Performance Review

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 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 to analyze and interpret the data - to four major customer classes:

• 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
• Applied Testing - government or industry customers using molecular technologies in non-healthcare fields, such as forensics and human identification
• 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

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, 2018, we employed approximately 5,000 people in more than 35 locations worldwide.

Recent Acquisitions

We have made a number of strategic acquisitions and implemented other strategic transactions since 2016, 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 April 2018, QIAGEN acquired STAT-Dx, a privately held company with a next-generation multiplex PCR system that enables fast, cost-effective and flexible syndromic testing. Following the acquisition, we launched the novel Sample to Insight system, known as QIAstat-Dx, in Europe, delivering one-step, fully integrated molecular analysis of widespread syndromes based on QIAGEN chemistries. The first two CE-IVD marked assays provide differential diagnosis of serious respiratory and gastrointestinal infections. FDA submission was completed in late 2018, and U.S. launch is expected in 2019. A broad menu of tests is under development for syndromes in infectious disease, oncology and other areas. QIAGEN acquired STAT-Dx for approximately $149 million in cash and additional future payments of up to about $44 million based on the achievement of regulatory and commercial milestones.
• In September 2018, QIAGEN announced a strategic partnership with NeuMoDx Molecular, Inc. to commercialize two next-generation, fully integrated automation systems for PCR testing. The NeuMoDx 288 (high-throughput version) and NeuMoDx 96 (mid-throughput version) systems help clinical laboratories process increasing molecular test volumes and deliver more rapid diagnostic insights. QIAGEN is initially distributing the systems and related consumables in Europe and other major markets outside the United States, while NeuMoDx is currently distributing these instruments within the United States. The two companies entered into a merger agreement under which QIAGEN can acquire all NeuMoDx shares that it does not currently own at a price of approximately $234 million (QIAGEN currently owns 19.9% of NeuMoDx), subject to regulatory and operational milestones. The systems offer a growing menu of in vitro diagnostic tests and the ability to flexibly and efficiently process both commercial and laboratory-developed tests.
• In January 2019, QIAGEN announced plans to develop next-generation systems for digital PCR, one of the fastest-growing molecular testing applications in the life sciences industry, and acquired the digital PCR assets of Formulatrix, Inc., a developer of laboratory automation solutions. Combining the Formulatrix assets with QIAGEN technologies and automation, we expect to bring to market a fully integrated digital PCR solution with a targeted launch in 2020. The system will offer highly automated workflows, quicker time-to-result, and higher multiplexing and throughput flexibility than current digital PCR platforms. 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 enables us to offer a broader range of software, content and service-based solutions. N-of-One’s services and proprietary database will be integrated into QIAGEN Clinical Insight (QCI), adding medical interpretation and real-world evidence insights and offering robust decision support in oncology. N-of-One’s somatic cancer database with more than 125,000 anonymized patient samples will further increase QIAGEN’s lead as provider of the industry’s largest genomics knowledge base.
• In April 2018, QIAGEN took steps to streamline our presence in veterinary testing through a strategic partnership with Fidelio Capital, a Swedish firm with significant investments in animal health. QIAGEN transferred our portfolio of veterinary assays and the Leipzig site to INDICAL BIOSCIENCE GmbH, a new company created by Fidelio. Under the agreement, QIAGEN manufactures and supplies sample processing solutions for INDICAL.
• QIAGEN entered into a joint venture in May 2017 with Sichuan 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 in China 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.

Our financial results include the contributions of recent acquisitions and divestitures from their effective dates, as well as costs related to the transactions and integration of the acquired companies, such as the relocation and closure of certain facilities.

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 2018, 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, 2018, Compared to 2017

Net Sales

In 2018, net sales grew 6% to $1.50 billion compared to $1.42 billion in 2017 reflecting our organic business expansion in both consumables and related revenues and instruments as well as growth due to the April 2018 acquisition of STAT-Dx Life, S.L. (STAT-Dx), a privately-held company developing the next generation of multiplex diagnostics for one-step, fully integrated molecular analysis of common syndromes using a novel system based on real-time PCR technology and proven QIAGEN chemistries. We experienced good volume gains across the consumables and related revenues portfolio (+6% / 88% of sales), while instrument sales (+7% / 12% of sales) were supported by solid placements of the QIAsymphony automation system.

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

Molecular Diagnostics grew at a 7% rate due, in part, to the QuantiFERON-TB test delivering 21% growth and a record year in Precision Medicine supported by the expansion in revenues from companion diagnostic co-development projects. This more than offset the decline in U.S. HPV sales ($19 million in 2018 as compared to $28 million in 2017), the divestment of the HPV test franchise in China to a third party in January 2018, and the accelerated reduction of low-margin, third-party instrument service contracts during the final months of 2018 to ensure service capacity for several new instrument launches.

Applied Testing was impacted by the April 2018 divestment of the veterinary assays portfolio in addition to changes made during the later portion of 2018 to a third-party research and development project linked to this divestment. Excluding the impact of this divestment, Applied Testing grew due to expansion of the forensics portfolio in the Americas.

Pharma experienced 6% sales growth 2018 as a result of solid gains in both instruments and consumables during the course of the year with gains in the Americas and Europe, Middle East and Africa regions.

Academia was led by a strong performance in the Asia Pacific / Japan region during 2018 with overall robust growth in instrument revenues along with more modest growth for consumables.

Geographic regions: All geographic regions grew at solid single-digit rates in 2018. The Europe / Middle East / Africa region experienced improving trends in Italy, Switzerland and Turkey during the year in addition to benefits from the geographic expansion in the Middle East. The Asia-Pacific / Japan advanced due partially to improving performance in Japan and China during the second half of 2018 despite a weaker performance in South Korea in part due to a 2017 QuantiFERON-TB tender in the country. The Americas advanced at a 6% rate due to gains in Latin America and Canada and the strong underlying U.S. performance after considering the decline in instrument service revenues in the Molecular Diagnostics customer class.

Gross Profit

Gross profit was $1.0 billion, or 67% of net sales, in 2018, compared with $922.6 million, or 65% of net sales, in 2017. Generally, our consumables and related products have a higher gross margin than our instrumentation products and service arrangements. Fluctuations in the sales levels of these products and services can result in changes in gross margin between periods. The 2018 growth in consumables contributed to the higher margin in 2018. Further, gross profit in 2018 was impacted by $1.6 million in restructuring charges while 2017 was impacted by restructuring charges of $4.4 million.

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 to $56.7 million in 2018 from $72.7 million in 2017 reflecting the end of the amortization period of intangibles acquired in 2007. Acquisition-related intangible amortization may increase in the future should we make further acquisitions.

Research and Development

Research and development expenses increased by 5% to $161.9 million (11% of net sales) in 2018, compared to $154.1 million (11% of net sales) in 2017. The increase in research and development costs in 2018 reflects our ongoing investments in NGS and our life sciences portfolio, together with regulatory activity in support of new products. Research and development costs during 2018 also reflect incremental costs due to the acquisition of STAT-Dx in January 2018. Lower expense in 2017 includes a $0.7 million reduction in costs as a result of forfeitures of share-based compensation. As we continue to discover, develop and acquire new products and technologies, we expect to incur additional expenses related to facilities, licenses and employees engaged in research and development. Overall, research and development costs are expected to increase as a result of seeking regulatory approvals, including U.S. FDA Pre-Market Approval (PMA), U.S. FDA 510(k) clearance and EU CE approval of certain assays or instruments. Further, business combinations, along with the acquisition of new technologies, may increase our research and development costs in the future. We have a strong commitment to innovation and expect to continue to make investments in our research and development efforts.

Sales and Marketing

Sales and marketing expenses increased by 4% to $392.3 million (26% of net sales) in 2018 compared to $375.6 million (26% of net sales) in 2017. Sales and marketing expenses were primarily associated with personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional expense. We experienced efficiencies due to a lower cost base following the realignment of marketing activities as part of restructuring projects which were offset by higher personnel costs, including the expansion into China and external services, as well as initiatives for new product launches. Sales and marketing expenses are primarily associated with personnel, commissions, advertising, trade shows, publications, freight and logistics expenses, and other promotional expenses. We anticipate that absolute sales and marketing costs will increase along with new product introductions and growth in sales of our products, but decrease as a percentage of sales.

General and Administrative, Restructuring, Integration and Other

General and administrative, restructuring, integration and other costs decreased by 29% to $141.2 million (9% of net sales) in 2018 from $200.1 million (14% of net sales) in 2017. The decrease in 2018 reflects lower litigation related charges which totaled $10.5 million in 2018 as compared to $45.3 million in 2017. Additionally, 2018 includes a $4.8 million revaluation gain of a minority interest investment in connection with the acquisition as discussed in Note 5 "Acquisitions and Divestitures" , and overall lower acquisition and integration costs which were partially offset higher compensation costs. 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 2019. Over time, we believe the restructuring and integration activities will reduce expenses as we improve efficiency in operations.

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 2018, amortization expense on acquisition-related intangibles within operating expense decreased to $39.0 million, compared to $39.4 million in 2017. We expect acquisition-related intangible amortization will increase as a result of our future acquisitions.

Other Income (Expense)

Total other expense, net was $40.8 million in 2018, compared to $39.0 million in 2017. 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, 2018, interest income increased to $20.9 million from $10.6 million in 2017. 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 "Derivatives and Hedging" in the accompanying consolidated financial statements and other components including the interest portion of operating lease transactions.

Interest expense increased to $67.3 million in 2018, compared to $49.7 million in 2017. Interest costs primarily relate to debt, discussed in Note 15 "Lines of Credit and Debt" in the accompanying consolidated financial statements.

Other income, net was $5.6 million for the year ended December 31, 2018. Other income includes $13.1 million of upward adjustments resulting from observable price changes for non-marketable investments not accounted for under the equity method, a $5.1 million gain from the sale of our interest in a non-publicly traded company and $2.6 million in income from equity-method investments, all as discussed further in Note 10 "Investments" . Additionally in 2018, we recorded a divestiture gain of $8.0 million as discussed in Note 5 "Acquisitions and Divestitures" . This income was partially offset by impairments, including $6.1 million of impairments in non-marketable investments accounted for under the equity method as discussed further in Note 10 , and net losses on foreign currency of $12.3 million for the year ended December 31, 2018.

Other expense, net for the year ended December 31, 2017 includes a $3.5 million gain in connection with the sale of our interest in a non-marketable investment accounted for under the equity method as well as $3.2 million in income from equity-method investments offset by a $5.1 million loss recognized in connection with the impairments of non-marketable investments not accounted for under the equity method and net losses on foreign currency in 2017 of $3.3 million.

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 2018 and 2017, our effective tax rates were 15.7% and 64.7%, respectively. The comparison is impacted by pre-tax book income which was higher in 2018 at $225.7 million compared to $114.4 million in 2017. 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 2018 and 2017, 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, rules, 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.

During 2017, the 64.7% reflects the impacts of the U.S. tax reform. Because of the tax reform, we revalued our U.S. deferred tax assets and liabilities to reflect the corporate income tax rate change from 35% to 21% and provided for a valuation allowance of $60.8 million which was recorded against deferred tax assets related to U.S. interest carry forwards. We also recorded full valuation allowances against other deferred tax assets on tax losses due to unlikely future profits in other jurisdictions. During 2017, we increased accruals for tax contingencies by $22.1 million, primarily related to ongoing income tax audits.

See Note 16 "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 of the 2018 Annual Report on Form 20-F files with the U.S. Securities and Exchange Commission.

Foreign Currencies

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

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 13 "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, 2018 and 2017, we had cash and cash equivalents of $1.16 billion and $657.7 million, respectively. We also had short-term investments of $234.6 million at December 31, 2018. 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, 2018, cash and cash equivalents had increased by $501.4 million from December 31, 2017, primarily as a result of cash provided by operating activities of $359.5 million and cash provided by financing activities of $360.4 million, partially offset by cash used in investing activities of $211.4 million. Working capital as of December 31, 2018 decreased to $1.18 billion as compared to $1.32 billion as of December 31, 2017, reflecting current portion of long-term debt as of December 31, 2018 of $503.1 million in addition to the cash provided by the operating and financing activities in 2018 as described below.

Operating Activities. For the years ended December 31, 2018 and 2017, we generated net cash from operating activities of $359.5 million and $286.8 million, respectively. While net income was $190.4 million in 2018, non-cash components in income included $206.4 million of depreciation and amortization and $17.0 million of non-cash impairments due to the impairment of cost-method investments as further discussed in Note 10 "Investments" and impairments of internal-use software as discussed in Note 9 "Property, Plant and Equipment" .

Operating cash flows include a net decrease in working capital of $80.8 million excluding changes in fair value of derivative instruments. The current period change in working capital is primarily due to increased inventories and accounts receivable and decreased accrued and other current liabilities and taxes payable. 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 $211.4 million of cash was used in investing activities during 2018, compared to $464.3 million during 2017. Investing activities during 2018 consisted principally of $568.0 million for purchases of short-term investments, $172.8 million in cash paid for acquisitions, net of cash acquired as discussed in Note 5 "Acquisitions and Divestitures" , $109.8 million in cash paid for purchases of property and equipment, as well as $41.0 million paid for intangible assets and $9.4 million paid for strategic investments in privately and publicly held companies as discussed in Note 10 "Investments" , partially offset by $691.8 million from the sale of short-term investments. Investing activities during 2017 consisted principally of $450.6 million for purchases of short-term investments, partially offset by $189.0 million from the sale of short-term investments. Additionally, during 2017 cash paid for acquisitions, net of cash acquired, totaled $50.5 million.

Financing Activities. For the year ended December 31, 2018, cash provided by financing activities was $360.4 million compared to cash provided by financing activities of $387.2 million in 2017. Financing activities during 2018 consisted primarily of $494.9 million net cash proceeds from the 2018 cash convertible offering. We used $97.3 million of the proceeds from the from the cash convertible offering to pay the premium for a call option related to the cash convertible notes, and simultaneously received $72.4 million from the sale of Warrants, for a net cash outlay of $24.9 million for the call spread overlay. Cash provided in 2018 was further offset by the repurchase of QIAGEN shares totaling $104.7 million.

In 2017, cash provided from financing activities included $329.9 million net cash proceeds from the German private placement and $394.4 million net cash proceeds from the 2017 cash convertible offering. We used $73.7 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 $45.3 million from the sale of Warrants, for a net cash outlay of $28.3 million for the call spread overlay. Cash provided in 2017 was further offset by the capital repayment of $243.9 million made to shareholders in connection with the January 2017 synthetic share buyback discussed in Note 17 "Equity" and repurchased QIAGEN shares of $61.0 million.

Cash used in other financing activities during the year ended December 31, 2018 and 2017 consisted primarily of $5.5 million and $4.4 million paid for contingent consideration, respectively, together with $2.0 million and $4.1 million 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, 2018 as described more fully in Note 15 "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 15 "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 15 "Lines of Credit and Debt" .

In October 2016, we extended the maturity of our €400 million syndicated revolving credit facility, which now has a contractual lifetime until December 2021 of which no amounts were utilized at December 31, 2018. 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, 2018. We also have capital lease obligations, including interest, in the aggregate amount of $0.1 million, and carry $2.2 billion of long-term debt, of which no amounts are current as of December 31, 2018.

In March 2014, we issued $730.0 million aggregate principal amount of Cash Convertible Senior Notes of which $430.0 million is due in 2019 (2019 Notes) and $300.0 million is due in 2021 (2021 Notes). Interest on the 2019 and 2021 Notes is payable semiannually in arrears on March 19 and September 19 of each year, at rates of 0.375% and 0.875% per annum for the 2019 Notes and 2021 Notes, respectively, commencing on September 19, 2014. 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 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%).

We also have capital lease obligations, including interest, in the aggregate amount of $0.1 million, and carry $2.2 billion of long-term debt, of which no amounts are current as of December 31, 2018.

In connection with certain acquisitions, we could be required to make additional contingent cash payments totaling up to $57.3 million based on the achievement of certain revenue and operating results milestones as further discussed in Note 19 "Commitments and Contingencies" .

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

In January 2017, we completed a synthetic share repurchase that combined a direct capital repayment with a consolidation of shares. The transaction was announced in August 2016 and involved an approach used by various large, multinational Dutch companies to provide returns to shareholders in a faster and more efficient manner than traditional open-market purchases. $243.9 million was repaid to shareholders through the transaction and the outstanding number of common shares was reduced by 8.9 million, or 3.7%. As discussed further in Note 17 "Equity" , the capital repayment program was completed in January 2017.

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

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

Off-Balance Sheet Arrangements

Other than our former arrangements with QIAGEN Finance as discussed in Note 15 "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, 2018, 2017 and 2016.

Contractual Obligations

As of December 31, 2018, our future contractual cash obligations are as follows:

On January 31, 2019, QIAGEN acquired all assets related to the digital PCR program of Formulatrix, Inc., for $125 million in cash with future milestone payments of approximately $136 million due in 2020.

In addition to the above and pursuant to purchase agreements for several of our recent acquisitions, we could be required to make additional contingent cash payments totaling up to $57.3 million based on the achievement of certain revenue and operating results milestones as follows: $23.7 million in 2019, $22.7 million in 2020, $5.9 million in 2022 and $5.0 million, payable in any 12-month period from now until 2028 based on the accomplishment of certain revenue or other milestones, regulatory approvals or clearances. Of the $57.3 million total contingent obligation, we have assessed the fair value at December 31, 2018 to be $49.0 million of which $27.5 million is included in accrued and other current liabilities and $21.5 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 $59.9 million as of December 31, 2018 and are not included in the table above, as we cannot reasonably estimate when, if ever, an amount would be paid to a government agency. Ultimate settlement of these liabilities is dependent on factors outside of our control, such as examinations by each agency and expiration of statutes of limitation for assessment of additional taxes.

Dividend

QIAGEN has not paid a cash dividend since its inception and does not intend to pay any dividends in the foreseeable future. We intend to retain any earnings for the development of our business.

Credit Rating

QIAGEN is currently not rated by any credit rating agency.