QIAGEN N.V. Annual Report 2001

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h. Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. The Company considers a history of operating losses or a change in expected sales levels to be indicators of potential impairment. Assets are grouped and evaluated for impairment at the lowest level for which there are identified cash flows that are largely independent of the cash flows of other groups of assets. The Company deems an asset to be impaired if a forecast of undiscounted projected future operating cash flows directly related to the asset, including disposal value, if any, is less than its carrying amount. If an asset is determined to be impaired, the loss is measured as the amount by which the carrying amount of the asset exceeds fair value. The Company generally measures fair value by discounting projected future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could differ from such estimates. i. Revenue Recognition 38 Revenue from consumable product sales is recognized when title passes, generally upon shipment (FOB shipping point). Revenue from instrumentation equipment is not recognized until title passes to the customer, either upon shipment in the case of sales to distributors (FOB shipping point), or written customer acceptance in the case of sales to end users after satisfying any installation and training requirements. For instrumentation equipment sales that contain other obligations, such as providing service or supplies, revenue is allocated based on the relative fair values of the individual components as determined by list prices. If cash sales prices are not available for individual components, then the sales value is deferred until all individual components are delivered or performed. Revenue from instrumentation service contracts, which account for less than 10 percent of total consolidated net sales, is deferred and recognized over the term of the contract. j. Shipping and Handling Income and Costs The Company accounts for income and costs related to shipping and handling activities in accordance with the Emerging Issues Task Force Issue No. 00-10 ”Accounting for Shipping and Handling Revenues and Costs.” Income from shipping and handling is included with revenue from product sales. Associated costs of shipping and handling are included in sales and marketing expenses. For the years ended December 31, 2001, 2000 and 1999, shipping and handling costs totaled $9.3 million, $7.1 million and $5.2 million, respectively. k. Warranty The Company warrants its products against defects in materials and workmanship for a period of one year. A provision for estimated future warranty is recorded when consumables are shipped and when title on instrumentation equipment passes to the customer. l. Foreign Currency Translation The Company’s reporting currency is the United States dollar. The subsidiaries’ functional currencies are primarily the local currency of the respective country. Balance sheets prepared in their functional currencies are translated to the reporting currency at exchange rates in effect at the end of the accounting period except for shareholders’ equity accounts, which are translated at rates in effect when these balances were originally recorded. Revenue and expense accounts are translated at a weighted average of exchange rates during the period. The cumulative effect of translation is included in accumulated other comprehensive loss in the accompanying consolidated balance sheets. m. Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, notes receivable, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short maturities of those instruments. The carrying value of the Company’s debt and capital leases approximate their fair values because of the short maturities and/or interest rates which are comparable to those available to the Company on similar terms.
n. Financial Instruments In the ordinary course of business, the Company purchases foreign currency exchange options to manage potential losses from foreign currency exposures. These options give the Company the right, but not the requirement, to sell foreign currencies in exchange for U.S. dollars at predetermined exchange rates. The principal objective of such options is to minimize the risks and/or costs associated with global financial and operating activities. The Company does not utilize financial instruments for trading or other speculative purposes. The Company accounts for these transactions in accordance with SFAS No. 133 ”Accounting for Derivative Instruments and Hedging Activities.” Premiums to purchase foreign exchange options are recorded as prepaid assets and amortized over the life of the option or immediately if the option is exercised. Amortization is included in other expense. The table below presents the notional amounts and the weighted average exchange rates for foreign currency exchange options as of December 31, 2001 and 2000. The options outstanding at December 31, 2001 expire at various dates through February 2002 and have a fair market value of approximately $6,000. The options outstanding at December 31, 2000 expired at various dates through February 2001 and had a fair market value of approximately $6,000. Gains or losses from changes in the fair market values are included in other miscellaneous income, net. 2001 2000 Notional Weighted Notional Weighted Notional Average Exchange Notional Average Exchange Functional Currency: Amount Rate Amount Rate German mark $ – – $4,600,000 1.9000 European Union euro 5,600,000 1.0000 – – Swiss franc 1,200,000 1.5500 – – $ 6,800,000 $4,600,000 39 o. Authoritative Pronouncements In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, ”Business Combinations” effective June 30, 2001 for business combinations that are consummated after July 1, 2001, and SFAS No. 142, ”Goodwill and Other Intangible Assets.” SFAS No. 141 eliminates the pooling-of-interests method for business combinations and requires use of the purchase method. SFAS No. 142 addresses how intangible assets should be accounted for upon their acquisition as well as how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. With the adoption of this statement, goodwill is no longer subject to amortization over its estimated useful life. Goodwill will be assessed for impairment each year using the fair-value-based test. The Company will adopt this standard on January 1, 2002 and based on the analysis performed to date, adoption of this standard will not result in a material impairment of the carrying value of the goodwill or other intangible assets with indefinite lives. The adoption is expected to result in an approximately $1.0 million decrease in the annual amortization of goodwill and other intangible assets. In June 2001, the FASB issued SFAS No. 143, ”Accounting for Asset Retirement Obligations”. SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which the obligation is incurred. When the liability is initially recorded, the entity capitalizes the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. This statement is effective on January 1, 2003 with earlier application encouraged. The Company is currently reviewing this statement and has not yet determined its impact, if any, on the Company’s financial position, results of operations or cash flows. In August 2001, the FASB issued SFAS No. 144, ”Accounting for the Impairment or Disposal of Long-Lived Assets”. SFAS No. 144 requires that long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. The statement is effective January 1, 2002 and is not anticipated to have any impact on the Company’s financial position, results of operations or cash flows.
Page 1 and 2: QIAGEN N.V. Annual Report 2001 QIAG
Page 3 and 4: Financial Highlights Financial High
Page 5 and 6: Report of the Supervisory Board Eri
Page 7 and 8: Letter from the Managing Board To O
Page 9 and 10: QIAGEN — Focusing the Power of Li
Page 13 and 14: — Cellomics QIAGEN — Focusing t
Page 19 and 20: SELECTED CONSOLIDATED FINANCIAL DAT
Page 21 and 22: RESULTS OF OPERATIONS The following
Page 23 and 24: Operon, and QIAGEN Sciences, Inc. (
Page 25 and 26: as a result, operating costs relate
Page 27 and 28: credit lines totaling $9.6 million
Page 29 and 30: $360,000, based on the year-end int
Page 31 and 32: QIAGEN N.V. AND SUBSIDIARIES CONSOL
Page 39: in affiliated companies that are 50
Page 43 and 44: December 31, 2001 (January 1, 2001
Page 45 and 46: During 1997, the Company purchased
Page 47 and 48: On March 20, 1997, the Company sold
Page 49 and 50: As of December 31, 2001 and 2000, t
Page 51 and 52: Long-term debt consists of the foll
Page 53 and 54: The Company has elected to adopt SF
Page 55 and 56: 17. LICENSING AGREEMENTS The Compan
Page 57 and 58: Assets Germany United States Switze
Page 59 and 60: STATEMENTS OF INCOME FOR THE YEAR E
Page 61 and 62: 7. SHAREHOLDERS’ EQUITY The autho
Page 63 and 64: OTHER INFORMATION 2. STATUTORY PROF
Page 65 and 66: 1977, Lecturer of Biophysical Chemi
Page 67 and 68: Since June 27, 1996, the Common Sha
Page 69 and 70: Corporate Headquarters QIAGEN N.V.
Page 71: QIAGEN Investor Relations Dr. Solve

QIAGEN N.V. Annual Report 2001

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