XML 19 R9.htm IDEA: XBRL DOCUMENT
v3.22.1

2. Fair Value Measurements | 3 Months Ended
--- | ---
Mar. 31, 2022
Fair Value Disclosures [Abstract] |
Fair Value Disclosures [Text Block] | 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 March 31, 2022 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 | $ | — |  |  | $ | 201.6 |  |  | $ | — |  |  | $ | 201.6 |
Time deposits | 21.0 |  |  | 10.0 |  |  | — |  |  | 31.0 |
Asset-backed securities | — |  |  | 5.5 |  |  | — |  |  | 5.5 |
Foreign government obligations | — |  |  | 8.0 |  |  | — |  |  | 8.0 |
Municipals obligations | — |  |  | 9.9 |  |  |  |  | 9.9 |
U.S. government sponsored agencies | — |  |  | 71.2 |  |  | — |  |  | 71.2 |
Money market funds | 101.6 |  |  | — |  |  | — |  |  | 101.6 |
Total cash equivalents (a) | 122.6 |  |  | 306.2 |  |  | — |  |  | 428.8 |
Restricted investments (b) | 6.9 |  |  | — |  |  | — |  |  | 6.9 |
Equity securities (c) | 9,371.2 |  |  | — |  |  | — |  |  | 9,371.2 |
Loan under the fair value option (d) | — |  |  | — |  |  | 342.6 |  |  | 342.6 |
Available-for-sale investments: |  |  |  |  |  |  |
Corporate debt securities | — |  |  | 576.7 |  |  | — |  |  | 576.7 |
U.S. government sponsored agencies | — |  |  | 254.3 |  |  | — |  |  | 254.3 |
Foreign government obligations | — |  |  | 1.5 |  |  | — |  |  | 1.5 |
Certificates of deposit | — |  |  | 8.0 |  |  | — |  |  | 8.0 |
Municipal obligations | — |  |  | 34.7 |  |  | — |  |  | 34.7 |
Asset-backed securities | — |  |  | 330.4 |  |  | — |  |  | 330.4 |
Total available-for-sale investments (e) | — |  |  | 1,205.6 |  |  | — |  |  | 1,205.6 |
Forward foreign exchange contracts (f) | — |  |  | 0.4 |  |  | — |  |  | 0.4 |
Total financial assets carried at fair value | $ | 9,500.7 |  |  | $ | 1,512.2 |  |  | $ | 342.6 |  |  | $ | 11,355.5 |
Financial liabilities carried at fair value: |  |  |  |  |  |  |
Forward foreign exchange contracts (g) | $ | — |  |  | $ | 4.4 |  |  | $ | — |  |  | $ | 4.4 |
Total financial liabilities carried at fair value | $ | — |  |  | $ | 4.4 |  |  | $ | — |  |  | $ | 4.4 |
Financial assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2021 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 | $ | — |  |  | $ | 39.8 |  |  | $ | — |  |  | $ | 39.8 |
Time deposits | 7.2 |  |  | 10.1 |  |  | — |  |  | 17.3 |
Asset-backed securities | — |  |  | 0.1 |  |  | — |  |  | 0.1 |
Foreign government obligations | — |  |  | 0.8 |  |  | — |  |  | 0.8 |
Municipals obligations | — |  |  | 0.3 |  |  |  |  | 0.3 |
U.S. government sponsored agencies | — |  |  | 33.6 |  | — |  |  | 33.6 |
Money market funds | 50.7 |  |  | — |  |  | — |  |  | 50.7 |
Total cash equivalents (a) | 57.9 |  |  | 84.7 |  |  | — |  |  | 142.6 |
Restricted investments (b) | 6.9 |  |  | — |  |  | — |  |  | 6.9 |
Equity securities (c) | 13,977.5 |  |  | — |  |  | — |  |  | 13,977.5 |
Loan under the fair value option (d) | — |  |  | — |  |  | 443.1 |  |  | 443.1 |
Available-for-sale investments: |  |  |  |  |  |  |
Corporate debt securities | — |  |  | 182.3 |  |  | — |  |  | 182.3 |
U.S. government sponsored agencies | — |  |  | 44.3 |  |  | — |  |  | 44.3 |
Foreign government obligations | — |  |  | 1.0 |  |  | — |  |  | 1.0 |
Other foreign obligations | — |  |  | 3.8 |  |  | — |  |  | 3.8 |
Municipal obligations | — |  |  | 9.0 |  |  | — |  |  | 9.0 |
Asset-backed securities | — |  |  | 87.3 |  |  | — |  |  | 87.3 |
Total available-for-sale investments (e) | — |  |  | 327.7 |  |  | — |  |  | 327.7 |
Forward foreign exchange contracts (f) | — |  |  | 1.7 |  |  | — |  |  | 1.7 |
Total financial assets carried at fair value | $ | 14,042.3 |  |  | $ | 414.1 |  |  | $ | 443.1 |  |  | $ | 14,899.5 |
Financial liabilities carried at fair value: |  |  |  |  |  |  |
Forward foreign exchange contracts (g) | $ | — |  |  | $ | 2.8 |  |  | $ | — |  |  | $ | 2.8 |
Total financial liabilities carried at fair value | $ | — |  |  | $ | 2.8 |  |  | $ | — |  |  | $ | 2.8 |
(a)Cash equivalents are included in Cash and cash equivalents in the condensed consolidated balance sheets. (b) Restricted investments are included in the following accounts in the condensed consolidated balance sheets (in millions):
| March 31, 2022 |  | December 31, 2021
Restricted investments | $ | 5.6 |  |  | $ | 5.6 |
Other investments | 1.3 |  |  | 1.3 |
Total | $ | 6.9 |  |  | $ | 6.9 |
(c) Equity securities are included in the following accounts in the condensed consolidated balance sheets (in millions):
| March 31, 2022 |  | December 31, 2021
Short-term investments | $ | 65.6 |  |  | $ | 71.4 |
Other investments | 9,305.6 |  |  | 13,906.1 |
Total | $ | 9,371.2 |  |  | $ | 13,977.5 |
(d) The Loan under the fair value option is included in Other investments in the condensed consolidated balance sheets. (e) Available-for-sale investments are included in Short-term investments in the condensed consolidated balance sheets. (f) Forward foreign exchange contracts in an asset position are included in Other current assets in the condensed consolidated balance sheets. (g) Forward foreign exchange contracts in a liability position are included in Other current liabilities in the condensed consolidated balance sheets. Level 1 Fair Value Measurements As of March 31, 2022, we own 12,987,900 ordinary voting shares and 9,588,908 preferenc e shares of Sartorius AG (Sartorius), of Goettingen, Germany, a process technology supplier to the biotechnology, pharmaceutical, chemical and food and beverage industries. We own approximately 37% of the ordinary outstanding shares (excluding treasury shares) and 28% of the preference shares of Sartorius as of March 31, 2022. The Sartorius family trust (Sartorius family members are beneficiaries of the trust) holds a majority interest of the outstanding ordinary shares of Sartorius. We do not have the ability to exercise significant influence over the operating and financial policies of Sartorius primarily because we do not have any representative or designee on Sartorius' board of directors and have tried and failed to obtain access to operating or financial information necessary to apply the equity method of accounting. The changes in fair market value of our investment in Sartorius for the three months ended March 31, 2022 was $4.45 billion loss and is recorded in our condensed consolidated statements of income (loss). Level 2 Fair Value Measurements To estimate the fair value of Level 2 debt securities as of March 31, 2022, our primary pricing provider uses Refinitiv as the primary pricing source. Our pricing process allows us to select a hierarchy of pricing sources for securities held. If Refinitiv 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. Available-for-sale investments consist of the following (in millions):
| March 31, 2022
| Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Allowances for Credit Losses | Fair Value
Short-term investments: |  |  |  |  |  |  |  |
Corporate debt securities | $ | 579.1 |  |  | $ | 0.2 |  |  | $ | (2.6) |  |  | $ | — |  | $ | 576.7 |
Municipal obligations | 34.8 |  |  | — |  |  | (0.1) |  |  | — |  | 34.7 |
Asset-backed securities | $ | 331.9 |  |  | $ | 0.1 |  |  | $ | (1.6) |  |  | $ | — |  | $ | 330.4 |
U.S. government sponsored agencies | 255.2 |  |  | — |  |  | (0.9) |  |  | — |  | 254.3 |
Foreign government obligations | $ | 1.5 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  | $ | 1.5 |
Certificates of Deposit | 8.0 |  |  | — |  |  | — |  |  | — |  | 8.0 |
| $ | 1,210.5 |  |  | $ | 0.3 |  |  | $ | (5.2) |  |  | $ | — |  | $ | 1,205.6 |
The following is a summary of the amortized cost and estimated fair value of our debt securities at March 31, 2022 by contractual maturity date (in millions):
| Amortized Cost |  | Estimated Fair Value
Mature in less than one year | $ | 519.2 |  |  | $ | 518.3 |
Mature in one to five years | 556.2 |  |  | 552.8 |
Mature in more than five years | 135.1 |  |  | 134.5 |
Total | $ | 1,210.5 |  |  | $ | 1,205.6 |
Available-for-sale investments consist of the following (in millions):
| December 31, 2021
| Amortized Cost |  | Unrealized Gains |  | Unrealized Losses | Allowances for Credit Losses |  | Estimated Fair Value
Short-term investments: |  |  |  |  |  |  |  |
Corporate debt securities | $ | 181.9 |  |  | $ | 0.5 |  |  | $ | (0.2) |  | — |  |  | $ | 182.2 |
Municipal obligations | 9.0 |  |  | — |  |  | — |  | — |  |  | 9.0 |
Asset-backed securities | 87.5 |  |  | 0.1 |  |  | (0.2) |  | — |  |  | 87.4 |
U.S. government sponsored agencies | 44.3 |  |  | — |  |  | — |  | — |  |  | 44.3 |
Foreign government obligations | 1.0 |  |  | — |  |  | — |  | — |  |  | 1.0 |
Other foreign obligations | 3.8 |  |  | — |  |  | — |  | — |  |  | 3.8 |
Total | 327.5 |  |  | 0.6 |  |  | (0.4) |  | — |  |  | 327.7 |
There were no significant unrealized losses as of March 31, 2022 and December 31, 2021 in either the less than or greater than 12 month categories. Our evaluation of credit losses for available-for-sale debt securities included t he extent to which the fair value is less than the amortized cost basis, adverse conditions specifically related to the debt security, an industry or geographic area, and any changes in the rating of a security by a rating agency. Credit loss impairments are limited to the amount that the fair value of an instrument is less than its amortized cost basis. At March 31, 2022, we have concluded that all payments related to our available-for-sale investments are expected to be made in full and on time at par value. The diminution of value in the intervening period is due to market conditions such as illiquidity and interest rate movements and not due to significant, inherent credit concerns surrounding the issuer. As a result, we have no allowances for credit losses on our available-for-sale investments portfolio as of March 31, 2022. Included in other current assets are $6.6 million and $2.2 million of interest receivable as of March 31, 2022 and December 31, 2021, respectively, primarily associated with securities in our available-for-sale investments portfolio. The interest on these securities is typically payable semi-annually. Due to the short-term nature of our interest receivable asset, we have made an accounting policy election not to measure an allowance for credit losses for accrued interest receivable. We consider any uncollected interest receivable that is overdue greater than one year to be impaired for purposes of write-off. For the three months ended March 31, 2022, we have not written-off any uncollected interest receivable. 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 March 31, 2022 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 Refinitiv 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 (gains) losses, net in the condensed consolidated statements of income (loss). The following is a summary of our forward foreign exchange contracts (in millions):
| March 31,
| 2022
Contracts maturing in April through June 2022 to sell foreign currency: |
Notional value | $ | 85.6 |
Unrealized gain/(loss) | $ | (0.2) |
Contracts maturing in April through June 2022 to purchase foreign currency: |
Notional value | $ | 513.5 |
Unrealized gain/(loss) | $ | (3.8) |
Level 3 Fair Value Investments During the fourth quarter of 2021, we extended a collateralized loan to Sartorius-Herbst Beteiligungen II Gmbh ("SHB"), a private limited company incorporated under the laws of Germany, with a principal amount of €400 million due on January 31, 2029, subject to certain events which could trigger payment prior to maturity (the “Loan”). SHB used the Loan proceeds to partially finance the acquisition of interests under the Sartorius family trust (“Trust”) from a beneficiary of the Trust. The Loan is collateralized by the pledge of certain of the Trust interests, which upon termination of the Trust in mid-2028 represent the right to receive Sartorius ordinary shares. Interest on the loan is payable annually in arrears at 1.5% per annum, and the entire principal amount is due at maturity. In addition to contractual interest, we are entitled to certain value appreciation rights associated with the acquired Trust interests, which upon termination of the Trust represent the right to receive Sartorius ordinary shares, that is due upon repayment of the Loan. We elected the fair value option under ASC 825, Financial Instruments for accounting of the Loan to SHB to simplify the accounting. The fair value of the Loan and value appreciation right is estimated under the income approach using a discounted cash flow, and option pricing model, respectively, which results in a fair value measurement categorized in Level 3. The significant assumptions used to estimate fair value of the Loan include an estimate of the discount rate and cash flows of the Loan and the significant assumptions used to estimate the fair value of the value appreciation right include volatility, the risk-free interest rate, expected life (in years) and expected dividend. The inputs are subject to estimation uncertainty and actual amounts realized may materially differ. An increase in the expected volatility may result in a significantly higher fair value, whereas a decrease in expected life may result in a significantly lower fair value. All subsequent changes in fair value of the Loan and value appreciation right, including accrued interest are recognized in (Gains) losses from change in fair market value of equity securities and loan receivable in our condensed consolidated statements of income (loss). The overall change in fair market value reflected in (Gains) losses from change in fair market value of equity securities and loan receivable during the three months ended March 31, 2022 was $89.9 million, which includes $14.7 million for the change in fair market value for the Loan and $75.2 million for the change in fair market value of the value appreciation right. The decrease in the fair market value of the value appreciation right was due to a decline in the value of the Sartorius ordinary shares. As of March 31, 2022, the €400 million principal amount of the loan is still due on January 31, 2029. The following table provides a reconciliation of the Level 3 Loan measured at estimated fair value (in millions):
December 31, 2021 | $ | 443.1 |
Net decrease in estimated fair market value of the loan included in Gains (losses) in fair market value of equity securities and loan receivable | $ | (89.9) |
Foreign currency exchange gains (losses), net | $ | (10.6) |
March 31, 2022 | $ | 342.6 |

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=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration