Notes to Consolidated Financial Statements | Financial ... ?· Notes to consolidated financial statements…

Download Notes to Consolidated Financial Statements | Financial ... ?· Notes to consolidated financial statements…

Post on 07-Sep-2018

212 views

Category:

Documents

0 download

TRANSCRIPT

NotestoconsolidatedfinancialstatementsDecember31,20171.CorporateInformationandBasisofPresentationCorporateInformationQIAGENN.V.isapubliclimitedliabilitycompany('naamlozevennootschap')underDutchlawwithregisteredofficeatHulsterweg82,5912PLVenlo,TheNetherlands.QIAGENN.V.,aNetherlandsholdingcompany,andsubsidiaries(we,ourortheCompany)istheleadingglobalproviderofSampletoInsightsolutionstotransformbiologicalmaterialsintovaluablemolecularinsights.OursampletechnologiesisolateandprocessDNA,RNAandproteinsfromblood,tissueandothermaterials.Assaytechnologiesmakethesebiomoleculesvisibleandreadyforanalysis.Bioinformaticssoftwareandknowledgebasesinterpretdatatoreportrelevant,actionableinsights.Automationsolutionstiethesetogetherinseamlessandcost-effectivemoleculartestingworkflows.Weprovidetheseworkflowstofourmajorcustomerclasses:MolecularDiagnostics(humanhealthcare),AppliedTesting(forensics,veterinarytestingandfoodsafety),Pharma(pharmaceuticalandbiotechnologycompanies)andAcademia(lifesciencesresearch).Wemarketourproductsinmorethan130countries.BasisofPresentationTheaccompanyingconsolidatedfinancialstatementswerepreparedinaccordancewithU.S.generallyacceptedaccountingprinciples(GAAP)andallamountsarepresentedinU.S.dollarsroundedtothenearestthousand,unlessotherwiseindicated.Theconsolidatedfinancialstatementshavebeenpreparedonahistoricalcostbasis,exceptforderivativefinancialinstruments,contingentconsiderationandavailable-for-salefinancialinstrumentsthathavebeenmeasuredatfairvalue.OnJanuary6,2017,weacquiredOmicSoftCorporation,locatedinCary,NorthCarolina(U.S.).OnJune28,2016,weacquiredExiqonA/S,locatedinVedbaek,DenmarkandonNovember20,2015,weacquiredMOBIOLaboratories,Inc.,locatedinCarlsbad,California.Accordingly,attheacquisitiondates,alloftheassetsacquiredandliabilitiesassumedwererecordedattheirrespectivefairvaluesandourconsolidatedresultsofoperationsincludetheoperatingresultsfromtheacquiredcompaniesfromtheacquisitiondates.CertainprioryearamountsrelatedtodeferredtaxeshavebeenreclassifiedinNote16IncomeTaxesandtheConsolidatedStatementsofCashFlows.Certainprioryearamountsrelatedtorestructuringcostshavebeenreclassifiedtoconformtothecurrentyearpresentation.FortheyearendedDecember31,2016,$26.3millionand$25.0millioncostswerereclassifiedoutofresearchanddevelopmentandsalesandmarketing,respectively,togeneralandadministrative,restructuring,integrationandother.Thesereclassificationshadnoeffectonincomefromoperations.2.EffectsofNewAccountingPronouncementsAdoptionofNewAccountingStandardsFINANCIALRESULTSThefollowingnewFASBAccountingStandardsUpdates(ASU)wereeffectivefortheyearendedDecember31,2017.ASU2015-11,Inventory(Topic330):SimplifyingtheMeasurementofInventoryrequiresinscopeinventory,includinginventorymeasuredusingfirst-in,firstout(FIFO)oraveragecost,tobemeasuredatthelowerofcostandnetrealizablevalue.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessreasonablypredictablecostsofcompletion,disposal,andtransportation.TheadoptionofASU2015-11didnothaveamaterialimpactonourconsolidatedfinancialstatements.ASU2016-07,Investments-EquityMethodandJointVentures(Topic323):SimplifyingtheTransitiontotheEquityMethodofAccountingeliminatestherequirementtoretroactivelyadopttheequitymethodofaccountingwhenaninvestmentqualifiesforuseoftheequitymethodasaresultofanincreaseinthelevelofownershipordegreeofinfluence.Thenewguidancehadnoimpactonourconsolidatedfinancialstatements.ASU2016-09,Compensation-StockCompensation(Topic718):ImprovementstoEmployeeShare-BasedPaymentAccountingisintendedtosimplifyseveralaspectsoftheaccountingforshare-basedpaymenttransactions,includingtheincometaxconsequences,classificationofawardsaseitherequityorliabilities,andclassificationonthestatementofcashflows.ThenewguidancebecameeffectiveforusonJanuary1,2017.TheimpactoftheadoptionofASU2016-09islimitedtotherecordingofanywindfallorshortfallbenefitdirectlytothetaxprovisionandthereclassificationofcertainitemsinourstatementofcashflows.Wewillcontinueestimatingstock-basedcompensationawardforfeituresindeterminingtheamountofcompensationcosttoberecognizedeachperiod.Asaresultofthisadoption,weexpectvolatilityinoureffectivetaxrateasanywindfallorshortfalltaxbenefitsrelatedtoourshare-basedcompensationwillberecordeddirectlyintoourresultsofoperations.Additionally,excesstaxbenefitsafteradoptionareclassifiedascashflowsfromoperatingactivitiesinsteadofcashflowsfromfinancingactivities.Weadoptedthisstandardonaprospectivebasisandduring2017,$5.2millionofexcesstaxbenefitwasrecognizeddirectlytothetaxprovisionandclassifiedascashflowsfromoperatingactivities.NewAccountingStandardsNotYetAdoptedThefollowingnewFASBAccountingStandardsUpdates,whicharenotyetadopted,havebeengroupedbytheirrequiredeffectivedates:FirstQuarterof2018ASU2014-09,RevenuefromContractswithCustomers(Topic606)affectsanyentitythateitherentersintocontractswithcustomerstotransfergoodsorservicesorentersintocontractsforthetransferofnonfinancialassetsunlessthosecontractsarewithinthescopeofotherstandards(e.g.,insurancecontractsorleasecontracts).InAugust2015,theFASBissuedAccountingStandardsUpdateNo.2015-14(ASU2015-14),RevenuefromContractswithCustomers(Topic606):DeferraloftheEffectiveDatewhichdeferstheeffectivedateofASU2014-09tointerimandannualreportingperiodsbeginningafterDecember15,2017.TheFASBhascontinuedtoissueaccountingstandardsupdatestoclarifyandprovideimplementationguidancerelatedtoRevenuefromContractswithCustomers,includingASU2016-08RevenuefromContractwithCustomers:PrincipalversusAgentConsiderations,ASU2016-10RevenuefromContractswithCustomers:IdentifyingPerformanceObligationsandLicensing,andASU2016-12RevenuefromContractswithCustomers:Narrow-ScopeImprovementsandPracticalExpedients.Anentityshouldapplytheamendmentseitherretrospectivelytoeachpriorreportingperiodpresentedandtheentitymayelectcertainpracticalexpedients(thefullretrospectivemethodofadoption);or,retrospectivelywiththecumulativeeffectofinitiallyapplyingthisASUrecognizedatthedateofinitialapplication(themodifiedretrospectivemethodofadoption).Wewilladoptthisstandardonitseffectivedate,January1,2018usingthemodifiedretrospectivemethod.Thenewstandardislargelyconsistentwiththeexistingguidanceandcurrentpracticesappliedbyourbusinessandwedonotexpectamaterialimpactonourexistingrevenueaccountingpolicies.Thenewstandardalsorequiresadditionaldisclosuresincludingquantitativeandqualitativedisclosuresaboutthenature,amount,timinganduncertaintyofrevenueandcashflowsfromcustomercontracts.TheCompanyisintheprocessoffinalizingchangestosupportrecognitionanddisclosureunderthenewrevenuestandard.ASU2016-01,FinancialInstruments-Overall(Subtopic825-10):RecognitionandMeasurementofFinancialAssetsandFinancialLiabilitieswillimpactcertainaspectsofrecognition,measurement,presentationanddisclosureoffinancialinstruments.ThenewguidancemakestargetedimprovementstoexistingU.S.GAAPby:Theamendmentswillbecomeeffectiveforourfinancialstatementsbeginninginthefirstquarterof2018andrequireadoptionusingacumulative-effectadjustmenttothebalancesheetasofthebeginningofthefiscalyearofadoption.Theimplementationoftheamendmentsisexpectedtoincreasethevolatilityofnetincomeasgainsorlossesinfutureperiodswillberecognizedinnetincome;howevertheextentofanyvolatilitywillbedependentuponthesignificanceoftheequityinvestmentsatthetimeofadoption.AtDecember31,2017,wehadanetunrealizedlossof$0.9millionnetoftax,andatDecember31,2016,wehadanetunrealizedloss,netoftax,of$0.2millionfromequityinvestmentsrecordedinequity,respectively.ASUNo.2016-15,StatementofCashFlows(Topic320):ClassificationofCertainCashReceiptsandCashPayments(aconsensusoftheFASBEmergingIssuesTaskForce),addresseseightclassificationissuesrelatedtothestatementofcashflows:requiringequityinvestments(exceptthoseaccountedforundertheequitymethodofaccounting,orthosethatresultinconsolidationoftheinvestee)tobemeasuredatfairvaluewithchangesinfairvaluerecognizedinnetincome;requiringpublicbusinessentitiestousetheexitpricenotionwhenmeasuringthefairvalueoffinancialinstrumentsfordisclosurepurposes;requiringseparatepresentationoffinancialassetsandfinancialliabilitiesbymeasurementcategoryandformoffinancialasset(i.e.,securitiesorloansandreceivables)onthebalancesheetortheaccompanyingnotestothefinancialstatements;eliminatingtherequirementforpublicbusinessentitiestodisclosethemethod(s)andsignificantassumptionsusedtoestimatethefairvaluethatisrequiredtobedisclosedforfinancialinstrumentsmeasuredatamortizedcostonthebalancesheet;andrequiringareportingorganizationtopresentseparatelyinothercomprehensiveincometheportionofthetotalchangeinthefairvalueofaliabilityresultingfromachangeintheinstrument-specificcreditrisk(alsoreferredtoasowncredit)whentheorganizationhaselectedtomeasuretheliabilityatfairvalueinaccordancewiththefairvalueoptionforfinancialinstruments.debtprepaymentordebtextinguishmentcosts;settlementofzero-couponbonds;contingentconsiderationpaymentsmadeafterabusinesscombination;proceedsfromthesettlementofinsuranceclaims;proceedsfromthesettlementofcorporate-ownedlifeinsurancepolicies,includingbank-ownedlifeinsurancepolicies;distributionsreceivedfromequitymethodinvestees;beneficialinterestsinsecuritizationtransactions;andseparatelyidentifiablecashflowsandapplicationofthepredominanceprinciple.WewilladoptASU2016-15onJanuary1,2018.WewillberequiredtoapplythisASUusingaretrospectivetransitionmethodtoeachperiodpresentedotherthanforissueswhereapplicationwouldbeimpracticableinwhichcasewewillbepermittedtoapplytheamendmentsforthoseissuesprospectivelyasoftheearliestdatepracticable.WedonotexpectanymaterialimpactfromtheadoptionofASU2016-15onourconsolidatedfinancialstatements.ASU2016-16,IncomeTaxes(Topic740):Intra-EntityTransfersofAssetsOtherThanInventory,aimstoimprovetheaccountingfortheincometaxconsequencesofintra-entitytransfersofassetsotherthaninventory.Thisamendmentrequiresanentitytorecognizetheincometaxconsequencesofanintra-entitytransferofanassetotherthaninventorywhenthetransferoccurs.Theamendmentsinthisupdateshouldbeappliedonamodifiedretrospectivebasisthroughacumulative-effectadjustmentdirectlytoretainedearningsasofthebeginningoftheperiodofadoption.WewilladoptASU2016-16onJanuary1,2018withoutmaterialimpact.ASU2016-18,StatementofCashFlows(Topic320):RestrictedCash,requiresentitiestoshowthechangesinthetotalofcash,cashequivalents,restrictedcashandrestrictedcashequivalentsinthestatementofcashflows.Asaresult,entitieswillnolongerpresenttransfersbetweencashandcashequivalentsandrestrictedcashandrestrictedcashequivalentsinthestatementofcashflows.Theamendmentsinthisupdateshouldbeappliedusingaretrospectivetransitionmethodtoeachperiodpresented.ThisupdateiseffectiveforusonJanuary1,2018.ThereisnoimpactfromtheadoptionofASU2016-18onourconsolidatedfinancialstatementsotherthantheeffectofaretrospectiveadjustmentforthe$6.3millionrestrictedcashbalanceheldasofJanuary1,2016inthecomparativeConsolidatedStatementsofCashFlows.ASU2017-01,BusinessCombinations(Topic805):ClarifyingtheDefinitionofaBusiness,clarifiesandprovidesamorerobustframeworktouseindeterminingwhenasetofassetsandactivitiesisabusiness.Theamendmentsinthisupdateshouldbeappliedprospectivelyonoraftertheeffectivedate.WeadoptedthisupdatebeginningJanuary1,2018.ASU2017-09,Compensation-StockCompensation(Topic718):ScopeofModificationAccounting,clarifieswhentoaccountforachangetothetermsorconditionsofashare-basedpaymentawardasamodification.Underthenewguidance,modificationaccountingisrequiredonlyifthefairvalue,thevestingconditions,ortheclassificationoftheaward(asequityorliability)changesasaresultofthechangeintermsorconditions.TheguidanceiseffectiveforusprospectivelyforannualperiodsbeginningonJanuary1,2018.FirstQuarterof2019ASU2016-02,Leases(Topic842)aimstoincreasetransparencyandcomparabilityamongorganizationsbyrecognizingleaseassetsandleaseliabilitiesonthebalancesheetanddisclosingkeyinformationaboutleasingarrangements.ASU2016-02willbecomeeffectiveforusbeginninginthefirstquarterof2019andrequiresmodifiedretrospectiveapplicationforleasesthatexistorareenteredintoafterthebeginningoftheearliestcomparativeperiodinthefinancialstatements.Wedonotplantoearlyadoptthisstandardandweanticipatethattheadoptionofthisstandardwillrequirechangestooursystemsandprocesses.Weexpectthisstandardtoincreasetotalassetsandtotalliabilities,however,wearecurrentlyevaluatingthepotentialsizeoftheimpactthatASU2016-02mayhaveonourconsolidatedfinancialstatements.ASU2017-12,DerivativesandHedging(Topic815):TargetedImprovementstoAccountingforHedgingActivities,willmakemorefinancialandnonfinancialhedgingstrategieseligibleforhedgeaccounting.Italsoamendsthepresentationanddisclosurerequirementsandchangeshowcompaniesassesseffectiveness.Itisintendedtomorecloselyalignhedgeaccountingwithcompaniesriskmanagementstrategies,simplifytheapplicationofhedgeaccounting,andincreasetransparencyastothescopeandresultsofhedgingprograms.ThenewguidancewillbecomeeffectiveforusbeginningonJanuary1,2019byapplyingamodifiedretrospectiveapproachtoexistinghedgingrelationshipasoftheadoptiondate.Underthemodifiedretrospectiveapproach,entitieswithcashflowornetinvestmenthedgeswillmake(1)acumulative-effectadjustmenttoaccumulatedothercomprehensiveincomesothattheadjustedamountrepresentsthecumulativechangeinthehedginginstrumentsfairvaluesincehedgeinception(lessanyamountsthatshouldhavebeenrecognizedinearningsunderthenewaccountingmodel)and(2)acorrespondingadjustmenttoopeningretainedearningsasofthemostrecentperiodpresentedonthedateofadoption.WearecurrentlyevaluatingthepotentialimpactASU2017-12mayhaveonourconsolidatedfinancialstatements.FirstQuarterof2020ASU2016-13,FinancialInstruments-CreditLosses(Topic326):MeasurementofCreditLossesonFinancialInstruments.providesfinancialstatementuserswithmoredecision-usefulinformationabouttheexpectedcreditlossesonfinancialinstrumentsandothercommitmentstoextendcreditheldbyareportingentityateachreportingdate.Toachievethisobjective,theamendmentsinASU2016-13replacetheincurredlossimpairmentmethodologyincurrentGAAPwithamethodologythatreflectsexpectedcreditlossesandrequiresconsiderationofabroaderrangeofreasonableandsupportableinformationtoinformcreditlossestimates.Thenewguidancewillbecomeeffectiveforusbyapplyingthestandard'sprovisionsasacumulative-effectadjustmenttoretainedearningsbeginningonJanuary1,2020.WearecurrentlyevaluatingthepotentialimpactASU2016-13mayhaveonourconsolidatedfinancialstatements.ASU2017-04,IntangiblesGoodwillandOther(Topic350):SimplifyingtheTestforGoodwillImpairment,removesStep2ofthegoodwillimpairmenttest.Agoodwillimpairmentwillnowbetheamountbywhichareportingunitscarryingvalueexceedsitsfairvalue,nottoexceedthecarryingamountofgoodwill.ASU2017-04iseffectiveforusforannualperiodsbeginningJanuary1,2020andearlyadoptionispermitted.Thenewguidanceisrequiredtobeappliedonaprospectivebasis.Wearecurrentlyevaluatingtheimpacttheadoptionofthisnewstandardwillhaveonourfinancialpositionandresultsofoperations.3.SummaryofSignificantAccountingPoliciesandCriticalAccountingEstimatesPrinciplesofConsolidationTheconsolidatedfinancialstatementsincludetheaccountsofQIAGENN.V.anditswholly-ownedsubsidiaries.Allsignificantintercompanyaccountsandtransactionshavebeeneliminated.Investmentsineithercommonstockorin-substancecommonstockofcompanieswhereweexercisesignificantinfluenceovertheoperationsbutdonothavecontrol,andwherewearenottheprimarybeneficiary,areaccountedforusingtheequitymethod.Allotherinvestmentsareaccountedforunderthecostmethod.Whenthereisaportionofequityinanacquiredsubsidiarynotattributable,directlyorindirectly,totheCompany,werecordthefairvalueofthenoncontrollinginterestsattheacquisitiondateandclassifytheamountsattributabletononcontrollinginterestsseparatelyinequityintheconsolidatedfinancialstatements.AnysubsequentchangesintheCompany'sownershipinterestwhiletheCompanyretainsitscontrollingfinancialinterestinitssubsidiaryareaccountedforasequitytransactions.UseofEstimatesThepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassets,liabilitiesanddisclosureofcontingenciesatthedateofthefinancialstatementsaswellasthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.ConcentrationsofRiskWebuymaterialsforproductsfrommanysuppliers,andarenotdependentonanyonesupplierorgroupofsuppliersforthebusinessasawhole.However,keycomponentsofcertainproducts,includingcertaininstrumentationcomponentsandchemicals,areavailableonlyfromasinglesource.Ifsuppliesfromthesevendorsweredelayedorinterruptedforanyreason,wemaynotbeabletoobtainthesematerialstimelyorinsufficientquantitiesinordertoproducecertainproductsandsaleslevelscouldbenegativelyaffected.Additionally,ourcustomersincluderesearchersatpharmaceuticalandbiotechnologycompanies,academicinstitutions,andgovernmentandprivatelaboratories.Fluctuationsintheresearchanddevelopmentbudgetsoftheseresearchersandtheirorganizationsforapplicationsinwhichourproductsareusedcouldhaveasignificanteffectonthedemandforourproducts.Thefinancialinstrumentsusedinmanagingourforeigncurrency,equityandinterestrateexposureshaveanelementofriskinthatthecounterpartiesmaybeunabletomeetthetermsoftheagreements.Weattempttominimizethisriskbylimitingthecounterpartiestoadiversegroupofhighly-ratedinternationalfinancialinstitutions.Thecarryingvaluesofourfinancialinstrumentsincorporatethenon-performanceriskbyusingmarketpricingforcreditrisk.However,wehavenoreasontobelievethatanycounterpartieswilldefaultontheirobligationsandthereforedonotexpecttorecordanylossesasaresultofcounterpartydefault.Inordertominimizeourexposurewithanysinglecounterparty,wehaveenteredintomasteragreementswhichallowustomanagetheexposurewiththerespectivecounterpartyonanetbasis.Otherfinancialinstrumentsthatpotentiallysubjectustoconcentrationsofcreditriskarecashandcashequivalents,short-terminvestments,andaccountsreceivable.Weattempttominimizetherisksrelatedtocashandcashequivalentsandshort-terminvestmentsbydealingwithhighly-ratedfinancialinstitutionsandinvestinginabroadanddiverserangeoffinancialinstruments.Wehaveestablishedguidelinesrelatedtocreditqualityandmaturitiesofinvestmentsintendedtomaintainsafetyandliquidity.Concentrationofcreditriskwithrespecttoaccountsreceivableislimitedduetoalargeanddiversecustomerbase,whichisdispersedoverdifferentgeographicareas.Allowancesaremaintainedforpotentialcreditlossesandsuchlosseshavehistoricallybeenwithinexpectedranges.ForeignCurrencyTranslationOurreportingcurrencyistheU.S.dollarandoursubsidiariesfunctionalcurrenciesaregenerallythelocalcurrencyoftherespectivecountriesinwhichtheyareheadquartered.AllamountsinthefinancialstatementsofentitieswhosefunctionalcurrencyisnottheU.S.dollararetranslatedintoU.S.dollarequivalentsatexchangeratesasfollows:(1)assetsandliabilitiesatperiod-endrates,(2)incomestatementaccountsataverageexchangeratesfortheperiod,and(3)componentsofequityathistoricalrates.Translationgainsorlossesarerecordedinequity,andtransactiongainsandlossesarereflectedinnetincomeasacomponentofotherexpense,net.Realizedgainsorlossesonthevalueofderivativecontractsenteredintotohedgetheexchangerateexposureofreceivablesandpayablesarealsoincludedinnetincomeasacomponentofotherexpense,net.Thenet(loss)gainonforeigncurrencytransactionswas$(3.3)million,lessthan$0.1million,and$(0.5)millionin2017,2016and2015,respectively,andisincludedinotherexpense,net.Theexchangeratesofkeycurrencieswereasfollows:SegmentInformationWedeterminedthatweoperateasoneoperatingsegmentinaccordancewiththeFinancialAccountingStandardsBoard(FASB)AccountingStandardsCodification(ASC)Topic280,SegmentReporting.Ourchiefoperatingdecisionmaker(CODM)makesdecisionsbasedontheCompanyasawhole.Inaddition,wehaveacommonbasisoforganizationandtypesofproductsandserviceswhichderiverevenuesandconsistentproductmargins.Accordingly,weoperateandmakedecisionsasonereportingunit.RevenueRecognitionOurrevenuesarereportednetofsalesandvalueaddedtaxes,discountsandsalesallowances,andarederivedprimarilyfromthesaleofconsumableandinstrumentationproducts,andtoamuchlesserextent,fromthesaleofservices,intellectualpropertyandtechnology.Werecognizerevenuewhenfourbasiccriteriaaremet:(1)persuasiveevidenceofanarrangementexists;(2)deliveryhasoccurredorserviceshavebeenrendered;(3)thefeeisfixedordeterminable;and(4)collectabilityisreasonablyassured.ConsumableandRelatedProducts:Inthelastthreeyears,revenuefromconsumableproductsaleshasaccountedforapproximately79%-80%ofournetsalesandisgenerallyrecognizedupontransferoftitleconsistentwiththeshippingterms.Wemaintainasmallamount,onaveragelessthan$2.0millionintotal,ofconsignmentinventoryatcertaincustomerlocations.Revenuesfortheconsumableproductswhichareconsignedinthismannerarerecognizeduponconsumption.Wegenerallyallowreturnsofconsumableproductsiftheproductisreturnedinatimelymannerandingoodcondition.Allowancesforreturnsareprovidedforbaseduponthehistoricalpatternofreturnsandmanagementsevaluationofspecificfactorsthatimpacttheriskofreturns.Revenuesfromrelatedproductsincludesoftware-as-a-service(SaaS),licensefees,intellectualpropertyandpatentsales,royaltiesandmilestonepaymentsandoverthelastthreeyearshasaccountedforapproximately7%-8%ofournetsales.RevenuefromSaaSarrangementsisrecognizedratablyoverthedurationoftheagreementunlessthetermsoftheagreementindicatethatrevenueshouldberecognizedinadifferentpattern,forexamplebasedonusage.Licensefeesfromresearchcollaborationsincludepaymentsfortechnologytransferandaccessrights.Non-refundable,up-frontpaymentsreceivedinconnectionwithcollaborativeresearchanddevelopmentagreementsaregenerallydeferredandrecognizedonastraight-linebasisoverthecontractperiodduringwhichthereisanycontinuingobligation.Revenuefromintellectualpropertyandpatentsalesisrecognizedwhenearned,eitheratthetimeofsale,oroverthecontractperiodwhenlicensed.Paymentsformilestones,generallybasedontheachievementofsubstantiveandat-riskperformancecriteria,arerecognizedinfullatsuchtimeasthespecifiedmilestonehasbeenachievedaccordingtothetermsoftheagreement.Royaltiesfromlicenseesarebasedonreportedsalesoflicensedproductsandrevenuesarecalculatedbasedoncontracttermswhenreportedsalesarereliablymeasurable,feesarefixedordeterminableandcollectabilityisreasonablyassured.(US$equivalentforone)ClosingrateatDecember31, Annualaveragerate2017 2016 2017 2016 2015Euro(EUR) 1.1993 1.0541 1.1292 1.1068 1.1100PoundSterling(GBP) 1.3517 1.2312 1.2882 1.3560 1.5286SwissFranc(CHF) 1.0249 0.9816 1.0156 1.0153 1.0406AustralianDollar(AUD) 0.7815 0.7222 0.7666 0.7439 0.7522CanadianDollar(CAD) 0.7975 0.7430 0.7710 0.7552 0.7836JapaneseYen(JPY) 0.0089 0.0085 0.0089 0.0092 0.0083ChineseYuan(CNY) 0.1537 0.1440 0.1480 0.1506 0.1592Instrumentation:Revenuefrominstrumentationincludestheinstrumentationequipment,installation,trainingandotherinstrumentationservices,suchasextendedwarrantyservicesorproductmaintenancecontractsandoverthelastthreeyearshasaccountedforapproximately12%-13%ofnetsales.Revenuefrominstrumentationequipmentisrecognizedwhentitlepassestothecustomer,uponeithershipmentorwrittencustomeracceptanceaftersatisfyinganyinstallationandtrainingrequirements.Weofferourcustomersaccesstoourinstrumentationviareagentrentalagreementswhichplaceinstrumentationwithcustomerswithoutrequiringthemtopurchasetheequipment.Instead,werecoverthecostofprovidingtheinstrumentationintheamountchargedforconsumableproducts.Theinstrumentsplacedwithcustomersunderareagentrentalagreementaredepreciatedandchargedtocostofsalesonastraight-linebasisovertheestimatedlifeoftheinstrument,typically3to5years.Thecoststomaintaintheseinstrumentsinthefieldarechargedtocostofsalesasincurred.Revenuefromthesereagentrentalagreementsisallocatedtotheelementswithinthearrangement(thelease,thesaleofconsumablesand/orservices)inaccordancewithASC605-25,RevenueRecognitionMultiple-ElementArrangementsandrecognizedforeachunitofaccountingasappropriate.Wehavecontractswithmultipleelementswhichincludeinstrumentationequipment,eitherleasedunderareagentrentalagreementorsolddirectly,togetherwithotherelementssuchasinstallation,training,extendedwarrantyservicesorproductmaintenancecontractsorconsumableproducts.ThesecontractsareaccountedforunderASC605-25,RevenueRecognitionMultiple-ElementArrangements.Multiple-elementarrangementsareassessedtodeterminewhetherthereismorethanoneunitofaccounting.Inorderforadeliverabletoqualifyasaseparateunitofaccounting,bothofthefollowingcriteriamustbemet:Arrangementconsiderationisallocatedattheinceptionofthearrangementtoalldeliverablesonthebasisoftheirrelativesellingprice.Whenapplyingtherelativesellingpricemethod,thesellingpriceforeachdeliverableisdeterminedusing(a)vendor-specificobjectiveevidence(VSOE)ofsellingprice,ifitexists;orotherwise(b)third-partyevidenceofsellingprice.IfneitherVSOEnorthird-partyevidenceofsellingpriceexistsforadeliverable,thenthebestestimatedsellingpriceforthedeliverableisused.Thearrangementconsiderationisallocatedtotheseparateunitsofaccountingbasedoneachunitsrelativefairvalue.Ifthesecriteriaarenotmet,deliverablesincludedinanarrangementareaccountedforasasingleunitofaccountingandrevenuesandcostsaredeferreduntiltheperiodorperiodsinwhichthefinaldeliverableisprovided.Wehaveevaluatedthedeliverablesinourmultiple-elementarrangementsandconcludedthattheyareseparateunitsofaccountingbecausethedelivereditemoritemshavevaluetothecustomeronastandalonebasisandforanarrangementthatincludesageneralrightofreturnrelativetothedelivereditem(s),deliveryorperformanceoftheundelivereditem(s)isconsideredprobableandsubstantiallyinourcontrol.Revenuesfrominstallationandtrainingarerecognizedasservicesarecompleted,basedonVSOE,whichisdeterminedbyreferencetothepricecustomerspaywhentheservicesaresoldseparately.Revenuesfromextendedwarrantyservicesorproductmaintenancecontractsarerecognizedonastraight-linebasisoverthetermofthecontract,typicallyoneyear.VSOEoffairvalueofextendedwarrantyservicesorproductmaintenanceisdeterminedbasedonthepricechargedforthemaintenanceandsupportwhensoldseparately.Revenuesfromtheinstrumentationequipmentandconsumableproductsarerecognizedwhentheproductsaredeliveredandtherearenofurtherperformanceobligations.VSOEoffairvalueofinstrumentationequipmentandconsumableproductsisdeterminedbasedonthepricechargedfortheinstrumentandconsumableswhensoldseparately.Certainofourreagentrentalarrangementsincludeterminationprovisionsforbreachofcontract.However,theseterminationprovisionswouldnotimpactrecognizedrevenues.Ourotherarrangementsdonotincludeanyprovisionsforcancellationorrefunds.Thedelivereditemshavevaluetotheclientonastand-alonebasis;Ifthearrangementincludesageneralrightofreturnrelativetothedelivereditem,deliveryorperformanceoftheundelivereditemoritemsisconsideredprobableandsubstantiallyinthecontroloftheCompany.WarrantyWeprovidewarrantiesonourproductsagainstdefectsinmaterialsandworkmanshipforaperiodof1year.Aprovisionforestimatedfuturewarrantycostsisrecordedincostofsalesatthetimeproductrevenueisrecognized.Productwarrantyobligationsareincludedinaccruedandothercurrentliabilitiesintheaccompanyingconsolidatedbalancesheets.Thechangesinthecarryingamountofwarrantyobligationsareasfollows:ResearchandDevelopmentResearchandproductdevelopmentcostsareexpensedasincurred.Researchanddevelopmentexpensesconsistprimarilyofsalariesandrelatedexpenses,facilitycostsandamountspaidtocontractresearchorganizations,andlaboratoriesfortheprovisionofservicesandmaterialsaswellascostsforinternaluseorclinicaltrials.GovernmentGrantsWerecognizegovernmentgrantswhenthereisreasonableassurancethatallconditionswillbecompliedwithandthegrantwillbereceived.Ourgovernmentgrantsgenerallyrepresentsubsidiesforspecifiedactivitiesandarethereforerecognizedwhenearnedasareductionoftheexpensesrecordedfortheactivitythatthegrantsareintendedtocompensate.Thus,whenthegrantrelatestoresearchanddevelopmentexpense,thegrantisrecognizedoverthesameperiodthattherelatedcostsareincurred.Otherwise,amountsreceivedundergovernmentgrantsarerecordedasliabilitiesinthebalancesheet.Whenthegrantrelatestoanasset,thenominalamountofthegrantisdeductedfromthecarryingamountoftheassetandrecognizedoverthesameperiodthattherelatedassetisdepreciated.BorrowingCostsBorrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofanassetthattakesasubstantialperiodoftimetogetreadyforitsintendeduseorsalearecapitalizedaspartofthecostoftherespectiveassets(qualifyingasset)whensuchborrowingcostsaresignificant.Allotherborrowingcostsareexpensedintheperiodtheyoccur.ShippingandHandlingIncomeandCostsShippingandhandlingcostschargedtocustomersarerecordedasrevenueintheperiodthattherelatedproductsalerevenueisrecorded.Associatedcostsofshippingandhandlingareincludedinsalesandmarketingexpenses.(inthousands) TotalBALANCEATDECEMBER31,2015 $2,637Provisionchargedtocostofsales 3,562Usage (2,936)Adjustmentstopreviouslyprovidedwarranties,net (424)Currencytranslation (60)BALANCEATDECEMBER31,2016 $2,779Provisionchargedtocostofsales 3,024Usage (2,859)Adjustmentstopreviouslyprovidedwarranties,net (54)Currencytranslation 161BALANCEATDECEMBER31,2017 $3,051FortheyearsendedDecember31,2017,2016and2015,shippingandhandlingcoststotaled$28.6million,$26.5millionand$26.2million,respectively.AdvertisingCostsThecostsofadvertisingareexpensedasincurredandareincludedasacomponentofsalesandmarketingexpense.AdvertisingcostsfortheyearsendedDecember31,2017,2016and2015were$7.2million,$8.4millionand$7.2million,respectively.GeneralandAdministrative,Restructuring,IntegrationandOtherGeneralandadministrativeexpensesprimarilyrepresentthecostsrequiredtosupportadministrativeinfrastructure.Inaddition,weincurindirectacquisitionandbusinessintegrationcostsinconnectionwithbusinesscombinations.Thesecostsrepresentincrementalcoststhatwebelievewouldnothavebeenincurredabsentthebusinesscombinations.MajorcomponentsofthesecostsincludepayrollandrelatedcostsforemployeesremainingwiththeCompanyonatransitionalbasis;publicrelations,advertisingandmediacostsforre-brandingofthecombinedorganization;and,consultingandrelatedfeesincurredtointegrateorrestructuretheacquiredoperations.Restructuringcostsincludepersonnelcosts(principallyterminationbenefits),facilityclosureandcontractterminationcosts.TerminationbenefitsareaccountedforinaccordancewithFASBASCTopic712,Compensation-NonretirementPostemploymentBenefits,andarerecordedwhenitisprobablethatemployeeswillbeentitledtobenefitsandtheamountscanbereasonablyestimated.Estimatesofterminationbenefitsarebasedonthefrequencyofpastterminationbenefits,thesimilarityofbenefitsunderthecurrentplanandpriorplans,andtheexistenceofstatutoryrequiredminimumbenefits.Facilityclosure,someterminationbenefitsandothercostsareaccountedforinaccordancewithFASBASCTopic420,ExitorDisposalCostObligationsandarerecordedwhentheliabilityisincurred.Thespecificrestructuringmeasuresandassociatedestimatedcostsarebasedonmanagement'sbestbusinessjudgmentundertheexistingcircumstancesatthetimetheestimatesaremade.Iffutureeventsrequirechangestotheseestimates,suchadjustmentswillbereflectedintheperiodoftherevisedestimate.IncomeTaxesWeaccountforincometaxesundertheliabilitymethod.Underthismethod,totalincometaxexpenseistheamountofincometaxesexpectedtobepayableforthecurrentyearplusthechangefromthebeginningoftheyearfordeferredincometaxassetsandliabilitiesestablishedfortheexpectedfurthertaxconsequencesresultingfromdifferencesinthefinancialreportingandtaxbasisofassetsandliabilities.Deferredtaxassetsand/orliabilitiesaredeterminedbymultiplyingthedifferencesbetweenthefinancialreportingandtaxreportingbasesforassetsandliabilitiesbytheenactedtaxratesexpectedtobeineffectwhensuchdifferencesarerecoveredorsettled.Deferredtaxassetsarereducedbyavaluationallowancetotheamountmorelikelythannottoberealized.Theeffectondeferredtaxesofachangeintaxratesisrecognizedinincomeintheperiodthatincludestheenactmentdate.Taxbenefitsareinitiallyrecognizedinthefinancialstatementswhenitismorelikelythannotthatthepositionwillbesustaineduponexaminationbythetaxauthorities.Suchtaxpositionsareinitiallyandsubsequentlymeasuredasthelargestamountoftaxbenefitthatisgreaterthan50percentlikelyofbeingrealizeduponsettlementwiththetaxingauthorityusingthecumulativeprobabilitymethod,assumingthetaxauthorityhasfullknowledgeofthepositionandallrelevantfacts.Ourpolicyistorecognizeinterestaccruedrelatedtounrecognizedtaxbenefitsininterestexpenseandpenaltieswithintheincometaxexpense.DerivativeInstrumentsWeenterintoderivativefinancialinstrumentcontractstominimizethevariabilityofcashflowsorincomestatementimpactassociatedwiththeanticipatedtransactionsbeinghedgedortohedgefluctuatinginterestrates.Aschangesinforeigncurrencyorinterestrateimpactthevalueofanticipatedtransactions,thefairvalueoftheforwardorswapcontractsalsochanges,offsettingforeigncurrencyorinterestratefluctuations.Derivativeinstrumentsarerecordedonthebalancesheetatfairvalue.Changesinfairvalueofderivativesarerecordedincurrentearningsorothercomprehensiveincome,dependingonwhetheraderivativeisdesignatedaspartofahedgetransaction.Share-BasedPaymentsCompensationcostforallshare-basedpaymentsisrecordedbasedonthegrantdatefairvalue,lessanestimateforpre-vestingforfeitures,recognizedinexpenseovertheserviceperiod.During2016wemadeachangeinaccountingprincipletomovefromastraight-lineattributionmethodforexpenserecognitiontoanacceleratedattributionmethod.ForfeitureRateThisistheestimatedpercentageofgrantsthatareexpectedtobeforfeitedorcancelledonanannualbasisbeforebecomingfullyvested.Weestimatedtheforfeitureratebasedonhistoricalforfeitureexperience.RestrictedStockUnitsandPerformanceStockUnits:RestrictedstockunitsandperformancestockunitsrepresentrightstoreceiveCommonSharesatafuturedate.Thefairmarketvalueofrestrictedandperformancestockunitsisdeterminedbasedonthenumberofstockunitsgrantedandthefairmarketvalueofoursharesonthegrantdate.Thefairmarketvalueatthetimeofthegrant,lessanestimateforpre-vestingforfeitures,isrecognizedinexpenseoverthevestingperiod.Ateachreportingperiod,theestimatedperformanceachievementoftheperformancestockunitsisassessedandanychangeintheestimatedachievementisrecordedonacumulativebasisintheperiodofadjustment.CashandCashEquivalentsCashandcashequivalentsconsistofcashondepositinbanksandothercashinvestedtemporarilyinvariousinstrumentsthatareshort-termandhighlyliquid,andhavinganoriginalmaturityoflessthan90daysatthedateofpurchase.Short-TermInvestmentsShort-terminvestmentsareclassifiedasavailableforsaleandstatedatfairvalueintheaccompanyingbalancesheet.Interestincomeisaccruedwhenearnedandchangesinfairmarketvaluesarereflectedasunrealizedgainsandlosses,calculatedonthespecificidentificationmethod,asacomponentofaccumulatedothercomprehensiveincome(loss)inequity.Theamortizationofpremiumsandaccretionofdiscountstomaturityarisingfromacquisitionisincludedininterestincome.Adeclineinfairvaluethatisjudgedtobeother-than-temporaryisaccountedforasarealizedlossandthewrite-downisincludedintheconsolidatedstatementsofincome.Realizedgainsandlosses,determinedonaspecificidentificationbasis,onthesaleofshort-terminvestmentsareincludedinincome.FairValueofFinancialInstrumentsThecarryingamountofcashandcashequivalents,notesreceivable,accountsreceivable,accountspayableandaccruedliabilitiesapproximatetheirfairvaluesbecauseoftheshortmaturitiesofthoseinstruments.Thecarryingvalueofourvariableratedebtandcapitalleasesapproximatestheirfairvaluesbecauseoftheshortmaturitiesand/orinterestrateswhicharecomparabletothoseavailabletousonsimilarterms.ThefairvaluesoftheCashConvertibleNotesarebasedonanestimationusingavailableover-the-countermarketinformation.ThefairvaluesofthePrivatePlacementSeniorNotesfurtherdescribedinNote15wereestimatedusingthechangesintheU.S.Treasuryrates.(inthousands) 2017 2016Cashatbankandonhand $139,597 $137,615Short-termbankdeposits 518,117 301,565CashandCashEquivalents $657,714 $439,180AccountsReceivableOuraccountsreceivableareunsecuredandweareatrisktotheextentsuchamountsbecomeuncollectible.Wecontinuallymonitoraccountsreceivablebalances,andprovideforanallowancefordoubtfulaccountsatthetimecollectionbecomesquestionablebasedonpaymenthistoryorageofthereceivable.Amountsdeterminedtobeuncollectiblearewrittenoffagainstthereserve.FortheyearsendedDecember31,2017,2016and2015,write-offsofaccountsreceivabletotaled$3.2million,$1.6millionand$2.0million,respectively,whileprovisionsfordoubtfulaccountswhichwerechargedtoexpensetotaled$3.1million,$2.1millionand$2.1million,respectively.Forallyearspresented,nosinglecustomerrepresentedmorethantenpercentofaccountsreceivableorconsolidatednetsales.InventoriesInventoriesarestatedatthelowerofcostornetrealizablevalue,determinedoneitheraweightedaveragecostbasisorastandardcostbasiswhichisregularlyadjustedtoactual.Inventoriesincludematerial,directlaborandoverheadcostsandarereducedforestimatedobsolescence.InventoriesconsistedofthefollowingasofDecember31,2017and2016:Property,PlantandEquipmentProperty,plantandequipment,includingequipmentacquiredundercapitalleaseobligations,arestatedatcostlessaccumulatedamortization.Capitalizedinternal-usesoftwarecostsincludeonlythosedirectcostsassociatedwiththeactualdevelopmentoracquisitionofcomputersoftwareforinternaluse,includingcostsassociatedwiththedesign,coding,installationandtestingofthesystem.Costsassociatedwithpreliminarydevelopment,suchastheevaluationandselectionofalternatives,aswellastraining,maintenanceandsupportareexpensedasincurred.Costsforsoftwaretobesold,leasedorotherwisemarketedthatarerelatedtotheconceptualformulationanddesignareexpensedasincurred.Costsincurredtoproducetheproductaftertechnologicalfeasibilityisestablishedarecapitalizedandamortizedinaccordancewiththeaccountingstandardsforthecostsofsoftwaretobesold,leased,orotherwisemarketed.Allotherdepreciationiscomputedusingthestraight-linemethodovertheestimatedusefullivesoftheassets(3to40years).Amortizationofleaseholdimprovementsiscomputedonastraight-linebasisoverthelesseroftheremaininglifeoftheleaseortheestimatedusefullifeoftheimprovementasset.Wehaveapolicyofcapitalizingexpendituresthatmateriallyincreaseassetsusefullivesandchargingordinarymaintenanceandrepairstooperationsasincurred.Whenpropertyorequipmentisdisposedof,thecostandrelatedaccumulateddepreciationandamortizationareremovedfromtheaccountsandanygainorlossisincludedinearnings.AcquiredIntangiblesandGoodwillAcquiredintangibleswithalternativefutureusesarecarriedatcostlessaccumulatedamortizationandconsistoflicensestotechnologyheldbythirdpartiesandotheracquiredintangibleassets.Amortizationiscomputedovertheestimatedusefullifeoftheunderlyingpatents,whichhashistoricallyrangedfromonetotwentyyears.Purchasedintangibleassetsacquiredinbusinesscombinations,otherthangoodwill,areamortizedovertheirestimatedusefullivesunlesstheselivesaredeterminedtobeindefinite.Intangiblesareassessedforrecoverabilityconsideringthecontractlifeandtheperiodoftimeoverwhichtheintangiblewillcontributetofuturecashflow.Theunamortizedcostofintangibleassets,wherecashflowsareindependentandidentifiablefromotherassets,isevaluatedperiodicallyandadjusted,ifnecessary,ifeventsandcircumstancesindicatethatadeclineinvaluebelowthecarryingamount(inthousands) 2017 2016Rawmaterials $23,717 $29,402Workinprocess 33,153 28,123Finishedgoods 99,057 $79,027Totalinventories,net $155,927 $136,552hasoccurred.FortheyearsendedDecember31,2016and2015,werecordedintangibleassetimpairmentsof$21.4millionand$0.2million,respectively.IntangibleassetimpairmentsrecordedduringtheyearendedDecember31,2016arefurtherdiscussedinNote6Restructuring.Amortizationexpenserelatedtodevelopedtechnologyandpatentandlicenserightswhichhavebeenacquiredinabusinesscombinationisincludedincostofsales.Amortizationoftrademarks,customerbaseandnon-competeagreementswhichhavebeenacquiredinabusinesscombinationisrecordedinoperatingexpenseunderthecaption'acquisition-relatedintangibleamortization'.Amortizationexpensesofintangibleassetsnotacquiredinabusinesscombinationarerecordedwithineitherthecostofsales,researchanddevelopmentorsalesandmarketinglineitemsbasedontheuseoftheasset.Goodwillrepresentsthedifferencebetweenthepurchasepriceandtheestimatedfairvalueofthenetassetsacquiredarisingfrombusinesscombinations.Goodwillissubjecttoimpairmenttestsannuallyorearlierifindicatorsofpotentialimpairmentexist,usingafair-value-basedapproach.WehaveelectedtoperformourannualtestforindicationsofimpairmentasofOctober1stofeachyear.FollowingtheannualimpairmenttestsfortheyearsendedDecember31,2017,2016and2015,goodwillhasnotbeenimpaired.AsdiscussedinNote6Restructuring,in2016werecordeda$2.6milliondisposalofgoodwillassociatedtothe2016restructuringinitiative.InvestmentsWehaveinvestmentsinnon-marketablesecuritiesissuedbyprivatelyheldcompanies.Theseinvestmentsareincludedinotherlong-termassetsintheaccompanyingconsolidatedbalancesheetsandareaccountedforusingtheequityorcostmethodofaccounting.Investmentsareevaluatedperiodically,orwhenimpairmentindicatorsarenoted,todetermineifdeclinesinvalueareother-than-temporary.Inmakingthatdetermination,weconsiderallavailableevidencerelatingtotherealizablevalueofasecurity.Thisevidenceincludes,butisnotlimitedto,thefollowing:Weconsiderwhetherthefairvaluesofanyofourcostorequitymethodinvestmentshavedeclinedbelowtheircarryingvaluewheneveradverseeventsorchangesincircumstancesindicatethatrecordedvaluesmaynotberecoverable.Ifanysuchdeclineisconsideredtobeotherthantemporary(basedonvariousfactors,includinghistoricalfinancialresults,productdevelopmentactivitiesandtheoverallhealthoftheaffiliatesindustry),thenawrite-downoftheinvestmentwouldberecordedinoperatingexpensetoitsestimatedfairvalue.FortheyearendedDecember31,2017and2015,werecordedtotalimpairmentstocostmethodinvestmentsof$5.1millionand$2.2million,respectively,inotherexpense,net.In2016,werecordedanimpairmenttoanequitymethodinvestmentof$8.3millioninotherexpense,net.ImpairmentofLong-LivedAssetsWereviewourlong-livedassetsforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountofanassetoragroupofassetsmaynotberecoverable.Weconsider,amongstotherindicators,ahistoryofoperatinglossesorachangeinexpectedsaleslevelstobeindicatorsofpotentialimpairment.Assetsaregroupedandevaluatedforimpairmentatthelowestlevelforwhichthereareidentifiablecashflowsthatarelargelyindependentofthecashflowsofothergroupsofassets.Ifanassetisdeterminedtobeimpaired,thelossismeasuredastheamountbywhichthecarryingamountoftheassetexceedsfairvaluewhichisdeterminedbyapplicablemarketprices,whenavailable.Whenmarketpricesarenotavailable,wegenerallymeasurefairvalueadversefinancialconditionsofaspecificissuer,segment,industry,regionorothervariables;thelengthoftimeandtheextenttowhichthefairvaluehasbeenlessthancost;andthefinancialconditionandnear-termprospectsoftheissuer.bydiscountingprojectedfuturecashflowsoftheasset.Considerablejudgmentisnecessarytoestimatediscountedfuturecashflows.Accordingly,actualresultscoulddifferfromsuchestimates.Duringtheyearended2016,inconnectionwiththerestructuringdiscussedinNote6,werecordedassetimpairmentchargesof$10.9million,ofwhich$10.8millionisrecordedingeneralandadministrative,restructuring,integrationandotherexpenseand$0.1millionisrecordedincostofsales.In2015,werecordedassetimpairmentchargesof$3.1millioningeneralandadministrative,restructuring,integrationandotherexpensesintheaccompanyingconsolidatedstatementsofincomerelatedtotheabandonmentofcertainsoftwareprojectsfollowingtheacquisitionofMOBIO.4.SegmentInformationConsideringtheacquisitionmadeduring2017,wedeterminedthatwestilloperateasonebusinesssegmentinaccordancewithFASBASCTopic280,SegmentReporting.Asaresultofourcontinuedrestructuringandstreamliningofthegrowingorganization,ourchiefoperatingdecisionmaker(CODM)continuestomakedecisionswithregardstobusinessoperationsandresourceallocationbasedonevaluationsofQIAGENasawhole.Accordingly,weoperateasonebusinesssegment.Summarizedproductcategoryandgeographicinformationisshowninthetablesbelow.ProductCategoryInformationNetsalesfortheproductcategoriesareattributedbasedonthoserevenuesrelatedtosampleandassayproductsandsimilarlyrelatedrevenuesincludingbioinformaticssolutions,andrevenuesderivedfrominstrumentationsales.GeographicalInformationNetsalesareattributedtocountriesbasedonthelocationofthecustomer.QIAGENoperatesmanufacturingfacilitiesinGermany,China,andtheUnitedStatesthatsupplyproductstocustomersaswellasQIAGENsubsidiariesinothercountries.Theintersegmentportionsofsuchnetsalesareexcludedtoderiveconsolidatednetsales.Nosinglecustomerrepresentsmorethantenpercentofconsolidatednetsales.OurcountryofdomicileistheNetherlands,whichreportednetsalesof$15.0million,$12.4millionand$11.3millionfortheyearsended2017,2016and2015,respectively,andtheseamountsareincludedinthelineitemEurope,MiddleEastandAfricaasshowninthetablebelow.(inthousands) 2017 2016 2015NetSalesConsumablesandrelatedrevenues $1,242,715 $1,166,131 $1,114,580Instrumentation 174,821 171,860 166,406Total $1,417,536 $1,337,991 $1,280,986Long-livedassetsincludeproperty,plantandequipment.TheNetherlands,whichisincludedinthebalancesforEurope,reportedlong-livedassetsof$1.7millionand$1.4millionasofDecember31,2017and2016,respectively.5.AcquisitionsAcquisitionshavebeenaccountedforasbusinesscombinations,andtheacquiredcompaniesresultshavebeenincludedintheaccompanyingconsolidatedstatementsofincomefromtheirrespectivedatesofacquisition.Ouracquisitionshavehistoricallybeenmadeatpricesabovethefairvalueoftheacquirednetassets,resultingingoodwill,duetoexpectationsofsynergiesofcombiningthebusinesses.Thesesynergiesincludeuseofourexistinginfrastructure,suchassalesforce,sharedservicecenters,distributionchannelsandcustomerrelations,toexpandsalesoftheacquiredbusinessesproducts;useoftheinfrastructureoftheacquiredbusinessestocost-effectivelyexpandsalesofourproducts;andeliminationofduplicativefacilities,functionsandstaffing.2017AcquisitionOnJanuary6,2017,weacquiredOmicSoftCorporation,aleadingproviderofomicsdatamanagementsolutionslocatedinCary,NorthCarolina(U.S.).ThisacquisitionwasnotsignificanttotheoverallconsolidatedfinancialstatementsandasofDecember31,2017,theallocationofthepurchasepricewasfinal.Theacquisitiondidnothaveamaterialimpacttonetsales,netincomeorearningspershareandthereforenoproformainformationhasbeenprovidedherein.2016Acquisitions(inthousands) 2017 2016 2015NetSalesAmericas:UnitedStates $579,906 $555,676 $525,532OtherAmericas 73,478 71,797 79,578TotalAmericas 653,384 627,473 605,110Europe,MiddleEastandAfrica 462,980 428,055 409,955AsiaPacificandRestofWorld 301,172 282,463 265,921Total $1,417,536 $1,337,991 $1,280,986(inthousands) 2017 2016Long-livedassetsAmericas:UnitedStates $148,694 $145,813OtherAmericas 4,488 4,544TotalAmericas 153,182 150,357Germany 286,567 237,190OtherEurope 41,188 37,057AsiaPacificandRestofWorld 13,384 12,051Total $494,321 $436,655Duringthesecondquarterof2016,weacquiredamajorityshareholdinginExiqonA/S(Exiqon),apubliclytradedDanishcompanyheadquarteredinVedbaek,Denmark,whichisaleadingproviderofRNAanalysissolutionswithaproprietaryLockedNucleicAcid(LNA)technology.TheacquisitionexpandsourleadershippositioninSampletoInsightsolutionsforRNAanalysis.OnJune28,2016,wepaidDKK627.4million($95.2million)forapproximately94.52%oftheoutstandingExiqoncommonshares.Ontheacquisitiondate,thefairvalueoftheremainingshareswas$5.5million.ThefairvalueofthisnoncontrollingsharewasbasedonreferencetoquotedmarketvaluesofExiqonstock.DuringtheyearendedDecember31,2016,weacquiredtheremainingExiqonsharesfor$5.5millionincash,whichisincludedinotherfinancingactivitiesintheaccompanyingconsolidatedstatementsofcashflowsandasofDecember31,2016weheld100%ofExiqon'sshares.FortheyearendedDecember31,2016,acquisition-relatedcostsof$6.3millionareincludedingeneralandadministrative,restructuring,integrationandotherintheaccompanyingconsolidatedstatementsofincome.ThefinalpurchasepriceallocationasofDecember31,2017didnotdifferfromthepreliminarypurchasepriceallocationasofJune30,2016otherthana$9.4millionincreaseindevelopedtechnology,a$9.2millionincreaseindeferredtaxassetontaxlosscarryforwards,a$2.8milliondecreaseincustomerrelationships,a$1.2millionincreaseoflong-termdeferredtaxliability,a$0.4millionincreaseinprepaidexpensesandothercurrentassetsandanadditional$0.3millionincreaseofotheropeningbalancesheetliabilities.Thecorrespondingimpactfortheseadjustmentswasadecreasetogoodwillof$14.7million.(inthousands) ExiqonacquisitionPurchasePrice:Cashconsideration $95,163Fairvalueofremainingshares 5,519$100,682FinalAllocation:Cashandcashequivalents $4,824Accountsreceivable 3,581Inventory 1,553Prepaidexpensesandothercurrentassets 1,853Accountspayable (1,289)Accrualsandothercurrentliabilities (11,587)Debtassumed (6,068)Otherlong-termliabilities (197)Deferredtaxassetontaxlosscarryforwards 10,016Fixedandotherlong-termassets 2,870Developedtechnology 18,500Customerrelationships 3,800Tradenames 1,400Goodwill 76,807Deferredtaxliabilityonfairvalueofidentifiableintangibleassetsacquired (5,381)$100,682Theweightedaverageamortizationperiodfortheintangibleassetsis11.1years.Thegoodwillacquiredisnotdeductiblefortaxpurposes.Revenueandearningsinthereportingperiodssincetheacquisitiondatehavenotbeensignificant.NoproformafinancialinformationhasbeenprovidedhereinastheacquisitionofExiqondidnothaveamaterialimpacttonetsales,netincomeorearningspershareonaproformabasis.2015AcquisitionsDuring2015,wecompletedthreeacquisitions,includingtheacquisitionofMOBIOLaboratories,Inc.,aprivately-heldU.S.company,thatisconsideredaleaderinsampletechnologiesformetagenomicsandmicrobiomeanalysis.Purchaseconsiderationfortheseacquisitionstotaled$66.9millionincash,netofcashacquired,andasofDecember31,2016,thepurchasepriceallocationsarefinal.Eachoftheseacquisitionsdidnothaveamaterialimpacttonetsales,netincomeorearningspershareandthereforenoproformainformationhasbeenprovidedherein.6.Restructuring2017RestructuringDuringthefourthquarterof2017,weinitiatedrestructuringinitiativestomitigatethenegativeimpactsstemmingfromtheU.S.taxlegislationasfurtherdiscussedinNote16.Totalpre-taxcostsareexpectedtobebetween$22.8millionand$24.8million,ofwhich$13.8millionwasincurredin2017.Futurepre-taxcostsbetween$9.0millionto$11.0millionareexpectedtobeincurredin2018primarilyrelatedtopersonnelandothercosts.Thefollowingtablesummarizesthecashcomponentsoftherestructuringactivity.ThePersonnelRelatedandConsultingCostsareincludedwithingeneralandadministrative,restructuring,integrationandotherandanadditional$3.0millionofinventorywrite-offsisincludedincostofsalesintheaccompanyingconsolidatedstatementofincomefortheyearendedDecember31,2017.Theliabilityof$10.8millionisincludedinaccruedandothercurrentliabilitiesintheaccompanyingconsolidatedbalancesheetatDecember31,2017.2016RestructuringDuringthefourthquarterof2016,weinitiatedaseriesoftargetedactionstosupportfastersalesmomentumandimproveefficiencyandaccountability.Theobjectivewiththeseactionsistoensurethatwegrowsustainablyandconsistentlyinthecomingyears.Measuresincludesimplifyingourgeographicpresencewithsitereductions,focusingresourcestosharedservicecenters,andstreamliningselectedorganizationalstructures.Noadditionalcostswillbeincurredrelatedtothisprogram.Cumulativecostsforthisprogramareasfollows:(inthousands) PersonnelRelated ConsultingCosts TotalCostsincurredin2017 $6,174 $4,583 $10,757Foreigncurrencytranslationadjustment 48 2 50LiabilityatDecember31,2017 $6,222 $4,585 $10,807PersonnelRelatedexpensesduring2017and2016includesreductionsincostsof$0.7millionand$2.0million,respectively,asaresultofforfeituresofshare-basedcompensationinconnectionwithterminations.DuringtheyearendedDecember31,2016,AssetImpairmentsandDisposalsinclude$21.4millionforintangibleassetimpairments,$10.9millionforfixedassetabandonments,and$1.1millionprimarilyinconnectionwiththewrite-offofprepaidcontractcosts.Thetotal$10.9millionofexpenseincludedinotherexpense,netintheaccompanyingconsolidatedstatementsofincomeiscomposedof$8.3millionassociatedwithanimpairmentofanequitymethodinvestmentandadisposalofgoodwillof$2.6million.Thefollowingtablesummarizesthecashcomponentsoftherestructuringactivity.AtDecember31,2017,$5.6millionoftheliabilityisincludedinaccruedandothercurrentliabilitiesand$0.8millionisincludedinother-longtermliabilitiesintheaccompanyingconsolidatedbalancesheet.AtDecember31,2016,$27.6millionoftheliabilityisincludedinaccruedandothercurrentliabilitiesand$4.7millionisincludedinotherlong-termliabilitiesintheaccompanyingconsolidatedbalancesheet.2014RestructuringDuringthefourthquarterof2014,werecordedrestructuringchargesinconnectionwiththeacquisitionofEnzymaticsandfromtheimplementationofheadcountreductionsandfacilityconsolidationstofurtherstreamline(inthousands) PersonnelRelated FacilityRelatedContractandOtherCostsAssetImpairments&Disposals TotalCostofsales $1,222 $205 $43 $10,490 $11,960Generalandadministrative,restructuring,integrationandother17,998 6,960 8,272 22,963 56,193Otherexpense,net 10,946 10,946Total2016costs $19,220 $7,165 $8,315 $44,399 $79,099Costofsales $1,141 $ $238 $ $1,379Generalandadministrative,restructuring,integrationandother$8,399 $350 $9,612 $ $18,361Total2017costs $9,540 $350 $9,850 $ $19,740Totalcumulativecosts $28,760 $7,515 $18,165 $44,399 $98,839(inthousands) PersonnelRelated FacilityRelatedContractandOtherCosts TotalCostsincurredin2016 $21,252 $7,165 $8,315 $36,732Payments (2,742) (601) (2,391) (5,734)Facilitydeferredrentreclassifiedtorestructuring 1,326 1,326Foreigncurrencytranslationadjustment (30) (8) 19 (19)LiabilityatDecember31,2016 $18,480 $7,882 $5,943 $32,305Additionalcostsin2017 13,357 1,798 9,883 25,038Releaseofexcessaccrual (3,083) (1,448) (30) (4,561)Payments (25,586) (7,478) (14,887) (47,951)Facilitydeferredrentreclassifiedtorestructuring 241 241Foreigncurrencytranslationadjustment 1,126 57 157 1,340LiabilityatDecember31,2017 $4,294 $1,052 $1,066 $6,412operationsandvariousmeasuresaspartofacommitmenttocontinuousimprovementandrelatedtoQIAGEN'sstrategicfocusonitsfivegrowthdrivers.Noadditionalcostswereincurredsubsequentto2014relatedtothisprogram.Thefollowingtablesummarizesthecomponentsoftherestructuringcosts.7.Short-TermInvestmentsAtDecember31,2017and2016,wehad$359.2millionand$89.3million,respectively,ofloanreceivablesandcommercialpaperduefromfinancialinstitutions.Theseloanreceivablesandcommercialpaperarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketandarecarriedatfairmarketvalue,whichisequaltothecost.AtDecember31,2017,theseloansconsistof$308.2millionand42.5million($51.0millionasofDecember31,2017)whichmatureatvariousdatesthroughDecember2018.Allinstrumentsthathaveanoriginaltenorofmorethan12monthsincluderedemptionrightsonatleastaquarterlybasis.Interestincomeisdeterminedusingtheeffectiveinterestratemethod.Theseloansareclassifiedascurrentassetsintheaccompanyingconsolidatedbalancesheetssincewemayredeemtheloansatourdiscretion.AtDecember31,2016,wehad3.5million($3.7million)intermdepositswhichmaturedinAugust2017.Thedepositscouldbewithdrawnattheendofeachquarterwithoutpenaltyandwerethereforeclassifiedascurrentassetsintheaccompanyingconsolidatedbalancesheets.FortheyearsendedDecember31,2017,2016and2015,proceedsfromsalesofshortterminvestmentstotaled$189.0million,$533.8millionand$367.7million,respectively.DuringtheyearsendedDecember31,2017and2016,realizedgainstotaled$1.1millionand$1.4million,respectively.DuringtheyearendedDecember31,2015,realizedlossestotaled$6.0million.8.PrepaidExpensesandOtherCurrentAssetsPrepaidexpensesandothercurrentassetsaresummarizedasfollowsasofDecember31,2017and2016:(inthousands) PersonnelRelated FacilityRelatedContractandOtherCosts TotalBalanceatDecember31,2014 $6,341 $7,627 $652 $14,620Payments (4,789) (4,199) (418) (9,406)Releaseofexcessaccrual (453) (20) (473)Foreigncurrencytranslationadjustment (630) (630)BalanceatDecember31,2015 $469 $3,428 $214 $4,111Payments (143) (3,428) (214) (3,785)Releaseofexcessaccrual (325) (325)Foreigncurrencytranslationadjustment (1) (1)BalanceatDecember31,2016 $ $ $ $9.Property,PlantandEquipmentProperty,plantandequipment,includingequipmentacquiredundercapitalleaseobligations,aresummarizedasfollowsasofDecember31,2017and2016:AmortizationofassetsacquiredundercapitalleaseobligationsisincludedwithinaccumulateddepreciationandamortizationabovefortheyearsendedDecember31,2017and2016,respectively.FortheyearsendedDecember31,2017,2016and2015depreciationandamortizationexpensetotaled$82.5million,$75.1millionand$59.5million,respectively.FortheyearsendedDecember31,2017,2016and2015amortizationrelatedtocomputersoftwaretobesold,leasedormarketedtotaled$13.9million,$9.3millionand$5.1million,respectively.In2016,werecordedassetimpairmentchargesof$10.9millionrelatedtotherestructuringchargediscussedinNote6.Impairmentsincluded$7.5millionofcomputersoftwaretobesold,leasedormarketed,$1.7millioninmachineryandequipment,$1.5millionininternal-usesoftware,$0.1millioninfurnitureandofficeequipmentand$0.1millioninbuildingsandimprovements.In2015,werecordedassetimpairmentchargesof$3.1million,ofwhich$1.0millionrelatedtocomputersoftwaretobesold,leasedormarketedrelatedtotheabandonmentofcertainprojectsfollowingtheacquisitionofMOBIO.Repairsandmaintenanceexpensewas$12.7million,$13.0millionand$15.4millionin2017,2016and2015,respectively.FortheyearendedDecember31,2017and2016,constructioninprogressprimarilyincludesamountsrelatedtoongoingsoftwaredevelopmentprojects.FortheyearsendedDecember31,2017,2016and2015,interestcapitalizedinconnectionwithconstructionprojectswasnotsignificant.10.Investments(inthousands) 2017 2016Prepaidexpenses $41,775 $35,529Cashcollateral 21,907 1,200Valueaddedtax 17,870 14,985Otherreceivables 15,902 9,699Fairvalueofderivativeinstruments 9,033 5,386Totalprepaidexpensesandothercurrentassets $106,487 $66,799(inthousands) Estimatedusefullife 2017 2016Land $18,188 $16,327Buildingsandimprovements 5-40 328,938 301,092Machineryandequipment 3-10 299,175 257,349Computersoftware 3-7 243,809 176,227Furnitureandofficeequipment 3-10 103,257 89,560Constructioninprogress 65,542 47,2601,058,909 887,815Less:Accumulateddepreciationandamortization (564,588) (451,160)Property,plantandequipment,net $494,321 $436,655Wehavemadestrategicinvestmentsincertaincompaniesthatareaccountedforusingtheequityorcostmethodofaccounting.Themethodofaccountingforaninvestmentdependsonthelevelofinfluence.Wemonitorchangesincircumstancesthatmayrequireareassessmentofthelevelofinfluence.Weperiodicallyreviewthecarryingvalueoftheseinvestmentsforimpairment,consideringfactorssuchasthemostrecentstocktransactionsandbookvaluesfromtherecentfinancialstatements.Thefairvalueofcostandequity-methodinvestmentsisestimatedwhenthereareidentifiedeventsorchangesincircumstancesthatmayhaveanimpactonthefairvalueoftheinvestment.Additionally,wehaveinvestmentsinmarketableequitysecuritiesthathavereadilydeterminablefairvaluesthatareclassifiedasavailable-for-sale.Theseinvestmentsarereportedatfairvalue,withunrealizedgainsandlossesrecordedinaccumulatedothercomprehensiveincome(loss)inequity.EquityMethodInvestmentsAsummaryoftheseequitymethodinvestments,whichareincludedinotherlong-termassetsintheconsolidatedbalancesheets,isasfollows:During2017,weacquireda40%interestinMAQGENBiotechnologyCo.,Ltd.for$4.0millionandacommitmenttocontributeanadditional$8.0millioninfutureperiods.Also,during2017,wesoldourinterestinQIAGEN(Suzhou)InstituteofTranslationResearchCo.,Ltd.,whichhadnobookvalueatthetimeofsale,for$3.5millionandrecordedacorrespondinggaininotherexpense,netintheaccompanyingstatementofincome.Inconnectionwiththe2016restructuringactivitiesdiscussedinNote6,in2016wetransferredtheresearchanddevelopmentactivitiesofourinstrumentationbusinesstoanewcompany,HombrechtikonSystemsEngineeringAG(HSE),inwhichweacquireda19.0%interestforatotalobligationof$9.8millionpayableoverthreeyears.AsofDecember31,2017and2016,$3.1millionand$3.9million,respectively,wereincludedinaccruedandothercurrentliabilitiesand$3.1millionand$5.9million,respectively,wereincludedinotherlong-termliabilitiesintheaccompanyingconsolidatedbalancesheet.HSEisavariableinterestentityandwearenottheprimarybeneficiaryaswedonotholdthepowertodirecttheactivitiesthatmostsignificantlyimpacttheeconomicperformanceofHSE.Therefore,HSEisnotconsolidated.In2016,werecordedanimpairmentoftheinvestmentinHSEof$8.3millioninotherexpense,net.AsofDecember31,2017and2016,theinvestmenthadacarryingvalueof$1.2millionand$1.5million,respectively,whichisincludedinotherlong-termassetsintheconsolidatedbalancesheets,representingourmaximumexposuretoloss.Wehada100%interestinQIAGENFinance(Luxembourg)S.A.(QIAGENFinance)whichwasestablishedforthepurposeofissuingconvertibledebtin2004.Theproceedsofthe2004NoteswereloanedtosubsidiarieswithintheconsolidatedQIAGENN.V.group.QIAGENN.V.hadguaranteedthe2004Notes,andhadagreementswith($inthousands)OwnershipPercentageEquityinvestmentsasofDecember31,Shareofincome(loss)fortheyearsendedDecember31,2017 2016 2017 2016 2015PreAnalytiXGmbH 50.00% $7,562 $3,519 $3,818 $3,067 $1,878BiotypeInnovationGmbH 24.90% 3,821 3,339 39 (335) (595)MAQGENBiotechnologyCo.,Ltd 40.00% 3,285 (542) Pyrobett 19.00% 2,639 2,444 195 333 (600)HombrechtikonSystemsEngineeringAG 19.00% 1,155 1,524 (346) QIAGEN(Suzhou)InstituteofTranslationResearchCo.,Ltd.0.00% (244) (107)QIAGENFinance 100.00% 85$18,462 $10,826 $3,164 $2,821 $661QIAGENFinancetoissuecommonsharestotheinvestorsintheeventofconversionofthe2004Notes.QIAGENFinancewasavariableinterestentity.WedidnotholdanyvariableinterestsinQIAGENFinance,andwewerenottheprimarybeneficiary,thereforeQIAGENFinancewasnotconsolidated.Accordingly,the2004convertibledebtwasnotincludedintheconsolidatedstatementsofQIAGENN.V.,thoughQIAGENN.V.didreportthefullobligationofthedebtthroughitsliabilitiestoQIAGENFinance.QIAGENN.V.accountedforitsinvestmentinQIAGENFinanceasanequityinvestmentuntilthefirstquarterof2015andaccordinglyrecorded100%oftheprofitorlossofQIAGENFinanceinthegainorlossfromequitymethodinvestees.Duringthefirstquarterof2015,werepaidthe$250.9millionloantoQIAGENFinanceandrepurchasedthewarrantagreementwithQIAGENFinance.CostMethodInvestmentsAtDecember31,2017and2016,wehadatotalofcost-methodinvestmentsinnon-publiclytradedcompanieswithcarryingamountsof$33.6millionand$38.2million,respectively,whichareincludedinotherlong-termassetsintheconsolidatedbalancesheets.Thefair-valueofthesecost-methodinvestmentsarenotestimatedunlessthereareidentifiedeventsorchangesincircumstancesthatmayhaveasignificantadverseeffectonthefairvalueoftheinvestment.DuringtheyearsendedDecember31,2017,and2016,wemadecost-methodinvestmentstotaling$0.3million,and$20.5million,respectively.In2017and2015,werecordedtotalimpairmentstocostmethodinvestmentsof$5.1millionand$2.2million,respectively,inotherexpense,net.In2016,weconverteda$0.6millionshort-termloanintoadditionalownershipinterestofacost-methodinvestment.MarketableEquitySecuritiesDuring2016,wemadeaninvestmentinHTGMolecularDiagnostics,Inc.(HTGM),apubliclytradedcompany.AtDecember31,2017,weheld833,333shareswithacostbasisof$2.0million.AsofDecember31,2017and2016,thefairmarketvalueoftheseshareswas$1.7millionand$1.9million,respectively.During2017,wepurchasedaconvertibleloanfromHTGMasfurtherdiscussedinNote22.Additionally,ourformercost-methodinvestmentinCuretisAGwasreclassifiedasalong-termmarketablesecurityduring2015uponthecompletedIPOofitsDutchholdingcompany,CuretisN.V.AtDecember31,2017,wehold320,424sharesofCuretisN.V.withacostbasisof$2.3millionandafairmarketvalueof$1.5million.Weheld320,712shareswithacostbasisof$2.3millionandafairvalueof$2.2millionasofDecember31,2016.Thesemarketablesecuritiesareincludedinotherlong-termassetsintheaccompanyingconsolidatedbalancesheets.11.GoodwillandIntangibleAssetsThefollowingsetsforththeintangibleassetsbymajorassetclassasofDecember31,2017and2016:ThechangesinintangibleassetsfortheyearsendedDecember31,2017and2016areasfollows:($inthousands)WeightedAverageLife2017 2016GrossCarryingAmountAccumulatedAmortizationGrossCarryingAmountAccumulatedAmortizationAmortizedIntangibleAssets:Patentandlicenserights 9.41 $407,635 $(280,434) $373,609 $(233,406)Developedtechnology 11.82 771,893 (544,633) 708,825 (469,312)Customerbase,trademarks,andnon-competeagreements10.28 437,213 (292,356) 422,797 (245,354)10.76 $1,616,741 $(1,117,423) $1,505,231 $(948,072)UnamortizedIntangibleAssets:Goodwill $2,012,904 $1,925,518Amortizationexpenseonintangibleassetstotaledapproximately$133.8million,$137.9millionand$132.0million,respectively,fortheyearsendedDecember31,2017,2016and2015.In2016,werecordedanintangibleassetabandonmentchargeof$21.4millionrelatedtothediscontinuationofexistingtechnologiesinconnectionwiththe2016restructuringdiscussedmorefullyinNote6.Ofthisabandonmentcharge,$10.3millionisincludedincostofsalesand$11.1millionisincludedingeneralandadministrative,restructuring,integrationandotherintheaccompanyingconsolidatedstatementsofincome.CashpaidforpurchasesofintangibleassetsduringtheyearendedDecember31,2017totaled$34.3million,ofwhich$16.5millionisrelatedtocurrentyearpaymentsforlicensesthatwereaccruedasofDecember31,2016and$5.8millionisrelatedtoprepaymentsrecordedinotherlong-termassetsintheaccompanyingconsolidatedbalancesheet.Intangibleassetadditionsof$15.5millionincludes$12.0millionofcashpaidduringtheyearendedDecember31,2017,togetherwith$3.5millionofadditionswhichwerepreviouslyrecordedasprepayments.CashpaidforintangibleassetsduringtheyearendedDecember31,2016totaled$19.4millionofwhich$3.9millionisrelatedtoprepaymentsrecordedinotherlong-termassetsinaccompanyingconsolidatedbalancesheet.Intangibleassetadditionsof$70.9millionincludes$15.5millionofcashpaidduringtheyearendedDecember31,2016,togetherwith$7.1millionofadditionswhichwerepreviouslyrecordedasprepaymentsand$48.4millionofadditionswhichwereaccruedasofDecember31,2016.Oftheaccruedadditionsin2016,$46.3millionrelatedtolicensesforwhichfixedpaymentsareexpectedtooccurthroughtheendofthelicensetermin2024.ThechangesinthecarryingamountofgoodwillduringtheyearsendedDecember31,2017and2016resultedprimarilyfromchangesinforeigncurrencytranslationtogetherwithacquiredgoodwillfromthe2017acquisitionofOmicSoftandthe2016acquisitionofExiqondiscussedinNote5.Additionally,$2.6millionofgoodwillwasdisposedofinconnectionwiththetransferoftheresearchanddevelopmentactivitiesofourinstrumentationbusinessaspartofthe2016restructuringprogramdiscussedinNote6.Amortizationofintangiblesforthenextfiveyearsisexpectedtobeapproximately:(inthousands) Intangibles GoodwillBALANCEATDECEMBER31,2015 $636,421 $1,875,698Additions 70,937 Purchaseadjustments (321) 316Additionsfromacquisitions 23,700 76,807Amortization (137,949) Disposals (29) (2,650)Impairmentlosses (21,423) Foreigncurrencytranslationadjustments (14,177) (24,653)BALANCEATDECEMBER31,2016 $557,159 $1,925,518Additions 15,527 Additionsfromacquisitions 28,700 26,934Amortization (133,797) Disposals (897) Foreigncurrencytranslationadjustments 32,626 60,452BALANCEATDECEMBER31,2017 $499,318 $2,012,90412.AccruedandOtherCurrentLiabilitiesAccruedandothercurrentliabilitiesatDecember31,2017and2016consistofthefollowing:13.DerivativesandHedgingIntheordinarycourseofbusiness,weusederivativeinstruments,includingswaps,forwardsand/oroptions,tomanagepotentiallossesfromforeigncurrencyexposuresandinterestbearingassetsorliabilities.Theprincipalobjectiveofsuchderivativeinstrumentsistominimizetherisksand/orcostsassociatedwithourglobalfinancialandoperatingactivities.Wedonotutilizederivativeorotherfinancialinstrumentsfortradingorotherspeculativepurposes.Werecognizeallderivativesaseitherassetsorliabilitiesonthebalancesheetonagrossbasis,measurethoseinstrumentsatfairvalueandrecognizethechangeinfairvalueinearningsintheperiodofchange,unlessthederivativequalifiesasaneffectivehedgethatoffsetscertainexposures.Wehaveagreedwithalmostallofourcounterpartieswithwhomwehadenteredintocross-currencyswaps,interestrateswapsorforeignexchangecontracts,toenterintobilateralcollateralizationcontractsunderwhichwewillreceiveorprovidecashcollateral,asthecasemaybe,forthenetpositionwitheachofthesecounterparties.AsofDecember31,2017,cashcollateralpositionsconsistedof$3.0millionrecordedinaccruedandothercurrentliabilitiesand$21.9millionrecordedinprepaidandothercurrentassetsintheaccompanyingconsolidatedbalancesheet.AsofDecember31,2016,wehadaliabilitypositionof$7.0millionrecordedinaccruedandothercurrentliabilitiesand$1.2millionrecordedinprepaidexpensesandothercurrentassetsintheaccompanyingconsolidatedbalancesheet.(inthousands) AmortizationYearsendedDecember31:2018 $114,0092019 $92,7172020 $65,5032021 $56,2142022 $40,692(inthousands) 2017 2016Accruedexpensesandotherliabilities $85,986 $74,245Payrollandrelatedaccruals 63,525 54,772Deferredrevenue 49,357 44,629Restructuring 14,667 27,590Accruedcontingentconsiderationandmilestonepayments 11,539 2,957Accruedroyalties 6,714 7,801Accruedinterestonlong-termdebt 5,543 4,239Cashcollateral 3,000 6,984Fairvalueofderivativeinstruments 2,424 6,089Currentportionofcapitalleaseobligations 1,359 999Totalaccruedandothercurrentliabilities $244,114 $230,305In2017,weenteredintoaforeigncurrencynon-derivativehedginginstrumentthatisdesignatedandqualifiesasnetinvestmenthedge.TheobjectiveofthehedgeistoprotectpartofthenetinvestmentinforeignoperationsagainstadversechangesintheexchangeratebetweentheEuroandthefunctionalcurrencyoftheU.S.dollar.Thenon-derivativehedginginstrumentistheGermanprivatecorporatebond("Schuldschein")whichwasissuedinthetotalamountof$331.1millionasdescribedinNote15.Ofthe$331.1million,whichisheldinbothU.S.dollarsandEuro,255.0millionisdesignatedasthehedginginstrumentagainstaportionofourEuronetinvestmentsinourforeignoperations.Therelativechangesinboththehedgeditemandhedginginstrumentarecalculatedbyapplyingthechangeinspotratebetweentwoassessmentdatesagainsttherespectivenotionalamount.Theeffectiveportionofthehedgeisrecordedinthecumulativetranslationadjustmentaccountwithinotheraccumulatedcomprehensiveincome(loss).Basedonthespotratemethod,theunrealizedlossrecordedinequityasofDecember31,2017is$19.8million.Sinceweareusingthedebtasthehedginginstrument,whichisalsoremeasuredbasedonthespotratemethod,thereisnohedgeineffectivenessrelatedtothenetinvestmenthedgeasofDecember31,2017.AsofDecember31,2017and2016,weheldderivativeinstrumentsthataredesignatedandqualifyascashflowhedgeswheretheeffectiveportionofthegainorlossonthederivativeisreportedasacomponentofothercomprehensiveincome(loss)andreclassifiedintoearningsinthesameperiodorperiodsduringwhichthehedgedtransactionaffectsearnings.Gainsandlossesonthederivativerepresentingeitherhedgeineffectivenessorhedgecomponentsexcludedfromtheassessmentofeffectivenessarerecognizedincurrentearnings.In2017andin2016,wedidnotrecordanyhedgeineffectivenessrelatedtoanycash-flowhedgesinearnings.BasedontheirvaluationasofDecember31,2017,weexpectapproximately$10.7millionofderivativelossesincludedinaccumulatedothercomprehensivelosswillbereclassifiedintoincomeduringthenext12months.Thecashflowsderivedfromderivativesareclassifiedintheconsolidatedstatementsofcashflowsinthesamecategoryastheconsolidatedbalancesheetaccountoftheunderlyingitem.AsofDecember31,2017and2016,weheldderivativeinstrumentsthatqualifyforhedgeaccountingasfairvaluehedges.Forderivativeinstrumentsthataredesignatedandqualifyasafairvaluehedge,theeffectiveportionofthegainorlossonthederivativeisreflectedinearnings.Thisearningseffectisoffsetbythechangeinthefairvalueofthehedgeditemattributabletotheriskbeinghedgedthatisalsorecordedinearnings.In2017and2016,weconcludedtherewasnoineffectiveness.Thecashflowsderivedfromderivativesareclassifiedintheconsolidatedstatementsofcashflowsinthesamecategoryastheconsolidatedbalancesheetaccountoftheunderlyingitem.InterestRateDerivativesWeuseinterestratederivativecontractstoalignourportfolioofinterestbearingassetsandliabilitieswithourriskmanagementobjectives.During2015,weenteredintofivecrosscurrencyinterestrateswapsthrough2025foratotalnotionalamountof$180.0millionwhichqualifyforhedgeaccountingascashflowhedges.Wedeterminedthatnoineffectivenessexistsrelatedtotheseswaps.AsofDecember31,2017,the180.0millionnotionalswapamounthadafairvalueof$28.9millionrecordedinother-longtermliabilitiesandarelatedinterestreceivableof$1.2millionrecordedinprepaidandothercurrentassets,respectively,intheaccompanyingconsolidatedbalancesheet.AsofDecember31,2016,thisswaphadafairvalueof$1.4millionandaccruedandunpaidinterestof$1.7millionwhichrecordedinotherlong-termassetsandprepaidexpensesandothercurrentassets,respectively,intheaccompanyingconsolidatedbalancesheet.During2014,weenteredintointerestrateswaps,whicheffectivelyfixedthefairvalueof$200.0millionofourfixedrateprivateplacementdebtandqualifyforhedgeaccountingasfairvaluehedges.Wedeterminedthatnoineffectivenessexistsrelatedtotheseswaps.AsofDecember31,2017,the$200.0millionnotionalswapamounthadafairvalueof$0.9millionandaccruedandunpaidinterestof$0.3millionwhicharerecordedinotherlong-termassetsandprepaidandothercurrentassets,respectively,intheaccompanyingconsolidatedbalancesheet.AsofDecember31,2016,thisswaphadafairvalueof$3.1millionandaccruedandunpaidinterestof$0.6millionwhicharerecordedinotherlong-termassetsandprepaidexpensesandothercurrentassets,respectively,intheaccompanyingbalancesheet.CallOptionsWeenteredintoCallOptionsin2014which,alongwiththesaleoftheWarrants,representtheCallSpreadOverlayenteredinconnectionwiththe2019and2021CashConvertibleNotes,whicharemorefullydescribedinNote15.Weused$105.2millionoftheproceedsfromtheissuanceofthe2019and2021CashConvertibleNotestopaythepremiumfortheCallOptions,andsimultaneouslyreceived$68.9million(netofissuancecosts)fromthesaleoftheWarrants,foranetcashoutlayof$36.3millionfortheCallSpreadOverlay.During2017,weused$73.6millionoftheproceedsfromthefromtheissuanceofthe2023CashConvertibleNotestopayforthepremiumfortheCallOption,andsimultaneouslyreceived$45.4millionfromthesaleofWarrants,foranetcashoutlayof$28.3millionfortheCallSpreadOverlay.IssuancecostsincurredinconnectionwiththeWarrantandtheCallOptionwere$0.3millionand$0.1millionrespectively,which$0.1millionwasaccruedasofDecember31,2017.Inbothtransactions,theCallOptionsareintendedtoaddresstheequitypriceriskinherentinthecashconversionfeatureofeachinstrumentbyoffsettingcashpaymentsinexcessoftheprincipalamountdueuponanyconversionoftheCashConvertibleNotes.Asidefromtheinitialpaymentofapremiumof$105.2million(2019and2021Notes)and$73.6million(2023notes)fortheCallOptions,wewillnotberequiredtomakeanycashpaymentsundertheCallOptions.Wewill,however,beentitledtoreceiveunderthetermsoftheCallOptionsanamountofcashgenerallyequaltotheamountbywhichthemarketpricepershareofourcommonstockexceedstheexercisepriceoftheCallOptionsduringtherelevantvaluationperiod.TheexercisepriceundertheCallOptionsisequaltotheconversionpriceoftheCashConvertibleNotes.TheCallOptions,forwhichourcommonstockistheunderlyingsecurity,areaderivativeassetthatrequiresmark-to-marketaccountingtreatmentduetothecashsettlementfeaturesuntiltheCallOptionssettleorexpire.TheCallOptionsaremeasuredandreportedatfairvalueonarecurringbasis,withinLevel2ofthefairvaluehierarchy.ForfurtherdiscussionoftheinputsusedtodeterminethefairvalueoftheCallOptions,refertoNote14.ThefairvalueoftheCallOptionsatDecember31,2017and2016wasapproximately$223.2millionand$185.8million,respectivelywhichisrecordedinotherlong-termassetsintheaccompanyingconsolidatedbalancesheet.TheCallOptionsdonotqualifyforhedgeaccountingtreatment.Therefore,thechangeinfairvalueoftheseinstrumentsisrecognizedimmediatelyinourconsolidatedstatementsofincomeinotherexpense,net.FortheyearsendedDecember31,2017and2016,thechangesinthefairvalueoftheCallOptionsresultedingainsof$37.4millionand$16.7million,respectively.BecausethetermsoftheCallOptionsaresubstantiallysimilartothoseoftheCashConvertibleNotes'embeddedcashconversionoption,discussedbelow,weexpecttheeffectonearningsfromthosetwoderivativeinstrumentstomostlyoffseteachother.CashConvertibleNotesEmbeddedCashConversionOptionTheembeddedcashconversionoptionwithintheCashConvertibleNotesisrequiredtobeseparatedfromtheCashConvertibleNotesandaccountedforseparatelyasaderivativeliability,withchangesinfairvaluereportedinourconsolidatedstatementsofincomeinotherexpense,netuntilthecashconversionoptionsettlesorexpires.ForfurtherdiscussionoftheCashConvertibleNotes,refertoNote15.Theinitialfairvalueliabilityoftheembeddedcashconversionoptionforthe2019and2021Noteswas$105.2millionandforthe2023Noteswas$74.5million,whichsimultaneouslyreducedthecarryingvalueoftheCashConvertibleNotes(effectivelyanoriginalissuancediscount).Theembeddedcashconversionoptionismeasuredandreportedatfairvalueonarecurringbasis,withinLevel2ofthefairvaluehierarchy.Forfurtherdiscussionoftheinputsusedtodeterminethefairvalueoftheembeddedcashconversionoptions,refertoNote14.ThefairvalueoftheembeddedcashconversionoptionsatDecember31,2017and2016wasapproximately$224.3millionand$187.5million,respectively,whichisrecordedinotherlong-termliabilitiesintheaccompanyingbalancesheet.FortheyearsendedDecember31,2017and2016thechangeinthefairvalueoftheembeddedcashconversionoptionsresultedinlossesof$36.7millionand$16.6million,respectively,recognizedinourconsolidatedstatementsofincomeinotherexpense,net.ForeignCurrencyDerivativesAsagloballyactiveenterprise,wearesubjecttorisksassociatedwithfluctuationsinforeigncurrenciesinourordinaryoperations.Thisincludesforeigncurrency-denominatedreceivables,payables,debt,andotherbalancesheetpositionsincludingintercompanyitems.Wemanagebalancesheetexposureonagroup-widebasisusingforeignexchangeforwardcontracts,foreignexchangeoptionsandcross-currencyswaps.UndesignatedDerivativeInstrumentsWearepartytovariousforeignexchangeforward,optionandswaparrangementswhichhad,atDecember31,2017,anaggregatenotionalvalueof$587.3millionandfairvaluesof$7.5millionand$2.4millionincludedinprepaidandothercurrentassetsandaccruedandothercurrentliabilities,respectively,whichexpireatvariousdatesthroughMarch2018.Wewerepartytovariousforeignexchangeforwardandswaparrangementswhichhad,atDecember31,2016,anaggregatenotionalvalueof$347.6millionandfairvaluesof$3.2millionand$6.1millionincludedinprepaidandothercurrentassetsandaccruedandothercurrentliabilities,respectively,whichexpiredatvariousdatesthroughDecember2017.Thetransactionshavebeenenteredintotooffsettheeffectsfromshort-termbalancesheetexposuretoforeigncurrencyexchangerisk.Changesinthefairvalueofthesearrangementshavebeenrecognizedinotherexpense,net.FairValuesofDerivativeInstrumentsThefollowingtablesummarizesthefairvalueamountsofderivativeinstrumentsreportedintheconsolidatedbalancesheetsasofDecember31,2017and2016:ThefollowingtablessummarizetheclassificationandgainsandlossesonderivativeinstrumentsfortheyearsendedDecember31,2017,2016and2015:($inthousands) DerivativesinAssetPositionsFairvalue DerivativesinLiabilityPositionsFairvalue2017 2016 2017 2016DerivativeinstrumentsdesignatedashedgesInterestratecontracts $2,409 $6,655 $(28,942) $Totalderivativeinstrumentsdesignatedashedges $2,409 $6,655 $(28,942) $UndesignatedderivativeinstrumentsCallspreadoverlay $223,164 $185,750 $(224,286) $(187,546)Foreignexchangecontracts 7,480 3,154 (2,424) (6,089)Totalderivativeinstruments $230,644 $188,904 $(226,710) $(193,635)Year-EndedDecember31,2017(inthousands)Gain/(loss)recognizedinAOCILocationof(gain)lossinincomestatement(Gain)lossreclassifiedfromAOCIintoincomeGain(loss)recognizedinincomeNon-derivativeinstrumentsNetinvestmenthedge $(19,757) Otherexpense,net $ n/aCashflowhedgesInterestratecontracts $(30,310) Otherexpense,net $26,136 n/aFairvaluehedgesInterestratecontracts $ Otherexpense,net $ $(2,199)UndesignatedderivativeinstrumentsCallspreadoverlay n/a Otherexpense,net n/a $1,573Foreignexchangecontracts n/a Otherexpense,net n/a 11,813$13,386Year-EndedDecember31,2016(inthousands)Gain/(loss)recognizedinAOCILocationof(gain)lossinincomestatement(Gain)lossreclassifiedfromAOCIintoincomeGain(loss)recognizedinincomeCashflowhedgesInterestratecontracts $(3,969) Otherexpense,net $(6,228) n/aFairvaluehedgesInterestratecontracts $ Otherexpense,net $ $(1,930)UndesignatedderivativeinstrumentsCallspreadoverlay n/a Otherexpense,net n/a $118Foreignexchangecontracts n/a Otherexpense,net n/a (6,072)$(5,954)Year-EndedDecember31,2015(inthousands)Gain/(loss)recognizedinAOCILocationof(gain)lossinincomestatement(Gain)lossreclassifiedfromAOCIintoincomeGain(loss)recognizedinincomeCashflowhedgesInterestratecontracts $5,337 Otherexpense,net $(5,273) n/aFairvaluehedgesInterestratecontracts $ Otherexpense,net $ $1,691UndesignatedderivativeinstrumentsCallspreadoverlay n/a Otherexpense,net n/a $(171)Foreignexchangecontracts n/a Otherexpense,net n/a $21,434$21,263Theamountsnotedinthetableaboveforaccumulatedothercomprehensiveincome(AOCI)donotincludeanyadjustmentfortheimpactofdeferredincometaxes.14.FairValueMeasurementsAssetsandliabilitiesaremeasuredatfairvalueaccordingtoathree-tierfairvaluehierarchywhichprioritizestheinputsusedinmeasuringfairvalueasfollows:Level1.Observableinputs,suchasquotedpricesinactivemarkets;Level2.Inputs,otherthanthequotedpriceinactivemarkets,thatareobservableeitherdirectlyorindirectly;andLevel3.Unobservableinputsinwhichthereislittleornomarketdata,whichrequirethereportingentitytodevelopitsownassumptions.Ourassetsandliabilitiesmeasuredatfairvalueonarecurringbasisconsistofshort-terminvestments,whichareclassifiedinLevel1andLevel2ofthefairvaluehierarchy,marketablesecuritiesdiscussedinNote10,whichareclassifiedinLevel1,derivativecontractsusedtohedgecurrencyandinterestrateriskandderivativefinancialinstrumentsenteredintoinconnectionwiththeCashConvertibleNotesdiscussedinNote15,whichareclassifiedinLevel2ofthefairvaluehierarchy,andcontingentconsiderationaccrualswhichareclassifiedinLevel3ofthefairvaluehierarchy,andareshowninthetablesbelow.Therehavebeennotransfersbetweenlevels.IndeterminingfairvalueforLevel2instruments,weapplyamarketapproach,usingquotedactivemarketpricesrelevanttotheparticularinstrumentundervaluation,givingconsiderationtothecreditriskofboththerespectivecounterpartytothecontractandtheCompany.Todetermineourcreditrisk,weestimatedourcreditratingbybenchmarkingthepriceofoutstandingdebttopublicly-availablecomparabledatafromratedcompanies.Usingtheestimatedrating,ourcreditriskwasquantifiedbyreferencetopublicly-tradeddebtwithacorrespondingrating.TheLevel2derivativefinancialinstrumentsincludetheCallOptionsassetandtheembeddedconversionoptionliability.SeeNote15,"LinesofCreditandDebt",andNote13,"DerivativesandHedging",forfurtherinformation.Thederivativesarenotactivelytradedandarevaluedbasedonanoptionpricingmodelthatusesobservablemarketdataforinputs.Significantmarketdatainputsusedtodeterminefairvaluesincludedourcommonstockprice,therisk-freeinterestrate,andtheimpliedvolatilityofourcommonstock.TheCallOptionsassetandtheembeddedcashconversionoptionliabilityweredesignedwiththeintentthatchangesintheirfairvalueswouldsubstantiallyoffset,withlimitednetimpacttoourearnings.Therefore,thesensitivityofchangesintheunobservableinputstotheoptionpricingmodelforsuchinstrumentsissubstantiallymitigated.OurLevel3instrumentsincludecontingentconsiderationliabilities.Wevaluecontingentconsiderationliabilitiesusingunobservableinputs,applyingtheincomeapproach,suchasthediscountedcashflowtechnique,ortheprobability-weightedscenariomethod.Contingentconsiderationarrangementsobligateustopaythesellersofanacquiredentityifspecifiedfutureeventsoccurorconditionsaremetsuchastheachievementoftechnologicalorrevenuemilestones.Weusevariouskeyassumptions,suchastheprobabilityofachievementofthemilestones(0%to100%)andthediscountrate(between2.2%and7.7%),torepresentthenon-performingriskfactorsandtimevaluewhenapplyingtheincomeapproach.Weregularlyreviewthefairvalueofthecontingentconsideration,andreflectanychangeintheaccrualintheconsolidatedstatementsofincomeinthelineitemscommensuratewiththeunderlyingnatureofmilestonearrangements.Thefollowingtablepresentsourfairvaluehierarchyforourfinancialassetsandliabilitiesmeasuredatfairvalueonarecurringbasis:ForliabilitieswithLevel3inputs,thefollowingtablesummarizestheactivityfortheyearsendedDecember31,2017and2016:FortheyearendedDecember31,2017,thetotal$11.5millionaccruedforcontingentconsiderationisaccruedandothercurrentliabilities.During2017and2016,gainsforthereductioninthefairvalueofcontingentconsiderationrelatedtounmetmilestonesof$3.3millionand$6.5millionwererecognizedingeneralandadministrative,restructuring,integrationandotherintheaccompanyingconsolidatedstatementsofincome.Thecarryingvaluesoffinancialinstruments,includingcashandcashequivalents,accountsreceivable,accountspayableandotheraccruedliabilities,approximatetheirfairvaluesduetotheirshort-termmaturities.Theestimatedfairvalueoflong-termdebtasdisclosedinNote15wasbasedoncurrentinterestratesforsimilartypesofborrowings.Theestimatedfairvaluesmaynotrepresentactualvaluesofthefinancialinstrumentsthatcouldbe(inthousands)AsofDecember31,2017 AsofDecember31,2016Level1 Level2 Level3 Total Level1 Level2 Level3 TotalAssets:Short-terminvestments $ $359,198 $ $359,198 $3,699 $89,300 $ $92,999Marketablesecurities 3,208 3,208 4,064 4,064Calloption 223,164 223,164 185,750 185,750Foreignexchange 7,480 7,480 3,154 3,154Interestratecontracts 2,409 2,409 6,655 6,655$3,208 $592,251 $ $595,459 $7,763 $284,859 $ $292,622Liabilities:Foreignexchange $ $(2,424) $ $(2,424) $ $(6,089) $ $(6,089)Interestratecontracts (28,942) (28,942) Cashconversionoption (224,286) (224,286) (187,546) (187,546)Contingentconsideration (11,539) (11,539) (8,754) (8,754)$ $(255,652) $(11,539) $(267,191) $(193,635) $(8,754) $(202,389)(inthousands) ContingentConsiderationBALANCEATDECEMBER31,2015 $(17,678)Additionsfromacquisitions (692)Payments 3,120Gainincludedinearnings 6,501Foreigncurrencytranslationadjustments (5)BALANCEATDECEMBER31,2016 $(8,754)Additions (10,954)Payments 4,900Gainincludedinearnings 3,269BALANCEATDECEMBER31,2017 $(11,539)realizedasofthebalancesheetdateorthatwillberealizedinthefuture.TherewerenofairvaluedifferencesintheyearsendedDecember31,2017and2016fornonfinancialassetsorliabilitiesrequiredtobemeasuredatfairvalueonanonrecurringbasisotherthantheimpairmentofcost-methodinvestmentsasdiscussedinNote10.15.LinesofCreditandDebtOurcreditfacilitiesavailableandundrawnatDecember31,2017total426.6million(approximately$511.6million).Thisincludesa400.0millionsyndicatedmulti-currencyrevolvingcreditfacilityexpiringDecember2021ofwhichnoamountswereutilizedatDecember31,2017oratDecember31,2016,andfourotherlinesofcreditamountingto26.6millionwithnoexpirationdate,noneofwhichwereutilizedasofDecember31,2017orasofDecember31,2016.The400.0millionfacilitycanbeutilizedinEuro,Britishpoundssterling,SwissfrancorU.S.dollarandbearsinterestof0.4%to1.2%abovethreemonthsEURIBOR,orLIBORinrelationtoanyloannotineuro,andisofferedwithinterestperiodsofone,two,threeorsixmonths.Thecommitmentfeeiscalculatedbasedon35%oftheapplicablemargin.In2017and2016,$0.9millionand$1.0millionofcommitmentfeeswerepaid,respectively.Therevolvingfacilityagreementcontainscertainfinancialandnon-financialcovenants,includingbutnotlimitedto,restrictionsontheencumbranceofassetsandthemaintenanceofcertainfinancialratios.WewereincompliancewiththesecovenantsatDecember31,2017.Thecreditfacilitiesareforgeneralcorporatepurposes.AtDecember31,2017andDecember31,2016,totallong-termdebt,netofdebtissuancecostsof$12.4millionand$8.1million,respectively,consistsofthefollowing:Thenotesareallunsecuredobligationsthatrankparipassu.Interestexpenseonlong-termdebtwas$43.6million,$35.8millionand$34.5millionfortheyearsendedDecember31,2017,2016and2015,respectively.Futurematurities(statedatthecarryingvalues)oflong-termdebtasofDecember31,2017areasfollows:(inthousands)2017 20160.375%SeniorUnsecuredCashConvertibleNotesdue2019$414,843 $402,8060.875%SeniorUnsecuredCashConvertibleNotesdue2021270,762 262,3710.500%SeniorUnsecuredCashConvertibleNotesdue2023322,902 3.19%SeriesASeniorNotesdueOctober16,2019 72,742 73,4083.75%SeriesBSeniorNotesdueOctober16,2022 300,276 301,6013.90%SeriesCSeniorNotesdueOctober16,2024 26,921 26,910SchuldscheinPrivatePlacement 349,812 Totallong-termdebt $1,758,258 $1,067,096CashConvertibleNotesdue2019,2021and2023OnMarch19,2014,weissued$730.0millionaggregateprincipalamountofCashConvertibleSeniorNotesofwhich$430.0millionisduein2019(2019Notes)and$300.0millionisduein2021(2021Notes).Theaggregatenetproceedsofthe2019and2021ConvertibleNoteswere$680.7million,afterpaymentofthenetcostoftheCallSpreadOverlaydescribedbelowandtransactioncosts.Additionally,weused$372.5millionofthenetproceedstorepayotherdebt.OnSeptember13,2017,weissued$400.0millionaggregateprincipalamountofCashConvertibleSeniorNoteswhichisduein2023(2023Notes).Thenetproceedsofthe2023Noteswere$365.9million,afterpaymentofthenetcostoftheCallSpreadOverlaydescribedbelowandtransactioncostspaidthroughDecember31,2017.Werefertothe2019Notes,2021Notesand2023Notes,collectivelyastheCashConvertibleNotes.InterestontheCashConvertibleNotesispayablesemi-annuallyinarrearsonMarch19andSeptember19ofeachyear,atratesof0.375%,0.875%and0.500%perannumforthe2019Notes,2021Notesand2023Notesrespectively,commencingonSeptember19,2014forthe2019Notesand2021NotesandMarch13,2018forthe2023Notes.The2019NoteswillmatureonMarch19,2019,the2021NoteswillmatureonMarch19,2021andthe2023NoteswillmatureonSeptember13,2023unlessrepurchasedorconvertedinaccordancewiththeirtermspriortosuchdate.TheCashConvertibleNotesaresolelyconvertibleintocashinwhole,butnotinpart,attheoptionofnoteholdersinthefollowingcircumstances:(a)fromApril29,2014throughSeptember18,2018forthe2019Notes,andSeptember18,2020forthe2021NotesandfromOctober24,2017throughMarch13,2023forthe2023Notes(ContingentConversionPeriod),underanyoftheContingentConversionConditionsand(b)atanytimefollowingtheContingentConversionPeriodthroughthefifthbusinessdayimmediatelyprecedingtheapplicablematurityDate.Uponconversion,noteholderswillreceiveanamountincashequaltotheCashSettlementAmount,calculatedasdescribedbelow.TheCashConvertibleNotesarenotconvertibleintosharesofourcommonstockoranyothersecurities.Noteholdersmayconverttheir2019and2021CashConvertibleNotesintocashattheiroptionatanytimeduringtheContingentConversionPeriodonlyunderthefollowingcircumstances(ContingentConversionConditions):YearendingDecember31, (inthousands)2018 $2019 487,5852020 2021 311,7432022 479,070thereafter 479,860$1,758,258duringanycalendarquartercommencingafterthecalendarquarterendingonMarch31,2014(andonlyduringsuchcalendarquarter),ifthelastreportedsalepriceofourcommonstockforatleast20tradingdays(whetherornotconsecutive)duringaperiodof30consecutivetradingdaysendingonthelasttradingdayoftheimmediatelyprecedingcalendarquarterisgreaterthanorequalto130%oftheconversionpriceoneachapplicabletradingday;ifweundergocertainfundamentalchangesasdefinedintheagreement;Noteholdersmayconverttheir2023NotesintocashattheiroptionatanytimeduringtheContingentConversionPeriodonlyunderthefollowingcircumstances(ContingentConversionConditions)TheContingentConversionConditionsinthe2019,2021and2023NotesnotedabovehavebeenanalyzedunderASC815,DerivativesandHedging,and,basedonouranalysis,wedeterminedthateachoftheembeddedfeatureslistedaboveareclearlyandcloselyrelatedtothe2019,2021and2023Notes(i.e.,thehostcontract).Asaresult,pursuanttotheaccountingprovisionsofASC815,DerivativesandHedging,thesefeaturesnotedabovearenotrequiredtobebifurcatedasseparateinstruments.AsofDecember31,2017,nocontingentconversionconditionwastriggered.duringthe5businessdayperiodimmediatelyafterany10consecutivetradingdayperiodinwhichthequotedpriceforthe2019Notesorthe2021Notesforeachtradingdayofthemeasurementperiodwaslessthan98%oftheproductofthelastreportedsalepriceofourcommonstockandtheconversionrateoneachsuchtradingday;ifweelecttodistributeassetsorpropertytoallorsubstantiallyalloftheholdersofourcommonstockandthoseassetsorotherpropertyhaveavalueofmorethan25%oftheaveragedailyvolume-weightedaveragetradingpriceofourcommonstockfortheprior20consecutivetradingdays;ifweelecttoredeemtheCashConvertibleNotes;orifweexperiencecertaincustomaryeventsofdefault,includingdefaultsundercertainotherindebtedness.duringanyfiscalquarterendingafterSeptember30,2017,ifthearithmeticmeanofthelastreportedsalepricesoftheCommonStockduringaperiodof20consecutivetradingdaysselectedfromthe30consecutivetradingdaysendingonandincludingthefinaltradingdayoftheimmediatelyprecedingquarterisequaltoormorethan130%oftheconversionprice(i.e.,USD200,000minimumdenominationdividedbytheapplicableConversionRatio)applicableonthelastdayofsuchprecedingquarter;intheeventofearlyredemptionattheoptionoftheIssuerofalltheoutstandingNotes,wheretheconversiondatefallsintheperiodfrom(andincluding)thedateonwhichthenoticeofredemptionispublisheduptothe10thcalendardayprecedingthedateofsuchearlyredemption;intheeventofaplanneddistributionbytheIssuerofcash,assets,securitiesorotherproperty,whichhasapersharevaluegreaterthan25%ofthearithmeticmeanofthevolumeweightedaverageprice(VWAP)oftheCommonStockduringthe20consecutivetradingdayperiodimmediatelyprecedingthedateonwhichtheplanneddistributionisannouncedbytheIssuer,atanytimefollowingsuchnotice,whichshallbeatleast20scheduledtradingdayspriortotheex-dividenddateforsuchdistribution,untiltheearlierof(i)thefifthbusinessdayimmediatelyprecedingtheex-dividenddateforsuchdistributionand(ii)theIssuer'sannouncementthatsuchplanneddistributionwillnottakeplace;intheeventofcertainFundamentalChangesorMake-WholeFundamentalChanges(eachasdescribedbelow),wheretheconversiondatefallsintheperiodfromthe60thscheduledtradingdaypriortotheanticipatedeffectivedateofsuchFundamentalChangeorMake-WholeFundamentalChange(or,iflater,publicannouncementofthesamebytheIssuer),until(i)thefifthbusinessdayimmediatelyprecedingtherelatedFundamentalChangeRepurchaseDate,or(ii)inthecaseofaMake-WholeFundamentalChangethatdoesnotconstituteaFundamentalChange,the60thtradingdayimmediatelyfollowingsucheffectivedate(or,iflaterineithercase,the60thcalendardayfollowingthenotificationofsuchFundamentalChangeorMake-WholeFundamentalChange);atanytimefromandaftertheoccurrenceofaneventofdefault,untilsucheventofdefaulthasbeencuredorwaivedortheprincipalamountoftheNotesshallhavebeenaccelerated;orifaParityEventoraTradingPriceUnavailabilityEvent,asthecasemaybe,occurs,theperiodof10BusinessDaysfromandincludingthefirstBusinessDayfollowingtherelevantTradingPriceNotificationDate.Forthe2023Notes,theinitialconversionrateis4,829.7279sharesofourcommonstockper$200,000principalamountofthe2023Notes(reflectinganinitialconversionpriceofapproximately$41.4102pershareofcommonstock).AsadjustedbythesyntheticsharerepurchasediscussedinNote17,theconversionrateforthe2019Notesand2021Notesis7,063.1647sharesofourcommonstockper$200,000principalamountofCashConvertibleNotes(reflectinganadjustedconversionpriceofapproximately$28.32pershareofcommonstock).Uponconversion,holdersareentitledtoacashpayment(CashSettlementAmount)equaltotheaverageoftheconversionratemultipliedbythedailyvolume-weightedaveragetradingpriceforourcommonstockovera50-dayperiod.Theconversionrateissubjecttoadjustmentincertaininstancesbutwillnotbeadjustedforanyaccruedandunpaidinterest.Inaddition,followingtheoccurrenceofcertaincorporateeventsthatmayoccurpriortotheapplicablematuritydate,wemayberequiredtopayacashmake-wholepremiumbyincreasingtheconversionrateforanyholderwhoelectstoconvertCashConvertibleNotesinconnectionwiththeoccurrenceofsuchacorporateevent,butinnoeventwilltheConversionRatioexceed6,728.6463per$200,000principalamountofNotes.Wemayredeemthe2019,2021or2023Notesintheirentiretyatapriceequalto100%oftheprincipalamountoftheapplicableCashConvertibleNotesplusaccruedinterestatanytimewhen20%orlessoftheaggregateprincipalamountoftheapplicableCashConvertibleNotesoriginallyissuedremainoutstanding.BecausetheCashConvertibleNotescontainanembeddedcashconversionoption,wehavedeterminedthattheembeddedcashconversionoptionisaderivativefinancialinstrument,whichisrequiredtobeseparatedfromtheCashConvertibleNotesandaccountedforseparatelyasaderivativeliability,withchangesinfairvaluereportedinourconsolidatedstatementsofincomeuntilthecashconversionoptiontransactionsettlesorexpires.Theinitialfairvalueliabilityoftheembeddedcashconversionoptionwas$105.2millionandforthe2023Noteswas$74.5million,whichsimultaneouslyreducedthecarryingvalueoftheCashConvertibleNotes(effectivelyanoriginalissuancediscount).ForfurtherdiscussionofthederivativefinancialinstrumentsrelatingtotheCashConvertibleNotes,refertoNote13.Asnotedabove,thereducedcarryingvalueontheCashConvertibleNotesresultedinadebtdiscountthatisamortizedtotheprincipalamountthroughtherecognitionofnon-cashinterestexpenseusingtheeffectiveinterestmethodovertheexpectedlifeofthedebt,whichisfive,sevenandsixyearsforthe2019Notes,2021Notesand2023Notes,respectively.ThisresultedinourrecognitionofinterestexpenseontheCashConvertibleNotesataneffectiverateapproximatingwhatwewouldhaveincurredhadnonconvertibledebtwithotherwisesimilartermsbeenissued.Theeffectiveinterestrateofthe2019Notes,2021Notesand2023Notesis2.937%,3.809%and3.997%,respectively,whichisimputedbasedontheamortizationofthefairvalueoftheembeddedcashconversionoptionovertheremainingtermoftheCashConvertibleNotes.AsofDecember31,2017,weexpectthe2019Notes,2021Notesand2023Notestobeoutstandinguntiltheirrespectivematuritydates.Basedonanestimationusingavailableover-the-countermarketinformationontheCashConvertibleNotes,theLevel2fairvalueofthe2019Notes,2021Notesand2023Noteswas$498.8million,$366.0millionand$404.8millionatDecember31,2017.Basedonanestimationusingavailableover-the-countermarketinformationontheCashConvertibleNotes,theLevel2fairvalueofthe2019Notesand2021Noteswas$485.9millionand$346.6million,atDecember31,2016.Inconnectionwiththeissuanceofthe2019and2021CashConvertibleNotes,weincurredapproximately$13.1millionintransactioncosts.Weincurredapproximately$6.2millionintransactioncostsforthe2023CashConvertibleNotesofwhich$0.6millionwasaccruedasofDecember31,2017.SuchcostshavebeenallocatedtotheCashConvertibleNotesanddeferredasalong-termassetandarebeingamortizedtointerestexpenseoverthetermsoftheCashConvertibleNotesusingtheeffectiveinterestmethod.InterestexpenserelatedtotheCashConvertibleNoteswascomprisedofthefollowing:CashConvertibleNotesCallSpreadOverlayConcurrentwiththeissuanceoftheCashConvertibleNotes,weenteredintoprivatelynegotiatedhedgetransactions(CallOptions)with,andissuedwarrantstopurchasesharesofourcommonstock(Warrants)to,certainfinancialinstitutions.WerefertotheCallOptionsandWarrantscollectivelyastheCallSpreadOverlay.TheCallOptionsareintendedtooffsetanycashpaymentspayablebyusinexcessoftheprincipalamountdueuponanyconversionoftheCashConvertibleNotes.During2014,weused$105.2millionoftheproceedsfromtheissuanceofthe2019and2021CashConvertibleNotestopayfortheCallOptions,andsimultaneouslyreceived$69.4millionfromthesaleoftheWarrants,foranetcashoutlayof$35.8millionfortheCallSpreadOverlay.During2017,weused$73.6millionoftheproceedsfromthefromtheissuanceofthe2023CashConvertibleNotestopayforthepremiumfortheCallOption,andsimultaneouslyreceived$45.4millionfromthesaleofWarrants,foranetcashoutlayof$28.3millionfortheCallSpreadOverlay.IssuancecostsincurredinconnectionwiththeWarrantandtheCallOptionwere$0.3millionand$0.1millionrespectively,which$0.1millionwasaccruedasofDecember31,2017.TheCallOptionsarederivativefinancialinstrumentsandarediscussedfurtherinNote13.TheWarrantsareequityinstrumentsandarefurtherdiscussedinNote17.Asidefromtheinitialpaymentofapremiumof$105.2million(2019and2021Notes)and$73.6million(2023Notes)fortheCallOption,wewillnotberequiredtomakeanycashpaymentsundertheCallOptions,andwillbeentitledtoreceiveanamountofcash,generallyequaltotheamountbywhichthemarketpricepershareofourcommonstockexceedstheexercisepriceoftheCallOptionsduringtherelevantvaluationperiod.TheexercisepriceundertheCallOptionsisinitiallyequaltotheconversionpriceoftheCashConvertibleNotes.TheWarrantscoveranaggregateof25.8millionsharesinconnectionwiththe2019and2021Notesofourcommonstock(subjecttoanti-dilutionadjustmentsundercertaincircumstances)andhaveaninitialexercisepriceof$32.085pershare,subjecttocustomaryadjustments.TheWarrantsexpireasfollows:Warrantstopurchase15.2millionsharesexpireoveraperiodof50tradingdaysbeginningonDecember27,2018andWarrantstopurchase10.6millionsharesexpireoveraperiodof50tradingdaysbeginningonDecember29,2020.TheWarrantsareEuropean-style(exercisableonlyuponexpiration).Concurrentwiththe2023Notes,weissuedWarrantswhichcover9.7millionsharesofourcommonstock(subjecttoanti-dilutionadjustmentsundercertaincircumstances)andhaveaninitialexercisepriceof$50.9664pershare,subjecttocustomaryadjustments.TheWarrantsexpireasfollows:Warrantstopurchase9.7millionsharesexpireoveraperiodof50tradingdaysbeginningonJune26,2023.TheWarrantsareEuropean-style(exercisableonlyuponexpiration).TheWarrantsthatwereissuedwithourCashConvertibleNotesdiscussedabove,couldhaveadilutiveeffecttotheextentthatthepriceofourcommonstockexceedstheapplicablestrikepriceoftheWarrants.ForeachWarrantthat(inthousands)Year-EndedDecember312017 2016Couponinterest $4,832 $4,238Amortizationoforiginalissuancediscount 21,377 17,503Amortizationofdebtissuancecosts 2,615 2,279TotalinterestexpenserelatedtotheCashConvertibleNotes $28,824 $24,020isexercised,wewilldelivertotheholderanumberofsharesofourcommonstockequaltotheamountbywhichthesettlementpriceexceedstheexerciseprice,pluscashinlieuofanyfractionalshares.WewillnotreceiveanyproceedsiftheWarrantsareexercised.PrivatePlacementInOctober2012,wecompletedaprivateplacementthroughtheissuanceofnewseniorunsecurednotesatatotalamountof$400millionwithaweightedaverageinterestrateof3.66%(settledonOctober16,2012).Thenoteswereissuedinthreeseries:(1)$73million7-yeartermduein2019(3.19%);(2)$300million10-yeartermduein2022(3.75%);and(3)$27million12-yeartermduein2024(3.90%).Wepaid$2.1millionindebtissuecostswhichwillbeamortizedthroughinterestexpenseusingtheeffectiveinterestmethodoverthelifetimeofthenotes.Thenotepurchaseagreementcontainscertainfinancialandnon-financialcovenants,includingbutnotlimitedto,restrictionsonpriorityindebtednessandthemaintenanceofcertainfinancialratios.WewereincompliancewiththesecovenantsatDecember31,2017.BasedonanestimationusingthechangesintheU.S.Treasuryrates,theLevel2fairvalueoftheseseniornotesasofDecember31,2017andDecember31,2016wasapproximately$394.7millionand$397.1million,respectively.During2014,weenteredintointerestrateswaps,whicheffectivelyfixedthefairvalueof$200.0millionofthisdebtandqualifyforhedgeaccountingasfairvaluehedgesasdescribedinNote13.GermanPrivatePlacement(Schuldschein)In2017,wecompletedaGermanprivateplacementbond("Schuldschein")whichwasissuedinseveraltranchestotaling$331.1milliondueinvariousperiodsthrough2027.TheSchuldscheinconsistsofU.S.dollarandEurodenominatedtranches.TheEurotranchesaredesignatedasaforeigncurrencynon-derivativehedginginstrumentthatqualifiesasanetinvestmenthedgeasdescribedinNote13"DerivativesandHedging".Basedonthespotratemethod,thechangeinthecarryingvalueoftheEurodenominatedtranchesattributedtothenetinvestmenthedgeasofDecember31,2017totaled$19.8millionofunrealizedlossandisrecordedinequity.Wepaid$1.2millionindebtissuancecostswhicharebeingamortizedthroughinterestexpenseoverthelifetimeofthenotes.AsummaryofthetranchesasofDecember31,2017isasfollows:2004NotesInAugust2004,wecompletedthesaleof$150millionof1.5%SeniorConvertibleNotesduein2024(2004Notes),throughourunconsolidatedsubsidiaryQIAGENFinance.Thenetproceedsofthe2004NoteswereloanedbyQIAGENFinancetoconsolidatedsubsidiarieswithaneffectiveinterestrateof1.8%weredueinFebruary2024.Interestwaspayablesemi-annuallyinFebruaryandAugust.The2004Noteswereissuedat100%ofprincipalvalue,andwereconvertibleinto11.5millioncommonsharesattheoptionoftheholdersupontheoccurrenceofCurrency NotionalAmount InterestRate Maturity CarryingValueasofDecember31,2017(inthousands)EUR 11.5million Fixed0.4% March2021 $13,660EUR 23.0million FloatingEURIBOR+0.4% March2021 27,320EUR 21.5million Fixed0.68% October2022 25,535EUR 64.5million FloatingEURIBOR+0.5% October2022 76,605USD $45.0million FloatingLIBOR+1.2% October2022 44,862EUR 25.0million FloatingEURIBOR+0.5% October2022 31,792EUR 64.0million Fixed1.09% June2024 76,005EUR 31.0million FloatingEURIBOR+0.7% June2024 36,815EUR 14.5million Fixed1.61% June2027 17,218$349,812certaineventsatapriceof$12.6449pershare,subjecttoadjustment.QIAGENN.V.hadanagreementwithQIAGENFinancetoissuesharestotheinvestorsintheeventofconversion.Thesubscriptionright,alongwiththerelatedreceivable,wasrecordedatfairvalueintheequityofQIAGENN.V.aspaid-incapital.In2014,1.2millioncommonshareswereissuedinconnectionwiththeconversions.During2015,werepaidtheloantoQIAGENFinanceandrepurchasedthewarrantagreementwithQIAGENFinancefor$250.9millionandrecognizedalossof$7.6millioninotherexpense,net.Therepaymentamountwasallocatedtotheloanandwarrantsonarelativefairvaluebasiswith$113.0millionrecordedagainstadditionalpaidincapitalfortheredemptionofthewarrantsubscriptionreceivable.SubsequenttothesetransactionsQIAGENFinancewasliquidated.16.IncomeTaxesOnDecember22,2017,PresidentTrumpsignedintolawtheTaxCutsandJobsAct(H.R.1)(the2017TaxAct).The2017TaxActincludesanumberofchangestoexistingU.S.taxlawsthatimpactus,mostnotablyareductionoftheU.S.corporateincometaxratefrom35%to21%effectiveasofJanuary1,2018andanewnetinterestexpensedeductionlimitation,whichlimitsthedeductionofnetinterestexpenseto30%ofthetaxpayersadjustedtaxableincome(ATI).The2017TaxActalsoprovidestheaccelerationofdepreciationforcertainassetsplacedintoserviceafterSeptember27,2017aswellasprospectivechangesincludingrepealofthedomesticmanufacturingdeductionbeginningin2018andcapitalizationofresearchanddevelopmentexpendituresbeginningin2022.InDecember2017,theSECstaffissuedStaffAccountingBulletinNo.118,IncomeTaxAccountingImplicationsoftheTaxCutsandJobsAct(SAB118),whichallowsustorecordprovisionalamountsduringameasurementperiodnottoextendbeyondoneyearoftheenactmentdate.Forthosespecificincometaxeffectsofthe2017TaxActforwhichtheaccountingunderASCTopic740isincomplete,areasonableestimatewasdetermined.WehaverecognizedtheprovisionaltaximpactsrelatedtotheinterestexpensedeductionlimitationandtherevaluationofdeferredtaxassetsandliabilitiesandincludedtheseamountsinourconsolidatedfinancialstatementsfortheyearendedDecember31,2017.Theultimateimpactmaydifferfromtheseprovisionalamountsduetoadditionalanalysis,changesininterpretationsandassumptionsthatwehavemade,additionalregulatoryguidancethatmaybeissued,andactionswemaytakebecauseofthe2017TaxAct.Wedidnotidentifyitemsforwhichtheincometaxeffectsofthe2017TaxActhavenotbeencompletedandareasonableestimatecouldnotbedeterminedasofDecember31,2017.WeexpecttocompleteouranalysiswithinthemeasurementperiodinaccordancewithSAB118.IncomebeforeincometaxesfortheyearsendedDecember31,2017,2016and2015consistedof:IncometaxesfortheyearsendedDecember31,2017,2016and2015areasfollows:(inthousands) 2017 2016 2015PretaxincomeinTheNetherlands $42,220 $20,695 $1,310Pretaxincomefromforeignoperations 72,155 36,213 134,993$114,375 $56,908 $136,303TheNetherlandsstatutoryincometaxratewas25%fortheyearsendedDecember31,2017,2016and2015.Incomefromforeignsubsidiariesisgenerallytaxedatthestatutoryincometaxratesapplicableintherespectivecountriesofdomicile.TheprincipalitemscomprisingthedifferencesbetweenincometaxescomputedatTheNetherlandsstatutoryrateandourreportedincometaxesandeffectivetaxratefortheyearsendedDecember31,2017,2016and2015areasfollows:(1)OureffectivetaxratereflectsthebenefitofourglobaloperationswherecertainincomeorlossistaxedatrateshigherorlowerthanTheNetherlandsstatutoryrateof25%aswellasthebenefitofsomeincomebeingpartiallyexemptfromincometaxesduetovariousintercompanyoperatingandfinancingactivities.ThemostsignificanttaxbenefitsfromtheseforeignoperationsandfinancingactivitiesareattributabletosubsidiariesinGermany,Singapore,Switzerland,IrelandandLuxembourg.Theseforeigntaxbenefitsareduetoacombinationoffavorabletaxlaws,regulations,rulings,andexemptionsinthesejurisdictions.Additionallyin2016,incertainforeignjurisdictions(primarilyGermanyandtheU.S.),werecordedacquisitionrelatedandimpairmentchargeswhichreducedpretaxincomeinthesehighertaxjurisdictions.(2)During2017,weincreasedaccrualsfortaxcontingencies,primarilyrelatedtoongoingincometaxaudits.(3)During2017,werevaluedourU.S.deferredtaxassetsandliabilitiestoreflectthecorporateincometaxratechangefrom35%to21%asaresultofU.S.taxreform.Additionally,werecordedafullvaluationallowanceof$60.8millionagainstdeferredtaxassetsrelatedtoU.S.interestcarryforwards.BasedonthecurrentdebtlevelintheU.S.,alongwiththenewrestrictiveinterestlimitationenactedwiththenewU.S.taxreform,itishighlyunlikelythatthehistoricU.S.interestcarryforwardwilleverbeutilized.Wealsorecordedfullvaluationallowancesagainstotherdeferredtaxassetsontaxlossesduetounlikelyfutureprofitsinotherjurisdictions.(4) h b f f h b d fl d d f h(inthousands) 2017 2016 2015CurrentTheNetherlands $3,430 $6,043 $973Foreign 10,375 34,543 37,70813,805 40,586 38,681DeferredTheNetherlands 151 188 250Foreign 60,025 (64,169) (32,530)60,176 (63,981) (32,280)Totalincometaxexpense(benefit) $73,981 $(23,395) $6,401(inthousands)2017 2016 2015Amount Percent Amount Percent Amount PercentIncometaxesatTheNetherlandsstatutory $28,594 25.0% $14,227 25.0% $34,076 25.0%Taxationofforeignoperations,net(1) (38,635) (33.8) (43,265) (76.0) (36,407) (26.7)Taximpactfrompermanentitems (1,586) (1.4) 5,938 10.4 14,219 10.4Taximpactfromtax-exemptincome (1,558) (1.4) (3,331) (5.9) (5,810) (4.3)Taxcontingencies,net(2) 23,189 20.3 1,761 3.1 1,163 0.9Taxesduetochangesintaxrates(3) 12,958 11.3 399 0.7 (836) (0.6)StockCompensation(4) (5,237) (4.6) Governmentincentivesandother (4,949) (4.3) (2,543) (4.5) (2,754) (2.0)Prioryeartaxes (2,319) (2.0) 1,411 2.5 (1,201) (0.9)Valuationallowance(3) 62,644 54.8 1,521 2.7 3,450 2.5Otheritems,net 880 0.8 487 0.9 501 0.4Totalincometaxexpense(benefit) $73,981 64.7% $(23,395) (41.1)% $6,401 4.7%(4)Beginningin2017,theexcesstaxbenefitsfromshare-basedcompensationactivityarereflectedasareductionoftheprovisionforincometaxes,whereaspreviouslytheywererecognizedinequity.(5)GovernmentincentivesincludefavorabletaxregulationsintheU.S.andtheU.K.andrelatingtoresearchanddevelopmentexpenseaswellastheU.S.InternalRevenueCodeSection199domesticproductionactivitiesdeduction.Weconductbusinessgloballyand,asaresult,filenumerousconsolidatedandseparateincometaxreturnsinTheNetherlands,Germany,SwitzerlandandtheU.S.federaljurisdiction,aswellasinvariousotherstateandforeignjurisdictions.Inthenormalcourseofbusiness,wearesubjecttoexaminationbytaxingauthoritiesthroughouttheworld.TaxyearsinTheNetherlandsareopensince2005forincometaxexaminationsbytaxauthorities.Oursubsidiaries,withfewexceptions,arenolongersubjecttoincometaxexaminationsbytaxauthoritiesforyearsbefore2013.TheU.S.consolidatedgroupissubjecttofederalandmoststateincometaxexaminationsbytaxauthoritiesbeginningwiththeyearendingDecember31,2014throughthecurrentperiod.StartinginFebruary2014,theU.S.taxauthorities(InternalRevenueService)havebeenauditingourU.S.federaltaxreturnsfor2011and2012.Theauditwasclosedin2016withoutanytaxadjustments.Asaresult,wereleased$6.6millionofunrecognizedtaxbenefitduetoclosureofthetaxaudit.Additionally,inFebruary2016GermantaxauthoritiesbegantheauditoftheGermantaxreturnsforthe2010-2013taxyears.Thisauditiscurrentlyinprocessandweexpecttheaudittocloseduring2018.Changesintheamountofunrecognizedtaxbenefitsareasfollows:AtDecember31,2017and2016,ournetunrecognizedtaxbenefitstotaledapproximately$44.0millionand$18.3million,respectively,ofwhich$44.0millionand$18.3millioninbenefits,ifrecognized,wouldfavorablyaffectoureffectivetaxrateinanyfutureperiod.Itisreasonablypossiblethatapproximately$11.6millionoftheunrecognizedtaxbenefitsmaybereleasedduringthenext12monthsduetolapseofstatuteoflimitationsorsettlementswithtaxauthorities;however,variouseventscouldcauseourcurrentexpectationstochangeinthefuture.Theaboveunrecognizedtaxbenefits,ifeverrecognizedinthefinancialstatements,wouldberecordedinthestatementofincomeaspartoftheincometaxexpense.Ourpolicyistorecognizeinterestaccruedrelatedtounrecognizedtaxbenefitsininterestexpenseandpenaltieswithinincometaxexpense.FortheyearsendedDecember31,2017,2016and2015,wehavenetinterest(income)expenseandpenaltiesof$1.5million,$0.1millionand$0.3million,respectively.AtDecember31,2017and2016,wehaveaccruedinterestof$3.0millionand$1.4million,respectively,whicharenotincludedinthetableabove.(inthousands) UnrecognizedTaxBenefitsBALANCEATDECEMBER31,2015 $16,735Additionsbasedontaxpositionsrelatedtothecurrentyear 4,218Additionsfortaxpositionsofprioryears 5,162Decreasefortaxpositionofprioryears (6,796)Reductionsduetolapseofstatuteoflimitations (288)Decreasefromcurrencytranslation (737)BALANCEATDECEMBER31,2016 $18,294Additionsbasedontaxpositionsrelatedtothecurrentyear 12,212Additionsfortaxpositionsofprioryears 9,933Increasefromcurrencytranslation 3,594BALANCEATDECEMBER31,2017 $44,033Wehaverecordednetdeferredtaxliabilitiesof$37.4millionanddeferredtaxassetsof$27.8millionatDecember31,2017and2016,respectively.ThecomponentsofthenetdeferredtaxassetandliabilityatDecember31,2017and2016areasfollows:AtDecember31,2017and2016,wehad$432.7millionand$380.7millionintotalforeignnetoperatingloss(NOL)carryforwards.IncludedintheseamountsatDecember31,2017and2016,were$108.5millionand$109.2millionofU.S.federal(NOL)carryforwards.AtDecember31,2017,theentireNOLintheU.S.issubjecttolimitationsunderSection382oftheU.S.InternalRevenueCode.TheNOLsintheU.S.willexpirebeginningDecember31,2023throughDecember31,2033.AlsoincludedintheaboveamountasofDecember31,2017and2016,wereotherforeignNOLcarryforwardstotalingapproximately$324.1millionand$271.5million,respectively,with$41.5millionaddedduetoGermantradetaxlossgeneratedin2017.AsofDecember31,2017,wehadNOLcarryforwardsinGermanyof$225.0millionpredominantlytradetaxNOLs.Ofthetotal$324.1millionforeignNOLcarryforwards,$253.8milliondoesnotexpirewiththebalanceexpiringbeginningDecember2018through2032.ThevaluationallowanceamountsrelatedtonetoperatinglossesasoftheyearsendedDecember31,2017andDecember31,2016are$7.1millionand$5.5million.In2017,werecordedavaluationallowanceof$60.8millionrelatedtoU.S.interestcarryforwards.BasedonthecurrentdebtlevelintheU.S.,alongwiththenewrestrictiveinterestlimitationenactedwiththenewU.S.taxreform,itishighlyunlikelythatthehistoricU.S.interestcarryforwardwilleverbeutilized.Webelieveitismorelikelythannotthatthedeferredtaxassets,netofthevaluationallowances,asshownabovewillberealized.AsofDecember31,2017,adeferredtaxliabilityhasnotbeenrecognizedforresidualincometaxesinTheNetherlandsontheundistributedearningsofthemajorityofourforeignsubsidiariesastheseearningsare(inthousands)2017 2016Deferred Deferred Deferred DeferredNetoperatinglosscarryforwards $30,966 $ $46,627 $Accruedandothercurrentliabilities 15,748 24,663 Inventories 4,163 (778) 2,919 (1,567)Allowanceforbaddebts 739 (475) 1,060 (451)Currencyrevaluation 4,095 (167) 3,474 (73)Property,plantandequipment 1,103 (23,649) 2,096 (19,733)Capitallease 531 830 Taxcreditcarryforwards 1,563 915 Unremittedprofitsandearnings (998) (923)Intangibleassets 1,289 (93,771) 586 (137,682)Share-basedcompensation 18,143 20,282 Deferredinterestdeductions 60,790 76,793 Convertibledebt 10,865 12,313 Other 2,632 (2,315) 2,652 (1,507)152,627 (122,153) 195,210 (161,936)Valuationallowance (67,849) (5,511) $84,778 $(122,153) $189,699 $(161,936)Netdeferredtaxassets(liabilities) $(37,375) $27,763consideredtobeeitherindefinitelyreinvestedorcanberepatriatedtaxfreeundertheDutchparticipationexemption.Theindefinitelyreinvestedearningsretainedbysubsidiariesamountedto$381.9millionatDecember31,2017.Estimatingtheamountoftheunrecognizeddeferredtaxliabilityonindefinitelyreinvestedforeignearningsisnotpracticable.Shouldtheearningsberemittedasdividends,wemaybesubjecttotaxesincludingwithholdingtax.Wehave$22.9millionofundistributedearningsthatwedonotconsiderindefinitelyreinvestedandhaverecordeddeferredtaxesorwithholdingtaxesatDecember31,2017andDecember31,2016,of$1.0millionand$0.9million,respectively.17.EquityIssuanceofWarrantsInMarch2014,inconnectionwiththeissuanceofourCashConvertibleNotes,weissuedWarrants(asdescribedinNote15)forapproximately25.8millionsharesofourcommonstock(subjecttoantidilutionadjustmentsundercertaincircumstances)withanexercisepriceof$32.085pershare,subjecttocustomaryadjustments.Followingthesyntheticsharerepurchasediscussedbelow,theadjustedexercisepriceis$32.056.Theproceeds,netofissuancecosts,fromthesaleoftheWarrantsofapproximately$68.9millionareincludedasadditionalpaidincapitalintheaccompanyingconsolidatedbalancesheets.TheWarrantsexpireasfollows:Warrantstopurchase15.2millionsharesexpireoveraperiodof50tradingdaysbeginningonDecember27,2018andWarrantstopurchase10.6millionsharesexpireoveraperiodof50tradingdaysbeginningonDecember29,2020.InSeptember2017,concurrentwiththeissuanceofour2023CashConvertibleNotes,weissuedWarrants(asdescribedinNote15)forapproximately9.7millionsharesofourcommonstock(subjecttoanti-dilutionadjustmentsundercertaincircumstances)withanexercisepriceof$50.9664pershare,subjecttocustomaryadjustments.TheproceedsfromthesaleoftheWarrants,netofissuancecosts,ofapproximately$45.3millionareincludedasadditionalpaidincapitalintheaccompanyingconsolidatedbalancesheets.Thewarrantstopurchaseapproximately9.7millionsharesexpireoveraperiodof50tradingdaysbeginningonJune26,2023.TheWarrantsareexercisableonlyuponexpiration.ForeachWarrantthatisexercised,wewilldelivertotheholderanumberofsharesofourcommonstockequaltotheamountbywhichthesettlementpriceexceedstheexerciseprice,dividedbythesettlementprice,pluscashinlieuofanyfractionalshares.TheWarrantscouldseparatelyhaveadilutiveeffectonsharesofourcommonstocktotheextentthatthemarketvaluepershareofourcommonstockexceedstheapplicableexercisepriceoftheWarrants(asmeasuredunderthetermsoftheWarrants).ShareRepurchaseProgramsInJuly2014,weannouncedthelaunchofourthirdsharerepurchaseprogramtopurchaseuptoanother$100millionofourcommonshares(excludingtransactioncosts).In2014,2.1millionQIAGENshareswererepurchasedfor$49.1million(excludingtransactioncosts)andin2015,0.8millionQIAGENshareswererepurchasedfor$20.8million.OnApril27,2016,weannouncedthelaunchofourfourth$100millionsharerepurchaseprogramwhichwasexpectedtobecompletedbytheendof2017.Duringthethirdquarterof2017,1.9millionQIAGENshareswererepurchasedfor$61.0million(includingtransactioncosts).OnJanuary31,2018,weannouncedourfifthsharerepurchaseprogramofupto$200millionofourcommonshares.Thecostofrepurchasedsharesisincludedintreasurystockandreportedasareductionintotalequitywhenarepurchaseoccurs.Repurchasedshareswillbeheldintreasuryinordertosatisfyvariousobligations,whichincludeexchangeabledebtinstruments,warrantsandemployeeshare-basedremunerationplans.SyntheticShareRepurchaseInAugust2016,weannouncedourplantoreturnapproximately$250.0milliontoshareholdersthroughasyntheticsharerepurchaseprogramthatcombinesadirectcapitalrepaymentwithareversestocksplit.ThesyntheticsharerepurchasewasimplementedthroughaseriesofamendmentstoourArticlesofAssociationwhichwereapprovedbyourshareholdersatanExtraordinaryGeneralMeeting(EGM)heldonOctober26,2016.ThefirstamendmentinvolvedanincreaseinsharecapitalbyanincreaseinthenominalvaluepercommonsharefromEUR0.01toEUR1.04andacorrespondingreductioninadditionalpaidincapital.Thesecondamendmentinvolvedareductioninstockwhereby27existingcommonshareswithanominalvalueofEUR1.04eachwereconsolidatedinto26newcommonshareswithanominalvalueofEUR1.08each.ThethirdamendmentwasareductionofthenominalvaluepercommonsharefromEUR1.08toEUR0.01.Asaresultoftheseamendments,whichinsubstanceconstituteasyntheticsharebuyback,$243.9millionwasrepaidtoourshareholdersandtheoutstandingnumberofcommonshareswasreducedby8.9,or3.7%.ThecapitalrepaymentprogramwascompletedinJanuary2017.Expensesincurredrelatedtothecapitalrepaymentandshareconsolidationamountedto$0.5millionandwerechargedtoequity.AccumulatedOtherComprehensiveLossThefollowingtableisasummaryofthecomponentsofaccumulatedothercomprehensivelossasofDecember31,2017and2016:18.EarningsperCommonShareWepresentbasicanddilutedearningspershare.BasicearningspershareiscalculatedbydividingthenetincomeattributabletotheownersofQIAGENN.V.bytheweightedaveragenumberofcommonsharesoutstanding.Dilutedearningspersharereflectthepotentialdilutionthatwouldoccurifallinthemoneyoptionsandwarrantstoissuecommonshareswereexercised.Thefollowingschedulesummarizestheinformationusedtocomputeearningspercommonshare:(inthousands)2017 2016Netunrealizedlossonhedgingcontracts,netoftax $(30,487) $(7,600)Netunrealizedlossonmarketablesecurities,netoftax (942) (156)Netunrealizedlossonpension,netoftax (878) (1,498)Foreigncurrencyeffectsfromintercompanylong-terminvestmenttransactions,netoftaxof$7.9millionand$7.7millionin2017and2016,respectively(16,144) (15,901)Foreigncurrencytranslationadjustments (172,308) (308,684)Accumulatedothercomprehensiveloss $(220,759) $(333,839)19.CommitmentsandContingenciesLeaseCommitmentsWeleasefacilitiesandequipmentunderoperatingleasearrangementsexpiringinvariousyearsthrough2024.Certainrentalcommitmentsprovideforescalatingrentalpaymentsorhaverenewaloptionsextendingthroughvariousyears.Certainfacilityandequipmentleasesconstitutecapitalleasesexpiringinvariousyearsthrough2020.Theaccompanyingconsolidatedbalancesheetsincludetheassetsandliabilitiesarisingfromthesecapitalleaseobligations.RentexpenseunderoperatingleaseagreementsnotincludingfacilityrelatedcostsaccruedinassociationwiththerestructuringactivitiesdiscussedinNote6was$24.5million,$22.4millionand$23.2millionfortheyearsendedDecember31,2017,2016and2015,respectively.MinimumfutureobligationsundercapitalandoperatingleasesatDecember31,2017areasfollows:(inthousands,exceptpersharedata)YearsendedDecember31,2017 2016 2015NetincomeattributabletotheownersofQIAGENN.V. $40,394 $80,404 $130,148Weightedaveragenumberofcommonsharesusedtocomputebasicnetincomepercommonshare228,074 234,800 233,483Dilutiveeffectofstockoptionsandrestrictivestockunits 4,760 4,193 5,028Dilutiveeffectofoutstandingwarrants 175 136Weightedaveragenumberofcommonsharesusedtocomputedilutednetincomepercommonshare233,009 238,993 238,647Outstandingoptionsandawardshavingnodilutiveeffect,notincludedinabovecalculation52 210 37Outstandingwarrantshavingnodilutiveeffect,notincludedinabovecalculation30,434 25,800 26,071BasicearningspercommonshareattributabletotheownersofQIAGENN.V.$0.18 $0.34 $0.56DilutedearningspercommonshareattributabletotheownersofQIAGENN.V.$0.17 $0.34 $0.55(inthousands)CapitalLeases OperatingLeases2018 $1,411 $18,4832019 45 16,0112020 14 11,7622021 8,4572022 6,126Thereafter 4,038 1,470 $64,877Less:Amountrepresentinginterest (54) 1,416Less:Currentportion (1,359)Long-termportion $57LicensingandPurchaseCommitmentsWehavelicensingagreementswithcompanies,universitiesandindividuals,someofwhichrequirecertainup-frontpayments.Royaltypaymentsarerequiredonnetproductsalesrangingfrom0.45percentto20percentofcoveredproductsorbasedonquantitiessold.Severaloftheseagreementshaveminimumroyaltyrequirements.Theaccompanyingconsolidatedbalancesheetsincludeaccruedroyaltiesrelatingtotheseagreementsintheamountof$6.7millionand$7.8millionatDecember31,2017and2016,respectively.Royaltyexpenserelatingtotheseagreementsamountedto$16.8million,$35.9million,and$43.2millionfortheyearsendedDecember31,2017,2016and2015,respectively.Royaltyexpenseisprimarilyrecordedincostofsales,withasmallportionrecordedasresearchanddevelopmentexpensedependingontheuseofthetechnologyunderlicense.Someoftheseagreementsalsohaveminimumrawmaterialpurchaserequirementsandrequirementstoperformspecifictypesofresearch.AtDecember31,2017,wehadcommitmentstopurchasegoodsorservices,andforfuturelicenseandroyaltypayments.Theyareasfollows:AsofDecember31,2017,futurelicensepaymentsof$11.8millionand$35.3millionareincludedinaccruedandothercurrentliabilitiesandotherlong-termliabilities,respectively.ContingentConsiderationCommitmentsPursuanttothepurchaseagreementsforcertainacquisitionswecouldberequiredtomakeadditionalcontingentcashpaymentstotalingupto$18.5millionbasedontheachievementofcertainrevenueandoperatingresultsmilestonesasfollows:$11.5millionin2018and$7.0million,payableinany12-monthperiodfromnowuntil2029basedontheaccomplishmentofcertainrevenuetargets.Ofthe$18.5milliontotalcontingentobligation,wehaveassessedthefairvalueatDecember31,2017,tobe$11.5millionwhichisincludedinaccruedliabilitiesintheaccompanyingconsolidatedbalancesheet.EmploymentAgreementsCertainofouremploymentcontractscontainprovisionswhichguaranteethepaymentsofcertainamountsintheeventofachangeincontrol,asdefinedintheagreements,oriftheexecutiveisterminatedforreasonsotherthancause,asdefinedintheagreements.AtDecember31,2017,thecommitmentundertheseagreementstotaled$16.8million.TheemploymentagreementswiththeManagingDirectorsandtheGermanaffiliateincludeaclause,wherebytheaffiliatewillcompensatetheManagingDirectorsforpotentialdeductionsunderDutchlawwhich,since2014,hasintroducedadutytodeductfromaManagingDirectorsremunerationanyincreaseinthevalueofsharesoroptionsthatwerepartofhispaytotheextentthatsuchincreaseisbasedonapublicoffer,mergerorotheridentitychangingtransaction.(inthousands)PurchaseCommitments License&RoyaltyCommitments2018 $65,073 $12,9072019 22,556 11,8582020 10,472 11,5582021 943 8,8602022 11 6,161Thereafter 434 3,748 $99,489 $55,092ContingenciesIntheordinarycourseofbusiness,weprovideawarrantytocustomersthatourproductsarefreeofdefectsandwillconformtopublishedspecifications.Generally,theapplicableproductwarrantyperiodisoneyearfromthedateofdeliveryoftheproducttothecustomerorofsiteacceptance,ifrequired.Additionally,wetypicallyprovidelimitedwarrantieswithrespecttoourservices.Fromtimetotime,wealsomakeotherwarrantiestocustomers,includingwarrantiesthatourproductsaremanufacturedinaccordancewithapplicablelawsandnotinviolationofthird-partyrights.Weprovideforestimatedwarrantycostsatthetimeoftheproductsale.WebelieveourwarrantyreservesasofDecember31,2017and2016appropriatelyreflecttheestimatedcostofsuchwarrantyobligations.PreacquisitionContingenciesInconnectionwithcertainacquisitions,amountswerepaidintoescrowaccountstocoverpreacquisitioncontingenciesassumedintheacquisition.TheescrowamountsthatarecertaintobeclaimedbyQIAGENarerecordedinprepaidexpensesandothercurrentassetsandtotal$2.5millionasofDecember31,2017.AsofDecember31,2016,$2.5millionwasrecordedinotherlong-termassetsintheaccompanyingconsolidatedbalancesheets.LitigationFromtimetotime,wemaybepartytolegalproceedingsincidentaltoourbusiness.FortheyearendedDecember31,2017,wehadsettlementamountsrelatedtovariousacquisition-relatedlitigationmatterstotaling$49.2million,primarilyrelatedtoPCR-basedbiomarkerdisputesandpatentlitigation,whichweresettledduring2017ofwhich$45.3millionwasrecordedtogeneralandadministrative,restructuring,integrationandotherexpenseand$3.9millionwasrecordedasalicenseright.$44.8millionofthesettlementamountswerepaidduring2017andasofDecember31,2017,$4.4millionwasaccruedinaccruedandothercurrentliabilities.AsofDecember31,2017,certainclaims,suitsorlegalproceedingsarisingoutofthenormalcourseofbusinesshavebeenfiledorwerependingagainstQIAGENoritssubsidiaries.Thesemattershavearisenintheordinarycourseandconductofbusiness,aswellasthroughacquisition.Althoughitisnotpossibletopredicttheoutcomeofsuchlitigation,weassessthedegreeofprobabilityandevaluatethereasonablypossiblelossesthatwecouldincurasaresultofthesematters.Weaccrueforanyestimatedlosswhenitisprobablethataliabilityhasbeenincurredandthattheamountoftheprobablelosscanbeestimated.BasedonthefactsknowntoQIAGENandafterconsultationwithlegalcounsel,managementbelievesthatsuchlitigationwillnothaveamaterialadverseeffectonQIAGENsfinancialpositionorresultsofoperations.20.Share-BasedCompensationWeadoptedtheQIAGENN.V.AmendedandRestated2005StockPlan(the2005Plan)in2005andtheQIAGENN.V.2014StockPlan(the2014Plan)in2014.The2005PlanexpiredbyitstermsinApril2015andnofurtherawardswillbegrantedunderthe2005Plan.Theplansallowforthegrantingofstockrightsandincentivestockoptions,aswellasnon-qualifiedoptions,stockgrantsandstock-basedawards,generallywithtermsofupto10years,subjecttoearlierterminationincertainsituations.Generally,optionsvestovera3-yearperiod.ThevestingandexercisabilityofcertainstockrightswillbeacceleratedintheeventofaChangeofControl,asdefinedintheplans.Todate,alloptiongrantshavebeenatthemarketvalueonthegrantdateoratapremiumabovetheclosingmarketpriceonthegrantdate.WeissueTreasurySharestosatisfyoptionexercisesandawardreleasesandhadapproximately22millionCommonSharesreservedandavailableforissuanceunderthe2005and2014PlansatDecember31,2017.StockOptionsWehavenotgrantedstockoptionssince2013.AsummaryofthestatusofemployeestockoptionsasofDecember31,2017andchangesduringtheyearthenendedispresentedbelow:ThetotalintrinsicvalueofoptionsexercisedduringtheyearsendedDecember31,2017,2016and2015was$3.3million,$3.2millionand$7.0million,respectively.AtDecember31,2017,therewasnounrecognizedshare-basedcompensationexpenserelatedtoemployeestockoptionawards.AtDecember31,2017,2016and2015,1.1million,1.4millionand1.7millionoptionswereexercisableataweightedaveragepriceof$19.54,$19.84and$19.27pershare,respectively.TheoptionsoutstandingatDecember31,2017expireinvariousyearsthrough2023.StockUnitsStockunitsrepresentrightstoreceiveCommonSharesatafuturedateandincluderestrictedstockunitswhicharesubjecttotime-vestingonlyandperformancestockunitswhichincludeperformanceconditionsinadditiontotime-vesting.Thefinalnumberofperformancestockunitsearnedisbasedontheperformanceachievementwhichforsomegrantscanreachupto120%ofthegrantedshares.Thereisnoexercisepriceandthefairmarketvalueatthetimeofthegrantisrecognizedovertherequisitevestingperiod,generally3to5years,andincertaingrants10years.Thefairmarketvalueisdeterminedbasedonthenumberofstockunitsgrantedandthemarketvalueofoursharesonthegrantdate.Pre-vestingforfeitureswereestimatedtobeapproximately7.0%.AtDecember31,2017,therewas$67.5millionremaininginunrecognizedcompensationcostincludingestimatedforfeituresrelatedtotheseawards,whichisexpectedtoberecognizedoveraweightedaverageperiodof2.35years.TheweightedaveragegrantdatefairvalueofstockunitsgrantedduringtheyearsendedDecember31,2017,2016and2015was$31.12,$23.81and$24.91,respectively.ThetotalfairvalueofstockunitsthatvestedduringtheyearsendedDecember31,2017,2016and2015was$69.2million,$27.4millionand$28.7million,respectively.AsummaryofstockunitsasofDecember31,2017andchangesduringtheyeararepresentedbelow:CompensationExpenseShare-basedcompensationexpensebeforetaxesfortheyearsendedDecember31,2017,2016and2015totaledapproximately$34.4million,$28.3millionand$23.8million,respectively,asshowninthetablebelow.AllEmployeeOptionsNumberofShares(inthousands)WeightedAverageExercisePriceWeightedAverageContractualTerm(inyears)AggregateIntrinsicValue(inthousands)OutstandingatJanuary1,2017 1,439 $19.84Exercised (287) $21.08Expired (3) $18.63OutstandingatDecember31,2017 1,149 19.54 3.32 13,088VestedatDecember31,2017 1,149 19.54 3.32 13,088VestedandexpectedtovestatDecember31,2017 1,149 19.54 3.32 13,088StockUnitsStockUnits(inthousands)WeightedAverageContractualTerm(inyears)AggregateIntrinsicValue(inthousands)OutstandingatJanuary1,2017 10,198Granted 1,976Vested (2,306)Forfeited (1,766)OutstandingatDecember31,2017 8,102 2.30 $250,603VestedandexpectedtovestatDecember31,2017 6,914 2.15 $213,861(1)Doesnotincludetheexcesstaxbenefitrealizedforthetaxdeductionsoftheshare-basedpaymentarrangementstotaled$5.2million,$0.8millionand$3.3million,respectively,fortheyearsendedDecember31,2017,2016and2015.Followingthe2016restructuringprogramdiscussedinNote6,share-basedcompensationexpensein2017and2016includesforfeituresof$0.7millionand$2.0million,respectively,inconnectionwiththerestructuringterminations.Totalshare-basedcompensationexpensein2015waslowerfollowingareassessmentonstockunitswithperformancecriteria.Noshare-basedcompensationcostwascapitalizedininventoryinDecember31,2017,2016or2015astheamountswerenotmaterial.21.EmployeeBenefitsWemaintainvariousbenefitplans,includingdefinedcontributionanddefinedbenefitplans.OurU.S.definedcontributionplanisqualifiedunderSection401(k)oftheInternalRevenueCode,andcoverssubstantiallyallU.S.employees.ParticipantsmaycontributeaportionoftheircompensationnotexceedingalimitsetannuallybytheInternalRevenueService.Thisplanincludesaprovisionforustomatchaportionofemployeecontributions.Totalexpenseunderthe401(k)plans,includingtheplansacquiredviabusinessacquisitions,was$3.6million,$2.5millionand$2.4millionfortheyearsendedDecember31,2017,2016and2015,respectively.Wealsohaveadefinedcontributionplanwhichcoverscertainexecutives.Wemakematchingcontributionsuptoanestablishedmaximum.Matchingcontributionsmadetotheplan,andexpensed,totaledapproximately$0.3millionineachyearendedDecember31,2017,2016and2015.Wehavefivedefinedbenefit,non-contributoryretirementorterminationplansthatcovercertainemployeesinGermany,France,Japan,ItalyandtheUnitedArabEmirates.Thesedefinedbenefitplansprovidebenefitstocoveredindividualssatisfyingcertainageand/orservicerequirements.Forcertainplans,wecalculatethevestedbenefitstowhichemployeesareentitlediftheyseparateimmediately.Thebenefitsaccruedonapro-ratabasisduringtheemployeesemploymentperiodarebasedontheindividualssalaries,adjustedforinflation.Theliabilityunderthedefinedbenefitplanswas$8.0millionatDecember31,2017and$6.7millionatDecember31,2016,andisincludedasacomponentofotherlong-termliabilitiesontheaccompanyingconsolidatedbalancesheets.22.RelatedPartyTransactionsFromtimetotime,wehavetransactionswithothercompaniesinwhichweholdaninterestallofwhichareindividuallyandintheaggregateimmaterial,assummarizedinthetablebelow.CompensationExpense(inthousands)2017 2016 2015Costofsales $2,641 $2,553 $2,177Researchanddevelopment 5,367 4,735 5,686Salesandmarketing 6,820 4,824 4,815Generalandadministrative 19,614 16,176 11,083Share-basedcompensationexpense 34,442 28,288 23,761Less:incometaxbenefit (1) 7,407 6,223 5,751Netshare-basedcompensationexpense $27,035 $22,065 $18,010During2017,wepurchasedaconvertiblenotefor$3.0millionfromapubliclylistedcompanyconsideredarelatedparty.ThenoteisdueinOctober2020andbearsinterestof3.0%.AsofDecember31,2017,theprincipalandaccruedinterestofthisnotetotals$2.7millionwhiletheremaining$0.2millionisattributabletotheembeddedderivative,thatisbifurcatedandmeasuredatfairvalue,associatedtoaconvertiblefeatureofthisnote.Alsoin2017,wegrantedaloantoamemberofmanagementtotaling0.6million($0.7millionasofDecember31,2017)bearinginterestat2.0%annually.Repaymentisforgivenwithcontinuedemploymentattherateof0.1millionplusaccruedinterestannually.Theseareincludedinotherlong-termassetsintheaccompanyingconsolidatedbalancesheet.Additionally,wehavetwoloanreceivablesduefromrelatedpartiesgrantedpriorto2017.Thefirstloan,withabalanceof$11.3millionincludingaccruedinterestatDecember31,2017,wasoriginallygrantedin2015andsubsequentlyincreasedduring2016.ThisloanisdueinJanuary2020andbearsinterestof6%.Thesecondloan,alsograntedin2015,hasaprincipalof2.0millionandisdueinJune2019.Thisloanbearsinterestof7%andasofDecember31,2017carriesabalanceof$2.9millionincludingaccruedinterest.Theloansweremadeforgeneralbusinesspurposesandnoamountshavebeenrepaid.Theseloansareincludedinotherlong-termassetsintheaccompanyingconsolidatedbalancesheetasofDecember31,2017.AsdiscussedinNote10,during2016weacquireda19.0%interestinHombrechtikonSystemsEngineeringAG(HSE)foratotalobligationof$9.8millionpayableoverthreeyears.AsofDecember31,2017,thetotalremainingobligationwas$6.2million,ofwhich$3.1millionwasincludedinaccruedandothercurrentliabilitiesand$3.1millionwasincludedinotherlong-termliabilitiesintheaccompanyingconsolidatedbalancesheet.HSEisavariableinterestentityandwearenottheprimarybeneficiary,thereforeHSEisnotconsolidated.23.SubsequentEventsOnJanuary31,2018,weannouncedourfifthsharerepurchaseprogramofupto$200millionofourcommonsharesbeginningin2018aswellastheacquisitionofSTAT-Dxforapproximately$147millionincashandadditionalpaymentsofuptoapproximately$44millionbasedontheachievementofregulatoryandcommercialmilestones.Theacquisitionisexpectedtobecompletedin2018andfundedfromexistingcashreserves.InJanuary2018,apartnershipbecameeffectivewithaChinesecompanythathastakenoverR&D,commercialdistribution,andtherelatedQIAGENemployeesandinfrastructureoftheHPVtestfranchiseinChina.(inthousands)AsofDecember31, FortheyearsendedDecember31,2017 2016 2017 2016 2015Netsales $3,852 $1,360 $418Reimbursementsagainstresearchanddevelopment $2,032Accountsreceivable $3,802 $1,302 Otherlong-termassets $17,713 $13,067 Accountspayable $1,921 $391 Accruedandothercurrentliabilities $9,028 $3,926 Otherlong-termliabilities $3,075 $5,889

Recommended

View more >