pacific, Japan and Rest of World Asia Pacific, Japan and Rest of World Asia Pacific, Japan and Rest of World Asia Pacific, Japan and Rest of World 316,958 316,958 316,958 316,958 316,958 318,528 318,528 318,528 318,528 318,528 301,172 301,172 301,172 301,172 301,172 Total Total Total Total Total $ 1,526,424 $ 1,526,424 $ 1,526,424 $ 1,526,424 $ 1,526,424 $ 1,501,848 $ 1,501,848 $ 1,501,848 $ 1,501,848 $ 1,501,848 $ 1,417,536 $ 1,417,536 $ 1,417,536 $ 1,417,536 $ 1,417,536 Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, respectively. respectively. respectively. respectively. respectively. 200 Americas: Americas: Americas: Americas: Americas: United States United States United States United States United States Other Americas Other Americas Other Americas Other Americas Other Americas Total Americas Total Americas Total Americas Total Americas Total Americas Europe, Middle East and Africa: Europe, Middle East and Africa: Europe, Middle East and Africa: Europe, Middle East and Africa: Europe, Middle East and Africa: Germany Germany Germany Germany Germany Other Europe, Middle East and Africa Other Europe, Middle East and Africa Other Europe, Middle East and Africa Other Europe, Middle East and Africa Other Europe, Middle East and Africa Total Europe, Middle East and Africa Total Europe, Middle East and Africa Total Europe, Middle East and Africa Total Europe, Middle East and Africa Total Europe, Middle East and Africa Asia Pacific and Japan Asia Pacific and Japan Asia Pacific and Japan Asia Pacific and Japan Asia Pacific and Japan Total Total Total Total Total $ 147,027 $ 147,027 $ 147,027 $ 147,027 $ 147,027 $ 152,381 $ 152,381 $ 152,381 $ 152,381 $ 152,381 3,507 3,507 3,507 3,507 3,507 3,748 3,748 3,748 3,748 3,748 150,534 150,534 150,534 150,534 150,534 156,129 156,129 156,129 156,129 156,129 229,225 229,225 229,225 229,225 229,225 284,601 284,601 284,601 284,601 284,601 49,004 49,004 49,004 49,004 49,004 50,051 50,051 50,051 50,051 50,051 278,229 278,229 278,229 278,229 278,229 334,652 334,652 334,652 334,652 334,652 26,480 26,480 26,480 26,480 26,480 20,878 20,878 20,878 20,878 20,878 $ 455,243 $ 455,243 $ 455,243 $ 455,243 $ 455,243 $ 511,659 $ 511,659 $ 511,659 $ 511,659 $ 511,659 22. Share-Based Compensation 22. Share-Based Compensation 22. Share-Based Compensation 22. Share-Based Compensation 22. Share-Based Compensation We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN 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 N.V. 2014 Stock Plan (the 2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no further N.V. 2014 Stock Plan (the 2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no further N.V. 2014 Stock Plan (the 2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no further 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 awards will be granted under the 2005 Plan. The plans allow for the granting of stock rights and incentive stock awards will be granted under the 2005 Plan. The plans allow for the granting of stock rights and incentive stock awards will be granted under the 2005 Plan. The plans allow for the granting of stock rights and incentive stock 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 options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 5 or 10 options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 5 or 10 options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 5 or 10 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 years, subject to earlier termination in certain situations. The vesting and exercisability of certain stock rights will be years, subject to earlier termination in certain situations. The vesting and exercisability of certain stock rights will be years, subject to earlier termination in certain situations. The vesting and exercisability of certain stock rights will be 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 accelerated in the event of a Change of Control, as defined in the plans. All option grants have been at the market accelerated in the event of a Change of Control, as defined in the plans. All option grants have been at the market accelerated in the event of a Change of Control, as defined in the plans. All option grants have been at the market 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 value on the grant date or at a premium above the closing market price on the grant date. We issue Treasury Shares value on the grant date or at a premium above the closing market price on the grant date. We issue Treasury Shares value on the grant date or at a premium above the closing market price on the grant date. We issue Treasury Shares 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 15.7 million Common Shares reserved and to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at December 31, 2019. available for issuance under the 2005 and 2014 Plans at December 31, 2019. available for issuance under the 2005 and 2014 Plans at December 31, 2019. available for issuance under the 2005 and 2014 Plans at December 31, 2019. available for issuance under the 2005 and 2014 Plans at December 31, 2019. LitigationProduct Category InformationGeographical Information(in thousands)20192018Stock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsStock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsStock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsStock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsStock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetssubsidiaries in other countries. The intersegment portions of such net sales are excluded to derive consolidated net subsidiaries in other countries. The intersegment portions of such net sales are excluded to derive consolidated net subsidiaries in other countries. The intersegment portions of such net sales are excluded to derive consolidated net 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 sales. No single customer represents more than ten percent of consolidated net sales. Our country of domicile is the sales. No single customer represents more than ten percent of consolidated net sales. Our country of domicile is the 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 $15.8 million, $15.9 million and $15.0 million for the years ended 2019, Netherlands, which reported net sales of $15.8 million, $15.9 million and $15.0 million for the years ended 2019, Netherlands, which reported net sales of $15.8 million, $15.9 million and $15.0 million for the years ended 2019, Netherlands, which reported net sales of $15.8 million, $15.9 million and $15.0 million for the years ended 2019, 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as shown in the table below. shown in the table below. shown in the table below. shown in the table below. Americas: Americas: Americas: Americas: United States United States United States United States Other Americas Other Americas Other Americas Other Americas Total Americas Total Americas Total Americas Total Americas $ 663,869 $ 663,869 $ 663,869 $ 663,869 $ 632,660 $ 632,660 $ 632,660 $ 632,660 $ 579,906 $ 579,906 $ 579,906 $ 579,906 58,121 58,121 58,121 58,121 60,359 60,359 60,359 60,359 73,478 73,478 73,478 73,478 721,990 721,990 721,990 721,990 693,019 693,019 693,019 693,019 653,384 653,384 653,384 653,384 Europe, Middle East and Africa Europe, Middle East and Africa Europe, Middle East and Africa Europe, Middle East and Africa 487,476 487,476 487,476 487,476 490,301 490,301 490,301 490,301 462,980 462,980 462,980 462,980 Asia Pacific, Japan and Rest of World Asia Pacific, Japan and Rest of World Asia Pacific, Japan and Rest of World Asia Pacific, Japan and Rest of World 316,958 316,958 316,958 316,958 318,528 318,528 318,528 318,528 301,172 301,172 301,172 301,172 F I N A N C I A L R E S U LT S Notes to consolidated financial statements Total Total Total Total $ 1,526,424 $ 1,526,424 $ 1,526,424 $ 1,526,424 $ 1,501,848 $ 1,501,848 $ 1,501,848 $ 1,501,848 $ 1,417,536 $ 1,417,536 $ 1,417,536 $ 1,417,536 Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, respectively. respectively. respectively. respectively. Americas: Americas: Americas: Americas: United States United States United States United States Other Americas Other Americas Other Americas Other Americas Total Americas Total Americas Total Americas Total Americas Europe, Middle East and Africa: Europe, Middle East and Africa: Europe, Middle East and Africa: Europe, Middle East and Africa: Germany Germany Germany Germany Other Europe, Middle East and Africa Other Europe, Middle East and Africa Other Europe, Middle East and Africa Other Europe, Middle East and Africa Total Europe, Middle East and Africa Total Europe, Middle East and Africa Total Europe, Middle East and Africa Total Europe, Middle East and Africa Asia Pacific and Japan Asia Pacific and Japan Asia Pacific and Japan Asia Pacific and Japan Total Total Total Total $ 147,027 $ 147,027 $ 147,027 $ 147,027 $ 152,381 $ 152,381 $ 152,381 $ 152,381 3,507 3,507 3,507 3,507 3,748 3,748 3,748 3,748 150,534 150,534 150,534 150,534 156,129 156,129 156,129 156,129 229,225 229,225 229,225 229,225 284,601 284,601 284,601 284,601 49,004 49,004 49,004 49,004 50,051 50,051 50,051 50,051 278,229 278,229 278,229 278,229 334,652 334,652 334,652 334,652 26,480 26,480 26,480 26,480 20,878 20,878 20,878 20,878 $ 455,243 $ 455,243 $ 455,243 $ 455,243 $ 511,659 $ 511,659 $ 511,659 $ 511,659 22. Share-Based Compensation 22. Share-Based Compensation 22. Share-Based Compensation 22. Share-Based Compensation We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN 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 N.V. 2014 Stock Plan (the 2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no further N.V. 2014 Stock Plan (the 2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no further 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 awards will be granted under the 2005 Plan. The plans allow for the granting of stock rights and incentive stock awards will be granted under the 2005 Plan. The plans allow for the granting of stock rights and incentive stock 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 options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 5 or 10 options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 5 or 10 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 years, subject to earlier termination in certain situations. The vesting and exercisability of certain stock rights will be years, subject to earlier termination in certain situations. The vesting and exercisability of certain stock rights will be 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 accelerated in the event of a Change of Control, as defined in the plans. All option grants have been at the market accelerated in the event of a Change of Control, as defined in the plans. All option grants have been at the market 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 value on the grant date or at a premium above the closing market price on the grant date. We issue Treasury Shares value on the grant date or at a premium above the closing market price on the grant date. We issue Treasury Shares 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 15.7 million Common Shares reserved and to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and to satisfy option exercises and award releases and had approximately 15.7 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at December 31, 2019. available for issuance under the 2005 and 2014 Plans at December 31, 2019. available for issuance under the 2005 and 2014 Plans at December 31, 2019. available for issuance under the 2005 and 2014 Plans at December 31, 2019. We have not granted stock options since 2013. A summary of the status of employee stock options as of December 31, 2019 and changes during the year then ended is presented below: Outstanding at January 1, 2019 Exercised Expired Outstanding at December 31, 2019 Vested at December 31, 2019 Vested and expected to vest at December 31, 2019 898 (104) (2) 792 792 792 $ 20.04 $ 19.95 $ 17.51 $ 20.06 $ 20.06 $ 20.06 1.78 1.78 1.78 $ 10,891 $ 10,891 $ 10,891 The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was $2.0 million, $5.0 million and $3.3 million, respectively. The actual tax benefit for the tax deductions from option exercises totaled $0.5 million, $0.8 million, and $0.7 million during the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, 2019, there was no unrecognized share-based compensation expense related to employee stock option awards. At December 31, 2019, 2018 and 2017, 0.8 million, 0.9 million and 1.1 million options were exercisable at a weighted average price of $20.06, $20.04 and $19.54 per share, respectively. The options outstanding at December 31, 2019 expire in various years through 2023. 201 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 up to 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 6.2%. At December 31, 2019, there was $60.1 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 2.57 years. The weighted average grant date fair value of stock units granted during the years ended December 31, 2019, 2018 and 2017 was $37.28, $35.37 and $31.12, respectively. The total fair value of stock units that vested during the years ended December 31, 2019, 2018 and 2017 was $123.9 million, $54.3 million and $69.2 million, respectively. A summary of stock units as of December 31, 2019 and changes during the year are presented below: Outstanding at January 1, 2019 Granted Vested Forfeited Outstanding at December 31, 2019 Vested and expected to vest at December 31, 2019 8,343 1,618 (3,517) (1,261) 5,183 3,972 2.57 2.26 $ 175,199 $ 134,254 Share-based compensation expense before taxes for the years ended December 31, 2019, 2018 and 2017 totaled approximately $65.9 million, $40.1 million and $34.4 million, respectively, as shown in the table below. Stock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsStock UnitsCompensation ExpenseAll Employee OptionsNumber of Shares(in thousands)Weighted AverageExercise PriceWeighted AverageContractual Term (in years)Aggregate IntrinsicValue (in thousands)Stock UnitsStock Units (in thousands)Weighted AverageContractual Term (inyears)Aggregate IntrinsicValue (in thousands)Stock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsStock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsStock Options(in thousands)201920182017Net Sales(in thousands)20192018Long-lived assetsWe have not granted stock options since 2013. A summary of the status of employee stock options as of December 31, 2019 and changes during the year then ended is presented below: Outstanding at January 1, 2019 Exercised Expired Outstanding at December 31, 2019 Vested at December 31, 2019 Vested and expected to vest at December 31, 2019 898 (104) (2) 792 792 792 $ 20.04 $ 19.95 $ 17.51 $ 20.06 $ 20.06 $ 20.06 1.78 1.78 1.78 $ 10,891 $ 10,891 $ 10,891 The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was $2.0 million, $5.0 million and $3.3 million, respectively. The actual tax benefit for the tax deductions from option exercises totaled $0.5 million, $0.8 million, and $0.7 million during the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, 2019, there was no unrecognized share-based compensation expense related to employee stock option awards. At December 31, 2019, 2018 and 2017, 0.8 million, 0.9 million and 1.1 million options were exercisable at a weighted average price of $20.06, $20.04 and $19.54 per share, respectively. The options outstanding at December 31, 2019 expire in various years through 2023. 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 up to 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 6.2%. At December 31, 2019, there was $60.1 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 2.57 years. The weighted average grant date fair value of stock units granted during the years ended December 31, 2019, 2018 and 2017 was $37.28, $35.37 and $31.12, respectively. The total fair value of stock units that vested during the years ended December 31, 2019, 2018 and 2017 was $123.9 million, $54.3 million and $69.2 million, respectively. A summary of stock units as of December 31, 2019 and changes during the year are presented below: Outstanding at January 1, 2019 Granted Vested Forfeited Outstanding at December 31, 2019 Vested and expected to vest at December 31, 2019 8,343 1,618 (3,517) (1,261) 5,183 3,972 2.57 2.26 $ 175,199 $ 134,254 Share-based compensation expense before taxes for the years ended December 31, 2019, 2018 and 2017 totaled approximately $65.9 million, $40.1 million and $34.4 million, respectively, as shown in the table below. Cost of sales Cost of sales Cost of sales Cost of sales Research and development Research and development Research and development Research and development Sales and marketing Sales and marketing Sales and marketing Sales and marketing General and administrative General and administrative General and administrative General and administrative Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Share-based compensation expense Share-based compensation expense Share-based compensation expense Share-based compensation expense $ 2,493 $ 2,493 $ 2,493 $ 2,493 $ 2,879 $ 2,879 $ 2,879 $ 2,879 $ 2,641 $ 2,641 $ 2,641 $ 2,641 5,810 5,810 5,810 5,810 6,457 6,457 6,457 6,457 6,102 6,102 6,102 6,102 7,947 7,947 7,947 7,947 9,372 9,372 9,372 9,372 6,820 6,820 6,820 6,820 23,706 23,706 23,706 23,706 21,405 21,405 21,405 21,405 19,614 19,614 19,614 19,614 25,938 25,938 25,938 25,938 — — — — (735) (735) (735) (735) 65,894 65,894 65,894 65,894 40,113 40,113 40,113 40,113 34,442 34,442 34,442 34,442 Less: income tax benefit (1) Less: income tax benefit (1) Less: income tax benefit (1) Less: income tax benefit (1) 12,153 12,153 12,153 12,153 8,277 8,277 8,277 8,277 7,407 7,407 7,407 7,407 Net share-based compensation expense Net share-based compensation expense Net share-based compensation expense Net share-based compensation expense $ 53,741 $ 53,741 $ 53,741 $ 53,741 $ 31,836 $ 31,836 $ 31,836 $ 31,836 $ 27,035 $ 27,035 $ 27,035 $ 27,035 (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and 2017. totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and 2017. (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and 2017. 2017. Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were 202 compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were not material. not material. Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were not material. not material. 23. Employee Benefits 23. Employee Benefits 23. Employee Benefits 23. Employee Benefits We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined 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. contribution plan is qualified under Section 401(k) of the Internal Revenue Code, and covers substantially all U.S. contribution plan is qualified under Section 401(k) of the Internal Revenue Code, and covers substantially all U.S. 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 employees. Participants may contribute a portion of their compensation not exceeding a limit set annually by the employees. Participants may contribute a portion of their compensation not exceeding a limit set annually by the 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 Internal Revenue Service. This plan includes a provision for us to match a portion of employee contributions. Total Internal Revenue Service. This plan includes a provision for us to match a portion of employee contributions. Total 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, $4.0 expense under the 401(k) plans, including the plans acquired via business acquisitions, was $4.0 million, $4.0 expense under the 401(k) plans, including the plans acquired via business acquisitions, was $4.0 million, $4.0 expense under the 401(k) plans, including the plans acquired via business acquisitions, was $4.0 million, $4.0 million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a defined contribution plan which covers certain executives. We make matching contributions up to an established defined contribution plan which covers certain executives. We make matching contributions up to an established defined contribution plan which covers certain executives. We make matching contributions up to an established defined contribution plan which covers certain executives. We make matching contributions up to an established maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. We have five defined benefit, non-contributory retirement or termination plans that cover certain employees in We have five defined benefit, non-contributory retirement or termination plans that cover certain employees in We have five defined benefit, non-contributory retirement or termination plans that cover certain employees in 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 Germany, France, Japan, Italy and the United Arab Emirates. These defined benefit plans provide benefits to Germany, France, Japan, Italy and the United Arab Emirates. These defined benefit plans provide benefits to Germany, France, Japan, Italy and the United Arab Emirates. These defined benefit plans provide benefits to covered individuals satisfying certain age and/or service requirements. For certain plans, we calculate the vested covered individuals satisfying certain age and/or service requirements. For certain plans, we calculate the vested covered individuals satisfying certain age and/or service requirements. For certain plans, we calculate the vested covered individuals satisfying certain age and/or 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 benefits to which employees are entitled if they separate immediately. The benefits accrued on a pro-rata basis benefits to which employees are entitled if they separate immediately. The benefits accrued on a pro-rata basis 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 during the employees’ employment period are based on the individuals’ salaries, adjusted for inflation. The liability during the employees’ employment period are based on the individuals’ salaries, adjusted for inflation. The liability during the employees’ employment period are based on the individuals’ salaries, adjusted for inflation. The liability under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. 24. Related Party Transactions 24. Related Party Transactions 24. Related Party Transactions 24. Related Party Transactions From time to time, we have transactions with other companies in which we hold an interest, all of which are From time to time, we have transactions with other companies in which we hold an interest, all of which are From time to time, we have transactions with other companies in which we hold an interest, all of which are 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. individually and in the aggregate immaterial, as summarized in the table below. individually and in the aggregate immaterial, as summarized in the table below. individually and in the aggregate immaterial, as summarized in the table below. Net sales Net sales Net sales Net sales $ 20,002 $ 23,358 $ 3,852 $ 20,002 $ 20,002 $ 20,002 $ 23,358 $ 23,358 $ 23,358 $ 3,852 $ 3,852 $ 3,852 Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology Stock UnitsCompensation ExpenseAll Employee OptionsNumber of Shares(in thousands)Weighted AverageExercise PriceWeighted AverageContractual Term (in years)Aggregate IntrinsicValue (in thousands)Stock UnitsStock Units (in thousands)Weighted AverageContractual Term (inyears)Aggregate IntrinsicValue (in thousands)Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017Cost of sales Cost of sales Cost of sales Cost of sales Research and development Research and development Research and development Research and development Sales and marketing Sales and marketing Sales and marketing Sales and marketing General and administrative General and administrative General and administrative General and administrative Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net Restructuring, acquisition, integration and other, net $ 2,493 $ 2,493 $ 2,493 $ 2,879 $ 2,879 $ 2,879 $ 2,641 $ 2,641 $ 2,641 $ 2,493 5,810 5,810 7,947 7,947 23,706 23,706 25,938 5,810 5,810 7,947 7,947 23,706 23,706 25,938 25,938 $ 2,879 6,457 6,457 9,372 9,372 21,405 21,405 — 6,457 6,457 9,372 9,372 21,405 21,405 — — $ 2,641 6,102 6,102 6,820 6,820 19,614 19,614 (735) 6,102 6,102 6,820 6,820 19,614 19,614 (735) (735) Less: income tax benefit (1) Less: income tax benefit (1) Share-based compensation expense Share-based compensation expense F I N A N C I A L R E S U LT S Notes to consolidated financial statements Restructuring, acquisition, integration and other, net (735) Share-based compensation expense 34,442 Share-based compensation expense 34,442 Less: income tax benefit (1) 7,407 Less: income tax benefit (1) 7,407 Net share-based compensation expense $ 27,035 Net share-based compensation expense $ 27,035 (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which 2017. totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and 2017. 25,938 65,894 65,894 12,153 12,153 $ 53,741 $ 53,741 (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which (1) Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and totaled $4.0 million, $4.7 million and $5.2 million, respectively, for the years ended December 31, 2019, 2018 and 2017. 2017. — 40,113 40,113 8,277 8,277 $ 31,836 $ 31,836 Net share-based compensation expense Net share-based compensation expense $ 31,836 $ 31,836 $ 53,741 $ 53,741 12,153 12,153 65,894 65,894 40,113 40,113 8,277 8,277 $ 27,035 $ 27,035 34,442 34,442 7,407 7,407 Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were not material. not material. Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 Share-based compensation expense includes amounts related to the restructuring programs discussed in Note 6 "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based "Restructuring and Impairment", including accelerated expense in 2019 and net forfeitures in 2017. No share-based compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were compensation costs were capitalized for the years ended December 31, 2019, 2018 or 2017 as the amounts were not material. not material. 23. Employee Benefits 23. Employee Benefits 23. Employee Benefits 23. Employee Benefits We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined 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. 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 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 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, $4.0 expense under the 401(k) plans, including the plans acquired via business acquisitions, was $4.0 million, $4.0 million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a defined contribution plan which covers certain executives. We make matching contributions up to an established defined contribution plan which covers certain executives. We make matching contributions up to an established maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined 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. 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 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 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, $4.0 expense under the 401(k) plans, including the plans acquired via business acquisitions, was $4.0 million, $4.0 million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a million and $3.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. We also have a defined contribution plan which covers certain executives. We make matching contributions up to an established defined contribution plan which covers certain executives. We make matching contributions up to an established maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million maximum. Matching contributions made to the plan, and expensed, totaled approximately $0.2 million, $0.2 million and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. and $0.3 million in each year ended December 31, 2019, 2018 and 2017, respectively. We have five defined benefit, non-contributory retirement or termination plans that cover certain employees in 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 Germany, France, Japan, Italy and the United Arab Emirates. These defined benefit plans provide benefits to covered individuals satisfying certain age and/or service requirements. For certain plans, we calculate the vested covered individuals satisfying certain age and/or 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 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 during the employees’ employment period are based on the individuals’ salaries, adjusted for inflation. The liability under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. We have five defined benefit, non-contributory retirement or termination plans that cover certain employees in 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 Germany, France, Japan, Italy and the United Arab Emirates. These defined benefit plans provide benefits to covered individuals satisfying certain age and/or service requirements. For certain plans, we calculate the vested covered individuals satisfying certain age and/or 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 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 during the employees’ employment period are based on the individuals’ salaries, adjusted for inflation. The liability under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, under the defined benefit plans was $8.2 million at December 31, 2019 and $7.4 million at December 31, 2018, and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets. 24. Related Party Transactions 24. Related Party Transactions 24. Related Party Transactions 24. Related Party Transactions From time to time, we have transactions with other companies in which we hold an interest, all of which are 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. individually and in the aggregate immaterial, as summarized in the table below. From time to time, we have transactions with other companies in which we hold an interest, all of which are 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. individually and in the aggregate immaterial, as summarized in the table below. Net sales Net sales Net sales Net sales $ 20,002 $ 20,002 $ 20,002 $ 20,002 $ 23,358 $ 23,358 $ 23,358 $ 23,358 $ 3,852 $ 3,852 $ 3,852 $ 3,852 Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology Co., Ltd which was terminated in conjunction with the 2019 restructuring activities discussed further in Note 6 "Restructuring and Impairments" which also details related party restructuring charges. Accounts receivable Prepaid expenses and other current assets Other long-term assets Accounts payable Accrued and other current liabilities $ 7,589 $ 13,697 $ 16,830 $ 1,775 $ 15,404 $ 10,109 $ 3,873 $ 24,300 $ 4,888 $ 5,488 Prepaid expenses and other current assets include short-term loan receivables and supplier advances from companies 203 with which we have an investment or partnership interest. In connection with the 2019 Restructuring further discussed in Note 6 "Restructuring and Impairments", we entered into a agreement with a non-publicly traded company considered a related party to reduce future purchase commitments to $25.2 million through 2022. The commitment was reduced by $12.8 million which will be paid in 2020 and is included in accrued and other current liabilities as of December 31, 2019 in the accompanying consolidated balance sheet. 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. As of December 31, 2019, the principal and accrued interest of this note totals $16.3 million and is included in other long-term assets. Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017(in thousands)As of December 31,20192018Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017Compensation Expense (in thousands)201920182017(in thousands)For the years ended December 31,201920182017Co., Ltd which was terminated in conjunction with the 2019 restructuring activities discussed further in Note 6 Co., Ltd which was terminated in conjunction with the 2019 restructuring activities discussed further in Note 6 "Restructuring and Impairments" which also details related party restructuring charges. "Restructuring and Impairments" which also details related party restructuring charges. Co., Ltd which was terminated in conjunction with the 2019 restructuring activities discussed further in Note 6 Co., Ltd which was terminated in conjunction with the 2019 restructuring activities discussed further in Note 6 "Restructuring and Impairments" which also details related party restructuring charges. "Restructuring and Impairments" which also details related party restructuring charges. Accounts receivable Accounts receivable Accounts receivable Accounts receivable $ 7,589 $ 7,589 $ 7,589 $ 7,589 $ 10,109 $ 10,109 $ 10,109 $ 10,109 Prepaid expenses and other current assets Prepaid expenses and other current assets Prepaid expenses and other current assets Prepaid expenses and other current assets $ 13,697 $ 13,697 $ 13,697 $ 13,697 $ 3,873 $ 3,873 $ 3,873 $ 3,873 Other long-term assets Other long-term assets Other long-term assets Other long-term assets Accounts payable Accounts payable Accounts payable Accounts payable $ 16,830 $ 16,830 $ 16,830 $ 16,830 $ 24,300 $ 24,300 $ 24,300 $ 24,300 $ 1,775 $ 1,775 $ 1,775 $ 1,775 $ 4,888 $ 4,888 $ 4,888 $ 4,888 Accrued and other current liabilities Accrued and other current liabilities Accrued and other current liabilities Accrued and other current liabilities $ 15,404 $ 15,404 $ 15,404 $ 15,404 $ 5,488 $ 5,488 $ 5,488 $ 5,488 Prepaid expenses and other current assets include short-term loan receivables and supplier advances from companies Prepaid expenses and other current assets include short-term loan receivables and supplier advances from companies with which we have an investment or partnership interest. with which we have an investment or partnership interest. Prepaid expenses and other current assets include short-term loan receivables and supplier advances from companies Prepaid expenses and other current assets include short-term loan receivables and supplier advances from companies with which we have an investment or partnership interest. with which we have an investment or partnership interest. In connection with the 2019 Restructuring further discussed in Note 6 "Restructuring and Impairments", we entered In connection with the 2019 Restructuring further discussed in Note 6 "Restructuring and Impairments", we entered In connection with the 2019 Restructuring further discussed in Note 6 "Restructuring and Impairments", we entered In connection with the 2019 Restructuring further discussed in Note 6 "Restructuring and Impairments", we entered into a agreement with a non-publicly traded company considered a related party to reduce future purchase into a agreement with a non-publicly traded company considered a related party to reduce future purchase into a agreement with a non-publicly traded company considered a related party to reduce future purchase into a agreement with a non-publicly traded company considered a related party to reduce future purchase commitments to $25.2 million through 2022. The commitment was reduced by $12.8 million which will be paid in commitments to $25.2 million through 2022. The commitment was reduced by $12.8 million which will be paid in commitments to $25.2 million through 2022. The commitment was reduced by $12.8 million which will be paid in commitments to $25.2 million through 2022. The commitment was reduced by $12.8 million which will be paid in 2020 and is included in accrued and other current liabilities as of December 31, 2019 in the accompanying 2020 and is included in accrued and other current liabilities as of December 31, 2019 in the accompanying 2020 and is included in accrued and other current liabilities as of December 31, 2019 in the accompanying 2020 and is included in accrued and other current liabilities as of December 31, 2019 in the accompanying consolidated balance sheet. consolidated balance sheet. consolidated balance sheet. consolidated balance sheet. During 2018, we purchased a convertible note for $15.0 million from a privately held company. The note is due in During 2018, we purchased a convertible note for $15.0 million from a privately held company. The note is due in During 2018, we purchased a convertible note for $15.0 million from a privately held company. The note is due in 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 December 2021 and bears interest at 8%. In the event the company goes public, the note will convert into common December 2021 and bears interest at 8%. In the event the company goes public, the note will convert into common 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. As of December 31, 2019, the principal shares in the company ranking pari-passu with existing common shares. As of December 31, 2019, the principal shares in the company ranking pari-passu with existing common shares. As of December 31, 2019, the principal shares in the company ranking pari-passu with existing common shares. As of December 31, 2019, the principal and accrued interest of this note totals $16.3 million and is included in other long-term assets. and accrued interest of this note totals $16.3 million and is included in other long-term assets. and accrued interest of this note totals $16.3 million and is included in other long-term assets. and accrued interest of this note totals $16.3 million and is included in other long-term assets. 204 (in thousands)As of December 31,20192018(in thousands)As of December 31,20192018(in thousands)As of December 31,20192018(in thousands)As of December 31,20192018F I N A N C I A L R E S U LT S Notes to consolidated financial statements 205 Financial Results Financial Results Auditor’s Report Auditor’s Report Report of independent registered public accounting firm Report of Independent Registered Public Accounting Firm To the Shareholders and Supervisory Board To the Shareholders and Supervisory Board QIAGEN N.V.: QIAGEN N.V.: We have audited the accompanying consolidated balance sheets of QIAGEN N.V. and subsidiaries (the We have audited the accompanying consolidated balance sheets of QIAGEN N.V. and subsidiaries (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, “Company”) as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles. with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2020 expressed an unqualified Organizations of the Treadway Commission, and our report dated February 28, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. opinion on the effectiveness of the Company’s internal control over financial reporting. As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842 - Leases. In 2018, the for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842 - Leases. In 2018, the Company has changed its method of accounting for revenue from contracts with customers due to the adoption of Company has changed its method of accounting for revenue from contracts with customers due to the adoption of Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers. Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting 206 Opinion on the Consolidated Financial StatementsChange in Accounting PrincipleBasis for OpinionOpinion on the Consolidated Financial StatementsChange in Accounting PrincipleBasis for OpinionFinancial Results Auditor’s Report Report of Independent Registered Public Accounting Firm To the Shareholders and Supervisory Board QIAGEN N.V.: We have audited the accompanying consolidated balance sheets of QIAGEN N.V. and subsidiaries (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842 - Leases. In 2018, the Company has changed its method of accounting for revenue from contracts with customers due to the adoption of Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers. F I N A N C I A L R E S U LT S Auditor’s Report These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. As discussed in Notes 3 and 6 to the consolidated financial statements, the Company performs impairment testing for its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset or a group of assets may not be recoverable and exceeds its fair value. In the second half of 2019, the Company began a restructuring initiative as a result of the suspended development of the NGS-related instrument systems. Due to the restructuring initiative, the Company fully impaired certain long-lived assets, based on the Company’s assumption that these assets had no alternative use. The Company estimated that no value was recoverable in a market disposal and recorded impairment expenses related to the certain long-lived assets during the year ended December 31, 2019 of $138.8 million. We identified the evaluation of the impairment analysis for certain long-lived assets associated with the restructuring initiative as a critical audit matter due to a high degree of complex auditor judgment in evaluating the Company’s assumption of related alternative uses. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s impairment assessment process for long-lived assets, including the control related to the assessment of alternative highest and best uses for these assets. For a selection of assets within the long-lived asset group, we evaluated the Company’s conclusion over their alternative uses through a combination of (1) inspecting application descriptions and uses in underlying license agreements, software documentation and other contracts, (2) inquiring with operational management and performing independent research into patents’ and other intangible assets’ potential uses outside of the Company’s other product areas, and, (3) considering the collective results of the procedures performed to assess the sufficiency of the audit evidence obtained related to the Company recording a full impairment charge. As discussed in Notes 5 and 11 to the consolidated financial statements, on January 31, 2019, the Company acquired the digital PCR asset of Formulatrix Inc. (Formulatrix) in an asset acquisition. Consistent with other business combination type transactions, the Company determines whether an acquired entity is considered to be a business, or an asset or group of assets, including whether substantially all of the fair value of the acquired gross assets is concentrated in a single asset or group of similarly identifiable assets. The purchase price of the digital PCR asset, determined as the acquired asset in the Formulatrix acquisition, was $260.9 million, of which $125.0 million was paid upon closing. We identified the evaluation of the Formulatrix asset purchase transaction as an asset acquisition as a critical audit matter. Complex auditor judgment and specialized skills were required to assess the Company’s determination that 207 substantially all of the fair value of the Formulatrix assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s acquisition-date evaluation process including controls to (1) identify assets acquired and (2) assess the application of the substantially all threshold in determining the asset acquisition criterion is met. We inspected the Formulatrix asset purchase agreement, including the transaction terms and specific assets Opinion on the Consolidated Financial StatementsChange in Accounting PrincipleBasis for OpinionCritical Audit MattersEvaluation of certain long-lived asset impairmentsEvaluation of the Formulatrix asset purchase agreement as an asset acquisitionprinciples used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. As discussed in Notes 3 and 6 to the consolidated financial statements, the Company performs impairment testing for its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset or a group of assets may not be recoverable and exceeds its fair value. In the second half of 2019, the Company began a restructuring initiative as a result of the suspended development of the NGS-related instrument systems. Due to the restructuring initiative, the Company fully impaired certain long-lived assets, based on the Company’s assumption that these assets had no alternative use. The Company estimated that no value was recoverable in a market disposal and recorded impairment expenses related to the certain long-lived assets during the year ended December 31, 2019 of $138.8 million. We identified the evaluation of the impairment analysis for certain long-lived assets associated with the restructuring initiative as a critical audit matter due to a high degree of complex auditor judgment in evaluating the Company’s assumption of related alternative uses. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s impairment assessment process for long-lived assets, including the control related to the assessment of alternative highest and best uses for these assets. For a selection of assets within the long-lived asset group, we evaluated the Company’s conclusion over their alternative uses through a combination of (1) inspecting application descriptions and uses in underlying license agreements, software documentation and other contracts, (2) inquiring with operational management and performing independent research into patents’ and other intangible assets’ potential uses outside of the Company’s other product areas, and, (3) considering the collective results of the procedures performed to assess the sufficiency of the audit evidence obtained related to the Company recording a full impairment charge. As discussed in Notes 5 and 11 to the consolidated financial statements, on January 31, 2019, the Company acquired the digital PCR asset of Formulatrix Inc. (Formulatrix) in an asset acquisition. Consistent with other business combination type transactions, the Company determines whether an acquired entity is considered to be a business, or an asset or group of assets, including whether substantially all of the fair value of the acquired gross assets is concentrated in a single asset or group of similarly identifiable assets. The purchase price of the digital PCR asset, determined as the acquired asset in the Formulatrix acquisition, was $260.9 million, of which $125.0 million was paid upon closing. We identified the evaluation of the Formulatrix asset purchase transaction as an asset acquisition as a critical audit matter. Complex auditor judgment and specialized skills were required to assess the Company’s determination that substantially all of the fair value of the Formulatrix assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s acquisition-date evaluation process including controls to (1) identify assets acquired and (2) assess the application of the substantially all threshold in determining the asset acquisition criterion is met. We inspected the Formulatrix asset purchase agreement, including the transaction terms and specific assets listed in the agreement, to evaluate the Company’s identification of assets acquired. We evaluated the Company’s assessment that substantially all the fair value of the assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets by inspecting the nature of these assets and comparisons to external cost and external market research studies to assess for indications of dissimilar characteristics. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in: › › evaluating the identification of the intangible assets acquired from the Formulatrix asset purchase transaction by inspecting and evaluating legal terms that would give rise to identifiable intangible assets; and assessing the Company’s determination of combining the Formulatrix intangible assets into a single developed technology intangible asset. As discussed in Note 17 to the consolidated financial statements, the Company conducts its business globally and operates more than 50 consolidated subsidiaries in multiple tax jurisdictions. This multi-jurisdictional business operation involves complex intercompany operating and financing activities. The nature of these activities can result in uncertainties in the estimation of the related tax exposures. The Company initially recognizes and subsequently measures the largest amount of tax benefit in its consolidated financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. As at 31 December 2019, the Company recorded unrecognized tax benefits of $58.0 million. We identified the assessment of unrecognized tax benefits as a critical audit matter because complex auditor judgment and specialized skills were required in evaluating the Company’s interpretation and application of tax laws in the jurisdictions where it operates and its estimate of the ultimate resolution of the tax position. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s unrecognized tax benefit process, including controls over (1) its identification and application of tax statutes and legislation, and changes thereto, in the various jurisdictions in which it operates and (2) its application in the process to estimate the associated unrecognized tax benefit. We inspected the Company’s legal composition to identify and assess changes in operating structures and financing arrangements. We inquired of the Group’s tax department in combination with inspecting correspondence with the responsible tax authorities. We involved professionals with specialized skills and knowledge, who assisted in: › evaluating the Company’s interpretation and application of multi-jurisdictional tax laws, and changes thereto, and its impact on the unrecognized tax benefit, 208 › inspecting the lapse of statute of limitations and settlements with tax authorities over a selection of unrecognized tax benefits to compare the amount in the settlement documents to the unrecognized tax benefit, and › inspecting a selection of intercompany operating and financing activities between group entities to assess the sustainability of tax positions based on their technical merits and the probabilities of possible settlement alternatives. /s/ KPMG AG Wirtschaftsprüfungsgesellschaft We have served as the Company’s auditor since 2015. Düsseldorf, Germany February 28, 2020 Report of independent registered public accounting firm Critical Audit MattersEvaluation of certain long-lived asset impairmentsEvaluation of the Formulatrix asset purchase agreement as an asset acquisitionAssessment of unrecognized tax benefits listed in the agreement, to evaluate the Company’s identification of assets acquired. We evaluated the Company’s assessment that substantially all the fair value of the assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets by inspecting the nature of these assets and comparisons to external cost and external market research studies to assess for indications of dissimilar characteristics. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in: › evaluating the identification of the intangible assets acquired from the Formulatrix asset purchase transaction by inspecting and evaluating legal terms that would give rise to identifiable intangible assets; and › assessing the Company’s determination of combining the Formulatrix intangible assets into a single developed technology intangible asset. As discussed in Note 17 to the consolidated financial statements, the Company conducts its business globally and operates more than 50 consolidated subsidiaries in multiple tax jurisdictions. This multi-jurisdictional business operation involves complex intercompany operating and financing activities. The nature of these activities can result in uncertainties in the estimation of the related tax exposures. The Company initially recognizes and subsequently measures the largest amount of tax benefit in its consolidated financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. As at 31 December 2019, the Company recorded unrecognized tax benefits of $58.0 million. We identified the assessment of unrecognized tax benefits as a critical audit matter because complex auditor judgment and specialized skills were required in evaluating the Company’s interpretation and application of tax laws in the jurisdictions where it operates and its estimate of the ultimate resolution of the tax position. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s unrecognized tax benefit process, including controls over (1) its identification and application of tax statutes and legislation, and changes thereto, in the various jurisdictions in which it operates F I N A N C I A L R E S U LT S and (2) its application in the process to estimate the associated unrecognized tax benefit. We inspected the Company’s legal composition to identify and assess changes in operating structures and financing arrangements. We inquired of the Group’s tax department in combination with inspecting correspondence with the responsible tax authorities. We involved professionals with specialized skills and knowledge, who assisted in: Auditor’s Report › › › evaluating the Company’s interpretation and application of multi-jurisdictional tax laws, and changes thereto, and its impact on the unrecognized tax benefit, inspecting the lapse of statute of limitations and settlements with tax authorities over a selection of unrecognized tax benefits to compare the amount in the settlement documents to the unrecognized tax benefit, and inspecting a selection of intercompany operating and financing activities between group entities to assess the sustainability of tax positions based on their technical merits and the probabilities of possible settlement alternatives. /s/ KPMG AG Wirtschaftsprüfungsgesellschaft We have served as the Company’s auditor since 2015. Düsseldorf, Germany February 28, 2020 Report of independent registered public accounting firm To the Shareholders and Supervisory Board QIAGEN N.V.: We have audited QIAGEN N.V.’s and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the consolidated financial statements), and our report dated February 28, 2020 expressed an unqualified opinion on those consolidated financial statements. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ‘Report of Management on Internal Control over Financial Reporting’. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and 209 testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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. Assessment of unrecognized tax benefitsOpinion on Internal Control Over Financial ReportingBasis for OpinionDefinition and Limitations of Internal Control Over Financial Reporting To the Shareholders and Supervisory Board QIAGEN N.V.: We have audited QIAGEN N.V.’s and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the consolidated financial statements), and our report dated February 28, 2020 expressed an unqualified opinion on those consolidated financial statements. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ‘Report of Management on Internal Control over Financial Reporting’. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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. /s/ KPMG AG Wirtschaftsprüfungsgesellschaft Düsseldorf, Germany February 28, 2020 210 Opinion on Internal Control Over Financial ReportingBasis for OpinionDefinition and Limitations of Internal Control Over Financial Reporting F I N A N C I A L R E S U LT S Auditor’s Report 211 Financial Results Financial Results List of Subsidiaries Auditor’s Report The following is a list of the Registrant’s subsidiaries as of December 31, 2019, The following is a list of the Registrant’s subsidiaries as of December 31, 2019, other than certain subsidiaries that other than certain subsidiaries that did not in the aggregate constitute a did not in the aggregate constitute a significant subsidiary. Report of independent registered public accounting firm significant subsidiary. To the Shareholders and Supervisory Board Amnisure International, LLC QIAGEN N.V.: Cellestis Pty. Ltd. STAT-Dx Life S.L. USA Australia Spain QIAGEN Aarhus A/S We have audited the accompanying consolidated balance sheets of QIAGEN N.V. and subsidiaries (the QIAGEN AB “Company”) as of December 31, 2019 and 2018, the related consolidated statements of (loss) income, comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended QIAGEN AG December 31, 2019, and the related notes and financial statement schedule as listed in Item 18 (A) (collectively, the QIAGEN Australia Holding Pty. Ltd. consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material QIAGEN Benelux B.V. respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its QIAGEN Beverly, LLC operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity QIAGEN China (Shanghai) Co. Ltd. with U.S. generally accepted accounting principles. Netherlands Switzerland Denmark Australia Sweden China USA QIAGEN Deutschland Holding (Luxembourg) SARL Luxembourg We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United QIAGEN Deutschland Holding GmbH States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on QIAGEN Finance (Malta) Ltd. criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring QIAGEN France S.A.S. Organizations of the Treadway Commission, and our report dated February 28, 2020 expressed an unqualified QIAGEN Gaithersburg LLC opinion on the effectiveness of the Company’s internal control over financial reporting. QIAGEN GmbH Germany Germany France Malta USA QIAGEN Hamburg GmbH Germany QIAGEN Inc. (Canada) As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting QIAGEN Instruments AG for leases in 2019 due to the adoption of Accounting Standards Codification Topic 842 - Leases. In 2018, the QIAGEN K.K. Japan Company has changed its method of accounting for revenue from contracts with customers due to the adoption of Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers. QIAGEN Lake Constance GmbH Germany Switzerland Canada QIAGEN LLC QIAGEN Ltd. USA UK QIAGEN Manchester Ltd. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to QIAGEN Marseille S.A.S. express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the QIAGEN North American Holdings Inc. U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and QIAGEN Pty. Ltd. the PCAOB. QIAGEN Redwood City, Inc. Australia France USA USA UK QIAGEN Sciences LLC We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and QIAGEN S.r.l. perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks QIAGEN TRM Services Ltd. UAE of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing QIAGEN U.S. Finance Holdings (Luxembourg) SARL procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the QIAGEN U.S. Finance LLC amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting QIAGEN U.S. Finance Ltd Luxembourg Ireland USA USA Italy 212 Company NameJurisdiction of IncorporationOpinion on the Consolidated Financial StatementsChange in Accounting PrincipleBasis for OpinionF I N A N C I A L R E S U LT S List of Subsidiaries Appendix Appendix Appendix Service Service Service CORPORATE COMMUNICATIONS CORPORATE COMMUNICATIONS CORPORATE COMMUNICATIONS Phone worldwide: +49 2103 29 11711 Phone U.S.: +1 240 686 2222 Phone worldwide: +49 2103 29 11711 Phone worldwide: +49 2103 29 11711 Email: IR@QIAGEN.COM Phone U.S.: +1 240 686 2222 Phone U.S.: +1 240 686 2222 IR.QIAGEN.COM Email: IR@QIAGEN.COM Email: IR@QIAGEN.COM IR.QIAGEN.COM IR.QIAGEN.COM Phone worldwide: +49 2103 29 11826 Phone U.S.: +1 240 686 7425 Phone worldwide: +49 2103 29 11826 Phone worldwide: +49 2103 29 11826 Email: PR@QIAGEN.COM Phone U.S.: +1 240 686 7425 Phone U.S.: +1 240 686 7425 PR.QIAGEN.COM Email: PR@QIAGEN.COM Email: PR@QIAGEN.COM PR.QIAGEN.COM PR.QIAGEN.COM www.QIAGEN.com www.corporate.QIAGEN.com www.QIAGEN.com www.QIAGEN.com www.facebook.com/QIAGEN www.corporate.QIAGEN.com www.corporate.QIAGEN.com www.twitter.com/QIAGEN www.facebook.com/QIAGEN www.facebook.com/QIAGEN www.linkedin.com/company/QIAGEN www.twitter.com/QIAGEN www.twitter.com/QIAGEN www.youtube.com/QIAGEN www.linkedin.com/company/QIAGEN www.linkedin.com/company/QIAGEN www.youtube.com/QIAGEN www.youtube.com/QIAGEN FINANCIAL CALENDAR FINANCIAL CALENDAR FINANCIAL CALENDAR June, 2020 June, 2020 June, 2020 July 2020 July 2020 July 2020 November 2020 November 2020 November 2020 February 2021 February 2021 February 2021 March 2021 March 2021 March 2021 213 For InvestorsFor MediaQIAGEN on the webAnnual General Meeting of Shareholders of QIAGEN N.V.Second Quarter 2020 ResultsThird Quarter 2020 ResultsFourth Quarter 2020 ResultsPublication DateFor InvestorsFor MediaQIAGEN on the webAnnual General Meeting of Shareholders of QIAGEN N.V.Second Quarter 2020 ResultsThird Quarter 2020 ResultsFourth Quarter 2020 ResultsPublication DateFor InvestorsFor MediaQIAGEN on the webAnnual General Meeting of Shareholders of QIAGEN N.V.Second Quarter 2020 ResultsThird Quarter 2020 ResultsFourth Quarter 2020 ResultsPublication DateTRADEMARKS Our name together with our logo is registered as a trademark in the United States and a number of other countries: QIAGEN® . For a complete list of QIAGEN’s trademarks and disclaimers, please refer to QIAGEN’s webpage under www.QIAGEN.com/trademarks_disclaimers.aspx. In this annual report QIAGEN uses the term molecular diagnostics. The use of this term is in reference to certain countries, such as the United States, limited to products subject to regulatory requirements. As of February 2019, QIAGEN molecular diagnostics products included 23 FDA (PMA approved or 510k cleared) products, 17 clinical sample concentrator products (14 kits and 3 instruments), 66 EU CE IVD assays, 17 EU CE IVD sample preparation products, 17 EU CE IVD instruments for sample purification or detection, 34 China CFDA IVD assays/sample preparations and 9 China CFDA IVD instruments. This Annual Report may also contain trade names or trademarks of companies other than QIAGEN. © 2020 QIAGEN, all rights reserved. This document contains detailed financial information about QIAGEN prepared under generally accepted accounting standards in the U.S. (U.S. GAAP) and included in our Form 20-F annual report filed with the U.S. Securities and Exchange Commission. QIAGEN also publishes an Annual Report under IFRS accounting standards, which is available on our website at www.QIAGEN.com. 214 F I N A N C I A L R E S U LT S List of Subsidiaries 215 216 

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