XML 21 R10.htm IDEA: XBRL DOCUMENT
v3.19.2

3. Fair Value Measurements | 6 Months Ended
--- | ---
Jun. 30, 2019
Fair Value Disclosures [Abstract] |
Fair Value Measurements | FAIR VALUE MEASUREMENTS We determine the fair value of an asset or liability based on the assumptions that market participants would use in pricing the asset or liability in an orderly transaction between market participants at the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritizes the inputs into three broad levels as follows:
• | Level 1: Quoted prices in active markets for identical instruments
• | Level 2: Other significant observable inputs (including quoted prices in active markets for similar instruments)
• | Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain investments)
Financial assets and liabilities carried at fair value and measured on a recurring basis as of June 30, 2019 are classified in the hierarchy as follows (in millions):
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets carried at fair value: |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |
Commercial paper | $ | — |  |  | $ | 85.0 |  |  | $ | — |  |  | $ | 85.0 |
Asset-backed securities | — |  |  | 0.1 |  |  | — |  |  | 0.1 |
Time deposits | 12.9 |  |  | 10.0 |  |  | — |  |  | 22.9 |
Money market funds | 71.2 |  |  | — |  |  | — |  |  | 71.2 |
Total cash equivalents (a) | 84.1 |  |  | 95.1 |  |  | — |  |  | 179.2 |
Restricted investment | 5.6 |  |  | — |  |  | — |  |  | 5.6 |
Equity securities (b) | 4,440.3 |  |  | — |  |  | — |  |  | 4,440.3 |
Available-for-sale investments: |  |  |  |  |  |  |
Corporate debt securities | — |  |  | 174.2 |  |  | — |  |  | 174.2 |
U.S. government sponsored agencies | — |  |  | 93.6 |  |  | — |  |  | 93.6 |
Foreign government obligations | — |  |  | 4.2 |  |  | — |  |  | 4.2 |
Other foreign obligations | — |  |  | 2.5 |  |  | — |  |  | 2.5 |
Municipal obligations | — |  |  | 11.2 |  |  | — |  |  | 11.2 |
Asset-backed securities | — |  |  | 67.9 |  |  | — |  |  | 67.9 |
Total available-for-sale investments (c) | — |  |  | 353.6 |  |  | — |  |  | 353.6 |
Forward foreign exchange contracts (d) | — |  |  | 0.4 |  |  | — |  |  | 0.4 |
Total financial assets carried at fair value | $ | 4,530.0 |  |  | $ | 449.1 |  |  | $ | — |  |  | $ | 4,979.1 |
Financial liabilities carried at fair value: |  |  |  |  |  |  |
Forward foreign exchange contracts (e) | $ | — |  |  | $ | 0.5 |  |  | $ | — |  |  | $ | 0.5 |
Contingent consideration (f) | — |  |  | — |  |  | 6.4 |  |  | 6.4 |
Total financial liabilities carried at fair value | $ | — |  |  | $ | 0.5 |  |  | $ | 6.4 |  |  | $ | 6.9 |
Financial assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2018 are classified in the hierarchy as follows (in millions):
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets carried at fair value: |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |
Commercial paper | $ | — |  |  | $ | 77.8 |  |  | $ | — |  |  | $ | 77.8 |
Time deposits | 22.7 |  |  | 10.0 |  |  | — |  |  | 32.7 |
Asset-backed securities | — |  |  | 0.3 |  |  | — |  |  | 0.3 |
Money market funds | 36.9 |  |  | — |  |  | — |  |  | 36.9 |
Total cash equivalents (a) | 59.6 |  |  | 88.1 |  |  | — |  |  | 147.7 |
Restricted investment | 5.6 |  |  | — |  |  | — |  |  | 5.6 |
Equity securities (b) | 2,672.9 |  |  | — |  |  | — |  |  | 2,672.9 |
Available-for-sale investments: |  |  |  |  |  |  |
Corporate debt securities | — |  |  | 215.0 |  |  | — |  |  | 215.0 |
U.S. government sponsored agencies | — |  |  | 80.3 |  |  | — |  |  | 80.3 |
Foreign government obligations | — |  |  | 3.6 |  |  | — |  |  | 3.6 |
Municipal obligations | — |  |  | 11.0 |  |  | — |  |  | 11.0 |
Asset-backed securities | — |  |  | 63.3 |  |  | — |  |  | 63.3 |
Total available-for-sale investments (c) | — |  |  | 373.2 |  |  | — |  |  | 373.2 |
Forward foreign exchange contracts (d) | — |  |  | 0.6 |  |  | — |  |  | 0.6 |
Total financial assets carried at fair value | $ | 2,738.1 |  |  | $ | 461.9 |  |  | $ | — |  |  | $ | 3,200.0 |
Financial liabilities carried at fair value: |  |  |  |  |  |  |
Forward foreign exchange contracts (e) | $ | — |  |  | $ | 0.7 |  |  | $ | — |  |  | $ | 0.7 |
Contingent consideration (f) | — |  |  | — |  |  | 8.4 |  |  | 8.4 |
Total financial liabilities carried at fair value | $ | — |  |  | $ | 0.7 |  |  | $ | 8.4 |  |  | $ | 9.1 |
(a) | Cash equivalents are included in Cash and cash equivalents in the Condensed Consolidated Balance Sheets.
(b) | Equity securities are included in the following accounts in the Condensed Consolidated Balance Sheets (in millions):
| June 30, 2019
Short-term investments | $ | 47.7 |
Other investments | 4,392.6 |
Total | $ | 4,440.3 |
The year-to-date unrealized gains on our equity securities as of June 30, 2019 were $1,775.7 million and were primarily due to our investment in Sartorius AG and are recorded in our Condensed Consolidated Statements of Income. (c)Available-for-sale investments are included in the following accounts in the Condensed Consolidated Balance Sheets (in millions):
| June 30, 2019 |  | December 31, 2018
Short-term investments | $ | 353.5 |  |  | $ | 373.0 |
Other investments | 0.1 |  |  | 0.2 |
Total | $ | 353.6 |  |  | $ | 373.2 |
(d) Forward foreign exchange contracts in an asset position are included in Other current assets in the Condensed Consolidated Balance Sheets. (e) Forward foreign exchange contracts in a liability position are included in Other current liabilities in the Condensed Consolidated Balance Sheets. (f) Contingent consideration liability is included in the following accounts in the Condensed Consolidated Balance Sheets (in millions):
| June 30, 2019 |  | December 31, 2018
Other current liabilities | $ | 3.2 |  |  | $ | 3.2 |
Other long-term liabilities | 3.2 |  |  | 5.2 |
Total | $ | 6.4 |  |  | $ | 8.4 |
During the first quarter of 2016, we recognized a contingent consideration liability upon our acquisition of a high performance analytical flow cytometer platform from Propel. At the acquisition date, the amount of contingent consideration was determined based on a probability-weighted income approach related to the achievement of sales milestones, ranging from 39% to 20% for the calendar years 2017 through 2020. The sales milestones could potentially range from $0 to an unlimited amount. In the first quarter of 2019, we paid $1.4 million per the purchase agreement. Since 2016 we have decreased the cumulative valuation of the sales milestones by net $12.8 million. The contingent consideration was accrued at its estimated fair value of $6.4 million as of June 30, 2019. The following table provides a reconciliation of the Level 3 analytical flow cytometer platform contingent consideration liabilities measured at estimated fair value (in millions):
December 31, 2018 | $ | 8.4 |
Payment of sales milestone | (1.4 | )
Decrease in estimated fair value of contingent consideration included in Selling, general and administrative expense | (0.6 | )
June 30, 2019 | $ | 6.4 |
The following table provides quantitative information about Level 3 inputs for fair value measurement of our analytical flow cytometer platform contingent consideration liability as of June 30, 2019. Significant increases or decreases in these inputs in isolation could result in a significantly lower or higher fair value measurement.
| Valuation Technique | Unobservable Input |
Analytical flow cytometer platform | Probability-weighted income approach | Sales milestones: |
|  | Discount rate | 11.5 | %
|  | Average cost of debt | 4.3 | %
To estimate the fair value of Level 2 debt securities as of June 30, 2019, our primary pricing provider uses Reuters as the primary pricing source. Our pricing process allows us to select a hierarchy of pricing sources for securities held. If Reuters does not price a Level 2 security that we hold, then the pricing provider will utilize our custodian supplied pricing as the secondary pricing source. For all commercial paper as of June 30, 2019, our primary pricing provider uses its leading pricing source in the hierarchy to determine pricing. Our pricing provider performs daily reasonableness testing of the Reuters prices. Price changes of 5% or greater are investigated and resolved. In addition, we perform a quarterly testing of the Reuters prices to custodian reported prices. Price differences outside a tolerable variance of approximately 1% are investigated and resolved. Available-for-sale investments consist of the following (in millions):
| June 30, 2019
| Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Estimated Fair Value
Short-term investments: |  |  |  |  |  |  |
Corporate debt securities | $ | 173.1 |  |  | $ | 1.2 |  |  | $ | (0.1 | ) |  | $ | 174.2 |
Municipal obligations | 11.1 |  |  | 0.1 |  |  | — |  |  | 11.2 |
Asset-backed securities | 67.7 |  |  | 0.2 |  |  | (0.1 | ) |  | 67.8 |
U.S. government sponsored agencies | 93.0 |  |  | 0.8 |  |  | (0.2 | ) |  | 93.6 |
Foreign government obligations | 4.2 |  |  | — |  |  | — |  |  | 4.2 |
Other foreign obligations | 2.5 |  |  | — |  |  | — |  |  | 2.5 |
| 351.6 |  |  | 2.3 |  |  | (0.4 | ) |  | 353.5 |
Long-term investments: |  |  |  |  |  |  |
Asset-backed securities | 0.1 |  |  | — |  |  | — |  |  | 0.1 |
| 0.1 |  |  | — |  |  | — |  |  | 0.1 |
Total | $ | 351.7 |  |  | $ | 2.3 |  |  | $ | (0.4 | ) |  | $ | 353.6 |
The following is a summary of the amortized cost and estimated fair value of our debt securities at June 30, 2019 by contractual maturity date (in millions):
| Amortized Cost |  | Estimated Fair Value
Mature in less than one year | $ | 127.0 |  |  | $ | 127.1 |
Mature in one to five years | 168.5 |  |  | 169.5 |
Mature in more than five years | 56.2 |  |  | 57.0 |
Total | $ | 351.7 |  |  | $ | 353.6 |
Available-for-sale investments consist of the following (in millions):
| December 31, 2018
| Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Estimated Fair Value
Short-term investments: |  |  |  |  |  |  |
Corporate debt securities | $ | 216.2 |  |  | $ | 0.1 |  |  | $ | (1.3 | ) |  | $ | 215.0 |
Municipal obligations | 11.1 |  |  | — |  |  | (0.1 | ) |  | 11.0 |
Asset-backed securities | 63.5 |  |  | — |  |  | (0.4 | ) |  | 63.1 |
U.S. government sponsored agencies | 80.9 |  |  | 0.2 |  |  | (0.8 | ) |  | 80.3 |
Foreign government obligations | 3.6 |  |  | — |  |  | — |  |  | 3.6 |
| 375.3 |  |  | 0.3 |  |  | (2.6 | ) |  | 373.0 |
Long-term investments: |  |  |  |  |  |  |
Asset-backed securities | 0.2 |  |  | — |  |  | — |  |  | 0.2 |
| 0.2 |  |  | — |  |  | — |  |  | 0.2 |
Total | $ | 375.5 |  |  | $ | 0.3 |  |  | $ | (2.6 | ) |  | $ | 373.2 |
The following is a summary of investments with gross unrealized losses and the associated fair value (in millions):
| June 30, 2019 |  | December 31, 2018
Fair value of investments in a loss position 12 months or more | $ | 59.0 |  |  | $ | 117.9 |
Fair value of investments in a loss position less than 12 months | $ | 51.5 |  |  | $ | 193.0 |
Gross unrealized losses for investments in a loss position 12 months or more | $ | 0.3 |  |  | $ | 1.8 |
Gross unrealized losses for investments in a loss position less than 12 months | $ | 0.1 |  |  | $ | 0.8 |
The unrealized losses on these securities are due to a number of factors, including changes in interest rates, changes in economic conditions and changes in market outlook for various industries, among others. Because Bio-Rad has the ability and intent to hold these investments with unrealized losses until a recovery of fair value, or for a reasonable period of time sufficient for a forecasted recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at June 30, 2019 or at December 31, 2018. As part of distributing our products, we regularly enter into intercompany transactions. We enter into forward foreign exchange contracts to manage foreign exchange risk of future movements in foreign exchange rates that affect foreign currency denominated intercompany receivables and payables. We do not use derivative financial instruments for speculative or trading purposes. We do not seek hedge accounting treatment for these contracts. As a result, these contracts, generally with maturity dates of 90 days or less and denominated primarily in currencies of industrial countries, are recorded at their fair value at each balance sheet date. The notional principal amounts provide one measure of the transaction volume outstanding as of June 30, 2019 and do not represent the amount of Bio-Rad's exposure to loss. The estimated fair value of these contracts was derived using the spot rates from Reuters on the last business day of the quarter and the points provided by counterparties. The resulting gains or losses offset exchange gains or losses on the related receivables and payables, both of which are included in Foreign currency exchange losses, net in the Condensed Consolidated Statements of Income. The following is a summary of our forward foreign exchange contracts (in millions):
| June 30,
| 2019
Contracts maturing in July through September 2019 to sell foreign currency: |
Notional value | $ | 30.1 |
Unrealized gain or loss | $ | — |
Contracts maturing in July through September 2019 to purchase foreign currency: |
Notional value | $ | 266.2 |
Unrealized loss | $ | 0.2 |
The estimated fair value of our long-term debt, excluding leases and current maturities, that is not recognized at fair value in the Condensed Consolidated Balance Sheets has an estimated fair value based on quoted market prices for the same or similar issues. The estimated fair value of our long-term debt discussed above and the level of the fair value hierarchy within which the fair value measurement is categorized are as follows (in millions):
| June 30, 2019 |  | December 31, 2018
| Carrying Amount |  | Estimated Fair Value |  | Fair Value Hierarchy Level |  | Carrying Amount |  | Estimated Fair Value |  | Fair Value Hierarchy Level
Total long-term debt, excluding leases and current maturities | $ | 437.7 |  |  | $ | 438.3 |  |  | 2 |  | $ | 423.7 |  |  | $ | 435.8 |  |  | 2
Included in Other Investments in the Condensed Consolidated Balance Sheet are investments without readily determinable fair value measured at cost with adjustments for observable price changes in price or impairments. The carrying value of these investments was $8.6 million and $0.6 million as of June 30, 2019 and December 31, 2018, respectively.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration