| | |
Developed technology, patents and license rights | | |
| | |
| | |
Other intellectual properties | | |
conditions.
The Company assesses the allowance for doubtful accounts by applying the IFRS 9 simplified approach to measuring expected credit losses (ECLs), which uses the lifetime
ECL allowance. To measure the ECLs on trade receivables, the Company considers any credit-risk concentration, collective debt risk based on historical losses, specific
circumstances considering the market information on a country specific basis, and other forward looking information. Trade receivables are written off when there is no
reasonable expectation of recovery of the asset (for example, because of bankruptcy).
Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair
value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or the Company's assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used.
These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
Impairment losses are recognized in the income statement in those expense categories consistent with the function of the impaired asset, except for property previously
revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognized in other comprehensive income up to the amount
of any previous revaluation.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no
longer exist or may have decreased. If such indication exists, the Company estimates the asset's or cash-generating unit's recoverable amount. A previously recognized
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was
recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the income statement unless the asset
is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
Goodwill
Goodwill is subject to impairment tests annually, as of October 1, or earlier if indicators of potential impairment exist. We assess goodwill for impairment at least annually
in the absence of an indicator of possible impairment and immediately upon an indicator of possible impairment.
Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates.
Where the recoverable amount of the cash generating unit is less than their carrying amount an impairment loss is recognized. Impairment losses relating to goodwill
cannot be reversed in future periods.
Intangible assets
Intangible assets with indefinite useful lives are tested for impairment annually as of October 1 either individually or at the cash-generating unit level, as appropriate and
when circumstances indicate that the carrying value may be impaired.
",
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3.23\u00a0 Provisions
Provisions are recognized by the Company when a present legal or constructive obligation exists as a result of past events, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the effect of the time
value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. Where discounting is used,
the increase in the provision due to the passage of time is recognized as a financing cost.
The Company provides warranties on products against defects in materials and workmanship for a period of one year. A provision for estimated future warranty costs is
recorded in cost of sales at the time product revenue is recognized. Product warranty obligations are included in other current liabilities in the balance sheet. Additionally,
we typically provide limited warranties with respect to our services. Refer to Note 14 \"Provisions\" for changes in the carrying amount of the warranty provision for 2022.
Acquisition related provisions are costs recognized separately from the purchase price of a business combination. These costs primarily relate to personnel and consulting
costs to effect the business combination and subsequent integration. Refer to Note 14 \"Provisions\" for changes in the carrying amount of the acquisition related provision
for 2022.
",
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"value": "
3.24\u00a0 Reportable Segment
We determined that we operate as one reportable segment. Our chief operating decision maker (CODM)\u00a0makes decisions based on the Company as a whole. In
addition, we have a common basis of organization and types of products and services which derive revenues and consistent product margins. Accordingly, we operate
and make decisions as one cash generating unit.",
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"value": "
3.25\u00a0 Statement of Cash Flows
The statement of cash flows provides an explanation of the changes in cash and cash equivalents. It is prepared on the basis of a comparison of the statements of financial
position as of January 1 and December 31 using the indirect method. Investing and financing transactions that do not require the use of cash or cash equivalents have
been excluded from the cash flow statement.
",
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"value": "
Significant Accounting Estimates and Judgments
The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next\u00a0
year are described below.
Purchase Price Allocation
The purchase price allocation for acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and
intangible assets acquired, including in-process research and development, and liabilities assumed based on their respective fair values. An acquisition may include
contingent consideration as part of the purchase price. Contingent consideration is accounted for at fair value at the acquisition date with subsequent changes to the fair
value being recognized in earnings. Additionally, we must determine whether an acquired entity is considered to be a business or a set of net assets, because a portion of
the purchase price can only be allocated to goodwill in a business combination.
We have made several acquisitions in recent years. The purchase prices for the acquisitions were allocated to tangible and intangible assets acquired and liabilities
assumed based on their estimated fair values at the acquisition dates. We engaged an independent third-party valuation firm to assist us in determining the estimated fair
values of in-process research and development and identifiable intangible assets. Such a valuation requires significant estimates and assumptions, including but not limited
to determining the timing and estimated costs to complete the in-process projects, projecting regulatory approvals, estimating future cash flows, and developing
appropriate discount rates. We believe the estimated fair values of contingent consideration and assets acquired and liabilities assumed are based on reasonable
assumptions. However, the fair value estimates for the purchase price allocations may change during the allowable allocation period, which is up to one year from the
acquisition dates, if additional information becomes available.
Fair Value Measurements
We have categorized our assets and liabilities that are measured at fair value, based on the priority of the inputs to the valuation techniques, in a three-level fair value
hierarchy: Level\u00a01 - using quoted prices in active markets for identical assets or liabilities; Level 2 - using observable inputs other than quoted prices; and Level 3 \u2013 using
unobservable inputs.\u00a0We primarily apply the market approach for recurring fair value measurements, maximize our use of observable inputs and minimize our use of
unobservable inputs.\u00a0We utilize the mid-point price between bid and ask prices for valuing the majority of our assets and liabilities measured and reported at fair value.\u00a0In
addition to using market data, we make assumptions in valuing assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation
technique.
Certain of our derivative instruments, which are classified in Level 2 of the fair value hierarchy, are valued using industry-standard models that consider various inputs,
including time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially
all of these inputs are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable prices
at which transactions are executed in the marketplace.
Certain of our acquisitions involve contingent consideration, the payment of which is contingent on the occurrence of future events. Contingent consideration is classified in
Level 3 of the fair value hierarchy and is initially recognized at fair value as a cost of the acquisition. After the acquisition, the contingent consideration liability is
remeasured each reporting period. The fair value of contingent consideration is measured predominantly on unobservable inputs such as assumptions about the likelihood
of achieving specified milestone criteria, projections of future financial performance, assumed discount rates and assumed weightings applied to potential scenarios in
deriving a probability weighted fair value. Significant judgment is used in developing these estimates and assumptions both at the acquisition date and in subsequent
periods. If actual events differ from management's estimates, or to the extent these estimates are adjusted in the future, our financial condition or results of operations could
be affected in the period of any change.
For other fair value measurements, we generally use an income approach to measure fair value when there is not a market observable price for an identical or similar
asset or liability.\u00a0This approach utilizes management\u2019s best assumptions regarding expectations of projected cash flows, and discounts the expected cash flows using a
commensurate risk-adjusted discount rate.\u00a0
Impairment of Intangible Assets
Assets are tested or reviewed for impairment in accordance with the accounting policy stated under Note 3.22 \"Impairment.\"
In the fourth quarter of 2022, we performed our annual impairment assessment of goodwill (using data as of October\u00a01, 2022). We performed our goodwill impairment
testing on a single cash generating unit basis which is consistent with our reporting structure. In testing for potential impairment, we measured the estimated fair value of
the cash generating unit based upon discounted future operating cash flows using a discount rate reflecting our estimated average cost of funds. Differences in assumptions
used in projecting future operating cash flows and cost of funds could have a significant impact on the determination of impairment amounts. In estimating future cash
flows, we used our internal five-year projections. Our projections were based on recent sales data for existing products, planned timing of new product launches, and
customer commitments related to new and existing products. We performed a series of sensitivity analyses on our calculation by varying key inputs individually including a
decrease in projected future cash flows and growth rates and an increase in the weighted average cost of capital to a +/-10% threshold and found no material impact on
the value of goodwill. We concluded that no impairment existed at October 1, 2022 or through December\u00a031, 2022.
Due to the numerous variables associated with our judgments and assumptions relating to the valuation of the cash generating unit and the effects of changes in
circumstances affecting these valuations, both the precision and reliability of the resulting estimates are subject to uncertainty, and as additional information becomes
known, we may change our estimates.
Development Costs
Development costs are capitalized in accordance with the accounting policy stated under research and development in Note 3.6 \"Operating Expenses\" above. Assessing
whether the development costs qualify for capitalization requires management to make assumptions regarding the expected future cash generation of the assets, discount
rates to be applied and the expected period of benefits. Periodically, and at least annually, management assesses whether there are indications that projects may be
impaired and if impairment indicators exist, management reviews the carrying amount of the projects and performs a test for impairment.
Income Taxes
The Company is subject to income taxes in numerous jurisdictions that require estimates to be made based on interpretations of laws or regulations. Various internal and
external factors, such as changes in tax laws, regulations and rates, changing interpretations of existing tax laws or regulations, future level of research and development
spending and changes in overall levels of pre-tax income may have favorable or unfavorable effects on the income tax and deferred tax provisions in the period in which
such determination is made.
Deferred tax assets are recognized in accordance with the accounting policy stated in Note 3.11 \"Taxation.\" Deferred tax assets are recognized for net operating loss
carry-forwards to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to
determine the amount of deferred tax assets that can be recognized based upon the likely timing and level of future taxable profits.
Share-Based Payments - Stock Options
The Company utilizes the Black-Scholes-Merton valuation model for estimating the fair value of its stock options as stated under Note 22 \"Share-Based Payments.\" Option
valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant
date fair value of an award.
Share-Based Payments - Restricted Stock Units and Performance Stock Units
Restricted stock units and performance stock units represent rights to receive Common Shares at a future date. The fair market value is determined based on the number of
stock units granted and the fair market value of our shares on the grant date. The fair market value at the time of the grant, less an estimate for pre-vesting forfeitures, is
recognized in expense over the vesting period. We grant performance-based stock units subject to performance periods of one-year up to three years. Thus the estimates of
performance achieved during the performance period may be subject to significant changes from period to period as the performance is completed.",
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"value": "Revenue
Nature of Goods and Services
Our revenues are reported net of sales and value-added taxes, estimated rebates and returns. Net sales are derived primarily from the sale of consumable and
instrumentation products, and to a much lesser extent, from the sale of services, intellectual property and technology. Revenue is recognized upon transfer of control of
promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into
contracts that can include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. The
transaction price is allocated to performance obligations based on their relative stand-alone selling prices.
We offer warranties on our products. Certain of our warranties are assurance-type in nature and do not cover anything beyond ensuring that the product is functioning as
intended. Based on the guidance in IFRS 15, assurance-type warranties do not represent separate performance obligations. The Company also sells separately-priced
service contracts which qualify as service-type warranties and represent separate performance obligations.
We sell our products and services both directly to customers and through distributors generally under agreements with payment terms typically less than 90 days and in
most cases, not exceeding one year and therefore, contracts do not contain a significant financing component.
Consumable and Related Revenue
Consumable Products: In the last three years, revenue from consumable product sales has accounted for approximately 80-81% of our net sales and revenue is
recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of our contracts have either a single performance
obligation to transfer a single consumable product or multiple performance obligations to transfer multiple products concurrently. Accordingly, we recognize revenue when
control of the products has transferred to the customer, which is generally at the time of shipment of products as this is when title and risk of loss have been transferred. In
addition, invoicing typically occurs at this time so this is when we have a present right to payment. Revenue is measured as the amount of consideration we expect to
receive in exchange for transferring products and is generally based upon a negotiated formula, list or fixed price.
Related Revenue: Revenues from related products include software-as-a-service (SaaS), licenses, intellectual property and patent sales, royalties and milestone payments
and over the last three years has accounted for approximately 6-8% of our net sales.
SaaS arrangements: Revenue from SaaS arrangements, which allow customers to use hosted software over the contract period without taking possession of the
software, is recognized over the duration of the agreement unless the terms of the agreement indicate that revenue should be recognized in a different pattern, for
example based on usage.
Licenses: Licenses for on-site software, which allow customers to use the software as it exists when made available, are sold as perpetual licenses or term licenses.
Revenue from on-site licenses are recognized upfront at the point in time at the later of when the software is made available to the customer and the beginning of the
license term. When a portion of the transaction price is allocated to a performance obligation to provide support and/or updates, revenue is recognized as the
updates/support are provided, generally over the life of the license. Fees from research collaborations include payments for technology transfer and access rights.
Royalties from licensees of intellectual property are based on sales of licensed products and revenues are recognized at the later of (i) when the related sales occur, or
(ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).\u00a0
Milestone Payments: At the inception of each companion diagnostic co-development arrangement that includes development milestone payments, which represent
variable consideration, we evaluate whether the milestones are probable of being reached and estimate the amount to be included in the transaction price using the
most likely amount method.\u00a0If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction
price.\u00a0Milestone payments that are not within our control, such as milestones which are achieved through regulatory approvals, are considered to be constrained and
excluded from the transaction price until those approvals are received.\u00a0Revenue is recognized following the input method as this is considered to best depict the timing
of the transfer of control. This involves measuring actual hours incurred to date as a proportion of the total budgeted hours of the project. At the end of each
subsequent reporting period, the proportion of completion is trued-up. We also re-evaluate the probability of achievement of development milestones and any related
constraint on a periodic basis, and if necessary, adjust our estimate of the overall transaction price.\u00a0Any such adjustments are recorded on a cumulative catch-up
basis, which would affect revenues and earnings in the period of adjustment.
Instruments
Revenue from instrumentation includes the instrumentation equipment, installation, training and other instrumentation services, such as extended warranty services or
product maintenance contracts and over the last three years has accounted for approximately 12-14% of net sales. Revenue from instrumentation equipment is recognized
when the customer obtains control of the instrument which is predominantly at the time of delivery or when title has transferred to the customer. Service revenue is
recognized over the term of the service period as the customers benefit from the service throughout the service period. Revenue related to services performed on a time-and-
materials basis is recognized when performed.
Contract Estimates
The majority of our revenue is derived from contracts (i) with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the
amount in which we have the right to invoice as product is delivered. We have elected the practical expedient not to disclose the value of remaining performance
obligations associated with these types of contracts.
However, we have certain companion diagnostic co-development contracts to provide research and development activities in which our performance obligations extend
over multiple years. As of December\u00a031, 2022, we had $54.5 million of remaining performance obligations for which the transaction price is not constrained related to
these contracts which we expect to recognize over the next 12 to 18 months.
Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original
expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance
obligations, is not material.
Contract Balances
The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables (contract assets), and customer advances and
deposits (contract liabilities) in the consolidated balance sheet.
Contract assets as of December\u00a031, 2022 and 2021 totaled $9.8 million and $14.1 million, respectively, are included in other current assets in the accompanying
consolidated balance sheets and relate to the companion diagnostic co-development contracts discussed above.
Contract liabilities primarily relate to non-cancellable advances or deposits received from customers before revenue is recognized and is primarily related to instrument
service and Software as a Service (SaaS) arrangements. As of December\u00a031, 2022 and 2021, contract liabilities totaled $84.2 million and $74.7 million, respectively, of
which $69.0 million and $63.4 million is included in other current liabilities, respectively, and $15.2 million and $11.3 million is included in other non-current liabilities,
respectively. During the years ended December\u00a031, 2022 and 2021, we satisfied the associated performance obligations and recognized revenue of $57.6 million and
$54.9 million, respectively, related to advance customer payments previously received.
Disaggregation of Revenue
We disaggregate our revenue based on product type and customer class as shown in the tables below for the years ended December\u00a031, 2022 and 2021:
| | | | |
| | | | |
Consumables and related revenues | | | | |
| | | | |
| | | | |
Consumables and related revenues | | | | |
| | | | |
| | | | |
| | | | |
Additionally, we disaggregate our revenue based on product category as shown in the tables below for the years ended December\u00a031, 2022 and 2021:
| | | | |
| | | | |
| | | | |
| | | | |
PCR / Nucleic acid amplification | | | | |
| | | | |
| | | | |
| | | | |
Refer to Note 21 \"Reportable Segment\" for disclosure of revenue by geographic region.
",
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"value": "
5.\u00a0 Acquisitions
Business Combinations and Asset Acquisitions
For acquisitions which have been accounted for as business combinations, the acquired companies\u2019 results have been included in the accompanying consolidated income
statements from their respective dates of acquisition. Our acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in
goodwill, due to expectations of synergies of combining the businesses. These synergies include use of our existing infrastructure, such as sales force, shared service
centers, distribution channels and customer relations; to expand sales of an acquired business' products; use of the infrastructure of the acquired businesses to cost-
effectively expand sales of our products; and elimination of duplicative facilities, functions and staffing.
If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill
is recognized. In an asset acquisition, the amount allocated to acquired IPR&D is recognized and measured based on its relative fair value in relation to the cost of the
group of assets as a whole at the acquisition date.
2022 Business Combinations
In May 2022, we acquired 100% of BLIRT S.A., a supplier of standardized and customized solutions for proteins and enzymes as well as molecular biology reagents
located in Gda\u0144sk, Poland. Its offering includes proteins and enzymes that are critical to the life sciences industry and diagnostic kit manufacturers. The cash consideration,
net of cash acquired, was $63.7 million. The acquisition was not significant to the overall consolidated financial statements and as of December\u00a031, 2022, the allocation
of the purchase price was preliminary as we continue to gather information about the fair value of all assets and liabilities, other than intangible assets. At the acquisition
date, all the assets acquired and liabilities assumed were recorded at their respective fair values and our consolidated results of operations include the operating results
from the acquired company from the acquisition date. The acquisition did not have a material impact to net sales, net income or earnings per common share and therefore
no pro forma information has been provided herein.",
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"value": "
6.\u00a0 Restructuring
As part of our restructuring activities, we incur expenses that qualify as constructive obligations under IAS 37 arising from a restructuring program including severance and
employee costs as well as contract and other costs, primarily contract termination costs, as well as inventory write-offs and other implementation costs primarily related to
consulting fees. Personnel costs (principally termination benefits) primarily relate to cash severance and other termination benefits including accelerated share-based
compensation. We also incur expenses that are an integral component of, and are directly attributable to, our restructuring activities which do not qualify as constructive
obligations under IAS 37, which consist of asset-related costs such as intangible asset impairments and other asset related write-offs.
Termination benefits are recorded when it is probable that employees will be entitled to benefits and the amounts can be reasonably estimated. Estimates of termination
benefits are based on the frequency of past termination benefits, the similarity of benefits under the current plan and prior plans, and the existence of statutory required
minimum benefits. Other benefits which require future service and are associated to non-recurring benefits are recognized ratably over the future service period. Other
assets, including inventory, are impaired or written-off if the carrying value exceeds the fair value. All other costs are recognized as incurred.
2022 Restructuring
During the fourth quarter of 2022, we initiated a restructuring plan to discontinue our third-party instrument service business and realign certain management positions in
order to improve the overall management structure. The total pre-tax costs are expected to total approximately $8.0\u00a0million, of which $5.0\u00a0million was incurred during the
second half of 2022 and included $0.4\u00a0million recorded in cost of sales related to inventory write-downs together with $4.1\u00a0million in personnel related costs, $0.5\u00a0million
in consulting and other costs expensed to restructuring, acquisition, integration and other, net in the accompanying consolidated income statement.
Of the total cost incurred, $4.6\u00a0million remains accrued as of December 31, 2022 in other current liabilities in the accompanying consolidated balance sheet as
summarized in the following table for the restructuring activity:
| | | | | | |
| | | | | | |
| | | | | | |
Foreign currency translation adjustment | | | | | | |
Liability at December 31, 2022 | | | | | | |
Future pre-tax costs of approximately $3.0\u00a0million are expected to be incurred in 2023, primarily related to personnel and contract termination costs. The plan is expected
to be completed by the end of 2023.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY185MS9mcmFnOjdjODUwMGU2MDMyZjQ4M2ZiNTQ4MGE5NGE5NWExYzQwL3RleHRyZWdpb246N2M4NTAwZTYwMzJmNDgzZmI1NDgwYTk0YTk1YTFjNDBfMjc0ODc3OTA3MzUxNQ_a90dee56-bf82-4ea5-9d5b-cbda208b41f6": {
"value": "
7.\u00a0 Financial Assets
| | | | |
| | | | |
Current financial assets: | | | | |
| | | | |
| | | | |
| | | | |
Non-current financial instruments: | | | | |
Unquoted equity securities | | | | |
| | | | |
At December\u00a031, 2022, we held unquoted debt securities of $608.0 million and quoted debt securities of $79.6 million. At December\u00a031, 2021, we held unquoted debt
securities valued at $184.8 million. These current financial assets consist of commercial paper and money market deposits due from financial and nonfinancial institutions.
Current investments are highly liquid deposits and fixed-income securities denominated in U.S. dollars. Investments in commercial paper, a marketable debt security, are
financial assets accounted for at fair value through profit and loss and are carried at fair market value. Interest income is calculated and accrued using the effective interest
method. Money market deposits are interest-bearing deposit accounts, valued at amortized cost with interest income accrued as earned. All instruments are classified as
current financial assets in the accompanying balance sheet as they have an original maturity of less than one year. Interest income is determined using the effective interest
rate method.
Unquoted Debt Securities
| | | | |
| | | | |
Balance at beginning of the year | | | | |
Unquoted debt securities acquired | | | | |
Unquoted debt securities redeemed | | | | |
Loss on sales of unquoted debt securities | | | | |
Additions for accrued interest | | | | |
Balance at end of the year | | | | |
Quoted Debt Securities
| | |
| | |
Balance at beginning of the year | | |
Quoted debt securities acquired | | |
Quoted debt securities redeemed | | |
Additions for accrued interest | | |
Balance at end of the year | | |
Unquoted Equity Securities
At December\u00a031, 2022 and 2021, we had investments in non-publicly traded companies that do not have readily determinable fair values with carrying amounts that
totaled $5.3 million and $3.9 million, respectively. These investments are required to be accounted for at fair value through profit and loss unless the investment is not held
for trading, and the holder elects at initial recognition to account for it at fair value through other comprehensive income. As this election has not been made, these
investments are accounted for at fair value through profit and loss in other financial results.
There was no observable fair value change in these unquoted equity investments during 2022. All other changes in these investments for the years ended December\u00a031,
2022 and 2021 are as follows:
| | | | |
| | | | |
Balance at beginning of year | | | | |
Cash investments in equity securities, net | | | | |
Shares received in exchange for services | | | | |
Foreign currency translation adjustments | | | | |
| | | | |
The changes in the allowance for doubtful accounts are as follows:
| | | | |
| | | | |
Balance at beginning of year | | | | |
Additions charged to expense | | | | |
Deductions from allowance(1) | | | | |
| | | | |
Currency translation adjustments and other | | | | |
| | | | |
(1)Write-offs for which an allowance was previously provided.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY185Ny9mcmFnOjJiNzFmYmZlZTBkMzRhYzBhMjNmZWMzMmZmOTYwOWViL3RleHRyZWdpb246MmI3MWZiZmVlMGQzNGFjMGEyM2ZlYzMyZmY5NjA5ZWJfMjc0ODc3OTA2OTYxMw_b97de9bd-3fb2-4ecc-a3a8-b096c0242285": {
"value": "
9.\u00a0 Other Current and Non-current Assets
Other current assets at December\u00a031, 2022 and 2021 consist of the following:
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Current loans receivable with related parties including interest | | | | | | |
Total other current assets | | | | | | |
Other non-current assets at December\u00a031, 2022 and 2021 consist of the following:
| | | | |
| | | | |
| | | | |
Prepaid licenses and royalties | | | | |
Non-current deposits and escrow payments | | | | |
Prepayment of intangibles | | | | |
Total other non-current assets | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY185Ny9mcmFnOjJiNzFmYmZlZTBkMzRhYzBhMjNmZWMzMmZmOTYwOWViL3RleHRyZWdpb246MmI3MWZiZmVlMGQzNGFjMGEyM2ZlYzMyZmY5NjA5ZWJfMjc0ODc3OTA2OTYxNQ_c0fb5206-a89a-49ae-b03a-b3cdab42671f": {
"value": "
Other non-current assets at December\u00a031, 2022 and 2021 consist of the following:
| | | | |
| | | | |
| | | | |
Prepaid licenses and royalties | | | | |
Non-current deposits and escrow payments | | | | |
Prepayment of intangibles | | | | |
Total other non-current assets | | | | |
| | | | | | | | | | | | |
Accumulated depreciation (in thousands) | | | | | | Furniture and office equipment | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
IAS 29 Hyperinflationary accounting | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Net book value (in thousands) | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Accumulated depreciation (in thousands) | | | | | | Furniture and office equipment | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
IAS 29 Hyperinflationary accounting | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Net book value (in thousands) | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | |
Accumulated amortization (in thousands) | | Developed technology, patent and license rights | | | | | | Other intellectual properties | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
IAS 29 Hyperinflationary accounting | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Net book value (in thousands) | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
During 2022, certain fully amortized intangible assets with a gross carrying amount of $135.3 million were retired.
During the year ended December\u00a031, 2022, we recorded a charge to restructuring, acquisition, integration and other, net in the accompanying consolidated income
statements, to fully impair a license with a carrying value of $12.8 million. This license was to use technology of Ellume Limited, Australia. In connection with Ellume
starting insolvency proceedings in September 2022, we decided to cease all product development and manufacturing activities associated with this license and
determined that there was no alternative use nor recoverable value. Accordingly, the license was fully impaired.
Amortization expense on intangible assets is included in the line items cost of sales, research and development expense, sales and marketing expense or general and
administrative expense in the accompanying consolidated income statements depending on the nature and use of the asset. In 2022, purchased intangibles amortization
related to developed technology and patent and license rights acquired in a business combination is included in cost of sales in the amount of $60.5 million (2021: $67.1
million) and purchased intangibles amortization of trademarks and customer base acquired in a business combination is recorded in sales and marketing expense in the
amount of $14.5 million (2021: $18.5 million).
Amortization of capitalized development costs have been recorded to cost of sales in the amount of $3.4 million in 2022 (2021: $4.4 million).
Intangible additions excluding development costs of $92.5 million includes $83.8 million of cash paid during the year ended December\u00a031, 2022 together with $7.0
million of additions which were previously recorded as prepayments and $1.7 million of additions that were accrued as of December\u00a031, 2022. Cash paid for intangible
assets during the year ended December\u00a031, 2022 totaled $93.0 million, of which $4.8 million is related to current year payments for assets that were accrued as of
December\u00a031, 2021 and $4.4 million is related to prepayments recorded in other non-current assets in the accompanying consolidated balance sheet.
Cash paid for intangible assets during the year ended December\u00a031, 2021 totaled $67.9 million, of which $8.4 million is related to current year payments for licenses
that were accrued as of December 31, 2020 and $0.2 million is related to prepayments recorded in other non-current assets in accompanying consolidated balance
sheet. Intangible additions excluding development costs of $75.3 million includes $59.4 million of cash paid during the year, $15.0 million associated to a fully paid-up
technology license received in exchange for a convertible note and $0.9 million of additions which were previously recorded as prepayments.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY18xMDMvZnJhZzpkM2VlMzlhMzBlNmE0ZDA2OTViMDc3NDFkYWVmOTc4Zi90ZXh0cmVnaW9uOmQzZWUzOWEzMGU2YTRkMDY5NWIwNzc0MWRhZWY5NzhmXzI3NDg3NzkwNzE4ODg_56e87f5e-436a-4105-a456-c7058076f760": {
"value": "
11.\u00a0 Equity Accounted Investments
We have made strategic investments in certain companies that are accounted for using the equity method of accounting. The method of accounting for an investment
depends on the level of influence. We hold investments in entities where, though we lack a controlling financial interest, we do have rights to direct the relevant activities
including the power to appoint key management personnel, and therefore have concluded that we have significant influence over these investments. We monitor changes
in circumstances that may require a reassessment of the level of influence. We periodically review the carrying value of these investments for impairment, considering
factors such as the most recent stock transactions and book values from the recent financial statements. Amounts from equity method investments considered in the financial
statements are as follows:
| | | | | | | | | | |
| | | | Equity\u00a0investments as\u00a0of\u00a0December\u00a031, | | Share of income (loss) for\u00a0the\u00a0years\u00a0ended\u00a0December\u00a031, |
| | | | | | | | | | |
| | | | | | | | | | |
Apis Assay Technologies Ltd | | | | | | | | | | |
TVM Life Sciences Ventures III | | | | | | | | | | |
Suzhou Fuda Business Management and Consulting Partnership | | | | | | | | | | |
| | | | | | | | | | |
Hombrechtikon Systems Engineering AG | | | | | | | | | | |
| | | | | | | | | | |
The table below reflects the financial information (at 100%) of all of our equity method investments in the aggregate. None of the equity method investments are
considered to be individually material to our financial statements.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY18xMDMvZnJhZzpkM2VlMzlhMzBlNmE0ZDA2OTViMDc3NDFkYWVmOTc4Zi90ZXh0cmVnaW9uOmQzZWUzOWEzMGU2YTRkMDY5NWIwNzc0MWRhZWY5NzhmXzI3NDg3NzkwNzY0ODA_96fc2475-71dd-4c29-afce-89592bdba585": {
"value": "Equity Accounted Investments
We have made strategic investments in certain companies that are accounted for using the equity method of accounting. The method of accounting for an investment
depends on the level of influence. We hold investments in entities where, though we lack a controlling financial interest, we do have rights to direct the relevant activities
including the power to appoint key management personnel, and therefore have concluded that we have significant influence over these investments. We monitor changes
in circumstances that may require a reassessment of the level of influence. We periodically review the carrying value of these investments for impairment, considering
factors such as the most recent stock transactions and book values from the recent financial statements. Amounts from equity method investments considered in the financial
statements are as follows:
| | | | | | | | | | |
| | | | Equity\u00a0investments as\u00a0of\u00a0December\u00a031, | | Share of income (loss) for\u00a0the\u00a0years\u00a0ended\u00a0December\u00a031, |
| | | | | | | | | | |
| | | | | | | | | | |
Apis Assay Technologies Ltd | | | | | | | | | | |
TVM Life Sciences Ventures III | | | | | | | | | | |
Suzhou Fuda Business Management and Consulting Partnership | | | | | | | | | | |
| | | | | | | | | | |
Hombrechtikon Systems Engineering AG | | | | | | | | | | |
| | | | | | | | | | |
The table below reflects the financial information (at 100%) of all of our equity method investments in the aggregate. None of the equity method investments are
considered to be individually material to our financial statements.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY18xMDYvZnJhZzpmYTc3ZDk5MTViN2M0YTQ4OTU0M2FiNTI4YTlmNjUyNy90ZXh0cmVnaW9uOmZhNzdkOTkxNWI3YzRhNDg5NTQzYWI1MjhhOWY2NTI3XzI3NDg3NzkwNzU1Njg_db9795ad-26b8-4364-9ced-c6afeda5772d": {
"value": "
12.\u00a0 Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the years ended December\u00a031, 2022 and 2021 are as follows:
| | | | |
| | | | |
Balance at beginning of year | | | | |
IAS 29 Hyperinflationary accounting | | | | |
Goodwill acquired during the year | | | | |
| | | | |
| | | | |
| | | | |
The changes in the carrying amount of goodwill during the year ended December\u00a031, 2022 resulted primarily from the acquisition of BLIRT S.A. in May 2022 and foreign
currency translation adjustments driven by the changes in euro, Australian dollar, Swiss franc and British pound. The changes in goodwill during the year ended
December\u00a031, 2021 resulted primarily from changes in foreign currency translation partially offset by purchase adjustments related to the acquisition of NeuMoDx.
In the fourth quarter of 2022, we performed our annual impairment assessment of goodwill (using data as of October 1, 2022) in accordance with the provisions of IAS
36. No events or changes in circumstances indicated that the acquired goodwill might be impaired.
Management monitors and makes decisions regarding the Company's operations on a functional specific and global level. Goodwill is monitored and assessed for the
entire consolidated group as a whole because the Company and its subsidiaries together compose a single cash-generating unit. In testing for potential impairment, we
measured the estimated fair value of the cash generating unit based upon discounted future operating cash flows using a discount rate reflecting our estimated average
cost of funds.
For impairment testing, the recoverable amount of goodwill allocated to the cash generating unit (higher of the cash generating unit's fair value less selling costs and its
value in use) is compared to the carrying amount of the net assets employed (including goodwill) of the cash generating unit. Value in use is normally assumed to be higher
than the fair value less selling costs; therefore, fair value less selling costs is only investigated when value in use is lower than the carrying amount of the cash generating
unit.
Key assumptions used in the value in use calculations
The value in use is calculated based on estimated future cash flow projections expected to result from the use of the cash generating unit, discounted using an appropriate
long-term pre-tax discount rate. The value in use calculations use cash flow projections based on financial budgets and models over the projection period (five years) as
available for internal reporting purposes and in accordance with standard valuation practices. The growth rates used are based on industry growth forecasts for the
projected period as well as for the subsequent period (long-term growth rate of 3% in 2022 and 2021). The discount rates used are based on the pre-tax weighted
average cost of capital (7.50% in 2022 and 6.70% in 2021) and are verified against external analyst reports.
Sensitivity to changes in assumptions
Changes in assumptions used in projecting future operating cash flows and cost of funds could have a significant impact on the determination of impairment amounts. In
estimating future cash flows, we used our internal budgets. Our budgets were based on recent sales data for existing products, planned timing of new product launches
and customer commitments related to new and existing products. The calculation of value in use is most sensitive to the discount rates and growth rates used.
Discount rates reflect management's estimate of the risks profile for the respective valuation object. The growth rates used are based on industry growth forecasts for the
projected period as well as for the subsequent period.
We concluded that no impairment existed. We believe that any reasonably possible change in the key assumptions would not have an impact on reported goodwill. Even
if our estimates of projected future cash flows in respect of discount and growth rates were too high by 10%, there would be no impact on the reported value of goodwill
at December\u00a031, 2022. Due to the numerous variables associated with our judgments and assumptions relating to the valuation of the cash generating unit and the effects
of changes in circumstances affecting these valuations, both the precision and reliability of the resulting estimates are subject to uncertainty, and as additional information
becomes known, we may change our estimates.
Other Intangible Assets
| | | | | | | | | | |
| | Developed technology, patent and license rights | | | | | | Other intellectual properties | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
IAS 29 Hyperinflationary accounting | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Accumulated amortization (in thousands) | | Developed technology, patent and license rights | | | | | | Other intellectual properties | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
IAS 29 Hyperinflationary accounting | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Net book value (in thousands) | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
During 2022, certain fully amortized intangible assets with a gross carrying amount of $135.3 million were retired.
During the year ended December\u00a031, 2022, we recorded a charge to restructuring, acquisition, integration and other, net in the accompanying consolidated income
statements, to fully impair a license with a carrying value of $12.8 million. This license was to use technology of Ellume Limited, Australia. In connection with Ellume
starting insolvency proceedings in September 2022, we decided to cease all product development and manufacturing activities associated with this license and
determined that there was no alternative use nor recoverable value. Accordingly, the license was fully impaired.
Amortization expense on intangible assets is included in the line items cost of sales, research and development expense, sales and marketing expense or general and
administrative expense in the accompanying consolidated income statements depending on the nature and use of the asset. In 2022, purchased intangibles amortization
related to developed technology and patent and license rights acquired in a business combination is included in cost of sales in the amount of $60.5 million (2021: $67.1
million) and purchased intangibles amortization of trademarks and customer base acquired in a business combination is recorded in sales and marketing expense in the
amount of $14.5 million (2021: $18.5 million).
Amortization of capitalized development costs have been recorded to cost of sales in the amount of $3.4 million in 2022 (2021: $4.4 million).
Intangible additions excluding development costs of $92.5 million includes $83.8 million of cash paid during the year ended December\u00a031, 2022 together with $7.0
million of additions which were previously recorded as prepayments and $1.7 million of additions that were accrued as of December\u00a031, 2022. Cash paid for intangible
assets during the year ended December\u00a031, 2022 totaled $93.0 million, of which $4.8 million is related to current year payments for assets that were accrued as of
December\u00a031, 2021 and $4.4 million is related to prepayments recorded in other non-current assets in the accompanying consolidated balance sheet.
Cash paid for intangible assets during the year ended December\u00a031, 2021 totaled $67.9 million, of which $8.4 million is related to current year payments for licenses
that were accrued as of December 31, 2020 and $0.2 million is related to prepayments recorded in other non-current assets in accompanying consolidated balance
sheet. Intangible additions excluding development costs of $75.3 million includes $59.4 million of cash paid during the year, $15.0 million associated to a fully paid-up
technology license received in exchange for a convertible note and $0.9 million of additions which were previously recorded as prepayments.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY18xMDYvZnJhZzpmYTc3ZDk5MTViN2M0YTQ4OTU0M2FiNTI4YTlmNjUyNy90ZXh0cmVnaW9uOmZhNzdkOTkxNWI3YzRhNDg5NTQzYWI1MjhhOWY2NTI3XzI3NDg3NzkwNzU1Njk_421d9cd7-33fe-4347-83f8-2daa9dfc022f": {
"value": "
The changes in the carrying amount of goodwill for the years ended December\u00a031, 2022 and 2021 are as follows:
| | | | |
| | | | |
Balance at beginning of year | | | | |
IAS 29 Hyperinflationary accounting | | | | |
Goodwill acquired during the year | | | | |
| | | | |
| | | | |
| | | | |
The changes in the carrying amount of goodwill during the year ended December\u00a031, 2022 resulted primarily from the acquisition of BLIRT S.A. in May 2022 and foreign
currency translation adjustments driven by the changes in euro, Australian dollar, Swiss franc and British pound. The changes in goodwill during the year ended
December\u00a031, 2021 resulted primarily from changes in foreign currency translation partially offset by purchase adjustments related to the acquisition of NeuMoDx.
In the fourth quarter of 2022, we performed our annual impairment assessment of goodwill (using data as of October 1, 2022) in accordance with the provisions of IAS
36. No events or changes in circumstances indicated that the acquired goodwill might be impaired.
Management monitors and makes decisions regarding the Company's operations on a functional specific and global level. Goodwill is monitored and assessed for the
entire consolidated group as a whole because the Company and its subsidiaries together compose a single cash-generating unit. In testing for potential impairment, we
measured the estimated fair value of the cash generating unit based upon discounted future operating cash flows using a discount rate reflecting our estimated average
cost of funds.
For impairment testing, the recoverable amount of goodwill allocated to the cash generating unit (higher of the cash generating unit's fair value less selling costs and its
value in use) is compared to the carrying amount of the net assets employed (including goodwill) of the cash generating unit. Value in use is normally assumed to be higher
than the fair value less selling costs; therefore, fair value less selling costs is only investigated when value in use is lower than the carrying amount of the cash generating
unit.
Key assumptions used in the value in use calculations
The value in use is calculated based on estimated future cash flow projections expected to result from the use of the cash generating unit, discounted using an appropriate
long-term pre-tax discount rate. The value in use calculations use cash flow projections based on financial budgets and models over the projection period (five years) as
available for internal reporting purposes and in accordance with standard valuation practices. The growth rates used are based on industry growth forecasts for the
projected period as well as for the subsequent period (long-term growth rate of 3% in 2022 and 2021). The discount rates used are based on the pre-tax weighted
average cost of capital (7.50% in 2022 and 6.70% in 2021) and are verified against external analyst reports.
Sensitivity to changes in assumptions
Changes in assumptions used in projecting future operating cash flows and cost of funds could have a significant impact on the determination of impairment amounts. In
estimating future cash flows, we used our internal budgets. Our budgets were based on recent sales data for existing products, planned timing of new product launches
and customer commitments related to new and existing products. The calculation of value in use is most sensitive to the discount rates and growth rates used.
Discount rates reflect management's estimate of the risks profile for the respective valuation object. The growth rates used are based on industry growth forecasts for the
projected period as well as for the subsequent period.
We concluded that no impairment existed. We believe that any reasonably possible change in the key assumptions would not have an impact on reported goodwill. Even
if our estimates of projected future cash flows in respect of discount and growth rates were too high by 10%, there would be no impact on the reported value of goodwill
at December\u00a031, 2022. Due to the numerous variables associated with our judgments and assumptions relating to the valuation of the cash generating unit and the effects
of changes in circumstances affecting these valuations, both the precision and reliability of the resulting estimates are subject to uncertainty, and as additional information
becomes known, we may change our estimates.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY18xMDYvZnJhZzpmYTc3ZDk5MTViN2M0YTQ4OTU0M2FiNTI4YTlmNjUyNy90ZXh0cmVnaW9uOmZhNzdkOTkxNWI3YzRhNDg5NTQzYWI1MjhhOWY2NTI3XzI3NDg3NzkwNzU1NzA_d3f24077-1e68-4317-84a5-7d69b000591d": {
"value": "
Other Intangible Assets
| | | | | | | | | | |
| | Developed technology, patent and license rights | | | | | | Other intellectual properties | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
IAS 29 Hyperinflationary accounting | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Accumulated amortization (in thousands) | | Developed technology, patent and license rights | | | | | | Other intellectual properties | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
IAS 29 Hyperinflationary accounting | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Net book value (in thousands) | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
During 2022, certain fully amortized intangible assets with a gross carrying amount of $135.3 million were retired.
During the year ended December\u00a031, 2022, we recorded a charge to restructuring, acquisition, integration and other, net in the accompanying consolidated income
statements, to fully impair a license with a carrying value of $12.8 million. This license was to use technology of Ellume Limited, Australia. In connection with Ellume
starting insolvency proceedings in September 2022, we decided to cease all product development and manufacturing activities associated with this license and
determined that there was no alternative use nor recoverable value. Accordingly, the license was fully impaired.
Amortization expense on intangible assets is included in the line items cost of sales, research and development expense, sales and marketing expense or general and
administrative expense in the accompanying consolidated income statements depending on the nature and use of the asset. In 2022, purchased intangibles amortization
related to developed technology and patent and license rights acquired in a business combination is included in cost of sales in the amount of $60.5 million (2021: $67.1
million) and purchased intangibles amortization of trademarks and customer base acquired in a business combination is recorded in sales and marketing expense in the
amount of $14.5 million (2021: $18.5 million).
Amortization of capitalized development costs have been recorded to cost of sales in the amount of $3.4 million in 2022 (2021: $4.4 million).
Intangible additions excluding development costs of $92.5 million includes $83.8 million of cash paid during the year ended December\u00a031, 2022 together with $7.0
million of additions which were previously recorded as prepayments and $1.7 million of additions that were accrued as of December\u00a031, 2022. Cash paid for intangible
assets during the year ended December\u00a031, 2022 totaled $93.0 million, of which $4.8 million is related to current year payments for assets that were accrued as of
December\u00a031, 2021 and $4.4 million is related to prepayments recorded in other non-current assets in the accompanying consolidated balance sheet.
Cash paid for intangible assets during the year ended December\u00a031, 2021 totaled $67.9 million, of which $8.4 million is related to current year payments for licenses
that were accrued as of December 31, 2020 and $0.2 million is related to prepayments recorded in other non-current assets in accompanying consolidated balance
sheet. Intangible additions excluding development costs of $75.3 million includes $59.4 million of cash paid during the year, $15.0 million associated to a fully paid-up
technology license received in exchange for a convertible note and $0.9 million of additions which were previously recorded as prepayments.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDetailedInformationAboutIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjBhM2Y1NTg5YjRiYzQxZjY5YWEyYTBhNDUzMzMxMWZjL3NlYzowYTNmNTU4OWI0YmM0MWY2OWFhMmEwYTQ1MzMzMTFmY18xMDkvZnJhZzoyN2MzZmNlNTZjZWM0NmNiODNlNWEyMmRlYTRmNDYwNi90ZXh0cmVnaW9uOjI3YzNmY2U1NmNlYzQ2Y2I4M2U1YTIyZGVhNGY0NjA2XzI3NDg3NzkwNzA2MTQ_92c4a429-edef-4ef7-9186-b9641af7cc36": {
"value": "
13.\u00a0 Leases
Nature of Existing Leases
We have leases primarily for real estate. The leases generally have terms which range from one year to 15 years with some including options to extend or renew and
some including options to early terminate the leases. As of December\u00a031, 2022 and 2021, no such options have been recognized as part of the right-of-use assets and
lease liabilities.
Leases can contain variable lease charges based on an index like consumer prices or rates. During the years ended December\u00a031, 2022 and 2021, amounts recorded as
variable lease payments not included in the lease liabilities were not material.
When the interest rate implicit in each lease is not readily determinable, we apply our incremental borrowing rate in determining the present value of lease payments.
Supplemental balance sheet and other information related to leases as of December\u00a031, 2022 and 2021 are as follows:
| | | | | | |
(in thousands, except lease term and discount rate) | | Location in balance sheet | | | | |
| | | | | | |
| | | | | | |
Cars and all other assets | | | | | | |
| | | | | | |
Current lease liabilities | | Other current liabilities | | | | |
Non-current lease liabilities | | Other non-current liabilities | | | | |
| | | | | | |
Weighted average remaining lease term | | | | | | |
Weighted average discount rate | | | | | | |
The components of lease expense for the years ended December\u00a031, 2022 and 2021 are as follows:
| | | | |
| | | | |
Amortization of right-of-use assets | | | | |
| | | | |
Cars and all other assets | | | | |
Interest on lease liabilities | | | | |
Supplemental cash flow information related to leases for the years ended December\u00a031, 2022 and 2021 are as follows:
| | | | |
| | | | |
Cash paid for amounts included in the measurement of lease liabilities: | | | | |
Financing cash flows from principal portion of lease payments | | | | |
Operating cash flows from interest portion of lease payments | | | | |
Total cash outflow for leases | | | | |
Future maturities of lease liabilities as of December\u00a031, 2022 are as follows:
| | |
Years ending December 31, (in thousands) | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Acquisition Related Costs
The provision for acquisition and related costs primarily relates to personnel and consulting costs. These provisions generally have a term of 1 to 2 years.
| | | | |
| | | | |
Balance at beginning of year | | | | |
Provision charged to expenses | | | | |
| | | | |
Currency translation adjustment and other | | | | |
| | | | |
The notes are all unsecured obligations that rank pari passu. Interest expense on long-term debt was $55.1 million and $50.7 million for the years ended December\u00a031,
2022 and 2021, respectively. Refer to Note 27 \"Capital Management\" for a schedule of the changes in total current and non-current financial debts during 2022.
At December\u00a031, 2021, the 2023 Notes were classified as current due to contingent conversion features as discussed below. No Contingent Conversion Conditions were
triggered as of December 31, 2022 but the 2023 Notes remain classified as current because the become due in less than 12 months.
Repayments of long-term debt for the years ended December\u00a031, 2022 and 2021 consisted of:
| | | | |
| | | | |
German Private Placement (Schuldschein) | | | | |
0.875% Senior Unsecured Cash Convertible Notes due 2021 | | | | |
3.75% Series B Senior Notes due October 16, 2022 | | | | |
3.90% Series C Senior Notes due October 16, 2024 | | | | |
| | | | |
| | | | | | | | | | |
| | As of December\u00a031, 2021 |
| | | | Unamortized debt discount and issuance costs | | | | |
| | | | | | |
Cash Convertible Notes due 2023 | | | | | | | | | | |
Cash Convertible Notes due 2024 | | | | | | | | | | |
Convertible Notes due 2027(1) | | | | | | | | | | |
| | | | | | | | | | |
German Private Placement (2017 Schuldschein) | | | | | | | | | | |
| | | | | | | | | | |
(1)The initial fair value liability of the embedded conversion options for the 2027 Notes was $54.1\u00a0million which simultaneously reduced the carrying value of the Convertible Notes as discussed further below.
Future maturities (stated at the carrying values) and future interest as of December\u00a031, 2022 is as follows:
| | | | | | | | |
Years ending December 31, (in thousands) | | | | Loans (fixed and floating-rate) | | Convertible notes (fixed-rate) | | Total future contractual cash obligations |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Future maturities (stated at the carrying values) and future interest as of December\u00a031, 2021 is as follows:
| | | | | | | | |
Years ending December 31, (in thousands) | | | | Loans (fixed and floating-rate) | | Convertible notes (fixed-rate) | | Total future contractual cash obligations(1) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)Future 2022 contractual cash obligations include only amounts due in cash. The 2023 Notes that became convertible pursuant to the indenture on January 1, 2022 and are classified as current as of December
31, 2021, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2023 date in the table above.
Interest expense for the years ended December\u00a031, 2022 and 2021 related to the 2027 Notes and the Cash Convertible Notes was comprised of the following:
| | | | |
(in\u00a0thousands)\u00a0 | | | | |
| | | | |
Amortization of original issuance discount | | | | |
Amortization of debt issuance costs | | | | |
Total interest expense related to the Cash Convertible Notes | | | | |
Convertible Notes due 2027
On December 17, 2020, we issued zero coupon convertible notes in an aggregate principal amount of $500.0\u00a0million with a maturity date of December 17, 2027
(2027 Notes). The 2027 Notes carry no coupon interest. The net proceeds of the 2027 Notes totaled $497.6\u00a0million, after payment of debt issuance costs of
$3.7\u00a0million.
Because the Convertible Notes contain an embedded conversion option, we have determined that the embedded conversion option is a derivative financial instrument,
which is required to be separated from the Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated
income statements until the conversion option transaction settles or expires. The initial fair value liability of the embedded conversion options for the 2027 Notes was
$54.1\u00a0million which simultaneously reduced the carrying value of the Convertible Notes. For further discussion of the derivative financial instruments relating to the
Convertible Note, refer to Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\"
The effective interest rate of the 2027 Notes is 1.65%, which is imputed based on the amortization of the fair value of the embedded conversion option over the remaining
term of the 2027 Note.
The 2027 Notes are convertible into common shares based on an initial conversion rate, subject to adjustment, of 2,477.65 shares per $200,000 principal amount of
notes (which represents an initial conversion price of $80.7218 per share, or 6.2\u00a0million underlying shares). At conversion, we will settle the 2027 Notes by repaying the
principal portion in cash and any excess of the conversion value over the principal amount in shares of common stock.
The notes may be redeemed at the option of each noteholder at their principal amount on December 17, 2025 or in connection with a change of control or delisting
event.
The 2027 Notes are convertible in whole, but not in part, at the option of the noteholders on a net share settlement basis, at the prevailing conversion price in the
following circumstances beginning after January 27, 2021 through June 16, 2027:
\u2022if the last reported sale price of our common stock for at least 20-consecutive trading days during a period of 30-consecutive trading days ending on the last trading
day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; or
\u2022if we undergo certain fundamental changes, including a change of control, as defined in the agreement; or
\u2022if parity event or trading price unavailability event, as the case maybe occurs during the period of 10 days, including the first business day following the relevant
trading price notification date; or
\u2022if we distribute assets or property to all or substantially all of the holders of our common stock and those assets or other property have a value of more than 25% of the
average daily volume-weighted average trading price of our common stock for the prior 20 consecutive trading days; or
\u2022in case of early redemption in respect of the outstanding notes at our option, where the conversion date falls in the period from (and including) the date on which the
call notice is published to (and including) the 45th business day prior to the redemption date; or
\u2022if we experience certain customary events of default, including defaults under certain other indebtedness, until such event of default has been cured or waived.
The noteholders may convert their notes at any time, without condition, on or after June 17, 2027 until the 45th business day prior to December 17, 2027.
No Contingent Conversion Conditions were triggered for the 2027 Notes as of December\u00a031, 2022 or December\u00a031, 2021.
Cash Convertible Notes due 2023 and 2024
On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 2023 (2023 Notes). The net proceeds
of the 2023 Notes were $365.6 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs.
On November 13, 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 2024 (2024 Notes). The net proceeds
of the 2024 Notes were $468.9 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs.
We refer to the 2023 Notes and 2024 Notes, collectively as the \u201cCash Convertible Notes.\u201d
Interest on the Cash Convertible Notes is payable semi-annually in arrears and will mature on the maturity date unless repurchased or converted with their terms prior to
such date. The interest rate and corresponding maturity of each Note are summarized in the table below. The Cash Convertible Notes that remain outstanding as of
December\u00a031, 2022 are solely convertible into cash in whole, but not in part, at the option of noteholders under the circumstances described below and during the
contingent conversion periods as shown in the table below.
| | | | | | | | | | |
| | | | Date of Interest Payments | | | | Contingent Conversion Period | | Conversion Rate per $200,000 Principal Amount |
| | | | March 13 and September 13 | | | | From October 24, 2017 to March 13, 2023 | | |
| | | | | | | | From December 24, 2018 to August 2, 2024 | | |
Additionally, conversion may occur at any time following a Contingent Conversion Period through the fifth business day immediately preceding the applicable maturity
date.
Upon conversion, noteholders will receive an amount in cash equal to the Cash Settlement Amount, calculated as described below. The Cash Convertible Notes are not
convertible into shares of our common stock or any other securities.
Noteholders may convert Cash Convertible Notes into cash at their option at any time during the Contingent Conversion Periods described above only under the following
circumstances (Contingent Conversion Conditions):
\u2022if the last reported sale price of our common stock for at least 20-consecutive trading days during a period of 30-consecutive trading days ending on the last trading
day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
\u2022if we undergo certain fundamental changes, including a change of control, as defined in the agreement;
\u2022if parity event or trading price unavailability event, as the case maybe occurs for the 2023 Notes and 2024 Notes during the period of 10 days, including the first
business day following the relevant trading price notification date;
\u2022if we elect to distribute assets or property to all or substantially all of the holders of our common stock and those assets or other property have a value of more than 25%
of the average daily volume-weighted average trading price of our common stock for the prior 20 consecutive trading days;
\u2022if we elect to redeem the Cash Convertible Notes; or
\u2022if we experience certain customary events of default, including defaults under certain other indebtedness until such event has been cured or waived or the payment of
the Notes have been accelerated.
No Contingent Conversion Conditions were triggered for the 2023 Notes as of December\u00a031, 2022. As of December 31, 2021, the 2023 Notes were contingently
convertible. No Contingent Conversion Conditions were triggered for the 2024 Notes as of December\u00a031, 2022 or December 31, 2021.
The Contingent Conversion Conditions in the 2023 Notes and 2024 Notes noted above have been analyzed under IFRS 9 Financial Instruments, and, based on our
analysis, we determined that each of the embedded features listed above are clearly and closely related to the 2023 Notes and 2024 Notes (i.e., the host contracts). As a
result, pursuant to the accounting provisions of IFRS 9, these features noted above are not required to be bifurcated as separate instruments.
Upon conversion, holders are entitled to a cash payment (Cash Settlement Amount) equal to the average of the conversion rate multiplied by the daily volume-weighted
average trading price for our common stock over a 50-day period. The conversion rate is subject to adjustment in certain instances but will not be adjusted for any accrued
and unpaid interest. In addition, following the occurrence of certain corporate events that may occur prior to the applicable maturity date, we may be required to pay a
cash make-whole premium by increasing the conversion rate for any holder who elects to convert Cash Convertible Notes in connection with the occurrence of such a
corporate event.
We may redeem the Cash Convertible Notes in their entirety at a price equal to 100% of the principal amount of the applicable Cash Convertible Notes plus accrued
interest at any time when 20% or less of the aggregate principal amount of the applicable Cash Convertible Notes originally issued remain outstanding.
Because the Cash Convertible Notes contain an embedded cash conversion option, we have determined that the embedded cash conversion option is a derivative
financial instrument, which is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value
reported in our consolidated income statements until the cash conversion option transaction settles or expires. The initial fair value liability of the embedded cash
conversion option was $74.5 million for the 2023 Notes and $98.5 million for the 2024 Notes, which simultaneously reduced the carrying value of the Cash Convertible
Notes (effectively an original issuance discount). For further discussion of the derivative financial instruments relating to the Cash Convertible Note, refer to Note 26
\"Financial Risk Factors and Use of Derivative Financial Instruments.\"
As noted above, the reduced carrying value on the Cash Convertible Notes resulted in a debt discount that is amortized to the principal amount through the recognition of
non-cash interest expense using the effective interest method over the expected life of the debt, six years for both the 2023 Notes and 2024 Notes. This resulted in our
recognition of interest expense on the Cash Convertible Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise
similar terms been issued. The effective interest rate is 3.997% for 2023 Notes and 4.782% for the 2024 Notes, which is imputed based on the amortization of the fair
value of the embedded cash conversion option over the remaining term of the Cash Convertible Notes.
We incurred approximately $6.2 million and $5.7 million in transaction costs for the 2023 and 2024 Notes, respectively. Such costs have been allocated to the Cash
Convertible Notes and deferred and are being amortized to interest expense over the terms of the Cash Convertible Notes using the effective interest method.
Cash Convertible Notes Call Spread Overlay
Concurrent with the issuance of the Cash Convertible Notes, we entered into privately negotiated hedge transactions (Call Options) with, and issued warrants to purchase
shares of our common stock (Warrants) to, certain financial institutions. We refer to the Call Options and Warrants collectively as the \u201cCall Spread Overlay.\u201d The Call
Options are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion of the Cash Convertible Notes. The Call
Options and Warrants are derivative financial instruments and are discussed further in Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\"
Aside from the initial payment of a premium, we will not be required to make any cash payments under the Call Options, and will be entitled to receive an amount of
cash, generally equal to the amount by which the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant valuation
period. The exercise price under the Call Options is initially equal to the conversion price of the Cash Convertible Notes.
We issued Warrants as summarized in the table below. The number of warrants and exercise prices are subject to customary adjustments under certain circumstances.
| | | | | | | | | | |
| | | | Number of share warrants (in millions) | | | | Proceeds from issuance of warrants, net of issuance costs (in millions) | | Warrants expire over a period of 50 trading days beginning on |
| | | | | | | | | | |
| | | | | | | | | | |
The Warrants that were issued with our Cash Convertible Notes, could have a dilutive effect to the extent that the price of our common stock exceeds the applicable strike
price of the Warrants. For each Warrant that is exercised, we will deliver to the holder a number of shares of our common stock equal to the amount by which the
settlement price exceeds the exercise price, plus cash in lieu of any fractional shares. The Warrants are exercisable only upon expiration and we will not receive any
proceeds if the Warrants are exercised.
U.S. Private Placement
In October 2012, we completed a private placement through the issuance of new senior unsecured notes at a total amount of $400.0 million with a weighted average
interest rate of 3.66% (settled on October 16, 2012). The notes were issued in three series: (1) 73.0 million 7-year term due and paid in October 16, 2019 (3.19%); (2)
$300.0 million 10-year term due in October 16, 2022 (3.75%); and (3) $27.0 million 12-year term due in October 16, 2024 (3.90%) but called and paid in October
2022. We paid $2.1 million in debt issue costs which will be amortized through interest expense over the lifetime of the notes. The note purchase agreement contains
certain financial and non-financial covenants, including but not limited to, restrictions on priority indebtedness and the maintenance of certain financial ratios. We were in
compliance with these covenants at December\u00a031, 2022.
German Private Placement (2017 Schuldschein)
In 2017, we completed a German private placement bond (2017 Schuldschein) which was issued in several tranches totaling $331.1 million due in various periods
through 2027. In the first half of 2021, we repaid $41.1\u00a0million for two tranches that matured. In October 2022, we repaid $153.0 million for the four tranches that
matured. The 2017 Schuldschein consists of U.S. dollar and several euro denominated tranches. The euro tranches are designated as a foreign currency non-derivative
hedging instrument that qualifies as a net investment hedge as described in Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\" Based on the spot
rate method, the change in the carrying value of the euro denominated tranches attributed to the net investment hedge as of December\u00a031, 2022 totaled $5.2\u00a0million of
unrealized loss and is recorded in equity. We paid $1.2 million in debt issuance costs which are being amortized through interest expense over the lifetime of the notes.
A summary of the tranches and the carrying values (in thousands) as of December\u00a031, 2022 and 2021 is as follows:
The notes are all unsecured obligations that rank pari passu. Interest expense on long-term debt was $55.1 million and $50.7 million for the years ended December\u00a031,
2022 and 2021, respectively. Refer to Note 27 \"Capital Management\" for a schedule of the changes in total current and non-current financial debts during 2022.
At December\u00a031, 2021, the 2023 Notes were classified as current due to contingent conversion features as discussed below. No Contingent Conversion Conditions were
triggered as of December 31, 2022 but the 2023 Notes remain classified as current because the become due in less than 12 months.
Repayments of long-term debt for the years ended December\u00a031, 2022 and 2021 consisted of:
| | | | |
| | | | |
German Private Placement (Schuldschein) | | | | |
0.875% Senior Unsecured Cash Convertible Notes due 2021 | | | | |
3.75% Series B Senior Notes due October 16, 2022 | | | | |
3.90% Series C Senior Notes due October 16, 2024 | | | | |
| | | | |
| | | | | | | | | | |
| | As of December\u00a031, 2021 |
| | | | Unamortized debt discount and issuance costs | | | | |
| | | | | | |
Cash Convertible Notes due 2023 | | | | | | | | | | |
Cash Convertible Notes due 2024 | | | | | | | | | | |
Convertible Notes due 2027(1) | | | | | | | | | | |
| | | | | | | | | | |
German Private Placement (2017 Schuldschein) | | | | | | | | | | |
| | | | | | | | | | |
(1)The initial fair value liability of the embedded conversion options for the 2027 Notes was $54.1\u00a0million which simultaneously reduced the carrying value of the Convertible Notes as discussed further below.
Future maturities (stated at the carrying values) and future interest as of December\u00a031, 2022 is as follows:
| | | | | | | | |
Years ending December 31, (in thousands) | | | | Loans (fixed and floating-rate) | | Convertible notes (fixed-rate) | | Total future contractual cash obligations |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Future maturities (stated at the carrying values) and future interest as of December\u00a031, 2021 is as follows:
| | | | | | | | |
Years ending December 31, (in thousands) | | | | Loans (fixed and floating-rate) | | Convertible notes (fixed-rate) | | Total future contractual cash obligations(1) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)Future 2022 contractual cash obligations include only amounts due in cash. The 2023 Notes that became convertible pursuant to the indenture on January 1, 2022 and are classified as current as of December
31, 2021, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2023 date in the table above.
Interest expense for the years ended December\u00a031, 2022 and 2021 related to the 2027 Notes and the Cash Convertible Notes was comprised of the following:
| | | | |
(in\u00a0thousands)\u00a0 | | | | |
| | | | |
Amortization of original issuance discount | | | | |
Amortization of debt issuance costs | | | | |
Total interest expense related to the Cash Convertible Notes | | | | |
Convertible Notes due 2027
On December 17, 2020, we issued zero coupon convertible notes in an aggregate principal amount of $500.0\u00a0million with a maturity date of December 17, 2027
(2027 Notes). The 2027 Notes carry no coupon interest. The net proceeds of the 2027 Notes totaled $497.6\u00a0million, after payment of debt issuance costs of
$3.7\u00a0million.
Because the Convertible Notes contain an embedded conversion option, we have determined that the embedded conversion option is a derivative financial instrument,
which is required to be separated from the Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated
income statements until the conversion option transaction settles or expires. The initial fair value liability of the embedded conversion options for the 2027 Notes was
$54.1\u00a0million which simultaneously reduced the carrying value of the Convertible Notes. For further discussion of the derivative financial instruments relating to the
Convertible Note, refer to Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\"
The effective interest rate of the 2027 Notes is 1.65%, which is imputed based on the amortization of the fair value of the embedded conversion option over the remaining
term of the 2027 Note.
The 2027 Notes are convertible into common shares based on an initial conversion rate, subject to adjustment, of 2,477.65 shares per $200,000 principal amount of
notes (which represents an initial conversion price of $80.7218 per share, or 6.2\u00a0million underlying shares). At conversion, we will settle the 2027 Notes by repaying the
principal portion in cash and any excess of the conversion value over the principal amount in shares of common stock.
The notes may be redeemed at the option of each noteholder at their principal amount on December 17, 2025 or in connection with a change of control or delisting
event.
The 2027 Notes are convertible in whole, but not in part, at the option of the noteholders on a net share settlement basis, at the prevailing conversion price in the
following circumstances beginning after January 27, 2021 through June 16, 2027:
\u2022if the last reported sale price of our common stock for at least 20-consecutive trading days during a period of 30-consecutive trading days ending on the last trading
day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; or
\u2022if we undergo certain fundamental changes, including a change of control, as defined in the agreement; or
\u2022if parity event or trading price unavailability event, as the case maybe occurs during the period of 10 days, including the first business day following the relevant
trading price notification date; or
\u2022if we distribute assets or property to all or substantially all of the holders of our common stock and those assets or other property have a value of more than 25% of the
average daily volume-weighted average trading price of our common stock for the prior 20 consecutive trading days; or
\u2022in case of early redemption in respect of the outstanding notes at our option, where the conversion date falls in the period from (and including) the date on which the
call notice is published to (and including) the 45th business day prior to the redemption date; or
\u2022if we experience certain customary events of default, including defaults under certain other indebtedness, until such event of default has been cured or waived.
The noteholders may convert their notes at any time, without condition, on or after June 17, 2027 until the 45th business day prior to December 17, 2027.
No Contingent Conversion Conditions were triggered for the 2027 Notes as of December\u00a031, 2022 or December\u00a031, 2021.
Cash Convertible Notes due 2023 and 2024
On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 2023 (2023 Notes). The net proceeds
of the 2023 Notes were $365.6 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs.
On November 13, 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 2024 (2024 Notes). The net proceeds
of the 2024 Notes were $468.9 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs.
We refer to the 2023 Notes and 2024 Notes, collectively as the \u201cCash Convertible Notes.\u201d
Interest on the Cash Convertible Notes is payable semi-annually in arrears and will mature on the maturity date unless repurchased or converted with their terms prior to
such date. The interest rate and corresponding maturity of each Note are summarized in the table below. The Cash Convertible Notes that remain outstanding as of
December\u00a031, 2022 are solely convertible into cash in whole, but not in part, at the option of noteholders under the circumstances described below and during the
contingent conversion periods as shown in the table below.
| | | | | | | | | | |
| | | | Date of Interest Payments | | | | Contingent Conversion Period | | Conversion Rate per $200,000 Principal Amount |
| | | | March 13 and September 13 | | | | From October 24, 2017 to March 13, 2023 | | |
| | | | | | | | From December 24, 2018 to August 2, 2024 | | |
Additionally, conversion may occur at any time following a Contingent Conversion Period through the fifth business day immediately preceding the applicable maturity
date.
Upon conversion, noteholders will receive an amount in cash equal to the Cash Settlement Amount, calculated as described below. The Cash Convertible Notes are not
convertible into shares of our common stock or any other securities.
Noteholders may convert Cash Convertible Notes into cash at their option at any time during the Contingent Conversion Periods described above only under the following
circumstances (Contingent Conversion Conditions):
\u2022if the last reported sale price of our common stock for at least 20-consecutive trading days during a period of 30-consecutive trading days ending on the last trading
day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
\u2022if we undergo certain fundamental changes, including a change of control, as defined in the agreement;
\u2022if parity event or trading price unavailability event, as the case maybe occurs for the 2023 Notes and 2024 Notes during the period of 10 days, including the first
business day following the relevant trading price notification date;
\u2022if we elect to distribute assets or property to all or substantially all of the holders of our common stock and those assets or other property have a value of more than 25%
of the average daily volume-weighted average trading price of our common stock for the prior 20 consecutive trading days;
\u2022if we elect to redeem the Cash Convertible Notes; or
\u2022if we experience certain customary events of default, including defaults under certain other indebtedness until such event has been cured or waived or the payment of
the Notes have been accelerated.
No Contingent Conversion Conditions were triggered for the 2023 Notes as of December\u00a031, 2022. As of December 31, 2021, the 2023 Notes were contingently
convertible. No Contingent Conversion Conditions were triggered for the 2024 Notes as of December\u00a031, 2022 or December 31, 2021.
The Contingent Conversion Conditions in the 2023 Notes and 2024 Notes noted above have been analyzed under IFRS 9 Financial Instruments, and, based on our
analysis, we determined that each of the embedded features listed above are clearly and closely related to the 2023 Notes and 2024 Notes (i.e., the host contracts). As a
result, pursuant to the accounting provisions of IFRS 9, these features noted above are not required to be bifurcated as separate instruments.
Upon conversion, holders are entitled to a cash payment (Cash Settlement Amount) equal to the average of the conversion rate multiplied by the daily volume-weighted
average trading price for our common stock over a 50-day period. The conversion rate is subject to adjustment in certain instances but will not be adjusted for any accrued
and unpaid interest. In addition, following the occurrence of certain corporate events that may occur prior to the applicable maturity date, we may be required to pay a
cash make-whole premium by increasing the conversion rate for any holder who elects to convert Cash Convertible Notes in connection with the occurrence of such a
corporate event.
We may redeem the Cash Convertible Notes in their entirety at a price equal to 100% of the principal amount of the applicable Cash Convertible Notes plus accrued
interest at any time when 20% or less of the aggregate principal amount of the applicable Cash Convertible Notes originally issued remain outstanding.
Because the Cash Convertible Notes contain an embedded cash conversion option, we have determined that the embedded cash conversion option is a derivative
financial instrument, which is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value
reported in our consolidated income statements until the cash conversion option transaction settles or expires. The initial fair value liability of the embedded cash
conversion option was $74.5 million for the 2023 Notes and $98.5 million for the 2024 Notes, which simultaneously reduced the carrying value of the Cash Convertible
Notes (effectively an original issuance discount). For further discussion of the derivative financial instruments relating to the Cash Convertible Note, refer to Note 26
\"Financial Risk Factors and Use of Derivative Financial Instruments.\"
As noted above, the reduced carrying value on the Cash Convertible Notes resulted in a debt discount that is amortized to the principal amount through the recognition of
non-cash interest expense using the effective interest method over the expected life of the debt, six years for both the 2023 Notes and 2024 Notes. This resulted in our
recognition of interest expense on the Cash Convertible Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise
similar terms been issued. The effective interest rate is 3.997% for 2023 Notes and 4.782% for the 2024 Notes, which is imputed based on the amortization of the fair
value of the embedded cash conversion option over the remaining term of the Cash Convertible Notes.
We incurred approximately $6.2 million and $5.7 million in transaction costs for the 2023 and 2024 Notes, respectively. Such costs have been allocated to the Cash
Convertible Notes and deferred and are being amortized to interest expense over the terms of the Cash Convertible Notes using the effective interest method.
Cash Convertible Notes Call Spread Overlay
Concurrent with the issuance of the Cash Convertible Notes, we entered into privately negotiated hedge transactions (Call Options) with, and issued warrants to purchase
shares of our common stock (Warrants) to, certain financial institutions. We refer to the Call Options and Warrants collectively as the \u201cCall Spread Overlay.\u201d The Call
Options are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion of the Cash Convertible Notes. The Call
Options and Warrants are derivative financial instruments and are discussed further in Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\"
Aside from the initial payment of a premium, we will not be required to make any cash payments under the Call Options, and will be entitled to receive an amount of
cash, generally equal to the amount by which the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant valuation
period. The exercise price under the Call Options is initially equal to the conversion price of the Cash Convertible Notes.
We issued Warrants as summarized in the table below. The number of warrants and exercise prices are subject to customary adjustments under certain circumstances.
| | | | | | | | | | |
| | | | Number of share warrants (in millions) | | | | Proceeds from issuance of warrants, net of issuance costs (in millions) | | Warrants expire over a period of 50 trading days beginning on |
| | | | | | | | | | |
| | | | | | | | | | |
The Warrants that were issued with our Cash Convertible Notes, could have a dilutive effect to the extent that the price of our common stock exceeds the applicable strike
price of the Warrants. For each Warrant that is exercised, we will deliver to the holder a number of shares of our common stock equal to the amount by which the
settlement price exceeds the exercise price, plus cash in lieu of any fractional shares. The Warrants are exercisable only upon expiration and we will not receive any
proceeds if the Warrants are exercised.
U.S. Private Placement
In October 2012, we completed a private placement through the issuance of new senior unsecured notes at a total amount of $400.0 million with a weighted average
interest rate of 3.66% (settled on October 16, 2012). The notes were issued in three series: (1) 73.0 million 7-year term due and paid in October 16, 2019 (3.19%); (2)
$300.0 million 10-year term due in October 16, 2022 (3.75%); and (3) $27.0 million 12-year term due in October 16, 2024 (3.90%) but called and paid in October
2022. We paid $2.1 million in debt issue costs which will be amortized through interest expense over the lifetime of the notes. The note purchase agreement contains
certain financial and non-financial covenants, including but not limited to, restrictions on priority indebtedness and the maintenance of certain financial ratios. We were in
compliance with these covenants at December\u00a031, 2022.
German Private Placement (2017 Schuldschein)
In 2017, we completed a German private placement bond (2017 Schuldschein) which was issued in several tranches totaling $331.1 million due in various periods
through 2027. In the first half of 2021, we repaid $41.1\u00a0million for two tranches that matured. In October 2022, we repaid $153.0 million for the four tranches that
matured. The 2017 Schuldschein consists of U.S. dollar and several euro denominated tranches. The euro tranches are designated as a foreign currency non-derivative
hedging instrument that qualifies as a net investment hedge as described in Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\" Based on the spot
rate method, the change in the carrying value of the euro denominated tranches attributed to the net investment hedge as of December\u00a031, 2022 totaled $5.2\u00a0million of
unrealized loss and is recorded in equity. We paid $1.2 million in debt issuance costs which are being amortized through interest expense over the lifetime of the notes.
A summary of the tranches and the carrying values (in thousands) as of December\u00a031, 2022 and 2021 is as follows:
Deferred tax related to items charged or credited directly to equity during 2022 and 2021 shown in the statement of comprehensive income totaled $0.3 million and $1.7
million, respectively.
The applicable statutory income tax rate in The Netherlands, our country of domicile, was 25.8% and 25.0% in 2022 and 2021, respectively. The principal items
comprising the differences between income taxes computed at The Netherlands' statutory rate and the effective tax rate for the years ended December\u00a031, 2022 and
2021 are as follows:
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
At Dutch statutory income tax rate of 25.8% and 25.0%, respectively | | | | | | | | |
Taxation of foreign operations, net(1) | | | | | | | | |
Tax impact from (deductible) non-deductible items(2) | | | | | | | | |
| | | | | | | | |
Changes in tax rates impacting deferred taxes | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher or lower than The Netherlands\u2019 statutory income tax rate of 25.8% as well as the benefit of
some income being partially exempt from income taxes. These foreign tax benefits are due to a combination of favorable tax laws, regulations and exemptions in certain jurisdictions. Partial tax exemptions exist
on foreign income primarily derived from operations in Germany, The Netherlands and Singapore. Further, we have intercompany financing arrangements in which the intercompany income is nontaxable in
Dubai or partially exempt or subject to lower statutory income tax rates.
(2)During 2022, tax benefits of $41.6 million are related to changes in fair values of warrants and the embedded conversion option related to convertible notes due in 2023, 2024 and 2027 as discussed in Note
16 \"Financial Debts\" and Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\"
We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The Netherlands, Germany, Switzerland and the U.S.
federal jurisdiction, as well as in various other state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities
throughout the world. Tax years in The Netherlands are potentially open back to 2010 for income tax examinations by The Netherlands taxing authority. The German
group is open to examination for the tax years starting in 2017 and in 2022, the German taxing authority commenced an examination for the 2017-2019 tax years. The
U.S. consolidated group is subject to federal and most state income tax examinations by taxing authorities beginning with the year ending December\u00a031, 2019 through
the current period. Our other subsidiaries, with few exceptions, are no longer subject to income tax examinations by taxing authorities for years before 2018.
Changes in the amount of unrecognized tax benefits for the years ended December\u00a031, 2022 and 2021 are as follows:
| | | | |
| | | | |
Balance at beginning of year | | | | |
Additions based on tax positions related to the current year | | | | |
Additions for tax positions of prior years | | | | |
Decrease related to settlements | | | | |
Decrease for tax position of prior years | | | | |
Decrease due to lapse of statute of limitations | | | | |
Decrease from currency translation | | | | |
| | | | |
The movements in deferred income tax assets and liabilities during 2022 and 2021 are as follows:
| | | | |
| | | | |
Change in deferred tax recognized in income | | | | |
Change in deferred tax recognized in equity(1) | | | | |
Change in deferred tax related to business combinations(2) | | | | |
| | | | |
(1)The change in deferred tax recognized in equity represents changes in components of other comprehensive income or loss, equity awards and foreign currency translation adjustments.
(2)The change in deferred tax related to business combinations represents the deferred tax liability on the fair value of identifiable intangible assets acquired and the deferred tax asset on tax loss carryforwards as
discussed in Note 5 \"Acquisitions.\"
At December\u00a031, 2022, we had $375.1 million in total net operating loss (NOL) carryforwards which included $131.9 million for the U.S., $90.3 million for Germany,
$49.4 million for the U.K., $39.5 million for The Netherlands and $64.0 million for other foreign jurisdictions. We did not recognize tax benefits related to the NOL
carryforwards in The Netherlands of $39.5 million and in other foreign jurisdictions of $45.1 million. The NOL carryforwards in Germany, the U.K. and The Netherlands
carryforward indefinitely. The entire NOL carryforward in the U.S. is subject to limitations under Section 382 of the U.S. Internal Revenue Code. The NOL carryforwards in
the U.S. expire between 2024 and 2034. NOL carryforwards of $22.5 million in other foreign jurisdictions expire between 2023 and 2031 while the remainder can be
carried forward indefinitely. At December\u00a031, 2022, tax credits total $7.6 million and expire between 2031 and 2040.
At December\u00a031, 2021, we had $599.5 million in total net operating loss (NOL) carryforwards which included $231.2 million for Germany, $158.8 million for the U.S.,
$59.7 million for Spain, $55.7 million for The Netherlands and $94.1 million for other foreign jurisdictions. We did not recognize tax benefits related to the NOL
carryforwards in The Netherlands of $55.7 million and in other foreign jurisdictions of $20.8 million.
A deferred tax asset can only be recognized to the extent it is \"more likely than not\" that the asset will be realized. Judgments around realizability depend on the
availability and weight of both positive and negative evidence. In 2021, we recognized $9.2 million of tax benefit NOL carryforward due to expected future taxable
income.",
"dimensions": {
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"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
17.\u00a0 Income Tax
Major components of income tax expense as presented in the income statement for the years ended December\u00a031, 2022 and 2021 are:
| | | | |
| | | | |
Current income tax charge | | | | |
Adjustment in respect of current income tax of previous years | | | | |
| | | | |
Origination and reversal of temporary differences | | | | |
| | | | |
| | | | |
| | | | |
Deferred tax related to items charged or credited directly to equity during 2022 and 2021 shown in the statement of comprehensive income totaled $0.3 million and $1.7
million, respectively.
The applicable statutory income tax rate in The Netherlands, our country of domicile, was 25.8% and 25.0% in 2022 and 2021, respectively. The principal items
comprising the differences between income taxes computed at The Netherlands' statutory rate and the effective tax rate for the years ended December\u00a031, 2022 and
2021 are as follows:
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
At Dutch statutory income tax rate of 25.8% and 25.0%, respectively | | | | | | | | |
Taxation of foreign operations, net(1) | | | | | | | | |
Tax impact from (deductible) non-deductible items(2) | | | | | | | | |
| | | | | | | | |
Changes in tax rates impacting deferred taxes | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher or lower than The Netherlands\u2019 statutory income tax rate of 25.8% as well as the benefit of
some income being partially exempt from income taxes. These foreign tax benefits are due to a combination of favorable tax laws, regulations and exemptions in certain jurisdictions. Partial tax exemptions exist
on foreign income primarily derived from operations in Germany, The Netherlands and Singapore. Further, we have intercompany financing arrangements in which the intercompany income is nontaxable in
Dubai or partially exempt or subject to lower statutory income tax rates.
(2)During 2022, tax benefits of $41.6 million are related to changes in fair values of warrants and the embedded conversion option related to convertible notes due in 2023, 2024 and 2027 as discussed in Note
16 \"Financial Debts\" and Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments.\"
We conduct business globally and, as a result, file numerous consolidated and separate income tax returns in The Netherlands, Germany, Switzerland and the U.S.
federal jurisdiction, as well as in various other state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities
throughout the world. Tax years in The Netherlands are potentially open back to 2010 for income tax examinations by The Netherlands taxing authority. The German
group is open to examination for the tax years starting in 2017 and in 2022, the German taxing authority commenced an examination for the 2017-2019 tax years. The
U.S. consolidated group is subject to federal and most state income tax examinations by taxing authorities beginning with the year ending December\u00a031, 2019 through
the current period. Our other subsidiaries, with few exceptions, are no longer subject to income tax examinations by taxing authorities for years before 2018.
Changes in the amount of unrecognized tax benefits for the years ended December\u00a031, 2022 and 2021 are as follows:
| | | | |
| | | | |
Balance at beginning of year | | | | |
Additions based on tax positions related to the current year | | | | |
Additions for tax positions of prior years | | | | |
Decrease related to settlements | | | | |
Decrease for tax position of prior years | | | | |
Decrease due to lapse of statute of limitations | | | | |
Decrease from currency translation | | | | |
| | | | |
The movements in deferred income tax assets and liabilities during 2022 and 2021 are as follows:
| | | | |
| | | | |
Change in deferred tax recognized in income | | | | |
Change in deferred tax recognized in equity(1) | | | | |
Change in deferred tax related to business combinations(2) | | | | |
| | | | |
(1)The change in deferred tax recognized in equity represents changes in components of other comprehensive income or loss, equity awards and foreign currency translation adjustments.
(2)The change in deferred tax related to business combinations represents the deferred tax liability on the fair value of identifiable intangible assets acquired and the deferred tax asset on tax loss carryforwards as
discussed in Note 5 \"Acquisitions.\"
At December\u00a031, 2022, we had $375.1 million in total net operating loss (NOL) carryforwards which included $131.9 million for the U.S., $90.3 million for Germany,
$49.4 million for the U.K., $39.5 million for The Netherlands and $64.0 million for other foreign jurisdictions. We did not recognize tax benefits related to the NOL
carryforwards in The Netherlands of $39.5 million and in other foreign jurisdictions of $45.1 million. The NOL carryforwards in Germany, the U.K. and The Netherlands
carryforward indefinitely. The entire NOL carryforward in the U.S. is subject to limitations under Section 382 of the U.S. Internal Revenue Code. The NOL carryforwards in
the U.S. expire between 2024 and 2034. NOL carryforwards of $22.5 million in other foreign jurisdictions expire between 2023 and 2031 while the remainder can be
carried forward indefinitely. At December\u00a031, 2022, tax credits total $7.6 million and expire between 2031 and 2040.
At December\u00a031, 2021, we had $599.5 million in total net operating loss (NOL) carryforwards which included $231.2 million for Germany, $158.8 million for the U.S.,
$59.7 million for Spain, $55.7 million for The Netherlands and $94.1 million for other foreign jurisdictions. We did not recognize tax benefits related to the NOL
carryforwards in The Netherlands of $55.7 million and in other foreign jurisdictions of $20.8 million.
A deferred tax asset can only be recognized to the extent it is \"more likely than not\" that the asset will be realized. Judgments around realizability depend on the
availability and weight of both positive and negative evidence. In 2021, we recognized $9.2 million of tax benefit NOL carryforward due to expected future taxable
income.",
"dimensions": {
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"language": "en",
"entity": "scheme:54930036WK3GMCN17Z57",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
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18.\u00a0 Equity
Common Shares
The authorized classes of our shares consist of Common Shares (410 million authorized), Preference Shares (450 million authorized) and Financing Preference Shares (40
million authorized). All classes of shares have a par value of \u20ac0.01. No Financing Preference Shares or Preference Shares have been issued. Common shares are
translated to U.S. dollars at the foreign exchange rates in effect when the shares are issued.
Appropriation of Profit of 2021
The financial statements for the reporting year 2021 have been adopted by the Annual General Meeting on June 23, 2022. The Annual General Meeting has adopted the
appropriation of profit after tax as proposed by the Managing Board.
Proposal for Profit Appropriation
The General Meeting of Shareholders will be asked to approve the following appropriation of the 2022 net income for the period: an amount of $575.7 million to be
added to retained earnings.
Share Repurchase Programs
On July 12, 2021, we announced our seventh share repurchase program of up to $100 million of our common shares. During 2021, we repurchased 1.9 million
QIAGEN shares for $100.0 million (including transaction costs). This program ended on October 29, 2021.
The cost of repurchased shares is included in treasury stock and reported as a reduction in total equity when a repurchase occurs. Repurchased shares will be held in
treasury in order to satisfy various obligations, which include exchangeable debt instruments, warrants and employee share-based remuneration plans.",
"dimensions": {
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"value": "The cost of repurchased shares is included in treasury stock and reported as a reduction in total equity when a repurchase occurs. Repurchased shares will be held in treasury in order to satisfy various obligations, which include exchangeable debt instruments, warrants and employee share-based remuneration plans.",
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"value": "
19.\u00a0 Earnings per Common Share
We present basic and diluted earnings per common share. Basic earnings per common share is calculated by dividing the net income by the weighted average number of
common shares outstanding. Diluted earnings per common share reflect the potential dilution that would occur if all \u201cin the money\u201d securities to issue common shares were
exercised.
The following schedule summarizes the information used to compute earnings per common share for the years ended December\u00a031, 2022 and 2021:
| | | | |
(in thousands, except per share data) | | | | |
| | | | |
| | | | |
Weighted average number of common shares used to compute basic net income per common share | | | | |
Dilutive effect of stock options and restricted stock units | | | | |
Dilutive effect of outstanding warrants | | | | |
Weighted average number of common shares used to compute diluted net income per common share | | | | |
Outstanding options and awards having no dilutive effect, not included in above calculation | | | | |
Outstanding warrants having no dilutive effect, not included in above calculation | | | | |
| | | | |
Basic earnings per common share | | | | |
Diluted earnings per common share | | | | |
2021) and Massachusetts General Hospital (MGH) sued QIAGEN for patent infringement. In August 2021, a federal jury ruled that QIAGEN infringed two patents owned
by ArcherDx and awarded damages of $4.7 million which were accrued in 2021 and as of December\u00a031, 2022 are included in other non-current liabilities in the
accompanying balance sheet. We plan to appeal the verdict as soon as the final verdict is completed.
Bio-RadLaboratories, Inc.
In April 2022, QIAGEN filed a lawsuit in a U.S. federal court against Bio-Rad Laboratories, Inc. (Bio-Rad) seeking a declaratory judgment of non-infringement of certain
Bio-Rad patents related to digital PCR technology. We are seeking judgment that we have not infringed and do not infringe any claims of the Bio-Rad patents, and have
not made, used, sold, offered for sale, or imported any products that infringe any of the patents' claims, directly or indirectly. We are also seeking attorneys' fees, costs,
and expenses and any other relief determined by the court.
Becton Dickinson
On September 17, 2020, QIAGEN acquired NeuMoDx. As part of the purchase, QIAGEN also acquired preexisting contingencies and became defendant in ongoing
litigation matters pertaining to preexisting claims made by Becton Dickinson (BD) and subsidiaries over patent infringement. In addition to patent infringement allegations,
the litigation involved trade secret misappropriation and other non-patent claims relating to NeuMoDx and former NeuMoDx officers, before the acquisition by QIAGEN.
On September 26, 2021, through mediation, the parties reached a preliminary settlement of $53.0 million due to BD for the past infringements of NeuMoDx prior to
QIAGEN's acquisition. On November 5, 2021, QIAGEN and BD reached an agreement to settle their ongoing litigation in the U.S. District Court of the District of
Delaware and certain inter partes review proceedings. As part of the settlement, QIAGEN paid $53.0 million to BD in November 2021 and all claims asserted against
QIAGEN, as well as counterclaims asserted against BD, were dismissed.
Other Litigation matters
For all other matters, management's best estimate of the liability amounts to $6.5 million, as accrued as of December\u00a031, 2022 in other current liabilities, with a range of
possible losses between zero and $8.0 million.
Based on the facts known to QIAGEN and after consultation with legal counsel, management believes that such litigation will not have a material adverse effect on our
financial position or results of operations above the amounts accrued. However, the outcome of these matters is ultimately uncertain, thus any settlements or judgments
against us in excess of management's expectations could have a material adverse effect on our financial position, results of operations or cash flows.",
"dimensions": {
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"language": "en",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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},
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"value": "
21.\u00a0 Reportable Segment
We operate as one reportable segment in accordance with IFRS 8 Operating Segments. As a result of our continued restructuring and streamlining of the growing
organization, our chief operating decision maker (CODM) continues to make decisions with regards to business operations and resource allocation based on evaluations
of QIAGEN as a whole. Accordingly, we operate as one reportable segment. Summarized geographic information is shown in the tables below.
Geographical Information
Net sales are attributed to countries based on the location of the customer. Our primary manufacturing facilities are located in Germany, China, and the United States and
supply products to customers as well as QIAGEN subsidiaries in other countries. The intercompany portions of such net sales are excluded to derive consolidated net sales.
No single customer represents more than ten percent of consolidated net sales. Our country of domicile is the Netherlands, which reported net sales of $31.5 million and
$28.3 million for the years ended 2022 and 2021, respectively, and these amounts are included in the line item Europe, Middle East and Africa as shown in the table
below.
\u00a0
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Europe, Middle East and Africa | | | | |
Asia Pacific, Japan\u00a0and Rest of World | | | | |
| | | | |
Long-lived assets include property, plant and equipment, goodwill, other intangible assets, right-of-use assets, equity accounted investments, non-current financial assets and
other non-current assets. The Netherlands, which is included in the line item other Europe, Middle East and Africa, reported long-lived assets of $15.2 million and $12.4
million for the years ended 2022 and 2021, respectively.
| | | | |
Long-lived assets (in thousands) | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Other Europe, Middle East and Africa | | | | |
Asia Pacific, Japan\u00a0and Rest of World | | | | |
| | | | |
| | | | |
| | Stock Options (in thousands) | | Weighted Average Exercise Price US$ |
Outstanding at January 1, 2021 | | | | |
| | | | |
Outstanding at December 31, 2021 | | | | |
Vested at December 31, 2021 | | | | |
Vested and expected to vest at December 31, 2021 | | | | |
The total intrinsic value of options exercised during the years ended December\u00a031, 2022 and 2021 was $0.2 million and $14.4 million, respectively. The actual tax
benefit for the tax deductions from option exercises totaled $0.1 million and $2.2 million during the years ended December\u00a031, 2022 and 2021, respectively. At
December\u00a031, 2022, there was no unrecognized share-based compensation expense related to employee stock option awards.
At December\u00a031, 2022 and 2021, 9 thousand and 18 thousand options were exercisable at a weighted average price of $18.68 and $17.79 per share, respectively.
The options outstanding at December\u00a031, 2022 will expire in 2023.
Stock Units
Stock units represent rights to receive Common Shares at a future date and include restricted stock units which are subject to time-vesting only and performance stock units
which include performance conditions in addition to time-vesting. The final number of performance stock units earned is based on the performance achievement which for
some grants can reach up to 200% of the granted shares. There is no exercise price and the fair market value at the time of the grant is recognized over the requisite
vesting period. The fair market value is determined based on the number of stock units granted and the market value of our shares on the grant date. Pre-vesting forfeitures
were estimated to be approximately 6.9% (2021: 6.9%). At December\u00a031, 2022, there was $79.7 million remaining in unrecognized compensation cost including
estimated forfeitures related to these awards, which is expected to be recognized over a weighted average period of 1.58 years (2021: $68.9 million over a weighted
average of 1.78 years). The weighted average grant date fair value of stock units granted during the year ended December\u00a031, 2022 was $45.49 (2021: $48.77). The
total fair value of restricted stock units released during the years ended December\u00a031, 2022 and 2021 was $55.8 million and $52.6 million, respectively.
A summary of stock units as of December\u00a031, 2022 and 2021 and changes during the year then ended are presented below:
| | | | |
| | | | |
Outstanding at January 1st | | | | |
| | | | |
| | | | |
| | | | |
Outstanding at December 31st | | | | |
Vested and expected to vest at December 31st | | | | |
We net share settle for the tax withholding upon the vesting of awards. Shares are issued on the vesting dates net of the applicable statutory tax withholding to be paid by
us on behalf of our employees. As a result, fewer shares are issued than the number of stock units outstanding. We record a liability for the tax withholding to be paid by
us as a reduction to treasury shares.
Compensation Expense
Share-based compensation expense for the years ended December\u00a031, 2022 and 2021 totaled approximately $49.5 million and $38.4 million, respectively, as shown in
the table below.
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
General and administrative | | | | |
Share-based compensation expense before taxes | | | | |
Less: Income tax benefit (1) | | | | |
Net share-based compensation expense | | | | |
(1)Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements totaled $2.7 million and $6.5 million for the years ended December\u00a031, 2022 and 2021,
respectively.
The lower share-based compensation expense in cost of sales in 2021 resulted from forfeitures upon the separation of an executive who received a cash severance
payment in lieu of accelerated vesting upon separation per the terms of the arrangement. The cash separation accrual offset the share-based compensation forfeiture.
No share-based compensation cost was capitalized in inventory in 2022 and 2021 as the amounts were not material",
"dimensions": {
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23.\u00a0 Employee Benefits and Personnel Costs
We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined contribution plan is qualified under Section\u00a0401(k) of the
Internal Revenue Code and covers substantially all U.S. employees. Participants may contribute a portion of their compensation not exceeding a limit set annually by the
Internal Revenue Service. This plan includes a provision for us to match a portion of employee contributions. Total expenses under the 401(k) plans, including the plans
acquired via business acquisitions, was $4.5 million and $4.3 million for the years ended December\u00a031, 2022 and 2021, respectively. We also have a defined
contribution plan which covers certain executives. We make matching contributions up to an established maximum. Matching contributions made to the plan, and
expensed, totaled approximately $0.1 million and $0.2 million for the years ended December\u00a031, 2022 and 2021, respectively.
We have seven defined benefit, non-contributory retirement or termination plans that cover certain employees in Germany, France, Italy, Japan, Poland, the Philippines
and the United Arab Emirates. These defined benefit plans provide benefits to covered individuals satisfying certain age and/or service requirements. For certain plans, we
calculate the vested benefits to which employees are entitled if they separate immediately. The benefits accrued on a pro-rata basis during the employees\u2019 employment
period are based on the individuals\u2019 salaries, adjusted for inflation. All defined benefit plans are unfunded. The liability under the defined benefit plans was $7.2 million
and $9.3 million as of December\u00a031, 2022 and 2021, respectively, and is included as a component of other non-current liabilities in the accompanying consolidated
balance sheets.
Personnel Costs
Personnel costs amounted to $616.7 million in 2022 (2021: $607.5 million).
| | | | |
| | | | |
| | | | |
Social security and pension | | | | |
Share-based payment expense | | | | |
| | | | |
| | | | |
| | | | |
The personnel costs are allocated to the functional areas in which the respective employees are working or, in the case of incremental termination costs which are the result
of restructuring activities as discussed in Note 6 \"Restructuring\", are recorded in restructuring, acquisition, integration and other costs.
Personnel costs included in the accompanying consolidated income statements for the years ended December\u00a031, 2022 and 2021 are as follows:
| | | | |
| | | | |
| | | | |
Research and development expense | | | | |
Sales and marketing expense | | | | |
General and administrative expense | | | | |
| | | | |
As of December\u00a031, 2022 and 2021 balance with related parties are as follows:
| | | | |
| | | | |
Trade accounts receivable | | | | |
| | | | |
| | | | |
Trade and other accounts payable | | | | |
Other current liabilities | | | | |
meetings but not directly related to their attendance. Amounts do not include the reimbursement of certain expenses relating to travel incurred at the request of QIAGEN, other reimbursements or payments that in
total did not exceed $10,000, or tax amounts paid by the Company to taxing authorities in order to avoid double-taxation under multi-tax jurisdiction employment agreements.
| | | | |
For the year ended December 31, 2021 (in thousands) | | | | |
| | | | |
| | | | |
| | | | |
Short-term variable cash bonus | | | | |
Total short-term income 2021 | | | | |
Defined contribution on benefit plan | | | | |
Total compensation (excluding long-term share-based compensation) | | | | |
meetings but not directly related to their attendance. Amounts do not include the reimbursement of certain expenses relating to travel incurred at the request of QIAGEN, other reimbursements or payments that in
total did not exceed $10,000 or tax amounts paid by the Company to tax authorities in order to avoid double-taxation under multi-tax jurisdiction employment agreements.
The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year 2022 (2021) for long-term compensation of stock units
amounted to $7.5 million ($4.5 million) for Mr. Bernard and $7.1 million ($5.9 million) for Mr. Sackers. The total compensation including share-based compensation
expenses in the year 2022 (2021) was $18.7 million ($13.8 million), and amounts to $10.2 million ($6.6 million) for Mr. Bernard and $8.4 million ($7.2 million) for Mr.
Sackers.
Remuneration of the Supervisory Board
The tables below state the amounts earned on an accrual basis by the members of the Supervisory Board in 2022 and 2021 (excluding long-term share-based
compensation):
| | | | | | | | | | |
For the year ended December 31, 2022 (in thousands, except for number of share grants) | | | | | | | | | | Number of restricted stock units granted |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1)Supervisory Board members are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These reimbursements are excluded from the amounts presented herein.
(2)Dr. Eva Pisa joined the Supervisory Board in June 2022.
| | | | | | | | | | |
For the year ended December 31, 2021 (in thousands, except for number of share grants) | | | | | | | | | | Number of restricted stock units granted |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1)Supervisory Board members are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These reimbursements are excluded from the amounts presented herein.
(2)Thomas Ebeling joined the Supervisory Board in February 2021.
(3)St\u00e9phane Bancel did not stand for re-appointment at the Annual General Meeting on June 29, 2021, resulting in the end of his Supervisory Board term.
The total recognized share-based compensation expense in accordance with IFRS 2 in 2022 (2021) amounted to $1.8 million ($1.8 million) and includes $349.6
thousand ($332.2 thousand) for Mr. Rosen, $222.7 thousand ($231.7\u00a0thousand) for Mr. Colpan, $349.6 thousand ($326.7 thousand) for Mr. Levine, $349.6 thousand
($332.2 thousand) for Ms. Mardis, $222.7 thousand ($231.7 thousand) for Ms. Tallett, $157.2 thousand ($72.7 thousand) for Dr. Haag and $148.4 thousand ($66.1
thousand) for Mr. Ebeling. In 2021, Mr. Bancel term as member of the Supervisory Board ended and $217.6 thousand share-based compensation expense was
recognized.
The total recognized compensation expense, including share-based compensation, for members of the Supervisory Board in 2022 (2021) totaled $2.5 million ($2.5
million) and includes amounts of $543.6\u00a0thousand ($532.0\u00a0thousand) for Mr. Rosen, $309.2\u00a0thousand ($318.2\u00a0thousand) for Mr. Colpan, $418.1\u00a0thousand
($395.2\u00a0thousand) for Mr. Levine, $429.1\u00a0thousand ($411.7\u00a0thousand) for Ms. Mardis, $324.2\u00a0thousand ($333.2\u00a0thousand) for Ms. Tallett, $239.7 thousand
($149.4\u00a0thousand) for Dr. Haag, $216.9 thousand ($119.5\u00a0thousand) for Mr. Ebeling and $34.3\u00a0thousand for Dr. Pisa who joined the Supervisory Board in June 2022.
In 2021, $247.6\u00a0thousand total compensation expense was recognized for Mr. Bancel.
",
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"value": "
Key management personnel compensation and total board remuneration
Remuneration of the Managing Board
The tables below state the amounts earned on an accrual basis by our key management personnel and Managing Board members in 2022 and 2021.
| | | | |
For the year ended December 31, 2022 (in thousands) | | | | |
| | | | |
| | | | |
| | | | |
Short-term variable cash bonus | | | | |
Total short-term income 2022 | | | | |
Defined contribution on benefit plan | | | | |
Total compensation (excluding long-term share-based compensation) | | | | |
meetings but not directly related to their attendance. Amounts do not include the reimbursement of certain expenses relating to travel incurred at the request of QIAGEN, other reimbursements or payments that in
total did not exceed $10,000, or tax amounts paid by the Company to taxing authorities in order to avoid double-taxation under multi-tax jurisdiction employment agreements.
| | | | |
For the year ended December 31, 2021 (in thousands) | | | | |
| | | | |
| | | | |
| | | | |
Short-term variable cash bonus | | | | |
Total short-term income 2021 | | | | |
Defined contribution on benefit plan | | | | |
Total compensation (excluding long-term share-based compensation) | | | | |
meetings but not directly related to their attendance. Amounts do not include the reimbursement of certain expenses relating to travel incurred at the request of QIAGEN, other reimbursements or payments that in
total did not exceed $10,000 or tax amounts paid by the Company to tax authorities in order to avoid double-taxation under multi-tax jurisdiction employment agreements.
The total recognized compensation expense in accordance with IFRS 2 for share-based compensation in the year 2022 (2021) for long-term compensation of stock units
amounted to $7.5 million ($4.5 million) for Mr. Bernard and $7.1 million ($5.9 million) for Mr. Sackers. The total compensation including share-based compensation
expenses in the year 2022 (2021) was $18.7 million ($13.8 million), and amounts to $10.2 million ($6.6 million) for Mr. Bernard and $8.4 million ($7.2 million) for Mr.
Sackers.
Remuneration of the Supervisory Board
The tables below state the amounts earned on an accrual basis by the members of the Supervisory Board in 2022 and 2021 (excluding long-term share-based
compensation):
| | | | | | | | | | |
For the year ended December 31, 2022 (in thousands, except for number of share grants) | | | | | | | | | | Number of restricted stock units granted |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1)Supervisory Board members are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These reimbursements are excluded from the amounts presented herein.
(2)Dr. Eva Pisa joined the Supervisory Board in June 2022.
| | | | | | | | | | |
For the year ended December 31, 2021 (in thousands, except for number of share grants) | | | | | | | | | | Number of restricted stock units granted |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1)Supervisory Board members are reimbursed for travel costs and for any value-added tax to be paid on their remuneration. These reimbursements are excluded from the amounts presented herein.
(2)Thomas Ebeling joined the Supervisory Board in February 2021.
(3)St\u00e9phane Bancel did not stand for re-appointment at the Annual General Meeting on June 29, 2021, resulting in the end of his Supervisory Board term.
The total recognized share-based compensation expense in accordance with IFRS 2 in 2022 (2021) amounted to $1.8 million ($1.8 million) and includes $349.6
thousand ($332.2 thousand) for Mr. Rosen, $222.7 thousand ($231.7\u00a0thousand) for Mr. Colpan, $349.6 thousand ($326.7 thousand) for Mr. Levine, $349.6 thousand
($332.2 thousand) for Ms. Mardis, $222.7 thousand ($231.7 thousand) for Ms. Tallett, $157.2 thousand ($72.7 thousand) for Dr. Haag and $148.4 thousand ($66.1
thousand) for Mr. Ebeling. In 2021, Mr. Bancel term as member of the Supervisory Board ended and $217.6 thousand share-based compensation expense was
recognized.
The total recognized compensation expense, including share-based compensation, for members of the Supervisory Board in 2022 (2021) totaled $2.5 million ($2.5
million) and includes amounts of $543.6\u00a0thousand ($532.0\u00a0thousand) for Mr. Rosen, $309.2\u00a0thousand ($318.2\u00a0thousand) for Mr. Colpan, $418.1\u00a0thousand
($395.2\u00a0thousand) for Mr. Levine, $429.1\u00a0thousand ($411.7\u00a0thousand) for Ms. Mardis, $324.2\u00a0thousand ($333.2\u00a0thousand) for Ms. Tallett, $239.7 thousand
($149.4\u00a0thousand) for Dr. Haag, $216.9 thousand ($119.5\u00a0thousand) for Mr. Ebeling and $34.3\u00a0thousand for Dr. Pisa who joined the Supervisory Board in June 2022.
In 2021, $247.6\u00a0thousand total compensation expense was recognized for Mr. Bancel.
",
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"value": "
25. Fair Value Measurements
Assets and liabilities are measured at fair value according to a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:
\u2022Level 1.Observable inputs, such as quoted prices in active markets;
\u2022Level 2.Inputs, other than the quoted price in active markets, that are observable either directly or indirectly; and
\u2022Level 3.Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy as of
December\u00a031, 2022. It does not include fair value information for financial assets and financial liabilities carried at amortized cost.
| | | | | | | | | | | | | | | | |
| | | | |
| | | | | | Fair value through profit or loss | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | | | | | | | |
Trade accounts receivable | | | | | | | | | | | | | | | | |
Financial assets, current | | | | | | | | | | | | | | | | |
Financial assets, non-current | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Foreign exchange forwards and options | | | | | | | | | | | | | | | | |
Interest rate contracts - cash flow hedge | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Foreign exchange forwards and options | | | | | | | | | | | | | | | | |
Interest rate contracts - cash flow hedge | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Warrants and embedded conversion option | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
(1)Separate disclosure of fair value of lease liabilities is not required.
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy as of
December\u00a031, 2021. It does not include fair value information for financial assets and financial liabilities carried at amortized cost.
| | | | | | | | | | | | | | | | |
| | | | |
| | | | | | Fair value through profit or loss | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | | | | | | | |
Trade accounts receivable | | | | | | | | | | | | | | | | |
Financial assets, current | | | | | | | | | | | | | | | | |
Financial assets, non-current | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Foreign exchange forwards and options | | | | | | | | | | | | | | | | |
Interest rate contracts - fair value hedge | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Foreign exchange forwards and options | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Warrants and embedded conversion option | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
(1) Separate disclosure of fair value of lease liabilities is not required.
Our assets and liabilities measured at fair value on a recurring basis consist of unquoted debt securities discussed in Note 7 \"Financial Assets\", which are classified in
Level 1 and Level 2 of the fair value hierarchy, derivative contracts used to hedge currency and interest rate risk and derivative financial instruments entered into in
connection with the Cash Convertible Notes discussed in Note 16 \"Financial Debts\", which are classified in Level 2 of the fair value hierarchy, contingent consideration
accruals which are classified in Level 3 of the fair value hierarchy, and unquoted equity securities remeasured during the years ended December\u00a031, 2022 and 2021 are
classified within Level 3 in the fair value hierarchy. There were no transfers between levels for the year ended December\u00a031, 2022.
In determining fair value for Level 2 instruments, we apply a market approach, using quoted active market prices relevant to the particular instrument under valuation,
giving consideration to the credit risk of both the respective counterparty to the contract and the Company. To determine our credit risk, we estimated our credit rating by
benchmarking the price of outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, our credit risk was quantified by
reference to publicly-traded debt with a corresponding rating. The Level 2 derivative financial instruments include the Call Options asset, the Warrants liability and the
embedded conversion option liability. See Note 16 \"Financial Debts\" and Note 26 \"Financial Risk Factors and Use of Derivative Financial Instruments\" for further
information. The derivatives are not actively traded and are valued based on an option pricing model that uses observable market data for inputs. Significant market data
inputs used to determine fair values included our common stock price, the risk-free interest rate, and the implied volatility of our common stock. The Call Options asset and
the embedded cash conversion option liability were designed with the intent that changes in their fair values would substantially offset, with limited net impact to our
earnings. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is substantially mitigated.
Our Level 3 instruments include unquoted equity investments for which we estimate the value based on valuation methods using the observable transaction price at the
transaction date and other unobservable inputs. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes
resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Adjustments are determined primarily based on
a market approach as of the transaction date.
Our Level 3 instruments also include contingent consideration liabilities. We value contingent consideration liabilities using unobservable inputs, applying the income
approach, such as the discounted cash flow technique, or the probability-weighted scenario method. Contingent consideration arrangements obligate us to pay the sellers
of an acquired entity if specified future events occur or conditions are met such as the achievement of technological or revenue milestones. We use various key
assumptions, such as the probability of achievement of the milestones (0% to 100%) and the discount rate (between 6.5% and 6.6%), to represent the non-performing risk
factors and time value when applying the income approach. We regularly review the fair value of the contingent consideration, and reflect any change in the accrual in
the consolidated income statements in the line items commensurate with the underlying nature of milestone arrangements.
Refer to Note 7 \"Financial Assets\" for the change in unquoted equity securities with Level 3 inputs during the years ended December\u00a031, 2022 and 2021. For contingent
consideration liabilities with Level 3 inputs, the following table summarizes the activity as of December\u00a031, 2022 and 2021, all of which is related to 2018 acquisition of
STAT-Dx:
| | | | |
| | | | |
Balance at beginning of year | | | | |
| | | | |
| | | | |
| | | | |
As of December\u00a031, 2022, $18.1 million was accrued for contingent consideration, of which $8.2 million is included in other current liabilities and $9.9 million is
included in other non-current liabilities in the accompanying consolidated balance sheet.
The estimated fair value of non-current financial debts as disclosed in Note 16 \"Financial Debts\" was based on current interest rates for similar types of borrowings. The
estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.
The fair values of the financial instruments are presented in Note 16 \"Financial Debts\" and were determined as follows:
Cash Convertible Notes and Convertible Notes: Fair value is based on an estimation using available over-the-counter market information on the Cash Convertible Notes
due in 2023 and 2024 as well as the Convertible Notes due in 2027.
U.S. Private Placement: Fair value of the outstanding bonds is based on an estimation using the changes in the U.S. Treasury rates.
German Private Placement: Fair value is based on an estimation using changes in the euro swap rates.
There were no adjustments in the twelve-month periods ended December\u00a031, 2022 and 2021 for nonfinancial assets or liabilities required to be measured at fair value on
a nonrecurring basis.",
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"value": "
26.1.Financial Risks
Our risk management approach embodies the key elements of a sound risk management system including (1) active Supervisory Board and senior management
involvement; (2) adequate policies and procedures; (3) adequate risk management, monitoring and information systems; and (4) comprehensive internal controls. Refer to
the detail discussion under the header Risk Management within the Management Report included in this annual report.
Market risk
Our market risk relates primarily to interest rate exposures on cash, short-term investments and borrowings and foreign currency exposures. Financial risk is centrally
managed and is regulated by internal guidelines which require a continuous internal risk analysis. The overall objective of our risk management is to reduce the potential
negative earnings effects from changes in interest and foreign exchange rates. Exposures are managed through operational methods and financial instruments relating to
interest rate and foreign exchange risks. In the ordinary course of business, we use derivative instruments, including swaps, forwards and/or options, to manage potential
losses from foreign currency exposures and interest rates. The principal objective of such derivative instruments is to minimize the risks and/or costs associated with global
financial and operating activities. We do not utilize derivative or other financial instruments for trading or other speculative purposes. All derivatives are recognized as
either assets or liabilities in the balance sheet and are measured at fair value with any change in fair value recognized in earnings in the period of change, unless the
derivative qualifies as an effective hedge that offsets certain exposures. In determining fair value, we consider both the counterparty credit risk and our own
creditworthiness, to the extent that the derivatives are not covered by collateral agreements with respective counterparties.
Foreign currency exchange rates
As a global enterprise, we are subject to risks associated with fluctuations in foreign currencies with regard to our ordinary operations. This includes foreign currency-
denominated receivables, payables, debt, and other balance sheet positions as well as future cash flows resulting from anticipated transactions including intra-group
transactions. We manage our balance sheet exposure on a group-wide basis primarily using foreign exchange forward contracts, options and cross-currency swaps.
Foreign currency transactions for the year ended December\u00a031, 2022 resulted in a net gain of $2.7 million and a net loss of $9.0 million for the year ended
December\u00a031, 2021. These amounts are included in other financial results in the accompanying consolidated income statements.
Russia's February 2022 invasion of Ukraine and the sanctions imposed in response have led to a decline in the value of the ruble which is expected to remain highly
volatile. In 2022, we suspended our activities in Russia and Belarus, with sales in these countries (along with Ukraine) representing less than 1% of total annual sales. As
of January 1, 2022, the results of our subsidiary in Turkey are reported under highly inflationary accounting as the prior three-years cumulative inflation rate exceeded
100 percent.
A significant portion of our revenues and expenses are earned and incurred in currencies other than the U.S. dollar. The euro is the most significant such currency, with
others including the British pound, Japanese yen, Chinese renminbi, Turkish lira, Brazilian real, Indian rupee, Swiss franc, and Canadian and Australian dollars.
Fluctuations in the value of the currencies in which we conduct our business relative to the U.S. dollar have caused and will continue to cause U.S. dollar translations of
such currencies to vary from one period to another. Due to the number of currencies involved, the constantly changing currency exposures, and the potential substantial
volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations upon future operating results. In general terms, depreciation of the U.S.
dollar against our other foreign currencies will increase reported net sales. However, this effect is, at least partially, offset by the fact that we also incur substantial
expenses in foreign currencies.
We have significant production and manufacturing facilities located in Germany and intercompany sales of inventory also expose us to foreign currency exchange rate
risk. Intercompany sales of inventory are generally denominated in the local currency of the subsidiary purchasing the inventory in order to centralize foreign currency risk
with the manufacturing subsidiary. We use an in-house bank approach to net and settle intercompany payables and receivables as well as intercompany foreign exchange
swaps and forward contracts in order to centralize the foreign exchange rate risk to the extent possible. We have entered in the past and may enter in the future into
foreign exchange derivatives including forwards, swaps and options to manage the remaining foreign exchange exposure.
For the presentation of market risks, IFRS 7 requires sensitivity analyses that show the effects of hypothetical changes of relevant risk variables on profit or loss and
shareholders' equity. Currency risks as defined by IFRS 7 arise on account of financial instruments being denominated in a currency that is not the functional currency and
being of a monetary nature; differences resulting from the translation of financial statements into the Company's presentation currency are not taken into consideration.
Relevant risk variables are generally all non-functional currencies in which QIAGEN has financial instruments.
QIAGEN is exposed to currency risks from financial derivatives. If each of the respective currency pairs for which the Company has financial derivatives in place, which
do not qualify for hedge accounting in accordance with IFRS 9, varied from the rates used for the preparation of the consolidated financial statements, this would have
had an effect on the net income of the Company. Any effect would have been almost fully off-set by corresponding valuation adjustments in the positions, which
economically had been hedged by these financial derivatives. Accordingly, the net effect of such variance in currency rates would not have been material.
If, at December\u00a031, 2022, the U.S. dollar had gained or lost 10% against all identified major currencies, the estimated effect on the fair value of the financial derivatives
would have been as follows:
generally affected by changes in the level of interest rates, principally the Euro and the U.S. dollar interest rate.
At December\u00a031, 2022, we had $730.3 million in cash and cash equivalents (2021: $879.9 million). Interest income earned on our cash investments is affected by
changes in the relative levels of market interest rates. We only invest in high-grade investment instruments. A hypothetical adverse 10% movement in market interest rates
would have impacted our financial statements by approximately $4.5 million.
Borrowings against lines of credit are at variable interest rates. We had no amounts outstanding against our lines of credit at December\u00a031, 2022 and 2021. A
hypothetical adverse 10% movement in market interest rates would not have materially impacted our financial statements.
At December\u00a031, 2022, we had $1.8 billion in current and non-current financial debt, of which $236.8 million is floating interest rate debt (2021: total $1.9 billion). A
hypothetical adverse 10% movement in market interest rates would not have materially impacted our financial statements.
Liquidity risk
To date, we have funded our business primarily through internally generated funds, debt and the private and public sales of equity. Our primary use of cash has been to
support continuing operations and our investing activities including capital expenditure requirements and acquisitions. As of December\u00a031, 2022 and 2021, we had cash
and cash equivalents of $730.3 million and $879.9 million, respectively. We also had current financial assets of $687.6 million and $184.8 million, respectively. Cash
and cash equivalents are primarily held in Euros and U.S. dollars, other than those cash balances maintained in the local currency of subsidiaries to meet local working
capital needs. As of December\u00a031, 2022 and 2021, we had working capital of $1.3 billion and $447.3 million, respectively.
We have a \u20ac400.0 million syndicated ESG-linked revolving credit facility expiring with a contractual life until December 2025 of which no amounts were utilized at
December\u00a031, 2022. We have additional credit lines totaling \u20ac27.0 million with no expiration date, none of which were utilized as of December\u00a031, 2022. We also
have repayment obligations of $1.8 billion of financial debt (2021: $1.9 billion), of which $389.6 million is current as of December\u00a031, 2022.
As of December\u00a031, 2022, our future contractual cash obligations are as follows:
| | | | | | | | | | | | | | |
Contractual Obligations (in thousands) | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
License and royalty payments | | | | | | | | | | | | | | |
Total contractual cash obligations | | | | | | | | | | | | | | |
(1)Amounts include required principal, stated at current carrying values, and interest payments.
Pursuant to the purchase agreements for certain acquisitions we could be required to make additional contingent cash payments for a previous business combination based
on the achievement of certain FDA approval milestones. Potential milestone payments total $20.7 million, of which $8.9 million may be triggered by the end of 2023 and
$11.8 million by the end of 2024. Of the total milestone payments, $8.2 million is included in other current liabilities and $9.9 million is included in other non-current
liabilities in the accompanying consolidated balance sheet as of December\u00a031, 2022.
We believe that funds from operations, existing cash and cash equivalents, together with the proceeds from our public and private sales of equity, and availability of
financing facilities, will be sufficient to fund our planned operations and expansion during the coming year. However, any global economic downturn may have a greater
impact on our business than currently expected, and we may experience a decrease in the sales of our products, which could impact our ability to generate cash. If our
future cash flows from operations and other capital resources are not adequate to fund our liquidity needs, we may be required to obtain additional debt or equity
financing or to reduce or delay our capital expenditures, acquisitions or research and development projects. If we could not obtain financing on a timely basis or at
satisfactory terms, or implement timely reductions in our expenditures, our business could be adversely affected.
Credit risk
Financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents, financial assets, and accounts receivable. We attempt to
minimize the risks related to cash and cash equivalents and financial assets by dealing with highly-rated financial institutions and investing in a broad and diverse range of
financial instruments. We have established guidelines related to credit quality and maturities of investments intended to maintain safety and liquidity. Concentration of
credit risk with respect to accounts receivable is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances are
maintained for potential credit losses and such losses have historically been within expected ranges. There were no significant concentrations of credit risk during the
reporting period. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.
Credit risk is managed on a Company basis, except for credit risk relating to accounts receivable balances. Each local entity is responsible for managing and analyzing
the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Further discussion of the allowance for doubtful
accounts can be found in Note 8 \"Trade Accounts Receivable.\"
Counterparty risk
The financial instruments used in managing our foreign currency, equity and interest rate exposures have an element of risk in that the counterparties may be unable to
meet the terms of the agreements. To the extent that derivatives are not subject to mutual collateralization agreements, we attempt to minimize this risk by limiting the
counterparties to a diverse group of highly-rated international financial institutions. The carrying values of our financial instruments incorporate the non-performance risk by
using market pricing for credit risk. However, we have no reason to believe that any counterparties will default on their obligations and therefore do not expect to record
any losses as a result of counterparty default. In order to minimize our exposure with any single counterparty, we have entered into all derivative agreements, with the
exception of the Call Spread Overlay, under master agreement which allow us to manage the exposure with the respective counterparty on a net basis. Most of these
master agreements, include bilateral collateral agreements.
Fair values
The fair values of financial assets and financial liabilities are determined in accordance with the accounting policies stated under Notes 3.12 \"Financial Instruments -
Recognition and Initial Measurement\" and 3.13 \"Financial Instruments - Classification and Subsequent Measurement.\"
Equity prices
The Warrants issued as part of the Call Spread Overlay discussed in Note 16 \"Financial Debts\" and Note 26.2 \"Use of Derivative Financial Instruments\" expose us to
income statement volatility due to changes in our own equity price. Changes in the fair value of the Warrants are recognized in other financial results. Assuming a
hypothetical 10% increase or decrease in equity prices at December\u00a031, 2022, the estimated effect would have been approximately $74.5 million loss or $64.3 million
gain, respectively (2021: $101.5 million loss or $91.4 million gain).
Commodities
We have exposure to price risk related to anticipated purchases of certain commodities used as raw materials in our business. A change in commodity prices may alter the
gross margin, but due to the limited exposure to any single raw material, a price change is unlikely to have a material unforeseen impact on earnings. However, in 2022,
the volatility in product availability and pricing drastically increased compared to previous years and we expect some level of market constraints to continue in 2023.
",
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Market risk
Our market risk relates primarily to interest rate exposures on cash, short-term investments and borrowings and foreign currency exposures. Financial risk is centrally
managed and is regulated by internal guidelines which require a continuous internal risk analysis. The overall objective of our risk management is to reduce the potential
negative earnings effects from changes in interest and foreign exchange rates. Exposures are managed through operational methods and financial instruments relating to
interest rate and foreign exchange risks. In the ordinary course of business, we use derivative instruments, including swaps, forwards and/or options, to manage potential
losses from foreign currency exposures and interest rates. The principal objective of such derivative instruments is to minimize the risks and/or costs associated with global
financial and operating activities. We do not utilize derivative or other financial instruments for trading or other speculative purposes. All derivatives are recognized as
either assets or liabilities in the balance sheet and are measured at fair value with any change in fair value recognized in earnings in the period of change, unless the
derivative qualifies as an effective hedge that offsets certain exposures. In determining fair value, we consider both the counterparty credit risk and our own
creditworthiness, to the extent that the derivatives are not covered by collateral agreements with respective counterparties.
Foreign currency exchange rates
As a global enterprise, we are subject to risks associated with fluctuations in foreign currencies with regard to our ordinary operations. This includes foreign currency-
denominated receivables, payables, debt, and other balance sheet positions as well as future cash flows resulting from anticipated transactions including intra-group
transactions. We manage our balance sheet exposure on a group-wide basis primarily using foreign exchange forward contracts, options and cross-currency swaps.
Foreign currency transactions for the year ended December\u00a031, 2022 resulted in a net gain of $2.7 million and a net loss of $9.0 million for the year ended
December\u00a031, 2021. These amounts are included in other financial results in the accompanying consolidated income statements.
Russia's February 2022 invasion of Ukraine and the sanctions imposed in response have led to a decline in the value of the ruble which is expected to remain highly
volatile. In 2022, we suspended our activities in Russia and Belarus, with sales in these countries (along with Ukraine) representing less than 1% of total annual sales. As
of January 1, 2022, the results of our subsidiary in Turkey are reported under highly inflationary accounting as the prior three-years cumulative inflation rate exceeded
100 percent.
A significant portion of our revenues and expenses are earned and incurred in currencies other than the U.S. dollar. The euro is the most significant such currency, with
others including the British pound, Japanese yen, Chinese renminbi, Turkish lira, Brazilian real, Indian rupee, Swiss franc, and Canadian and Australian dollars.
Fluctuations in the value of the currencies in which we conduct our business relative to the U.S. dollar have caused and will continue to cause U.S. dollar translations of
such currencies to vary from one period to another. Due to the number of currencies involved, the constantly changing currency exposures, and the potential substantial
volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations upon future operating results. In general terms, depreciation of the U.S.
dollar against our other foreign currencies will increase reported net sales. However, this effect is, at least partially, offset by the fact that we also incur substantial
expenses in foreign currencies.
We have significant production and manufacturing facilities located in Germany and intercompany sales of inventory also expose us to foreign currency exchange rate
risk. Intercompany sales of inventory are generally denominated in the local currency of the subsidiary purchasing the inventory in order to centralize foreign currency risk
with the manufacturing subsidiary. We use an in-house bank approach to net and settle intercompany payables and receivables as well as intercompany foreign exchange
swaps and forward contracts in order to centralize the foreign exchange rate risk to the extent possible. We have entered in the past and may enter in the future into
foreign exchange derivatives including forwards, swaps and options to manage the remaining foreign exchange exposure.
For the presentation of market risks, IFRS 7 requires sensitivity analyses that show the effects of hypothetical changes of relevant risk variables on profit or loss and
shareholders' equity. Currency risks as defined by IFRS 7 arise on account of financial instruments being denominated in a currency that is not the functional currency and
being of a monetary nature; differences resulting from the translation of financial statements into the Company's presentation currency are not taken into consideration.
Relevant risk variables are generally all non-functional currencies in which QIAGEN has financial instruments.
QIAGEN is exposed to currency risks from financial derivatives. If each of the respective currency pairs for which the Company has financial derivatives in place, which
do not qualify for hedge accounting in accordance with IFRS 9, varied from the rates used for the preparation of the consolidated financial statements, this would have
had an effect on the net income of the Company. Any effect would have been almost fully off-set by corresponding valuation adjustments in the positions, which
economically had been hedged by these financial derivatives. Accordingly, the net effect of such variance in currency rates would not have been material.
If, at December\u00a031, 2022, the U.S. dollar had gained or lost 10% against all identified major currencies, the estimated effect on the fair value of the financial derivatives
would have been as follows:
generally affected by changes in the level of interest rates, principally the Euro and the U.S. dollar interest rate.
At December\u00a031, 2022, we had $730.3 million in cash and cash equivalents (2021: $879.9 million). Interest income earned on our cash investments is affected by
changes in the relative levels of market interest rates. We only invest in high-grade investment instruments. A hypothetical adverse 10% movement in market interest rates
would have impacted our financial statements by approximately $4.5 million.
Borrowings against lines of credit are at variable interest rates. We had no amounts outstanding against our lines of credit at December\u00a031, 2022 and 2021. A
hypothetical adverse 10% movement in market interest rates would not have materially impacted our financial statements.
At December\u00a031, 2022, we had $1.8 billion in current and non-current financial debt, of which $236.8 million is floating interest rate debt (2021: total $1.9 billion). A
hypothetical adverse 10% movement in market interest rates would not have materially impacted our financial statements.
",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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Liquidity risk
To date, we have funded our business primarily through internally generated funds, debt and the private and public sales of equity. Our primary use of cash has been to
support continuing operations and our investing activities including capital expenditure requirements and acquisitions. As of December\u00a031, 2022 and 2021, we had cash
and cash equivalents of $730.3 million and $879.9 million, respectively. We also had current financial assets of $687.6 million and $184.8 million, respectively. Cash
and cash equivalents are primarily held in Euros and U.S. dollars, other than those cash balances maintained in the local currency of subsidiaries to meet local working
capital needs. As of December\u00a031, 2022 and 2021, we had working capital of $1.3 billion and $447.3 million, respectively.
We have a \u20ac400.0 million syndicated ESG-linked revolving credit facility expiring with a contractual life until December 2025 of which no amounts were utilized at
December\u00a031, 2022. We have additional credit lines totaling \u20ac27.0 million with no expiration date, none of which were utilized as of December\u00a031, 2022. We also
have repayment obligations of $1.8 billion of financial debt (2021: $1.9 billion), of which $389.6 million is current as of December\u00a031, 2022.
As of December\u00a031, 2022, our future contractual cash obligations are as follows:
| | | | | | | | | | | | | | |
Contractual Obligations (in thousands) | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
License and royalty payments | | | | | | | | | | | | | | |
Total contractual cash obligations | | | | | | | | | | | | | | |
(1)Amounts include required principal, stated at current carrying values, and interest payments.
Pursuant to the purchase agreements for certain acquisitions we could be required to make additional contingent cash payments for a previous business combination based
on the achievement of certain FDA approval milestones. Potential milestone payments total $20.7 million, of which $8.9 million may be triggered by the end of 2023 and
$11.8 million by the end of 2024. Of the total milestone payments, $8.2 million is included in other current liabilities and $9.9 million is included in other non-current
liabilities in the accompanying consolidated balance sheet as of December\u00a031, 2022.
We believe that funds from operations, existing cash and cash equivalents, together with the proceeds from our public and private sales of equity, and availability of
financing facilities, will be sufficient to fund our planned operations and expansion during the coming year. However, any global economic downturn may have a greater
impact on our business than currently expected, and we may experience a decrease in the sales of our products, which could impact our ability to generate cash. If our
future cash flows from operations and other capital resources are not adequate to fund our liquidity needs, we may be required to obtain additional debt or equity
financing or to reduce or delay our capital expenditures, acquisitions or research and development projects. If we could not obtain financing on a timely basis or at
satisfactory terms, or implement timely reductions in our expenditures, our business could be adversely affected.
",
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"value": "
Credit risk
Financial instruments that potentially subject us to concentrations of credit risk are cash and cash equivalents, financial assets, and accounts receivable. We attempt to
minimize the risks related to cash and cash equivalents and financial assets by dealing with highly-rated financial institutions and investing in a broad and diverse range of
financial instruments. We have established guidelines related to credit quality and maturities of investments intended to maintain safety and liquidity. Concentration of
credit risk with respect to accounts receivable is limited due to a large and diverse customer base, which is dispersed over different geographic areas. Allowances are
maintained for potential credit losses and such losses have historically been within expected ranges. There were no significant concentrations of credit risk during the
reporting period. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.
Credit risk is managed on a Company basis, except for credit risk relating to accounts receivable balances. Each local entity is responsible for managing and analyzing
the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Further discussion of the allowance for doubtful
accounts can be found in Note 8 \"Trade Accounts Receivable.\"
",
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"value": "
26.2Use of Derivative Financial Instruments
Derivatives and Hedging
Objective and Strategy
In the ordinary course of business, we use derivative instruments, including swaps, forwards and/or options, to manage potential losses from foreign currency exposures
and interest bearing assets or liabilities. The principal objective of such derivative instruments is to minimize the risks and/or costs associated with our global financial and
operating activities. We do not utilize derivative or other financial instruments for trading or other speculative purposes. We recognize all derivatives as either assets or
liabilities on the balance sheet on a gross basis, measure those instruments at fair value and recognize the change in fair value in earnings in the period of change, unless
the derivative qualifies as an effective hedge that offsets certain exposures. We have agreed with almost all of our counterparties with whom we had entered into cross-
currency swaps, interest rate swaps or foreign exchange contracts, to enter into bilateral collateralization contracts under which we will receive or provide cash collateral,
as the case may be, for the net position with each of these counterparties. As of December\u00a031, 2022, cash collateral positions consisted of $21.8 million recorded in other
current liabilities and $21.1 million recorded in other current assets. As of December 31, 2021, we had cash collateral positions consisting of $9.2 million recorded in
other current liabilities and $11.2 million recorded in other current assets in the accompanying consolidated balance sheet.
Non-Derivative Hedging Instrument
Net Investment Hedge
We are party to a foreign currency non-derivative hedging instrument that is designated and qualifies as net investment hedge. The objective of the hedge is to protect part
of the net investment in foreign operations against adverse changes in the exchange rate between the Euro and the functional currency of the U.S. dollar. The non-
derivative hedging instrument is the German private corporate bond (2017 Schuldschein) which was issued in 2017 in the total amount of $331.1 million as described in
Note 16 \"Financial Debts.\" Of the $331.1 million, which is held in both U.S. dollars and Euros, \u20ac255.0 million was designated as the hedging instrument as of December
31, 2021 against a portion of our Euro net investments in our foreign operations. As further described in Note 16, four tranches of the 2017 Schuldschein matured and
were paid in October 2022 and two tranches of the 2017 Schuldschein matured and were paid during 2021. As a result, \u20ac109.5 million remained designated as a
hedging instrument as of December\u00a031, 2022. In July 2022, we issued an additional \u20ac370.0 million German private corporate bond (2022 Schuldschein) as described in
Note 16, and it is designated in its entirety as the hedging instrument against a portion of our euro net investments in our foreign operations. The relative changes in both
the hedged item and hedging instrument are calculated by applying the change in spot rate between two assessment dates against the respective notional amount. The
effective portion of the hedge is recorded in the cumulative translation adjustment account within other accumulated comprehensive loss. Based on the spot rate method,
the unrealized loss recorded in equity as of December\u00a031, 2022 and 2021 is $22.6 million and $2.1 million, respectively. Since we are using the debt as the hedging
instrument, which is also remeasured based on the spot rate method, there is no hedge ineffectiveness related to the net investment hedge as of December\u00a031, 2022 and
2021.
Derivatives Designated as Hedging Instruments
Net Investment Hedge
In September 2022, we entered into a one-month cross currency swap for a total notional amount \u20ac135.0\u00a0million, that matured in October 13, 2022, which qualified as
net investment hedge. The objective of the hedge was to protect the additional investments in foreign operations in September 2022 against adverse changes in the
exchange rate between the euro and the functional currency of the U.S. dollar. The relative changes in both the hedged item and derivative hedging instrument were
calculated by applying the change in spot rate between two assessment dates against the respective notional amount. The effective portion of the hedge is recorded in the
cumulative translation adjustment account within other accumulated comprehensive loss and will be reclassified to earnings upon the disposal or liquidation of the foreign
operations. In October 2022, the interest rate derivative contract expired and the unrealized gain recorded in equity was $5.8 million as of December\u00a031, 2022.
Cash Flow Hedges
As of December\u00a031, 2022 and 2021, we held derivative instruments that are designated and qualify as cash flow hedges, where the effective portion of the gain or loss
on the derivative is reported as a component of other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction
affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are
recognized in current earnings. To date, we have not recorded any hedge ineffectiveness related to any cash-flow hedges in earnings. Based on their valuation as of
December\u00a031, 2022, we expect approximately $1.2 million of derivative losses included in accumulated other comprehensive loss will be reclassified into income during
the next 12 months. The cash flows derived from derivatives are classified in the consolidated statements of cash flows in the same category as the consolidated balance
sheets account of the underlying item.
We use interest rate derivative contracts to align our portfolio of interest bearing assets and liabilities with our risk management objectives. Since 2015, we have been a
party to five cross currency interest rate swaps through 2025 for a total notional amount of \u20ac180.0 million which qualify for hedge accounting as cash flow hedges. In
September 2022, we entered into five new cross currency interest rate swaps through 2025 for a total notional amount of CHF 542.0 million which qualify for hedge
accounting as cashflow hedges. We determined that no ineffectiveness exists related to these swaps. As of December\u00a031, 2022 and 2021, interest receivables of $5.5
million and $1.4 million, respectively are recorded in other current assets in the accompanying consolidated balance sheets.
Fair Value Hedges
Until October 2022, we held derivative instruments that qualified for hedge accounting as fair value hedges. For derivative instruments that are designated and qualify as
a fair value hedge, the effective portion of the gain or loss on the derivative is reflected in earnings. This effect on earnings is offset by the change in the fair value of the
hedged item attributable to the risk being hedged that is also recorded in earnings. The cash flows derived from derivatives are classified in the consolidated statement of
cash flows in the same category as the consolidated balance sheet account of the underlying item.
We held interest rate swaps which effectively fixed the fair value of a portion of our fixed rate private placement debt and qualified for hedge accounting as fair value
hedges. These interest rate swap derivative instruments expired along with the repayment of the private placement debt in October 2022, as described in Note 16
\"Financial Debts.\" As of December\u00a031, 2021, interest receivables of $0.6 million is recorded in other current assets in the accompanying consolidated balance sheets.
There has been no ineffectiveness related to the interest rate swaps.
Derivatives Not Designated as Hedging Instruments
Call Options and Warrants
We entered into Call Options which, along with the sale of the Warrants, represent the Call Spread Overlay entered into in connection with the Cash Convertible Notes.
In these transactions, the Call Options are intended to address the equity price risk inherent in the cash conversion feature of each instrument by offsetting cash payments
in excess of the principal amount due upon any conversion of the Cash Convertible Notes. As of December 31, 2021, the 2023 Notes may be surrendered for conversion
through the close of business on March 31, 2022 as discussed in Note 16 \"Financial Debts.\" Accordingly, the related call options were classified as current as of
December 31, 2021. As of December\u00a031, 2022, the 2023 Notes and the related call options have been reclassified as current.
Aside from the initial payment of premiums for the Call Options, we will not be required to make any cash payments under the Call Options. We will, however, be entitled
to receive under the terms of the Call Options, an amount of cash generally equal to the amount by which the market price per share of our common stock exceeds the
exercise price of the Call Options during the relevant valuation period. The exercise price under the Call Options is equal to the conversion price of the Cash Convertible
Notes.
The Call Options and Warrants, for which our common stock is the underlying security, are derivative assets and liabilities, respectively, that require mark-to-market
accounting treatment. The derivatives are measured and reported at fair value on a recurring basis, within Level 2 of the fair value hierarchy. The change in fair value of
these instruments is recognized immediately in our consolidated income statements in other financial results.
The Warrants are more fully described in Note 16 \"Financial Debts.\"
Cash Convertible Notes Embedded Cash Conversion Option
The embedded cash conversion option within the Cash Convertible Notes discussed in Note 16 \"Financial Debts\" is required to be separated from the Cash Convertible
Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated income statements in other financial results until the
cash conversion option settles or expires. The embedded cash conversion option is measured and reported at fair value on a recurring basis, within Level 2 of the fair
value hierarchy.
Because the terms of the Cash Convertible Notes' embedded cash conversion option are substantially similar to those of the Call Options, discussed above, we expect the
effect on earnings from these two derivative instruments to mostly offset each other.
Foreign Currency Derivatives
As a globally active enterprise, we are subject to risks associated with fluctuations in foreign currencies in our ordinary operations. This includes foreign currency-
denominated receivables, payables, debt, and other balance sheet positions including intercompany items. We manage balance sheet exposure on a group-wide basis
using foreign exchange forward contracts, foreign exchange options and cross-currency swaps.
We are party to various foreign exchange forward, option and swap arrangements which had an aggregate notional value of $466.0 million at December\u00a031, 2022,
which expire at various dates through July 2023. At December\u00a031, 2021, these arrangements had an aggregate notional value of $1.3 billion, which expired at various
dates through December 2022. The transactions have been entered into to offset the effects from short-term balance sheet exposure to foreign currency exchange risk.
Changes in the fair value of these arrangements have been recognized in other financial results.
Fair Values of Derivative Instruments
The following table summarizes the fair value amounts of derivative instruments reported in the consolidated balance sheets as of December\u00a031, 2022 and 2021:
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
Derivative instruments designated as hedges | | | | | | | | |
Interest rate contracts - cash flow hedge (1) | | | | | | | | |
Interest rate contracts - fair value hedge (1) | | | | | | | | |
Total derivative instruments designated as hedges | | | | | | | | |
| | | | | | | | |
Undesignated derivative instruments | | | | | | | | |
| | | | | | | | |
Foreign exchange forwards and options | | | | | | | | |
Total undesignated derivative instruments | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
Derivative instruments designated as hedges | | | | | | | | |
Interest rate contracts - cash flow hedge (1) | | | | | | | | |
Interest rate contracts - fair value hedge (1) | | | | | | | | |
Total derivative instruments designated as hedges | | | | | | | | |
| | | | | | | | |
Undesignated derivative instruments | | | | | | | | |
| | | | | | | | |
Warrants and embedded conversion option | | | | | | | | |
Foreign exchange forwards and options | | | | | | | | |
Total undesignated derivative instruments | | | | | | | | |
Total derivative liabilities | | | | | | | | |
(1)The fair value amounts for the interest rate contracts do not include accrued interest.
Gains and Losses on Derivative Instruments
The following table summarize the classification and gains and losses on derivative instruments for the years ended December\u00a031, 2022 and 2021:
| | | | |
| | | | |
| | | | |
Total amounts presented in the Consolidated Income Statements in which the effects of cash flow and fair value hedges are recorded | | | | |
| | | | |
Gains (Losses) on Derivatives in Cash Flow Hedges | | | | |
| | | | |
Amount of (loss) gain reclassified from accumulated other comprehensive income | | | | |
Amounts excluded from effectiveness testing | | | | |
| | | | |
Gains (Losses) on Derivatives in Fair Value Hedges | | | | |
| | | | |
| | | | |
Derivatives designated as hedging instruments | | | | |
| | | | |
Gains (Losses) Derivatives Not Designated as Hedging Instruments | | | | |
| | | | |
Cash convertible notes embedded cash conversion option | | | | |
Warrants and embedded conversion option | | | | |
Foreign exchange contracts | | | | |
| | | | |
| | | | |
",
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27. Capital Management
The primary objectives of the Group's capital management are to safeguard the Group's ability to continue as a going concern and to ensure financial flexibility to execute
the Group's strategic growth targets. We regularly review our capital structure to ensure a low cost of capital to enhance shareholder value. The Group's overall strategy
remains unchanged from 2021 and we are not subject to any externally imposed capital requirements. All common shares issued are fully paid.
In July and August 2022, we completed a German private placement bond (2022 Schuldschein), which was issued in various tranches totaling \u20ac370.0 million ($371.5
million) that have maturities through 2032 as described more fully in Note 16 \"Financial Debts.\" The interest rate is linked to our ESG performance. As of December\u00a031,
2022, a total of $393.5 million is outstanding.
In 2022, we repaid $480.0 million of long-term debt including $327.0 million for the remaining U.S. Private Placement and $153.0 million for the four tranches of
German Private Placement (2017 Schuldschein) that matured in October 2022.
In 2021, we repaid $41.1\u00a0million for two tranches of the German Private Placement bond (Schuldschein) that matured and the remaining $0.2\u00a0million of 2021 Notes was
repaid at the original maturity on March 19, 2021. Both discussed further in Note 16 \"Financial Debts.\"
An important indicator of capital management efforts is the ratio of shareholders' equity compared to total assets as shown in the consolidated statement of financial
position:
| | | | |
(in thousands, except of ratio) | | | | |
Shareholders' equity attributable to equity holders of the parent | | | | |
| | | | |
Shareholders' equity ratio in % | | | | |
Total financial debt consists of convertible notes, cash convertible notes and private placements as discussed in Note 16 \"Financial Debts.\" The changes in financial debts
reconciled to the cash flows arising from financing activities as follows:
Reconciliation of Liabilities Arising from Financing Activities
Total financial debt consists of cash convertible notes and private placements as discussed in Note 16. The changes in financial debts reconciled to the cash flows arising
from financing activities as follows:
| | | | | | | | | | |
| | | | | | Amortization of debt discount and issuance costs (1) | | Foreign currency and other(2) | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
German Private Placement (Schuldschein) | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Total liabilities from financing activities | | | | | | | | | | |
December\u00a031, 2022, other than certain subsidiaries that did not in the aggregate constitute a significant
subsidiary.
| | | | | | |
| | Jurisdiction of\u00a0Incorporation | | | | |
Amnisure International LLC | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Life Biotech Partners B.V. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
QIAGEN Australia Holding Pty. Ltd. | | | | | | |
| | | | | | |
| | | | | | |
QIAGEN Business Management MEA Ltd. | | | | | | |
QIAGEN Business Services (Manila), Inc. | | | | | | |
QIAGEN Business Services S.p.z.o.o. | | | | | | |
QIAGEN China (Shanghai) Co. Ltd. | | | | | | |
Audit fees consist of fees and expenses billed for the annual audit and quarterly review of our consolidated financial statements. They also include fees billed for other
audit services, which are those services that only the statutory auditor can provide.
Audit-related fees consist of fees and expenses billed for assurance and related services that are related to the performance of the audit or review of our financial
statements and include consultations concerning financial accounting and reporting standards and review of the opening balance sheets of newly acquired companies.
Tax fees include fees and expenses billed for tax compliance services, including assistance on the preparation of tax returns and claims for refunds and tax consultations,
such as assistance and representation in connection with tax audits and appeals.
All other fees include various fees and expenses billed for services, such as transaction due diligence, as approved by the Audit Committee.",
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30. Subsequent Events
Events that occurred after the balance sheet date that provide no information on the actual situation at the balance sheet date are not recognized in the financial
statements. When those events are relevant for the economic decisions of users of the financial statements, the nature and the estimated financial effects of those events are
disclosed in the financial statements.
On January 3, 2023, we acquired Verogen, Inc., a leader in the use of next-generation sequencing (NGS) technologies to drive the future of human identification (HID)
and forensic investigation. Verogen, a privately held company founded in 2017 and based in San Diego, California, supports the global human identification community
with NGS tools and professional services to help resolve criminal and missing-persons cases. The cash consideration was $150.0\u00a0million, subject to adjustment. The
acquisition is not significant to the overall consolidated financial statements.
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
}
}
}