(~~1) Working capital is current assets less current liabilities.~~


(1)	Working capital is current assets less current liabilities.

Risk Factors

Risk Management:

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

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

Identified risks are subdivided into three types:

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

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

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

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

Our corporate governance structure is based on a strong framework that outlines the responsibilities of our Managing and Supervisory Boards (discussed in more detail in Item 10 of this Annual Report) and the function of the Audit Committee of the Supervisory Board (discussed in more detail in Item 6 of this Annual Report). We maintain adequate internal controls over financial reporting to ensure the integrity of financial reporting, which is described further in Item 15 of this Annual Report. Additionally, we have a Compliance Committee that consists of senior executives from various functional areas who are responsible for ensuring compliance with legal and regulatory requirements, as well as overseeing the communication of corporate policies, including our Code of Ethics as described further in Item 16B of this Annual Report.



Risk Types
Base Business Risk	• Identification and monitoring of competitive business threats • Monitoring complexity of product portfolio • Monitoring dependence on key customers for single product groups • Reviewing dependence on individual production sites or suppliers • Evaluating purchasing initiatives, price controls and changes to reimbursements • Monitoring production risks, including contamination prevention, high-quality product assurance • Ensuring ability to defend against intellectual property infringements and maintain competitive advantage after expiration
Business Growth Risk	• Managing development and success of key R&D projects • Managing successful integration of acquisitions to achieve anticipated benefits
Underlying Business Risk	• Evaluating financial risks, including economic risks and currency rate fluctuations • Monitoring financial reporting risks, including multi-jurisdiction tax compliance • Reviewing possible asset impairment events • Assessing compliance and legal risks, including safety in operations and environmental hazard risks, compliance with various regulatory bodies and pending product approvals • Monitoring risks of FCPA (Foreign Corrupt Practices Act) or antitrust concerns arising from a network of subsidiaries and distributors in foreign countries

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

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

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

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

availability, quality and price relative to ~~competitive~~existing competitor products;

the timing of introduction of the new product relative to competitive products;

opinions of the new product’s utility;

citation of the new product in published research;

regulatory trends and approvals; and

general trends in life sciences research, applied markets and molecular diagnostics.

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

Our continued growth depends significantly on the success of new products in the molecular testing markets we serve. Important new product programs underway include our modular medium-throughput QIAsymphony automation platform, ~~our GeneReader NGS System~~QIAstat-Dx system for ~~next-generation sequencing (NGS),~~one-step, fully integrated molecular analysis of hard-to-diagnose syndromes, the high-throughput

NeuMoDx 288 and mid-throughput NeuMoDx 96 fully integrated PCR automation systems, sample and assay technologies designed either for use either with QIAGEN instruments or for "universal" ~~use on other platforms,~~automation systems and instruments, and bioinformatics solutions to analyze and interpret complex genomic data.

In addition, we are now developing next-generation systems for digital PCR, an emerging analytical technique in the life sciences, targeting a 2020 launch with fully-integrated solutions that simplify workflows and offer other advantages.

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

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

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

Our business has grown in recent years, with total net sales increasing to ~~$1.42~~$1.53 billion in ~~2017~~2019 from ~~$1.30~~$1.28 billion in ~~2013.~~2015. We have made a series of acquisitions in recent years, including the acquisitions of N-of-One in January 2019, STAT-Dx Life, S.L. in 2018, and OmicSoft Corporation in 2017 ~~Exiqon A/S in 2016, MO BIO Laboratories in 2015, Enzymatics~~to complement internal research and ~~BIOBASE in 2014, and Ingenuity and CLC bio in 2013.~~development activities. We intend to identify and acquire other businesses in the future ~~including the acquisition of STAT-Dx expected in 2018,~~ that support our strategy to build on our global leadership position in Sample to Insight ~~solutions.~~solutions focused on molecular testing. The successful integration of acquired businesses requires a significant effort and expense across all operational areas.

We ~~have also made significant~~continue to make investments to expand our existing business operations. We completed an expansion project in Germany in early 2012 and another at our facility in Germantown, Maryland, for research, production and administrative space in 2013. We completed two smaller-scale building projects in 2015. These projects ~~increased~~increase our fixed costs, resulting in higher operational costs in the short term that will negatively impact our gross profit and operating income until we more fully utilize the additional capacity of these facilities. In addition, we have invested in establishing and expanding shared service centers in Poland and the Philippines, opening new commercial operations in emerging markets to expand our geographic footprint, and implementing digitization of business processes to increase ~~efficiency and improve customer experiences.~~sales growth while also enhancing operational efficiencies. The expansion of our business and the addition of new personnel may place a strain on our management and operational systems. As we continue to upgrade our operating and financial systems, ~~and~~as well as expand the geographic presence of our operations, we intend to continue to assess the need ~~for reallocation of~~to reallocate existing resources or ~~the hiring of~~hire new employees, as well as increased responsibilities for both existing and new management personnel.

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

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

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

assimilation of new products, technologies, operations, sites and personnel;

integration and retention of fundamental personnel and technical expertise;

application for and achievement of regulatory approvals or other clearances;

diversion of resources from our existing products, business and technologies;

generation of ~~sales to offset associated acquisition costs;~~sales;

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

exposure to pre-existing cyber security risks or compromise of acquired entities;

maintenance of relationships with employees, customers and ~~customers~~suppliers, and integration of new management personnel;

issuance of dilutive equity securities;

incurrence or assumption of debt and contingent liabilities;

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

exposure to liabilities of and claims against acquired ~~entities.~~entities or personnel, including patent litigation.

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

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

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

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

Our results of operations could also be negatively impacted by any governmental actions or inaction resulting in automatic government spending cuts (sequestration) that may take effect, ~~(as~~particularly in terms of federal government funding in the ~~U.S. in 2013).~~United States. These conditions may add uncertainty to the timing and budget for investment decisions by our customers, particularly researchers, universities, government laboratories and private foundations whose funding is dependent upon grants from government agencies, such as the U.S. National Institutes of Health (NIH) and similar bodies.

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

severely limited access to financing over an extended period of time, which may affect our ability to fund our growth strategy and could result in delays to capital expenditures, acquisitions or research and development projects;

failures of currently solvent financial institutions, which may cause losses from our short-term cash investments or our hedging transactions due to a counterparty’s inability to fulfill its payment obligations;

inability to refinance existing debt at competitive rates, reasonable terms or sufficient amounts; and

increased volatility or adverse movements in foreign currency exchange rates.

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

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

Further, the ability of many of our customers to successfully market their products depends in part on the extent to which reimbursement for the costs of these products is available from governmental health administrations, private health insurers and other organizations. Governmental and other third-party payors are increasingly seeking to contain healthcare costs and to reduce the price of medical products and services. For example, in 2010, the Patient Protection and Affordable Care Act, or ACA, was enacted with the goal of expanding coverage, increasing quality of care and reducing costs through payment innovation, among other things. ~~Both~~With evolving political realities in the United States, including divergent efforts by the Trump Administration and members of Congress, ~~and President Trump have expressed their intention to repeal or repeal and replace the ACA, and as a result~~ certain sections of the ACA have not been fully implemented ~~or effectively repealed. The uncertainty~~and the direction of healthcare policy is unpredictable. Uncertainty around the future of the ACA, and in particular the impact to reimbursement

levels, may lead to uncertainty or delay in the purchasing decisions of our customers, which may in turn negatively impact our product sales. ~~As of January 1, 2018, in~~In accordance with the Protecting Access to Medicare Act of 2014 (PAMA), the Centers for Medicare & Medicaid Services ~~began calculating~~calculate Medicare reimbursement rates for certain clinical diagnostic tests using weighted median private payor rates, which are based on rate information reported by applicable laboratories. This new rate methodology means the lower reimbursement rates previously experienced in the field of molecular pathology testing now extends to additional

diagnostic testing codes on the Clinical Laboratory Fee ~~Schedule.~~Schedule (CLFS). If there are not adequate reimbursement levels, our business and results of operations could be adversely affected.

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

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

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

Approximately ~~23%~~25% of our sales are generated from demand for our products used ~~in the Academia customer class by researchers~~ at universities, government laboratories and private foundations, and whose funding is dependent upon grants from government agencies, such as the ~~NIH.~~NIH (National Institutes of Health) in the United States. Although the level of research funding has been increasing in recent years, we cannot assure you that this trend will continue given federal and state budget constraints. Government funding of research and development is subject to the political process, which is inherently unpredictable. Future sales may be adversely affected if our customers delay purchases as a result of uncertainties regarding the approval of government or industrial budget proposals. Also, government proposals to reduce or eliminate budgetary deficits have sometimes included reduced allocations to the NIH and government agencies in other countries that fund life sciences research and development activities. A reduction in government funding for the NIH or government research agencies in other countries could have a serious adverse impact on our results of operations.

Competition could reduce our sales.

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

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

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

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

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

We and our customers operate in a highly regulated environment characterized by ~~continuous~~frequent changes in the governing regulatory ~~framework, particularly for product approvals.~~framework. Genetic research activities and products commonly referred to as “genetically engineered” (such as certain food and therapeutic products) are subject to extensive governmental regulation in most developed countries, especially in the major markets for pharmaceutical and diagnostic products such as the European Union, the U.S., China and Japan. In recent years, several highly publicized scientific events ~~(most notably~~(notably in genomic research, gene editing and ~~“cloning”)~~cloning) have prompted intense public debates on the ethical, philosophical and religious implications of an unlimited expansion in

genetic research and the use of products emerging from this research. As a result of this debate, some key countries may increase ~~existing~~or establish regulatory barriers, which could adversely affect demand for our products and prevent us from fulfilling our growth expectations. Furthermore, there can be no assurance that any future changes ofin applicable

regulations will not require further expenditures or an alteration, suspension or liquidation of our operations in certain areas, or even in their entirety.

Changes in the existing regulations or adoption of new requirements or policies could adversely affect our ability to sell our approved or cleared products or to seek approvals for new products in other countries around the world. Sales of certain products now in development may be dependent upon us successfully conducting pre-clinical studies, clinical trials and other tasks required to gain regulatory ~~approvals. These trials could be subject to extensive regulation by governmental authorities~~approvals and meet other requirements from the FDA in the U.S., ~~particularly the FDA,~~ and regulatory agencies in other countries. ~~These trials involve substantial uncertainties and could impact customer demand for~~If we are not able to meet the applicable requirements, we will not be able to commercialize our ~~products.~~

In addition, certain products, especially those intended for use in in vitro diagnostic applications, require regulatory approvals in various countries. For example, since the European Union Directive 98/79/EC on in vitro diagnostic medical devices (EU-IvD-D) went into effect in 2003, all products and kits used for in vitro diagnostic applications must be compliant with this directive. In addition to high-risk products such as HIV testing systems (list A of Annex II of the directive) or blood glucose testing systems (list B of Annex II of the directive), nucleic acid purification products,tests, which are used in diagnostic workflows, are affected by this regulatory framework. The major goals of this directive are to standardize diagnostic procedures within the European Union, to increase reliability of diagnostic analysis and to enhance patient safety. In addition, new Medical Device Regulations and In Vitro Diagnostic Regulations, part of which may go intowill have a material adverse effect as early as 2018, will make major changes in IVD regulation for all medical devices and in vitro diagnostics. Compliance with these regulations may be expensive and time-consuming. The new IVD regulation introduces, among other things, a new risk classification system and requirements for conformity assessments. If we fail to obtain any required clearances, approvals, or certifications, it could significantly damageon our ~~business in these markets.~~business.

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

Each medical device that we wish to distribute commercially in the U.S. will likely require us to seek either 510(k) clearance or approval of a pre-market approval application (PMA) from the FDA prior to marketing the device for ~~in-vitro~~ diagnostic use. Clinical trials related to our regulatory submissions may take years to complete and represent a significant expense. The 510(k) clearance pathway usually takes from three to 12 months, but can take longer. The PMA pathway is more costly, lengthy and uncertain, and can take from one to three years, or longer. For example, it took more than four years to receive pre-market approval from the FDA for our HPV test product for use as a test for the presence of HPV in women with equivocal Pap test results and pre-market approval for the use of our HPV test as a primary adjunctive cervical cancer screening test to be performed in combination with the Pap test for women age 30 and older. The uncertain time period required for regulatory review increases our costs to develop new products and increases the risk that we will not succeed in introducing or selling new products in the U.S.

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

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

Further, the FDA has publicly announced its intention to regulate certain LDTs in a phased-in approach, but draft guidance that was published a couple of years ago was withdrawn at the end of the Obama administration and replaced by an informal nonenforceable discussion paper reflecting some of the feedback that it received on LDT regulation. LDTs represent many of the molecular tests currently in use in terms of volume, and our automation systems - particularly the QIAsymphony platform - are designed to accommodate the automation and validation of these tests. Moreover, laboratories creating LDTs may use some of our materials in their tests. We do not promote these products for clinical diagnostic use, but if the FDA were to stop the use

of LDTs or significantly limit their area of application, sales of some of our products in the U.S. could be adversely affected. The flexibility to handle LDTs is an advantage for our instruments, particularly the QIAsymphony automation system. On the consumables side, however, LDTs can at times create competition to our own commercially approved tests. We are pursuing a strategy of developing new content for our platforms partly by seeking regulatory approvals for new assays that incorporates approvals for these tests to run on QIAGEN instruments. We believe standardized tests that pass regulatory scrutiny and are clinically validated are highly attractive to reference laboratories and healthcare providers in our Molecular Diagnostics customer class, and also to customers in Pharma and Academia who rely on molecular assays to research and develop new products. At this point, the ultimate impact of potential new FDA policies on LDTs is uncertain.

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

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

~~Changes in the interpretation and application of the 2017 Tax Cuts and Jobs Act could materially affect our tax obligations and effective tax rate.~~

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (H.R.1) (the “2017 Tax Act”). The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact us, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% effective as of January 1, 2018 and a new net interest expense deduction limitation, which limits the deduction of net interest expense to 30% of the taxpayer’s adjusted taxable income (ATI). The 2017 Tax Act also provides the acceleration of depreciation for certain assets placed into service after September 27, 2017 as well as prospective changes including repeal of the domestic manufacturing deduction beginning in 2018 and capitalization of research and development expenditures beginning in 2022. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, ~~Income Tax Accounting Implications of the Tax Cuts and Jobs Act~~ (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. For those specific income tax effects of the 2017 Tax Act for which the accounting under ASC Topic 740 is incomplete, a reasonable estimate was determined. We have recognized the provisional tax impacts related to the interest expense deduction limitation and the revaluation of deferred tax assets and liabilities and included these amounts in our consolidated financial statements for the year ended December 31, 2017 as discussed in Note 16 ~~Income Taxes~~ in the Notes to the Consolidated Financial Statements. The ultimate impact may differ from these provisional amounts due to additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take because of the 2017 Tax Act, which could materially affect our tax obligations and effective tax rate.

We are subject to risks associated with patent litigation.

The biotechnology industry has been characterized by extensive litigation regarding patents and other intellectual property rights, particularly since industry competitors gravitate around common technology platforms. We are aware that patents have been applied for and/or issued to third parties claiming technologies for ~~the~~ sample and assay technologies that are closely related to those we use. From time to time, we receive inquiries requesting confirmation that we do not infringe patents of third parties. We endeavor to follow developments in this field, and we do not believe that our technologies or products infringe any proprietary rights of third parties. However, there can be no assurance that third parties will not challenge our activities ~~and,~~or, if so challenged, that we will prevail. In addition, the patent and proprietary rights of others could require that we alter our products or processes, pay licensing fees or cease certain activities, and there can be no assurance that we will be able to license any technologies that we may require on acceptable terms. In addition, litigation, including proceedings that may be declared by the U.S. Patent and Trademark Office or the International Trade Commission, may be necessary to respond to any assertions of infringement, enforce our patent rights and/or determine the scope and validity of our proprietary rights or those of third parties. Litigation, or threatened litigation, could involve substantial cost, and there can be no assurance that we would prevail in any proceedings.

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

Our long-term business strategy involves entering into strategic alliances as well as marketing and distribution arrangements with academic, corporate and other partners relating to the development, commercialization, marketing and distribution of

certain of our existing and potential products. In 2017, we entered a new joint venture with Sichuan Maccura Biotechnology Co., Ltd. (Maccura) for the distribution of our GeneReader NGS System in China and are preparing for a new partnership with a Chinese company in 2018 that will take over the research and development, commercial distribution and infrastructure of the HPV test franchise in China. We may be unable to continue to negotiate these collaborative arrangements on acceptable terms, and these relationships also may not be scientifically or commercially successful. In addition, we may be unable to maintain these relationships, and our collaborative partners may pursue or develop competing products or technologies, either on their own or in collaboration with others.

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

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

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

Our top seven emerging markets are Brazil, Russia, India, China, South Korea, Mexico and Turkey, which together accounted for approximately 16% of total sales in ~~2017, and we~~2019. We expect to continue to focus on expanding our business in these or other fast-growing ~~markets.~~markets, including those in the Middle East and Asia. In addition to the currency and ~~international operation~~operating risks described above, our international operations are subject to a variety of risks that include those arising out of the economy, political outlook, ~~and~~ language and cultural barriers in countries where we have operations or do business. In many of these emerging markets, we may be faced with several risks that are more significant than in other countries in which we have a history of doing business. These risks include economies that may be dependent on only a few products and are therefore subject to significant fluctuations, weak legal systems which may affect our ability to enforce contractual rights, exchange controls, unstable governments, and privatization or other government actions affecting the flow of goods and currency. In conducting our business, we move products from one country to another and may provide services in one country from a subsidiary located in another country. Accordingly, we are vulnerable to abrupt changes in customs and tax regimes that could have significant negative impacts on our results of operations.

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

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

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

We rely heavily on communications and information systems to conduct our business. In the ordinary course of business, we collect and store sensitive data, including our own intellectual property and other proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information of our customers and employees, in our data centers and on our networks. Our operations rely on the secure processing, storage and transmission of confidential and other information on our computer systems and networks. We are transforming to a digital, cloud-leveraging organization, which places our assets, customer data, and personally identifiable data at a higher risk than in previous years. We have made significant investments to ensure our employees are aware of cyber security risks facing our company and how to prevent data ~~breaches, including but not limited to, mandatory yearly trainings that are continually updated.~~breaches. We have modernized our cyber security tools, and are continually modernizing our cyber security processes, in an attempt to keep pace with evolving cyber security risks. In spite of our efforts, we are unable to completely eliminate these risks and occasionally experience minor cyber security incidents. External phishing emails (occurring outside of our computer

services) isare a growing threat that our customers

are facing. These emails could lead to the disclosing of intellectual property or personally identifiable information, which could lead to financial harm ~~and cause~~or reputational damage. While our cyber security team works diligently with our employees around the world, as well as with our customers, to mitigate these threats by helping to identify and analyze phishing emails, we cannot guarantee that sensitive data will not be lost or stolen.

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

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

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

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

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

Our business involves operations around the world. Our consumable manufacturing facilities are located in Germany, ~~China~~the U.S. and ~~the U.S.~~China. We have established sales subsidiaries in numerous countries and our products are sold through independent distributors serving more than 40 additional countries. Our global footprint exposes us to unforeseen events, such as the January 2020 eruption of the Taal volcano in the Philippines or the December 2019 outbreak of novel coronavirus (COVID-19) in China. Our facilities may be harmed by unforeseen events, and in the event that we or our customers are affected by a disaster, we may experience delays or reductions in sales or production, or increased costs, or may be required to identify alternate suppliers and/or rely on third-party manufacturers.

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

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

Damage to our property due to unforeseen events and the disruption of our business from casualties may be covered by insurance, but this insurance may not be sufficient to cover all of our potential losses, and such insurance may not continue to

be available to us on acceptable terms, or at all. In addition, we may incur incremental costs following an unforeseen event, which will reduce profits and adversely affect our results of operations.

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

We buy materials to create our products from a number of suppliers and are not dependent on any one supplier or group of suppliers for our business as a whole. However, key components of certain products, including certain instrumentation and

chemicals, are available only from a single source. If supplies from these vendors are delayed or interrupted for any reason, we may not be able to obtain these materials timely or in sufficient quantities or qualities ~~in order~~ to produce certain products, and this could have an adverse impact on our results of operations.

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

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

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

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

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

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

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

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

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

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

make it difficult for us to obtain ~~any~~ financing in the future necessary for working capital, capital expenditures, debt service requirements or other purposes;

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and

make us more vulnerable in the event of a downturn in our business.

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

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

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

marketing, sales and customer support efforts;

research and development activities;

expansion of our facilities;

consummation of possible future acquisitions of technologies, products or businesses;

demand for our products and services;

repayment or refinancing of debt; and

payments in connection with our hedging ~~activities.~~activities and/or taxes.

We currently anticipate that our short-term capital requirements will be satisfied by cash flow from our ~~operations.~~operations and/or cash on hand. As of December 31, ~~2017,~~2019, we had outstanding long-term debt of ~~approximately $1.8~~$1.7 billion, of which ~~no amount~~$285.2 million was current. ~~Furthermore, as of December 31, 2017, we had capital lease obligations, including the current portion, of $1.4 million, that expire in various years through 2020.~~ We may need to refinance ~~all or part of~~ these ~~liabilities before or at their contractual maturities.~~liabilities.

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

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

We will settle any conversions of the Cash Convertible Notes described under the heading “Other Factors Affecting Liquidity and Capital Resources” elsewhere in this report, entirely in cash. Accordingly, the conversion option that is part of the Cash Convertible Notes will be accounted for as a derivative pursuant to accounting standards relating to derivative instruments and hedging activities. Refer to Note ~~13, “Derivatives~~14 "Derivatives and ~~Hedging”~~Hedging" and Note 1516 "Lines of Credit and ~~Debt,"~~Debt", of the Notes to Consolidated Financial Statements. In general, this resulted in an initial valuation of the conversion option separate from the debt component of the Cash Convertible Notes, resulting in an original issue discount. The original issue discount will be accreted to interest expense over the term of the Cash Convertible Notes, which will result in an effective interest rate reported in our financial statements significantly in excess of the stated coupon rates of the Cash Convertible Notes. This accounting treatment will reduce our earnings. For each financial statement period after the issuance of the Cash Convertible Notes, a gain (or loss) will be reported in our financial statements to the extent the valuation of the conversion option changes from the previous period. The Call Options issued in connection with the Cash Convertible Notes will also be accounted for as derivative instruments, substantially offsetting the gain (or loss) associated with changes to the valuation of the conversion option. This may result in increased volatility to our results of operations.

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

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

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

At December 31, ~~2017,~~2019, our consolidated balance sheet reflected ~~approximately $2.0~~$2.1 billion of goodwill and ~~approximately $499.3~~$632.4 million of intangible assets. Goodwill is recorded when the purchase price of a business exceeds the fair value of the tangible and separately measurable intangible net assets. U.S. generally accepted accounting principles (U.S. GAAP) ~~requires~~require us to test goodwill for impairment on an annual basis or when events or circumstances occur indicating that goodwill might be impaired. Long-lived assets, such as intangible assets with finite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment review often cannot be done at the level of the individual asset and it must instead be applied to a group of assets. For the purpose of our annual goodwill impairment testing based on the current circumstances of how we manage our business, this group of assets is the Company as a whole. If we determine that any of our goodwill or intangible assets were impaired, we will be required to take an immediate charge to earnings and our results of operations could be adversely affected.

Our strategic equity investments may result in losses.

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

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

Doing business internationally creates certain risks.

Our business involves operations in several countries outside of the U.S. Our consumable manufacturing facilities are located in Germany, China and the U.S. We source raw materials and subcomponents to manufacture our products from different countries. We have established sales subsidiaries in numerous countries including the U.S., Germany, Japan, the United Kingdom, France, Switzerland, Australia, Canada, the Netherlands, Sweden, Italy, Hong Kong, Singapore, Turkey, Thailand, South Korea, Taiwan, Malaysia, China, Spain, Brazil, Mexico, South Africa and India.many countries. In addition, our products are sold through independent distributors serving more than 40 other countries. Conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. We have invested heavily in computerized information systems in order to manage more efficiently the widely dispersed components of our operations. If we fail to coordinate and manage these activities effectively, our business and results of operations will be adversely affected.

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

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

Our business in countries with a history of corruption and transactions with foreign governments ~~increase~~increases the risks associated with our international activities. Based on our international operations, we are subject to the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by business entities for the purpose of obtaining or retaining business. We have operations, agreements with third parties and ~~make~~ sales in countries known to experience corruption. Further international expansion may involve increased exposure to such practices. Our activities in these countries and ~~in all countries as well,~~others create risks of unauthorized payments or offers of payments, non-compliance with laws, or other unethical behavior by any of our employees, consultants, sales agents or distributors, that could be in violation of various laws, including the FCPA, even though these parties are not always subject to our control. ItOur policy is ~~our policy~~ to implement safeguards to discourage these or other unethical practices by our employees and distributors including online and in-person employee trainings, periodic internal audits and standard reviews of our distributors. However, our existing safeguards and any future improvements may not prove to be effective, and our employees, consultants, sales agents or distributors may engage in conduct for which we might be held responsible. Violations of the FCPA and other laws may result in criminal or civil sanctions, which could be severe, and we may be subject to other liabilities, which could negatively affect our business, results of operations and financial condition.

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

Our success depends to a large extent on our ability to develop proprietary products and technologies and to establish and protect our patent and trademark rights in these products and technologies. As of December 31, ~~2017,~~2019, we owned ~~362~~352 issued patents in the United States, ~~279~~275 issued patents in Germany and ~~1,825~~1,700 issued patents in other major industrialized countries. In addition, at December 31, ~~2017,~~2019, we had ~~776~~558 pending patent applications, and we intend to file applications for additional patents as our products and technologies are developed. The patent positions of technology-based companies involve complex legal and factual questions and may be uncertain, and the laws governing the scope of patent coverage and the periods of enforceability of patent protection are subject to change. In addition, patent applications in the United States are maintained in secrecy until patents issue, and publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months. Therefore, no assurance can be given that patents will issue from any patent applications that we

own or license, or if patents do issue, that the claims allowed will be sufficiently broad to protect our technology. In addition, no assurance can be given that any issued patents that we own or license will not be challenged, invalidated or circumvented, or that the rights granted thereunder will provide us competitive advantages. Further, as issued patents expire, we may lose some competitive advantage as others develop competing products and as a result, we may lose revenue.

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

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

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

Our business exposes us to potential product liability.

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

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

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

Our operating results may vary significantly from quarter to quarter, and also ~~from~~ year to year, since they are dependent upon a broad range of factors that include demand for our products, the level and timing of customer research budgets and commercialization efforts, the timing of government funding budgets of our customers, the timing of our research and development activities and related regulatory approvals, the impact of sales and marketing expenses, ~~the impact of~~ restructuring activities, ~~the~~ introduction of new products by us or our competitors, competitive market conditions, exchange rate fluctuations and general economic conditions. Our expense levels are based in part on our expectations as to future sales trends. As a result, sales and earnings may vary significantly from quarter to quarter or from year to year, and actual sales and earnings results in any one period will not necessarily be indicative of results to be anticipated in subsequent periods. Our results may also fail to meet or exceed the expectations of securities analysts or investors, which could cause a decline in the market price of our Common Shares.

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

QIAGEN N.V. is incorporated under Dutch law as a public limited liability company (naamloze vennootschap), and is organized as a holding company. Currently, the material assets are the outstanding shares of the QIAGEN subsidiaries,

intercompany receivables and other financial assets such as cash, short-term investments and ~~short-term investments.~~derivative instruments. As a result, QIAGEN N.V. is dependent upon payments, dividends and distributions from the subsidiaries for funds to pay operating and other expenses as well as to pay future cash dividends or distributions, if any, to holders of our Common Shares. Dividends or distributions by subsidiaries in a currency other than the U.S. dollar may result in a loss upon a subsequent conversion into U.S. dollars.

Our Common Shares may have a volatile public trading price.

The market price of our Common Shares since our initial public offering in September 1996 has increased significantly and been highly volatile. Beginning January 10, 2018, our shares are listed on the New York Stock Exchange (NYSE). Before that, our shares were listed on the NASDAQ through January 9, 2018. In the last two years, the price of our Common Shares has ranged from a high of ~~$36.34~~$43.16 to a low of ~~$19.94 on NASDAQ, and~~$25.04. On the Frankfurt Stock Exchange our Common Shares have ranged from a high of ~~€31.52~~€39.19 to a low of ~~€17.76 on~~€22.54 during the ~~Frankfurt Stock Exchange.~~last two years. In addition to overall stock market fluctuations, factors that may have a significant impact on the price of our Common Shares include:

announcements of technological innovations or the introduction of new products by us or our competitors;

developments in our relationships with collaborative partners;

quarterly variations in our operating results or those of our peer companies;

changes in government regulations, tax laws or patent laws;

developments in patent or other intellectual property rights;

developments in government spending budgets for life sciences-related research;

general market conditions relating to the diagnostics, applied testing, pharmaceutical and biotechnology industries; and

impact from foreign exchange rates.

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

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

InQIAGEN has not paid an annual dividend since its inception, nor intends to implement one at this time. At the same time, in January 2017 we completed a synthetic share repurchase that combined a direct capital repayment with a reverse stock split and in early 2018 we announced plans to return up to an additional $200.0 million through open-market purchases. We do not anticipate paying any cash dividends on our Common Shares for the foreseeable future, and until the January 2017 distribution in connection with a synthetic share repurchase, we have not paid cash dividends since our inception.split. Although we do not anticipate paying any cash dividends on a regular basis, the distribution of any cash dividends through another synthetic share repurchase in a currency other than the U.S. dollar will be subject to the risk of foreign currency transaction losses. Investors should not invest in our Common Shares if they are seeking dividend income; the only return that may be realized through investing in our Common Shares would be through an appreciation in the share price.

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

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

The purpose of our share repurchases has been to hold the shares in treasury in order to satisfy obligations from exchangeable debt instruments, warrants and/or employee share-based remuneration plans and thus to reduce dilution to existing holders of our Common Shares. In 2019, we began net share withholding on the vesting of stock-based awards and as a result, fewer shares are issued than the number of awards outstanding. We may decide not to continue such programs in the future, ~~the~~our covenants ~~we have~~ with ~~our~~ lenders may limit our ability to use available cash to do so, ~~and~~or the market price of our Common Shares may make such repurchases less desirable. In any of these cases, holders of our Common Shares may suffer dilution from conversion of our indebtedness or issuance of shares pursuant to employee remuneration plans that would otherwise be at least partially offset by repurchased shares.

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

Any future sale or issuance of a substantial number of our Common Shares in the public market, or any perception that a sale may occur, could adversely affect the market price of our Common Shares. Under Dutch law, a company can issue shares up to

its authorized share capital provided for in its Articles of Association. Pursuant to our Articles of Association, our authorized share capital amounts to EUR 9.0 million, which is divided into 410.0 million common shares, 40.0 million financing preference shares and 450.0 million preference shares, with all shares having a EUR 0.01 par value. As of December 31, ~~2017,~~2019, a total of approximately ~~226.6~~227.8 million Common Shares were outstanding along with approximately ~~9.3~~6.0 million additional shares reserved for issuance upon exercise or release of outstanding stock options and awards, of which ~~1.1~~0.8 million were vested. A total of approximately ~~22.0~~15.7 million Common Shares are reserved and available for issuances under our stock plans as of December 31, ~~2017,~~2019, including the shares subject to outstanding stock options and awards. The majority of our outstanding Common Shares may be sold without restriction, except shares held by our affiliates, which are subject to certain limitations on resale. Additionally, the Warrants issued in connection with the Cash Convertible Notes Call Spread Overlays cover an aggregate of ~~35.4~~31.1 million shares of our common stock (subject to ~~anti-dilution~~customary adjustments under certain circumstances).

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

We may be classified as a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes if certain tests are met. Our treatment as a PFIC could result in a reduction in the after-tax return to holders of Common Shares and would likely cause a reduction in the value of these shares. If we were determined to be a PFIC for U.S. federal income tax

purposes, highly complex rules would apply to our U.S. shareholders. We would be considered a PFIC with respect to a U.S. shareholder if for any taxable year in which the U.S. shareholder held the Common Shares, either (i) 75% or more of our gross income for the taxable year is passive income; or (ii) the average value of our assets (during the taxable year) which produce or are held for the production of passive income is at least 50% of the average value of all assets for such year. Based on our income, assets and activities, we do not believe that we were a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, ~~2017,~~2019, and do not expect to be a PFIC for the current taxable year or any future taxable year. No assurances can be made, however, that the Internal Revenue Service will not challenge this position or that we will not subsequently become a PFIC. ~~In countries outside the U.S., other or similar tax regimes may apply and result in unfavorable tax treatment for any dividends received.~~

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

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

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

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

Note Regarding Forward-Looking Statements and Risk Factors

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


Item 4.	Information on the Company

Description of our business

Company overview

QIAGEN is a global leader in Sample to Insight solutions that transform biological samples into valuable molecular insights. Our mission is to enable ~~our~~ customers ~~in four broad classes~~across the continuum of molecular testing to unlock valuable insights faster, better and more efficiently - ~~Molecular Diagnostics, Applied Testing, Pharma and Academia -~~from the raw biological sample to ~~achieve outstanding success and breakthroughs, all in keeping with our goal of making improvements in life possible.~~the final interpreted result.

~~QIAGEN's solutions integrate sample and assay technologies, bioinformatics and automation systems into workflows that help customers move from Sample to Insight. Our solutions support~~We serve more than 500,000 customers ~~worldwide~~ in ~~generating insights into the molecular building blocks of life. Our proven~~two broad customer groups: Molecular Diagnostics (human healthcare) and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). Proven QIAGEN solutions and content are providing answers in hospitals and laboratories worldwide, helping make sense of the increasing volumes and complexity of biological ~~information.~~

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

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

Net sales of ~~$1.42~~$1.53 billion in ~~2017~~2019 consisted of consumable kits and other revenues ~~(88%~~(89% of sales) and automation systems and instruments ~~(12%~~(11% of sales). Approximately 48% of net sales in ~~2017~~2019 were in Molecular Diagnostics, and 52% in Life Sciences customer classes in the Academia ~~Pharma~~/ Applied Testing and ~~Applied Testing~~Pharma markets.

QIAGEN has grown ~~substantially~~ by developing new ~~platforms,~~instruments, consumables and ~~bioinformatics~~digital solutions to meet diverse and growing needs in the market, partnering with researchers and Pharma companies, and acquiring companies or technologies to complement our portfolio. We believe the addressable global market for QIAGEN's portfolio of molecular testing products for customers across the continuum of life science research and molecular diagnostics totals more than $8$10 billion.

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

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

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

Recent Developments

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

Sustaining the rapid growth of our QuantiFERON-TB ~~franchise growing rapidly:~~franchise:

~~QIAGEN is aiding~~QIAGEN’s QuantiFERON-TB tests play an increasingly central role in the global fight against tuberculosis (TB), a contagious bacterial infection that strikes more than 10 million new ~~persons~~patients and kills about ~~1.8~~1.7 million annually. ~~The global epidemic is complicated because an estimated one out of three people have latent TB infection, a phase in which~~Guidelines from the ~~bacterium infects a person but produces no detectable symptoms. About 5-10% of those individuals, if untreated, will progress to the active TB disease, so~~World Health Organization (WHO) and leading clinical organizations now recommend screening of high-risk individuals ~~and treatment~~ for latent TB ~~plays an important role in global tuberculosis~~infection and preventive treatment as a component of TB control ~~efforts.~~programs.

~~QIAGEN's novel QuantiFERON tests,~~Sales of the QuantiFERON-TB franchise, including the fourth-generation QuantiFERON-TB Gold Plus (QFT-Plus), grew 8% in 2019 to $240 million.

In November 2019 QIAGEN and ~~third-generation~~DiaSorin announced the U.S. launch of the LIAISON QuantiFERON-TB Gold ~~(QFT), are the market-leading modern diagnostic tools~~Plus test as a streamlined, highly automated option for latent TB ~~infection. In a class known~~

~~as interferon-gamma release assays (IGRAs), QuantiFERON-TB tests have been shown in clinical studies~~screening programs from small-scale to ~~be faster, less labor-intensive~~high-throughput. QIAGEN and ~~more accurate than the century-old tuberculin skin test. QFT is one of two tests mentioned in the World Health Organization guidelines as an alternative to tuberculin skin tests. First~~DiaSorin introduced ~~in 2015,~~ QFT-Plus adds clinical insights with antigens that measure the cell-mediated immune response to TB infection from both CD4+ and CD8+ T cells. The addition of CD8+ assessment led WHO in its Global TB Report 2016 to cite QFT-Plus (the only such test on ~~the market) for its potential in identifying at-risk adults at greater risk of progressing to active TB. QFT-Plus is now available in more than 75 countries~~LIAISON analyzers in Europe in late 2018, added the ~~Americas, Africa, Asia~~U.S. market following the recent FDA approval, and ~~Middle East.The laboratory-based QuantiFERON-TB tests~~ are ~~displacing the more subjective and time-consuming tuberculin skin test, and sales surpassed $175 million~~planning availability for China in ~~2017.~~2020.

In October ~~2017~~ 2019 the Stop TB Partnership’s Global Drug Facility (GDF) added QFT-Plus to its diagnostic catalog, opening a new channel to reach countries with a high incidence of TB but limited resources. The GDF helps match global demand with funding from donors, governments and non-governmental organizations.

QIAGEN ~~launched~~continues to innovate in latent tuberculosis testing. In partnership with Ellume, QIAGEN is developing QuantiFERON-TB ~~Gold Plus~~Access, a simplified, low-cost test offering ultrasensitive digital detection in a workflow designed for cost-efficiency and use in areas lacking laboratory infrastructure. The product will further advance global TB control efforts, particularly in low-resource and high-burden regions. Commercialization is expected to begin in 2020.

Driving growth in next-generation sequencing (NGS) with greater focus:

QIAGEN continues to expand our global presence in the ~~United States after it received Food~~fast-growing market for next-generation sequencing (NGS). In 2019 we shifted our strategy and Drug Administration approval. Japan also recently approved QFT-Plus. These market introductions follow adoption of QFT-Plus in more than 75 countries across Europe, the Middle East, Africa, Asia and Latin America, where nearly two million of the tests have been used. QFT-Plus advances the science of TB testing with innovative antigens that measure each patient’s cell-mediated immune response from both CD4+ and CD8+ T cells, a unique capability. An increasing number of peer-reviewed publications support the efficacy of QFT-Plus, which is the only interferon-gamma release assay (IGRA) testreoriented our NGS activities to focus on ~~the pathway~~opportunities to ~~evaluation by the World Health Organization (WHO) for its global campaign to eradicate TB.~~

In January 2018, QIAGEN began a new partnership with DiaSorin that will provide a state-of-the-art automation option for QuantiFERON-TB Gold Plus customers, embedding QFT-Plus in a broad and highly synergistic assay menu for DiaSorin's LIAISON-family analyzers. More than 7,000 LIAISON-family analyzers are already in use worldwide.

~~Next-generation sequencing solutions extending QIAGEN's reach:~~

Asbuild upon our strengths as a leader in ~~“universal”~~"universal" technologies for preparing samples, analyzing genomic variations and interpreting sequencing data.

NGS-related sales in 2019 achieved QIAGEN’s goal of more than $180 million, compared to over $140 million in 2018. Demand for our universal NGS technologies and Digital Insights from bioinformatics applications drove this growth.

In October 2019 QIAGEN and Illumina, Inc. announced a 15-year partnership to broaden the use of NGS-based in vitro diagnostic kits to deliver insights for clinical decision-making, including companion diagnostics for precision medicine. Illumina and QIAGEN will cooperate to commercialize a menu of clinically validated workflows that combine QIAGEN’s proprietary content and digital solutions for use with Illumina’s MiSeq Dx, NextSeq 550Dx and future diagnostic systems. In the coming years we expect the partnership with Illumina, whose sequencing instruments are in widespread use worldwide, to expand our global presence in clinical decision-making using NGS technology.

QIAGEN also announced in October 2019 that we have discontinued development of new NGS instruments. We will focus NGS-related development resources on maximizing the new Illumina partnership for NGS-based diagnostic kits, as well as expanding our offering of universal NGS consumables for use with any ~~next-generation sequencing system, as well as creator~~sequencer. QIAGEN intends to continue supporting and servicing customers of the innovative GeneReader NGS System for benchtop sequencing, QIAGEN continues to expand its presence in the rapidly growing market for NGS solutions in laboratories around the world. QIAGEN’s NGS portfolio produced more than $115 million in sales in 2017.

In 2017 QIAGEN continued to broaden its portfolio of platform-agnostic NGS solutions, streamlining tasks such as automated sample and library preparation, reliable detection of DNA and RNA variations, and bioinformatics for analysis and interpretation. Our industry-leading solutions for preparation of liquid biopsy samples, along with a diverse offering of off-the-shelf and customized QIAseq panels, continued to expand to new applications.

QIAGEN’s GeneReader NGS System, the first complete Sample to Insight next-generation sequencing solution designed for any laboratory to deliver actionable results, continued to gain acceptance with strong growth in placements in 2017.

We expanded the GeneReader system's capabilities and content menu for clinical researchers in 2017. Going beyond the original GeneRead QIAact Actionable Insights Tumor Panel (AIT), we launched the GeneRead QIAact Lung DNA Panel and Lung RNA Panel for deep analysis of lung cancer samples and the GeneRead QIAact BRCA 1/2 Panel for in-depth insights into breast and ovarian cancers. All of the QIAact NGS panels run with the GeneReader system and integrate seamlessly with our QCI bioinformatics software for analysis and interpretation. We have incorporated the GeneReader NGS System, which is available as a complete system for the processing of smaller targeted gene panels, but we do not expect to develop new sequencing platforms at this time.

We continue to expand QIAGEN’s broad portfolio of universal, or platform-agnostic, NGS solutions. Among the new products introduced in 2019 are QIAseq Multimodal Panels, the industry’s only consolidated workflow to simultaneously detect DNA variants, RNA fusions and gene expression levels from a single sample; QIAseq FastSelect kits to remove unwanted RNA from samples, addressing critical bottlenecks in research into ~~collaborations with pharmaceutical companies for co-development~~RNA and gene expression; and the QIAseq Expanded Carrier Screening Panel, enabling identification of ~~companion diagnostics.~~

~~Multiple studies demonstrating the efficacy~~genetic drivers of QIAGEN’s GeneReader system, panels and other NGS solutions were presented in major scientific meetings in 2017, including the American Society of Clinical Oncology (ASCO), American Society of Human Genetics (ASHG) and Association for Molecular Pathology (AMP). At the AMP annual meeting in November 2017, about 10 percent of the more than ~~500 papers presented relied on QIAGEN solutions~~200 rare and inherited diseases.

Reaping the value of genomic insights for ~~some aspect of molecular testing, from sample technologies for NGS to bioinformatics for interpretation of data.~~

To accelerate the growth of the GeneReader system in China, QIAGEN formed a joint venture in 2017 with Maccura, a leading in vitro diagnostics company in China. The venture, MAQGEN Biotechnology Co., Ltd. (MAQGEN), will develop local adaptations, pursue regulatory paths to maximize the GeneReader’s value and leverage Maccura’s broad customer network to expand adoption in laboratories across China. The NGS market in China is growing rapidly in personalized medicine and clinical research. MAQGEN China is 60% owned by Maccura and 40% by QIAGEN.

In late 2017, QIAGEN created a new unit, Enterprise Genomics Services, to serve the growing demand for customization of NGS gene panels with integrated bioinformatics for dedicated applications. This initiative offers benefits to customers in implementation time, expense and risk mitigation across the continuum from NGS discovery to panel development, optimization, verification and implementation. QIAGEN's capabilities support customized solutions for any NGS platform, including the GeneReader NGS System.

In Applied Testing, QIAGEN collaborated with the International Commission on Missing Persons (ICMP) in 2017 to launch a cutting-edge next-generation sequencing workflow for DNA identification at the ICMP's laboratory in The Hague. The lab integrates the GeneReader system, other QIAGEN instruments and a new NGS panel specifically designed to

~~identify missing persons. QIAGEN will supply software, reagents, consumables and technical support on an ongoing basis.~~

~~Continued Leadership in Personalized Healthcare:~~Precision Medicine:

QIAGEN ~~strengthened its leading position~~continues to lead our industry in ~~Personalized Healthcare in 2017, surpassing a milestone of~~precision medicine, collaborating with more than 25 ~~master collaboration agreements with pharma~~pharmaceutical and biotech companies to develop companion and complementary diagnostics ~~providing individualized genomic insights~~ to guide clinical decision-making. ~~QIAGEN launched 15 new companion diagnostic projects in 2017,~~These partnerships feed a ~~record high for QIAGEN. In addition, we continued~~deep pipeline of Sample to ~~achieve~~Insight tests supporting clinical trials and, with regulatory approvals, ~~of companion diagnostics and to launch them commercially.~~

A major initiative in 2017 was QIAGEN’s expansion into developing biomarker tests to support emerging therapies in immuno-oncology (I-O), a novel approach using drugs to target the body’s immune system to help fight cancer. QIAGEN and Bristol-Myers Squibb launched a groundbreaking collaboration to explore the use of NGS technology to develop gene expression profiles (GEPs) as predictive or prognostic tools for use with a number of novel immuno-oncology molecules Bristol-Myers Squibb is developing. QIAGEN subsequently has entered into other agreements with undisclosed industry partners to co-develop molecular tests to identify patients who could benefit from I-O therapies. QIAGEN obtained a worldwide license in 2017 from The Johns Hopkins University for biomarkers that play roles in identifying patients for I-O therapies.

~~QIAGEN continues to roll out regulator-approved companion diagnostics that deliver actionable insights for treatment decisions based on patients’ genomic information. We launched the~~ ~~ipsogen~~ JAK2 RGQ PCR Kit in 2017 as the only FDA-cleared JAK2 kit for blood cancers, diagnosing gene mutations in patients with Polycythemia Vera. The FDA approval was expanded in early 2018 to other myeloproliferative neoplasms. The FDA indicated use of QIAGEN's ~~therascreen~~ EGFR RGQ PCR Kit as a companion diagnostic also was expanded in early 2018 to diagnose additional EGFR gene mutations involved in treatment decisions for first-line treatment of metastatic non-small cell lung cancer (NSCLC).

We added a new liquid biopsy assay in 2017 for clinical research - the AdnaTest Prostate Cancer Panel AR-V7, using circulating tumor cells to monitor RNA expression of a biomarker indicating resistance to prostate cancer treatments.

As one of the world’s leading independent developers of molecular technologies, with a diverse portfolio of sequencing platforms and solutions, QIAGEN is a preferred industry partner for developing companion or complementary diagnostics.

~~QIAsymphony delivering platform growth as content menu expands:~~

QIAGEN surpassed its 2017 goal of 2,000 cumulative placements of QIAsymphony, a cost-effective modular system that integrates PCR molecular testing workflows from initial biological sample processing to final insights. The platform’s rapid dissemination and growing content menu fueled double-digit growth in consumables for QIAsymphony. patient care.

•

~~The QIAsymphony automation system serves laboratories around~~In 2019 three of our co-development partnerships bore fruit in newly approved companion diagnostics in oncology. We introduced the ~~world, with~~therascreen PIK3CA RGQ PCR Kit in the ~~broadest test menu of any platform~~U.S. as a companion diagnostic to aid in ~~its category~~identifying patients for a new breast cancer therapy developed by Novartis (launched in Europe in early 2020); the therascreen FGFR RGQ RT-PCR Kit to help identify U.S. urothelial cancer patients for Janssen Biotech’s newly approved FGFR kinase inhibitor; and ~~other markets, plus~~ the ~~unique ability to handle laboratory-developed tests. Nearly 30 diagnostic tests in infectious disease, oncology and transplant care are marketed for use on the Rotor-Gene~~^® Q, a component of the modular QIAsymphony workflow. In the United States, eight FDA-approved diagnostic tests, including three companion diagnostics to guide treatment decisions in cancer, are marketed for this detection platform.

~~Two new QIAGEN test kits were approved by the FDA in 2017 for use on QIAsymphony instruments: the~~ ~~ipsogen~~ ~~JAK2~~therascreen EGFR RGQ PCR Kit in Japan - our first companion diagnostic approval there - to help guide the use of a ~~qualitative~~new Pfizer therapy in non-small cell lung cancer (NSCLC). All three run on the Rotor-Gene Q, a module in our QIAsymphony system.

A partnership with Inovio Pharmaceuticals, launched in May 2019, will co-develop a liquid-biopsy companion diagnostic for Inovio’s DNA-based immunotherapy compound, which has potential to be the first treatment for human papillomavirus (HPV) infection of the cervix and first non-surgical treatment for precancerous lesions associated with the virus.

A new collaboration with Amgen announced in early 2020 will develop tissue-based companion diagnostics to identify non-small cell lung cancer patients who would benefit from Amgen's investigational cancer treatment AMG 510. The test ~~for~~will identify patients with cancers that have the ~~detection of an important~~KRAS G12C genetic ~~variant in blood cancers; and the~~ ~~artus~~ ~~CMV QS-RGQ MDx kit, to monitor solid organ transplant patients for cytomegalovirus (CMV),~~mutation, a common ~~infection that can be life-threatening~~cause of cancer.

We expanded our Day-One Lab Readiness network in ~~vulnerable patients.~~2019 through collaborations with CLIA-certified laboratories to ensure immediate patient access to QIAGEN companion diagnostics upon approval of new oncology drugs. Among the clinical labs now participating to accelerate patient access are LabCorp, Quest, NeoGenomics, SRL in Japan, and others.

Expanding QIAGEN automation solutions to serve growing market needs:

QIAGEN has strategically expanded our offering of automation solutions to enter growing segments of the life science and molecular diagnostics markets, as well as to meet the diverse, rapidly evolving needs of customers.

The QIAsymphony ~~system's~~system, a cost-effective modular automation solution that integrates PCR molecular testing from sample processing to final insights, surpassed our goal of 2,500 cumulative placements by year-end 2019. Related consumables grew globally, including an extensive menu of in vitro diagnostic tests in infectious disease, oncology and transplant care. The sample processing module, QIAsymphony SP, is a market-leading ~~“front end” automated~~"front end" solution ~~for downstream molecular testing. The growth of next-generation sequencing has highlighted the critical need of laboratories~~ for reliable automated ~~processing~~handling of samples, including liquid ~~biopsies. QIAsymphony SP automates~~biopsies, for PCR and next-generation sequencing.

The QIAstat-Dx system is approaching 1,000 cumulative placements, providing fast, cost-effective and easy-to-use syndromic testing with novel Sample to Insight solutions. In May 2019, we launched the ~~processing~~platform in the United States with an FDA-cleared multiplex panel for differential diagnosis of ~~nucleic acids~~respiratory infections. QIAstat-Dx was introduced in Europe in 2018 with CE-IVD marked panels for respiratory and gastrointestinal infections. The system produced $15 million of sales in 2019. In early 2020, QIAGEN created a version of the QIAstat-Dx respiratory panel that includes the COVID-19 coronavirus strain for potential use in testing of patients in China and other markets using the QIAstat-Dx platform. Additional diagnostic panels are planned to launch in 2020 to enhance the value to clinics and physician offices.

The NeuMoDx 96 and 288 Molecular Systems are providing fully integrated, mid- to high-throughput PCR analysis systems for clinical laboratories, and now have eight CE-IVD cleared diagnostic kits covering a range of infectious diseases. QIAGEN has the right to commercialize these platforms in Europe and other markets outside the U.S.

Our development of disruptive new systems for digital PCR is on track to begin commercialization in 2020, combining proprietary QIAGEN technologies with assets acquired from Formulatrix in early 2019. Our digital PCR initiative aims to provide fully-integrated solutions that simplify workflows for laboratories, offer higher throughput and multiplexing, and provide customers with favorable costs for instruments and consumables.

Digital Insights solutions transforming raw data into valuable insights:

As genomic data increasingly influences decisions in science and healthcare, QIAGEN’s Digital Insights solutions are driving growth with content-enabled bioinformatics that transform raw NGS data into actionable insights for customers.

Researchers worldwide use our software and industry-leading knowledge bases to accelerate innovation, guide experiments and translate genomic results into actions that enhance clinical care. Starting in 2014, QIAGEN has built a comprehensive, easy-to-use toolbox through acquisitions of Ingenuity, CLC bio, BIOBASE and OmicSoft. Digital Insights solutions are marketed as standalone products and integrated into QIAGEN Sample to Insight workflows to meet customer needs.

In June 2019, our industry-leading QIAGEN Clinical Insight (QCI), a clinical decision support platform for interpretation and reporting of next-generation sequencing data, achieved a milestone of more than 1 million patient test cases analyzed and interpreted. We continually update and expand the ~~GeneReader NGS System or other sequencers.~~content available through QCI. After acquiring N-of-One, Inc. in January 2019, we integrated N-of-One’s services and somatic cancer database, including medical interpretation and real-world evidence from more than 125,000 anonymized patient samples, into QIAGEN Clinical Insight.

~~Leadership in~~Pioneering differentiated ~~core~~sample technologies ~~continuing to drive growth:~~and liquid biopsy solutions:

As a ~~world~~ leader in sample technologies enabling laboratories to obtain highest-quality DNA and RNA for molecular testing, QIAGEN ~~continued~~continues to ~~expand its offerings~~innovate with front-end solutions in ~~2017 with differentiated solutions for front-end challenges.~~growing fields. QIAGEN technologies process an estimated 50,000 biological samples a day. ~~Our strategic focus is on rapidly growing applications in~~In 2019 we rolled out several new products solving tough challenges for customers, such as new tools to accelerate RNA sequencing for research and ~~clinical diagnostics, such as handling microbiome samples, where we have an estimated 75% market share.~~

Innovation in “liquid biopsy” technologies is increasingly enabling QIAGEN customers to unlock molecular insights from blood or other fluids as a non-invasive alternatives to surgical biopsies. Our solutions based on several different technologiesliquid biopsies for ~~isolation and stabilization of nucleic acids are used in an estimated 80% of liquid biopsy testing.~~efficient, less-invasive diagnosis.

Our QIAcube Connect system, launched in January 2019 to amplify the benefits of automated sample processing for customers, reached more than 660 placements by year-end, with strong Life Sciences demand. Building on over 8,000 placements of our first-generation QIAcube instrument, QIAcube Connect delivers a new level of digitization and ease of use with thousands of protocols, assuring full standardization and freeing customers from repetitive manual processing.

•

~~Partnering with leading providers~~QIAGEN offers an innovative portfolio of ~~molecular testing services, QIAGEN continues to incorporate its differentiated solutions in~~ liquid biopsy ~~testing.~~technologies for research and clinical applications. Liquid biopsies extract and purify DNA and RNA from blood or other body fluids, as an alternative to costly and sometimes impractical tissue biopsies. In ~~2017, for example, QIAGEN’s PAXgene~~^® ~~Blood ccfDNA Tube was adopted by Clinical Genomics for sample collection with its assay~~2019, our therascreen PIK3CA RGQ PCR Kit became the first FDA-approved liquid biopsy test using blood plasma to ~~monitor patients for recurrence of colorectal~~guide treatment decisions in breast cancer.

~~To facilitate the growing trend toward liquid biopsies~~In October 2019, we launched innovative new QIAseq FastSelect kits for ~~routine~~customers in Life Sciences to remove unwanted RNA from biological samples for faster, simpler library preparation. The solutions address critical bottlenecks in RNA sequencing, enabling scientists to achieve more on-target NGS reads and more efficient use ~~in clinical testing, QIAGEN joined CANCER-ID, a public-private consortium working~~of resources.

Executing initiatives to ~~establish standard protocols~~prioritize resource allocation and ~~clinical validation for blood-based biomarkers in lung and breast cancer. QIAGEN is helping~~ create ~~standardized methods and Sample to Insight workflows.~~value:

QIAGEN ~~launched a Custom Solutions business~~implemented several organizational changes and portfolio initiatives in ~~2017 to serve life science and molecular diagnostics customers~~2019 with the ~~tools~~aim of driving future growth, efficiency and ~~expertise~~profitability. These actions prioritized resource allocation to ~~quickly build~~streamline operations, strengthen the focus on execution and improve operating margins.

In October 2019, QIAGEN stopped internal development of new instruments for next-generation sequencing, restructuring to allocate resources from work on new proprietary NGS systems to QIAGEN's partnership with Illumina to commercialize ~~products that meet unique workflow requirements. The new unit offers custom and OEM sample technologies, oligo and enzyme product options for PCR, qPCR and~~in vitro diagnostic kits running on Illumina’s clinical NGS ~~product development,~~platforms, as well as to universal NGS portfolio.

Streamlining initiatives in 2019 aimed to create a more focused, agile and efficient global operation. Changes included shifting worldwide production into a regional structure, integrating global sales resources into the three Business Areas (Life Sciences, Molecular Diagnostics and QIAGEN Digital Insights), and moving additional activities to QIAGEN Business Services centers in Poland and the Philippines.

Digitization of a wide range of ~~other platform technologies.~~

In forensics, QIAGEN’s long-standing leadership in developing international standards of quality for products to collect and test samples for human identification gained support in 2017 with third-party certification that QIAGEN meets state-of-the-art requirements for forensics supply chain and manufacturing (ISO18385:2016).

~~Industry-leading bioinformatics turning raw genomic data into valuable insights:~~

~~QIAGEN’s broad offering of content-enabled bioinformatics software~~customer interactions continues to ~~grow both as a standalone franchise and as a driver integrated into QIAGEN’s Sample to Insight workflows. Our bioinformatics turn vast amounts~~progress, with approximately 43% of genomic data into actionable insights for customers, addressing a critical bottleneck in next-generation sequencing, especially for clinical research and diagnostics. Studies by leading institutions often use solutions such as2019 sales coming via the QIAGEN Clinical Insight (QCI) or CLC Genomics Workbench to analyze and interpret genomic data. QIAGEN pursues collaborations across the genomics and bioinformatics community to offer customers the richest access possible to insights for research and diagnostics.

In January 2017, QIAGEN acquired OmicSoft Corporation to expand its solutions and enable scientists to visualize and mine large institutional and publicly available “omics” datasets, in addition to the expertly curated, literature-based datasets marketed by QIAGEN. Its OmicSoft solutions meet a growing need in discovery and translational research to access and manage huge amounts of data on DNA, RNAwebsite and other ~~sequencing insights.~~

In October 2017, QIAGEN partnered with CENTOGENE AG, a leader in testing for rare diseases and hereditary disorders, to provide customers of both companies with more complete insights. QIAGEN integrated CENTOGENE’s rare disease variant database into its bioinformatics offerings for genomic interpretation, while CENTOGENE licensed QIAGEN's bioinformatics solutions for use in its diagnostic testing services for rare diseases.

Advancing the potential of precision medicine for the diagnosis and treatment of cancer, in November 2017 we launched enhancements in our QIAGEN Clinical Insight (QCI) bioinformatics software to automate guidelines published by leading oncology and pathology groups for the use of next-generation sequencing in genetic profiling of cancers. QIAGEN’s QCI-Interpret software integrates the consensus AMP/ASCO/CAP standards with our comprehensive biomedical knowledge base to guide the selection of treatments based on findings from each patient’s genomic testing and diagnosis.

Also in November 2017, a collaboration in women’s health with Counsyl, a company based in California, demonstrated the value of QIAGEN Clinical Insight for interpretation of results from prenatal testing and hereditary disease screening. Counsyl reported that using QCI for interpreting and scoring genetic variants reduced search time for literature references by 75%, while maintaining accuracy.

~~Targeted action increasing returns to shareholders~~

In 2017, QIAGEN fulfilled its commitment to return $300 million to shareholders through share repurchase transactions, including the return of $245 million through a synthetic share repurchase in January 2017 and the open-market repurchase of 1.9 million shares on the Frankfurt Stock Exchange for approximately $60 million in September 2017. Reaffirming its commitment to a disciplined approach to capital allocation, QIAGEN announced a new commitment to return $200 million to shareholders beginning in 2018 via open-market repurchases. Shares will be repurchased on the Frankfurt Stock Exchange.

In 2017, QIAGEN continued to execute previously announced restructuring actions to improve efficiency and profitability, while supporting momentum in sales growth. Key areas include consolidating activities into shared service centers and global centers of excellence, gaining efficiencies in marketing, and embracing digital tools across the business. In 2017, we launched a shared service center for administrative functions in the Philippines, expanding on the efficiencies and complementing the geographic footprint of our first shared service center in Poland. A pre-tax restructuring charge of $19.8 million ($0.06 per share after taxes) was recorded in 2017 for these changes. In addition, following enactment of the new U.S. tax law in December 2017, QIAGEN announced restructuring initiatives to mitigate some of its impacts, resulting in a pre-tax restructuring charge of $13.8 million ($0.04 per share after taxes) in the fourth quarter. Operating results in 2017 show the benefits in cost reduction and profitability, and targeted actions are continuing into 2018.

In a review aimed at freeing resources to focus on high-growth market opportunities, QIAGEN took steps in late 2017 to streamline its product portfolio in China, the company's second-largest market, by discontinuing the commercialization of some non-core PCR tests and externalizing the HPV test (cervical cancer screening) franchise to a third-party company in China. A partnership became effective in January 2018 with a Chinese company that has absorbed R&D, commercial distribution, and the related QIAGEN employees and infrastructure of the HPV test franchise in China. QIAGEN has become a minority shareholder of this company. QIAGEN China will focus additional resources on QuantiFERON-TB, the new MAQGEN China joint venture with Maccura for the GeneReader NGS System, and the life sciences portfolio.online channels.

Our Products

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

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

Consumables and related revenues

~~Consumable products, accounting for~~, approximately ~~79%-80%~~88-89% of net sales, ~~typically include~~including sample and assay kits, digital insights, royalties, co-development milestone payments and services; and Automation platforms and instruments, approximately 11-12% of net sales, including related services and contracts.

QIAGEN automation systems streamline molecular testing using consumables in efficient workflows and carrying customers through the process from Sample to Insight. Some QIAGEN consumables are designed to run on QIAGEN instruments, while others are universal kits designed for use with any molecular testing platform.

Major types of QIAGEN solutions and related brands

Sample Technologies

Our broad portfolio of sample technologies isolate and process DNA, RNA and proteins from blood, tissue and other biological materials to ~~extract and purify molecules of interest from biological samples and assay technologies that make information from these samples available~~prepare for ~~analysis and interpretation. To maximize customer convenience and reduce user error, these kits contain all necessary reagents and~~ a ~~manual of protocols and background information. Reliability, standardization, ease of use and cost-effectiveness are keys to the success~~wide variety of molecular testing ~~products.~~needs in research and clinical applications.

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

~~Our~~



Sample Technologies	Selected QIAGEN brands
Primary sample technology consumables • Nucleic stabilization and purification kits designed for primary sample materials (DNA, RNA, proteins), manual and automated processing for genotyping, gene expression, viral and bacterial analysis • Mainly based on silica membranes and buffers	• QIAamp • PAXgene • Gentra Puregene	• DNeasy • AdnaTest • Oligotex • BioSprint	• RNeasy • Tiangen • AllPrep

Secondary sample technology consumables • Kits and components for purification of nucleic acids and proteins from secondary sample materials (e.g. gel, plasmid DNA, proteins) • Molecular biology reagents	• QIAprep • Qproteome • QIAGEN Plasmid Plus • HiSpeed	• QIAquick • BioMag • QIAfilter • EndoFree	• DyeEx • Ni-NTA • R.E.A.L.

Sample technology instruments • Instruments for nucleic acid purification and accessories	• QIAsymphony SP • QIAscout	• QIAcube Connect • Centrifuges	• QIAcube HT • TissueLyser

Assay Technologies

Targeted or multiplex assay technologies ~~contain all the needed reagents~~ deploy a variety of methods to ~~enable~~amplify biomolecules and make them visible and ready for molecular analysis using different techniques.



Assay Technologies	Selected QIAGEN brands
Assay content consumables • Kits, assays, reagents and controls for identification and analysis of sequence-specific targets (such as DNA, methylated DNA, bacterial DNA, RNA, miRNA) with different technologies (such as PCR, Pyrosequencing, hybridization) in assay and array format • Oligonucleotide synthesis, siRNAs, bisulfite conversion	• EpiTect • GapmeR • miScript	• ADNATest • qBiomarker • AllStars	• miCURY • RT² • FlexiTube/FlexiPlate

Enzymatics consumables • Custom-developed and configured enzymes and products which are sold to OEM customers	• EnzScript • ZipScript	• Phoenix Hot Start	• VeraSeq

Assay foundation consumables • Different generations of PCR, qPCR, reverse transcription and combinations (RT-PCR) kits for analysis of gene expression, genotyping and gene regulation, running on QIAGEN or third-party instruments and technologies • Similar product portfolio developed and sold through QIAGEN second brands (Quanta, Tiangen) • QIAxpert consumables, cloning kits and transfection reagents	• QuantiTect • OneStep RT-PCR • Type-it • OmniScript • PolyFect	• QuantiFast • Rotor-Gene • QIAGEN Multiplex • SuperScript • SuperFect	• QuantiNova • HotStarTaq • TopTaq • HiPerFect

Assay instruments • Modular PCR system with Sample to Insight laboratory automation • One-step molecular analysis of hard-to-diagnose syndromes • Fully integrated medium- to high-throughput PCR test analysis • Specialized instruments for assay setup and analysis	• QIAsymphony RGQ • QIAstat-Dx • PyroMark • QIAgility	• QIAsymphony AS • NeuMoDx 96 • QIAxpert	• Rotor-Gene-Q • NeuMoDx 288 • QIAxcel

Custom laboratory and genomic services • Custom services such as DNA sequencing, qPCR service, whole genome amplification, and non-cGMP DNA production	• Provided on an individualized contract basis

Next-Generation Sequencing (NGS)

High-throughput or next-generation sequencing (NGS) enables analysis of multiple sequences in parallel, using massive analytical and computing power to ~~target molecules~~generate date for a profile of ~~interest for detection on platforms supporting PCR, NGS~~a whole genome or ~~multimodal analysis. Each assay kit is sufficient to support~~portion of a number of applications, varying from a single application to kits containing more than 1,000 applications each. Applications include open, general-purpose PCR reagents, as well as kits for the detection of viral or bacterial pathogensgenome.



Next-Generation Sequencing (NGS)	Selected QIAGEN brands
Universal NGS consumables • Predefined and custom NGS gene panels (DNA, RNA), library prep kits and components, whole genome amplification, etc.	• QIAseq	• REPLI-g	• GeneRead

Digital Insights solutions • Bioinformatics solutions to deliver actionable insights from NGS data, sold as freestanding software or cloud-based solutions, also integrated into many QIAGEN consumables and instruments	• QIAGEN Clinical Insight • N-of-One • Ingenuity Variant Analysis	• CLC Genomics Workbench • QIAGEN Knowledge Base • Ingenuity Pathway Analysis	• OmicSoft • HGMD

Forensics and ~~parasites, pharmacogenomic testing and genotyping. In PCR, examples are our~~ ~~therascreen~~ ~~family of companion diagnostics,~~ ~~artus~~ ~~line for profiling infectious diseases, and~~ ~~investigator~~ ~~assays~~Human Identification

Genetic analysis used for forensics and human ~~identification. A growing portfolio~~identification can positively identify or rule out identification of ~~Digital NGS panels enable sequencing to target DNA~~individuals or ~~RNA variants~~biological substances for ~~clinical research in cancer or other diseases.~~

~~Related revenues, accounting for approximately 7%-8% of our net sales, include~~ ~~bioinformatics solutions~~, sold as freestanding software or cloud-based solutions and also integrated into many QIAGEN consumables and instruments for seamless Sample to Insight workflows. Examples of our bioinformatics solutions:

~~Ingenuity Variant Analysis~~,~~a powerful cloud-based platform tapping into the QIAGEN Knowledge Base, interprets data from NGS analysis to efficiently filter genetic variants and interpret links to diseases.~~

~~QIAGEN Clinical Insight,~~ ~~a unique evidence-based decision support solution, draws on the QIAGEN Knowledge Base to deliver clinically relevant insights from complex genomic variants identified in NGS.~~

~~CLC Genomics Workbench~~ ~~incorporates cutting-edge technology and algorithms to overcome challenges face by scientists in analyzing and visualizing data from all major NGS platforms.~~

~~GeneGlobe, a web-based portal, enables researchers to search and select gene- and pathway-specific solutions from approximately 25 million pre-designed and custom PCR assay kits, NGS panels and other products.~~

~~Related revenues also include royalties, milestone payments from co-development agreements with pharmaceutical companies, payments from technology licenses and patent sales, and custom services,~~purposes such as ~~whole genome amplification services, DNA sequencing, and non-cGMP DNA production on a contract basis.~~law enforcement investigation, paternity testing or food safety screening.

~~Automation platforms and instruments~~

Our instrumentation systems, contributing approximately 12%-13% of net sales together with related services and contracts, automate the use of consumables into efficient workflows for a broad range of laboratory needs. QIAGEN platforms are designed to carry our customers from Sample to Insight - handling and preparation of biological samples, analysis using

sequencing technologies, and interpretation that delivers valuable insights. These instruments enable laboratories to perform reliable and reproducible processes, including nucleic acid sample preparation, assay setup, target detection, and interpretation of genomic information. Often several of these instruments are integrated into end-to-end workflows.

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

~~QIAsymphony~~ is a user-friendly automation system that is driving a new era of integrated workflow, making molecular testing more efficient and helping disseminate standardized, clinically proven molecular diagnostics. The platform includes three modules - ~~QIAsymphony SP~~ ~~for sample preparation,~~ ~~QIAsymphony AS~~ ~~for assay setup, and~~ ~~Rotor-Gene Q, our rotary real-time PCR cycler system, which makes sequences of DNA and RNA visible through amplification and quantifiable. The fully integrated system with all three modules is~~ ~~QIAsymphony RGQ~~. In 2017, our installed base surpassed 2,000 QIAsymphony systems worldwide, serving in a wide variety of laboratories and applications. The platform offers many features to enhance workflows, such as continuous loading, random access and the ability to process an almost unlimited range of sample types. QIAsymphony has the broadest content menu in its category in Europe and other markets, and QIAGEN is developing more regulator-approved assays to add value for customers.

~~GeneReader NGS System~~, introduced in late 2015, continues to gain acceptance as the first complete Sample to Insight next-generation sequencing (NGS) solution designed for any laboratory to deliver actionable results. This end-to-end platform provides a simpler, more cost-effective way for basic and translational research to take advantage of NGS technology and improve outcomes. The GeneReader workflow offers the flexibility of scalable batch sizes and continuous loading of multiple flow cells, and customers can create relevant reports using QIAGEN's proven gene panels and bioinformatics solutions. In 2017, we continued to enhance performance and added new content, including QIAact panels for deep analysis of lung, breast and ovarian cancers, as well as customized panels for users' specific needs. GeneReader's digital sequencing integrates seamlessly with QIAGEN bioinformatics solutions for interpretation.

~~QIAcube~~ robotic workstations provide highly versatile solutions for automated sample processing, with novel technologies for purification of DNA, RNA and proteins, saving laboratory staff time and enabling standardized results in analysis using PCR or NGS.

~~QIAxcel~~ replaces traditional slab-gel analysis, eliminating time-consuming nucleic acid separation methods in low- to high-throughput labs and offering unprecedented sensitivity and time-to-results for analysis of DNA fragments and RNA.

~~QIAgility~~ ~~is a compact benchtop instrument that enables rapid, high-precision PCR setup supporting almost all tube and plate formats, as well as Rotor-Discs for the Rotor-Gene Q.~~

~~ESEQuant~~ ~~portable, battery-operated instrumentsenable optical measurement for Point of Need molecular testing in physician practices, emergency rooms, remote areas, and other settings with limited or delayed access to laboratories.~~



Forensics and Human Identification	Selected QIAGEN brands
Human ID / Forensics sample collection consumables • Sample cards and collection swabs	• FTA	• Other consumables

Human ID / Forensics consumables • STR assays for Human ID, additional assays for food contamination	• Investigator (human ID / forensics)	•mericon (food safety)

Customers

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

~~Molecular Diagnostics~~ ~~- healthcare providers engaged in patient care including hospitals, public health organizations, reference laboratories and physician practices~~

~~Applied Testing~~ ~~- government or industry customers using molecular technologies in fields such as forensics, veterinary diagnostics and food safety testing~~

~~Pharma~~ ~~- pharmaceutical and biotechnology companies using molecular testing to support drug discovery, translational medicine and clinical development efforts~~

~~Academia~~ ~~- researchers exploring the secrets of life such as disease mechanisms and pathways, in some cases translating findings into drug targets or other products~~


•	Molecular Diagnostics - healthcare providers engaged in patient care including hospitals, public health organizations, reference laboratories and physician practices


•	Life Sciences - researchers in universities, research institutes and industry customers using molecular testing to achieve new insights into disease or other biological processes, as well as applying molecular testing in non-healthcare fields


•	Academia / Applied Testing- exploring the secrets of life such as disease mechanisms and pathways, translating findings into drug targets or other products, or serving purposes such as forensics and human identification


•	Pharma- pharmaceutical and biotechnology companies engaging in the R&D process from drug discovery to translational medicine and then clinical development

Molecular Diagnostics

QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare, and Molecular Diagnostics customers accounted for $737 million of our sales in 2019. The success of molecular testing in healthcare depends on the ability ~~of advanced diagnostic technologies~~ to ~~unlock molecular information for patients is changing the practice of medicine, creating a large and growing market for~~accurately analyze purified nucleic acid ~~sample preparation, assay technologies~~samples from sources such as blood, tissue, body fluids and ~~bioinformatics in clinical care. Dissemination~~stool. Automated systems must process tests reliably and efficiently, often handling hundreds of ~~PCR~~samples concurrently. The range of assays for diseases and ~~other amplification technologies has brought molecular diagnostics into routine use in healthcare around the world,~~biomarkers, convenience and ~~next-generation sequencing is rapidly disseminating, further transforming healthcare. Technologies for molecular diagnostics enable clinicians~~ease of laboratory workflow, and ~~labs to identify and profile microorganisms, cancer cells, bacteria and viruses by detecting specific nucleic acid sequences or characterizing newly discovered genomic sequences related to~~standardization of lab procedures also influence success.

~~diseases. Commercial applications are multiplying as researchers identify new biological markers for disease and develop novel technologies to decipher these diagnostic clues.~~

The molecular diagnostics market generates total sales estimated by industry experts at approximately $7 billion in ~~2017,~~2019, including about ~~$3-4~~$5 billion potentially addressable with QIAGEN's product portfolio. Molecular ~~diagnostics~~testing is the most dynamic segment of the global in vitro diagnostics market, ~~and is~~ growing at ~~a compound~~an estimated annual rate ~~estimated~~ in the ~~high single-digits or low double-digits.~~mid-single-digits at constant exchange rates. Given the advantages of precise genetic information over traditional tests, QIAGEN expects the healthcare market to continue to provide significant growth opportunities.

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


•	Oncology - accurately diagnosing cancer, enabling prevention or early detection, as well as guiding selection of therapies with individualized molecular insights for precision medicine.

~~Oncology~~ ~~- accurately diagnosing cancer, enabling prevention or early detection, and guiding selection of therapies with individualized molecular insights. QIAGEN offers~~QIAGEN's oncology test portfolio includes a broad ~~portfolio~~range of technologies and biomarkers for Precision Medicine, including regulator-approved companion ~~diagnostic kits and panels to detect mutations of genes~~diagnostics for oncogenes such as KRAS, EGFR ~~BRAF,~~ BRCA1/2, JAK2, PIK3CA and others, ~~that influence the efficacy and safety of medicines.~~as well as comprehensive gene panels for research applications in next-generation sequencing. We also provide industry-leading tests to screen for human papillomavirus (HPV) and protect women from cervical cancer.

~~Infectious diseases~~ ~~- detecting~~We have a deep pipeline of oncology tests for PCR and ~~differentiating a broad range of viral and bacterial infections, including diseases such as HIV, hepatitis, influenza and healthcare-associated infections. Use of molecular testing~~NGS analysis under development. In addition to ~~differentiate among pathogens can be useful in guiding treatment, such as selection of antibiotic or antiviral therapies.~~

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

~~QIAGEN offers one of the broadest portfolios~~our portfolio of molecular technologies and automation systems, QIAGEN offers Pharma partners a full infrastructure for ~~healthcare. Success in Molecular Diagnostics depends~~co-development programs, intellectual property on ~~the ability to accurately analyze purified nucleic acid samples from sources such~~platforms and content, regulatory experience, global marketing reach, and independence as ~~blood, tissue, body fluids and stool,~~a company focusing exclusively on ~~automated systems that process~~ these ~~samples reliably and efficiently, often handling hundreds~~types of ~~samples concurrently. Other success factors are the range of assays for diseases and biomarkers, convenience and ease of laboratory workflow, and reliability and standardization of lab procedures.~~technologies.

~~The immune monitoring portfolio, using sensitive QuantiFERON technology, accurately detects infection and measures immune response~~


•	Immune monitoring - using advanced tests to detect immune-system markers as a preventive strategy, such as screening patients for latent tuberculosis infection to guard against active TB disease, or to monitor immune function, for example in transplant patients. Our sensitive QuantiFERON technology accurately detects infection and measures immune response.

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

~~QIAGEN's oncology test portfolio includes a broad range~~In transplantation, our QuantiFERON Monitor provides monitoring of ~~Personalized Healthcare technologies~~immune function in solid organ transplant patients and ~~biomarkers, including regulator-approved companion diagnostics~~QuantiFERON-CMV Kit tests immunity for ~~oncogenes such as KRAS, EGFR and JAK2, as well as comprehensive gene panels for research applications~~infection with cytomegalovirus (CMV) in ~~next-generation sequencing. In 2017, we launched the~~ ~~ipsogen~~ ~~JAK2 RGQ PCR Kit in the United States for use in blood cancers. In Europe, we already offer a market-leading portfolio of~~ ~~ipsogen~~ ~~assays for common and rare leukemia types. The U.S. approval for our~~ ~~therascreen~~ ~~EGFR RGQ PCR Kit was expanded in early 2018 for use as a companion diagnostic to diagnose additional EGFR gene mutations in metastatic non-small cell lung cancer (NSCLC).~~at-risk patients.


•	Infectious diseases - detecting and differentiating viral and bacterial infections - such as HIV, hepatitis, influenza, sexually transmitted diseases and healthcare-associated infections, as well as respiratory and gastrointestinal syndromes - can be useful in guiding treatment, such as selection of appropriate antibiotic or antiviral therapies.

QIAGEN ~~also~~ offers an extensive range of kits for diagnosing infectious diseases, including a broad menu of reliable tests on the QIAsymphony and weNeuMoDx automation systems, as well as QIAstat-Dx panels for respiratory and gastrointestinal syndromes. We are expanding this portfolio by seeking regulatory approvals of new ~~tests in additional markets.~~assays across these platforms.

QIAGEN ~~is the~~remains a global leader in screening technologies for HPV, a viral infection that is the primary cause of cervical cancer, which kills about 270,000 women a year. Our ~~“gold standard”~~ gold standard digeneHC2 HPV Test and our ~~careHPV~~careHPV Test for use in low-resource regions lead the market in HPV screening around the world. In the United States, ~~QIAGEN remains a market leader although~~ vigorous price competition has reduced ~~that~~QIAGEN’s HPV business to about 2%1% of total sales.

~~A key success factor for our growth~~Life Sciences

QIAGEN partners with customers across diverse disciplines in ~~Molecular Diagnostics is enabling laboratories to efficiently use our~~academia and industry, providing sample technologies, assay technologies, ~~on QIAGEN automation platforms. Our flagship PCR platform is QIAsymphony, based on its flexibility~~Digital Insights and ~~unique capabilities. We offer broad portfolios of companion diagnostics~~services to universities and ~~infectious disease tests running on the QIAsymphony system. We also are developing companion diagnostics~~institutes, Pharma and biotech companies, government and law enforcement agencies. Life Sciences customers accounted for our GeneReader NGS System and Modaplex platform. Nucleic acid samples purified on our instruments are ready for use in the demanding and sensitive downstream assays performed in molecular diagnostic applications. We market assays directly via QIAGEN sales channels, and selected assays through major diagnostic partners or other companies to broaden the distribution$789 million of our ~~products.~~sales in 2019.

Academia / Applied Testing

~~Use of molecular technologies is expanding in more areas of life as industry and government organizations apply standardized~~QIAGEN provides Sample to Insight solutions to ~~diverse needs.~~ academic and research institutions around the world. We focus on enabling researchers to use reliable, fast, highly reproducible and high-quality technologies, sometimes replacing time-consuming traditional or in-house methods. QIAGEN often partners with leading institutions in research projects and develops customized solutions such as NGS panels for digital sequencing of multiple gene targets. As academic institutions increasingly embrace translational research, bridging from discoveries to practical applications in medicine, our relationships in Academia also support our presence in the Pharma and Molecular Diagnostics markets.

Applied Testing customers make up the growing market for molecular testing beyond research and human healthcare. QIAGEN is ~~our term~~a global leader in solutions for ~~applications outside of~~governments and industry, particularly in forensic testing and human ~~healthcare and~~

~~research - such as human identification and forensics, food and environmental safety, and veterinary testing.~~identification. The value of genetic ~~“fingerprinting”~~"fingerprinting" has been ~~shown for~~proven in criminal investigations ~~or clarification~~and examinations of paternity or ancestry, ~~public policy compliance for~~as well as food safety and ~~genetically modified organisms (GMOs),~~veterinary diagnostics. QIAGEN provides sample collection and ~~containment of diseases in commercial livestock.~~

QIAGEN has developed relationships with diverse molecular testing laboratories and continually innovates to meet their needs. In 2017, QIAGEN helped the International Commission on Missing Persons launch a cutting-edge next-generation sequencing lab for forensic DNA identification, deploying the GeneReader NGS System and other solutions. We are a leader in standardizinganalytical solutions for ~~reliable forensic testing,~~law enforcement and ~~in 2017 we received international certification~~human identification labs, as well as advanced technologies for ~~manufacturing human ID products. In environmental research, QIAGEN’s solutions for metagenomics are increasingly used in~~ studies of microbiomes and their effect on ~~health.~~health and the environment.

Pharma

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

WeIn Precision Medicine, we have built a position as the industry’s preferred partner ~~for pharmaceutical and biotech companies~~ to co-develop companion diagnostics paired with targeted drugs. A wave of newly discovered biomarkers and molecular tests indicating the likely efficacy and safety of associated drugs is now transforming the treatment of cancer and other diseases. In 2017, we surpassedQIAGEN’s more than 25 master collaboration agreements with Pharma ~~each enabling~~customers, some with multiple co-development ~~projects. These alliances~~projects, have created a rich pipeline of molecular tests that are transforming the treatment of cancer and other diseases. Companion diagnostics can move ~~along with the drugs,~~ through clinical trials and regulatory approvals, ~~for~~along with the paired drugs, to commercialization and marketing to healthcare providers. ~~Several new companion diagnostics are currently in the registration process.~~

In addition to our broad portfolio of molecular technologies, QIAGEN offers Pharma partners a full infrastructure for co-development programs, intellectual property on platforms and content, extensive regulatory experience, global marketing reach, and independence as a company focusing exclusively on these types of technologies.

~~Academia~~

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

As academic institutions increasingly embrace translational research, bridging from discoveries to practical applications in medicine, our relationships in Academia also support our presence in the Molecular Diagnostics, Pharma and Applied Testing customer classes. Research in university settings often helps in development of technologies for targeted biomolecules, and academic research also can result in scientific publications that validate the usefulness of QIAGEN solutions.

Global Presence by Category of Activity and Geographic Market

Product Category Information

Net sales for the product categories are attributed based on those revenues related to sample and assay products and ~~similarly~~ related revenues including bioinformatics solutions, and revenues derived from instrumentation sales.


(in thousands)	2017		2016		2015		2019		2018		2017
Net Sales
Consumables and related revenues	$	1,242,715	$	1,166,131	$	1,114,580	$	1,354,147	$	1,315,459	$	1,242,715
Instrumentation	174,821		171,860		166,406		172,277		186,389		174,821
Total	$	1,417,536	$	1,337,991	$	1,280,986	$	1,526,424	$	1,501,848	$	1,417,536

Geographical Information

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


(in thousands)	2017		2016		2015		2019		2018		2017
Net Sales
Americas:
United States	$	579,906	$	555,676	$	525,532	$	663,869	$	632,660	$	579,906
Other Americas	73,478		71,797		79,578		58,121		60,359		73,478
Total Americas	653,384		627,473		605,110		721,990		693,019		653,384
Europe, Middle East and Africa	462,980		428,055		409,955		487,476		490,301		462,980
Asia Pacific and Rest of World	301,172		282,463		265,921
Asia Pacific, Japan and Rest of World							316,958		318,528		301,172
Total	$	1,417,536	$	1,337,991	$	1,280,986	$	1,526,424	$	1,501,848	$	1,417,536

QIAGEN has built an increasing presence in key emerging markets as a growth strategy. In ~~2017,~~2019, the top seven emerging markets - Brazil, Russia, India, China, South Korea, Mexico and Turkey - contributed approximately 16% of net sales.

Research and Development

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

As a percentage of sales, our research and development investments are among the highest in our industry. About 950 employees in research and development work in QIAGEN centers of excellence on three continents.

Innovation at QIAGEN follows parallel paths:

Creating new systems for automation of workflows - platforms for laboratories, hospitals and other users of ~~these~~ novel molecular technologies.

Expanding our broad portfolio of novel ~~“content”~~content - including assays to detect and measure biomarkers for disease or genetic identification.

Integrating ~~bioinformatics~~Digital Insights with the testing process - software and cloud-based resources to interpret and transform raw molecular data into useful insights.

~~As a percentage of sales, our research and development investments are among the highest~~Innovation in ~~our industry. Almost 1,000 employees~~automation systems positions QIAGEN in ~~research and development work in QIAGEN centers of excellence on three continents.~~

~~Strengthening our leadership in the automation of laboratories is a key to driving dissemination~~fast-growing fields of molecular testing, ~~in healthcare and other fields,~~ as well as generating ~~increased~~ongoing demand for our consumable products. We ~~continue to expand the applications of our modular QIAsymphony platform, enabling hospitals~~are developing and ~~other customers to adopt or greatly expand their use of molecular diagnostics.~~ ~~QIAGEN also is rolling out a range of performance enhancements and expansions for our~~ ~~GeneReader NGS System to~~ ~~add value by addressing new applications and improving output and connectivity within labs.~~

~~We are~~ commercializing a deep pipeline of assays for preventive screening and diagnostic profiling of diseases, detection of biomarkers to guide ~~personalized medicine~~Precision Medicine in cancer and other diseases, and ~~a range of~~ other molecular targets. Our assay development program ~~generates commercial launches of~~aims to commercialize tests that will add value to our QIAsymphony, QIAstat-Dx and ~~GeneReader~~NeuMoDx automation systems in the coming years, as well as next-generation sequencing kits to support our universal NGS ~~platforms.~~franchise and our in vitro diagnostics partnership with Illumina. In ~~2017,~~2019, we launched novel ~~infectious disease tests and~~ companion diagnostics on the QIAsymphony platform for ~~QIAsymphony, as well as additional QIAact panels~~breast, lung and urothelial cancers. We also added the FDA approved respiratory panel for ~~deep analysis~~infectious diseases to the menus for QIAstat-Dx and the NeuMoDx 96 and 288 platforms.

QIAGEN collaborates with many institutions and companies to create innovative molecular solutions. In May 2019, partnering with U.K.-based organizations, we launched APIS Assay Technologies Ltd., a new company aiming to accelerate biomarker commercialization by bridging the translational gap between genomic discoveries and the development of ~~lung, breast and ovarian cancers using the GeneReader NGS System. In Applied Testing, we continue to develop~~ new content for human identification and environmental applications. We are also expanding our extensive portfolio of products for disease pathway research by Pharma and Academic customers. In addition, we are developing assays for specific applications in key markets such as China and Japan.diagnostics.

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

Sales and Marketing

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

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

QIAGEN has initiated actions to drive the growth of our digital marketing channels - including our website (www.qiagen.com), product-specific sites and social media. Our website makes ordering easy with a fully searchable online product catalog and ordering. The site can be viewed in Chinese and Japanese, and contains selected information in French, German and Korean. Our eCommerce team works with clients to provide automated processes supporting a variety of electronic transactions and all major eProcurement systems. Information contained on our website, or accessed through it, is not part of this Annual Report.

Our GeneGlobe ~~Genes~~Design & ~~Pathways web portal (www.geneglobe.com)~~Analysis Hub (www.geneglobe.com), upgraded in September 2019, is a valuable outreach to scientists in Pharma and Academia, enabling researchers to search and order from approximately 25 million pre-designed and custom PCR assay kits, NGS assay panels and other products. ~~We have integrated GeneGlobe with~~The new hub brings next-level experiment planning, execution and follow-up to life science researchers, linking our ~~bioinformatics~~Digital Insights solutions ~~linking biological interpretation~~ with ordering of ~~relevant~~ assays to accelerate research.

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

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

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

Seasonality

Our business does not experience significant, predictable seasonality. Historically, a significant portion of our sales have been to researchers, universities, government laboratories and private foundations whose funding is dependent upon grants from

government agencies, such as the National Institutes of Health and similar bodies. To the extent that our customers experience increases, decreases or delays in funding arrangements and budget approvals, and to the extent that ~~any of our~~ customers' activities are slowed such as during times of higher unemployment, vacation periods or delays in ~~the~~ approval of government budgets, we may experience fluctuations in sales volumes during the year or delays from one period to the next in the recognition of sales. Additionally, we have customers who are active in the diagnostics testing market, and sales to these customers fluctuate to the extent their activities are impacted by public health concerns such as the timing and severity of flu season.

Intellectual Property, Proprietary Rights and Licenses

We have made and expect to continue to make investments in intellectual property. In ~~2017,~~2019, additions to our ~~purchases of~~ intangible assets outside of business combinations totaled ~~$34.3~~$286.2 million. While we do not depend solely on any individual patent or technology, we are significantly dependent in the aggregate on technology that we own or license. Therefore, we consider protection of proprietary technologies and products one of the major keys to our business success. We rely on a combination of patents, licenses and trademarks to establish and protect proprietary rights. As of December 31, ~~2017,~~2019, we owned ~~362~~352 issued patents in the United States, ~~279~~275 issued patents in Germany and ~~1,825~~1,700 issued patents in other major industrialized countries. We had ~~638~~558 pending patent applications. Our policy is to file patent applications in Western Europe, the United States and Japan. U.S. patents have a term of 17 years from the date of issue (for patents issued from applications submitted prior to June 8, 1995), or 20 years from the date of filing (in the case of patents issued from applications submitted on or after June 8, 1995). Patents in most other countries have a term of 20 years from the date of filing the patent application. We intend to aggressively prosecute and enforce patents and to otherwise protect our proprietary technologies. We also rely on trade secrets, know-how, continuing technological innovation and licensing opportunities to develop and maintain our competitive position.

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

circumstances and to other specific exceptions. In the case of our employees, the agreements provide that all inventions conceived by individuals in the course of their employment will be our exclusive property.

See “Risk Factors” included in Item 3 above for details regarding risks related to our reliance on patents and proprietary rights.

Competition

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

We also experience competition in various markets from other companies providing sample preparation products in kit form and assay solutions. These competitors include, but are not limited to, ~~Promega Corp., EMD Millipore or Merck Millipore, and Macherey-Nagel GmbH for~~companies with a focus on nucleic acid separation and ~~purification; Thermo Fisher and Promega Corp. for~~purification, assay solutions, ~~and for~~ transfection ~~reagents;~~reagents and ~~Merck KGaA (MilliporeSigma business) and Thermo Fisher for~~ protein fractionation products. We believe our proprietary technologies and products offer significant advantages over competitors' products with regard to purity, speed, reliability and ease-of-use.

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

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

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

Suppliers

As part of our supplier assessment procedures, we evaluate on a monthly basis the supply performance of our raw material and component suppliers, and we assess on a continuous basis potential ~~new~~ alternative sources of such materials and components, and on a yearly basis assess the risks and benefits of reliance on our existing suppliers. We buy materials for our products from many suppliers, and are not dependent on any one supplier or group of suppliers for our business as a whole. Raw materials generally include chemicals, raw separation media, biologics, plastics, electronics and packaging. Raw materials are generally readily available at competitive, stable prices from a number of suppliers. Certain raw materials are produced under our ~~specifications, so~~specifications. We have inventory agreements with the majority of our suppliers and we closely monitor stock levels to maintain adequate supplies. We believe we maintain inventories at a sufficient level to ensure reasonable customer service levels and to guard against normal volatility in availability.

Government Regulations

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

European Union Regulations

In the European Union, in vitro diagnostic medical devices (IVDs) ~~are~~have been regulated under EU-Directive 98/79/EC (IVD Directive) and corresponding national ~~provisions.~~provisions, however, this Directive will be replaced by the In Vitro Diagnostic Device Regulation (IVDR) in May 2022. The IVD Directive requires that medical devices meet the essential requirements set out in an annex of the directive. These requirements include the safety and efficacy of the devices. According to the IVD Directive, the Member States presume compliance with these essential requirements in respect of devices which are in conformity with

the relevant national standards transposing the harmonized standards of which the reference numbers have been published in the Official Journal of the European Communities. These harmonized standards include ISO 13485:~~2003,~~2016, the quality standard for medical device manufacturers.

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

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

~~On May 25, 2017,~~Under the IVDR, which was enacted by the European Commission (EC) ~~enacted new EU regulations for medical devices and IVDs that impose~~on May 25, 2017, in vitro diagnostics will be subject to additional legal regulatory requirements ~~on MD/IVDs used in~~after the ~~EU. These new regulations will come~~IVDR comes into full effect ~~after a 5-year transition period. All products will require approval under the new law and no grandfathering of existing approvals will be allowed.~~on May 26, 2022. Once implemented, the entire EU IVD industry will have to comply with these new requirements, which will bring the EU regulatory landscape on par with other highly regulated markets such as the US. Many Guidance Documents and other regulatory mechanisms will need to be established during this ~~transition. It~~transition period and it is anticipated that it will be late in ~~2019~~2020 before the infrastructure is established to begin the new approvals process.

U.S. Regulations

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

In Vitro Diagnostics

The FDA regulates the sale or distribution of medical devices, including in vitro diagnostic test kits and some ~~Lab Developed Tests (LDTs).~~LDTs. The information that must be submitted to the FDA in order to obtain clearance or approval to market a new medical device varies depending on how the medical device is classified by the FDA. Medical devices are classified into one of three classes depending on ~~the basis of~~ the controls deemed by the FDA to be necessary to reasonably ensure their safety and effectiveness. Class I devices are subject to general controls, including labeling ~~pre-market notification~~requirements, and adherence to the FDA’s quality system regulations (QSRs), which are device-specific current good manufacturing practices. Class II devices are subject to premarket notification, QSRs, general controls and sometimes special controls, including performance standards and post-market surveillance. Class III devices are subject to most of the previously identified requirements as well as to pre-market approval. ~~All~~ Class I devices are exempt from premarket review; most Class II devices require 510(k) clearance, and all Class III devices must receive premarket approval before they can be sold in the United States. The payment of a user fee, that is ~~subject to frequent adjustment,~~typically adjusted annually, to the FDA is usually required when a 510(k) notice or premarket approval application is submitted.

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

The FDA generally issues a decision letter within 90 days of receipt of the 510(k) if it has no additional questions or sends a first action letter requesting additional information within 75 days. Most 510(k)s do not require clinical data for clearance, but a minority will. Requests for additional data, including clinical data, will increase the time necessary to review the notice. If the FDA believes that the device is not substantially equivalent to a predicate device, it will issue a “Not Substantially Equivalent” ~~letter~~(NSE) determination and designate the device as a Class III device, which will require the submission and approval of a PMA before the new device may be marketed. ~~Under certain circumstances,~~A person who receives an NSE determination in response to a 510(k) submission may, within 30 days of receipt of the ~~sponsor may petition~~NSE determination, submit a de novo request for the FDA to make a risk-based ~~determination~~evaluation for classification of the ~~new~~ device ~~and reclassify the new device as a~~into Class I or ~~Class II device.~~II. Devices that are classified through the de novo process may be marketed and used as predicates for future 510(k) submissions. The FDA continues to reevaluate the 510(k) ~~review~~pathway and process and wethe de novo process, and has taken what it describes as a risk-based approach to develop innovative regulatory policy to propose a more "contemporary" approach. In October 2017, the FDA published a final guidance entitled, “De Novo Classification Process (Evaluation of Automatic Class III Designation)” and in December 2018, the FDA issued a proposed rule which if finalized is intended to provide structure, clarity and transparency on the de novo classification process. We cannot predict what if any changes will ~~occur.~~occur or how they will affect our current or future products.

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

begin the trial.

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

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

Regulation of Companion Diagnostic Devices

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

It also issued a draft guidance on July 15, 2016, entitled, “Principles for Codevelopment of an In Vitro Companion Diagnostic Device with a Therapeutic Product” to serve as a practical guide to assist therapeutic product sponsors and IVD sponsors in developing a therapeutic product and an accompanying IVD companion ~~diagnostic.~~diagnostic and on December 7, 2018, it published another draft guidance, “Developing and Labeling In Vitro Companion Diagnostic Devices for a Specific Group or Class of Oncology Therapeutic Products” which, if finalized, is intended to facilitate class labeling on diagnostic tests for oncology therapeutic products, where scientifically appropriate.

The FDA also introduced the concept of complementary diagnostics that are distinct from companion diagnostics because they provide additional information about how a drug is used or identify patients who are likely to derive the greatest benefit from therapy without being required for the safe and effective use of that drug. The FDA has not yet provided much guidance on the regulation and use of complementary diagnostics, but several have been approved.

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

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

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

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

If the FDA evaluations of both the PMA and the manufacturing facilities are favorable, the FDA will either issue an approval order or an approvable letter, which usually contains a number of conditions that must be met in order to secure the final

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

After approval, the use of an IVD companion diagnostic device with a therapeutic product will be stipulated in the instructions for use in the labeling of both the diagnostic device and the corresponding therapeutic product. In addition, a diagnostic test that was approved through the PMA process or one that was cleared through the 510(k) process and placed on the market will be

subject to many of the same regulatory requirements that apply to approved drugs. The FDA has approved a number of drug/diagnostic device companions in accordance with the Guidance.

Unique Device Identifier Requirements

In September 2013, the FDA issued its final rule on the Unique Device Identifier. This rule now requires an additional registered identifier, including a special barcode, on all FDA regulated medical devices. The rule is implemented in phases with the first deadline of September 24, 2014 being established for all Class III medical devices. For QIAGEN, this impacted the ~~hc2,~~HC2, QuantiFERON, artus, and therascreen products. We established a task force to ensure that the deadline was met but ~~this will place~~there is additional administrative and regulatory burden on us related to the annual reporting of compliance of these products to the new regulation. Class II and Class I products ~~are~~were required to have this same labeling as of September 24, 2016 and 2018, respectively. QIAGEN was fully compliant with the new rule by ~~the~~ September ~~2014 and 2016 deadlines and we continue to work to ensure that we will be able to meet the remaining deadlines.~~2018. The new rule will also require additional compliance oversight now that it has been implemented. The requirements are now ~~required to be~~ confirmed as part of our annual reporting and PMA submissions. They are also assessed during site inspections by the U.S. FDA.

Regulation of Research Use Only Products

Some of our products are sold for research purposes in the U.S., and labeled “For Research Use Only” (RUO) or “for molecular biology applications.” In November 2013, the FDA issued a final Guidance for Industry and Food and Drug Administration Staff entitled, “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only.” In the Guidance, RUO refers to devices that are in the laboratory phase of development, and investigational use only, or IUO, refers to devices that are in the product testing phase of development. These types of devices are exempt from most regulatory controls. Because we do not promote our RUOs for clinical diagnostic use or provide technical assistance to clinical laboratories with respect to these tests, we believe that these tests are exempt from FDA’s premarket review and other requirements. If the FDA were to disagree with our designation of any of these products, we could be forced to stop selling the product until we obtain appropriate regulatory clearance or approval. Further, it is possible that some of our RUOs may be used by some customers without our knowledge in their LDTs, which they develop, validate and promote for clinical use. However, as previously noted, we do not promote these products for use in LDTs or assist in the development of the LDTs for clinical diagnostic use.

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

HIPAA and Other Privacy and Security Laws

Numerous privacy and data security laws apply to personal information, including health information. These laws vary in their application. For example, the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations ~~(HIPAA)~~(collectively, HIPAA), regulate the uses, disclosures and security of identifiable health information (protected health information or PHI) in the hands of certain health care providers, health plans or health care clearing houses (covered entities). HIPAA regulates and limits covered entities’ uses and disclosures of PHI and requires the implementation of administrative, physical and technical safeguards to keep PHI secure. HIPAA also applies to organizations that create, receive, maintain or transmit PHI to provide services to or for or on behalf of covered entities (business associates). Business associates and certain of their subcontractors are required to comply with certain privacy and all of the security standards of HIPAA. Business associates and covered entities must also comply with breach notification standards established by HIPAA. The HIPAA breach notification standards require covered entities to notify affected individuals, the government, and in some cases, local and national media in the event of a breach of PHI that has not been secured in accordance with HIPAA standards, such as by encryption. The breach notification standards require business

associates to notify covered entity customers of their own breaches of unsecured PHI so that the relevant covered entity may make required notifications. In the ordinary course, HIPAA does not apply to us directly, but if we were to act as a HIPAA covered entity or business associate, we would be subject to these obligations. Most of our institutional and physician customers are covered entities under HIPAA and must obtain proper authorization, or de-identify information or take some other step so that we may provide ~~services.~~services involving PHI. When PHI is de-identified in accordance with HIPAA or when the disclosure of PHI is authorized by a patient, HIPAA does not impose any compliance obligations on the recipient, but our use and disclosure of the information may be limited by contract or the terms of the authorization.

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

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

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

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

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

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

Compliance with Fraud and Abuse Laws

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

Anti-Kickback Statute

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

The referral of an individual for a service or product for which payment may be made by Medicare, Medicaid or other government-sponsored healthcare program; or

purchasing, ordering, arranging for, or recommending the ordering of, any service or product for which payment may be made by a government-sponsored healthcare program.

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

The Anti-Kickback Statue is broad and prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. Recognizing that the Anti-Kickback Statute is broad and may technically prohibit many innocuous or beneficial arrangements, the Office of Inspector General of the Department of Health and Human Services (OIG) has issued regulations, commonly known as "safe harbors." These safe harbors set forth certain requirements that, if fully met, will

insulate healthcare providers, medical device manufacturers, and others, from prosecution under the Anti-Kickback Statute. Although full compliance with these safe harbor provisions ensures against prosecution under the Anti-Kickback Statute, full compliance is often difficult and the failure of a transaction or arrangement to fit within a specific safe harbor does not necessarily mean that the transaction or arrangement is illegal or that prosecution under the Anti-Kickback Statute will be

pursued. However, conduct and business arrangements that do not fully satisfy each applicable safe harbor may result in increased scrutiny by government enforcement authorities such as the OIG. The statutory penalties for violating the Anti-Kickback Statute include imprisonment for up to five years and criminal fines of up to $25,000 per violation. In addition, through application of other laws, conduct that violates the Anti-Kickback Statute can also give rise to False Claims Act lawsuits, civil monetary penalties and possible exclusion from Medicare and Medicaid and other federal healthcare programs. In addition to the Federal Anti-Kickback Statute, many states have their own kickback laws. Often, these laws closely follow the language of the federal law, although they do not always have the same scope, exceptions, safe harbors or sanctions. In some states, these anti-kickback laws apply not only to payment made by a government health care program but also with respect to other payors, including commercial insurance companies.

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

Other Fraud and Abuse Laws

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

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

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

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

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

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

Despite extensive procedures to ensure compliance, we may also be exposed to liabilities under the U.S. Foreign Corrupt Practices Act, or FCPA, which generally prohibits companies and their intermediaries from making corrupt payments to foreign

officials for the purpose of obtaining or maintaining business or otherwise obtaining favorable treatment, and requires companies to maintain adequate record-keeping and internal accounting practices to accurately reflect the transactions of the company. We are also subject to a number of other laws and regulations relating to money laundering, international money transfers and electronic fund transfers. These laws apply to companies, individual directors, officers, employees and agents.

Environment, Health and Safety

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

Other Country Specific Requirements

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

Reimbursement

United States

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

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

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

Code Assignment. In the United States, a third-party payor's decisions regarding coverage and payment are impacted, in large part, by the specific Current Procedural Terminology, or CPT, code used to identify a test. The American Medical Association, or AMA, publishes the CPT, which ~~is a listing of descriptive terms and identifying~~identifies codes, along with descriptions, for reporting medical services and procedures. The purpose of the CPT is to provide a uniform language that accurately describes medical, surgical, and diagnostic services and therefore to ensure reliable nationwide communication among healthcare providers, patients, and third-party

payors. CMS uses its own HCPCS codes for medical billing and reimbursement purposes. Level I HCPCS codes reflect current CPT codes, while

Level II codes primarily represent non-physician services and Level III codes are local codes developed by Medicaid agencies, Medicare contractors and private insurers.

Proprietary Laboratory Analyses (PLA) Codes are an addition to the CPT® code set approved by the AMA CPT® Editorial Panel. They are alpha-numeric CPT codes with a corresponding descriptor for labs or manufacturers that want to more specifically identify their test.

A manufacturer of in vitro diagnostic kits or a provider of laboratory services may request establishment of a Category I CPT code for a new ~~product.~~product or the PLA Code or both. In addition, Z-Code identifiers are unique five-character alphanumeric tracking codes associated with a specific molecular diagnostic test. When a claim is submitted, it includes the associated CPT code and the Z-Code identifier is entered as a device code. Assignment of a specific CPT code ensures routine processing and payment for a diagnostic test by both private and government third-party payors.

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

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

CMS reimbursement rates for clinical diagnostic tests are defined by CPT and HCPS ~~code~~codes in the Clinical Laboratory Fee Schedule (CLFS).In 2012, the AMA added 127 new CPT codes for molecular pathology services that became effective on January 1, 2013. These new CPT codes are biomarker specific and were designed to replace the previous methodology of billing for molecular pathology testing, which involved “stacking” a series of non-biomarker specific CPT codes together to describe the testing performed. CMS issued final national reimbursement prices for the new CPT codes in November 2013. These federal reimbursement amounts are widely acknowledged to be lower than the reimbursement obtained by the now outdated “stacking” method, but commercial ~~payors~~insurers and Medicare contractors are still in the process of solidifying their coverage and reimbursement policies for the testing described by these new CPT codes.

As of January 1, 2018, in accordance with the Protecting Access to Medicare Act of 2014 (PAMA), CMS began calculating Medicare reimbursement rates for certain clinical diagnostic tests using weighted median private payor rates, which are based on rate information reported by applicable laboratories. This new rate methodology means the lower reimbursement rates previously experienced in the field of molecular pathology testing now extends to additional diagnostic testing codes on the CLFS. On December 20, 2019, the President signed the Further Consolidated Appropriations Act, which included the Laboratory Access for Beneficiaries Act, or the LAB Act. The LAB Act delays by one year the reporting of payment data under PAMA for clinical laboratory diagnostic tests that are not advanced diagnostic laboratory tests. CDLT data for the collection period of January 1, 2019 through June 30, 2019, which was supposed to be reported in 2020, must now be reported between January 1, 2021 and March 31, 2021. Data reporting will then resume on a three-year cycle beginning in 2024. Under PAMA, as amended by the LAB Act, any reduction to a particular payment rate resulting from the new methodology is limited to 10% per test per year in 2020 and to 15% per test per year in each of the years 2021 through 2023.

Coverage Decisions. When deciding whether to cover a particular diagnostic test, private and government third-party payors generally consider whether the test is a ~~contractual benefit~~medically necessary and, if so, whether ~~it is reasonable~~the test will directly impact clinical decision making. For coverage, the testing method should be considered scientifically valid to identify the specific gene biomarker or gene mutation, and ~~necessary~~must have been demonstrated to improve clinical outcomes for the ~~diagnosis~~patient’s condition. Coverage of a drug therapy and its companion diagnostic are usually validated by a NCCN category 1, 2A or ~~treatment of an illness or injury.~~2B recommendation. However, most third-party payors do not cover experimental services. Coverage determinations are often influenced by current standards of practice and clinical data, particularly at the local level. CMS ~~the government agency responsible for overseeing the Medicare program,~~ has the authority to make coverage determinations on a national basis, but most Medicare coverage decisions are made at the local level by contractors that administer the Medicare program in specified geographic areas. Private and government third-party payors have separate processes for making coverage determinations, and private third-party payors may or may not follow Medicare's coverage decisions. If a third-party payor has a coverage determination in place for a particular diagnostic test, billing for that test must comply with the established policy. Otherwise, the third-party payor makes reimbursement decisions on a case-by-case basis.

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

and provisions. Medicaid programs generally pay for diagnostic tests based on a fee schedule, but reimbursement varies by ~~state.~~geographic region.

European Union

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

Conflict Minerals

~~Recent~~ U.S. legislation has been enacted to improve transparency and accountability concerning the sourcing of conflict minerals from mines located in the conflict zones of the Democratic Republic of Congo (DRC) and its adjoining countries. The term conflict minerals currently encompasses tantalum, tin, tungsten (or their ores) and gold. Certain of our instrumentation product components which we purchase from third party suppliers contain gold. This U.S. legislation requires manufacturers, such as us, to investigate our supply chain and disclose if there is any use of conflict minerals originating in the DRC or adjoining countries. We conduct due diligence measures annually to determine the presence of conflict minerals in our products and the source of any such conflict minerals. Because we do not purchase conflict minerals directly from smelters or refineries, we rely on our suppliers to specify to us their Conflict Minerals sources and declare their conflict minerals status. We disclosed our most recent Conflict Minerals findings to the Securities Exchange Commission for the calendar year ending December 31, ~~2016~~2018 on Form SD on ~~April 24, 2017~~May 8, 2019 and will provide updated disclosure to the Securities Exchange Commission as required.

Organizational Structure

QIAGEN N.V. is the holding company for more than 50 consolidated subsidiaries, many of which have the primary function of distributing our products and services on a regional basis. Certain subsidiaries also have research and development or production activities. A listing of our significant subsidiaries and their jurisdictions of incorporation is included in Exhibit 8.1 to this Annual Report.

Description of Property

Our production and manufacturing facilities for consumable products are located in Germany, the United States ~~China,~~ and ~~the United Kingdom.~~China. Our facilities for software development are located in the United States, Germany, Poland, Denmark and Romania. In recent years, we have made investments in automated and interchangeable production equipment to increase our production capacity and improve efficiency. Our production and manufacturing operations are highly integrated and benefit from sophisticated inventory control. Production management personnel are highly qualified, and many have advanced degrees in engineering, business and science. We also have installed and continue to expand production-planning systems that are included in our integrated information and control system based on the SAP R/3 business software package from SAP AG. Worldwide, we use SAP software to integrate most of our operating subsidiaries. Capital expenditures for property, plant and equipment totaled $118.0 million, $109.8 million and $90.1 million ~~$74.5 million~~for 2019, 2018 and ~~$97.8 million for~~ 2017, ~~2016 and 2015,~~ respectively.

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

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

Our facilities in Hilden, Germany, currently occupy a total of approximately ~~781,000~~786,000 square ~~feet, some of which is leased pursuant to separate contracts, the last of which expires in 2018.~~feet. Our most recent expansion to these facilities was in ~~2017~~2018 and included approximately ~~4,400~~6,400 square feet of ~~additional office and warehouse space.~~clean room space for Stat-DX integration. Our production capacity is increased through our manufacturing and research facilities in the United States. QIAGEN Sciences, LLC owns a 24-acre site in Germantown, Maryland. The 285,000 square foot Germantown facility consists of several buildings in a campus-like arrangement and can accommodate over 500 employees. There is room for future expansion of up to 300,000 square feet of facility space. ~~In 2015, we completed expansion of our research and production facilities in Hilden, Germany and renovations of administrative facilities in Germantown, Maryland.~~

We lease ~~a facility~~facilities in Frederick, Maryland comprising 42,000 square feet for manufacturing, warehousing, distribution and research ~~operations. We~~operations and also ~~lease~~ facilities in Beverly, Massachusetts with ~~32,400~~44,000 square feet ~~in Waltham for NGS system development and 39,100 square feet in Beverly~~ for enzyme manufacturing. Additionally, we have leased facilities in Redwood City, California with 12,700 square feet for digital insights and ~~Cary, North Carolina with 10,900~~19,000 square feet ~~focused on bioinformatics.~~in Minden, Nevada for Service Solutions. We have shared service centers which lease facilities in Wroclaw, Poland

(48,600 square feet) and Manila, Philippines (29,300 square feet). Additionally, we lease ~~smaller~~ facilities in Shenzhen, China and Manchester, United Kingdom for ~~manufacturing, warehousing, distribution and~~ research ~~operations and have shared service centers which lease facilities in Wroclaw, Poland and Manila, Philippines.~~operations. Other subsidiaries throughout the world lease smaller amounts of space. Our corporate headquarters are located in leased office space in Venlo, The Netherlands.

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


Item 4A.	Unresolved Staff Comments

Not applicable.


Item 5.	Operating and Financial Review and Prospects

This section contains a number of forward-looking statements. These statements are based on current management expectations, and actual results may differ materially. Among the factors that could cause actual results to differ from management’s expectations are those described in “Risk Factors” and “Forward-looking and Cautionary Statements” in Item 3 of this Annual Report.

Results of Operations

Overview

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

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

~~Molecular Diagnostics~~ ~~- healthcare providers engaged in many aspects of patient care including Prevention, Profiling of diseases, Personalized Healthcare and Point of Need testing~~

~~Applied Testing~~ ~~- government or industry customers using molecular technologies in fields such as forensics, veterinary diagnostics and food safety testing~~

~~Pharma~~ ~~- pharmaceutical and biotechnology companies using molecular testing to support drug discovery, translational medicine and clinical development efforts~~

~~Academia~~ ~~- researchers exploring the secrets of life such as the mechanisms and pathways of diseases, and in some cases translating that research into drug targets or commercial applications~~


•	Molecular Diagnostics - healthcare providers engaged in many aspects of patient care requiring accurate diagnosis and insights to guide treatment decisions in oncology, infectious diseases and immune monitoring. Includes Precision Medicine and companion diagnostics.


•	Life Sciences - customers including government, biotechnology companies and researchers who utilize molecular testing and technologies who are generally served by public funding including areas such as medicine and clinical development efforts, forensics and exploring the secrets of life. Includes Pharma, Academia and Applied Testing customers.

We market products in more than 130 countries, mainly through subsidiaries in markets we believe have the greatest sales potential in Europe, Asia, the Americas and Australia. We also work with specialized independent distributors and importers. As of December 31, ~~2017,~~2019, we employed approximately ~~4,700~~5,100 people in more than 35 locations worldwide.

Recent Acquisitions

We have made a number of strategic acquisitions and implemented other strategic transactions ~~since 2015, targeting innovative technologies and~~ aiming to achieve market-leading positions with innovative technologies in high-growth areas of molecular diagnostics and research. These transactions have enhanced our product offerings and technology platforms, as well as our geographic footprint. They include:

In ~~early~~January 2019, QIAGEN began developing next-generation systems for digital PCR and acquired the digital PCR assets of Formulatrix, Inc., a developer of laboratory automation solutions. We expect to begin commercializing fully integrated digital PCR solutions in 2020, combining QIAGEN technologies and automation with the Formulatrix assets we acquired. Known as QIAcuity, the system will offer highly automated workflows, quicker time-to-result, and higher multiplexing and throughput flexibility than current digital PCR platforms. Digital PCR is one of the fastest-growing molecular testing applications in the life sciences industry. QIAGEN paid Formulatrix $125 million in cash upon closing and agreed to future milestone payments of approximately $136 million in 2020.

Also in January 2019, QIAGEN acquired N-of-One, Inc., a pioneer in molecular oncology decision support services, to strengthen our bioinformatics leadership in clinical NGS interpretation. The acquisition broadened the QIAGEN Digital Insights offering of software, content and service-based solutions. N-of-One’s services and content have been integrated into QIAGEN Clinical Insights (QCI), adding medical interpretation and real-world evidence insights. The

N-of-One somatic cancer database, drawing upon more than 125,000 anonymized patient samples, has increased QIAGEN’s lead as the provider of the industry’s largest genomics knowledge base.

In September 2018, QIAGEN announced a strategic partnership with NeuMoDx Molecular, Inc. to commercialize next-generation, fully integrated automation systems for PCR testing. The NeuMoDx 288 (high-throughput version) and NeuMoDx 96 (mid-throughput) systems help clinical laboratories process increasing molecular test volumes and deliver more rapid diagnostic insights. QIAGEN is initially distributing NeuMoDx systems and consumables in Europe and other markets outside the United States. The companies entered ~~into~~ a ~~purchase~~merger agreement whereby QIAGEN will acquire remaining NeuMoDx shares that it does not currently own at a price of approximately $234 million (QIAGEN currently owns 19.9% of NeuMoDx), subject to ~~acquire~~the achievement of regulatory and operational milestones, by mid-2020.

In April 2018, QIAGEN acquired STAT-Dx, a ~~privately-held~~privately held company, ~~developing advanced~~and launched QIAstat-Dx, a next-generation multiplex ~~diagnostics for widespread syndromes such as~~PCR system developed by STAT-Dx, in Europe. The novel QIAstat-Dx system enables fast, cost-effective and flexible syndromic testing from Sample to Insight. The first two CE-IVD marked assays provide differential diagnosis of serious respiratory orand gastrointestinal infections. ~~Subject to successful completion~~In May 2019, we received FDA clearance and launched QIAstat-Dx in the United States with the respiratory panel. A broad menu of ~~defined~~tests is under development ~~activities by STAT-Dx,~~in infectious disease, oncology and other areas. QIAGEN ~~has agreed to acquire all shares of~~acquired STAT-Dx for approximately ~~$147~~$149 million in cash and additional future payments of up to about $44 million based on the achievement of regulatory and commercial milestones. The acquisition is expected to be completed in the second quarter of 2018 and funded from existing cash reserves. The transaction will expand QIAGEN's instrument and consumables portfolio by adding a novel CE-IVD marked system, to be branded as QIAstat-Dx, enabling Sample to Insight processing of up to 48 molecular targets with cost-efficient, easy-to-use assays. The first two QIAstat-Dx tests, extensive respiratory and gastrointestinal panels, are expected to be launched in Europe and other markets in the second half of 2018, and in the U.S. following expected regulatory approval in 2019.

QIAGEN entered into a joint venture in May 2017 with Maccura Biotechnology Co., Ltd., a leading in vitro diagnostics company in China, to accelerate the growth of QIAGEN’s GeneReader NGS System. Known as MAQGEN China and based in Chengdu, Sichuan Province, the venture will develop local adaptations, pursue regulatory paths for the GeneReader and leverage Maccura’s broad customer network to expand the system’s adoption in laboratories across China. Maccura owns 60% of the joint venture and QIAGEN owns 40%. QIAGEN’s own operations in China continue as a stand-alone company, focusing on our other products and services for customers such as QuantiFERON-TB and the Life Sciences portfolio.

QIAGEN took steps in late 2017 to streamline its product portfolio and focus on growth areas by discontinuing commercialization of some non-core PCR tests and externalizing the HPV test franchise for cervical cancer screening in China to a third-party company. In January 2018, a partnership became effective with a Chinese company that has taken over R&D, commercial distribution, and the related QIAGEN employees and infrastructure of the HPV test franchise in China. QIAGEN is a minority shareholder of this company.

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

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

In 2015, we acquired MO BIO Laboratories, Inc., a privately-held provider of cutting-edge sample technologies for studies of the microbiome and metagenomics, analyzing the impact of microbial diversity on health and the environment. The acquisition added a complementary portfolio of sample technologies to QIAGEN's universal solutions for next-generation sequencing. MO BIO kits, based on proprietary Inhibitor Removal Technology, enable the isolation of pure DNA from challenging samples like soil, water, plants and stool.

In 2015, we acquired an innovative technology from AdnaGen GmbH, a subsidiary of Alere Inc., that enables enrichment and molecular analysis of circulating tumor cells (CTCs) from blood samples. The acquisition added to QIAGEN’s pipeline of technologies for molecular testing through non-invasive liquid biopsies as an alternative to costly and risky tissue biopsies. Other assets acquired include two marketed CE-IVD marked products, AdnaTest BreastCancer and AdnaTest Prostate Cancer, for treatment monitoring and detection of tumor relapse.

In February 2015, we announced the spin-off of teams and activities of QIAGEN Marseille S.A. (formerly Ipsogen S.A.), a majority-owned and fully consolidated entity. In the divestiture, QIAGEN Marseille agreed to the sale of all its assets and liabilities, except its intellectual property portfolio, to a stand-alone company. QIAGEN retained rights to commercialize the ~~ipsogen~~ ~~line of products, including companion diagnostics for blood cancers. As part of this initiative, we acquired the remaining QIAGEN Marseille shares through a tender offer during 2015 and 2016.~~

Our financial results include the ~~contributions~~impacts of recent acquisitions ~~and the QIAGEN Marseille spin-off~~ from their effective ~~dates,~~dates.

NGS portfolio orientation and measures to prioritize resource allocation

In October 2019, QIAGEN announced a new orientation for its NGS-related activities that focuses development activities on maximizing the new Illumina partnership for IVD solutions, as well as ~~costs related~~expanding QIAGEN’s offering of universal NGS consumables solutions for use with any sequencer. QIAGEN intends to ~~the transactions~~continue supporting and ~~integration~~servicing customers of the ~~acquired companies, such~~GeneReader NGS System, which is commercialized worldwide as a complete system for the ~~relocation~~processing of smaller targeted gene panels. However, QIAGEN discontinued development for new NGS instruments. Additionally, QIAGEN began implementing a set of initiatives to shift its Global Operations organization to a regional manufacturing structure and ~~closure~~to expand the scope of ~~certain facilities.~~activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland, and Manila, Philippines. QIAGEN currently anticipates further pre-tax charges of about $15-23 million in 2020 for these measures.

We determined that we operate as one business segment in accordance with ASC Topic 280, Segment Reporting. Our chief operating decision maker (CODM) makes decisions on business operations and resource allocation based on evaluations of the QIAGEN Group as a whole. Considering ~~the~~ acquisitions made during ~~2017,~~2019 together with recent changes in our management, we determined that we still operate as one business segment. We provide certain revenue information by customer class to allow better insight into our operations. This information is estimated using certain assumptions to allocate revenue among the customer classes.

Year Ended December 31, ~~2017,~~2019, Compared to ~~2016~~2018

Net Sales

In ~~2017,~~2019, net sales grew 6%2% to ~~$1.42~~$1.53 billion compared to ~~$1.34~~$1.50 billion in ~~2016 with organic business expansion contributing four percentage points to total sales~~2018 reflecting growth ~~with two percentage points of additional growth from the June 2016 acquisition of Exiqon A/S, a leader~~ in RNA analysis technologies, and the January 2017 acquisition of OmicSoft Corporation, a software provider unlocking valuable insights from large “omics” datasets. Sales growth of 6% includes an adverse impact of one percentage point related to growth of non-core PCR tests and the China HPV franchise, which beginning in January 2018 have either been discontinued or externalized through a partnership with a Chinese company which has taken over the commercial distribution of the HPV test franchise in China. All regions and customer classes supported higher sales of consumables and related revenues which more than offset lower instrument revenues. Consumable and related revenues includes the contributions from our January 2019 acquisition of N-of-One, which provided net sales of approximately $5.0 million in 2019. We experienced increases across consumables and related revenues (+7%3% / ~~88%~~89% of sales) ~~and~~due to strong sales of the QuantiFERON-TB test as well as gains within the Life Sciences customer classes. This more than outweighed decreases across the instruments ~~(+2%~~portfolio (-8% / ~~12%~~11% of sales) including lower sales of platforms for assay technologies and the GeneReader NGS Systems despite higher placements of the QIAcube Connect, QIASymphony and QIAstat-Dx systems. Net sales were negatively impacted by two percentage points from adverse currency movements against the U.S. dollar

Customer classes: An overview of net sales by product category and customer class:

Net sales by product category and customer class



	Year ended December 31, 2019
	Sales (In $ m)	% change	% of sales
Consumables and related revenues	$1,354	+3%	89%
Instruments	$172	-8%	11%

Molecular Diagnostics ⁽¹⁾	$737	+1%	48%
Life Sciences	$789	+2%	52%
Academia / Applied Testing	$487	+2%	32%
Pharma	$302	+4%	20%

(1) Includes companion diagnostic co-development revenues ($42 million, -28%).

Molecular Diagnostics grew 1% and represented 48% of sales in 2019. Molecular Diagnostics sales were adversely affected by three percentage points of adverse currency movements compared to 2018. Sales in 2019 included gains in consumables, in particular for the QuantiFERON-TB test compared to 2018 that was partially offset by significantly lower revenues from companion diagnostic co-development projects and instruments.

During 2019, Life Sciences sales grew 2% and reflected 52% of sales, while currency movements adversely impacted this customer class by three percentage point compared to 2018. Increased demand in consumables and related revenues across this customer class more than offset weaker instrument sales, which were affected by the focus on a new generation of products being prepared for launch and led by the new version of QIAcube Connect. Results for 2019 also absorbed the adverse effect of the April 2018 divestment of the Applied Testing veterinary testing assay portfolio.

Net sales by geographic region


	Full-year 2017			Year ended December 31, 2019
	Sales (In $ m)	% change	% of sales	Sales (In $ m)	% change	% of sales
Americas	$653	+4%	46%	$722	+4%	47%
Europe / Middle East / Africa	$463	+8%	33%	$487	-1%	32%
Asia-Pacific / Japan	$299	+7%	21%	$314	0%	21%

Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey ($~~234~~250 million, ~~+12%~~+2%, 16% of sales)

~~FY 2017:~~ Rest of world represented less than 1% of net sales.

~~Geographic regions:~~ ~~Europe / Middle East / Africa~~The Americas led the geographic ~~performance~~regions with 8%4% sales growth in ~~2017, including adverse currency movements of one percentage point of sales growth,~~2019 with continued improvements within Life Sciences and ~~benefited from~~overall gains in ~~Germany, Italy~~the United States, Brazil and ~~Turkey.~~Mexico against a decline in Canada. The Asia-Pacific / Japan region ~~advanced 7%,~~in 2019 was flat due ~~partially~~primarily to ~~strong performance in South Korea and India, which more than offset lower sales in Japan. Excluding~~ the ~~business portfolio change~~weaker results in China ~~the Asia-Pacific /~~and Japan against gains in India. The EMEA region experienced ~~13% growth, including one percentage point of favorable currency movements. The Americas advanced at~~ a ~~5% pace, excluding U.S. HPV test sales, on higher sales of QuantiFERON-TB tests~~1% decline due in part to declines in France and ~~improved conditions among Life Science customers. Excluding adverse currency movements of one percentage point, the top seven emerging markets expanded 12%, with key contributions from~~Italy against improving trends in Germany, Turkey ~~South Korea, India and Brazil.~~

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

~~Net sales by product category and customer class~~

Full-year 2017
Sales
(In $ m)
%
change
% of
sales
Consumables and related revenues $1,243 +7% 88%
Instruments $175 +2% 12%

Molecular Diagnostics⁽¹⁾
$683 +5% 48%
Applied Testing $137 +14% 10%
Pharma $275 +7% 19%
Academia $323 +4% 23%

~~(1) Includes companion diagnostic co-development revenues ($43 million, +32%) and U.S. HPV sales ($28 million, -16%, 2% of sales).~~

~~Molecular Diagnostics~~, which contributed approximately 48% of net sales, expanded 5% in 2017, after being reduced by adverse currency movements of one percentage point. The core portfolio delivered approximately 7% growth before adverse currency movements and the ongoing decline in sales of U.S. HPV test products (-16% / 2% of sales). Sales of consumables used on the QIAsymphony automation platform also grew at a solid pace for the full year, as QIAGEN exceeded its goal for new QIAsymphony placements in 2017. Sales growth of 5% includes an adverse impact of 1% related to the China HPV franchise, which beginning in January 2018 has been externalized through a partnership with a Chinese company.

~~Applied Testing~~ represented approximately 10% of net sales and grew 14% in 2017 compared to 2016, with negligible favorable currency movements. Applied Testing advanced for instruments as well as consumables and related revenues, in part due to gains in the human identification / forensics portfolio.

~~Pharma~~ experienced 7% sales growth in 2017 compared to 2016 and provided 19% of net sales, with negligible adverse currency movements. Pharma grew in consumables and related revenues that more than offset weaker instruments growth during the course of the year.

~~Academia~~ represented approximately 23% of net sales and rose 4% in 2017 compared to 2016, with modestly favorable currency movements. Academia advanced on consumables and related revenues, while the EMEA and Asia Pacific / Japan regions showed growth during 2017.United Kingdom.

Gross Profit

Gross profit was ~~$922.6 million,~~$1.01 billion, or ~~65%~~66% of net sales, in ~~2017,~~2019, compared with ~~$844.7 million,~~$1.00 billion, or ~~63%~~67% of net sales, in ~~2016.~~2018. Generally, our consumables and related products have a higher gross margin than our instrumentation products and service arrangements. Fluctuations in the sales levels of these products and services can result in changes in gross margin between

periods. ~~Further, gross profit~~The growth in ~~2017~~consumables and related revenue during 2019 contributed favorably to the margin, which was negatively impacted by $4.4 million in restructuring charges while 2016 was impacted by restructuring charges of $12.0 million. Additionally, during 2016, we incurred incremental costs in connection with the relocation and centralization of the manufacturing of certain products to our European production site in Hilden, Germany and also in connection with the in-sourcing of the manufacturing of our QuantiFERON product to our U.S. site in Germantown, Maryland.

~~Amortization expense~~higher amortization expenses related to developed technology and patent and license rights ~~which have been~~that were acquired in business combinations ~~is included in cost of sales.~~or asset acquisitions. The amortization expense on acquisition-related intangibles within cost of sales ~~decreased~~increased to ~~$72.7~~$71.5 million in ~~2017~~2019 from ~~$80.1~~$56.7 million in ~~2016 reflecting~~2018. The increase was due to the ~~end of the amortization period of intangibles acquired~~asset acquisition from Formulatrix as further discussed in ~~2007. Acquisition-related~~Note 5 "Acquisitions and Divestitures". We expect that our acquisition-related intangible amortization ~~may~~will increase as a result of further acquisitions in the ~~future should we make further acquisitions.~~future.

Research and Development

Research and development expenses ~~increased~~fell by 3% to ~~$154.1~~$157.4 million (10% of net sales) in 2019, from $161.9 million (11% of net sales) in ~~2017, compared to $149.8 million (11% of~~2018. The net ~~sales) in 2016. The increase in research and development costs during 2017 reflects our ongoing~~decrease reflected higher investments in ~~NGS~~QIAstat-Dx and ~~our life sciences portfolio, as well as our acquisitions~~the planned launch of ~~Exiqon~~a digital PCR system against the significant reduction in ~~2016 and OmicSoft in 2017 together with regulatory activity in support~~costs following the decision to discontinue development of ~~new products.~~NGS-related instrument systems. As we continue to discover, develop and acquire new products and technologies, we expect to incur additional expenses related to facilities, licenses and employees engaged in research and development. ~~Additionally,~~Overall, research and development costs are

expected to increase as a result of seeking regulatory approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE approval of certain assays or ~~instruments.~~ ~~Further, business combinations, along with the acquisition~~instruments, but to decline as a percentage of ~~new technologies, may increase our research and development costs~~sales in ~~the future. We have a strong commitment~~2020 compared to ~~innovation and expect to continue to make investments in our research and development efforts.~~2019.

Sales and Marketing

Sales and marketing expenses were ~~largely~~essentially unchanged at ~~$375.6~~$391.9 million (26% of net sales) in ~~2017~~2019 compared to ~~$376.3~~$392.3 million ~~(28%~~(26% of net sales) in ~~2016.~~2018. Sales and marketing expenses were primarily associated with personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional ~~expenses. We experienced efficiencies due~~expense. Higher costs in 2019 related to ~~a lower cost base following the realignment of marketing activities as part of the 2016 restructuring project. These incremental savings were slightly~~an increase in sales personnel, which was partially offset by ~~higher~~lower share-based compensation ~~costs including share based compensation expense when compared to the prior period due to reassessment of stock units with performance criteria.~~and reduced third-party marketing activities. We anticipate that absolute sales and marketing costs will increase along with new product introductions and growth in sales of our products, but decrease as a percentage of sales. ~~Further, looking forward we expect a lower cost base following the realignment of marketing activities as part of the 2016 restructuring project.~~

General and Administrative ~~Restructuring, Integration and Other~~

General and administrative ~~restructuring, integration and other costs~~expenses increased by ~~11%~~7% to ~~$200.1~~$112.3 million ~~(14%~~(7% of net sales) in ~~2017~~2019 from ~~$180.6~~$104.6 million ~~(13%~~(7% of net sales) in ~~2016.~~2018. The increase in 2017 reflects an increase in acquisition and integration costs which totaled $68.9 million in 2017, which included $45.3 million in costs from acquisition related legal settlements partially offset by $3.3 million gains recorded from the reduction in the fair value of contingent consideration following unmet milestones, as compared to $31.1 million in 2016, of which $6.3 million related to the transaction costs incurred in connection with the acquisition of Exiqon A/S. Acquisition and integration related costs in 2016 are net of $5.0 million of the total $6.5 million gains recorded in general and administrative expenses in 2019 was primarily due to higher licensing costs ~~from~~in connection with continued investments in information technology systems, including cyber security, across the ~~reduction~~organization as well as an increase in the ~~fair value~~number of ~~contingent consideration following unmet milestones. 2016 also includes the impact of lower share based~~administrative personnel and higher share-based compensation costs following a reassessment of stock units with performance criteria. Restructuring costs of $29.1 million were lower in 2017 compared to $56.2 million in 2016 related to internal activities, including severance and retention costs as discussed fully in Note 6. As we further integrate the acquired companies and pursue other opportunities to gain efficiencies, we expect to continue to incur additional restructuring and business integration costs in 2018. Over time, we believe the restructuring and integration activities will reduce expenses as we improve efficiency in operations.expenses.

Acquisition-Related Intangible Amortization

Amortization expense related to developed technology and patent and license rights acquired in a business combination is included in cost of sales. Amortization of trademarks and customer base acquired in a business combination is recorded in operating expense under the caption “acquisition-related intangible amortization.” Amortization expenses of intangible assets not acquired in a business combination are recorded within cost of sales, research and development, or sales and marketing line items based on the use of the asset.

During ~~2017,~~2019, amortization expense on acquisition-related intangibles within operating expense ~~increased~~decreased to ~~$39.4~~$30.0 million, compared to ~~$39.1~~$39.0 million in ~~2016.~~2018. The decrease follows the full amortization of assets previously acquired in 2007. We expect acquisition-related intangible amortization will increase as a result of our future acquisitions.

Restructuring, Acquisition, Integration and Other, net

Restructuring, acquisition, integration and other, net was expense of $199.8 million in 2019 as compared to $28.7 million in 2018. During 2019, $163.0 million of charges are included in the 2019 Restructuring program as further discussed in Note 6 "Restructuring and Impairments". We expect to incur additional restructuring cost in 2020 as disclosed therein. In addition, during 2019, we continued to incur acquisition and integration costs related to the acquisitions discussed in Note 5 "Acquisitions and Divestitures". In addition, a $7.4 million gain from the reduction in the fair value of contingent consideration was recognized during 2019 discussed in Note 15 "Financial Instruments and Fair Value Measurements". Further, as we further integrate acquired companies and pursue opportunities to gain efficiencies, we expect to continue to incur additional business integration costs in 2019.

Long-lived Asset Impairments

Impairments to intangible assets and property, plant and equipment in 2019 totaled $140.0 million, of which $138.8 million was incurred in connection with the 2019 restructuring measures as further discussed in Note 6 "Restructuring and Impairments". During 2018, impairments to property, plant and equipment included $1.6 million related to the 2017 Restructuring program also discussed in Note 6 and $6.3 million related to strategic shifts in our business.

Other Income (Expense)

Total other expense, net was ~~$39.0~~$51.6 million in ~~2017,~~2019, compared to ~~$41.9~~$40.8 million in ~~2016.~~2018. Total other expense, net is primarily the result of interest expense, ~~and other expense,~~ partially offset by interest ~~income.~~income and other income (expense), net.

For the year ended December 31, ~~2017,~~2019, interest income increased to ~~$10.6~~$22.1 million from ~~$6.8~~$20.9 million in ~~2016.~~2018. Interest income includes interest earned on cash, cash equivalents and ~~short term~~short-term investments, income related to certain interest rate derivatives as discussed in Note 1314 "Derivatives and Hedging" in the accompanying consolidated financial statements and other components including the interest portion of operating lease transactions. Interest income earned in 2019 includes interest on higher cash balances following the issuance of cash convertible notes in November 2018.

Interest expense increased to ~~$49.7~~$74.2 million in ~~2017,~~2019, compared to ~~$39.0~~$67.3 million in ~~2016.~~2018. Interest costs primarily relate to debt, discussed in Note 1516 "Lines of Credit and Debt" in the accompanying consolidated financial ~~statements.~~statements and the increase in interest expense reflects the issuance of cash convertible notes in November 2018 which bear interest at a higher rate than the notes that matured in 2019.

Other ~~expense,~~income (expense), net was $0.4 million of income for the year ended December 31, ~~2017~~2019. Other income includes $7.8 million of upward adjustments resulting from observable price changes for non-marketable investments not accounted for under the equity method, $2.1 million in income from equity-method investments and a ~~$3.5~~$0.7 million gain from receipt of shares in ~~connection~~settlement of a zero-book value financial instrument held with a third party, all as discussed further in Note 10 "Investments". This income was partially offset by impairments, including $4.8 million of impairments in non-marketable investments accounted for under the equity method as discussed further in Note 10 "Investments", and net losses on foreign currency of $5.7 million for the year ended December 31, 2019.

Other income (expense), net was $5.6 million of income for the year ended December 31, 2018. Other income includes $13.1 million of upward adjustments resulting from observable price changes for non-marketable investments not accounted for under the equity method, a $5.1 million gain from the sale of our interest in ~~an equity-method investment as well as $3.2~~a non-publicly traded company and $2.6 million in income from equity-method investments, all as discussed further in Note 10 "Investments". Additionally in 2018, we recorded a divestiture gain of $8.0 million as discussed in Note 5 "Acquisitions and Divestitures". This income was partially offset by ~~a $5.1~~impairments, including $6.1 million ~~loss recognized~~of impairments in ~~connection with~~non-marketable investments accounted for under the ~~impairments of cost-method investment~~equity method as discussed further in Note 10, and net losses on foreign currency ~~in 2017. Included in $9.7~~of $12.3 million ~~other expense, net in 2016 is a $8.3 million loss recognized in connection with the impairment of an equity-method investment and a $2.6 million charge~~ for ~~the disposal of goodwill following the transfer of the research and development activities of our instrumentation business as part of the restructuring program initiated late in 2016. For~~ the year ended December 31, ~~2017, we recorded net losses on foreign currency of $3.3 million compared to less than $0.1 million in 2016 due to foreign currency rate fluctuations.~~2019.

Provision for Income Taxes

Our effective tax rates differ from The Netherlands statutory tax rate of 25% due in part to our operating subsidiaries being exposed to effective tax rates ranging from zero to ~~more than 40%~~35%. In ~~2017~~2019 and ~~2016,~~2018, our effective tax rates were ~~64.7%~~46.7% and ~~(41.1)%~~15.7%, respectively. The comparison is impacted by pre-tax book income which was ~~higher~~lower in ~~2017~~2019 at ~~$114.4~~a pre-tax book loss of $77.8 million compared to ~~$56.9~~pre-tax book income of $225.7 million in ~~2016. Pretax book income was lower in 2016 primarily due to charges incurred in connection with the restructuring program initiated in the fourth quarter of 2016.~~2018. Fluctuations in the distribution of pre-tax (loss) income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements.

~~During 2017, the 64.7% reflects the impacts of the U.S. tax reform. Because of the tax reform, we revalued of our U.S. deferred tax assets~~ In 2019 and liabilities to reflect the corporate income tax rate change from 35% to 21% and provided for a full valuation allowance of $60.8 million which was recorded against deferred tax assets related to U.S. interest carry forwards. Based on the current debt level in the U.S., along with the new restrictive interest limitation enacted with the new U.S. tax reform, it is highly unlikely that the historic U.S. interest carry forward will ever be utilized. We also recorded full valuation allowances against other deferred tax assets on tax losses due to unlikely future profits in other jurisdictions. Following the adoption of ASU 2016-09 ~~Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~, $5.2 million of excess tax benefit was recognized directly to the tax provision for the year ended December 31, 2017 and during 2017, we increased accruals for tax contingencies by $22.1 million, primarily related to ongoing income tax audits. In 2016,2018, tax expense on foreign operations was favorably impacted by lower income tax rates and partial tax exemptions on foreign income primarily derived from operations in Germany, Singapore, ~~Luxembourg,~~Switzerland, Ireland, Dubai and ~~Switzerland.~~Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions in these jurisdictions. In particular, ~~we have pre-tax~~intercompany foreign royalty income in Germany ~~which~~ is statutorily exempt from trade ~~tax on intercompany foreign royalty income.~~tax. Further, we have intercompany financing arrangements through Luxembourg, Dubai and Ireland in which the intercompany income is partially exempt.

See Note 1617 "Income Taxes" to the consolidated financial statements for a full reconciliation of the effective tax rate to The Netherlands statutory rate.

In future periods, our effective tax rate may fluctuate from similar or other factors as discussed in “Changes in tax laws or their application could adversely affect our results of operations or financial flexibility” in Item 3 Risk Factors.

Year Ended December 31, ~~2016,~~2018, Compared to ~~2015~~2017

~~Net Sales~~

~~In 2016, net sales grew 4%~~Refer to $1.34 billion compared to $1.28 billion in 2015, including two percentage points of adverse currency movements. Excluding the effect of adverse currency movements, organic business expansion contributed four percentage points to total sales growth while nearly two percentage points of additional growth came from the December 2015 acquisition of MO BIO Laboratories Inc, a leader in sample technologies for metagenomics and microbiome analysis, and the June 2016 acquisition of Exiqon A/S, a leader in RNA analysis technologies. Excluding the expected impact of sharply lower U.S. sales of HPV tests, which created approximately two percentage points of headwind, as well as the effect of adverse currency movements, net sales rose approximately 8% in 2016. All regions and customer classes supported higher sales of consumables and related revenues (+5% / 87% of sales) and instruments (+3% / 13% of sales).

~~Net sales by geographic region~~

Full-year 2016
Sales
(In $ m)
%
change
% of
sales
Americas⁽¹⁾
$627 +4% 47%
Europe / Middle East / Africa $428 +4% 32%
Asia-Pacific / Japan $279 +10% 21%

Top 7 emerging markets⁽²⁾
$209 +13% 16%

~~(1) Americas excluding U.S. HPV (+6%)~~

~~(2) Top 7 emerging markets: Brazil, Russia, India, China, South Korea, Mexico and Turkey.~~

~~FY 2016: Rest of world represented less than 1% of net sales.~~

~~Geographic regions:~~ The Asia-Pacific / Japan region led the geographic performance with 10% growth in 2016 reflecting adverse currency movements of one percentage point of sales growth, benefiting from key contributions from China, South Korea and India. The Americas advanced at a faster pace (+6%) when excluding U.S. HPV test sales on higher sales of the QuantiFERON-TB test and improved conditions among Life Science customers. Europe / Middle East / Africa advanced 4% reflecting adverse currency movements of approximately four percentage points of sales growth while experiencing expansion in markets such as France, the United Kingdom, Turkey and the Middle East. Turkey, China, South Korea, India and Brazil were key contributors (+13% / 16% of sales) when excluding adverse currency movements of 6 percentage points.

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

~~Net sales by product category and customer class~~

Full-year 2016
Sales
(In $ m)
%
change
% of
sales
Consumables and related revenues $1,166 +5% 87%
Instruments $172 +3% 13%

Molecular Diagnostics⁽¹⁾
$663 +4% 50%
Of which: U.S. HPV test solutions $33 -29% 3%
MDx excluding U.S. HPV⁽¹⁾
$630 +7% 47%
Applied Testing $120 +5% 9%
Pharma $262 +5% 19%
Academia $293 +4% 22%

~~(1) Includes companion diagnostic co-development revenues ($32 million, -8%)~~

~~Molecular Diagnostics~~, which contributed approximately 50% of net sales, expanded by 4% in 2016 reflecting adverse currency movements of three percentage points of sales growth. The core portfolio delivered approximately 10% growth before adverse currency impacts and the ongoing decline in sales of U.S. HPV test products (-29% / 3% of sales). Sales of consumables used on the QIAsymphony automation platform also grew at a solid pace for the full year, as QIAGEN exceeded its goal for new QIAsymphony placements.

~~Applied Testing~~ represented approximately 9% of net sales, grew 5% in 2016 compared to 2015 with adverse currency movements resulting in a loss of two percentage points of sales growth. Before negative currency impacts, Applied Testing advanced on high-single digit growth rates for instruments while consumables and related revenues grew at mid-single digit rates.

~~Pharma~~ experienced 5% sales growth in 2016 compared to 2015 with adverse currency movements resulting in a loss of two percentage points of sales growth and provided 19% of net sales. Pharma grew on high-single digit growth rates for consumables and related revenues while instruments maintained a mid-single digit rate during the course of the year before negative currency impacts.

~~Academia~~ represented approximately 22% of net sales and rose 4% in 2016 compared to 2015 with negligible adverse currency movements. Before negative currency impacts, Academia advanced on a mid-single digit growth rate for consumables and related revenues while all regions showed gains in this customer class in 2016.

~~Gross Profit~~

Gross profit was $844.7 million, or 63% of net sales, in 2016, compared with $826.7 million, or 65% of net sales, in 2015. Generally, our consumables and related products have a higher gross margin than our instrumentation products and service arrangements. Fluctuations in the sales levels of these products and services can result in fluctuations in gross margin between periods. Gross profit in 2016 was impacted by lower gross margins for companion diagnostic partnerships. Further, gross profit in 2016 was impacted by impairment charges of $12.0 million recognized in connection with our 2016 restructuring. Additionally, during 2016, we incurred incremental costs in connection with the relocation and centralization of the manufacturing of certain products to our European production site in Hilden, Germany and also in connection with the in-sourcing of the manufacturing of our QuantiFERON product to our U.S. production site in Germantown, Maryland.

Amortization expense related to developed technology and patent and license rights, which have been acquired in business combinations, is included in cost of sales. The amortization expense on acquisition-related intangibles within cost of sales decreased slightly to $80.1 million in 2016 from $84.5 million in 2015.

~~Research and Development~~

~~Research and development expenses increased by 2% to $149.8 million (11% of net sales) in 2016, compared to $146.8 million (11% of net sales) in 2015. During 2015, we introduced~~ ~~our~~ ~~GeneReader NGS System and continue to invest in research and development as we~~ develop a range of upgrades and enhancements to address new applications and market segments. We also plan to introduce additional cancer-related gene panels, with longer-term expansion of the NGS content menu beyond oncology. The increase in research and development costs during 2016 also reflects our ongoing investments in NGS and our life sciences portfolio, as well as our acquisitions of MO BIO in late 2015 and Exiqon in 2016 together with regulatory activity in support of new products. As we continue to discover, develop and acquire new products and technologies, we expect to incur additional expenses related to facilities, licenses and employees engaged in research and development. Additionally, research and development costs are expected to increase as a result of seeking regulatory approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE approval of certain assays or instruments.

~~Sales and Marketing~~

Sales and marketing expenses increased 5% to $376.3 million (28% of net sales) in 2016 from $359.6 million (28% of net sales) in 2015. Sales and marketing expenses were higher as a percentage of sales in 2016 as compared to 2015 to support commercialization of growth drivers and geographic expansion. Sales and marketing expenses are primarily associated with personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional expenses. In 2016, we continued investmentsItem 5 in our ~~commercialization activities related to our sales force, in particular the addition~~December 31, 2018 Annual Report on Form 20-F for discussion of sales representatives for QuantiFERON TB and the life sciences markets. We have also continued our e-commerce initiatives as well as investments to expand our presence in markets such as the Middle East and Asia. These incremental investments more than offset favorable currency impacts and lower compensation costs following a reassessment of stock units with performance criteria.

~~General and Administrative, Restructuring, Integration and Other~~

General and administrative, restructuring, integration and other costs increased by 77% to $180.6 million (13% of net sales) in 2016 from $102.1 million (8% of net sales) in 2015. The increase in 2016 includes $56.2 million in restructuring costs related to internal restructuring activities, including personnel related, asset impairment and advisory costs. Additionally, acquisition and integration costs totaled $31.1 million, of which $6.3 million related to the transaction costs incurred in connection with the acquisition of Exiqon A/S. In 2015, acquisition and integration costs totaled $13.9 million, of which $7.5 million related to the transaction costs incurred in connection with the acquisition of MO BIO Laboratories. Acquisition and integration related costs in 2016 are net of $5.0 million of the total $6.5 million gains recorded in general and administrative costs from the reduction in the fair value of contingent consideration following unmet milestones. The increase in general and administrative, restructuring, integration and other costs also reflects an increase of $5.1 million related to share-based compensation expense as 2015 includes the impact of lower share based compensation costs following a reassessment of stock units with performance criteria.

~~Acquisition-Related Intangible Amortization~~

~~During 2016, amortization expense on acquisition-related intangibles within operating expense increased to $39.1 million, compared to $38.7 million in 2015.~~

~~Other Income (Expense)~~

Total other expense, net was $41.9 million in 2016, compared to $43.2 million in 2015. Total other expense, net is primarily the result of interest expense and other expense, partially offset by interest income.

~~For~~ the year ended December 31, 2016, interest income increased to $6.8 million from $4.8 million in 2015. Interest income includes interest earned on cash, cash equivalents and short term investments, income related to certain interest rate derivatives as discussed in Note 13 in the accompanying consolidated financial statements and other components including the interest portion of operating lease transactions.

~~Interest expense increased to $39.0 million in 2016,~~2018, compared to ~~$37.4 million in 2015. Interest costs primarily relate to debt, discussed in Note 15 in the accompanying consolidated financial statements.~~

Other expense, net was $9.7 million for the year ended December 31, 2016, and includes a $8.3 million loss recognized in connection with the impairment of an equity-method investment and a $2.6 million charge for the disposal of goodwill following the transfer of the research and development activities of our instrumentation business as part of the restructuring program initiated late in 2016. Included in $10.6 million of other expense, net in 2015 is a $7.6 million loss recognized on the repurchase of the $130.5 million loan payable to and warrant agreement with QIAGEN Finance. For the year ended December 31, 2016, we recorded net losses on foreign currency of less than $0.1 million compared to $0.5 million in 2015 due to foreign currency rate fluctuations.

~~Provision for Income Taxes~~

Our effective tax rates differ from The Netherlands statutory tax rate of 25% due in part to our operating subsidiaries being exposed to effective tax rates ranging from zero to more than 40%. In 2016 and 2015, our effective tax rates were (41.1)% and 4.7%, respectively. The comparison is impacted by pre-tax book income which was lower in 2016 at $56.9 million compared to $136.3 million in 2015. Pretax book income was lower in 2016 primarily due to charges incurred in connection with the restructuring program initiated in the fourth quarter of 2016. Fluctuations in the distribution of pre-tax (loss) income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements. In 2016 and 2015, tax expense on foreign operations was favorably impacted by lower income tax rates and partial tax exemptions on foreign income primarily derived from operations in Germany, Singapore, Luxembourg, Ireland and Switzerland. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions in these jurisdictions. In particular, we have pre-tax income in Germany which is statutorily exempt from trade tax on intercompany foreign royalty income. Further, we have intercompany financing arrangements through Luxembourg and Ireland in which the intercompany income is partially exempt. See Note 16 to the consolidated financial statements for a full reconciliation of the effective tax rate to The Netherlands statutory rate.

Foreign Currencies

QIAGEN N.V.’s reporting currency is the U.S. dollar, and most of our subsidiaries’ functional currencies are the local currencies of the countries in which they are headquartered. All amounts in the financial statements of entities whose functional currency is not the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: (1) assets and liabilities at period-end rates, (2) income statement accounts at average exchange rates for the period, and (3) components of shareholders’ equity at historical rates. Translation gains or losses are recorded in shareholders’ equity, and transaction gains and losses are reflected in net income. The net loss on foreign currency transactions ~~in 2017 was $3.3 million and in 2016 and 2015 was less than $0.1 million, and $0.5 million, respectively, and~~ is included in other ~~expense, net.~~income (expense), net, and in 2019, 2018 and 2017 was $5.7 million, $12.3 million, and $3.3 million, respectively.

Derivatives and Hedging. In the ordinary course of business, we use derivative instruments, including swaps, forwards and/or options, to manage potential losses from foreign currency exposures and variable rate debt. The principal objective of such derivative instruments is to minimize the risks and/or costs associated with global financial and operating activities. We do not utilize derivative or other financial instruments for trading or speculative purposes. We recognize all derivatives as either assets

or liabilities on the balance sheet, measure those instruments at fair value and recognize the change in fair value in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures. In determining fair value, we consider both the counterparty credit risk and our own creditworthiness, to the extent that the derivatives are not covered by collateral agreements with the respective counterparties. To determine our own credit risk, we estimated our own credit rating by benchmarking the price of our outstanding debt to publicly-available comparable data from rated companies. Using the estimated rating, we quantify our credit risk by reference to publicly-traded debt with a corresponding rating.

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 our balance sheet exposure on a group-wide basis using foreign exchange forwards, options and cross-currency swaps.

Interest Rate Derivatives. We use interest rate derivative contracts on certain borrowing transactions to hedge interest rate exposures. We have entered into interest rate swaps in which we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount.

We also make use of economic hedges. Further details of our derivative and hedging activities can be found in Note 1314 "Derivatives and Hedging" to the accompanying consolidated financial statements.

Liquidity and Capital Resources

To date, we have funded our business primarily through internally generated funds, debt, and private and public sales of equity. Our primary use of cash has been to support continuing operations and our investing activities including capital expenditure requirements and acquisitions. As of December 31, ~~2017~~2019 and ~~2016,~~2018, we had cash and cash equivalents of ~~$657.7~~$623.6 million and ~~$439.2 million,~~$1.16 billion, respectively. We also had restricted cash of $5.7 million and short-term investments of ~~$359.2~~$129.6 million at December 31, ~~2017.~~2019. Cash and cash equivalents are primarily held in U.S. dollars and euros, other than those cash balances maintained in the local currency of subsidiaries to meet local working capital needs. At December 31, ~~2017,~~2019, cash, ~~and~~ cash equivalents and restricted cash had ~~increased~~decreased by ~~$218.5~~$529.7 million from December 31, ~~2016,~~2018, primarily as a result of cash ~~provided by operating activities of $286.8 million and cash provided by~~used financing activities of ~~$387.2~~$639.1 million ~~partially offset by~~and cash used in investing activities of ~~$464.3~~$222.3 million, partially offset by cash provided by operating activities of $330.8 million. ~~Working capital as~~As of December 31, ~~2017 increased to $1.323~~2019 and 2018, we had working capital of $618.9 million and $1.18 billion, ~~as compared to $729.1 million as of December 31, 2016, reflecting the cash provided by the operating and financing activities in 2017 as described below.~~respectively.

Operating Activities. For the years ended December 31, ~~2017~~2019 and ~~2016,~~2018, we generated net cash from operating activities of ~~$286.8~~$330.8 million and ~~$341.6~~$359.5 million, respectively. While the net ~~income~~loss was ~~$40.4~~$41.5 million in ~~2017,~~2019, non-cash components in income included ~~$216.4~~$231.5 million of depreciation and amortization and ~~$5.1~~$144.8 million of non-cash impairments ~~due to~~primarily recorded in connection with the ~~impairment of cost-method investments as further~~restructuring discussed in Note ~~10.~~

6 "Restructuring and Impairments", $40.8 million of amortization of debt discount and issuance costs and $65.9 million of share-based compensation expense. Operating cash flows include a net decrease in working capital of ~~$95.2~~$28.6 million excluding changes in fair value of derivative instruments. The current period change in working capital is primarily due to increased inventories and accounts receivable and decreased ~~taxes payable.~~accrued and other current liabilities. Because we rely heavily on cash generated from operating activities to fund our business, a decrease in demand for our products, longer collection cycles or significant technological advances of competitors would have a negative impact on our liquidity.

Investing Activities. Approximately ~~$464.3~~$222.3 million of cash was used in investing activities during ~~2017,~~2019, compared to ~~$179.1~~$211.4 million during ~~2016.~~2018. Investing activities during ~~2017~~2019 consisted principally of ~~$450.6~~$294.0 million for purchases of short-term investments, ~~$90.1~~$68.1 million in cash paid for acquisitions, net of cash acquired as discussed in Note 5 "Acquisitions and Divestitures", $118.0 million in cash paid for purchases of property and equipment, as well as ~~$34.3~~$156.9 million paid for intangible assets and ~~$4.8~~$5.2 million paid for strategic investments in privately and publicly held companies as discussed in Note 10 "Investments", partially offset by ~~$189.0~~$396.1 million from the sale of short-term investments. ~~Additionally,~~Investing activities during ~~2017~~2018 consisted principally of $172.8 million of cash paid for acquisitions, net of cash acquired, ~~totaled $50.5 million. Cash used in other investing activities during~~$568.0 million for purchases of short-term investments, partially offset by $691.8 million from the ~~year ended December 31, 2017 and 2016 consisted primarily~~sale of ~~$20.7 million and $1.2 million, respectively, paid in connection with derivative collateral arrangements.~~short-term investments.

Financing Activities. For the year ended December 31, ~~2017,~~2019, cash used in financing activities was $639.1 million compared to cash provided by financing activities ~~was $387.2 million compared to cash used in financing activities~~ of ~~$10.6~~$360.4 million in ~~2016.~~2018. Financing activities during ~~2017~~2019 consisted primarily of ~~$329.9~~$506.4 million repayments of long-term debt including $430.0 million for the amount due for the 2019 Cash Convertible Notes, $73.0 million for amounts due for the U.S. Private Placement and $3.4 million for a portion of the 2021 Cash Convertible Notes which was converted during the contingent conversion period as discussed further in Note 16 "Lines of Credit and Debt". In addition, repurchases of QIAGEN shares totaled $74.5 million during 2019.

In 2018, cash provided from financing activities totaled $360.4 million primarily due to $494.9 million net cash proceeds from the ~~German private placement and $394.4 million net cash proceeds from the~~2018 cash convertible offering. We used ~~$73.6~~$97.3 million of the proceeds from the from the cash convertible offering to pay the premium for a call option related to the cash convertible notes, and simultaneously received ~~$45.4~~$72.4 million from the sale of Warrants, for a net cash outlay of ~~$28.3~~$24.9 million for the call spread overlay. ~~Additionally~~Cash provided in ~~2017, we used $243.9 million for a capital repayment made to shareholders in connection with~~2018 was further offset by the ~~January 2017 synthetic share buyback and repurchased~~repurchase of QIAGEN shares ~~of $61.0 million in connection with the fourth share repurchase program discussed in Note 17 "Equity."~~ totaling $104.7 million.

Cash used in other financing activities during the year ended December 31, ~~2017~~2019 and ~~2016~~2018 consisted primarily of ~~$4.4~~$10.5 million and ~~$3.1~~$5.5 million paid for contingent consideration, respectively, together with ~~$4.1~~$0.4 million cash received and ~~$0.8~~$2.0 million cash paid in connection with derivative collateral arrangements, respectively.

Other Factors Affecting Liquidity and Capital Resources

In November 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 2024 (2024 Notes). The net proceeds of the 2024 Notes were $470.0 million, after payment of the net cost of the Call Spread

Overlay and transaction costs paid through December 31, 2019 as described more fully in Note 16 "Lines of Credit and Debt". Interest on the 2024 Notes is payable semiannually in arrears at a rate of 1.000% per annum. The 2024 Notes will mature on November 13, 2024 unless repurchased or converted in accordance with their terms prior to such date.

In September 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes which are due in 2023 (2023 Notes), which are discussed fully in Note 1516 "Lines of Credit and Debt". Interest on the 2023 Notes is payable semiannually in arrears at a rate of 0.500% per annum. The 2023 Notes will mature on September 13, 2023 unless repurchased or converted in accordance with their terms prior to such date.

Additionally in 2017, we completed a German private placement of $329.9 million, net of issuance costs, consisting of several tranches denominated in either U.S. dollars or Euro at either floating or fixed rates and due at various dates through June 2027 as described in Note 1516 "Lines of Credit and ~~Debt."~~Debt".

In October 2016, we extended the maturity of our €400 million syndicated revolving credit facility, which now has a contractual lifetime until December 2021 of which no amounts were utilized at December 31, ~~2017.~~2019. The facility can be utilized in Euro, British pounds sterling, Swiss franc or U.S. dollar and bears interest of 0.40% to 1.20% above three months EURIBOR, or LIBOR in relation to any loan not in euro, and is offered with interest periods of one, two, three or six months. We have additional credit lines totaling €26.6 million with no expiration date, none of which were utilized as of December 31, 2017. We also have capital lease obligations, including interest, in the aggregate amount of $1.5 million, and carry $1.8 billion of long-term debt, of which no amounts are current as of December 31, 2017.2019.

In March 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes of which ~~$430.0~~$433.4 million ~~is due~~was paid in 2019 ~~(2019 Notes)~~ and ~~$300.0~~$296.6 million is due in 2021 (2021 Notes). ~~We refer to the 2019 Notes, the 2021 Notes and the 2023 Notes collectively as the “Cash Convertible Notes” which are discussed fully in Note 15 to the consolidated financial statements.~~ Interest on the ~~2019 and~~ 2021 Notes is payable semiannually in arrears on ~~March 19 and~~ September 19 of each year, at ~~rates~~rate of ~~0.375% and~~ 0.875% per ~~annum for the 2019 Notes and 2021 Notes, respectively, commencing on September 19, 2014.~~annum. The ~~2019 Notes will mature on March 19, 2019 and the~~ 2021 Notes will mature on March 19, 2021, unless repurchased or converted in accordance with their terms prior to such date.

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

As of December 31, 2019, we carry $1.7 billion of long-term debt, of which $285.2 million is current. We ~~had notes payable, which were the long-term borrowings~~did not hold any material finance leases as of the proceeds from the issuances of $150.0 million senior unsubordinated convertible notes, with a 1.5% coupon due in 2024 through QIAGEN Finance (2004 Notes). The 2004 Notes were convertible into our common shares at a conversion price of $12.6449, subject to adjustment. In connection with conversions of $14.9 million of the 2004 Notes, we previously repaid $14.5 million of the debt to QIAGEN Finance. During 2015, we paid $250.9 million for the redemption of the remaining loan and repurchased the warrant agreement with QIAGEN Finance and recognized a loss of $7.6 million in other expense, net.December 31, 2019.

In connection with certain acquisitions, we could be required to make additional contingent cash payments totaling up to ~~$18.5~~$179.4 million based on the achievement of certain revenue and operating results milestones as ~~follows: $11.5 million~~further discussed in ~~2018~~Note 20 "Commitments and $7.0 million, payable in any 12-month period from now until 2029 based on the accomplishment of certain revenue targets. Of the $18.5 million total contingent obligation, we have assessed the fair value at December 31, 2017, to be $11.5 million, which is included in accrued liabilities in the accompanying balance sheet as of December 31, 2017.Contingencies".

In ~~July 2014,~~January 2018, we announced ~~the launch of~~ our ~~third $100 million~~fifth share repurchase program ~~to purchase~~of up to ~~another $100~~$200 million of our common shares. During 2019, we repurchased 2.0 million QIAGEN shares ~~(excluding~~for $74.5 million (including transaction costs) bringing the total shares repurchased under this program to 4.9 million for $179.1 million (including transaction costs). ~~In 2014, 2.1 million QIAGEN~~Repurchased shares ~~were repurchased for $49.1 million (excluding transaction costs) and~~will be held in ~~2015 0.8 million QIAGEN~~treasury in order to satisfy various obligations, which include employee share-based remuneration plans. Repurchased shares ~~were repurchased for $20.8 million. This program expired~~will be held in ~~December 2015.~~treasury in order to satisfy various obligations, which include employee share-based remuneration plans.

In April 2016, we announced the launch of our fourth $100 million share repurchase program. In August 2016, we announced our intention to return a total amount of approximately $300 million to our shareholders by the end of 2017. In January 2017, we completed a synthetic share repurchase that combined a direct capital repayment with a consolidation of shares. ~~This~~The transaction was announced in August 2016 and involved an approach ~~has been~~ used by various large, multinational Dutch companies to provide returns to shareholders in a faster and more efficient manner than traditional open-market purchases. $243.9 million was repaid to shareholders through the transaction and the outstanding number of common shares was reduced by 8.9 million, or 3.7%. As discussed further in Note 1718 "Equity", the capital repayment program was completed in January 2017. ~~During the remainder of 2017, 1.9 million QIAGEN shares were repurchased for $61.0 million (including transaction costs) to complete the total program.~~

~~In January 2018, we announced our fifth share repurchase program of up to $200 million of our common shares.~~

~~Repurchased shares will be held in treasury in order to satisfy various obligations, which include employee share-based remuneration plans.~~

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

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

Off-Balance Sheet Arrangements

Other than our former arrangements with QIAGEN Finance as discussed in Note 1516 "Lines of Credit and Debt" to the consolidated financial statements, we did not use special purpose entities and do not have off-balance sheet financing arrangements as of and during the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015.~~2017.

Contractual Obligations

As of December 31, ~~2017,~~2019, our future contractual cash obligations are as follows:


Contractual Obligations (in thousands)	Payments Due by Period														Payments Due by Period
Contractual Obligations (in thousands)	Total		2018		2019		2020		2021		2022		Thereafter		Total		2020		2021		2022		2023		2024		Thereafter
Long-term debt ⁽¹⁾	$	1,865,393	$	24,426	$	510,267	$	20,485	$	330,029	$	493,910	$	486,276	$	1,790,350	$	25,438	$	347,230	$	491,356	$	356,738	$	552,636	$	16,952
Purchase obligations	99,489		65,073		22,556		10,472		943		11		434		194,596		126,121		35,915		26,337		3,223		3,000		—
Operating leases	64,877		18,483		16,011		11,762		8,457		6,126		4,038		61,520		19,914		16,009		11,885		7,119		3,391		3,202
License and royalty payments⁽²⁾	55,092		12,907		11,858		11,558		8,860		6,161		3,748		37,455		11,434		9,012		6,507		4,382		1,823		4,297
Capital lease obligations⁽³⁾	1,470		1,411		45		14		—		—		—
Total contractual cash obligations	$	2,086,321	$	122,300	$	560,737	$	54,291	$	348,289	$	506,208	$	494,496	$	2,083,921	$	182,907	$	408,166	$	536,085	$	371,462	$	560,850	$	24,451

____________________

⁽¹⁾ Amounts include required principal, stated at the current carrying values, and interest payments. Future 2020 contractual cash obligations include only amounts due in cash. The 2021 Notes that became convertible pursuant to the indenture on January 1, 2020 as further discussed in Note 16 "Lines of Credit and Debt" and are classified as current as of December 31, 2019, are only convertible during the triggered conversion period and are thus not included as a cash payment until the 2021 date in the table above.

⁽²⁾ As of December 31, ~~2017, $11.8~~2019, $10.0 million and ~~$35.3~~$14.5 million are included in accrued and other current liabilities and other long-term liabilities, ~~respectively.~~

⁽³⁾~~Includes~~respectively, associated to future ~~cash payments, including interest, due under capital lease arrangements.~~license payments.

In addition to the above, and pursuant to the purchase agreements for ~~several of our recent~~certain acquisitions and other contractual arrangements, we could be required to make additional contingent cash payments totaling up to ~~$18.5~~$179.4 million based on the achievement of certain revenue and operating results milestones as follows: ~~$11.5~~



(in thousands)	Contingent Cash Payments
2020	$	152,750
2021	11,800
2022	5,900
2024	5,900
Anytime 12-month period from now until 2028	3,000
	$	179,350

Of the $179.4 million ~~in 2018 and $7.0 million, payable in any 12-month period from now until 2029 based on~~total contingent obligation, we have assessed the ~~accomplishment of certain revenue targets, the launch of certain products or the grant of certain patent rights. As of~~fair value at December 31, ~~2017, we have accrued $11.5~~2019 to be $162.2 million, ~~for these contingent payments~~of which $142.6 million is included in accrued and other current ~~liabilities.~~liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet.

Liabilities associated with uncertain tax positions, including interest and penalties, are currently estimated at ~~$47.1~~$60.6 million as of December 31, ~~2017~~2019 and are not included in the table above, as we cannot reasonably estimate when, if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for assessment of additional taxes.

Critical Accounting Policies, Judgments and Estimates

The preparation of our financial statements in accordance with accounting principles generally accepted in the United States requires management to make assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that require the most complex or subjective judgments often as a result of the need to

make estimates about the effects of matters that are inherently uncertain. Thus, to the extent that actual events differ from management’s estimates and assumptions, there could be a material impact to the financial statements. In applying our critical accounting policies, at times we used accounting estimates that either required us to make assumptions about matters that were

highly uncertain at the time the estimate was made or it is reasonably likely that changes in the accounting estimate may occur from period to period that would have a material impact on the presentation of our results of operations, financial position or cash flows. Our critical accounting policies are those related to revenue recognition, ~~share-based compensation,~~ income taxes, investments, ~~variable interest entities,~~ goodwill and other intangible assets, ~~purchase price allocation~~acquisitions and fair value measurements. We reviewed the development, selection, and disclosure of our critical accounting policies and estimates with the Audit Committee of our Supervisory Board.

Revenue Recognition. We recognize revenue when ~~four basic criteria are met: (1) persuasive evidence~~control of ~~an arrangement exists; (2) delivery has occurred~~promised goods or services ~~have been rendered; (3)~~is transferred to customers in an amount that reflects the ~~fee~~consideration that is ~~fixed~~expected to be received for those goods or ~~determinable;~~services. Identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price and ~~(4) collectability is reasonably assured. Determination of criteria (3) and (4) could require~~allocating the transaction price to each separate performance obligation requires management’s judgments ~~regarding the fixed nature~~and estimates. Sales arrangements which require a measure of progress toward completion by measuring actual hours incurred to date as a proportion of the ~~fee charged for services rendered~~total budgeted hours of the project also involves management's judgments and ~~products delivered and the collectability of those fees.~~estimates. While the majority of our sales agreements contain standard terms and conditions, we do enter into agreements that contain multiple ~~elements~~products or services or non-standard terms and conditions. Sometimes ~~interpretation of the sales agreement or contract for multiple-element arrangements~~it is ~~complex in determining~~difficult to determine whether there is more than one ~~unit of accounting~~performance obligation under a sales agreement and if so, how and when revenue should be recognized ~~for each element~~ is subject to certain estimates or assumptions. ~~We record revenue as the separate elements are delivered to the customer if the delivered item has value on a stand-alone basis~~Should our judgments and delivery or performance of the undelivered item is probable and substantially in our control. Revenue is allocated according to the relative selling price method. Should changes in conditions cause management to determine that these criteria areestimates not ~~met for certain future transactions,~~be correct, revenue recognized for any reporting period could be adversely affected.

~~Share-Based Compensation~~. Our stock plan, the QIAGEN N.V. 2014 Stock Plan (the Plan), allows for the granting of stock rights, incentive stock options, as well as for non-qualified options, stock grants and stock-based awards. 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.

Income Taxes. Calculation of our tax provision is complex due to our international operations and the multiple taxing jurisdictions in which we operate. Some of our deferred tax assets relate to net operating losses (NOL). The utilization of NOLs is not assured and is dependent on generating sufficient taxable income in the future. Although management believes it is more likely than not that we will generate sufficient taxable income to utilize substantially all NOL carryforwards, evaluating the NOLs related to our newer subsidiaries requires us to make estimates that we believe are reasonable, but may also be highly uncertain given that we do not have direct experience with these subsidiaries or their products. Thus, the estimates may be subject to significant changes from period to period as we gain that experience. To the extent that our estimates of future taxable income are insufficient to utilize all available NOLs, a valuation allowance will be recorded in the provision for income taxes in the period the determination is made, and the deferred tax assets will be reduced by this amount, which could be material. In the event that actual circumstances differ from management’s estimates, or to the extent that these estimates are adjusted in the future, any changes to the valuation allowance could materially impact our financial position and results of operations.

~~Additionally,~~The calculation of our tax liabilities involves dealing with uncertainties in the ~~2017 Tax Act includes a number~~application of ~~changes to existing U.S.~~complex tax laws and regulations in many jurisdictions across our global operations. ASC 740 states that ~~impact us. For those specific~~a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes on the basis of technical merits. We record unrecognized tax positions in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax liabilities. These differences will be reflected as increases or decreases to income tax ~~effects of~~expense in the ~~2017 Tax Act for~~period in which the ~~accounting under ASC Topic 740~~new information is incomplete, we made reasonable estimates to record the provisional tax impacts related to the interest expense deduction limitation and the revaluation of deferred tax assets and liabilities and included these provisional amounts in our consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts due to additional analysis, changes in interpretations and assumptions and estimates that we have made, additional regulatory guidance that may be issued, and actions we may take because of the 2017 Tax Act, which could materially affect our tax obligations and effective tax rate.available.

Investments. We have equity investments accounted for under the cost method. We periodically review the carrying value of these investments for permanent impairment, considering factors such as the most recent stock transactions, book values from the most recent financial statements, and forecasts and expectations of the investee. Estimating the fair value of these nonmarketable equity investments in biotech companies is inherently subjective, and if actual events differ from management’s assumptions, it could require a write-down of the investment that could materially impact our financial position and results of operations.

~~In addition, generally~~Generally accepted accounting principles require different methods of accounting for an investment depending on the level of influence that we exert. Assessing the level of influence involves subjective judgments. If management’s assumptions with respect to its level of influence differ in future periods and we therefore have to account for these investments under a method other than the cost method, it could have a material impact to our financial statements.

We have equity investments accounted for under the measurement alternative as these equity securities do not have readily determinable fair values and are not accounted for under the equity method. This measurement alternative requires these investments to be 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. At each reporting date, we review each investment for impairment, considering factors such as book values from the most recent financial statements, and forecasts and expectations of the investee, and also for any observable price changes from stock transactions of the issuer. If an impairment is determined to have occurred, estimation of the fair value of these nonmarketable equity investments is inherently subjective. Therefore, in the case of an impairment or an observable price change occurs, it could require a write-down or write-up of the investment that could materially impact our financial position and results of operations.

~~Variable Interest Entities.~~ WeAdditionally, we have made strategic investments in certain companies as more fully described in Note 10 "Investments" to the Consolidated Financial Statements, some of which are variable interest entities. FASB ASC Topic 810 requires a company to consolidate a variable interest entity in which it holds a variable interest if it is designated as the primary beneficiary of that entity even if the company does not have a majority of voting interests. A variable interest entity is generally defined as an entity with insufficient equity to finance its activities or where the owners of the entity lack the risk and rewards of ownership. Assessing the requirements of ASC Topic 810 involves subjective judgments. If management’s assumptions with respect to the criteria differ in future periods, and we therefore have to account for these investments under a different method, it could have a material impact on our financial statements.

Goodwill and Other Intangible Assets. We assess goodwill and other intangible assets for impairment at least annually in the absence of an indicator of possible impairment and immediately upon an indicator of possible impairment. Intangibles are assessed for recoverability considering the contract life, where applicable, and the period of time over which the intangible will contribute to future cash flow. The unamortized cost of intangible assets, where cash flows are independent and identifiable from other assets, is evaluated periodically and adjusted, if necessary, if events and circumstances indicate that a decline in value below the carrying amount has occurred. Goodwill is subject to impairment tests annually or earlier if indicators of potential impairment exist, using a fair-value-based approach. We have elected to perform our annual test for indications of impairment as of October 1^st of each year. Goodwill is deemed to be impaired if we determine that the carrying value of our reporting unit is more than the fair value. Due to the numerous variables associated with our judgments and assumptions ~~relating to the valuation of reporting units~~ and the effects of changes in circumstances affecting ~~these valuations,~~the valuation, both the precision and reliability of the resulting estimates are subject to uncertainty. As additional information becomes known, we may change our estimates.

~~Purchase Price Allocation~~Acquisitions. We frequently enter into business combinations and must determine whether an acquired entity is considered to be a business or an asset or group of assets under ASU 2017-01, Business Combinations: Clarifying the Definition of a Business. A portion of the purchase price can only be allocated to goodwill in a business combination and transaction costs are expensed in a business combination yet capitalized in an asset acquisition. Contingent payments and in-process research and development costs are also handled differently. A set of assets is not a business if substantially all of the fair value of the acquired gross assets is concentrated in a single asset or group of similar identifiable assets. In determining whether an acquired entity is considered to be a business or a set of assets, application of the "substantially all" threshold requires judgment.

The purchase price allocation for acquisitions of a business 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 of businesses in recent years. The purchase prices for the acquisitions were allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. We engaged an independent third-party valuation firm to assist us in determining the estimated fair values of in-process research and development and identifiable intangible assets. Such a valuation requires significant estimates and assumptions, including but not limited to determining the timing and estimated costs to complete the in-process projects, projecting regulatory approvals, estimating future cash flows, and developing appropriate discount rates. We believe the estimated fair values of contingent consideration and assets acquired and liabilities assumed are based on reasonable assumptions. However, the fair value estimates for the purchase price allocations may change during the allowable allocation period, which is up to one year from the acquisition dates, if additional information becomes available.

Fair Value Measurements. We have categorized our assets and liabilities that are measured at fair value, based on the priority of the inputs to the valuation techniques, in a three-level fair value hierarchy: Level 1 - using quoted prices in active markets for identical assets or liabilities; Level 2 - using observable inputs other than quoted prices; and Level 3 – using unobservable inputs. We primarily apply the market approach for recurring fair value measurements, maximize our use of observable inputs and minimize our use of unobservable inputs. We utilize the mid-point price between bid and ask prices for valuing the majority of our assets and liabilities measured and reported at fair value. In addition to using market data, we make assumptions in valuing assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

Certain of our derivative instruments, which are classified in Level 2 of the fair value hierarchy, are valued using industry-standard models that consider various inputs, including time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in 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.

Additionally, our Level 3 instruments include non-marketable equity security investments for which we estimate the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs. These

investments are carried at fair value or under the measurement alternative. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date.

For other fair value measurements, we generally use an income approach to measure fair value when there is not a market observable price for an identical or similar asset or liability. This approach utilizes management’s best assumptions regarding expectations of projected cash flows, and discounts the expected cash flows using a commensurate risk-adjusted discount rate.

The above listing is not intended to be a comprehensive list of all our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles in the United States, with limited or no need for management’s judgment. There are also areas in which management’s judgment in selecting available alternatives may or may not produce a materially different result. See our audited consolidated financial statements and notes thereto in Item 18 of this Annual Report, containing a description of accounting policies and other disclosures required by generally accepted accounting principles in the United States.

Recent Authoritative Pronouncements

For information on recent accounting pronouncements impacting our business see Note 2 "Effects of New Accounting Pronouncements" of the Notes to Consolidated Financial Statements included in Item 18.


Item 6.	Directors, Senior Management and Employees

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

Our Supervisory Directors and Managing Directors for the year ended December 31, ~~2017~~2019 and their ages as of January 31, ~~2018,~~2020, are as follows:

Managing ~~Directors:~~Director and Interim Chief Executive Officer:



Name⁽¹⁾	Age	Position
~~Peer M. Schatz~~Thierry Bernard	5255	~~Managing Director,~~Interim Chief Executive Officer and Senior Vice President, Head of Molecular Diagnostics Business Area
Roland Sackers	4951	Managing Director, Chief Financial Officer


(1)	The contract for Peer M. Schatz as Managing Director and Chief Executive Officer concluded effective September 30, 2019. Mr. Schatz continues as a Senior Advisor until June 30, 2021.

Supervisory Directors:



Name	Age	Position
Stéphane Bancel	4547	Supervisory Director, Member of the Compensation Committee, Audit Committee and Science and Technology Committee
Dr. Håkan Björklund	6163	Chair of the Supervisory ~~Director,~~Board, Member of the Compensation Committee and Selection and Appointment Committee
Dr. Metin Colpan	6365	Supervisory Director, ~~Chairman~~Chair of the Science and Technology Committee and Member of the Selection and Appointment Committee
~~Prof. Dr. Manfred Karobath~~	77	~~Chairman of the Supervisory Board, Supervisory Director, Chairman of the Selection and Appointment Committee, Member of the Compensation Committee and Member of the Science and Technology Committee~~
Dr. Ross L. Levine	4648	Supervisory Director and Member of the Science and Technology Committee
Dr. Elaine Mardis	5557	Supervisory Director and Member of the Science and Technology Committee
Lawrence A. Rosen	6062	Supervisory Director and ~~Chairman~~Chair of the Audit Committee
Elizabeth E. Tallett	6870	Supervisory Director, ~~Chairwoman~~Chair of the Compensation Committee, Member of the Audit Committee and Member of the Selection and Appointment Committee

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

Managing Directors and Interim Chief Executive Officer

~~Peer M. Schatz~~

Thierry Bernard, ~~52,~~55, joined QIAGEN in ~~1993, when~~February 2015 to lead QIAGEN’s growing presence in Molecular Diagnostics, the ~~Company had just 30 employees and revenues~~application of ~~approximately $2 million, and has been~~Sample to Insight solutions for molecular testing in human healthcare. In October 2019, Mr. Bernard was named Interim Chief Executive Officer ~~since January 1, 2004. He was Chief Financial Officer between 1993~~in addition to his prior role as Senior Vice President, Head of Molecular Diagnostics Business Area. Mr. Bernard previously worked at bioMérieux, where he served in roles of increasing responsibility for 15 years, most recently as Corporate Vice President, Global Commercial Operations, Investor Relations and ~~2003~~

~~and became~~the Greater China Region. Prior to joining bioMérieux, he served in management roles in multiple international environments. Mr. Bernard is a member of the ~~Managing Board in 1998. Mr. Schatz was previously a partner in a private management buyout group in Switzerland, worked in finance~~boards of directors of three privately held U.S. companies, First Light Biosciences, HepatoChem and ~~systems positions in Sandoz, Ltd.~~more recently, Daktari Diagnostics, where he also served as CEO. He has earned degrees from Sciences Po (Paris), Harvard Business School, London School of Economics and ~~Computerland AG, and participated in~~ the ~~founding~~College of ~~start-up companies in the computer and software trading industry in~~ Europe and the United States. Mr. Schatz graduated from the University of St. Gallen, Switzerland, with a Master's degree in Finance in 1989 and obtained an M.B.A. in Finance from the University of Chicago Graduate School of Business in 1991. Mr. Schatz served asis a member of the German Corporate Governance Commission from 2002 to 2012. He is Managing Director of PS Capital Management GmbH. He is a board member of AdvaMedDx, an advocacy dedicated to issues facing the in vitro diagnostics industry in the United States and Europe, and ALDA (the Analytical, Life Science and Diagnostics Association), a trade association of developers and suppliers in these fields.French Foreign Trade Advisors.

Roland Sackers, ~~49,~~51, joined ~~the Company~~QIAGEN in 1999 as Vice President Finance and has been Chief Financial Officer since 2004. In 2006, Mr. Sackers became a member of the Managing Board. Between 1995 and 1999, he served as an auditor with Arthur Andersen Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft. Mr. Sackers earned his Diplom-Kaufmann from University of Münster, Germany. In 2019, he joined the supervisory board of Evotec SE and is chairman of the audit committee. He is a former member of the ~~Supervisory Board~~supervisory board and ~~Audit Committee~~audit committee of IBS AG and a former member of the board of directors of Operon Biotechnologies, Inc. Mr. Sackers is a board member of the industry association BIO Deutschland. He ~~is also~~was previously a non-executive director and chair of the audit committee from 2011 to 2018 of Immunodiagnostic Systems Holding PLC (IDS), a leading producer of immunological tests for research and diagnostic applications publicly listed in the United Kingdom.

Peer M. Schatz, 54, joined QIAGEN in 1993 and served as Chief Executive Officer from January 1, 2004 until September 30, 2019. He was Chief Financial Officer between 1993 and 2003 and became a member of the Managing Board in 1998. Mr. Schatz’s contract as Managing Director and Chief Executive Officer concluded effective September 30, 2019 and he continues as a Senior Advisor until June 30, 2021.

Supervisory Directors

Stéphane Bancel, ~~45,~~ 47, joined the ~~Company's~~ Supervisory Board as well as the Compensation Committee in 2013 and joined the Audit Committee and Science and Technology Committee in 2014. He is Chief Executive Officer of Moderna, ~~Therapeutics,~~ Inc., a clinical-stage biotechnology company based in Cambridge, Massachusetts, which is advancing ~~multiple~~24 drug development programs involving messenger RNA therapeutics. Before joining Moderna, Mr. Bancel served for five years as Chief Executive Officer of the French diagnostics company bioMérieux SA. Prior to bioMérieux, he was Managing Director of Eli Lilly in Belgium and Executive Director of Global Manufacturing Strategy and Supply Chain at Eli Lilly in Indianapolis, Indiana, after having started at Lilly in Great Britain. Before joining Eli Lilly, Mr. Bancel served as Asia-Pacific Sales and Marketing Director for bioMérieux while based in Tokyo, Japan. He holds a Master of Engineering degree from École Centrale Paris (ECP), a Master of Science in Chemical Engineering from the University of Minnesota and an M.B.A. from Harvard Business School.

Dr. Håkan Björklund, ~~61,~~ 63, was appointed as a ~~new~~ Supervisory Board Member in March ~~2017.~~2017 and as Chair of the Supervisory Board in June 2018. He is a member of the Compensation Committee and the Selection and Appointment Committee. Dr. Björklund brings an extensive international background in the life science industry to QIAGEN, in particular through his current role as Operating Executive at Avista Capital Partners, as well as through previous roles as CEO of the global pharmaceutical company Nycomed, Regional Director at Astra (now AstraZeneca) ~~and~~, President of Astra ~~Draco.~~Draco and Operating Executive at Avista Capital Partners. Under ~~Mr.~~Dr. Björklund’s leadership, Nycomed grew from a predominantly Scandinavian business into a global pharmaceutical company. In addition to QIAGEN, he currently serves as Chairman of the Board of Directors ~~at Acino International AG,~~of OneMed Top Holding AB and Swedish Orphan Biovitrum AB (Sobi), and as a Member of the Board of Directors of BONESUPPORT AB and ~~Trimb Healthcare~~Tellacq AB. Dr. Björklund earlier served as Chairman of the Board of Directors of Acino International AG and Lundbeck A/S, and was also a Member of the Board of Directors of several international life science companies, including Alere, Atos, Coloplast and Danisco. Dr. Björklund has a Ph.D. in Neuroscience from Karolinska Institutet in Sweden.

Dr. Metin Colpan, ~~63,~~65, is a co-founder of QIAGEN and was the ~~Company's~~ Chief Executive Officer and a Managing Director from 1985 through 2003. Dr. Colpan has been a member of the Supervisory Board since 2004 and has served as ~~Chairman~~Chair of the Science and Technology Committee since 2014. He has been a member of the Selection and Appointment Committee since 2015. Dr. Colpan obtained his Ph.D. and M.S. in Organic Chemistry and Chemical Engineering from the Darmstadt Institute of Technology in 1983. Prior to founding QIAGEN, Dr. Colpan was an Assistant Investigator at the Institute for Biophysics at the University of Düsseldorf. Dr. Colpan has had wide experience in separation techniques and in the separation and purification of nucleic acids in particular, and has filed many patents in the field. Dr. Colpan also serves as a Supervisory Board member of ~~Qalovis Farmer Automatic Energy~~CGR GmbH ~~Laer,~~in Mettmann, Germany and Heilpflanzenwohl AG in Baar, Germany. Dr. Colpan previously served as a Supervisory Board member of Ingenium Pharmaceuticals AG, GenPat77 Pharmacogenetics AG, GPC Biotech AG and Morphosys AG, each in Munich, ~~Germany.~~

~~Professor Dr. Manfred Karobath, 77, has been a member of the Supervisory Board since 2000~~Germany and ~~joined the Compensation Committee~~Qalovis Farmer Automatic Energy GmbH, in 2005. In 2016, Prof. Karobath was appointed as Chairman of the Supervisory Board. He joined the Science and Technology Committee in 2014 and the Compensation Committee in 2016. He is also the Chairman of the Selection and Appointment Committee. Prof. Dr. Karobath studied medicine, and from 1967 to 1980 he worked first in the Dept. of Biochemistry of the University of Vienna and, after a stage as postdoctoral fellow, he joined the Dept. of Psychiatry where he became Professor of Biological Psychiatry. In 1980, he joined Sandoz Pharma in Basel, first in drug discovery, and later becoming Senior Vice President and head of R&D. In 1992, Prof. Dr. Karobath joined Rhone Poulenc Rorer (RPR) as President of R&D and Executive Vice President, and later, he became a member of the boards of directors of RPR, Pasteur MérieuxLaer, Germany.

~~Connought, Centeon and Rhone Poulenc Pharma. He has received several scientific awards and has published 92 scientific papers.~~

Dr. Ross L. Levine, ~~46,~~48, joined the Supervisory Board and its Science and Technology Committee in 2016. He is a physician-scientist focused on researching and treating blood and bone marrow cancers as the Laurence Joseph Dineen Chair in Leukemia Research, the ~~Director~~Chief of ~~the Center for Hematologic Malignancies,~~Molecular Cancer Medicine, and an Attending Physician at Memorial Sloan Kettering Cancer Center, as well as Professor of Medicine at Weill Cornell Medical College. He leads a research lab investigating genetics and targeted therapies in myeloid malignancies and is interested in application of next-generation sequencing technology in the practice of medicine in hematologic cancers. He trained in internal medicine at Massachusetts General Hospital and in hematology-oncology at the Dana-Farber Cancer Institute, earning board certification in these specialties. He received his M.D. from the Johns Hopkins University School of Medicine and his A.B. degree from Harvard College.

Dr. Elaine Mardis, ~~55,~~57, joined the ~~Company’s~~ Supervisory Board and its Science and Technology Committee in 2014. Dr. Mardis is the Co-Executive Director of the Institute for Genomic Medicine at Nationwide Children’s Hospital in Columbus, OH. She also is Professor of Pediatrics at the Ohio State University College of Medicine. Dr. Mardis has research interests in the application of genomic technologies to ~~improving~~improve our understanding of human disease, and toward improving the precision of medical diagnosis, prognosis and treatment. Dr. Mardis is the former Robert E. and Louise F. Dunn Distinguished Professor of Medicine at Washington University School of Medicine in St. Louis, MO, where she was on the faculty for 22 years. As Co-Director of the McDonnell Genome Institute, she devised methods and automation that contributed to the Human Genome Project and has since played key roles in the 1000 Genomes Project, The Cancer Genome Atlas, and the Pediatric Cancer Genome Project. Prior to joining the Washington University faculty, she was a senior research scientist at BioRad Laboratories in Hercules, CA. Dr. Mardis is a board member of the American Association for Cancer Research, and has scientific advisory roles at ~~the Regeneron Genomics Center, Caperna~~Kiadis Pharmaceuticals N.V., PACT Pharma LLC, and Interpreta LLC. ~~She also serves the U.S. government as a scientific advisor to the Veteran’s Administration for the Million Veterans Program.~~ Dr. Mardis received her Bachelor of Science degree in Zoology in 1984 and her Ph.D. in Chemistry and Biochemistry in 1989, both from the University of Oklahoma.

Lawrence A. Rosen, ~~60,~~ 62, joined the ~~Company's~~ Supervisory Board as well as the Audit Committee in 2013, and has served as the committee's ~~chairman~~Chair since 2014. Mr. Rosen was a member of the Board of Management and Chief Financial Officer of Deutsche Post DHL until September 2016. Holding this position since 2009, Mr. Rosen was in charge of controlling, corporate accounting and reporting, investor relations, corporate finance, corporate internal audit and security, taxes, as well as the group’s global business services. Prior to joining Deutsche Post DHL, Mr. Rosen served as Chief Financial Officer of Fresenius Medical Care AG & Co. KGaA in Germany from 2003 to 2009. Prior to that, he was Senior Vice President and Treasurer for Aventis SA in Strasbourg, France. Between 1984 and 2000, Mr. Rosen held different positions at the Aventis predecessor companies Hoechst AG and American Hoechst/Hoechst Celanese Inc. Since 2015, Mr. Rosen has served as a member of the board of Lanxess AG and previously served on the board of Postbank AG from 2009 until 2015. Mr. Rosen, who is a U.S. citizen, holds a Bachelor's degree in Economics from the State University of New York and an M.B.A. from the University of Michigan.

Elizabeth E. Tallett, ~~68,~~70, joined the ~~Company's~~ Supervisory Board, as well as the Audit Committee and Compensation Committee, in ~~2011 and~~2011. She has served since 2016 ~~has served~~ as ~~Chairwoman~~Chair of the Compensation Committee. She is a member of the Selection and Appointment Committee. Ms. Tallett was a Principal of Hunter Partners, LLC, a management company for early to mid-stage pharmaceutical, biotechnology and medical device companies, from 2002 until February 2015. Ms. Tallett continues to consult with early stage health care companies. Her senior management experience includes President and CEO of Transcell Technologies Inc., President of Centocor Pharmaceuticals, member of the Parke-Davis Executive Committee, and Director of Worldwide Strategic Planning for Warner-Lambert Company. Ms. Tallett graduated from Nottingham University, England with dual Bachelor's degrees with honors in mathematics and economics. She is a member of the board of directors of ~~Principal Financial Group,~~Anthem, Inc. (where she is currently ~~the Lead Director)~~Chair), ~~Anthem,~~Principal Financial Group, Inc., and Meredith Corp. She is a former director of Coventry Health Care, Inc. Ms. Tallett was a founding board member of the Biotechnology Council of New Jersey and is ~~a Trustee~~Chair of the Trustees of Solebury School in Pennsylvania.

Compensation of Managing Board Members and Supervisory Directors

Remuneration policy

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

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

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

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

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

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

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

Managing Board compensation

The compensation granted to the members of the Managing Board in ~~2017~~2019 consisted of a fixed salary and variable components, with the significant majority of compensation awarded in the form of QIAGEN stock units that are restricted for a long multi-year period to align management with the interests of shareholders and other stakeholders. Variable compensation included ~~annual payments linked to business performance (annual bonus), as well as~~ long-term equity incentives that were awarded based on individual ~~performance.~~performance as well as equity awards in lieu of the value of the annual cash bonus.

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

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

In ~~2016,~~2018, a grant of Performance Stock Units with mandatory minimum holding levels of QIAGEN shares was made under the Commitment Program linked to achievement of a ~~two-year~~three-year plan covering ~~2017~~2019 and ~~2018~~2021 including quantitative goals for net sales, earnings before interest and taxes (EBIT), QIAGEN Value Added (QVA), a steering metric that measures the ability of QIAGEN to generate returns and exceed its cost of capital and share price development as compared to peer companies. Under the Commitment Program, the financial targets for vesting are based on ~~two-year~~three-year goals as defined within QIAGEN’s five-year business plan covering the period from ~~2017~~2019 until the end of ~~2022.~~2023. The targets for vesting were set and approved by the Supervisory Board.

For the year ended December 31, ~~2017,~~2019, the Managing Board members and Interim Chief Executive Officer received the following compensation:


	Annual Compensation						Long-Term Compensation			Annual Compensation						Long-Term Compensation
Name	Fixed Salary		Variable Cash Bonus	Other ⁽¹⁾	Total		Defined Contribution Benefit Plan		Performance Stock Units Granted⁽²⁾	Fixed Salary		Variable Cash Bonus⁽²⁾	Other ⁽³⁾	Total		Defined Contribution Benefit Plan		Performance Stock Units Granted⁽²⁾
Managing Board
Peer M. Schatz	$	1,192,000	671,000	5,000	$	1,868,000	$	74,000	445,000
Thierry Bernard										$	650,000	500,000	34,000	$	1,184,000	$	24,000	99,869
Peer M. Schatz ⁽¹⁾										$	910,000	—	6,571,000	$	7,481,000	$	65,000	430,982
Roland Sackers	$	535,000	237,000	38,000	$	810,000	$	76,000	186,075	$	560,000	249,000	40,000	$	849,000	$	76,000	141,131

Future maturities (stated at the carrying values) of long-term debt as of December 31, ~~2017~~2019, are as follows:



Year ending December 31,	(in thousands)
2020	$	285,244
2021	38,716
2022	471,432
2023	347,995
2024	546,716
thereafter	16,249
	$	1,706,352

Year ending December 31, (in thousands)
2018 $ —
2019 487,585
2020 —
2021 311,743
2022 479,070
thereafter 479,860
$ 1,758,258

Cash Convertible Notes due 2019, 2021, 2023 and ~~2023~~2024

On March 19, 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes in two tranches consisting of ~~which~~ $430.0 million is due in 2019 (2019 Notes) and $300.0 million is due in 2021 (2021 Notes). The aggregate net proceeds of the 2019 and 2021 Convertible Notes were $680.7 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs. Additionally, we used $372.5 million of the net proceeds to repay other debt. During the first quarter of 2019, $430.0 million was paid at maturity (2019 Notes) and $3.4 million of the 2021 Notes was redeemed.

On September 13, 2017, we issued $400.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 2023 (2023 Notes). The net proceeds of the 2023 Notes were ~~$365.9~~$365.6 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs paid.

On November 13, 2018, we issued $500.0 million aggregate principal amount of Cash Convertible Senior Notes which is due in 2024 (2024 Notes). The net proceeds of the 2024 Notes were $468.9 million, after payment of the net cost of the Call Spread Overlay described below and transaction costs paid through December 31, ~~2017.~~2019.

We refer to the 2019 Notes, 2021 Notes 2023 Notes and ~~2023~~2024 Notes, collectively as the “Cash Convertible Notes”.

Interest on the Cash Convertible Notes is payable semi-annually in arrears ~~on March 19~~ and September 19 of each year, at rates of 0.375%, 0.875% and 0.500% per annum for the 2019 Notes, 2021 Notes and 2023 Notes respectively, commencing on September 19, 2014 for the 2019 Notes and 2021 Notes and March 13, 2018 for the 2023 Notes. The 2019 Notes will mature on ~~March 19, 2019,~~ the ~~2021 Notes will mature on March 19, 2021 and the 2023 Notes will mature on September 13, 2023~~maturity date unless repurchased or converted ~~in accordance~~ with their terms prior to such date.

The interest rate and corresponding maturity of each Note are summarized in the table below. The Cash Convertible Notes are solely convertible into cash in whole, but not in part, at the option of noteholders under the circumstances described below and during the contingent conversion periods as shown in the following circumstances: (a) from April 29, 2014 through September 18, 2018 for the 2019 Notes, and September 18, 2020 for the 2021 Notes and from October 24, 2017 through March 13, 2023 for the 2023 Notes (Contingent Conversion Period), under any of the Contingent Conversion Conditions and (b)table below.



Cash Convertible Notes	Annual Interest Rate	Date of Interest Payments	Maturity Date	Contingent Conversion Period	Conversion Rate per $200,000 Principal Amount
2021 Notes	0.875%	March 19 and September 19	March 19, 2021	From April 29, 2014 to September 18, 2020	7,063.1647
2023 Notes	0.500%	March 13 and September 13	September 13, 2023	From October 24, 2017 to March 13, 2023	4,829.7279
2024 Notes	1.000%	May 13 and November 13	November 13, 2024	From December 24, 2018 to August 2, 2024	4,360.3098

Additionally, conversion may occur at any time following ~~the~~a Contingent Conversion Period through the fifth business day immediately preceding the applicable maturity ~~Date.~~ date.

Upon conversion, noteholders will receive an amount in cash equal to the Cash Settlement Amount, calculated as described below. The Cash Convertible Notes are not convertible into shares of our common stock or any other securities.

Noteholders may convert ~~their 2019 and 2021~~of the Cash Convertible Notes into cash at their option at any time during the Contingent Conversion ~~Period~~Periods described above only under the following circumstances (Contingent Conversion Conditions):

~~during any calendar quarter commencing after the calendar quarter ending on March 31, 2014 (and only during such calendar quarter),~~ if the last reported sale price of our common stock for at least 2020-consecutive trading days ~~(whether or not consecutive)~~ during a period of ~~30 consecutive~~30-consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

if we undergo certain fundamental changes as defined in the agreement;

during the ~~5 business~~five-business day period immediately after any 10 consecutive trading day period in which the quoted price for ~~the 2019 Notes or~~ the 2021 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;

if parity event or trading price unavailability event, as the case maybe occurs for the 2023 Notes and 2024 Notes during the period of 10 days, including the first business day following the relevant trading price notification date.

if we elect to distribute assets or property to all or substantially all of the holders of our common stock and those assets or other property have a value of more than 25% of the average daily volume-weighted average trading price of our common stock for the prior 20 consecutive trading days;

if we elect to redeem the Cash Convertible Notes; or

if we experience certain customary events of default, including defaults under certain other ~~indebtedness.~~

~~Noteholders may convert their 2023 Notes into cash at their option at any time during the Contingent Conversion Period only under the following circumstances (Contingent Conversion Conditions)~~

during any fiscal quarter ending after September 30, 2017, if the arithmetic mean of the last reported sale prices of the Common Stock during a period of 20 consecutive trading days selected from the 30 consecutive trading days ending on and including the final trading day of the immediately preceding quarter is equal to or more than 130% of the conversion price (i.e., USD 200,000 minimum denomination divided by the applicable Conversion Ratio) applicable on the last day of such preceding quarter;

in the event of early redemption at the option of the Issuer of all the outstanding Notes, where the conversion date falls in the period from (and including) the date on which the notice of redemption is published up to the 10th calendar day preceding the date of such early redemption;

in the event of a planned distribution by the Issuer of cash, assets, securities or other property, which has a per share value greater than 25% of the arithmetic mean of the volume weighted average price (VWAP) of the Common Stock during the 20 consecutive trading day period immediately preceding the date on which the planned distribution is announced by the ~~Issuer, at~~ any time following such notice, which shall be at least 20 scheduled trading days prior to the ex-dividend date for such distribution, until the earlier of (i) the fifth business day immediately preceding the ex-dividend date for such distribution and (ii) the Issuer's announcement that such planned distribution will not take place;

in the event of certain Fundamental Changes or Make-Whole Fundamental Changes (each as described below), where the conversion date falls in the period from the 60th scheduled trading day prior to the anticipated effective date of such Fundamental Change or Make-Whole Fundamental Change (or, if later, public announcement of the same by the Issuer), until (i) the fifth business day immediately preceding the related Fundamental Change Repurchase Date, or (ii) in the case of a Make-Whole Fundamental Change that does not constitute a Fundamental Change, the 60th trading day immediately following such effective date (or, if later in either case, the 60th calendar day following the notification of such Fundamental Change or Make-Whole Fundamental Change);

~~at any time from and after the occurrence of an event of default,~~indebtedness until such event ~~of default~~ has been cured or waived or the ~~principal amount~~payment of the Notes ~~shall~~ have been ~~accelerated; or~~accelerated.

if a Parity Event or a Trading Price Unavailability Event, as the case may be, occurs, the period of 10 Business Days from and including the first Business Day following the relevant Trading Price Notification Date.

The Contingent Conversion Conditions in the ~~2019,~~ 2021, 2023 and ~~2023~~2024 Notes noted above have been analyzed under ASC 815, Derivatives and Hedging,and, based on our analysis, we determined that each of the embedded features listed above are clearly and closely related to the ~~2019,~~ 2021, 2023 and ~~2023~~2024 Notes (i.e., the host ~~contract)~~contracts). As a result, pursuant to the accounting provisions of ASC 815, Derivatives and Hedging, these features noted above are not required to be bifurcated as separate instruments. As

Beginning on January 1, 2020 and ending at the close of ~~December~~business on March 31, ~~2017, no contingent conversion condition was triggered.~~

~~For~~2020, the ~~2023~~2021 Notes became convertible pursuant to the ~~initial conversion rate is 4,829.7279 shares~~indenture. The 2021 Notes became convertible pursuant to Section 12.01(b)(iv) of the indenture because the arithmetic mean of the last reported sale prices of our common stock, ~~per $200,000 principal amount~~in each trading day in at least one 20-consecutive trading day period during the 30-consecutive trading day period ending on the last trading day of the preceding fiscal quarter, was greater than 130% of the conversion price in effect on such last trading day.

No Contingent Conversion Conditions were triggered for the 2023 Notes ~~(reflecting an initial conversion price~~and 2024 Notes as of approximately $41.4102 per share of common stock). As adjusted by the synthetic share repurchase discussed in Note 17, the conversion rate for the 2019 Notes and 2021 Notes is 7,063.1647 shares of our common stock per $200,000 principal amount of Cash Convertible Notes (reflecting an adjusted conversion price of approximately $28.32 per share of common stock). December 31, 2019.

Upon conversion, holders are entitled to a cash payment (Cash Settlement Amount) equal to the average of the conversion rate multiplied by the daily volume-weighted average trading price for our common stock over a 50-day period. The conversion rate is subject to adjustment in certain instances but will not be adjusted for any accrued and unpaid interest. In addition, following the occurrence of certain corporate events that may occur prior to the applicable maturity date, we may be required to pay a cash make-whole premium by increasing the conversion rate for any holder who elects to convert Cash Convertible Notes in connection with the occurrence of such a corporate ~~event, but in no event will the Conversion Ratio exceed 6,728.6463 per $200,000 principal amount of Notes.~~event.

We may redeem the ~~2019, 2021 or 2023~~Cash Convertible Notes in their entirety at a price equal to 100% of the principal amount of the applicable Cash Convertible Notes plus accrued interest at any time when 20% or less of the aggregate principal amount of the applicable Cash Convertible Notes originally issued remain outstanding.

Because the Cash Convertible Notes contain an embedded cash conversion option, we have determined that the embedded cash conversion option is a derivative financial instrument, which is required to be separated from the Cash Convertible Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income until the cash conversion option transaction settles or expires. The initial fair value liability of the embedded cash conversion option for the 2019 and 2021 Notes was ~~$105.2~~$51.2 million and $54.0 million, respectively, $74.5 million for the 2023 Notes, ~~was $74.5~~and $98.5 million for the 2024 Notes, which simultaneously reduced the carrying value of the Cash Convertible Notes (effectively an original issuance discount). For further discussion of the derivative financial instruments relating to the Cash Convertible Notes, refer to Note ~~13.~~14 "Derivatives and Hedging".

As noted above, the reduced carrying value on the Cash Convertible Notes resulted in a debt discount that is amortized to the principal amount through the recognition of non-cash interest expense using the effective interest method over the expected life of the debt, which is five and seven for the 2019 Notes and 2021 Notes, and six years for the ~~2019 Notes, 2021~~2023 Notes and ~~2023~~2024 Notes, respectively. This resulted in our recognition of interest expense on the Cash Convertible Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise similar terms been issued. The effective interest rate of the 2019 Notes, 2021 Notes, 2023 Notes and ~~2023~~2024 Notes is 2.937%, 3.809%, 3.997% and ~~3.997%,~~4.782% respectively, which is imputed based on the amortization of the fair value of the embedded cash conversion option over the remaining term of the Cash Convertible Notes. As of December 31, 2017, we expect the 2019 Notes, 2021 Notes and 2023 Notes to be outstanding until their respective maturity dates. Based on an estimation using available over-the-counter market information on the Cash Convertible Notes, the Level 2 fair value of the 2019 Notes, 2021 Notes and 2023 Notes was $498.8 million, $366.0 million and $404.8 million at December 31, 2017. Based on an estimation using available over-the-counter market information on the Cash Convertible Notes, the Level 2 fair value of the 2019 Notes and 2021 Notes was $485.9 million and $346.6 million, at December 31, 2016.

In connection with the issuance of the 2019 and 2021 Cash Convertible Notes, we incurred approximately $13.1 million in transaction costs. We incurred approximately $6.2 million in transaction costs for the 2023 Cash Convertible Notes. For 2024 Cash Convertible Notes, we incurred $5.7 million transaction costs of which ~~$0.6~~$0.2 million was accrued as of December 31, ~~2017.~~2019. Such costs have been allocated to the Cash Convertible Notes and deferred ~~as a long-term asset~~ and are being amortized to interest expense over the terms of the Cash Convertible Notes using the effective interest method.

Interest expense related to the Cash Convertible Notes was comprised of the following:



	Year-Ended December 31
(in thousands)	2019		2018
Coupon interest	$	9,954	$	6,890
Amortization of original issuance discount	36,966		32,114
Amortization of debt issuance costs	3,014		3,485
Total interest expense related to the Cash Convertible Notes	$	49,934	$	42,489

Year-Ended December 31
(in thousands)
2017 2016
Coupon interest $ 4,832
$ 4,238
Amortization of original issuance discount 21,377
17,503
Amortization of debt issuance costs 2,615
2,279
Total interest expense related to the Cash Convertible Notes $ 28,824
$ 24,020

Cash Convertible Notes Call Spread Overlay

Concurrent with the issuance of the Cash Convertible Notes, we entered into privately negotiated hedge transactions (Call Options) with, and issued warrants to purchase shares of our common stock (Warrants) to, certain financial institutions. We

refer to the Call Options and Warrants collectively as the “Call Spread Overlay”. The Call Options are intended to offset any cash payments payable by us in excess of the principal amount due upon any conversion of the Cash Convertible Notes. During 2014, we used $105.2 million of the proceeds from the issuance of the 2019 and 2021 Cash Convertible Notes to pay for the Call Options, and simultaneously received $69.4 million from the sale of the Warrants, for a net cash outlay of $35.8 million for the Call Spread Overlay.

During 2017, we used ~~$73.6~~$73.7 million of the proceeds from the from the issuance of the 2023 Cash Convertible Notes to pay for the premium for the Call Option, and simultaneously received ~~$45.4~~$45.3 million from the sale of Warrants, for a net cash outlay of $28.3 million for the Call Spread Overlay. Issuance costs incurred in connection with the Warrant and the Call Option were $0.3 million and $0.1 million respectively.

In November 2018, we used $97.3 million of the proceeds from the from the issuance of the 2024 Cash Convertible Notes to pay for the premium for the Call Option, and simultaneously received $72.4 million from the sale of Warrants, for a net cash outlay of $24.9 million for the Call Spread Overlay. Issuance costs incurred in connection with the Warrant and the Call Option were $0.5 million and $0.5 million respectively, of which ~~$0.1 million~~$48.0 thousand was accrued as of December 31, ~~2017.~~2019.

The Call Options are derivative financial instruments and are discussed further in Note ~~13.~~14 "Derivatives and Hedging". The Warrants are equity instruments and are further discussed in Note ~~17.~~18 "Equity".

Aside from the initial payment of a premium of $105.2 million (2019 and 2021 Notes), $73.7 million (2023 Notes), and ~~$73.6~~$97.3 million ~~(2023~~(2024 Notes) for the Call Option, we will not be required to make any cash payments under the Call Options, and will be entitled to receive an amount of cash, generally equal to the amount by which the market price per share of our common stock exceeds the exercise price of the Call Options during the relevant valuation period. The exercise price under the Call Options is initially equal to the conversion price of the Cash Convertible Notes.

~~The Warrants cover an aggregate~~During the first quarter of ~~25.8~~2019, we received $133.2 million ~~shares~~in cash upon the exercise of the call options in connection with the repayment of the 2019 Notes. In the same transaction, we paid $132.7 million for the intrinsic value of the 2019 Notes' embedded cash conversion option. Not all of the 2019 Note holders tendered the required conversion notice, and as a result the net effect of the cash paid and received of $0.5 million was recognized as a gain in other income, net.

In connection with the early conversion of a portion of the 2021 Notes during the first quarter of ~~our common stock (subject to anti-dilution adjustments under certain circumstances)~~2019, we received $0.4 million in cash and recorded an other receivable of $0.7 million upon the exercise of the related call options. In the same transaction, we paid $1.1 million for the intrinsic value of the 2021 Notes' embedded cash conversion option. During the second quarter of 2019, we collected the $0.7 million receivable balance and received $0.4 million in cash upon the exercise of additional call options. As a result of these early conversions, we have ~~an initial exercise price of $32.085 per share, subject to customary adjustments. The Warrants expire as follows: Warrants to purchase 15.2~~recognized a $0.4 million shares expire over a period of 50 trading days beginning on December 27, 2018 and Warrants to purchase 10.6 million shares expire over a period of 50 trading days beginning on December 29, 2020. The Warrants are European-style (exercisable only upon expiration).

Concurrent with the 2023 Notes, we issued Warrants which cover 9.7 million shares of our common stock (subject to anti-dilution adjustments under certain circumstances) and have an initial exercise price of $50.9664 per share, subject to customary adjustments. The Warrants expire as follows: Warrants to purchase 9.7 million shares expire over a period of 50 trading days beginning on June 26, 2023. The Warrants are European-style (exercisable only upon expiration).gain in other income, net.

The Warrants that were issued with our Cash Convertible Notes, ~~discussed above,~~ could have a dilutive effect to the extent that the price of our common stock exceeds the applicable strike price of the Warrants. For each Warrant that is exercised, we will deliver to the holder a number of shares of our common stock equal to the amount by which the settlement price exceeds the exercise price, plus cash in lieu of any fractional shares. 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~~$400.0 million with a weighted average interest rate of 3.66% (settled on October 16, 2012). The notes were issued in ~~three~~3 series: (1) ~~$73~~$73.0 million 7-year term due and paid in 2019 (3.19%); (2) ~~$300~~$300.0 million 10-year term due in 2022 (3.75%); and (3) ~~$27~~$27.0 million 12-year term due in 2024 (3.90%). We paid $2.1 million in debt ~~issue~~issuance costs which will be amortized through interest expense using the effective interest method over the lifetime of the notes. The note purchase agreement contains certain financial and non-financial covenants, including but not limited to, restrictions on priority indebtedness and the maintenance of certain financial ratios. We were in compliance with these covenants at December 31, ~~2017.~~2019. Based on an

estimation using the changes in the U.S. Treasury rates, the Level 2 fair value of these senior notes as of December 31, ~~2017~~2019 and December 31, ~~2016~~2018 was approximately ~~$394.7~~$329.2 million and ~~$397.1~~$391.7 million, respectively. During 2014, we entered into interest rate swaps, which effectively fixed the fair value of $200.0 million of this debt, ~~and~~which was reduced to $127.0 million following the 2019 $73.0 million repayment. These interest rate swaps qualify for hedge accounting as fair value hedges as described in Note ~~13.~~14 "Derivatives and Hedging".

German Private Placement (Schuldschein)

In 2017, we completed a German private placement bond ("Schuldschein") which was issued in several tranches totaling $331.1 million due in various periods through 2027. The Schuldschein consists of U.S. dollar and Euro denominated tranches. The Euro tranches are designated as a foreign currency non-derivative hedging instrument that qualifies as a net investment hedge as described in Note 1314 "Derivatives and Hedging". Based on the spot rate method, the change in the carrying value of the Euro denominated tranches attributed to the net investment hedge as of December 31, ~~2017~~2019 totaled ~~$19.8~~$0.4 million of unrealized loss and is recorded in equity. We p~~aid~~paid $1.2 million in debt issuance costs which are being amortized through interest expense over the lifetime of the notes. A summary of the tranches as of December 31, ~~2017~~2019 and December 31, 2018 is as follows:

Carrying Value (in thousands) as of

Currency

Notional Amount

Interest Rate

Maturity

December 31, 2019

December 31, 2018

EUR

€11.5 million

Fixed 0.4%

March 2021

12,905

13,143

EUR

€23.0 million

Floating EURIBOR + 0.4%

March 2021

25,811

26,286

EUR

€21.5 million

Fixed 0.68%

October 2022

24,112

24,561

EUR

€64.5 million

Floating EURIBOR + 0.5%

October 2022

72,335

73,684

USD

$45.0 million

Floating LIBOR + 1.2%

October 2022

44,919

44,891

EUR

€25.0 million

Floating EURIBOR + 0.5%

October 2022

28,026

28,543

EUR

€64.0 million

Fixed 1.09%

June 2024

71,747

73,097

EUR

€31.0 million

Floating EURIBOR + 0.7%

June 2024

34,753

35,406

EUR

€14.5 million

Fixed 1.61%

June 2027

16,249

16,557

330,857

336,168

Carrying Value as of
December 31, 2017
Currency Notional Amount Interest Rate Maturity (in thousands)
EUR €11.5 million Fixed 0.4% March 2021 $ 13,660
EUR €23.0 million Floating EURIBOR + 0.4% March 2021 27,320
EUR €21.5 million Fixed 0.68% October 2022 25,535
EUR €64.5 million Floating EURIBOR + 0.5% October 2022 76,605
USD $45.0 million Floating LIBOR + 1.2% October 2022 44,862
EUR €25.0 million Floating EURIBOR + 0.5% October 2022 31,792
EUR €64.0 million Fixed 1.09% June 2024 76,005
EUR €31.0 million Floating EURIBOR + 0.7% June 2024 36,815
EUR €14.5 million Fixed 1.61% June 2027 17,218
$ 349,812

~~2004 Notes~~

~~In August 2004, we completed~~The financial markets regulators in the ~~sale of $150 million of 1.5% Senior Convertible Notes due~~United Kingdom and the Eurozone have passed regulations that will become effective in ~~2024 (2004 Notes), through our unconsolidated subsidiary QIAGEN Finance. The net proceeds of the 2004 Notes were loaned by QIAGEN Finance to consolidated subsidiaries with an effective~~2021 under which LIBOR and EURIBOR in their current form will not be compliant. Market participants and regulators are working on establishing new interest rate benchmarks. While the outcome of ~~1.8% were due in February 2024. Interest was payable semi-annually in February~~this work is not clear yet, the Schuldschein our syndicated loan facility, and August. The 2004 Notes were issued at 100% of principal value, and were convertible into 11.5 million common shares at the option of the holders upon the occurrence of certain events at a price of $12.6449 per share, subjectour interest rate swaps continue to ~~adjustment. QIAGEN N.V. had an agreement with QIAGEN Finance to issue shares~~make reference to the investors in the event of conversion. The subscription right, along with the related receivable, was recorded at fair value in the equity of QIAGEN N.V. as paid-in capital. In 2014, 1.2 million common shares were issued in connection with the conversions. During 2015, we repaid the loan to QIAGEN Financecurrent LIBOR and repurchased the warrant agreement with QIAGEN Finance for $250.9 million and recognized a loss of $7.6 million in other expense, net. The repayment amount was allocated to the loan and warrants on a relative fair value basis with $113.0 million recorded against additional paid in capitalEURIBOR benchmark rates. These agreements contain language for the ~~redemption~~determination of interest rates in case the ~~warrant subscription receivable. Subsequent~~benchmark rate is not available. However, it appears likely that the agreements will need to ~~these transactions QIAGEN Finance was liquidated.~~be adjusted in line with still to be developed market practice once new benchmark rates become available.

~~16.~~17. Income Taxes

~~In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118,~~ ~~Income Tax Accounting Implications of the Tax Cuts and Jobs Act~~ (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. For those specific income tax effects of the 2017 Tax Act for which the accounting under ASC Topic 740 is incomplete, a reasonable estimate was determined. We have recognized the provisional tax impacts related to the interest expense deduction limitation and the revaluation of deferred tax assets and liabilities and included these amounts in our consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts due to additional analysis, changes in interpretations and assumptions that we have made, additional regulatory guidance that may be issued, and actions we may take because of the 2017 Tax Act. We did not identify items for which the income tax effects of the 2017 Tax Act have not been completed and a reasonable estimate could not be determined as of December 31, 2017. We expect to complete our analysis within the measurement period in accordance with SAB118.

~~Income~~ before income taxes for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015~~2017 consisted of:



(in thousands)	2019			2018			2017
Pretax income in The Netherlands	$	17,455		$	(1,675	)	$	42,220
Pretax (loss) income from foreign operations	(95,231		)	227,412			72,155
	$	(77,776	)	$	225,737		$	114,375

(in thousands) 2017 2016 2015
Pretax income in The Netherlands $ 42,220
$ 20,695
$ 1,310
Pretax income from foreign operations 72,155
36,213
134,993
$ 114,375
$ 56,908
$ 136,303

Income ~~taxes~~tax (benefit) expense for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015~~2017 are as follows:



(in thousands)	2019			2018			2017
Current—The Netherlands	$	5,670		$	5,794		$	3,430
—Foreign	13,371			52,835			10,375
	19,041			58,629			13,805
Deferred—The Netherlands	4,177			2,551			151
—Foreign	(59,539		)	(25,823		)	60,025
	(55,362		)	(23,272		)	60,176
Total income tax (benefit) expense	$	(36,321	)	$	35,357		$	73,981

(in thousands) 2017 2016 2015
Current—The Netherlands $ 3,430
$ 6,043
$ 973
—Foreign 10,375
34,543
37,708
13,805
40,586
38,681
Deferred—The Netherlands 151
188
250
—Foreign 60,025
(64,169 ) (32,530 )
60,176
(63,981 ) (32,280 )
Total income tax expense (benefit) $ 73,981
$ (23,395 ) $ 6,401

The Netherlands statutory income tax rate was 25% for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015.~~2017. Income from foreign subsidiaries is generally taxed at the statutory income tax rates applicable in the respective countries of domicile. The principal items comprising the differences between income taxes computed at The Netherlands statutory rate and our reported income taxes and effective tax rate for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015~~2017 are as follows:

2017 2016 2015
(in thousands) Amount Percent Amount Percent Amount Percent
Income taxes at The Netherlands statutory rate $ 28,594
25.0 % $ 14,227
25.0 % $ 34,076
25.0 %
Taxation of foreign operations, net⁽¹⁾
(38,635 ) (33.8 ) (43,265 ) (76.0 ) (36,407 ) (26.7 )
Tax impact from permanent items (1,586 ) (1.4 ) 5,938
10.4
14,219
10.4
Tax impact from tax-exempt income (1,558 ) (1.4 ) (3,331 ) (5.9 ) (5,810 ) (4.3 )
Tax contingencies, net⁽²⁾
23,189
20.3
1,761
3.1
1,163
0.9
Taxes due to changes in tax rates⁽³⁾
12,958
11.3
399
0.7
(836 ) (0.6 )
Stock Compensation⁽⁴⁾
(5,237 ) (4.6 ) —
—
—
—
Government incentives and other deductions⁽⁵⁾
(4,949 ) (4.3 ) (2,543 ) (4.5 ) (2,754 ) (2.0 )
Prior year taxes (2,319 ) (2.0 ) 1,411
2.5
(1,201 ) (0.9 )
Valuation allowance⁽³⁾
62,644
54.8
1,521
2.7
3,450
2.5
Other items, net 880
0.8
487
0.9
501
0.4
Total income tax expense (benefit) $ 73,981
64.7 % $ (23,395 ) (41.1 )% $ 6,401
4.7 %



	2019					2018					2017
(in thousands)	Amount			Percent		Amount			Percent		Amount			Percent
Income taxes at The Netherlands statutory rate	$	(19,444	)	25.0	%	$	56,434		25.0	%	$	28,594		25.0	%
Taxation of foreign operations, net⁽¹⁾	(25,720		)	33.1		(33,994		)	(15.1	)	(38,635		)	(33.8	)
Tax impact from intangible property transfer	(21,122		)	27.2		—			—		—			—
Unrecognized tax benefits⁽²⁾	10,962			(14.1	)	13,570			6.0		23,189			20.3
Tax impact from nondeductible items	7,986			(10.3	)	2,949			1.3		2,645			2.3
Excess tax benefit related to share-based compensation	(3,989		)	5.1		(4,740		)	(2.1	)	(5,237		)	(4.6	)
Government incentives and other deductions⁽⁴⁾	(7,516		)	9.7		(2,892		)	(1.2	)	(6,519		)	(5.7	)
Changes in tax laws and rates⁽³⁾	331			(0.4	)	1,907			0.8		12,958			11.3
Other items, net	1,306			(1.7	)	(1,170		)	(0.5	)	(5,658		)	(4.9	)
Valuation allowance⁽³⁾	20,885			(26.9	)	3,293			1.5		62,644			54.8
Total income tax (benefit) expense	$	(36,321	)	46.7	%	$	35,357		15.7	%	$	73,981		64.7	%

____________________

(1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher or lower than The Netherlands’ statutory rate of 25% as well as the benefit of some income being partially exempt from income taxes due to various intercompany operating and financing activities. The most significant tax benefits from these foreign ~~operations~~operating and financing activities are attributable to subsidiaries in Germany, Singapore, Switzerland, Ireland, Dubai, and Luxembourg. These foreign tax benefits are due to a combination of favorable tax laws, regulations, rulings, and exemptions in these jurisdictions. Additionally in 2016, in certain foreign jurisdictions (primarily Germany and the U.S.), we recorded acquisition related and impairment charges which reduced pretax income in these higher tax jurisdictions.

(2) During ~~2017,~~2019, we ~~increased~~reassessed accruals for tax contingencies, primarily related to ongoing income tax audits.

(3) ~~During 2017, we revalued our U.S. deferred tax assets and liabilities to reflect the~~The Netherlands' top statutory corporate income tax rate ~~change~~will be reduced to 21.7% from ~~35% to 21% as a result of U.S. tax reform. Additionally, we recorded a full valuation~~25% beginning in 2021. Valuation allowance ~~of $60.8 million against deferred tax assets~~ related to U.S. disallowed interest ~~carry forwards. Based on the current debt level~~totaled $12.7 million in the U.S., along with the new restrictive interest limitation enacted with the new U.S. tax reform, it is highly unlikely that the historic U.S. interest carry forward will ever be utilized. We also recorded full valuation allowances against other deferred tax assets on tax losses due to unlikely future profits2019 and $60.5 million in ~~other jurisdictions.~~2017.

(4) ~~Beginning in 2017, the excess tax benefits from share-based compensation activity are reflected as a reduction of the provision for income taxes, whereas previously they were recognized in equity.~~

~~(5)~~ Government incentives include favorable tax regulations in the U.S., Spain and the U.K. ~~and~~ relating to research and development expense ~~as well as the U.S. Internal Revenue Code Section 199 domestic production activities deduction.~~

and other government incentives.

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 ~~since 2005~~back to 2007 for income tax examinations by tax authorities. ~~Our subsidiaries, with few exceptions, are no longer subject~~The German group is open to ~~income~~audit for the tax ~~examinations by~~years starting in 2014 and in 2019, the German tax ~~authorities~~authority commenced an audit for ~~years before 2013.~~the 2014-2016 tax years. The U.S. consolidated group is subject to federal and most state income tax examinations by tax authorities beginning with the year ending December 31, ~~2014~~2016 through the current period.

~~Starting in February 2014, the U.S.~~ Our other subsidiaries, with few exceptions, are no longer subject to income tax examinations by tax authorities ~~(Internal Revenue Service) have been auditing our U.S. federal tax returns~~ for 2011 and 2012. The audit was closed in 2016 without any tax adjustments. As a result, we released $6.6 million of unrecognized tax benefit due to closure of the tax audit. Additionally, in February 2016 German tax authorities began the audit of the German tax returns for the 2010-2013 tax years. This audit is currently in process and we expect the audit to close during 2018.years before 2015.

Changes in the amount of unrecognized tax benefits for the years ended December 31, 2019, 2018, and 2017 are as follows:



(in thousands)	2019			2018			2017
Balance at beginning of year	$	55,780		$	44,033		$	18,294
Additions based on tax positions related to the current year	5,770			3,359			12,212
Additions for tax positions of prior years	14,532			11,984			9,933
Decrease for tax position of prior years	(9,073		)	—			—
Decrease related to settlements	(7,605		)	—			—
Decrease due to lapse of statute of limitations	(409		)	(1,238		)	—
(Decrease) increase from currency translation	(993		)	(2,358		)	3,594
Balance at end of year	$	58,002		$	55,780		$	44,033

(in thousands) Unrecognized Tax Benefits
BALANCE AT DECEMBER 31, 2015 $ 16,735
Additions based on tax positions related to the current year 4,218
Additions for tax positions of prior years 5,162
Decrease for tax position of prior years (6,796 )
Reductions due to lapse of statute of limitations (288 )
Decrease from currency translation (737 )
BALANCE AT DECEMBER 31, 2016 $ 18,294
Additions based on tax positions related to the current year 12,212
Additions for tax positions of prior years 9,933
Increase from currency translation 3,594
BALANCE AT DECEMBER 31, 2017 $ 44,033

At December 31, ~~2017~~2019 and ~~2016,~~2018, our net unrecognized tax benefits totaled approximately ~~$44.0~~$58.0 million and ~~$18.3~~$55.8 million, respectively, of which, ~~$44.0 million and $18.3 million in benefits,~~ if recognized, would favorably affect our effective tax rate in any future period. It is reasonably possible that approximately ~~$11.6~~$31.4 million of the unrecognized tax benefits may be released or utilized during the next 12 months due to lapse of statute of limitations or settlements with tax authorities; however, various events could cause our current expectations to change in the future. The above unrecognized tax benefits, if ever recognized in the financial statements, would be recorded in the ~~statement~~statements of income as part of the income tax expense.

Our policy is to recognize interest accrued related to ~~unrecognized tax benefits~~an underpayment of income taxes in interest expense and penalties within income tax expense. For the years ended December 31, 2019, 2018 and 2017, ~~2016 and 2015,~~ we ~~have~~recognized a net expense for interest ~~(income) expense~~ and penalties of ~~$1.5~~$1.6 million, ~~$0.1~~$1.1 million and ~~$0.3~~$1.5 million, respectively. At December 31, ~~2017~~2019 and ~~2016,~~2018, we have accrued interest of ~~$3.0~~$2.5 million and ~~$1.4~~$4.1 million, respectively, which are not included in the table above.

We have recorded net deferred tax ~~liabilities of $37.4 million and deferred tax~~ assets of ~~$27.8~~$33.1 million at December 31, ~~2017~~2019 and ~~2016,~~net deferred tax liabilities of $20.5 million at December 31, 2018, respectively. The components of the net deferred tax asset and liability at December 31, ~~2017~~2019 and ~~2016~~2018 are as follows:



	2019						2018
(in thousands)	Deferred Tax Asset			Deferred Tax Liability			Deferred Tax Asset			Deferred Tax Liability
Net operating loss and tax credit carryforward	$	50,274		$	—		$	27,293		$	—
Accrued and other liabilities	17,977			—			15,480			—
Inventory	4,726			(1,439		)	3,978			(1,725		)
Unrealized gain (loss) on investments	—			(4,973		)	3,280			(4,855		)
Property, plant and equipment	5,297			(20,332		)	3,604			(25,448		)
Intangible assets	1,078			(26,294		)	1,721			(63,990		)
Share-based compensation	13,787			—			17,998			—
Disallowed interest carryforwards	73,690			—			60,458			—
Convertible notes	7,104			—			8,102			—
Other	5,998			(6,174		)	5,854			(3,614		)
	179,931			(59,212		)	147,768			(99,632		)
Valuation allowance	(87,619		)	—			(68,651		)	—
	$	92,312		$	(59,212	)	$	79,117		$	(99,632	)
Net deferred tax assets (liabilities)				$	33,100					$	(20,515	)

2017 2016
(in thousands)
Deferred
Tax Assets

Deferred
Tax Liability

Deferred
Tax Assets

Deferred
Tax Liability
Net operating loss carryforwards $ 30,966
$ —
$ 46,627
$ —
Accrued and other current liabilities 15,748
—
24,663
—
Inventories 4,163
(778 ) 2,919
(1,567 )
Allowance for bad debts 739
(475 ) 1,060
(451 )
Currency revaluation 4,095
(167 ) 3,474
(73 )
Property, plant and equipment 1,103
(23,649 ) 2,096
(19,733 )
Capital lease 531
—
830
—
Tax credit carryforwards 1,563
—
915
—
Unremitted profits and earnings —
(998 ) —
(923 )
Intangible assets 1,289
(93,771 ) 586
(137,682 )
Share-based compensation 18,143
—
20,282
—
Deferred interest deductions 60,790
—
76,793
—
Convertible debt 10,865
—
12,313
—
Other 2,632
(2,315 ) 2,652
(1,507 )
152,627
(122,153 ) 195,210
(161,936 )
Valuation allowance (67,849 ) —
(5,511 ) —
$ 84,778
$ (122,153 ) $ 189,699
$ (161,936 )
Net deferred tax assets (liabilities) $ (37,375 ) $ 27,763

At December 31, ~~2017 and 2016,~~2019, we had ~~$432.7 million and $380.7~~$682.5 million in total ~~foreign~~ net operating loss (NOL) ~~carryforwards. Included~~carryforwards which included $394.0 million for Germany, $133.8 million for the U.S., $52.4 million for The Netherlands and $102.3 million for other foreign jurisdictions. Of the total $394.0 million NOL in ~~these amounts at December 31, 2017~~Germany, there is no expiration and ~~2016, were $108.5 million and $109.2 million of U.S. federal (NOL) carryforwards. At December 31, 2017, the~~expect to be fully utilized in future years. The entire NOL in the U.S. is subject to limitations under Section 382 of the U.S. Internal Revenue Code. The NOLs in the U.S. will expire ~~beginning~~between 2024 through 2034. At December 31, ~~2023 through December 31, 2033. Also included~~2019, we have $52.4 million of Netherlands net operating loss carryforwards before valuation allowance, which will expire in the above amount as of December 31, 2017 and 2016, were other foreign NOL carryforwards totaling approximately $324.1 million and $271.5 million, respectively, with $41.5 million added due to German trade tax loss generated in 2017. As of December 31, 2017, we had NOL carryforwards in Germany of $225.0 million predominantly trade tax NOLs.year 2027. Of the total ~~$324.1~~$102.3 million foreign NOL carryforwards, ~~$253.8~~$25.4 million ~~does not~~will expire ~~with~~between 2020 and 2028 while the ~~balance expiring beginning~~rest of the NOLs can be carried forward indefinitely. At December ~~2018 through 2032. The valuation allowance amounts related to net operating losses as~~31, 2019, we had $280.0 million of disallowed interest carryforwards which can be carried forward indefinitely. At December 31, 2019, tax credits total $1.3 million which expire between 2030 and 2039.

For the years ended December 31, 2019, 2018 and 2017, ~~and December 31, 2016 are $7.1~~the changes in the valuation allowance charged to income tax expense totaled $19.0 million, $0.8 million and ~~$5.5 million. In 2017, we recorded a~~$62.3 million, respectively. The valuation allowance ~~of $60.8 million related~~relates to ~~U.S.~~disallowed interest carryforwards and net operating loss carryforwards. ~~Based~~The Company can only recognize a deferred tax asset to the extent it is "more likely than not" that these assets will be realized. Judgments around realizability depend on the current debt level in the U.S., along with the new restrictive interest limitation enacted with the new U.S. tax reform, it is highly unlikely that the historic U.S. interest carry forward will ever be utilized. We believe it is more likely than not that the deferred tax assets, netavailability and weight of ~~the valuation allowances, as shown above will be realized.~~both positive and negative evidence.

As of December 31, ~~2017,~~2019, a deferred tax liability has not been recognized for residual income taxes in The Netherlands on the undistributed earnings of the majority of our foreign subsidiaries as these earnings are considered to be either indefinitely reinvested or can be repatriated tax free under the Dutch participation exemption. The indefinitely reinvested earnings retained byof our subsidiaries that would be subject to tax if distributed amounted to ~~$381.9~~$699.0 million at December 31, ~~2017.~~2019. Estimating the amount of the unrecognized deferred tax liability on indefinitely reinvested foreign earnings is not practicable. Should the earnings be remitted as dividends, we may be subject to taxes including withholding tax. We have ~~$22.9~~$26.4 million of undistributed earnings that we do not consider indefinitely reinvested and have recorded a deferred ~~taxes or withholding taxes~~tax liability at December 31, ~~2017~~2019 and December 31, ~~2016,~~2018, of ~~$1.0~~$1.5 million and $0.9 million, respectively.

~~17.~~18. Equity

The authorized classes of our shares consist of Common Shares (410 million authorized), Preference Shares (450 million authorized) and Financing Preference Shares (40 million authorized). All classes of shares have a par value of €0.01. NaN Financing Preference Shares or Preference Shares have been issued. Like all shareholders' equity accounts, common shares are translated to U.S. dollars at the foreign exchange rates in effect when the shares are issued.

Issuance and Conversion of Warrants

In ~~March 2014, in~~ connection with the issuance of ~~our~~the Cash Convertible Notes as described in Note 16 "Lines of Credit and Debt", we issued Warrants ~~(as described~~as summarized in ~~Note 15) for approximately 25.8 million shares~~the table below. The number of ~~our common stock (subject~~warrants and exercise prices are subject to ~~antidilution~~customary adjustments under certain ~~circumstances) with an exercise price of $32.085 per share, subject to customary adjustments. Following the synthetic share repurchase discussed below, the adjusted exercise price is $32.056.~~circumstances. The proceeds, net of issuance costs, from the sale of the Warrants ~~of approximately $68.9 million~~ are included as additional paid in capital in the accompanying consolidated balance sheets. ~~The~~



Cash convertible notes	Issued on	Number of share warrants (in millions)	Exercise price per share	Proceeds from issuance of warrants, net of issuance costs (in millions)	Warrants expire over a period of 50 trading days beginning on
2019	March 19, 2014	15.2	$32.0560	$40.6	December 27, 2018
2021	March 19, 2014	10.6	$32.0560	$28.3	December 29, 2020
2023	September 13, 2017	9.7	$50.9664	$45.3	June 26, 2023
2024	November 13, 2018	10.9	$52.1639	$72.4	August 27, 2024

Warrants expire as follows: Warrants to purchase 15.2 million shares expire over a period of 50 trading days beginning on December 27, 2018 and Warrants to purchase 10.6 million shares expire over a period of 50 trading days beginning on December 29, 2020.

In September 2017, concurrent with the issuance of our 2023 Cash Convertible Notes, we issued Warrants (as described in Note 15) for approximately 9.7 million shares of our common stock (subject to anti-dilution adjustments under certain circumstances) with an exercise price of $50.9664 per share, subject to customary adjustments. The proceeds from the sale of the Warrants, net of issuance costs, of approximately $45.3 million are included as additional paid in capital in the accompanying consolidated balance sheets. The warrants to purchase approximately 9.7 million shares expire over a period of 50 trading days beginning on June 26, 2023.

The Warrants are exercisable only upon expiration. For each Warrant that is exercised, we will deliver to the holder a number of shares of our common stock equal to the amount by which the settlement price exceeds the exercise price, divided by the settlement price, plus cash in lieu of any fractional shares. The Warrants could separately have a dilutive effect on shares of our common stock to the extent that the market value per share of our common stock exceeds the applicable exercise price of the Warrants (as measured under the terms of the Warrants).

During 2019, 2.1 million common shares were issued in connection with the conversion of the 15.2 million warrants related to the 2019 Notes which resulted in a $31.1 million decrease to additional paid in capital, a $37.7 million decrease in retained earnings, a decrease of 68.8 million in treasury shares and an approximately $4 thousand cash payment for fractional shares.

Share Repurchase Programs

~~In July 2014,~~On May 6, 2019, we announced ~~the launch of~~ our ~~third~~sixth share repurchase program ~~to purchase~~of up to ~~another~~ $100 million of our common ~~shares (excluding transaction costs). In 2014, 2.1 million QIAGEN~~shares. During 2019, 0 shares were repurchased ~~for $49.1 million (excluding transaction costs) and in 2015, 0.8 million QIAGEN shares were repurchased for $20.8 million.~~

On April 27, 2016, we announced the launch of our fourth $100 million share repurchase program which was expected to be completed by the end of 2017. During the third quarter of 2017, 1.9 million QIAGEN shares were repurchased for $61.0 million (including transaction costs).under this program.

On January 31, 2018, we announced our fifth share repurchase program of up to $200 million of our common shares. During 2018, we repurchased 2.9 million QIAGEN shares for $104.7 million (including transaction costs). During 2019, we repurchased 2.0 million QIAGEN shares for $74.5 million (including transaction costs), bringing the total shares repurchased under this program to 4.9 million for $179.1 million (including transaction costs).

On April 27, 2016, we announced the launch of our fourth $100 million share repurchase program. During 2017, 1.9 million QIAGEN shares were repurchased for $61.0 million (including transaction costs).

The cost of repurchased shares is included in treasury stock and reported as a reduction in total equity when a repurchase occurs. Repurchased shares will be held in treasury in order to satisfy various obligations, which include exchangeable debt instruments, warrants and employee share-based remuneration plans.

Synthetic Share Repurchase

In August 2016, we announced our plan to return approximately $250.0 million to shareholders through a synthetic share repurchase program that combines a direct capital repayment with a reverse stock split. The synthetic share repurchase was implemented through a series of amendments to our Articles of Association which were approved by our shareholders at an Extraordinary General Meeting (EGM) held on October 26, 2016. The first amendment involved an increase in share capital by an increase in the nominal value per common share from EUR 0.01 to EUR 1.04 and a corresponding reduction in additional paid in capital. The second amendment involved a reduction in stock whereby 27 existing common shares with a nominal value of EUR 1.04 each were consolidated into 26 new common shares with a nominal value of EUR 1.08 each. The third amendment was a reduction of the nominal value per common share from EUR 1.08 to EUR 0.01. As a result of these amendments, which in substance constitute a synthetic share buyback, $243.9 million was repaid to our shareholders and the outstanding number of common shares was reduced by 8.9 million, or 3.7%. The capital repayment program was completed in January 2017. Expenses incurred related to the capital repayment and share consolidation amounted to $0.5 million and were charged to equity.

Accumulated Other Comprehensive Loss

The following table is a summary of the components of accumulated other comprehensive loss as of December 31, ~~2017~~2019 and ~~2016:~~2018:



(in thousands)	2019			2018
Net unrealized loss on hedging contracts, net of tax	$	(2,289	)	$	(15,453	)
Net unrealized loss on pension, net of tax	(561		)	(124		)
Foreign currency effects from intercompany long-term investment transactions, net of tax of $9.7 million and $9.3 million in 2019 and 2018, respectively	(22,587		)	(21,662		)
Foreign currency translation adjustments	(284,182		)	(273,405		)
Accumulated other comprehensive loss	$	(309,619	)	$	(310,644	)

(in thousands) 2017 2016
Net unrealized loss on hedging contracts, net of tax $ (30,487 ) $ (7,600 )
Net unrealized loss on marketable securities, net of tax (942 ) (156 )
Net unrealized loss on pension, net of tax (878 ) (1,498 )
Foreign currency effects from intercompany long-term investment transactions, net of tax of $7.9 million and $7.7 million in 2017 and 2016, respectively (16,144 ) (15,901 )
Foreign currency translation adjustments (172,308 ) (308,684 )
Accumulated other comprehensive loss $ (220,759 ) $ (333,839 )

~~18.~~19. Earnings per Common Share

We present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net (loss) income ~~attributable to the owners of QIAGEN N.V.~~ by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that would occur if all “in the money” ~~options and warrants~~securities to issue common shares were exercised. Due to the net loss for the year ended December 31, 2019, stock options and restricted stock units representing approximately 3.9 million weighted-average shares of common stock and warrants representing 1.7 million shares of common stock were excluded from the computation of diluted net loss because the impact would have been antidilutive.

The following schedule summarizes the information used to compute earnings per common share:



	Years ended December 31,
(in thousands, except per share data)	2019			2018		2017
Net (loss) income	$	(41,455	)	$	190,380	$	40,394

Weighted average number of common shares used to compute basic net income per common share	226,777			226,640		228,074
Dilutive effect of stock options and restrictive stock units	—			4,613		4,760
Dilutive effect of outstanding warrants	—			2,203		175
Weighted average number of common shares used to compute diluted net income per common share	226,777			233,456		233,009
Outstanding options and awards having no dilutive effect, not included in above calculation	107			272		52
Outstanding warrants having no dilutive effect, not included in above calculation	32,938			35,939		30,434

Basic (loss) earnings per common share	$	(0.18	)	$	0.84	$	0.18
Diluted (loss) earnings per common share	$	(0.18	)	$	0.82	$	0.17

Years ended December 31,
(in thousands, except per share data) 2017 2016 2015
Net income attributable to the owners of QIAGEN N.V. $ 40,394
$ 80,404
$ 130,148

Weighted average number of common shares used to compute basic net income per common share 228,074
234,800
233,483
Dilutive effect of stock options and restrictive stock units 4,760
4,193
5,028
Dilutive effect of outstanding warrants 175
—
136
Weighted average number of common shares used to compute diluted net income per common share 233,009
238,993
238,647
Outstanding options and awards having no dilutive effect, not included in above calculation 52
210
37
Outstanding warrants having no dilutive effect, not included in above calculation 30,434
25,800
26,071

Basic earnings per common share attributable to the owners of QIAGEN N.V. $ 0.18
$ 0.34
$ 0.56
Diluted earnings per common share attributable to the owners of QIAGEN N.V. $ 0.17
$ 0.34
$ 0.55

~~19.~~20. Commitments and Contingencies

~~Lease Commitments~~

We lease facilities and equipment under operating lease arrangements expiring in various years through 2024. Certain rental commitments provide for escalating rental payments or have renewal options extending through various years. Certain facility and equipment leases constitute capital leases expiring in various years through 2020. The accompanying consolidated balance sheets include the assets and liabilities arising from these capital lease obligations. Rent expense under operating lease agreements not including facility related costs accrued in association with the restructuring activities discussed in Note 6 was $24.5 million, $22.4 million and $23.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.

~~Minimum future obligations under capital and operating leases at December 31, 2017 are as follows:~~

(in thousands)
Capital
Leases

Operating
Leases
2018 $ 1,411
$ 18,483
2019 45
16,011
2020 14
11,762
2021 —
8,457
2022 —
6,126
Thereafter —
4,038
1,470
$ 64,877
Less: Amount representing interest (54 )
1,416

Less: Current portion (1,359 )
Long-term portion $ 57

Licensing and Purchase Commitments

We have licensing agreements with companies, universities and individuals, some of which require certain up-front payments. Royalty payments are required on net product sales ranging from 0.45 percent to 2025 percent of covered products or based on quantities sold. Several of these agreements have minimum royalty requirements. The accompanying consolidated balance sheets include accrued royalties relating to these agreements in the amount of ~~$6.7 million and $7.8~~$5.5 million at December 31, ~~2017~~2019 and ~~2016, respectively.~~2018. Royalty expense relating to these agreements amounted to ~~$16.8~~$13.5 million, ~~$35.9~~$14.0 million, and ~~$43.2~~$16.8 million for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015,~~2017, respectively. Royalty expense is primarily recorded in cost of sales, with a small portion recorded as research and development expense depending on the use of the technology under license. Some of these agreements also have minimum raw material purchase requirements and requirements to perform specific types of research.

At December 31, ~~2017,~~2019, we had commitments to purchase goods or services, and for future license and royalty payments. They are as follows:



(in thousands)	Purchase Commitments		License & Royalty Commitments
2020	$	126,121	$	11,434
2021	35,915		9,012
2022	26,337		6,507
2023	3,223		4,382
2024	3,000		1,823
Thereafter	—		4,297
	$	194,596	$	37,455

(in thousands)
Purchase
Commitments

License & Royalty
Commitments
2018 $ 65,073
$ 12,907
2019 22,556
11,858
2020 10,472
11,558
2021 943
8,860
2022 11
6,161
Thereafter 434
3,748
$ 99,489
$ 55,092

As of December 31, ~~2017,~~2019, future license payments of ~~$11.8~~$10.0 million and ~~$35.3~~$14.5 million are included in accrued and other current liabilities and other long-term liabilities, respectively.

Contingent Consideration Commitments

Pursuant to the purchase agreements for certain acquisitions and other contractual arrangements, we could be required to make additional contingent cash payments totaling up to ~~$18.5~~$179.4 million based on the achievement of certain revenue and operating results milestones as follows: ~~$11.5 million in 2018 and $7.0 million, payable in any 12-month period from now until 2029 based on the accomplishment of certain revenue targets.~~



(in thousands)	Contingent Cash Payments
2020	$	152,750
2021	11,800
2022	5,900
2024	5,900
Anytime 12-month period from now until 2028	3,000
	$	179,350

Of the ~~$18.5~~$179.4 million total contingent obligation as discussed further in Note 15 "Financial Instruments and Fair Value Measurements", we have assessed the fair value at December 31, ~~2017,~~2019 to be ~~$11.5~~$162.2 million, of which $142.6 million is included in accrued and other current liabilities and $19.6 million is included in other long-term liabilities in the accompanying consolidated balance sheet.

Employment Agreements

Certain of our employment contracts contain provisions which guarantee the payments of certain amounts in the event of a change in control, as defined in the agreements, or if the executive is terminated for reasons other than cause, as defined in the agreements. At December 31, ~~2017,~~2019, the commitment under these agreements totaled ~~$16.8~~$6.2 million. The employment agreements with the Managing Directors and the German affiliate include a clause, whereby the affiliate will compensate the Managing Directors for potential deductions under Dutch law which, since 2014, has introduced a duty to deduct from a Managing Director’s remuneration any increase in the value of shares or options that were part of his pay to the extent that such increase is based on a public offer, merger or other identity changing transaction.

Contingencies

In the ordinary course of business, we provide a warranty to customers that our products are free of defects and will conform to published specifications. Generally, the applicable product warranty period is one year from the date of delivery of the product to the customer or of site acceptance, if required. Additionally, we typically provide limited warranties with respect to our services. From time to time, we also make other warranties to customers, including warranties that our products are manufactured in accordance with applicable laws and not in violation of third-party rights. We provide for estimated warranty costs at the time of the product sale. We believe our warranty reserves as of December 31, ~~2017~~2019 and ~~2016~~2018 appropriately reflect the estimated cost of such warranty obligations.

~~Preacquisition Contingencies~~

~~In connection with certain acquisitions, amounts were paid into escrow accounts to cover preacquisition contingencies assumed~~ The changes in the ~~acquisition. The escrow amounts that are certain to be claimed by QIAGEN are recorded in prepaid expenses and other current assets and total $2.5 million as~~carrying amount of warranty obligations for the years ended December 31, ~~2017. As of December 31, 2016, $2.5 million was recorded in other long-term assets in the accompanying consolidated balance sheets.~~2019 and 2018 are as follows:



(in thousands)	2019			2018
Balance at beginning of year	$	2,848		$	3,051
Provision charged to cost of sales	3,229			2,892
Usage	(2,921		)	(2,760		)
Adjustments to previously provided warranties, net	(1		)	(243		)
Currency translation	(14		)	(92		)
Balance at end of year	$	3,141		$	2,848

Litigation

From time to time, we may be party to legal proceedings incidental to our business. For the year ended December 31, 2017, we had settlement amounts related to various acquisition-related litigation matters totaling $49.2 million, primarily related to PCR-based biomarker disputes and patent litigation, which were settled during 2017 of which $45.3 million was recorded to general and administrative, restructuring, integration and other expense and $3.9 million was recorded as a license right. $44.8 million of the settlement amounts were paid during 2017 and as of December 31, 2017, $4.4 million was accrued in accrued and other current liabilities.

As of December 31, ~~2017,~~2019, certain claims, suits or legal proceedings arising out of the normal course of business have been filed or were pending against QIAGEN or ~~its~~our subsidiaries. These matters have arisen in the ordinary course and conduct of business, as well as through acquisition. Although it is not possible to predict the outcome of such litigation, we assess the degree of probability and evaluate the reasonably possible losses that we could incur as a result of these matters. We accrue for any estimated loss when it is probable that a liability has been incurred and ~~that~~ the amount of ~~the~~ probable loss can be estimated.

Litigation accruals recorded in accrued and other current liabilities totaled $0.8 million and $6.0 million as of December 31, 2019 and 2018, respectively. The estimated amount of a range of possible losses is between $0.3 million and $2.2 million. During the year ended December 31, 2019, payments of $5.4 million related to previous matters were made. Based on the facts known to QIAGEN and after consultation with legal counsel, management believes that such litigation will not have a material adverse effect on ~~QIAGEN’s~~our financial position or results of ~~operations.~~operations above the amounts accrued. However, the outcome of these matters is ultimately uncertain, thus any settlements or judgments against us in excess of management's expectations could have a material adverse effect on our financial position, results of operations or cash flows.

For the year ended December 31, 2017, we had settlement amounts related to various acquisition-related litigation matters totaling $49.2 million, primarily related to PCR-based biomarker disputes and patent litigation, which were settled during 2017 of which $45.3 million was recorded to restructuring, acquisition, integration and other, net and $3.9 million was recorded as a

license right. $44.8 million of the settlement amounts were paid during 2017 and as of December 31, 2017, $4.4 million was accrued in accrued and other current liabilities.

21. Segment Information

~~20.~~We operate as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. We have a common basis of organization and our products and services are offered globally. Considering the acquisitions made during 2019 and our continued restructuring and streamlining of the growing organization, our chief operating decision maker (CODM) continues to make decisions with regards to business operations and resource allocation based on evaluations of QIAGEN as a whole. Accordingly, we operate and make decisions as 1 business segment. Product category and geographic information follows below.

Product Category Information

Net sales for the product categories are attributed based on those revenues related to sample and assay products and similarly related revenues including bioinformatics solutions, and revenues derived from instrumentation sales. Refer to Note 4 "Revenue" for disaggregation of revenue based on product categories and customer class.

Geographical Information

Net sales are attributed to countries based on the location of the customer. QIAGEN operates manufacturing facilities in Germany, China, and the United States that supply products to customers as well as QIAGEN subsidiaries in other countries. The intersegment portions of such net sales are excluded to derive consolidated net sales. NaN single customer represents more than ten percent of consolidated net sales. Our country of domicile is the Netherlands, which reported net sales of $15.8 million, $15.9 million and $15.0 million for the years ended 2019, 2018 and 2017, respectively, and these amounts are included in the line item Europe, Middle East and Africa as shown in the table below.



(in thousands)	2019		2018		2017
Net Sales
Americas:
United States	$	663,869	$	632,660	$	579,906
Other Americas	58,121		60,359		73,478
Total Americas	721,990		693,019		653,384
Europe, Middle East and Africa	487,476		490,301		462,980
Asia Pacific, Japan and Rest of World	316,958		318,528		301,172
Total	$	1,526,424	$	1,501,848	$	1,417,536

Long-lived assets include property, plant and equipment. The Netherlands, which is included in the balances for Europe, reported long-lived assets of $1.3 million and $1.8 million as of December 31, 2019 and 2018, respectively.



(in thousands)	2019		2018
Long-lived assets
Americas:
United States	$	147,027	$	152,381
Other Americas	3,507		3,748
Total Americas	150,534		156,129
Europe, Middle East and Africa:
Germany	229,225		284,601
Other Europe, Middle East and Africa	49,004		50,051
Total Europe, Middle East and Africa	278,229		334,652
Asia Pacific and Japan	26,480		20,878
Total	$	455,243	$	511,659

22. Share-Based Compensation

We adopted the QIAGEN N.V. Amended and Restated 2005 Stock Plan (the 2005 Plan) in 2005 and the QIAGEN N.V. 2014 Stock Plan (the 2014 Plan) in 2014. The 2005 Plan expired by its terms in April 2015 and no further awards will be granted under the 2005 Plan. The plans allow for the granting of stock rights and incentive stock options, as well as non-qualified options, stock grants and stock-based awards, generally with terms of up to 5 or 10 years, subject to earlier termination in certain situations. ~~Generally, options vest over a 3-year period.~~ The vesting and exercisability of certain stock rights will be accelerated in the event of a Change of Control, as defined in the plans. ~~To date, all~~All option grants have been at the market value on the grant date or at a premium above the closing market price on the grant date. We issue Treasury Shares to satisfy option exercises and award releases and had approximately 2215.7 million Common Shares reserved and available for issuance under the 2005 and 2014 Plans at December 31, ~~2017.~~2019.

Stock Options

We have not granted stock options since 2013. A summary of the status of employee stock options as of December 31, ~~2017~~2019 and changes during the year then ended is presented below:



All Employee Options	Number of Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2019	898		$	20.04
Exercised	(104	)	$	19.95
Expired	(2	)	$	17.51
Outstanding at December 31, 2019	792		$	20.06	1.78	$	10,891
Vested at December 31, 2019	792		$	20.06	1.78	$	10,891
Vested and expected to vest at December 31, 2019	792		$	20.06	1.78	$	10,891

All Employee Options
Number of
Shares (in thousands)

Weighted
Average
Exercise
Price

Weighted
Average
Contractual
Term (in years)

Aggregate
Intrinsic
Value
(in thousands)
Outstanding at January 1, 2017 1,439
$ 19.84

Exercised (287 ) $ 21.08

Expired (3 ) $ 18.63

Outstanding at December 31, 2017 1,149
$ 19.54
3.32 $ 13,088
Vested at December 31, 2017 1,149
$ 19.54
3.32 $ 13,088
Vested and expected to vest at December 31, 2017 1,149
$ 19.54
3.32 $ 13,088

The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 ~~2016~~was $2.0 million, $5.0 million and ~~2015 was~~ $3.3 million, ~~$3.2~~respectively. The actual tax benefit for the tax deductions from option exercises totaled $0.5 million, $0.8 million, and ~~$7.0~~$0.7 million during the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, ~~2017,~~2019, there was no unrecognized share-based compensation expense related to employee stock option awards.

At December 31, 2019, 2018 and 2017, ~~2016 and 2015, 1.1~~0.8 million, ~~1.4~~0.9 million and ~~1.7~~1.1 million options were exercisable at a weighted average price of ~~$19.54, $19.84~~$20.06, $20.04 and ~~$19.27~~$19.54 per share, respectively. The options outstanding at December 31, ~~2017~~2019 expire in various years through 2023.

Stock Units

Stock units represent rights to receive Common Shares at a future date and include restricted stock units which are subject to time-vesting only and performance stock units which include performance conditions in addition to time-vesting. The final number of performance stock units earned is based on the performance achievement which for some grants can reach up to 120% of the granted shares. There is no exercise price and the fair market value at the time of the grant is recognized over the requisite vesting period, generally 3up to 5 ~~years, and in certain grants~~or 10 years. The fair market value is determined based on the number of stock units granted and the market value of our shares on the grant date. Pre-vesting forfeitures were estimated to be approximately ~~7.0%~~6.2%. At December 31, ~~2017,~~2019, there was ~~$67.5~~$60.1 million remaining in unrecognized compensation cost including estimated forfeitures related to these awards, which is expected to be recognized over a weighted average period of ~~2.35~~2.57 years.

The weighted average grant date fair value of stock units granted during the years ended December 31, 2019, 2018 and 2017 ~~2016~~was $37.28, $35.37 and ~~2015 was~~ $31.12, ~~$23.81 and $24.91,~~ respectively. The total fair value of stock units that vested during the years ended December 31, 2019, 2018 and 2017 ~~2016~~was $123.9 million, $54.3 million and ~~2015 was~~ $69.2 million, ~~$27.4 million and $28.7 million,~~ respectively.

A summary of stock units as of December 31, ~~2017~~2019 and changes during the year are presented below:



Stock Units	Stock Units (in thousands)		Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2019	8,343
Granted	1,618
Vested	(3,517	)
Forfeited	(1,261	)
Outstanding at December 31, 2019	5,183		2.57	$	175,199
Vested and expected to vest at December 31, 2019	3,972		2.26	$	134,254

Stock Units
Stock
Units (in thousands)

Weighted
Average
Contractual
Term (in years)

Aggregate
Intrinsic
Value
(in thousands)
Outstanding at January 1, 2017 10,198

Granted 1,976

Vested (2,306 )
Forfeited (1,766 )
Outstanding at December 31, 2017 8,102
2.30 $ 250,603
Vested and expected to vest at December 31, 2017 6,914
2.15 $ 213,861
Beginning in 2019, we began net share settlement 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 before taxes for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015~~2017 totaled approximately ~~$34.4~~$65.9 million, ~~$28.3~~$40.1 million and ~~$23.8~~$34.4 million, respectively, as shown in the table below.



Compensation Expense (in thousands)	2019		2018		2017
Cost of sales	$	2,493	$	2,879	$	2,641
Research and development	5,810		6,457		6,102
Sales and marketing	7,947		9,372		6,820
General and administrative	23,706		21,405		19,614
Restructuring, acquisition, integration and other, net	25,938		—		(735		)
Share-based compensation expense	65,894		40,113		34,442
Less: income tax benefit⁽¹⁾	12,153		8,277		7,407
Net share-based compensation expense	$	53,741	$	31,836	$	27,035

Compensation Expense (in thousands) 2017 2016 2015
Cost of sales $ 2,641
$ 2,553
$ 2,177
Research and development 5,367
4,735
5,686
Sales and marketing 6,820
4,824
4,815
General and administrative 19,614
16,176
11,083
Share-based compensation expense 34,442
28,288
23,761
Less: income tax benefit⁽¹⁾
7,407
6,223
5,751
Net share-based compensation expense $ 27,035
$ 22,065
$ 18,010

⁽¹⁾ Does not include the excess tax benefit realized for the tax deductions of the share-based payment arrangements which totaled ~~$5.2~~$4.0 million, ~~$0.8~~$4.7 million and ~~$3.3~~$5.2 million, respectively, for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015.~~2017.

~~Following~~Share-based compensation expense includes amounts related to the ~~2016~~ restructuring ~~program~~programs discussed in Note 6 ~~share-based compensation~~"Restructuring and Impairments", including accelerated expense in ~~2017~~2019 and ~~2016 includes~~net forfeitures ~~of $0.7 million and $2.0 million, respectively,~~ in ~~connection with the restructuring terminations. Total share-based compensation expense in 2015 was lower following a reassessment on stock units with performance criteria.~~2017. No share-based compensation ~~cost was~~costs were capitalized ~~in inventory in~~for the years ended December 31, ~~2017, 2016~~2019, 2018 or ~~2015~~2017 as the amounts were not material.

~~21.~~23. Employee Benefits

We maintain various benefit plans, including defined contribution and defined benefit plans. Our U.S. defined contribution plan is qualified under Section 401(k) of the Internal Revenue Code, and covers substantially all U.S. employees. Participants may contribute a portion of their compensation not exceeding a limit set annually by the Internal Revenue Service. This plan includes a provision for us to match a portion of employee contributions. Total expense under the 401(k) plans, including the plans acquired via business acquisitions, was ~~$3.6~~$4.0 million, ~~$2.5~~$4.0 million and ~~$2.4~~$3.6 million for the years ended December 31, ~~2017, 2016~~2019, 2018 and ~~2015,~~2017, 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 $0.2 million, $0.2 million and $0.3 million in each year ended December 31, 2019, 2018 and 2017, ~~2016 and 2015.~~respectively.

We have ~~five~~5 defined benefit, non-contributory retirement or termination plans that cover certain employees in Germany, France, Japan, Italy and the United Arab Emirates. These defined benefit plans provide benefits to covered individuals satisfying certain age and/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’ employment period are based on the individuals’ salaries, adjusted for inflation. The liability under the defined benefit plans was ~~$8.0~~$8.2 million at December 31, ~~2017~~2019 and ~~$6.7~~$7.4 million at December 31, ~~2016,~~2018, and is included as a component of other long-term liabilities on the accompanying consolidated balance sheets.

~~22.~~24. Related Party Transactions

From time to time, we have transactions with other companies in which we hold an interest, all of which are individually and in the aggregate immaterial, as summarized in the table below.



	For the years ended December 31,
(in thousands)	2019		2018		2017
Net sales	$	20,002	$	23,358	$	3,852

Net sales with related parties primarily reflects our ventures in China including our partnership to externalize the HPV test franchise for cervical cancer screening in China as well as our joint venture with Sichuan Maccura Biotechnology Co., Ltd which was terminated in conjunction with the 2019 restructuring activities discussed further in Note 6 "Restructuring and

As of December 31, For the years ended December 31,
(in thousands) 2017 2016 2017 2016 2015
Net sales —
—
$ 3,852
$ 1,360
$ 418
Reimbursements against research and development costs —
—
—
—
$ 2,032
Accounts receivable $ 3,802
$ 1,302
—
—
—
Other long-term assets $ 17,713
$ 13,067
—
—
—
Accounts payable $ 1,921
$ 391
—
—
—
Accrued and other current liabilities $ 9,028
$ 3,926
—
—
—
Other long-term liabilities $ 3,075
$ 5,889
—
—
—

Impairments" which also details related party restructuring charges.



	As of December 31,
(in thousands)	2019		2018
Accounts receivable	$	7,589	$	10,109
Prepaid expenses and other current assets	$	13,697	$	3,873
Other long-term assets	$	16,830	$	24,300
Accounts payable	$	1,775	$	4,888
Accrued and other current liabilities	$	15,404	$	5,488

Prepaid expenses and other current assets include short-term loan receivables and supplier advances from companies with which we have an investment or partnership interest.

In connection with the 2019 Restructuring further discussed in Note 6 "Restructuring and Impairments", we entered into a agreement with a non-publicly traded company considered a related party to reduce future purchase commitments to $25.2 million through 2022. The commitment was reduced by $12.8 million which will be paid in 2020 and is included in accrued and other current liabilities as of December 31, 2019 in the accompanying consolidated balance sheet.

During ~~2017,~~2018, we purchased a convertible note for ~~$3.0~~$15.0 million from a ~~publicly listed company considered a related party.~~privately held company. The note is due in ~~October 2020~~December 2021 and bears interest ~~of 3.0%~~at 8%. In the event the company goes public, the note will convert into common shares in the company ranking pari-passu with existing common shares. As of December 31, ~~2017,~~2019, the principal and accrued interest of this note totals ~~$2.7~~$16.3 million ~~while the remaining~~ ~~$0.2 million~~and is attributable to the embedded derivative, that is bifurcated and measured at fair value, associated to a convertible feature of this note. Also in 2017, we granted a loan to a member of management totaling €0.6 million ($0.7 million as of December 31, 2017) bearing interest at 2.0% annually. Repayment is forgiven with continued employment at the rate of €0.1 million plus accrued interest annually. These are included in other long-term ~~assets in the accompanying consolidated balance sheet.~~

Additionally, we have two loan receivables due from related parties granted prior to 2017. The first loan, with a balance of $11.3 million including accrued interest at December 31, 2017, was originally granted in 2015 and subsequently increased during 2016. This loan is due in January 2020 and bears interest of 6%. The second loan, also granted in 2015, has a principal of €2.0 million and is due in June 2019. This loan bears interest of 7% and as of December 31, 2017 carries a balance of $2.9 million including accrued interest. The loans were made for general business purposes and no amounts have been repaid. These loans are included in other long-term assets in the accompanying consolidated balance sheet as of December 31, 2017.

As discussed in Note 10, during 2016 we acquired a 19.0% interest in Hombrechtikon Systems Engineering AG (HSE) for a total obligation of $9.8 million payable over three years. As of December 31, 2017, the total remaining obligation was $6.2 million, of which $3.1 million was included in accrued and other current liabilities ~~and$3.1 million~~ ~~was included in other long-term liabilities in the accompanying consolidated balance sheet. HSE is a variable interest entity and we are not the primary beneficiary, therefore HSE is not consolidated.~~assets.

~~23. Subsequent Events~~

On January 31, 2018, we announced our fifth share repurchase program of up to $200 million of our common shares beginning in 2018 as well as the acquisition of STAT-Dx for approximately $147 million in cash and additional payments of up to approximately $44 million based on the achievement of regulatory and commercial milestones. The acquisition is expected to be completed in 2018 and funded from existing cash reserves.

In January 2018, a partnership became effective with a Chinese company that has taken over R&D, commercial distribution, and the related QIAGEN employees and infrastructure of the HPV test franchise in China.

SCHEDULE II

QIAGEN N.V. AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, ~~2017, 2016~~2019, 2018 AND ~~2015~~2017



(in thousands)	Balance at Beginning of Year		Provision Charged to Expense		Write-Offs			Foreign Exchange and Other			Balance at End of Year
Year Ended December 31, 2017:
Allowance for doubtful accounts	$	7,614	$	3,094	$	(3,233	)	$	533		$	8,008
Year Ended December 31, 2018:
Allowance for doubtful accounts	$	8,008	$	4,448	$	(2,827	)	$	(359	)	$	9,270
Year Ended December 31, 2019:
Allowance for doubtful accounts	$	9,270	$	8,701	$	(5,777	)	$	(79	)	$	12,115

(in thousands)
Balance at
Beginning of
Year

Provision
Charged to
Expense
Write-Offs
Foreign
Exchange
and Other

Balance at
End of Year
Year Ended December 31, 2015:
Allowance for doubtful accounts $ 8,847
$ 2,093
$ (2,022 ) $ (1,663 ) $ 7,255
Year Ended December 31, 2016:
Allowance for doubtful accounts $ 7,255
$ 2,135
$ (1,642 ) $ (134 ) $ 7,614
Year Ended December 31, 2017:
Allowance for doubtful accounts $ 7,614
$ 3,094
$ (3,233 ) $ 533
$ 8,008

S- 1



Title of class:	Trading Symbol	Name of each exchange on which registered:
Common Shares, par value EUR 0.01 per share	~~Name of each exchange on which registered:~~ QGEN	New York Stock Exchange



ý☒	U.S. GAAP
o☐	International Financial Reporting Standards as issued by the International Accounting Standards Board
o☐	Other



o☐	Item 17
o☐	Item 18



	PART I
		Page
Item 1.	Identity of Directors, Senior Management and Advisors	4
Item 2.	Offer Statistics and Expected Timetable	4
Item 3.	Key Information	4
Item 4.	Information on the Company	2120
Item 4A.	Unresolved Staff Comments	4039
Item 5.	Operating and Financial Review and Prospects	4039
Item 6.	Directors, Senior Management and Employees	5349
Item 7.	Major Shareholders and Related Party Transactions	6157
Item 8.	Financial Information	6258
Item 9.	The Offer and Listing	6359
Item 10.	Additional Information	6560
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	7974
Item 12.	Description of Securities Other than Equity Securities	8075

	PART II

Item 13.	Defaults, Dividend Arrearages and Delinquencies	8176
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	8176
Item 15.	Controls and Procedures	8176
Item 16A.	Audit Committee Financial Expert	8277
Item 16B.	Code of Ethics	8277
Item 16C.	Principal Accountant Fees and Services	8277
Item 16D.	Exemptions from the Listing Standards for Audit Committees	8277
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	8277
Item 16F.	Change in Registrant’s Certifying Accountant	78
Item 16G.	Corporate Governance	78
Item 16H.	Mine Safety Disclosure	83
~~Item 16G.~~	~~Corporate Governance~~	83
~~Item 16H.~~	~~Mine Safety Disclosure~~	88
	PART III

Item 17.	Financial Statements	8984
Item 18.	Financial Statements	8984
Item 19.	Exhibits	8984
	Signatures	9286


	Years ended December 31,															Years ended December 31,
	2017			2016			2015			2014			2013			2019			2018			2017			2016			2015
Consolidated Statement of Income Data: (amounts in thousands, except per share data)
Consolidated Statements of Income Data: (amounts in thousands, except per share data)
Net sales	$	1,417,536		$	1,337,991		$	1,280,986		$	1,344,777		$	1,301,984		$	1,526,424		$	1,501,848		$	1,417,536		$	1,337,991		$	1,280,986
Cost of sales	494,975			493,338			454,328			479,570			487,321			521,162			500,888			494,975			493,338			454,328
Gross profit	922,561			844,653			826,658			865,207			814,663			1,005,262			1,000,960			922,561			844,653			826,658
Operating expenses:
Research and development	154,084			149,841			146,830			163,666			147,157			157,448			161,852			154,084			149,841			146,830
Sales and marketing	375,562			376,321			359,598			376,141			373,719			391,906			392,281			375,562			376,321			359,598
General and administrative, restructuring, integration and other	200,098			180,573			102,066			126,637			200,815
General and administrative, restructuring, integration, long-lived asset impairments and other																452,071			141,214			200,098			180,573			102,066
Acquisition-related intangible amortization	39,398			39,091			38,666			37,070			35,495			29,973			39,032			39,398			39,091			38,666
Total operating expenses	769,142			745,826			647,160			703,514			757,186			1,031,398			734,379			769,142			745,826			647,160
Income from operations	153,419			98,827			179,498			161,693			57,477
(Loss) income from operations																(26,136		)	266,581			153,419			98,827			179,498
Other expense	(39,044		)	(41,919		)	(43,195		)	(42,304		)	(25,992		)	(51,640		)	(40,844		)	(39,044		)	(41,919		)	(43,195		)
Income before income taxes	114,375			56,908			136,303			119,389			31,485
(Loss) income before income taxes																(77,776		)	225,737			114,375			56,908			136,303
Income taxes	73,981			(23,395		)	6,401			2,456			(33,164		)	(36,321		)	35,357			73,981			(23,395		)	6,401
Net income	$	40,394		$	80,303		$	129,902		$	116,933		$	64,649
Net (loss) income attributable to noncontrolling interest	—			(101		)	(246		)	568			25
Net income attributable to QIAGEN N.V.	$	40,394		$	80,404		$	130,148		$	116,365		$	64,624
Basic net income per common share attributable to the owners of QIAGEN N.V.⁽¹⁾	$	0.18		$	0.34		$	0.56		$	0.50		$	0.28
Diluted net income per common share attributable to the owners of QIAGEN N.V.⁽¹⁾	$	0.17		$	0.34		$	0.55		$	0.48		$	0.27
Net (loss) income																$	(41,455	)	$	190,380		$	40,394		$	80,303		$	129,902
Net loss attributable to noncontrolling interest																—			—			—			(101		)	(246		)
Net (loss) income attributable to QIAGEN N.V.																$	(41,455	)	$	190,380		$	40,394		$	80,404		$	130,148
Basic net (loss) income per common share attributable to the owners of QIAGEN N.V.⁽¹⁾																$	(0.18	)	$	0.84		$	0.18		$	0.34		$	0.56
Diluted net (loss) income per common share attributable to the owners of QIAGEN N.V.⁽¹⁾																$	(0.18	)	$	0.82		$	0.17		$	0.34		$	0.55
Weighted-average common shares outstanding
Basic	228,074			234,800			233,483			232,644			234,000			226,777			226,640			228,074			234,800			233,483
Diluted	233,009			238,993			238,647			242,806			243,400			226,777			233,456			233,009			238,993			238,647



o☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934



ý☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, ~~2017~~2019



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to



o☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report


(1)	See Note 1819 "Earnings per Common Share" of the “Notes to Consolidated Financial Statements” for the computation of the weighted average number of Common Shares.



	Full-year 2016
	Sales (In $ m)	% change	% of sales
Americas⁽¹⁾	$627	+4%	47%
Europe / Middle East / Africa	$428	+4%	32%
Asia-Pacific / Japan	$279	+10%	21%

Top 7 emerging markets⁽²⁾	$209	+13%	16%


(1)	Mr. Schatz’s contract as Managing Director and Chief Executive Officer concluded effective September 30, 2019 and he continues as a Senior Advisor until June 30, 2021.


(2)	The Performance Stock Units Granted amount includes the number of performance share units granted to each Managing Board member in 2019 for the conversion of 2018 cash bonus earned by each Managing Board member in 2018. In 2019, Mr. Schatz received 60,982 performance stock units and Mr. Sackers received 21,131 performance stock units.


~~(2)~~	~~The Performance Stock Units Granted amount includes a special incentive grant of 100,000 PSUs which was not achieved.~~



Fee payable to the ~~Chairman~~Chair of the Supervisory Board	$150,000
~~Fee payable to the Vice Chairman of the Supervisory Board~~	~~$90,000~~
Fee payable to each member of the Supervisory Board	$57,500
Additional compensation payable to members holding the following positions:
~~Chairman~~Chair of the Audit Committee	$25,000
~~Chairman~~Chair of the Compensation Committee	$18,000
~~Chairman~~Chair of the Selection and Appointment Committee and other board committees	$12,000
Fee payable to each member of the Audit Committee	$15,000
Fee payable to each member of the Compensation Committee	$11,000
Fee payable to each member of the Selection and Appointment Committee and other board committees	$6,000


	As of December 31,										As of December 31,
	2017		2016		2015		2014		2013		2019		2018		2017		2016		2015
Consolidated Balance Sheet Data: (amounts in thousands)
Cash and cash equivalents	$	657,714	$	439,180	$	290,011	$	392,667	$	330,303	$	623,647	$	1,159,079	$	657,714	$	439,180	$	290,011
Working capital⁽¹⁾	$	1,323,181	$	729,140	$	693,043	$	717,124	$	583,851	$	618,903	$	1,182,871	$	1,323,181	$	729,140	$	693,043
Total assets	$	5,038,516	$	4,308,194	$	4,179,117	$	4,454,372	$	4,088,392	$	5,235,616	$	5,748,332	$	5,038,516	$	4,308,194	$	4,179,117
Total long-term liabilities, including current portion	$	2,174,087	$	1,393,668	$	1,343,616	$	1,490,114	$	1,024,389
Total long-term liabilities, including current portion of long-term debt											$	2,032,924	$	2,644,373	$	2,174,087	$	1,393,668	$	1,343,616
Total equity	$	2,540,996	$	2,607,096	$	2,568,070	$	2,664,876	$	2,731,891	$	2,536,591	$	2,634,970	$	2,540,996	$	2,607,096	$	2,568,070
Common shares, par value	$	2,702	$	2,812	$	2,812	$	2,812	$	2,812	$	2,702	$	2,702	$	2,702	$	2,812	$	2,812
Common shares issued	230,829		239,707		239,707		239,707		239,707		230,829		230,829		230,829		239,707		239,707
Common shares outstanding	226,557		234,561		233,006		232,023		233,890		227,752		225,509		226,557		234,561		233,006


Name	Fixed Remuneration		Committee Chairman/ Chairwoman	Committee Membership	Total⁽¹⁾		Restricted Stock Units	Fixed Remuneration		Committee Chair	Committee Membership	Total ⁽¹⁾		Restricted Stock Units
Supervisory Board
Stéphane Bancel	$	57,500	—	32,000	$	89,500	10,732	$	57,500	—	32,000	$	89,500	9,331
Dr. Håkan Björklund	$	43,125	—	12,750	$	55,875	—	$	150,000	12,000	11,000	$	173,000	9,331
Dr. Metin Colpan	$	57,500	12,000	6,000	$	75,500	10,732	$	57,500	12,000	6,000	$	75,500	9,331
Prof. Dr. Manfred Karobath	$	150,000	12,000	17,000	$	179,000	10,732
Dr. Ross L. Levine	$	57,500	—	6,000	$	63,500	10,732	$	57,500	—	6,000	$	63,500	9,331
Dr. Elaine Mardis	$	57,500	—	6,000	$	63,500	10,732	$	57,500	—	6,000	$	63,500	9,331
Lawrence A. Rosen	$	57,500	25,000	—	$	82,500	10,732	$	57,500	25,000	—	$	82,500	9,331
Elizabeth E. Tallett	$	57,500	18,000	21,000	$	96,500	10,732	$	57,500	18,000	21,000	$	96,500	9,331



Name of Supervisory Director	~~Member of Audit~~ ~~Committee~~⁽¹⁾	Member of ~~Compensation~~ Audit Committee	Member of Compensation Committee	Member of Selection and Appointment Committee	Member of Science and Technology Committee
Stéphane Bancel	l	l		l
Dr. Håkan Björklund		l	l(Chair)
Dr. Metin Colpan			l	l (Chair) ~~(Chairman)~~
~~Prof. Dr. Manfred Karobath~~		l	l ~~(Chairman)~~	l
Dr. Ross L. Levine				l
Dr. Elaine Mardis				l
Lawrence A. Rosen	l ~~(Chairman)~~ (Chair)
Elizabeth E. Tallett	l	l ~~(Chairwoman)~~(Chair)	l


	Shares Beneficially Owned⁽¹⁾				Shares Beneficially Owned⁽¹⁾
Name and Country of Residence	Number⁽²⁾		Percent Ownership		Number⁽²⁾		Percent Ownership
Peer M. Schatz, Germany	2,681,395	(3)	1.18	%
Thierry Bernard, United States					47,526	(3)	*
Roland Sackers, Germany	40,000	(4)	*		139,476	(4)	*
Stéphane Bancel, United States	2,081	(5)	*		9,975	(5)	*
Dr. Håkan Björklund, Sweden	—		—		—		—
Dr. Metin Colpan, Germany	3,529,123	(6)	1.56	%	3,550,617	(6)	1.56	%
Prof. Dr. Manfred Karobath, Austria	22,631	(7)	*
Dr. Ross L. Levine, United States	—		—		—	(7)	—
Dr. Elaine Mardis, United States	—	(8)	—		—	(8)	—
Lawrence A. Rosen, United States	—	(9)	—		—	(9)	—
Elizabeth Tallett, United States	10,130	(10)	*		22,167	(10)	*


(1)	The number of Common Shares outstanding as of January 31, ~~2018~~2020 was ~~226,556,855.~~227,626,974. The persons and entities named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them and have the same voting rights as shareholders with respect to Common Shares.


(2)	Does not include Common Shares subject to options or awards held by such persons at January 31, ~~2018.~~2020. See footnotes below for information regarding options now exercisable or that could become exercisable within 60 days of the date of this table.


(3)	Does not include 628,045 shares issuable upon the exercise of options now exercisable having exercise prices ranging from $15.59 to $22.25 per share. Options expire in increments during the period between February 2019 and February 2023. Does not include 387,51820,010 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table.


(5)	Does not include ~~4,496~~11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table.


(10)	Does not include 1,563 shares issuable upon the exercise of options now exercisable having exercise prices of $15.59 per share. Options expire on February 2022. Does not include ~~10,496~~11,037 shares issuable upon the release of unvested stock awards that could become releasable within 60 days from the date of this table.


Region	Research & Development	Sales	Production	Marketing	Administration	Total	Research & Development	Sales	Production	Marketing	Administration	Total
Americas	218	592	279	66	90	1,245	188	540	252	69	83	1,132
Europe, Middle East & Africa	691	718	679	154	325	2,567	718	798	777	161	366	2,820
Asia Pacific & Rest of World	44	575	123	58	76	876
December 31, 2017	953	1,885	1,081	278	491	4,688
Asia Pacific, Japan & Rest of World							47	732	135	79	151	1,144
December 31, 2019							953	2,070	1,164	309	600	5,096


	Shares Beneficially Owned				Shares Beneficially Owned
Name and Country of Residence	Number		Percent Ownership⁽¹⁾		Number		Percent Ownership⁽¹⁾
BlackRock, Inc., United States	21,813,445	(2)	9.63	%
Franklin Resources, Inc., United States	18,757,447	(3)	8.28	%
BlackRock, Inc., United States and United Kingdom					23,530,964	(2)	10.33	%
PRIMECAP Management Company, United States	16,566,194	(4)	7.31	%	14,917,178	(3)	6.55	%
Massachusetts Financial Services Company, United States and Canada					12,629,790	(4)	5.55	%
Wellington Management Group LLP, United States and United Kingdom					11,644,677	(5)	5.11	%


(1)	The percentage ownership was calculated based on ~~226,556,855~~227,752,280 Common Shares outstanding as of December 31, ~~2017.~~2019.


(3)	Of the 18,757,447 shares attributed to Franklin Resources, Inc., it shares voting and dispositive powers over all 18,757,447 shares with various members of a reporting group of which it is part. This information is based solely on the Schedule 13G filed by Franklin Resources Inc. with the Securities and Exchange Commission on February 7, 2018, which reported ownership as of December 31, 2017.


(4)	Of the 12,629,790 shares attributed to Massachusetts Financial Services Company, it has sole voting power over 10,586,991 and sole dispositive power over all 12,629,790 shares. This information is based solely on the Schedule 13G filed by Massachusetts Financial Services Company with the Securities and Exchange Commission on February 14, 2020, which reported ownership as of December 31, 2019.


	High ($)	Low ($)	High ($)	Low ($)
Annual:
2013	24.74	18.30
2014	25.32	19.46
2015	28.53	22.11	28.53	22.11
2016	28.84	19.94	28.84	19.94
2017	36.34	27.40	36.34	27.40
2018			39.45	30.78
2019			43.16	25.04


	High (EUR)	Low (EUR)	High (EUR)	Low (EUR)
Annual:
2013	18.15	13.67
2014	19.64	14.38
2015	26.05	18.72	26.05	18.72
2016	27.26	17.76	27.26	17.76
2017	31.52	25.41	31.52	25.41
2018			34.05	25.22
2019			39.19	22.54



	High (EUR)	Low (EUR)
Monthly:
September 2017	27.70	26.48
October 2017	30.08	26.70
November 2017	29.60	25.78
December 2017	27.93	25.92
January 2018	28.15	25.54
February 2018	28.33	25.42


(i)	the transfer of our enterprise or practically our entire enterprise to a third party;


(ii)	the entry into or termination of a long-term cooperation by us or one of our subsidiaries (dochtermaatschappijen) with another legal person or partnership or as a fully liable general partner of a limited partnership or a general partnership, if such cooperation or termination is of a far-reaching significance for us; and


(iii)	the acquisition or divestment by us or one of our subsidiaries (dochtermaatschappijen) of a participating interest in the capital of a company with a value of at least one-third of the sum of our assets according to our consolidated balance sheet and explanatory notes in our last adopted annual accounts.


(in millions)	2017		2016		2019		2018
Audit fees	$	1.8	$	1.9	$	2.5	$	2.6
-Consolidated financial statements	1.2		1.2		1.8		1.8
-Statutory financial statements	0.6		0.7		0.7		0.8
Audit-related fees	0.5		0.5		0.2		0.3
Tax and other fees					0.0		0.1
Total	$	2.3	$	2.4	$	2.7	$	3.0