10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
	(Mark One)
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2014
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from _______________ to _______________.
COMMISSION FILE NUMBER: 0-19271
IDEXX LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE (State or other jurisdiction of incorporation or organization) ONE IDEXX DRIVE, WESTBROOK, MAINE (Address of principal executive offices)			01-0393723 (I.R.S. Employer Identification No.) 04092 (ZIP Code)
Registrant’s telephone number, including area code:  207-556-0300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.10 par value per share	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐(Do not check if a smaller reporting company)	Smaller reporting company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes☐ No ☒

Based on the closing sale price on June 30,2014 of the registrant’s Common Stock, the last business day of the registrant’s most recently completed second fiscal quarter, as reported by the NASDAQ Global Select Market, the aggregate market value of the voting stock held by non-affiliates of the registrant was $6,663,805,564. For these purposes, the registrant considers its directors and executive officers to be its only affiliates.

The number of shares outstanding of the registrant’s Common Stock was 47,125,601 on February 6, 2015.

DOCUMENTS INCORPORATED BY REFERENCE

Part III—Specifically identified portions of the Company’s definitive Proxy Statement to be filed in connection with the Company’s 2015annual meeting of stockholders (the “2015 Annual Meeting”), to be held on  May 6, 2015, are incorporated herein by reference.

IDEXX LABORATORIES, INC.

Annual Report on Form 10-K

Table of Contents

Item No.		Page No.
	PART I
Item 1	Business	4
Item 1A	Risk Factors	17
Item 1B	Unresolved Staff Comments	24
Item 2	Properties	25
Item 3	Legal Proceedings	25
Item 4	Mine Safety Disclosures	25
	PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6	Selected Financial Data	29
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A	Quantitative and Qualitative Disclosure about Market Risk	62
Item 8	Financial Statements and Supplementary Data	63
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	63
Item 9A	Controls and Procedures	64
Item 9B	Other Information	65
	PART III
Item 10	Directors, Executive Officers and Corporate Governance	65
Item 11	Executive Compensation	65
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	65
Item 13	Certain Relationships and Related Transactions, and Director Independence	66
Item 14	Principal Accountant Fees and Services	66
	PART IV
Item 15	Exhibits, Financial Statement Schedules	66
Financial Statements and Supplementary Data – Index to Consolidated Financial Statements		F-1
Exhibit Index
Signatures

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BASIS OF PRESENTATION

IDEXX Laboratories, Inc. is a Delaware corporation. Our principal executive offices are located at One IDEXX Drive, Westbrook, Maine 04092, our telephone number is 207-556-0300, and our Internet address is www.idexx.com. References herein to “we,” “us,” “our,” the “Company,” or “IDEXX” include IDEXX Laboratories, Inc. and our wholly-owned subsidiaries and majority-owned subsidiaries unless the context otherwise requires. References to our website are inactive textual references only and the content of our website should not be deemed incorporated by reference into this Annual Report on Form 10-K for any purpose.

The following terms used in this Annual Report on Form 10-K are our trademarks: 4Dx®,  Catalyst Dx®, Catalyst One™, Coag Dx™,  Colilert®,  Colisure®,  Cornerstone®,  DVMAX®,  Enterolert®,  Feline Triple®,  Filta-Max®,  Filta-Maxxpress®,  IDEXX I-Vision CR®,  IDEXX I-Vision DR®,  IDEXX I-Vision Mobile™,  IDEXX ImageBank™  , IDEXX-PACS™,  IDEXX VetLab®,  IDEXX VPM™,  LaserCyte®, LaserCyte Dx™,  Navigator™, OPTI®, OPTI LION™,  PetChek®,  PetDetect®,  Pet Health Network®,  Practice Profile™,  ProCyte Dx®,  Pseudalert®,  Quanti-Tray®,  SimPlate®, SmartService™, SNAP®,  SNAPduo®,  SNAP Pro®, SNAPcPL™  , SNAPfPL™,  SNAPshot Dx®,  VetAutoread™,  VetConnect®,VetLab UA™,  VetLINK®,  VetLyte®,  VetStat®,  VetTest® and VetVault®.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K for the year ended December 31, 2014 contains statements which, to the extent they are not statements of historical fact, constitute “forward-looking statements.” Such forward-looking statements about our business and expectations within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include statements relating to future revenue growth rates, earnings and other measures of financial performance; the effect of economic downturns on our business performance; demand for our products; realizability of assets; future cash flow and uses of cash; future repurchases of common stock; future levels of indebtedness and capital spending; interest expense; warranty expense; share-based compensation expense; and competition. Forward-looking statements can be identified by the use of words such as “expects,” “may,” “anticipates,” “intends,” “would,” “will,” “plans,” “believes,” “estimates,” “should,” and similar words and expressions. These forward-looking statements are intended to provide our current expectations or forecasts of future events, are based on current estimates, projections, beliefs, and assumptions, and are not guarantees of future performance. Actual events or results may differ materially from those described in the forward-looking statements. These forward-looking statements involve a number of risks and uncertainties as more fully described under the heading “Part I, Item 1A. Risk Factors” in this Annual Report on Form 10-K. Any forward-looking statements represent our estimates only as of the day this Annual Report on Form 10-K was first filed with the Securities and Exchange Commission (“SEC”) and should not be relied upon as representing our estimates as of any subsequent date. From time to time, oral or written forward-looking statements may also be included in other materials released to the public  and they are subject to the risks and uncertainties described or cross-referenced in this section. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates or expectations change.

PART I

ITEM 1. BUSINESS

We are a Delaware corporation incorporated in 1983. We develop, manufacture and distribute products and provide services primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets. We also sell a line of portable electrolytes and blood gas analyzers for the human point-of-care medical diagnostics market. Our primary products and services are:

· Point-of-care veterinary diagnostic products, comprising instruments, consumables and rapid assays;

· Veterinary reference laboratory diagnostic and consulting services;

· Practice management systems and services and digital imaging systems used by veterinarians;

· Biological materials testing, laboratory animal diagnostic instruments and services used by the biomedical research community;

· Diagnostic, health-monitoring and food safety testing products for livestock, poultry and dairy;

· Products that test water for certain microbiological contaminants;

· Point-of-care electrolytes and blood gas analyzers used in the human point-of-care medical diagnostics market.

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DESCRIPTION OF BUSINESS BY SEGMENT

Prior to January 1, 2013, we operated primarily through three business segments: diagnostic and information technology-based products and services for the veterinary market, which we continue to refer to as the Companion Animal Group (“CAG”); water quality products (“Water”); and diagnostic products for livestock and poultry health, which we referred to as Livestock and Poultry Diagnostics. We also operated two smaller operating segments that comprised products for milk quality and safety (“Dairy”) and products for the human point-of-care medical diagnostics market (“OPTI Medical”). Financial information about our Dairy and OPTI Medical operating segments was combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they did not meet the quantitative or qualitative thresholds for reportable segments. 

In 2013, we combined the management of our Livestock and Poultry Diagnostics, and Dairy lines of business to more effectively realize the market synergies between the product lines and to achieve operational efficiencies. We refer to this segment as Livestock, Poultry and Dairy (“LPD”). Our OPTI Medical operating segment remains combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they do not meet the quantitative or qualitative thresholds for reportable segments. The segment income (loss) from operations discussed within this report for the year ended December 31, 2012 has been retrospectively revised to reflect this change in the composition of our reportable segments. See Note 14 to the consolidated financial statements for the year ended December 31, 2014 included in this Annual Report on Form 10-K for financial information about our segments, including our product and service categories and our geographic areas.

The performance of our business is particularly subject to various risks that are associated with doing business internationally. For the year ended December 31, 2014, sales of products and services to customers outside the U.S. accounted for approximately 43% of our overall revenue. These foreign sales accounted for approximately 36%, 52% and 90% of revenue in our CAG, Water and LPD segments, respectively. See “Part 1, Item 1A. Risk Factors.” and Note 14 to the consolidated financial statements for the year ended December 31, 2014 included in this Annual Report on Form 10-K for more information on revenue from customers outside of the U.S.

COMPANION ANIMAL GROUP

CAG provides to veterinarians diagnostic capabilities and information management solutions that enhance the health and well-being of pets. The breadth and complementary nature of our products and services comprise a unique competitive advantage that we refer to as the IDEXX Diagnostic Advantage, providing veterinarians with the tools and services to offer advanced veterinary medical care. The IDEXX Diagnostic Advantage improves staff efficiencies and also enables the veterinarian to communicate the value of this medical care to the pet owner, which ultimately leads to growing practice revenues.

CAG Diagnostics

We provide diagnostic capabilities that meet veterinarians’ diverse needs through a variety of modalities, including in-clinic diagnostic solutions and outside reference laboratory services. Regardless of modality utilized, veterinarians are provided with clinically relevant data which is integrated within our information management technologies. The result is a comprehensive view of patient diagnostic information that is easily accessible by both the veterinarian and pet owner.

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Integrated Diagnostic Information Management

VetConnect PLUS is a cloud-based technology that enables veterinarians to access and analyze patients’ data from all of IDEXX’s diagnostic modalities. These integrated diagnostic results provide the veterinarian with a visualization of patient-specific testing results, allowing the veterinarian to easily see and trend diagnostic results, enabling greater medical insight and enhanced decision making. In addition, VetConnect PLUS provides instant mobile or browser-based access to results, which can be printed or emailed to pet owners and other veterinarians. In this way, VetConnect PLUS can aid veterinarians and practice staff in engaging the pet owner in the patient’s care, which can support greater compliance with medical recommendations or preventive care protocols. VetConnect PLUS is currently available in North America, Australia, New Zealand, Israel and in numerous countries throughout Europe.

In-Clinic Diagnostic Solutions

Our in-clinic diagnostic solutions are comprised of our IDEXX VetLab suite of in-clinic chemistry, hematology, immunoassay, urinalysis and coagulation analyzers, associated proprietary consumable products that provide real-time reference lab quality diagnostic results and a broad range of single-use, handheld IDEXX SNAPrapid assay test kits that provide quick, accurate and convenient point-of-care diagnostic test results for a variety of companion animal diseases and health conditions.

The IDEXX VetLab suite includes several instrument systems, as well as associated proprietary consumable products, all of which are described below. Additionally, we offer extended maintenance agreements in connection with the sale of our instruments.

Blood and Urine Chemistry. We sell three chemistry analyzers, the Catalyst DxChemistry Analyzer, the Catalyst One Chemistry Analyzer and the VetTest Chemistry Analyzer, that are used by veterinarians to measure levels of certain enzymes and other substances in blood or urine for monitoring health status and assisting in diagnosing physiologic conditions. These three instruments use consumables manufactured for IDEXX by Ortho-Clinical Diagnostics, Inc. (“Ortho”) based on Ortho’s dry slide technology. In addition, the Catalyst Dx and the Catalyst One analyzers also use dry slide electrolyte consumables manufactured by OPTI Medical Systems, Inc. (“OPTI Medical Systems”), one of our wholly-owned subsidiaries, and other slides also manufactured by IDEXX. Blood tests commonly run on these analyzers include glucose, alkaline phosphatase, ALT (alanine aminotransferase), albumin, calcium, creatinine, blood urea nitrogen, total protein and many others. Tests are sold individually and in prepackaged panels. All three analyzers also run a urine test called urine protein:creatinine ratio, which assists in the early detection of renal disease.

The Catalyst Dx and Catalyst One analyzers provide significantly improved throughput, ease of use and test menu relative to the VetTest analyzer (our original chemistry analyzer), including the ability to run electrolytes, phenobarbital and fructosamine. Key ease-of-use features include the ability to run a whole blood sample using an on-board centrifuge, the ability to run pre-packaged, multi-slide clips in addition to single chemistry slides and an automated metering system. These analyzers also enable automated dilutions, which is an ease-of-use feature both for certain blood chemistries and the test for urine protein:creatinine ratio. The Catalyst Dx analyzer allows a veterinarian to run multiple patient samples simultaneously and both the Catalyst Dx and Catalyst One run different sample types including whole blood, plasma, serum and urine. In addition, the Catalyst Dx and Catalyst One analyzers run a test to measure phenobarbital levels in blood, allowing veterinarians to adjust anticonvulsant medication more quickly and efficiently. Our fructosamine test helps veterinarians to manage canine and feline diabetes mellitus, helping to assess insulin treatments and adjust insulin dosages. We launched a total thyroxine (“T₄”) test for use with the Catalyst One analyzer in February 2015 and will be introducing a similar test for use with the Catalyst Dx during the first half of 2015. T₄ testing is essential to assessing thyroid function and is an accepted standard for baseline testing for both sick pets and preventive care in senior pets.

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The Catalyst One analyzer, launched in November 2014, is engineered to deliver the same laboratory-quality results and real-time work flow as the Catalyst Dx analyzer, offering an attractive in-house chemistry option when a single sample drawer is sufficient for a clinic’s work-flow requirements. The Catalyst One analyzer currently offers an expanding menu of 30 tests, including tests for thyroid disease, kidney disease, diabetes and therapeutic drug monitoring. Additionally, the instrument is the industry’s first to combine chemistry, electrolytes and T₄  in a single blood sample run.

We also sell two other chemistry analyzers, the VetLyte Electrolyte Analyzer and the VetStat Electrolyte and Blood Gas Analyzer. The VetStat analyzer runs single-use disposable cassettes that are manufactured by OPTI Medical Systems.

Sales of consumables for use in our installed base of chemistry analyzers provide the majority of consumables volumes and recurring diagnostic revenues generated from our installed base of IDEXX VetLab equipment.

Hematology. We sell four hematology analyzers that assess the cellular components of blood, including red blood cells, white blood cells and platelets (also called a complete blood count). These analyzers include the ProCyte DxHematology Analyzer, the first and only in-house analyzer to combine laser-flow cytometry, optical fluorescence and laminar-flow impedance in its analysis; the original LaserCyte Hematology Analyzer and next generation LaserCyte Dx Hematology Analyzer, launched in 2013, which both use laser-flow cytometry technology in their analysis; and the IDEXX VetAutoread Hematology Analyzer, our original hematology analyzer. In addition, the ProCyte DxHematology Analyzer, the LaserCyte Dx Hematology Analyzer and the LaserCyte Hematology Analyzer each have the ability to analyze the components of certain body fluids. We also sell the Coag Dx Analyzer, which permits the detection and diagnosis of blood clotting disorders. 

The ProCyte Dxanalyzer is our premier hematology analyzer, which we launched in 2010. The ProCyte Dx analyzer provides significantly improved throughput and accuracy and more complete medical information relative to the LaserCyte, LaserCyte Dx and VetAutoread hematology analyzers. The ProCyte Dx analyzer provides up to 26 different blood parameters, including the ability to detect band neutrophils and nucleated red blood cells, for a more complete picture of a patient’s health. The ProCyte Dx is validated for ten companion animal species (canine, feline, equine, bovine, ferret, rabbit, gerbil, pig, guinea pig and mini pig) with research and development efforts focused on validating results for additional species. In 2012, we began to place ProCyte Dxanalyzers containing a more advanced and research-focused user interface with customers in the bioresearch market.

Immunoassay Testing Instruments. During the first quarter of 2014, we launched the SNAP Pro Mobile Device, which automatically activates a SNAP test, properly times the run and captures an image of the result. This device improves medical care by allowing veterinarians to share the test results on the SNAP Pro Mobile screen, or via VetConnect PLUS. In addition, the SNAP Pro Mobile Device improves staff efficiency and ensures that all SNAP test runs are captured and entered into the patient record for customer billing.

With multiple-patient testing functionality, the SNAPshot Dx Analyzer provides quantitative measurements of total T₄, cortisol and bile acids to assist in the evaluation of thyroid, adrenal and liver function, respectively. The SNAPshot Dx Analyzer also reads, interprets and records the results of many IDEXX rapid assay SNAP tests, including our canine SNAP4Dx Plus test,feline SNAP FIV/FeLV Combo test, canine SNAPcPL test, feline SNAPfPL test, SNAP Feline Triple test, canine SNAPHeartworm RT test and SNAP Feline proBNP test.

Urinalysis. The IDEXX VetLab UA Analyzer provides rapid, automated capture of semi-quantitative chemical urinalysis and is validated specifically for veterinary use.

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IDEXX VetLab Station. The IDEXX VetLab Station (“IVLS”) connects and integrates the diagnostic information from all the IDEXX VetLab analyzers and thus provides reference laboratory information management system capability. IVLS securely connects to the Internet, and in this way enables IDEXX to perform, through its SmartService Solutions wireless services, remote instrument service and software updates to IVLS and certain connected instruments. IVLS also sends all results created on connected instruments instantly to VetConnect PLUS. We sell IVLS as an integral component of the Catalyst Dx, Catalyst One, LaserCyte Dx and ProCyte Dxanalyzers, SNAP Pro Mobile Device and also as a standalone hardware platform. The IVLS includes a touch screen user interface to simplify laboratory work flow, connect with a practice management system and send information to run the individual analyzers. IVLS also generates one integrated patient report incorporating all of the lab work generated by the IDEXX VetLab suite, stores, retrieves and analyzes historical patient diagnostics data, including SNAP test results, and sends and receives information from practice management systems, including the IDEXX Cornerstone system, as well as a wide variety of third-party systems.

The SNAP rapid assays are single-use, handheld test kits that can work without the use of instrumentation, although many kits may also be read and recorded automatically by the SNAPshot Dx Analyzer or activated and captured automatically by the SNAP Pro Mobile Device as discussed above. The principal SNAP rapid assay tests are as follows:

Single-Use Canine Tests:

· SNAP 4Dx Plus, launched during the second quarter of 2012, which tests for the six vector-borne diseases; Lyme disease, Ehrlichia canis, Ehrlichia ewingii, Anaplasma phagocytophilum and Anaplasma platys, and canine heartworm;

· SNAP 3Dx, which tests for Lyme disease, Ehrlichia canis and canine heartworm;

· SNAP Heartworm RT, which tests for canine heartworm;

· SNAP Parvo, which tests for parvovirus, a virus causing life-threatening damage to the immune system and intestinal tract;

· SNAP cPL, which tests for canine pancreatitis; and

· SNAP Giardia, which is a fecal test for soluble Giardia antigens, a common cause of waterborne infection.

Single-Use Feline Tests:

· SNAP Feline Triple, which tests for feline immunodeficiency virus (“FIV”) (which is similar to the human AIDS virus), feline leukemia virus (“FeLV”) and feline heartworm;

· SNAP FIV/FeLV Combo Test, which tests for FIV and FeLV;

· SNAP fPL, which tests for feline pancreatitis;

· SNAP Giardia, which is a fecal test for soluble Giardia antigens; and

· SNAP Feline proBNP, which uses a cardiac biomarker (NT proBNP) to test for stretch and stress on the heart.

Sales of canine vector-borne disease tests, including SNAP 4Dx Plus, SNAP 3Dx and SNAP Heartworm RT, are greater in the first half of our fiscal year due to seasonality of disease testing in the veterinary practice.

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Outside Reference Laboratory Diagnostic and Consulting Services

We offer commercial reference laboratory diagnostic and consulting services to veterinarians worldwide, including customers in the U.S., Europe, Canada, Australia, Japan, South Africa and South Korea. We have large reference laboratories in Memphis, Tennessee and Leipzig, Germany that are strategically located near large courier hubs. Customers use our services by submitting samples by courier or overnight delivery to one of our facilities. Most test results have same-day or next-day turnaround times. Our reference laboratories offer a large selection of tests and diagnostic panels to detect a number of disease states and other conditions in animals, including all tests that can be run in-clinic at the veterinary practice with our instruments or rapid assays. This menu of tests also includes a number of specialized and proprietary tests that we have developed that allow practitioners to diagnose increasingly relevant diseases and conditions in dogs and cats, including parasites, heart disease, allergies, pancreatitis, diabetes and infectious diseases.Canine vector-borne disease testing volumes are greater in the first half of our fiscal year due to seasonality of disease testing in the veterinary practice.

In January 2015, we announced an upcoming kidney test SDMA, which utilizes a new renal biomarker to detect the onset of canine and feline kidney disease months or years earlier than traditional methods. We anticipate offering SDMA as part of a standard chemistry panel in North America during the summer of 2015. In the spring of 2015, we plan to introduce Hookworm and Roundworm antigen teststo all fecal panels that already include the Whipworm antigen test. These new intestinal parasite panels detect the presence of intestinal worms left undiagnosed by current methods, finding them earlier in the infection cycle and therefore enabling earlier disease diagnosis and treatment intervention.

Additionally, we provide specialized veterinary consultation, telemedicine and advisory services, including radiology, cardiology, internal medicine and ultrasound consulting. These services enable veterinarians to obtain readings and interpretations of test results transmitted by telephone and over the Internet.

In 2012, we acquired the research and diagnostic laboratory (“RADIL”) business of the College of Veterinary Medicine from the University of Missouri. RADIL provides health monitoring and diagnostic testing services to bioresearch customers in North America, Europe and Asia.

Customer Information Management and Digital Imaging Systems

Customer Information Management. We develop, market and sell practice management systems, including hardware, software and services that run key functions of veterinary clinics, including managing patient electronic health records, scheduling (including for boarding and grooming), client communication, billing and inventory management. Our principal practice management systems are Cornerstone, DVMAX Veterinary Practice Management Software andIDEXX Animana.  We also support several other practice management systems installed with our customers, including IDEXX Better Choice, IDEXX VPM, IDEXX VetLINK and BeeFree. Our practice management services include Cornerstone Coaching, Practice Profile, VetVault Backup Solution, Payment Solutions and PetDetect Pet Identification System.

In addition, we offer services designed to strengthen the relationship between the veterinarian and the pet owner. We commercially launched Pet Health Network Pro in March 2013, which is a subscription-based service that permits veterinarians to provide online communication and education to pet owners before, during and after each patient visit, thus strengthening the loyalty between a practice and its clients. Further, veterinarians can share VetConnect PLUS testing results directly with pet owners via Pet Health Network Pro. We also offer Pet Health Network 3D, an educational subscription-based service that replaces cumbersome plastic anatomy models with engaging, three-dimension anatomical animations on a desktop or mobile device.  Using this service in the exam room improves client communication and facilitates adherence to veterinarian recommendations.  In September 2014, we acquired Petly Plans, a cloud-based software solution for veterinary practices to customize, manage and monitor a range of monthly payment preventive care plans for their pet owner clients.  Petly Plans complements the Pet Health Network suite of client marketing services by making it easier for practices to increase access to the best care and offer plans that spread the cost of that care – including examinations, vaccines and diagnostics – over the course of a year rather than payment in full upon each visit. Certain of our services are compatible with non-IDEXX practice management systems.

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Digital Imaging Systems. Our digital imaging systems capture radiographic images in digital form, replacing traditional x-ray film and the film development process, which generally requires the use of hazardous chemicals and darkrooms. We market and sell three digital imaging systems, our latest generation IDEXX EliteVision Digital Imaging System, the IDEXX I-Vision CR and the IDEXX I-Vision DR system. The newly launched IDEXX EliteVision Digital Imaging System is a wireless system which uses advanced plate technology to capture clear, high-quality images in a short capture time. The IDEXX EliteVision Digital Imaging system is promoted for use as a portable unit in ambulatory veterinary practices, such as equine practices.

Our digital imaging systems employ picture archiving and communication system (“PACS”) software, IDEXX-PACS,allowing for the viewing, manipulation, management, storage and retrieval of the digital images generated by the digital capture plate. This software also permits images from our digital imaging systems to be integrated into patients’ medical records in the Cornerstone system, as well as transferred to other practice management systems. IDEXX I-Vision Mobile is an application that allows veterinarians with the I-Vision DR and IDEXX I-Vision CR systems, as well as our legacy digital radiography systems, to request, view and send images using an iPad®  or an Android™ mobile tablet. This application integrates with our IDEXX-PACS software. In November 2013, we launched the IDEXX ImageBank storage system, a cloud-based image storage solution which provides secure storage for an unlimited number of diagnostic images and is accessible anywhere through VetConnect PLUS.

WATER

We provide innovative testing solutions for easy, rapid and accurate detection and quantification of various microbiological parameters in water, helping to ensure water safety for billions of people around the world.

Our principal products are the Colilert, Colilert-18 and Colisure tests, which simultaneously detect the presence of total coliforms and E. coli in water. These organisms are broadly used as microbial indicators for potential fecal contamination in water. These products utilize nutrient-indicators that produce a change in color or fluorescence when metabolized by target microbes in the sample. Our water tests are used by government laboratories, water utilities and private certified laboratories to test drinking water in compliance with regulatory standards, including U.S. Environmental Protection Agency (“EPA”) standards. The tests also are used in evaluating water used in production processes (for example, in beverage and pharmaceutical applications) and in evaluating bottled water, recreational water, wastewater and water from private wells.

Our Enterolert products detect the presence of enterococci in drinking, waste and recreational waters. Enterococci, bacteria normally found in human and animal waste, are organisms broadly used as microbial indicators for potential fecal contamination in water. Our Pseudalert products detect the presence of Pseudomonas aeruginosa in pool, spa and bottled water. Pseudomonas aeruginosa is a pathogen that can cause “hot-tub rash,” “swimmer’s ear” and potentially fatal infections in individuals with weakened immune systems.  Our Filta-Max and Filta-Maxxpress products are used in the detection of Cryptosporidium and Giardia in water. Cryptosporidium and Giardia are parasites that can cause potentially fatal gastrointestinal illness if ingested. We also distribute certain water testing kits manufactured by Thermo Fisher Scientific, Inc. that complement our Cryptosporidium and Giardia  testing products.

Our Quanti-Tray products, when used in conjunction with our Colilert, Colilert-18, Colisure, Enterolert, Pseudalert or Heterotrophic Plate Count (HPC) products, provide users quantitative measurements of microbial contamination rather than a presence/absence indication. Our SimPlate for HPC product detects the total number of the most common bacteria in a water sample.

We also sell consumables, parts and accessories to be used with many of our water testing products.

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LIVESTOCK, POULTRY and dairy

We sell diagnostic tests and related instrumentation that are used to manage the health status of livestock and poultry, to improve bovine reproductive efficiency, and to ensure the quality and safety of milk and food. Our livestock and poultry diagnostic products are purchased by government and private laboratories that provide testing services to cattle, swine and poultry veterinarians, producers and processors. Our principal livestock and poultry diagnostic products include tests for Bovine Viral Diarrhea Virus (“BVDV”) and Porcine Reproductive and Respiratory Syndrome (“PRRS”). BVDV is a common and contagious viral infection that suppresses the immune system, making the animal susceptible to a host of other infections, impacting beef and dairy production yields as a result. PRRS is a contagious virus causing reproductive problems and respiratory diseases in swine. In the fourth quarter of 2012, we launched pregnancy tests for detecting pregnancy in bovine, which provides a means to optimize reproductive efficiency.

Our principal dairy products use our SNAP test format and are used by dairy producers and processors worldwide to detect antibiotic drug residue in milk. Our primary product line is SNAP Beta-Lactam ST, which detects penicillin, amoxicillin, ampicillin, ceftiofur and cephapirin residues, followed by SNAPduo Beta-Tetra ST, which detects certain tetracycline antibiotic residues in addition to those detected by the SNAP Beta Lactam test kits. We also sell SNAPtests for the detection of certain other contaminants in milk, such as Aflatoxin M1.

In the third quarter of 2013, we acquired a Brazilian distributor of certain of our Livestock, Poultry and Dairy products. As part of this acquisition, we acquired the right to distribute product lines of food safety products which provide microbial monitoring and drug residue tests for bovine, poultry and swine producers, meat exporters and pharmaceutical companies.

OTHER

OPTI Medical Systems

Through OPTIMedical Systems, we sell point-of-care analyzers and related consumables for use in human medical hospitals and clinics to measure electrolytes, blood gases, acid-base balance, glucose, lactate, blood urea nitrogen and ionized calcium, and to calculate other parameters such as base excess and anion gap. These OPTI analyzers are used primarily in emergency rooms, operating rooms, cardiac monitoring areas and other locations where time-critical diagnostic testing is performed within the hospital setting. Our latest generation OPTI CCA-TS2 Blood Gas and Electrolyte Analyzer, which launched in April 2013, contains many new features relative to previous generation blood gas analyzers including customized work flows, faster time to result, improved communication and a multi-level electronic control. Similar to our earlier generation OPTI CCA and OPTI Touch Electrolyte Analyzers, the OPTI CCA-TS2 runs whole blood, plasma and serum samples on single-use disposable cassettes that contain various configurations of analytes. The OPTI R Analyzer runs reusable cassettes in various analyte configurations, and the OPTI LION Stat Electrolyte Analyzer runs single-use electrolyte cassettes.

In addition, OPTI Medical Systems manufactures our VetStat analyzer, an instrument and consumable system that is a member of the IDEXX VetLab suite for the veterinary market, and provides the electrolyte module and dry slide reagents that make up the electrolyte testing functionality of the Catalyst analyzers for our CAG segment.

Other Activities

In the fourth quarter of 2008, we sold our Acarexx® and SURPASS® veterinary pharmaceutical products and a feline insulin product under development. Upon completion of this transaction we restructured the remaining pharmaceutical division and realigned two of our pharmaceutical product lines to the Rapid Assay line of business, which is part of CAG, and realigned the remainder of the products, comprised of one product line and two out-licensing arrangements, to the Other segment. We retained certain drug delivery technologies that we continue to seek to commercialize through agreements with third parties, such as pharmaceutical companies, that are also included in the Other segment.

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We earned a milestone payment of $3.5 million in 2012 in connection with the achievement of certain sales milestones by the acquirer of our feline insulin product following commercialization of that product. See Note 21 to the consolidated financial statements for the year ended December 31, 2014, included in this Annual Report on Form 10-K, for additional information regarding the restructuring of our pharmaceutical business. Since realignment to the Rapid Assay line of business, we have discontinued the production and sale of the two remaining pharmaceutical product lines. Neither of these product lines is or was a significant contributor to revenue in the Rapid Assay line of business.

MARKETING AND DISTRIBUTION

We market, sell and service our products worldwide through our marketing, customer service, sales and technical service groups, as well as through independent distributors and other resellers. We maintain sales offices outside the U.S. in all major regions, including Africa, Asia Pacific, Canada, Europe and Latin America.

Generally, we select the appropriate distribution channel for our products based on the type of product, technical service requirements, number and concentration of customers, regulatory requirements and other factors. Effective January 1, 2015, we market our companion animal diagnostic products to veterinarians directly in the U.S. Prior to January 1, 2015,wemarketed our companion animal diagnostic products to veterinarians both directly and through independent veterinarydistributors in the U.S., with most instruments sold directly by IDEXX sales personnel and rapid assay test kits and instrument consumables supplied primarily by distributors. Outside the U.S., we sell our companion animal diagnostic products through our direct sales force and, in certain countries, through distributors and other resellers. We sell our veterinary reference laboratory diagnostic and consulting services worldwide generally through our direct sales force. We market our digital radiography products primarily through our direct sales force in the U.S. and Canada.  We market our software products primarily through our direct sales force in the U.S., Canada, Europe and Australia. We market our Water and LPD products primarily through our direct sales force in the U.S. and Canada. Outside the U.S. and Canada, we market these products through selected independent distributors and, in certain countries, through our direct sales force. We sell our OPTI electrolyte and blood gas analyzers both directly and through independent human medical product distributors in the U.S. and we sell most of the related consumables through the distribution channel. Outside the U.S., we sell our OPTI products primarily through distributors and other resellers.

Historically, our largest customers have been the U.S. distributors of our products in the CAG segment. Our two largest CAG distributors were Henry Schein Animal Health Supply, LLC (“Henry Schein”) and MWI Veterinary Supply, Inc. (“MWI”). Henry Schein accounted for 8% of our 2014 revenue and 9% of our 2013 and 2012 revenue, and  2% and 7% of our net accounts receivable at December 31, 2014 and 2013, respectively. MWI accounted for 8% of our 2014, 2013 and 2012 revenue and 8% and 11% of our net accounts receivable at December 31, 2014 and 2013, respectively. Effective January 1, 2015, most U.S. distributors are no longer our customers as a result of our transition to an all-direct sales strategy in the U.S.

RESEARCH AND DEVELOPMENT

Our business includes the development and introduction of new products and services and may involve entry into new business areas. We maintain active research and development programs in each of our business areas. Our research and development expenses, which consist of salaries, employee benefits, materials and external consulting and development costs, were $98.3 million, $88.0 million and $82.0 million for the years ended December 31, 2014, 2013 and 2012, respectively, or 6.6%, 6.4% and 6.3% of our consolidated revenue for the years ended December 31, 2014, 2013 and 2012, respectively.

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PATENTS AND LICENSES

We actively seek to obtain patent protection in the U.S. and other countries for inventions covering our products and technologies. We also license patents and technologies from third parties. Patents and licenses of patents and technologies from third parties are considered important to the Company based on a variety of factors, including providing protection for the Company’s inventions and other proprietary intellectual property, affording protection from competitors in certain markets, enabling the use of more effective and efficient technologies in the development and production of our products and offerings, strengthening the Company’s reputation and standing among customers, employees and key suppliers, and acting as a deterrent against counterfeiters, imitators and other copiers of technologies. 

Important patents and licenses include:

· Patents concerning the SNAP immunoassay platform that expire in 2015;

· Exclusive licenses from the University of Texas and Tulane University to patents that expire in 2017 and 2019, respectively, relating to reagents and methods for the detection of Lyme disease utilized in certain of our SNAP products and a reference laboratory diagnostic test;

· An exclusive license from Cornell University to patents covering methods for detecting BVDV that expire beginning in 2017;

· Patents relating to reagents and methods for the detection of Anaplasma phagocytophilum utilized in certain of our SNAP products that expire beginning in 2017;

· Patents relating to reagents and methods for the detection of Ehrlichia canis utilized in certain of our SNAP products that expire beginning in 2019;

· A patent concerning LaserCyte consumables that expires in 2020;

· Patents concerning Catalystconsumables that expire beginning in 2023; and

· Patents concerning Catalyst instruments that expire in 2026.

While we consider these proprietary technology rights to be important to the Company, a range of factors help to mitigate the future effects of patent and license expiration on our results of operations and financial position. These factors include our brand strength and reputation in the marketplace; the breadth, quality and integration of our product offerings; our existing customer relationships and our customer support; our sales force; the applicable regulatory approval status for certain products; our continued investments in innovative product improvements that often result in new technologies and/or additional patents; our significant know-how, scale and investments related to manufacturing processes of associated product offerings and certain supply arrangements for consumables that are compatible with our instruments. Although the Company had and will have several patents expire during 2014 and 2015,  the expiration of these patents, individually or in the aggregate, is not expected to have a material effect on the Company’s financial position or future operations. In addition, we already face notable competition in certain areas as other companies have been successful in bringing competitive products to market, despite the protections afforded by these proprietary technology rights. 

To the extent some of our products may now or in the future embody technologies protected by patents, copyrights or trade secrets of others, we may be required to obtain licenses to such technologies in order to continue to sell our products. These licenses may not be available on commercially reasonable terms or at all. Our failure to obtain any such licenses may delay or prevent the sale of certain new or existing products. See “Part I, Item 1A. Risk Factors.”

PRODUCTION AND SUPPLY

Many of the instruments that we sell are manufactured by third parties and we rely on third parties to supply us with certain important components, raw materials and consumables used in or with our products. In some cases these third parties are sole or single source suppliers.

Instruments and consumables. Significant products supplied by sole and single source providers include VetTestanalyzers and consumables, Catalyst Dx and Catalyst One consumables (other than electrolyte consumables and the fructosamine and T₄ slides), LaserCyteand LaserCyte Dx consumables, VetAutoread, VetLyte and ProCyte Dx analyzers and consumables and components of our SNAP Pro Mobile Device.

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VetTest and Catalyst chemistry slides are supplied by Ortho under supply agreements that are currently set to expire at the end of 2028. We are required to purchase all of our requirements for our current menu of VetTestand Catalyst chemistry slides from Ortho to the extent Ortho is able to supply those requirements. The agreements provide for pricing based on purchase volumes and a fixed annual inflationary adjustment. The agreements also prohibit Ortho from promoting and selling these chemistry slides in the veterinary market other than to IDEXX. 

We purchase other analyzers and consumables under supply agreements with terms extending through 2032, which in some cases may be extended at our option. We have minimum purchase obligations under some of these agreements, and our failure to satisfy these obligations may result in loss of some or all of our rights under these agreements. See “Part I, Item 1A. Risk Factors.”

Other components. We purchase certain other products, raw materials and components from sole and single source suppliers. These products include certain digital radiography systems and certain components used in our SNAP rapid assay and dairy devices, livestock and poultry testing kits and water testing products.

Certain components incorporated into our SNAP products and certain livestock and poultry testing kits are supplied by Moss, Inc. (“Moss”) under a supply agreement that either party may terminate with 24 months prior written notice. Pursuant to the terms of the supply agreement, Moss has escrowed its manufacturing information relating to the components, which may be released to us upon certain triggering events that would render Moss incapable of supplying the components to us. If such a triggering event occurs, we will make royalty payments to Moss for the use of such information until Moss is able to again begin manufacturing.

We have been successful in ensuring an uninterrupted supply of products purchased from sole and single source suppliers. However, there can be no assurance that uninterrupted supply can be maintained if these agreements terminate for any reason or our suppliers otherwise are unable to satisfy our requirements for products. See “Part I, Item 1A. Risk Factors.”

BACKLOG

We do not generally maintain significant backlog orders and believe that our backlog at any particular date historically has not been indicative of future sales.

COMPETITION

We compete with many companies ranging from large human pharmaceutical and medical diagnostics companies to small businesses focused on animal health. Our companion animal veterinary diagnostic products and services compete with both reference laboratory service and in-clinic product providers. Our competitors vary in our different markets. In some markets, academic institutions, governmental agencies and other public and private research organizations conduct research activities and may commercialize products or services which could compete with our products, on their own or through joint ventures. Several of our direct and potential competitors have substantially greater capital, manufacturing, marketing, and research and development resources than we do.

Competitive factors in our different business areas are detailed below:

· Companion animal diagnostic offerings. We compete primarily on the basis of ease of use and speed of our products, diagnostic accuracy, product quality, breadth of our product line and services, technology, information management capability, availability of medical consultation, effectiveness of our sales and distribution channels, quality of our technical and customer service and our pricing relative to the value of our products and services in comparison with competitive products and services. Our major competitors in most geographic locations in North America are Antech Diagnostics, a unit of VCA Inc., Abaxis, Inc., Heska Corporation and Zoetis Inc.  We also compete in international markets with Fujifilm Holdings Corporation, Arkray, Inc. and BioNote, Inc.

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· Water, livestock and poultry and dairy testing products. We compete primarily on the basis of the ease of use, speed, accuracy, product quality and other performance characteristics of our products and services (including unique tests), the breadth of our product line and services, the effectiveness of our sales and distribution channels, the quality of our technical and customer service, our ability to receive regulatory approvals from governing agencies and our pricing relative to the value of our products in comparison with competitive products and services. Our competitors include highly focused smaller companies and multi-billion dollar companies with small livestock and poultry diagnostics and water testing solution franchises.

· Customer information management and digital imaging systems. We compete primarily on the basis of functionality, connectivity to equipment and other systems, performance characteristics, effectiveness of our implementation, training process and customer service, information handling capabilities, advances in technologies and our pricing relative to the value of our products and services. We sell these products primarily in North America where our largest competitor is Henry Schein.

· Electrolyte and blood gas analyzers for the human point-of-care medical diagnostics market. We compete primarily on the basis of the ease of use, menu, convenience, international distribution and service, instrument reliability, and our pricing relative to the value of our products. We compete primarily with large human medical diagnostics companies such as Radiometer A/S, Siemens Medical Solutions Diagnostics, Instrumentation Laboratory Company, Abbott Diagnostics, a division of Abbott Laboratories and Roche Diagnostics Corporation.

GOVERNMENT REGULATION

Many of our products are subject to comprehensive regulation by U.S. and foreign regulatory agencies that relate to, among other things, product approvals, manufacturing, distribution, marketing and promotion, labeling, recordkeeping, testing, quality, storage and product disposal. The following is a description of the principal regulations affecting our businesses.

Veterinary diagnostic products. Diagnostic tests for animal health infectious diseases, including most of our livestock and poultry products and our rapid assay products, are regulated in the U.S. by the Center for Veterinary Biologics within the United States Department of Agriculture (“USDA”) Animal and Plant Health Inspection Service (“APHIS”). These products must be approved by APHIS before they may be sold in the U.S. The APHIS regulatory approval process involves the submission of product performance data and manufacturing documentation. Following regulatory approval to market a product, APHIS requires that each lot of product be submitted for review before release to customers. In addition, APHIS requires special approval to market products where test results are used in part for government-mandated disease management programs. A number of foreign governments accept APHIS approval as part of their separate regulatory approvals. However, compliance with an extensive regulatory process is required in connection with marketing diagnostic products in Japan, Germany, the Netherlands and many other countries. We also are required to have a facility license from APHIS to manufacture USDA-licensed products. We have a facility license for our manufacturing facility in Westbrook, Maine and our distribution center in Memphis, Tennessee. Our manufacturing facility in Montpellier, France has been approved by APHIS and we have a permit to import products manufactured in Montpellier, France to the U.S. for distribution.

Our veterinary diagnostic instrument systems are veterinary medical devices regulated by the U.S. Food and Drug Administration (“FDA”) under the Food, Drug and Cosmetics Act (the “FDC Act”). While the sale of these products does not require premarket approval by the FDA and does not subject us to the FDA’s current Good Manufacturing Practices regulations (“cGMP”), these products must not be adulterated, mislabeled or misbranded under the FDC Act.

These instrument systems also are subject to the European Medical Device Directives, which create a single set of medical device regulations for all European Union (“EU”) member countries and require companies that wish to manufacture and distribute medical devices in EU member countries to obtain European Conformity marking for their products.

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Water testing products. Our water tests are not subject to formal premarket regulatory approval. However, before a test can be used as part of a water quality monitoring program in the U.S. that is regulated by the EPA, the test must first be approved by the EPA. The EPA approval process involves submission of extensive product performance data in accordance with an EPA-approved protocol, evaluation of the data by the EPA and publication for public comment of any proposed approval in the Federal Register before final approval. Our Colilert, Colilert-18, Colisure, Quanti-Tray, Filta-Max xpress, Enterolert and SimPlate for heterotrophic plate counts products have been approved by the EPA for use under various regulatory programs. Water testing products are subject to similarly extensive regulatory processes in other countries around the world.

Dairy testing products. Dairy products used in National Conference on Interstate Milk Shipments (“NCIMS”) milk-monitoring programs in the U.S. are regulated by the FDA as veterinary medical devices. However, before products requiring FDA approval can be sold in the U.S., performance data must be submitted in accordance with an FDA-approved protocol administered by an independent body, such as the Association of Analytical Communities Research Institute (“AOAC RI”). Following approval of a product by the FDA, the product must also be approved by NCIMS, an oversight body that includes state, federal and industry representatives. Our SNAP Beta-Lactam antibiotic residue test product has been approved by the FDA, NCIMS and AOAC RI for sale in the U.S. While some foreign countries accept AOAC RI approval as part of their regulatory approval process, many countries have separate regulatory processes.

Human point-of-care electrolyte and blood gas analyzers. Our OPTI instrument systems are classified as Class II medical devices, and their design, manufacture and marketing are regulated by the FDA. Accordingly, we must comply with cGMP in the manufacture of our OPTI products. The FDA’s Quality System regulations further set forth standards for product design and manufacturing processes, require the maintenance of certain records and provide for inspections of our facilities by the FDA. New OPTI products fall into FDA classifications that require notification of and review by the FDA before marketing, and which are submitted as a 510(k) application. OPTI Medical products are also subject to the European Medical Device Directives and regulations governing the manufacture and marketing of medical devices in other countries in which they are sold.

In addition to the foregoing, our business is generally subject to various U.S. and foreign regulatory authorities, including the U.S. Federal Trade Commission (the “FTC”) and other anti-competition authorities, and any acquisitions of new products and technologies may subject us to additional areas of government regulation. These may involve food safety, medical device, water-quality and other regulations of the FDA, the EPA, the USDA, the FTC and other federal agencies, as well as state, local and foreign governments. See “Part I, Item 1A. Risk Factors.”

EMPLOYEES

As of February 6, 2015, we had approximately 6,400 employees.

AVAILABLE INFORMATION

Our principal executive offices are located at One IDEXX Drive, Westbrook, Maine 04092, our telephone number is 207-556-0300, and our Internet address is www.idexx.com. References to our website are inactive textual references only and the content of our website should not be deemed incorporated by reference into this Annual Report on Form 10-K for any purpose.

We make available free of charge at www.idexx.com our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we file such information with, or furnish it to, the SEC. In addition, copies of our reports filed electronically with the SEC may be accessed at www.sec.gov. The public may also read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

Our Corporate Governance Guidelines and our Code of Ethics are also available on our website at www.idexx.com.

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ITEM 1A.RISK FACTORS

Our future operating results involve a number of risks and uncertainties. Actual events or results may differ materially from those discussed in this report. Factors that could cause or contribute to such differences include, but are not limited to, the factors discussed below, as well as those factors discussed elsewhere in this report.

Our Business Lines are Highly Competitive and Our Failure to Successfully Execute Certain Strategies Could Have a Material Negative Impact on Our Growth and Profitability 

The companion animal healthcare industry is highly competitive and we anticipate increasing levels of competition from both existing competitors and new market entrants. Our ability to maintain or enhance our growth rates and our profitability depends on our successful execution of many elements of our strategy, including: 

· Developing, manufacturing and marketing innovative new or improved and cost competitive in-clinic laboratory analyzers that drive sales of IDEXX VetLab instruments, grow our installed base of instruments and increase demand for related consumable products, services and accessories;

· Developing and introducing new proprietary diagnostic tests and services that provide valuable medical information to our customers and effectively differentiate our products and services from those of our competitors;

· Increasing the value to our customers of our companion animal products and services by enhancing the integration of these products and the management of diagnostic information derived from our products;

· Providing our veterinary customers with the medical and business tools, information and resources that enable them to grow their practices through increased pet visits and enhanced practice of real-time care;

· Achieving cost improvements in our worldwide network of laboratories by implementing global best practices, including lean processing techniques, incorporating technological enhancements, including laboratory automation and a global laboratory information management system, employing purchasing strategies to maximize leverage of our global scale, increasing the leverage of existing infrastructure and consolidating testing in high volume laboratory hubs;

· Achieving cost improvements in the manufacture and service of our in-clinic laboratory analyzers by employing the benefits of economies of scale in both negotiating supply contracts and leveraging manufacturing overhead, and by improving reliability of our instruments;

· Continuing to expand and develop our companion animal diagnostic sales, marketing, customer support and logistics organizations in the U.S. in support of, among other things, our all-direct sales strategy for our rapid assay kits and instrument consumables (“kits and consumables”) in the U.S.;

· Attracting, developing and retaining key leadership and talent necessary to support all elements of our strategy;  

· Expanding our served market and growing our market share by strengthening our sales and marketing activities both within the U.S. and in geographies outside of the U.S.;

· Identifying, completing and integrating acquisitions that enhance our existing businesses or create new business or geographic areas for us; and

· Developing and implementing new technology and licensing strategies.

If we are unsuccessful in implementing and executing on some or all of these strategies, our rate of growth or profitability may be negatively impacted. 

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Our Dependence on Suppliers Could Limit Our Ability to Sell Certain Products or Negatively Affect Our Operating Results  

We rely on third-party suppliers to provide components in our products, manufacture products that we do not manufacture ourselves and perform services that we do not provide ourselves, including package-delivery services. Because these suppliers are independent third parties with their own financial objectives, actions taken by them could have a materially negative effect on our results of operations. The risks of relying on suppliers include our inability to enter into contracts with third-party suppliers on reasonable terms, inconsistent or inadequate quality control, relocation of supplier facilities, supplier work stoppages and suppliers’ failure to comply with their contractual obligations. Problems with suppliers could materially negatively impact our ability to supply the market, substantially decrease sales, lead to higher costs or damage our reputation with our customers.

In addition, we currently purchase many products and materials from sole or single sources. Some of the products that we purchase from these sources are proprietary and, therefore, cannot be readily or easily replaced by alternative sources. These products include the majority of our Catalyst Dx and Catalyst One consumables; ProCyte Dx hematology, IDEXX VetAutoread hematology, VetLyte  electrolyte, VetTest chemistry analyzers and related consumables and accessories; image capture plates used in our digital radiography systems; and certain components and raw materials used in our SNAPrapid assay kits and SNAP Pro Mobile Device, livestock and poultry diagnostic tests, dairy testing products, Catalyst One, LaserCyteand LaserCyte Dx hematology analyzers. To mitigate risks associated with sole and single source suppliers, we seek when possible to enter into long-term contracts that provide for an uninterrupted supply of products at predictable prices. However, some suppliers decline to enter into long-term contracts and we are required to purchase products on a purchase order basis. There can be no assurance that suppliers with which we do not have contracts will continue to supply our requirements for products, that suppliers with which we do have contracts will always fulfill their obligations under these contracts, or that any of our suppliers will not experience disruptions in their ability to supply our requirements for products. In cases where we purchase sole and single source products or components under purchase orders, we are more susceptible to unanticipated cost increases or changes in other terms of supply. In addition, under some contracts with suppliers we have minimum purchase obligations, and our failure to satisfy those obligations may result in loss of some or all of our rights under these contracts or require us to compensate the supplier. If we are unable to obtain adequate quantities of products in the future from sole and single source suppliers, we may be unable to supply the market, which could have a material adverse effect on our results of operations.

Our Biologic Products Are Complex and Difficult to Manufacture, Which Could Negatively Affect Our Ability to Supply the Market

Many of our rapid assay, livestock and poultry diagnostic, water and dairy products are biologic products, which are products that include materials from living organisms, such as antibodies, cells and sera. Manufacturing biologic products is highly complex due to the inherent variability of biological input materials and to the difficulty of controlling the interactions of these materials with other components of the products, samples and the environment. There can be no assurance that we will be able to maintain adequate sources of biological materials or that we will be able to consistently manufacture biologic products that satisfy applicable product release criteria. Further, products that meet release criteria at the time of manufacture may fall out of specification while in customer inventory, which could require us to incur expenses associated with recalling products and providing customers with new products, and could damage customer relations. Our inability to produce or obtain necessary biological materials or to successfully manufacture biologic products that incorporate such materials could result in our inability to supply the market with these products and have an adverse effect on our results of operations.

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Our Business Sells Many Products through Distributors, which Present Risks that Could Negatively Affect Our Operating Results

We sell many of our products outside of the U.S. through distributors. As a result, we are dependent on these distributors to sell our products and assist us in promoting and creating a demand for our products outside the U.S. Our distributors often offer products from several different companies, and certain of our distributors may carry our competitors’ products and promote our competitors’ products over our own products. We have limited ability, if any, to cause our distributors to devote adequate resources to promoting, marketing, selling and supporting our products. We cannot assure you that we will be successful in maintaining and strengthening our relationships with our distributors or establishing relationships with new distributors who have the ability to market, sell and support our products effectively. We may rely on one or more key distributors for a product or a region, and the loss of these distributors could reduce our revenue. Distributors may face financial difficulties, including bankruptcy, which could harm our collection of accounts receivable and financial results. In addition, violations of anti-corruption or similar laws by our distributors could have a material impact on our business, and any termination of a distributor relationship may result in increased competition in the applicable jurisdiction. Failing to manage the risks associated with our use of distributors outside of the U.S. may reduce sales, increase expenses and weaken our competitive position, which could have a negative effect on our operating results. 

Increased Competition and Technological Advances by Our Competitors Could Negatively Affect Our Operating Results 

We face intense competition within the markets in which we sell our products and services and we expect that future competition may become even more intense. Competition could negatively affect our sales and profitability in a number of ways. New competitors may enter our markets and new or existing competitors may introduce new and competitive products and services, which could be superior to our products and services. Some of our competitors and potential competitors may choose to differentiate themselves by offering products and services similar to ours at lower sales prices, which could have an adverse effect on our results of operations through loss of market share or a decision to lower our own sales prices to remain competitive. In addition, our ability to attract and retain customers depends on the effectiveness of our customer marketing and incentive programs and multiple competitors could bundle product and service offerings through co-marketing or other arrangements, which could enhance their ability to compete with our broad product and service offering. With our transition to an all-direct sales strategy for our kits and consumables in the U.S. effective January 1, 2015, we did not renew our distribution agreements with our former key U.S. distribution partners after their expiration at the end of 2014, including exclusive distribution agreements with some of the largest U.S. distributors of companion animal veterinary products. We historically sold significant amounts of our kits and consumables through our former U.S. distribution partners, and two of our previously exclusive U.S. distribution partners joined a third former U.S. distribution partner by beginning to carry competitive instruments, consumables and rapid assay products in the fourth quarter of 2014. The promotion and sale of our competitors’ products by our former U.S. distribution partners may adversely affect the retention of our customers for our kits and consumables and the sales and distribution of our products, which could have an adverse effect on our results of operations. Some of our competitors and potential competitors, including large diagnostic and pharmaceutical companies, also have substantially greater financial resources than us, and greater experience in manufacturing, marketing, research and development and obtaining regulatory approvals than we do. 

Various Government Regulations Could Limit or Delay Our Ability to Market and Sell Our Products or Otherwise Negatively Impact Our Business

In the U.S., the manufacture and sale of many of our products are regulated by agencies such as the USDA, the FDA or the EPA. Our infectious disease diagnostic tests for animal health applications, including most rapid assay canine and feline SNAP tests and livestock and poultry diagnostic tests, must be approved by the USDA prior to sale in the U.S. Our dairy testing products require approval by the FDA prior to sale in the U.S. Our water testing products must be approved by the EPA before they can be used by customers in the U.S. as a part of a water quality monitoring program required by the EPA. The manufacture and sale of our OPTI line of human point-of-care electrolytes and blood gas analyzers require approval by the FDA before they may be sold commercially in the U.S.  The manufacture and sale of our products are subject to similar and sometimes more stringent laws in many foreign countries. In addition, delays in obtaining regulatory approvals for new products or product upgrades could have a negative impact on our growth and profitability.

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We are also subject to a variety of federal, state, local and international laws and regulations that govern, among other things, the importation and exportation of products and our business practices in the U.S. and abroad, such as anti-corruption and anti-competition laws. These legal and regulatory requirements differ among jurisdictions around the world and are rapidly changing and increasingly complex. The costs associated with compliance with these legal and regulatory requirements are significant and likely to increase in the future. In addition, any failure to comply with these legal and regulatory requirements could result in fines, penalties and sanctions; suspensions or discontinuations of our ability to manufacture, market or sell our products; and damage to our reputation.

Increase in Corporate Hospital Ownership and Prevalence of Buying Consortiums Could Negatively Affect Our Business

An increasing percentage of veterinary hospitals in the U.S. are owned by corporations that are in the business of acquiring veterinary hospitals and/or opening new veterinary hospitals nationally or regionally. Major corporate hospital owners in the U.S. include Banfield Pet Hospital, National Veterinary Associates and VCA Antech, Inc. A similar trend exists in other countries, such as in the U.K. and Nordic countries and may in the future also develop in other international markets. Furthermore, an increasing percentage of individually-owned veterinary hospitals in the U.S. are participating in buying consortiums. Corporate owners of veterinary hospitals and buying consortiums often seek to improve profitability by leveraging the buying power they derive from their scale to obtain favorable pricing from suppliers, which could have a negative impact on our results of operations. While we have strong supplier relationships with several corporate hospital groups and buying consortiums, decisions by larger corporate owners and buying consortiums to shift their purchasing of products and services away from us and to a competitor would have a negative impact on our results of operations. In addition, certain corporate owners, most notably VCA Antech, Inc., our primary competitor in the U.S. and Canadian markets for veterinary reference laboratory diagnostic services, also operate reference laboratories that serve both their hospitals and unaffiliated hospitals. Any hospitals acquired by these companies generally shift all or a large portion of their testing to the reference laboratories operated by these companies. Furthermore, because these companies compete with us in the reference laboratory services marketplace, hospitals acquired by these companies may cease to be customers or potential customers of our other companion animal products and services, which would cause our sales of these products and services to decline.  

Our Success Is Heavily Dependent Upon Proprietary Technologies  

We rely on a combination of patent, trade secret, trademark and copyright laws to protect our proprietary rights. We also license patents and technologies from third parties to enable the use of third-party technologies in the development and production of our products and offerings. If we do not have adequate protection of our proprietary rights or are unable to license third-party patents and technologies on reasonable terms, our business may be affected by competitors who utilize substantially equivalent technologies that compete with us. 

We cannot ensure that we will obtain issued patents, that any patents issued or licensed to us will remain valid, or that any patents owned or licensed by us will provide protection against competitors with similar technologies. Even if our patents cover products sold by our competitors, the time and expense of litigating to enforce our patent rights could be substantial, and could have an adverse effect on our results of operations. In addition, expiration of patent rights could result in substantial new competition in the markets for products previously covered by those patent rights. 

In the past, we have received notices claiming that our products infringe third-party patents and we may receive such notices in the future. Patent litigation is complex and expensive, and the outcome of patent litigation can be difficult to predict. We cannot ensure that we will win a patent litigation case or negotiate an acceptable resolution of such a case. If we lose, we may be prohibited from selling certain products and/or we may be required to pay damages and/or ongoing royalties as a result of the lawsuit. Any such result could have an adverse effect on our results of operations. 

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Changes in Testing Patterns Could Negatively Affect Our Operating Results

The market for our companion animal, livestock and poultry diagnostic tests and our dairy and water testing products could be negatively impacted by a number of factors impacting testing practices. The introduction or broad market acceptance of vaccines or preventatives for the diseases and conditions for which we sell diagnostic tests and services could result in a decline in testing. Changes in accepted medical protocols regarding the diagnosis of certain diseases and conditions could have a similar effect. Eradication or substantial declines in the prevalence of certain diseases also could lead to a decline in diagnostic testing for such diseases. Our livestock and poultry products business in particular is subject to fluctuations resulting from changes in disease prevalence. For example, the demand for our bovine spongiform encephalopathy (“BSE”) testing products has been negatively impacted as a result of regulatory changes in the European Union, including the European Union’s Standing Committee on the Food Chain and Animal Health agreement to allow European Union member states the option to eliminate BSE testing of healthy cattle at slaughter effective March 2013. In addition, changes in government regulations or in the availability of government funds available for monitoring programs could negatively affect sales of our products that are driven by compliance testing, such as our livestock and poultry, dairy and water products. Declines in testing for any of the reasons described, along with lost opportunities associated with a reduction in veterinary visits, could have an adverse effect on our results of operations. 

Our Operations and Reputation May Be Impaired if We, Our Products or Our Services Do Not Comply with Regulations and Policies Regarding Privacy and Protection of User Data

We offer products and services that store and use practice and client information, including practice management systems for veterinary practices (e.g., Cornerstone), online client communication tools and services (e.g., Pet Health Network Pro), and cloud-based technology through VetConnect PLUS that enables veterinarians to access and analyze patients’ diagnostic data from IDEXX in-clinic analyzers, our Rapid Assays and Reference Laboratories in one place. Some of these products and services rely on third-party providers for cloud storage.  We also engage in e-commerce through various IDEXX websites and collect contact and other personal or identifying information from our customers and visitors to our websites.

Federal, state and international laws and regulations govern the collection, use, retention, sharing and security of personal information, including data that we receive from our employees, customers and visitors to our websites and data collected by our customers and others when using our products and services. The costs associated with compliance with these legal and regulatory requirements are significant and likely to increase in the future. In addition, we have and post on our website our own privacy policy concerning the collection, use and disclosure of user data. Any failure, or perceived failure, by us or our products and services to protect employee or customer data (including as a result of a breach by or of a third-party provider) or to comply with any privacy-related laws, government regulations or directives or industry self-regulatory principles or our posted privacy policies could result in damage to our reputation or proceedings or actions against us by governmental entities or otherwise, which could have an adverse effect on our business.

Strengthening of the Rate of Exchange for the U.S. Dollar Has a Negative Effect on Our Business

Any strengthening of the rate of exchange for the U.S. dollar against non-U.S. currencies, and in particular the Euro, British pound, Canadian dollar, Japanese yen and Australian dollar, adversely affects our results, as it reduces the dollar value of sales that are made in those currencies and reduces the profits on products manufactured or sourced in U.S. dollars and exported to international markets. Approximately 28% of our consolidated revenue for the year ended December 31, 2014 and 26% of our consolidated revenue for each of the years ended December 31, 2013 and 2012 was derived from products manufactured in the U.S. and sold internationally in local currencies. A strengthening U.S. dollar could also negatively impact the ability of customers outside the U.S. to pay for purchases denominated in U.S. dollars. 

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A Weak Economy Could Result in Reduced Demand for Our Products and Services or Increased Customer Credit Risk 

A substantial percentage of our sales are made worldwide to the companion animal veterinary market. Demand for our companion animal diagnostic products and services is driven in part by the number of patient visits to veterinary hospitals and the practices of veterinarians with respect to the recommendations for diagnostic testing, as well as pet owner compliance with these recommendations. Economic weakness in our significant markets could cause pet owners to forgo or defer visits to veterinary hospitals or affect their willingness to approve certain diagnostic tests, comply with a treatment plan or, even more fundamentally, continue to own a pet. In addition, concerns about the financial resources of pet owners could cause veterinarians to be less likely to recommend certain diagnostic tests, and concerns about the economy may cause veterinarians to defer purchasing capital items such as our instruments and systems. These conditions, if they continue, could result in a decrease in sales of diagnostic products and services, which could have an adverse effect on our results of operations.  

Demand for our water products is driven in part by the availability of funds at government laboratories, water utilities and private certified laboratories that utilize our products. Availability of funds also affects demand by government laboratories and cattle, swine and poultry producers that utilize our livestock and poultry diagnostic products, and by users of our human point-of-care diagnostic instruments. Economic weakness in our markets has caused and could continue to cause our customers to reduce their investment in such testing, which could have an adverse effect on our results of operations. 

In all of our markets, a weak economy may also cause deterioration in the financial condition of our distributors and customers, which could inhibit their ability to pay us amounts owed for products delivered or services provided in a timely fashion or at all. 

Risks Associated with Doing Business Internationally Could Negatively Affect Our Operating Results

For the year ended December 31, 2014, approximately 43% of our revenue was attributable to sales of products and services to customers outside the U.S., compared to 42% and 41% for the years ended December 31, 2013 and 2012, respectively. Although we intend to continue to expand our international operations and business, we may not be able to successfully promote, market, sell or distribute our products and services outside the U.S. Various risks associated with foreign operations may impact our international sales, including disruptions in transportation of our products, the differing product and service needs of foreign customers, difficulties in building and managing foreign operations, import/export duties and licensing requirements, natural disasters, unexpected regulatory and economic or political changes in foreign markets, security concerns and local business and cultural factors that differ from our normal standards and practices, including business practices prohibited by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations.

Further, prices that we charge to foreign customers may be different than the prices we charge for the same products in the U.S. due to competitive, market or other factors. In addition, foreign government regulations may restrict our ability to repatriate funds currently held in foreign jurisdictions, and any repatriation of such funds to the U.S. may result in higher effective tax rates for us. Our results of operations are also susceptible to changes in foreign currency exchange rates. As a result, the mix of domestic and international sales in a particular period could have an adverse impact on our results of operations for that period.  

Our Limited Experience and Small Scale in the Human Point-of-Care Market Could Inhibit Our Success in this Market 

We have limited experience in the human point-of-care medical diagnostics market and we operate at a small scale in this market. This market differs in many respects from the veterinary diagnostic market. Significant differences include the impact of third-party reimbursement on diagnostic testing, more extensive regulation, greater product liability risks, larger competitors, a more segmented customer base and more rapid technological innovation. Our limited experience and small scale in the human point-of-care medical diagnostics market could negatively affect our ability to successfully manage the risks and features of this market that differ from the veterinary diagnostic market. There can be no assurance that we will be successful in achieving growth and profitability in the human point-of-care medical diagnostics market comparable to the results we have achieved in the veterinary diagnostic market. 

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Our Operations are Vulnerable to Interruption as a Result of Natural and Man-Made Disasters, System Disruptions and Security Breaches

The operation of all of our facilities may be vulnerable to interruption as a result of natural and man-made disasters, interruptions in power supply or other system failures. While we maintain plans to continue business under such circumstances, there can be no assurance that such plans will be successful in fully or partially mitigating the effects of such events. 

We manufacture many of our significant companion animal products, including our rapid assay devices and certain instruments, many of our water testing products and certain of our livestock, poultry and dairy testing products, at a single facility in Westbrook, Maine. Certain of our companion animal products, as well as our human point-of-care products, are manufactured in Roswell, Georgia. We also manufacture certain of our livestock and poultry testing products in Bern, Switzerland and Montpellier, France. In addition, we maintain major distribution facilities in North America and in the Netherlands and major reference laboratories in Memphis, Tennessee; Leipzig, Germany; Ludwigsburg, Germany; Sacramento, California; Elmhurst, Illinois; North Grafton, Massachusetts; East Brisbane, Australia; Markham, Ontario; Wetherby, U.K; and Tokyo, Japan. Interruption of operations at any of these facilities could have an adverse effect on our results of operations. 

                We rely on several information systems throughout our company to keep financial records, process customer orders, manage inventory, process shipments to customers and operate other critical functions. Although we employ system backup measures, our current disaster recovery plan may be ineffective or inadequate to address all eventualities. Further, our information systems may be vulnerable to attacks by hackers and other security breaches, including computer viruses. Any such attack or breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. If we were to experience a system disruption, attack or security breach that impacts any of our critical functions, it could result in the loss of sales and customers, financial misstatement and significant incremental costs, which could adversely affect our business. Furthermore, any access to, public disclosure of, or other loss of information as a result of an attack or security breach could result in governmental actions or private claims or proceedings, which could damage our reputation, cause a loss of confidence in our products and services, and adversely affect our business.

We maintain property and business interruption insurance to insure against the financial impact of certain events of this nature. However, this insurance may be insufficient to compensate us for the full amount of any losses that we may incur. In addition, such insurance will not compensate us for the long-term competitive effects of being out of the market for the period of any interruption in operations. 

If Our Quarterly or Annual Results of Operations Fluctuate, This Fluctuation May Cause Our Stock Price to Decline 

Our prior operating results have fluctuated due to a number of factors, including seasonality of certain product lines; changes in our accounting estimates; the impact of acquisitions; timing of distributor purchases, product launches, operating expenditures, customer marketing and incentive programs, changes in foreign currency exchange rates, and litigation and claim-related expenditures; increase in the number and type of competitors; changes in competitors’ product offerings; changes in our sales and distribution model; changes in the economy affecting consumer spending; and other matters. Similarly, our future operating results may vary significantly from quarter to quarter or year to year due to these and other factors, many of which are beyond our control. If our operating results or projections of future operating results do not meet the expectations of market analysts or investors in future periods, our stock price may fall. 

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Future Operating Results Could Be Negatively Affected by Changes in Tax Rates, the Adoption of New U.S. or International Tax Legislation or Exposure to Additional Tax Liabilities

We are subject to local, state, regional and federal tax laws in the U.S. and many other international jurisdictions.  Due to economic and political conditions, the various tax rates applied to the earnings of our activities are subject to significant change.  Our future tax expense could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities or changes in tax laws or their interpretation.  Also, we have received tax rulings from various governments that have jurisdictional authority over our operations.  If we are unable to meet the requirements of such agreements, or if they expire or are renewed on less favorable terms, the result could negatively impact our future earnings.  Additionally, the European Commission has opened formal investigations into specific tax rulings granted by several countries to specific taxpayers.  While we believe that our rulings are different than those being discussed, the ultimate resolution of such activities cannot be predicted and could also have an adverse impact on future operating results.

Our income tax filings are regularly under audit by various tax authorities, and the final determination of tax audits could be materially different than that which is reflected in historical income tax provisions and accruals. Significant judgment is required in determining our worldwide provision for income taxes. We regularly assess our exposures related to our worldwide provision for income taxes to determine the adequacy of our provision for taxes. Any reduction in these contingent liabilities or additional assessments would increase or decrease income, respectively, in the period such determination is made.

Restrictions in Our Debt Agreements or Our Inability to Obtain Financing on Favorable Terms May Limit Our Activities

Our ability to make scheduled payments and satisfy our other obligations under our unsecured revolving credit facility and senior notes depends on our future operating performance and on economic, financial, competitive and other factors beyond our control. Our business may not generate sufficient cash flows to meet these obligations or generate sufficient levels of earnings to satisfy the applicable affirmative, negative and financial covenants. Our failure to comply with these covenants and the other terms of the credit facility and senior notes could result in an event of default and acceleration of our obligations under these agreements, which may require us to seek additional financing or restructure existing debt on unfavorable terms. In addition, adverse changes in credit markets could increase our cost of borrowing and make it more difficult for us to obtain financing. 

Our senior notes include provisions which stipulate a prepayment penalty for which we will be obligated in the event that we elect to repay the notes prior to their stated maturity dates. Should we elect to repay some or all of the outstanding principal balance on our senior notes, the prepayment penalty we incur could adversely affect our results of operations and cash flows.

We fund our operations, capital purchase requirements and strategic growth needs through cash on hand, funds generated from operations and amounts available under our credit facility. If we were unable to obtain financing on favorable terms, we could face restrictions that would limit our ability to execute certain strategies, which could have an adverse effect on our revenue growth and profitability.

ITEM 1B.UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 2.PROPERTIES

Our worldwide headquarters is located on a company-owned, 65-acre site in Westbrook, Maine where we occupy a 667,000 square foot building utilized for manufacturing, research and development, marketing, sales and general and administrative support functions.In 2011, we began the construction of an 111,100 square foot administrative building adjacent to our primary facility in Westbrook, Maine, which was completed in August 2013.

Additional property ownership and leasing arrangements with approximate square footage, purpose and location are as follows:

Additional Properties Owned:

· 34,200 square feet of laboratory space located in the U.S., used for our Reference Laboratory Diagnostic and Consulting Services line of business of CAG

· 23,000 square feet of office and laboratory space located in the U.K., used for our Reference Laboratory Diagnostic and Consulting Services line of business of CAG

· 3,100 square feet of laboratory space located in Canada, used for our Reference Laboratory Diagnostic and Consulting Services line of business of CAG

Additional Properties Leased:

· 501,900 total square feet of laboratory, office and warehousing space located throughout the U.S., Europe, Canada, Australia, Asia and South Africa, primarily used for our Reference Laboratory Diagnostic and Consulting Services line of business of CAG

· 114,400 square feet of industrial space in Tennessee for distribution and warehousing related to various lines of business

· 100,100 square feet of distribution, warehousing and office space in the Netherlands, which serves as our European headquarters

· 84,300 square feet of office, manufacturing and warehousing space in Georgia related to our OPTI Medical line of business

· 69,300 square feet of office space in Wisconsin related to our Customer Information Management line of business of CAG

· 67,000 square feet of office space in Maine for Corporate, Customer Service and Information Technology support services

· 52,800 total square feet of office and manufacturing space in France, Switzerland and Brazil related to our Livestock,  Poultry and Dairy line of business

· 7,600 square feet of manufacturing space in the U.K. related to our Water line of business

We believe that our owned and leased properties are generally in good condition, are well-maintained, and are generally suitable and adequate to carry on our business.

ITEM 3.LEGAL PROCEEDINGS

Due to the nature of our activities, we areat times subject to pending and threatened legal actions that arise out of the ordinary course of business. In the opinion of management, based in part upon advice of legal counsel, the disposition of any such currently pending matters is not expected to have a material effect on our results of operations, financial condition or cash flows. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that our results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the NASDAQ Global Select Market under the symbol IDXX. The following table shows the quarterly range of high and low sale prices per share of our common stock as reported on the NASDAQ Global Select Market for the years 2013 and 2014.

For the Quarter Ended	High		Low
March 31, 2013	$	100.81	$	90.19
June 30, 2013		92.60		81.57
September 30, 2013		100.37		87.99
December 31, 2013		113.11		99.13
March 31, 2014		129.27		104.64
June 30, 2014		136.13		115.84
September 30, 2014		140.00		113.49
December 31, 2014		153.89		115.12

Holders of Common Stock

As of February 6, 2015, there were 558 holders of record of our common stock. Because the majority of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Purchases of Equity Securities by the Issuer

During the three months ended December 31, 2014, we repurchased shares of common stock as described below:

1
Period	Total Number of Shares Purchased (a)		Average Price Paid per Share (b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (c)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (d)
October 1, 2014 to October 31, 2014	644,140		$	119.51	644,140	3,571,483
November 1, 2014 to November 30, 2014	180,507			145.55	178,880	3,392,603
December 1, 2014 to December 31, 2014	313,121			148.30	311,300	3,081,303
Total	1,137,768	(2)	$	131.57	1,134,320	3,081,303

(1)As of December 31, 2014, our Board of Directors had approved the repurchase of up to 57 million shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program. The program was approved and announced on August 13, 1999, and the maximum number of shares that may be purchased under the program was subsequently increased on October 4, 1999, November 16, 1999, July 21, 2000, October 20, 2003, October 12, 2004, October 12, 2005, February 14, 2007, February 13, 2008, February 10, 2010, October 12, 2011, May 7, 2013 and again on July 16, 2014. There is no specified expiration date for this repurchase program. There were no other repurchase programs outstanding during the three months ended December 31, 2014, and no repurchase programs expired during the period. Repurchases of 1,134,320 shares were made during the three months ended December 31, 2014 in transactions made pursuant to our repurchase program.

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(2) During the three months ended December 31, 2014, we received 3,448 shares of our common stock that were surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units. In the above table, these shares are included in columns (a) and (b), but excluded from columns (c) and (d). These shares do not reduce the number of shares that may yet be purchased under the repurchase program.

During the year ended December 31, 2014, we repurchased 4,880,524 shares of our common stock in transactions made pursuant to our repurchase program and received 46,190 shares of common stock that were surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units. See Note 17 to the consolidated financial statements for the year ended December 31, 2014 included in this Annual Report on Form 10-K for further information.

Dividends

We have never paid any cash dividends on our common stock. From time to time our board of directors may consider the declaration of a dividend. However, we have no intention to pay a dividend at this time.

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Stock Performance

This graph compares our total stockholder returns, the Standard & Poor’s (“S&P”) MidCap 400 Index, the S&P MidCap 400 Health Care Index and the Total Return Index for the NASDAQ Stock Market (U.S. Companies) prepared by the Center for Research in Security Prices (the “NASDAQ Index”). This graph assumes the investment of $100 on December 31, 2009 in IDEXX’s common stock, the S&P MidCap 400 Index, the S&P MidCap 400 Health Care Index and the NASDAQ Index and assumes dividends, if any, are reinvested. Measurement points are the last trading days of the years ended December 2009, 2010, 2011, 2012,  2013 and 2014.

	12/31/2009		12/31/2010		12/30/2011		12/31/2012		12/31/2013		12/31/2014
IDEXX Laboratories, Inc.	$	100.00	$	129.50	$	143.99	$	173.62	$	199.01	$	277.40
S&P MidCap 400 Health Care Index		100.00		123.02		124.31		157.59		229.96		284.43
S&P MidCap 400 Index		100.00		126.64		124.45		146.70		195.84		214.97
NASDAQ Index		100.00		118.02		117.04		137.47		192.62		221.02

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ITEM 6.SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the Company for each of the last five fiscal years of the Company. The selected consolidated financial data presented below has been derived from the Company’s consolidated financial statements. These financial data should be read in conjunction with the consolidated financial statements, related notes and other financial information appearing elsewhere in this Annual Report on Form 10-K.

	For the Years Ended December 31,
	(in thousands, except per share data)
		2014		2013		2012		2011		2010
INCOME STATEMENT DATA:
Revenue	$	1,485,807	$	1,377,058	$	1,293,338	$	1,218,689	$	1,103,392
Cost of revenue		669,691		620,940		594,190		572,183		524,769
Gross profit		816,116		756,118		699,148		646,506		578,623
Expenses:
Sales and marketing		283,708		243,492		216,962		204,850		179,626
General and administrative		173,890		157,861		137,609		129,389		126,519
Research and development		98,263		88,003		82,014		76,042		68,597
Income from operations		260,255		266,762		262,563		236,225		203,881
Interest expense, net		(13,700)		(3,501)		(1,946)		(1,803)		(1,752)
Income before provision for income taxes		246,555		263,261		260,617		234,422		202,129
Provision for income taxes		64,604		75,467		82,330		72,668		60,809
Net income		181,951		187,794		178,287		161,754		141,320
Less: Net income (loss) attributable to noncontrolling interest		45		(6)		20		(32)		36
Net income attributable to IDEXX Laboratories, Inc. stockholders	$	181,906	$	187,800	$	178,267	$	161,786	$	141,284
Earnings per share:
Basic	$	3.63	$	3.53	$	3.24	$	2.85	$	2.45
Diluted		3.58		3.48		3.17		2.78		2.37
Weighted average shares outstanding:
Basic		50,047		53,159		54,985		56,790		57,713
Diluted		50,751		53,985		56,155		58,214		59,559
BALANCE SHEET DATA:
Cash and cash equivalents	$	322,536	$	279,058	$	223,986	$	183,895	$	156,915
Working capital		(61,508)		174,353		163,204		87,348		175,479
Total assets		1,384,211		1,230,516		1,103,602		1,030,814		897,144
Total long-term debt1		350,000		150,359		1,394		2,501		3,418
Total stockholders' equity		117,589		518,214		636,257		539,593		574,281
1  In September 2014, we issued and sold through a private placement an aggregate principal amount of $75 million of 3.72% Senior Notes due September 4, 2026 under a Note Purchase Agreement dated as of July 22, 2014 among the Company, New York Life Insurance Company and the accredited institutional purchasers named therein. In July 2014, we issued and sold through a private placement an aggregate principal amount of $125 million of senior notes consisting of $75 million of 3.76% Series B Senior Notes due July 21, 2024 and $50 million of 3.32% Series A Senior Notes due July 21, 2021 under a Note Purchase and Private Shelf Agreement among the Company, Prudential Investment Management, Inc. and the accredited institutional purchasers named therein. In December 2013, we issued and sold through a private placement an aggregate amount of $150 million of senior notes consisting of $75 million of 3.94% Series A Senior Notes due December 11, 2023 and $75 million of 4.04% Series B Senior Notes due December 11, 2025 under a Note Purchase Agreement among the Company and the accredited institutional purchasers named therein. See Note 10 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information about these senior notes.

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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Description of Segments. Prior to January 1, 2013, we operated primarily through three business segments: diagnostic and information technology-based products and services for the veterinary market, which we continue to refer to as the Companion Animal Group (“CAG”); water quality products (“Water”); and diagnostic products for livestock and poultry health, which we referred to as Livestock and Poultry Diagnostics. We also operated two smaller operating segments that comprised products for milk quality and safety (“Dairy”) and products for the human point-of-care medical diagnostics market (“OPTI Medical”). Financial information about our Dairy and OPTI Medical operating segments was combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they did not meet the quantitative or qualitative thresholds for reportable segments. 

In 2013, we combined the management of our Livestock and Poultry Diagnostics, and Dairy lines of business to more effectively realize the market synergies between the product lines and to achieve operational efficiencies. We refer to this segment as Livestock, Poultry and Dairy (“LPD”). Our OPTI Medical operating segment remains combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they do not meet the quantitative or qualitative thresholds for reportable segments. The segment income (loss) from operations discussed within this report for the year ended December 31, 2012 has been retrospectively revised to reflect this change in the composition of our reportable segments. See Note 14 to the consolidated financial statements for the year ended December 31, 2014 included in this Annual Report on Form 10-K for financial information about our segments, including our product and service categories, and our geographic areas.

Items that are not allocated to our operating segments are as follows: a portion of corporate support function and personnel-related expenses; certain manufacturing costs; corporate research and development expenses that do not align with one of our existing business or service categories; the difference between estimated and actual share-based compensation expense; certain foreign currency exchange gains and losses; and variances from standard cost for products sold resulting from changes in certain currency exchange rates. In our segment disclosure, these amounts are shown under the caption “Unallocated Amounts.”

The following is a discussion of the strategic and operating factors that we believe have the most significant effect on the performance of our business.

Companion Animal Group

Our strategy is to provide veterinarians with both the highest quality diagnostic information to support more advanced medical care and information management solutions that help demonstrate the value of diagnostics to pet owners and enable efficient practice management. By doing so, we are able to build a mutually successful partnership with our veterinarian customers based on healthy pets, loyal customers and expanding practice revenues.

CAG Diagnostics. We refer to the extensiveness and integration of our diagnostic and information management offerings as the IDEXX Diagnostic Advantage. We provide diagnostic capabilities that meet veterinarian’s diverse needs through a variety of modalities including in-clinic diagnostic solutions and outside reference laboratories. Veterinarians that utilize our full line of diagnostic modalities obtain a single view of a patient’s diagnostic results, which allows them to spot trends and achieve greater medical insight. 

The breadth and complementary nature of our diagnostic solutions also provides us scale in sales and distribution. During 2013, we reorganized our companion animal diagnostic sales organization in North America, transitioning our specialty sales force that represented either in-clinic or outside reference laboratory diagnostics to account representatives who represent all CAG diagnostic modalities. In addition to this reorganization, we increased the size of our sales force resulting in smaller geographically sized sales territories. These changes allowed for more frequent customer contact by a consistent sales professional. We have experienced accelerated revenue growth subsequently to implementing this change.

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To further increase our customer reach, effective January 1, 2015 we transitioned to an all-direct sales strategy in the U.S. and did not renew our current annual contracts with our U.S. distribution partners. Under this approach, we take orders, ship product, invoice and receive payment for all rapid assay test kits and instrument consumables in the U.S., aligning with our direct model for instruments, reference laboratory services, and other CAG products and services. We believe these changes will continue to strengthen customer loyalty and help support growth of our diagnostic revenues in North America.

Our diagnostic capabilities generate both recurring and non-recurring revenues.  Revenues related to capital placements of our in-clinic VetLab suite of instruments and our SNAP Pro Mobile Device are non-recurring in nature, while revenues from the associated proprietary VetLab consumables, SNAP rapid assay test kits, outside reference laboratory and consulting services, and extended maintenance agreements and accessories related to our VetLab instruments are recurring in nature. Instrument sales have significantly lower gross margins than those provided by our recurring revenues, especially in the case of VetLab consumables and rapid assay test kits.  Therefore, the mix of nonrecurring and recurring revenues in a particular period will impact our gross margins.

Diagnostic Capital Revenue. Revenues related to the placement of the VetLab suite of instruments are non-recurring in nature, in that the customer will buy an instrument once over its respective product life cycle, but will purchase consumables for that instrument on a recurring basis as they use that instrument for testing purposes. During the early stage of an instrument’s life cycle, we derive relatively greater revenues from instrument placements, while consumable sales become relatively more significant in later stages as the installed base of instruments increases and instrument placement revenues begin to decline. In the early stage of an instrument’s life cycle, placements are made primarily through sales transactions.  As the market for the product matures, an increasing percentage of placements are made in transactions, sometimes referred to as “reagent rentals,” in which instruments are placed at customer sites at little or no cost in exchange for a long-term customer commitment to purchase instrument consumables.

Prior to the Catalyst One instrument launch during November 2014, we pre-sold the instrument under a customer marketing program through which customers preordering a Catalyst One were initially provided with the right to use a Catalyst Dx instrument. Under this marketing program, we deferred $7 million of instrument revenue in 2014, which will not be recognized until delivery of the Catalyst One instrument occurs in 2015.

We place our Catalyst chemistry analyzers through sales, leases, rental and other programs. In addition, we continue to place VetTestinstruments through sales, lease, rental and other programs, with substantially all of our revenues from that product line currently derived from consumable sales. As of December 31, 2014, these three chemistry analyzers provided for a combined active installed base of approximately 38,000 units. Approximately half of 2014 Catalyst analyzer placements were to customers that are new to IDEXX, including customers who had been using instruments from one of our competitors, sometimes referred to as competitive accounts. Generally, placement of an instrument with a competitive account is more attractive as the entire consumable stream associated with that placement represents incremental revenue, whereas the consumable stream associated with a Catalyst placement at a VetTest customer substitutes a Catalyst consumable stream for a VetTest consumable stream. We have found that the consumables revenues increase by approximately 25% when a customer upgrades from a VetTest analyzer to a Catalyst analyzer due to the superior capability, flexibility and ease of use of the Catalyst, which leads to additional testing by the customer.

As we continue to experience growth in placements of Catalystanalyzers and in sales of related consumables, we expect this growth to be partly offset by a decline in placements of VetTest analyzers and in sales of related consumables.  

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The ProCyte Dxanalyzer is our latest generation hematology analyzer, which we launched in 2010. In addition we sell the LaserCyte Dxand LaserCyteanalyzers and VetAutoread analyzers. As of December 31, 2014, these four hematology analyzers provided for a combined active installed base of approximately 27,000 units. A substantial portion of ProCyte Dx analyzer placements continue to be made at veterinary clinics that elect to upgrade from their LaserCyte analyzer to a ProCyte Dx analyzer. In 2014, slightly less than half of ProCyte placements were made at competitive accounts. We also continue to place a substantial number of LaserCyte Dx and LaserCyte instruments, both new and recertified, as trade-ups from the VetAutoread analyzer and at new and competitive accounts. In 2014, a significant number of LaserCyte instruments that were placed were recertified instruments that had been received in trade in the sale of a ProCyte Dx analyzer. As we continue to experience growth in placements of ProCyte Dxanalyzers and in sales of related consumables, we expect this growth to be partly offset by a decline in placements of LaserCyte and VetAutoread analyzers and in sales of related consumables.

We seek to enhance the attractiveness of our SNAP rapid assay tests by providing the SNAP Pro Mobile Device, which activates SNAP tests, properly times the run, captures and saves images of the results and,in conjunction with IVLS, records invoice charges in the patient record. This promotes practice efficiency by eliminating manual entry of test results in patient records and also helps ensure that the services are recorded and accurately invoiced. In addition, SNAP Pro Mobile Device results can be shared with pet owners on the SNAP Pro screen or, in conjunction with IVLS, via VetConnect PLUS. We also sell theSNAPshot Dx, which automatically reads certain SNAP test results and, in conjunction with IVLS, records those results in the electronic medical record. We continue to work on enhancing the functionality of our analyzers to read the results of additional tests from our canine and feline family of rapid assay products.

Prior to 2014, the SNAPshot Dx was our primary in-clinic solution which screened for thyroid disease. With the recent launch of the total thyroxine (“T₄”) slide for use with the Catalyst One analyzer, we anticipate a decline in placements of the SNAPshot Dx, although we will continue to service the existing install base.

Our long-term success in this area of our business is dependent upon new customer acquisition, customer loyalty and retention and customer utilization of existing and new assays introduced for use on our analyzers. We continuously seek opportunities to enhance the care that veterinary professionals give to their patients and clients through supporting the implementation of real-time care testing work flows, which is performing tests and sharing test results with the client at the time of the patient visit. Our latest generation of chemistry and hematology instruments demonstrates this commitment by offering enhanced ease of use, faster time to results, greater sample throughput, broader test menu and connectivity to various information technology platforms that enhance the value of the diagnostic information generated by the instruments. In addition, we provide marketing tools and consultative services that help drive efficiencies in veterinary practice processes and allow practices to increase the number of clients they see on a daily basis.

With all of our instrument product lines, we seek to differentiate our products from our competitors’ products based on time-to-result, ease-of-use, throughput, breadth of diagnostic menu, flexibility of menu selection, accuracy, reliability, ability to handle compromised samples, analytical capability of software, integration with the IDEXX VetLab Station and VetConnect PLUS, client communications capabilities, education and training, and superior sales and customer service. Our success depends, in part, on our ability to differentiate our products in a way that justifies a premium price.

Recurring Diagnostic Revenue. Revenues from our proprietary VetLab consumable products, our SNAP rapid assay test kits, outside reference laboratory and consulting services, and extended maintenance agreements and accessories related to our VetLab instruments are considered recurring in nature. Recurring diagnostic revenue accounts for approximately 71% of our consolidated revenue and is both highly durable and profitable.

Our in-clinic diagnostic solutions, consisting of our VetLab consumable products and SNAP rapid assay test kits, provide real-time reference lab quality diagnostic results for a variety of companion animal diseases and health conditions. Our outside reference laboratories provide veterinarians with the benefits of a more comprehensive list of diagnostic tests and access to consultations with board-certified veterinary specialists and pathologists, combined with the benefit of same-day or next-day turnaround times. 

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We derive substantial revenues and margins from the sale of consumables that are used in VetLab instruments and the multi-year consumable revenue stream is significantly more valuable than the placement of the instrument. Our strategy is to increase diagnostic testing within veterinary practices by placing VetLab instruments and increasing instrument utilization of consumables.  Utilization can increase due to a greater number of patient samples being run or to an increase in the number of tests being run per patient sample. Our strategy is to increase both drivers. To increase utilization, we seek to educate veterinarians about best medical practices that emphasize the importance of chemistry and hematology testing for a variety of diagnostic purposes, as well as by introducing new testing capabilities that were previously not available to veterinarians. Additionally, we have found that veterinarian adoption of VetConnect PLUS drives utilization by spurring testing across all IDEXX diagnostic modalities. In connection with the purchase of instruments, we also offer protocol-based rebate incentives when customers utilize the broad testing functionality of our analyzers. 

Our in-clinic diagnostic solutions also include SNAP rapid assay tests that address important medical needs for particular diseases prevalent in the companion animal population. We seek to differentiate these tests from those of other in-clinic test providers and reference laboratory diagnostic service providers through ease-of-use, superior performance, sensitivity, specificity and by providing our customers with combination tests that test a single sample for up to six diseases at once. We further augment our product development and customer service efforts with sales and marketing programs that enhance medical awareness and understanding regarding certain diseases and the importance of diagnostic testing.

We believe that more than half of all diagnostic testing by U.S. veterinarians is provided by outside reference laboratories such as our IDEXX Reference Laboratories. In several markets outside the U.S., in-clinic testing is less prevalent and an even greater percentage of diagnostic testing is done in reference laboratories. We attempt to differentiate our reference laboratory testing services from those of competitive reference laboratories and competitive in-clinic offerings primarily on the basis of test menu, technology employed, quality, turnaround time, customer service and tools such as VetConnect PLUS that demonstrate the complementary manner in which our laboratory services work with our in-clinic offerings.

Profitability from our reference laboratory diagnostic and consulting services is largely the result of our ability to achieve efficiencies from both volume and operational improvements. When possible, we utilize core reference laboratories to service samples from other countries, expanding our customer reach without an associated expansion in our reference laboratory footprint. Start-up laboratories that we open typically will operate at a loss until testing volumes achieve sufficient scale. Acquired laboratories frequently operate less profitably than our existing laboratories and acquired laboratories may not achieve the profitability of our existing laboratory network for several years until we complete the implementation of operating improvements and efficiencies. Therefore, in the short term, new and acquired reference laboratories generally will have a negative effect on our operating margin. Recurring revenue growth is achieved both through increased sales to existing customers and through the acquisition of new customers. We believe the increased number of customer visits resulting from our all-direct sales strategy in the U.S. will lead to increased reference laboratory opportunities with customers who already use one of our in-clinic diagnostic modalities. In recent years, recurring reference laboratory diagnostic and consulting revenues have also been increased through reference laboratory acquisitions, customer list acquisitions, the opening of new reference laboratories, including laboratories that are co-located with large practice customers, and as a result of our up-front customer loyalty programs. Under these arrangements, we provide incentives to customers in the form of cash payments or IDEXX Points upon entering multi-year agreements to purchase annual minimum amounts of products or services in the future.

Health Monitoring and Biological Materials Testing.  We believe the acquisition of the research and diagnostic laboratory business of the College of Veterinary Medicine from the University of Missouri allows us to leverage our expertise in veterinary diagnostics and expand our integrated offering of reference laboratory diagnostic and consulting services and in-clinic testing solutions in the adjacent bioresearch market.

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Customer Information Management and Digital Imaging Systems. Our Cornerstone practice management system provides a superior integrated information solution, backed by exceptional customer support and education, to allow the veterinarian to practice better medicine and achieve the practice’s business objectives, including a quality client experience, staff efficiency and practice profitability. We differentiate our practice management systems through enhanced functionality, ease of use and connectivity with in-clinic VetLab instruments and outside reference laboratory test results. Our client communication services create more meaningful pet owner experiences through personalized communication. Pet Health Network Pro online client communication and education service complements the entire IDEXX product offering by educating pet owners and building loyalty through engaging the pet owner before, during and after the visit, thereby building client loyalty and driving more patient visits.

Our digital imaging systems offer a convenient system that provides superior image quality and software capability that enables sharing of these images with clients virtually anywhere and enhanced diagnostic features and customer workflow, backed by the same customer support provided for our other products and services in CAG.

Water

Our strategy in the water testing business is to develop, manufacture, market and sell proprietary products with superior performance, supported by exceptional customer service. Our customers primarily consist of water utilities, government laboratories and private certified laboratories that highly value strong relationships and customer support. Sales of water testing products outside of the U.S. represented 52% of total water product sales in 2014, and we expect that future growth in this business will be significantly dependent on our ability to increase international sales. Growth also will be dependent on our ability to enhance and broaden our product line. Most water microbiological testing is driven by regulation, and, in many countries, a test may not be used for compliance testing unless it has been approved by the applicable regulatory body. As a result, we maintain an active regulatory program that involves applying for regulatory approvals in a number of countries, primarily in Europe. Further, we seek to receive regulatory approvals from governing agencies as a means to differentiate our products from the competition.

Livestock, Poultry and Dairy

We develop, manufacture, market and sell a broad range of tests for various cattle, swine and poultry diseases and conditions, and have active research and development and in-licensing programs in this area. Our strategy is to offer proprietary tests with superior performance characteristics for use in government programs to control or eradicate disease and disease outbreaks and in livestock and poultry producers’ disease and reproductive management programs. Disease outbreaks are episodic and unpredictable, and certain diseases that are prevalent at one time may be substantially contained or eradicated at a later time. In response to outbreaks, testing initiatives may lead to exceptional demand for certain products in certain periods. Conversely, successful eradication programs may result in significantly decreased demand for certain products. In addition, increases in government funding may lead to increased demand for certain products and budgetary constraints may lead to decreased demand for certain products. As result, the performance of this business can fluctuate.

Our strategy in the dairy testing business is to develop, manufacture and sell antibiotic residue and contaminant testing products that satisfy applicable regulatory requirements or dairy processor standards for testing of milk and provide reliable field performance. The manufacture of these testing products leveragesthe SNAP platform as well as the manufacturing equipment of our rapid assay business, incorporating customized reagents for antibiotic and contaminant detection. To successfully increase sales of dairy testing products, we believe that we need to increase penetration in dairy processorsand develop product line enhancements and extensions.

We also distribute food safety products, including Randox Food Diagnostics, a wide range of cost effective ELISAs, sensitive and reproducible diagnostic assays, for the detection of multiple compounds in one test based on a multi-analyte quantitative screening drug residue analyzer called the Evidence Investigator. Our technology for food safety screening reduces the number of samples sent to confirmation laboratories, lowering costs on expensive confirmation tests. We believe distributing food safety products provides us opportunities at a later stage in the food value chain.

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In 2014, approximately 90% of our sales in this business were from markets outside of the U.S., most notably Europe and China. The performance of the business is particularly subject to the various risks that are associated with doing business internationally. See “Part I, Item 1A. Risk Factors.”

Other

OPTI Medical Systems. Our strategy in the OPTI Medical Systems business for the human market is to develop, manufacture, and sell electrolyte and blood gas analyzers and related consumable products for the medical point-of-care diagnostics market worldwide, with a focus on small to mid-sized hospitals. We seek to differentiate our products based on ease of use, convenience, international distribution and service and instrument reliability. Similar to our veterinary instruments and consumables strategy, a substantial portion of the revenues from this product line is derived from the sale of consumables for use on the installed base of electrolyte and blood gas analyzers. During the early stage of an instrument’s life cycle, relatively greater revenues are derived from instrument placements, while consumable sales become relatively more significant in later stages as the installed base of instruments increases and instrument placement revenues begin to decline. Our long-term success in this area of our business is dependent upon new customer acquisition, customer retention and increased customer utilization of existing and new assays introduced on these instruments.

Our strategy in the OPTI Medical Systems business for the veterinary market is to utilize this unit’s know-how, intellectual property and manufacturing capability to continue to expand the menu and instrument capability of the VetStat and Catalyst Dx platforms for veterinary applications while reducing our cost of consumables by leveraging experience and economies of scale.

In 2014, approximately 83% of our sales in the OPTI Medical Systems business were from markets outside of the U.S., most notably Asia and Europe. The performance of the business is particularly subject to the various risks that are associated with doing business internationally. See “Part I, Item 1A. Risk Factors.”

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K describes the significant accounting policies used in preparation of these consolidated financial statements.

We believe the following critical accounting estimates and assumptions may have a material impact on reported financial condition and operating performance and involve significant levels of judgment to account for highly uncertain matters or are susceptible to significant change.

Revenue Recognition

We recognize revenue when four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. See Note 2(i) to the consolidated financial statements for the year ended December 31, 2014 included in this Annual Report on Form 10-K for additional information about our revenue recognition policy and criteria for recognizing revenue.

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Multiple Element Arrangements (“MEAs”). Arrangements to sell products to customers frequently include multiple deliverables. Our most significant MEAs include the sale of one or more of the instruments from the IDEXX VetLab suite of analyzers, digital imaging systems or practice management software, combined with one or more of the following products: extended maintenance agreements (“EMAs”), consumables and reference laboratory diagnostic and consulting services. Practice management software is frequently sold with post-contract customer support and implementation services. Delivery of the various products or performance of services within the arrangement may or may not coincide. Delivery of our IDEXX VetLab instruments, digital imaging systems and practice management software generally occurs at the onset of the arrangement. EMAs, consumables, and reference laboratory diagnostic and consultingservices typically are delivered over future periods, generally one to six years. In certain arrangements, revenue recognized is limited to the amount invoiced or received that is not contingent on the delivery of products and services in the future.

We allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element. If available, we establish the selling price of each element based on vendor-specific objective evidence (“VSOE”), which represents the price charged for a deliverable when it is sold separately. We use third-party evidence (“TPE”) if VSOE is not available, or best estimate of selling price if neither VSOE nor TPE is available. When these arrangements include a separately-priced EMA, we recognize revenue related to the EMA at the stated contractual price on a straight-line basis over the life of the agreement to the extent the separately stated price is substantive. If there is no stated contractual price for an EMA, or the separately stated price is not substantive, we allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element.

When arrangements within the scope of software revenue recognition guidance include multiple elements, we allocate revenue to each element based on relative fair value, when VSOE exists for all elements, or by using the residual method when there is VSOE for the undelivered elements but no such evidence for the delivered elements. Under the residual method, the fair value of the undelivered elements is deferred and the residual revenue is allocated to the delivered elements. Revenue is recognized on any delivered elements when the four criteria for revenue recognition have been met for each element. If VSOE does not exist for the undelivered element, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE does exist or all elements of the arrangement have been delivered. We determine fair value based on amounts charged separately for the delivered and undelivered elements to similar customers in standalone sales of the specific elements.

Certain arrangements with customers include discounts on future sales of products and services. We apply judgment in determining whether future discounts are significant and incremental. When the future discount offered is not considered significant and incremental, we do not account for the discount as an element of the original arrangement. If the future discount is significant and incremental, we recognize that discount as an element of the original arrangement and allocate the discount to the other elements of the arrangement based on relative selling price. To determine whether a discount is significant and incremental, we look to the discount provided in comparison to standalone sales of the same product or service to similar customers, the level of discount provided on other elements in the arrangement and the significance of the discount to the overall arrangement. If the discount in the MEA approximates the discount typically provided in standalone sales, that discount is not considered incremental.

Customer Programs. We record reductions to revenue related to customer marketing and incentive programs, which include end-user rebates and other volume-based incentives. Incentives may be provided in the form of IDEXX Points, credits or cash and are earned by end users upon achieving defined volume purchases or utilization levels or upon entering an agreement to purchase products or services in future periods. The summary of revenue reductions presented below reflects all revenue reductions recorded for the year for each particular program. These amounts are presented on a net basis when applicable, which accounts for any differences between estimates and actual incentives earned for the relevant customer marketing or incentive program. These differences have been insignificant in all quarterly or annual periods. Our most significant customer programs are categorized as follows:

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Customer Loyalty Programs. Our customer loyalty programs offer customers the opportunity to earn incentives on a variety of IDEXX products and services as those products and services are purchased and utilized. Revenue reductions related to customer loyalty programs are recorded based on the actual issuance of incentives, incentives earned but not yet issued and estimates of incentives to be earned in the future.

Up-Front Customer Loyalty Programs. Our up-front loyalty programs provide incentives to customers in the form of cash payments or IDEXX Points upon entering multi-year agreements to purchase annual minimum amounts of future products or services. If a customer breaches its agreement, it is required to refund a prorated portion of the up-front cash or IDEXX Points, among other things. These incentives are considered to be customer acquisition costs and are capitalized and recognized as a reduction to revenue over the term of the customer agreement. If these up-front incentives are subsequently utilized to purchase IDEXX VetLab instruments, digital imaging systems or Cornerstone practice management systems, product revenue and cost is deferred and recognized over the term of the customer agreement as products and services are provided to the customer. We monitor customer purchases over the term of their agreement to assess the realizability of our capitalized customer acquisition costs. For the years ended December 31, 2014, 2013 and 2012, impairments of customer acquisition costs were immaterial.

IDEXX InstrumentMarketing Programs. Our instrumentmarketing programs require the customer to enroll at the time of instrument purchase and offer customers the opportunity to earn incentives in future periods based on the volume of the products they purchase and utilize over the term of the program. These arrangements are considered MEAs in accordance with our revenue recognition policy stated above. Revenue reductions related to instrumentmarketing programs are recorded based on an estimate of customer purchase and utilization levels and the incentive the customer will earn over the term of the program. Our estimates are based on historical experience and the specific terms and conditions of the marketing program and require us to apply judgment to approximate future product purchases and utilization. Differences between our estimates and actual incentives earned are accounted for as a change in estimate. These differences were not material for the years ended December 31, 2014, 2013 and 2012. At December 31, 2014, a 5% change in our estimate of future customer utilization would increase or reduce revenue by approximately $0.4 million.

Reagent Rental Programs. Our reagent rental programs provide our customers the right to use our instruments in consideration for multi-year agreements to purchase annual minimum amounts of consumables. No instrument revenue is recognized at the time of instrument installation. We recognize a portion of the revenue allocated to the instrument concurrent with the future sale of consumables. We determine the amount of revenue allocated from the consumable to the instrument based on relative selling prices and determine the rate of instrument revenue recognition in proportion to the customer’s minimum volume commitment. The cost of the instrument is charged to cost of product revenue on a straight-line basis over the term of the minimum purchase agreement.

IDEXX Points may be applied against the purchase price of IDEXX products and services purchased in the future or applied to trade receivables due to us. IDEXX Points that have not yet been used by customers are classified as a liability until use or expiration occurs. We estimate the amount of IDEXX Points expected to expire, or breakage, based on historical expirations and we recognize the estimated benefit of breakage in proportion to actual redemptions of IDEXX Points by customers. On November 30 of each year, unused IDEXX Points earned before January 1 of the prior year generally expire and any variance from the breakage estimate is accounted for as a change in estimate. This variance was not material for the years ended December 31, 2014, 2013 and 2012.

Future market conditions and changes in product offerings may cause us to change marketing strategies to increase or decrease customer incentive offerings, possibly resulting in incremental reductions of revenue in future periods as compared to reductions in the current or prior periods. Additionally, certain customer programs require us to estimate, based on historical experience, and apply judgment to approximate the number of customers who will actually redeem the incentive. In determining estimated revenue reductions we utilize data supplied from distributors and collected directly from end users, which includes the volume of qualifying products purchased and the number of qualifying tests run as reported to us by end users via IDEXX SmartService.  Differences between estimated and actual customer participation in programs may impact the amount and timing of revenue recognition.

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Following is a summary of revenue reductions, net recorded in connection with our customer programs for the years ended December 31, 2014, 2013 and 2012  (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Revenue Reductions Recorded, Net
Customer Loyalty Programs, net (1)	$	14,800	$	16,193	$	17,332
Up-Front Customer Loyalty Programs		13,089		9,937		8,704
IDEXX Instrument Marketing Programs, net (1)		24,158		17,885		15,686
Other Customer Programs, net (1)		2,796		2,733		578
Total revenue reductions, net	$	54,843	$	46,748	$	42,300

⁽¹⁾ Revenue reduction is provided on a net basis, which accounts for any differences between estimates and actual incentives earned.

Accrued customer programs are included within accrued liabilities and other long-term liabilities, depending on the anticipated settlement date, in the consolidated balance sheets included in this Annual Report on Form 10-K. Following is a summary of changes in the accrual for estimated revenue reductions attributable to customer programs and the ending accrued customer programs balance for the years ended December 31, 2014, 2013 and 2012  (in thousands):

	For the Years Ended December 31,
		2014			2013			2012
Accrued Customer Programs:
Balance, beginning of the year	$	39,345		$	36,625		$	37,767
Revenue reductions for Customer Loyalty Programs, net (1)		14,800			16,193			17,332
Up-Front Customer Loyalty Program Awards issued as IDEXX Points		20,315			8,019			8,215
Revenue reductions for IDEXX InstrumentMarketing Programs, net (1)		24,158			17,885			15,686
Revenue reductions for Other Customer Programs, net (1)		2,796			2,733			578
IDEXX Points redeemed and credits issued		(52,035	)		(40,783	)		(41,832	)
Breakage		(421	)		(1,044	)		(1,135	)
Exchange impact on balances denominated in foreign currency		(805	)		(283	)		14
Balance, end of year	$	48,153		$	39,345		$	36,625

⁽¹⁾ Revenue reduction is provided on a net basis, which accounts for any differences between estimates and actual incentives earned.

Inventory Valuation

We write down the carrying value of inventory for estimated obsolescence by an amount equal to the difference between the cost of inventory and the estimated market value when warranted based on assumptions of future demand, market conditions, remaining shelf life or product functionality. If actual market conditions or results of estimated functionality are less favorable than those we estimated, additional inventory write-downs may be required, which would have a negative effect on results of operations.

Valuation of Goodwill and Other Intangible Assets

A significant portion of the purchase price for acquired businesses is generally assigned to intangible assets. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to IDEXX. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When material, we utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. We assess contingent consideration to determine if it is part of the

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business combination or if it should be accounted for separately from the business combination in the postcombination period. Contingent consideration  is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. Changes in fair value of contingent consideration are recognized in earnings. 

We assess goodwill for impairment annually, at the reporting unit level, in the fourth quarter and whenever events or circumstances indicate impairment may exist. An impairment charge is recorded for the amount, if any, by which the carrying amount of goodwill exceeds its implied fair value. Our reporting units are the individual product and service categories that comprise our CAG operating segment, our Water and LPD operating segments and goodwill remaining from the restructuring of our pharmaceutical business in the fourth quarter of 2008, referred to herein as the Technology reporting unit. A substantial portion of the goodwill remaining from the pharmaceutical business, included in our “Other Segment”, is associated with products that have been, or that we expect to be, licensed to third parties. Realization of this goodwill is dependent upon the success of those third parties in developing and commercializing products, which will result in our receipt of royalties and other payments.

In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we would then perform step one of the two-step impairment test; otherwise, no further impairment test would be required. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the two-step impairment test. Doing so does not preclude us from performing the qualitative assessment in any subsequent period.

As part of our goodwill testing process, we evaluate factors specific to a reporting unit as well as industry and macroeconomic factors that are reasonably likely to have a material impact on the fair value of a reporting unit. Examples of the factors considered in assessing the fair value of a reporting unit include: the results of the most recent impairment test, the competitive environment, anticipated changes in product or labor costs, revenue growth trends, the consistency of operating margins and cash flows and current and long-range financial forecasts. The long-range financial forecasts of the reporting units, which are based upon management’s long-term view of our markets, are used by senior management and the Board of Directors to evaluate operating performance.

In the fourth quarter of 2014, we elected to bypass the qualitative approach and instead proceeded directly to step one of the two-step impairment test to assess the fair value of all of our reporting units.

As part of step one of the two-step impairment test, we estimate the fair values of applicable reporting units using an income approach based on discounted forecasted cash flows. We make significant assumptions about the extent and timing of future cash flows, growth rates and discount rates. Model assumptions are based on our projections and best estimates, using appropriate and customary market participant assumptions. In addition, we make certain assumptions in allocating shared assets and liabilities to individual reporting units in determining the carrying value of each reporting unit. As of September 30, 2014, the date that we performed our assessment of goodwill for impairment, the total aggregate fair value of the reporting units approximated the Company’s market capitalization. Valuation assumptions reflect our projections and best estimates, based on significant assumptions about the extent and timing of future cash flows, growth rates and discount rates. The results of our goodwill impairment test indicate an excess of estimated fair value over the carrying amount for each of our reporting units by a range of approximately $12.0 million to $2.1 billion and 125% to 1063% of the reporting unit’s carrying value.

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While we believe that the assumptions used to determine the estimated fair values of each of our reporting units are reasonable, a change in assumptions underlying these estimates could result in a material negative effect on the estimated fair value of the reporting units. Our fair value estimate assumes the achievement of future financial results contemplated in our forecasted cash flows, and there can be no assurance that we will realize that value. We use forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlooks for our reporting units. Actual results may differ from those assumed in our forecasts. The discount rate is based on a weighted average cost of capital derived from industry peers. Changes in market conditions, interest rates, growth rates, tax rates, costs, pricing or the discount rate would affect the estimated fair values of our reporting units and could result in a goodwill impairment charge in a future period. No goodwill impairments were identified during the years ended December 31, 2014, 2013 or 2012.

A prolonged economic downturn in the U.S. or internationally resulting in lower long-term growth rates and reduced long-term profitability may reduce the fair value of our reporting units. Industry specific events or circumstances could have a negative impact on our reporting units and may also reduce the fair value of our reporting units. Should such events occur and it becomes more likely than not that a reporting unit’s fair value has fallen below its carrying value, we will perform an interim goodwill impairment test, in addition to the annual impairment test. Future impairment tests may result in an impairment of goodwill, depending on the outcome of future impairment tests. An impairment of goodwill would be reported as a non-cash charge to earnings.

We assess the realizability of intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of an intangible asset exceeds the related estimated undiscounted future cash flows, an impairment to write the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset and applying a risk-adjusted discount rate. No material impairments of intangible assets were identified during the years ended December 31, 2014, 2013 and 2012.  

Share-Based Compensation

Our share-based compensation programs provide for grants of stock options, restricted stock units and deferred stock units, along with the issuance of employee stock purchase rights. The total fair value of future awards may vary significantly from past awards based on a number of factors, including our share-based award practices. Therefore, share-based compensation expense is likely to fluctuate, possibly significantly, from year to year.

We use the Black-Scholes-Merton option-pricing model to determine the fair value of options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. The risk-free interest rate is based on the U.S. Treasury yield for a duration similar to the expected term at the date of grant. We have never paid any cash dividends on our common stock and we have no intention to pay a dividend at this time; therefore, we assume that no dividends will be paid over the expected terms of option awards. We determine the assumptions to be used in the valuation of option grants as of the date of grant. As such, we use different assumptions during the year if we grant options at different dates. Substantially all of our options granted during the years ended December 31, 2014, 2013 and 2012 were granted in the first quarter of each year. The weighted average of each of the valuation assumptions used to determine the fair value of each option grant during each of the previous three years is as follows:

	For the Years Ended December 31,
	2014		2013		2012
Expected stock price volatility	28	%	32	%	34	%
Expected term, in years (1)	5.7		4.9		4.6
Risk-free interest rate	1.5	%	1.0	%	0.8	%

⁽¹⁾ Options granted after May 8, 2013 have a contractual term of ten years. Options granted between January 1, 2006 and May 8, 2013 have contractual terms of seven years.

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Changes in the subjective input assumptions, particularly for the expected stock price volatility and the expected term of options, can materially affect the fair value estimate. Our expected stock price volatility assumption is based on the historical volatility of our stock over a period similar to the expected term and other relevant factors. Lower estimated volatility reduces the fair value of a stock option, while higher estimated volatility has the opposite effect. The total fair value of stock options granted during the year ended December 31, 2014 was $10.7 million. If the weighted average of the stock price volatility assumption was increased or decreased by 1%, the total fair value of stock options awarded during the year ended December 31, 2014 would have increased or decreased by approximately $0.3 million and the total expense recognized for the year ended December 31, 2014 for options awarded during the same period would have increased or decreased by less than $0.1 million.

We derive the expected term assumption for stock options based on historical experience and other relevant factors concerning expected behavior with regard to option exercises. The expected term is determined using a consistent method at each grant date. A longer expected term assumption increases the fair value of stock option awards, while a shorter expected term assumption has the opposite effect. If the weighted average of the expected term was increased or decreased by one year, the total fair value of stock options awarded during the year ended December 31, 2014 would have increased or decreased by approximately $1.0 million and the total expense recognized for the year ended December 31, 2014 for options awarded during 2014 would have increased or decreased by $0.2 million.

Share-based compensation expense is recognized on a straight-line basis over the requisite service period, which ranges from one to five years, depending on the award. Share-based compensation expense is based on the number of awards ultimately expected to vest and is, therefore, reduced for an estimate of the number of awards that are expected to be forfeited. The forfeiture estimates are based on historical data and other factors; share-based compensation expense is adjusted annually for actual results. Total share-based compensation expense for the year ended December 31, 2014 was $18.1 million, which is net of a reduction of $3.2 million for actual and estimated forfeitures. Fluctuations in our overall employee turnover rate may result in changes in estimated forfeiture rates and differences between estimated forfeiture rates and actual experience and, therefore could have a significant unanticipated impact on share-based compensation expense.

Modifications of the terms of outstanding awards may result in significant increases or decreases in share-based compensation. There were no material modifications to the terms of outstanding options, restricted stock units or deferred stock units during 2014, 2013 or 2012.

The fair value of stock options, restricted stock units, deferred stock units and employee stock purchase rights issued during the years ended December 31, 2014, 2013 and 2012 totaled $24.0 million, $22.2 million and $18.2 million, respectively. The total unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards outstanding at December 31, 2014 was $35.9 million, which will be recognized over a weighted average period of approximately 1.6 years.

Income Taxes

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable.

On a quarterly basis, we assess our current and projected earnings by jurisdiction to determine whether or not our earnings during the periods when the temporary differences become deductible will be sufficient to realize the related future tax benefits. Should we determine that we would not be able to realize all or part of our net deferred tax asset in a particular jurisdiction in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made. A reduction of net income before taxes in each subsidiary equal to 5% of revenue, compared to the corresponding reported amounts for the year ended December 31, 2014, would not result in the recognition of material incremental valuation allowances.

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For those jurisdictions where tax carryforwards are likely to expire unused or the projected operating results indicate that realization is not more likely than not, a valuation allowance is recorded to offset the deferred tax asset within that jurisdiction. In assessing the need for a valuation allowance, we consider future taxable income and ongoing prudent and feasible tax planning strategies. Alternatively, in the event that we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, a reduction to the deferred tax asset would be charged to income in the period such determination was made.

Our net taxable temporary differences and tax carryforwards are recorded using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax liability or asset is expected to be settled or realized. Should the expected applicable tax rates change in the future, an adjustment to the net deferred tax liability would be credited or charged, as appropriate, to income in the period such determination was made. For example, an increase of one percentage point in our anticipated U.S. state income tax rate would cause us to decrease our net deferred tax liability balance by $0.2 million. This decrease in the net deferred liability would increase net income in the period that our rate was adjusted. Likewise, a decrease of one percentage point to our anticipated U.S. state income tax rate would have the opposite effect.

We periodically assess our exposures related to our worldwide provision for income taxes and believe that we have appropriately accrued taxes for contingencies. Any reduction of these contingent liabilities or additional assessment would increase or decrease income, respectively, in the period such determination was made.

We consider the majority of the operating earnings of non-U.S. subsidiaries to be indefinitely invested outside the U.S. The cumulative earnings of these subsidiaries were $431.7 million at December 31, 2014, of which approximately $321.5 million was held in cash and cash equivalents as of December 31, 2014. No provision has been made for the payment of U.S. federal and state or international taxes that may result from future remittances of these undistributed earnings of non-U.S. subsidiaries. Should we repatriate these earnings in the future, we would have to adjust the income tax provision in the period in which the decision to repatriate earnings is made. A determination of the related tax liability that would be paid on these undistributed earnings if repatriated is not practicable.  For the operating earnings not considered to be indefinitely invested outside the U.S. we have accounted for the tax impact on a current basis.

We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. For positions that we believe that it is more likely than not that we will prevail, we record a benefit considering the amounts and probabilities that could be realized upon ultimate settlement. If our judgment as to the likely resolution of the uncertainty changes, if the uncertainty is ultimately settled or if the statute of limitation related to the uncertainty expires, the effects of the change would be recognized in the period in which the change, resolution or expiration occurs. Our net liability for uncertain tax positions was $6.1 million and $6.6 million as of December 31, 2014 and 2013, respectively, which includes estimated interest expense and penalties.

RESULTS OF OPERATIONS AND TRENDS

Effects of Certain Factors on Results of Operations

Distributor Purchasing and Inventories. The instrument consumables and rapid assay products in our CAG segment were sold in the U.S. and continue to be sold in certain other geographies by third party distributors, who purchase products from us and sell them to veterinary practices, which are the end users. As a result, distributor purchasing dynamics have an impact on our reported sales of these products. Distributor purchasing dynamics may be affected by many factors and in a given period may not be directly related to underlying end-user demand for our products. Consequently, reported results may reflect fluctuations in inventory levels held at distributors and not necessarily reflect changes in underlying end-user demand. Therefore, we believe it is important to track distributor sales to end users and to distinguish between the impact of end-user demand and the impact of distributor purchasing dynamics on reported revenue.  

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Where growth rates are affected by changes in end-user demand, we refer to this as the impact of practice-level sales on growth. Where growth rates are affected by distributor purchasing dynamics, we refer to this as the impact of changes in distributors’ inventories on growth. If during the current year, distributors’ inventories grew by less than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories have an unfavorable impact on our reported sales growth in the current period. Conversely, if during the current year, distributors’ inventories grew by more than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories have a favorable impact on our reported sales growth in the current period. 

Effective January 1, 2015, we fully transitioned to an all-direct sales strategy in the U.S. and did not renew our existing contracts with our former key U.S. distribution partners after their expiration at the end of 2014. Under this approach, we take orders, ship product, invoice and receive payment for all rapid assay test kits and instrument consumables in the U.S., aligning with our direct model for instruments, reference laboratory services, and other CAG products and services.

We incurred transition costs to implement this all-direct sales strategy in the U.S., including approximately $5 million in incremental expense during the year ended December 31, 2014 resulting from the ramp up of sales and operating resources. We also incurred $9.5 million in non-recurring expenses during the year ended December 31, 2014 associated with project management and other one-time costs required to implement this new strategy. Further, we incurred one-time transitional impacts related to the drawdown of distributor inventory in the fourth quarter of 2014, resulting in a reduction in revenue and operating profit of $25 million and $21 million, respectively.

During the three months ended December 31, 2014, we began recognizing revenue on rapid assay kits and instrument consumables upon delivery to end users in the U.S., instead of at distribution. We continue to expect to capture an additional $50 million to $55 million in annual revenue on these direct sales. We estimate that annual operating profit associated with this incremental revenue stream will increase approximately $5 million to $8 million in 2015 and will continue to provide accretive benefits that will scale over time based on our expected future growth rates. Also as a result of the transition to an all-direct sales strategy in the U.S., we anticipate increased working capital demands of approximately $15 million to $20 million, including inventory costs previously held by our distributors and incremental accounts receivable resulting from a potentially longer elapsed time to collect our receivables.

Currency Impact.  Approximately 28% of our consolidated revenue for the year ended December 31, 2014 and 26% of our consolidated revenue for each of the years ended December 31, 2013 and 2012 was derived from products manufactured in the U.S. and sold internationally in local currencies.Strengthening of the rate of exchange for the U.S. dollar relative to other currencies has a negative impact on our revenues derived in currencies other than the U.S. dollar and on profits of products manufactured in the U.S. and sold internationally, and a weakening of the U.S. dollar has the opposite effect. Similarly, to the extent that the U.S. dollar is stronger in current or future periods relative to the exchange rates in effect in the corresponding prior periods, our growth rate will be negatively affected. The impact of foreign currency denominated operating expenses and foreign currency denominated supply contracts partly offsets this exposure. Additionally, our designated hedges of intercompany inventory purchases and sales help delay the impact of certain exchange rate fluctuations on non-U.S. denominated revenues. See Item 7A. “Quantitative and Qualitative Disclosure About Market Risks” included in this Annual Report on Form 10-K for additional information regarding currency impact.

The impact on revenue resulting from changes in foreign currency exchange rates is not a measure defined byaccounting principles generally accepted in the United States of America (“U.S. GAAP”), otherwise referred to herein as anon-GAAP financial measure. As exchange rates are an important factor in understanding period-to-period comparisons, webelieve the presentation of results normalized for changes in currency in addition to reported results helps improve investors’ability to understand our operating results and evaluate our performance in comparison to prior periods.

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Effective January 1, 2014, we calculate the impact on revenue resulting from changes in foreign currency exchangerates by applying the difference between the weighted average exchange rates during the current year period and thecomparable previous year period to foreign currency denominated revenues for the prior year period. Prior to January 1, 2014,we calculated this impact by applying the difference between the weighted average exchange rates during the current yearperiod and the comparable previous year period to foreign currency denominated revenues for the current year period. Thischange in methodology, which was implemented to achieve operational efficiencies, has not had a material impact on organicrevenue growth. See the subsection below titled “Results of Operations” for the definition of and other information regardingorganic revenue growth.

During the twelve months ended December 31, 2014, compared to the twelve months ended December 31, 2013, changes in foreign currency exchange rates decreased total company revenue by approximately $8.3 million, due primarily to the strengthening of the U.S. dollar against the Canadian dollar, Australian dollar and Japanese yen, partly offset by a weakening of the U.S. dollar against the British pound.

During the twelve months ended December 31, 2013, compared to the twelve months ended December 31, 2012, changes in foreign currency exchange rates decreased total company revenue by approximately $9.5 million, due primarily to the strengthening of the U.S. dollar against the Japanese yen and the Australian dollar.

Effects of Economic Conditions. Demand for our products and services is vulnerable to changes in the economic environment, including slow economic growth, high unemployment and credit availability. Negative or cautious consumer sentiment can lead to reduced or delayed consumer spending, resulting in a decreased number of patient visits to veterinary clinics. Unfavorable economic conditions can impact sales of instruments, digital radiography and practice management systems, which are larger capital purchases for veterinarians. Additionally, economic turmoil can cause our customers to remain sensitive to the pricing of our products and services. We monitor patient visits and clinic revenue data provided by a subset of our CAG customers. Although limited and susceptible to short-term impacts such as weather, we believe that this data provides a fair and meaningful long-term representation of the trend in patient visit activity in the U.S., providing us insight regarding demand for our products and services. We believe the overall trends in patient visits and capital investments since the beginning of the economic downturn in 2008 have had a slightly negative impact on our CAG segment revenue growth rates. Although the rate of growth has not been steady, we have seen an improvement in growth of patient visits since the beginning of 2012.

Economic conditions can also affect the purchasing decisions of our Water and LPD business customers. In the past,water testing volumes have been susceptible to declines in discretionary testing and in mandated testing as a result ofdecreases in home and commercial construction. Fiscal difficulties can also reduce government funding for water andlivestock testing programs.

We believe that the diversity of our products and services and the geographic diversity of our markets partiallymitigate the effects of the economic environment and negative consumer sentiment on our revenue growth rates.

Effects of Patent Expiration. Although the Company had and will have several patents and licenses of patents and technologies from third parties expire during 2014 and 2015, the expiration of these patents or licenses, individually or in the aggregate, is not expected to have a material effect on the Company’s financial position or future operations due to a range of factors including our brand strength and reputation in the marketplace; the breadth, quality and integration of our product offerings; our existing customer relationships and our customer support; our sales force; the applicable regulatory approval status for certain products; our continued investments in innovative product improvements that often result in new technologies and/or additional patents; andour significant know-how, scale and investments related to manufacturing processes of associated product offerings.

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Twelve Months Ended December 31, 2014 Compared to Twelve Months Ended December 31, 2013

Revenue

The following revenue analysis and discussion focuses on organic revenue growth. Organic revenue growth is a non-GAAP financial measure and represents the percentage change in revenue during the twelve months ended December 31, 2014, as compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates and acquisitions. Organic revenue growth should be considered in addition to, and not as a replacement for or as a superior measure to, revenues reported in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. We exclude the effect of changes in foreign currency exchange rates because changes in foreign currency exchange rates are not under management’s control, are subject to volatility and can obscure underlying business trends. We exclude the effect of acquisitions because the nature, size and number of acquisitions can vary dramatically from period to period and therefore can also obscure underlying business trends. 

The percentage changes in revenue from foreign currency exchange rates and acquisitions are non-GAAP financial measures. See the subsection above titled “Effects of Certain Factors on Results of Operations – Currency Impact” for a description of the calculation of the percentage change in revenue resulting from changes in foreign currency exchange rates. The percentage change in revenue resulting from acquisitions represents incremental revenues attributable to acquisitions that have occurred since the beginning of the prior year period.

Total Company. The following table presents revenue by operating segment:

	For the Year		For the Year
	Ended		Ended					Percentage	Percentage	Organic
Net Revenue	December 31,		December 31,		Dollar		Percentage	Change from	Change from	Revenue
(dollars in thousands)	2014		2013		Change		Change	Currency	Acquisitions	Growth
CAG	$	1,236,855	$	1,150,169	$	86,686	7.5%	(0.8%)	0.3%	8.0%
Water		94,725		87,959		6,766	7.7%	(0.4%)	1.0%	7.1%
LPD		127,388		113,811		13,577	11.9%	(0.7%)	4.0%	8.6%
Other		26,839		25,119		1,720	6.8%	-	-	6.8%
Total	$	1,485,807	$	1,377,058	$	108,749	7.9%	(0.7%)	0.6%	8.0%

We transitioned to an all-direct sales strategy in the U.S. during the fourth quarter of 2014, resulting in a drawdown of distributors’ inventory levels which reduced both reported CAG and Total Company revenue growth by 2%.

U.S. and International Revenue. The following table provides further analysis of total company revenue by U.S. markets and non-U.S., or international, markets:

	For the Year		For the Year
	Ended		Ended					Percentage	Percentage	Organic
Net Revenue	December 31,		December 31,		Dollar		Percentage	Change from	Change from	Revenue
(dollars in thousands)	2014		2013		Change		Change	Currency	Acquisitions	Growth
United States	$	848,925	$	802,346	$	46,579	5.8%	-	0.1%	5.7%
International		636,882		574,712		62,170	10.8%	(1.7%)	1.3%	11.2%
Total	$	1,485,807	$	1,377,058	$	108,749	7.9%	(0.7%)	0.6%	8.0%

The increase in both U.S. and international revenues was primarily driven by CAG Diagnostics recurring revenue.  The increase in international revenues was driven by strong growth in Europe and Asia-Pacific markets, most significantly from the United Kingdom, Germany, China, Australia and France. We transitioned to an all-direct sales strategy in the U.S. during the fourth quarter of 2014, resulting in a drawdown of distributors’ inventory levels which reduced reported U.S. revenue growth by 3%. The impact of changes in distributors’ inventory levels did not have a significant impact on reported international revenue growth.

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Companion Animal Group. The following table presents revenue by product and service category for CAG:

	For the Year		For the Year
	Ended		Ended					Percentage	Percentage	Organic
Net Revenue	December 31,		December 31,		Dollar		Percentage	Change from	Change from	Revenue
(dollars in thousands)	2014		2013		Change		Change	Currency	Acquisitions	Growth
CAG Diagnostics recurring revenue:	$	1,053,410	$	973,886	$	79,524	8.2%	(0.7%)	0.3%	8.6%
VetLab consumables		341,397		312,457		28,940	9.3%	(0.6%)	-	9.9%
VetLab service and accessories		53,383		50,675		2,708	5.3%	(0.8%)	-	6.1%
Rapid assay products		165,647		169,547		(3,900)	(2.3%)	(0.4%)	-	(1.9%)
Reference laboratory diagnostic and consulting services		492,983		441,207		51,776	11.7%	(0.9%)	0.5%	12.1%
CAG Diagnostics capital instruments		79,626		83,492		(3,866)	(4.6%)	(1.2%)	-	(3.4%)
Customer information management and digital imaging systems		103,819		92,791		11,028	11.9%	(0.5%)	0.5%	11.9%
Net CAG revenue	$	1,236,855	$	1,150,169	$	86,686	7.5%	(0.8%)	0.3%	8.0%

The increase in CAG Diagnostics recurring revenue was due primarily to increased volumes and higher realized prices in both our reference laboratory diagnostic services and our VetLab consumables.  The drawdown of inventory held by distributors, as a result of our transition to an all-direct sales strategy in the U.S. during the fourth quarter of 2014, reduced reported CAG Diagnostics recurring revenue by 3%. 

VetLab consumables revenue growth was due primarily to higher unit volumes. The increase in unit volumes resulted primarily from growth of our installed base of Catalyst and ProCyte Dxinstruments as a result of new customer acquisitions, as well as an increase in testing from existing customers, including those who upgraded to these instruments. Additionally, VetLab consumables revenue benefited from higher average unit sales prices resulting from price increases. These favorable impacts were partly offset by lower consumables volumes from our VetTest chemistry instrument as customers continue to upgrade from our VetTest instrument to our Catalyst instruments. The drawdown of inventory held by distributors, resulting from our transition to an all-direct sales strategy in the U.S. during the fourth quarter of 2014, reduced reported consumables revenue growth by 5%. 

VetLabservice and accessories revenue growth was primarily a result of the increase in our installed base of instruments. 

The decrease in rapid assay revenue was due primarily to the drawdown of inventory held by distributors as we transitioned to an all-direct sales strategy in the U.S. during the fourth quarter of 2014, which reduced reported rapid assay revenue growth by 7%. This unfavorable factor was partly offset by higher sales of both our canine and feline testing products, resulting from both an increase in U.S. practice-level sales volumes and higher average unit sales prices.

The increase in reference laboratory diagnostic and consulting services revenue was due primarily to the impact of higher volumes throughout our worldwide network of laboratories resulting from increased testing from existing customers, the acquisition of new customers and improved customer retention. Additionally, the increase in revenue was favorably impacted by higher average unit sales prices due to price increases.

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The decrease in CAG Diagnostics capital instruments revenue was due primarily to the unfavorable impact of deferred revenue associated with preorders for our Catalyst One analyzer, which we launched during the fourth quarter of 2014 and the impact of lower realized prices. Under our Catalyst One introductory offer, customers are provided with the right to use a Catalyst Dx instrument through the Catalyst One delivery date. As a result, we do not recognize instrument revenue for preorders relating to the Catalyst One introductory offer until the Catalyst One is delivered. These unfavorable impacts were partly offset by higher placements of our Catalyst Dx and ProCyte Dx instruments, primarily in Europe and the Asia-Pacific region, and placements of our SNAP Pro Mobile Device in North America. For the year ended December 31, 2014, the majority of SNAP Pro Mobile Device placements were made under a reagent rental program for which instrument revenue will be recognized with the future sale of consumables.

The increase in customer information management and digital imaging systems revenue was due primarily to a growing Pet Health Network Pro subscriber base, higher support revenue resulting from an increase in our installed base of digital imaging and practice management systems and higher revenue from hardware upgrades as a result of Microsoft ending support for Windows XP.

Water. The increase in Water revenue resulted from higher revenue from our Colilert products and related accessories, due primarily to increased sales volumes worldwide resulting from the acquisition of new customers.

Livestock, Poultry and Dairy.The increase in LPD organic revenue was due primarily to higher sales of certain bovine test products in the Asia-Pacific region, higher volumes in Europe of our milk-based bovine pregnancy test and higher sales of poultry tests in Europe and Latin America. Lower European bovine volumes are expected to reduce revenue by less than $5 million for the year ending December 31, 2015. The acquisition of a Brazilian distributor of our LPD products in the third quarter of 2013 added 4% to reported revenue growth for the year ended December 31, 2014 as compared to the prior year.

Other. The increase in Other revenue was due primarily to higher milestone revenue from our pharmaceutical out-licensing arrangements earned during the year ended December 31, 2014 and higher sales volumes associated with our OPTI Medical consumables and pharmaceutical product line. These favorable impacts were partly offset by lower sales of our OPTI Medical instruments in Latin America.

Gross Profit

Total Company. The following table presents gross profit and gross profit percentages by operating segment:

	For the Year			For the Year
	Ended			Ended
Gross Profit	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2014		Revenue	2013		Revenue		Change	Change
CAG	$	665,477	53.8%	$	616,335	53.6%	$	49,142	8.0%
Water		62,924	66.4%		58,218	66.2%		4,706	8.1%
LPD		79,239	62.2%		62,534	54.9%		16,705	26.7%
Other		14,236	53.0%		12,650	50.4%		1,586	12.5%
Unallocated amounts (1)		(5,760)	N/A		6,381	N/A		(12,141)	(190.3%)
Total Company	$	816,116	54.9%	$	756,118	54.9%	$	59,998	7.9%

(1) “Unallocated amounts” refers to items not allocated to our operating segments, including a portion of corporate support function and personnel-related expenses, certain manufacturing costs, corporate research and development expenses that do not align with one of our existing business or service categories, the difference between estimated and actual share-based compensation expense and certain foreign currency exchange gains and losses.

Companion Animal Group. Gross profit for CAG increased due to higher sales and a slight increase in the gross profit percentage. The increase in gross profit percentage was due primarily to lower overall VetLab product costs and price increases across our CAG Diagnostics recurring revenue portfolio. These favorable factors were partly offset by impacts related to our transition to an all-direct sales strategy in the U.S. during the fourth quarter of 2014, including an unfavorable product mix resulting from the inventory drawdown of higher margin rapid assay test kits and VetLab consumables from our U.S. distributors and higher freight and distribution costs.

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Water. Gross profit for Water increased due primarily to higher sales. The slight increase in the gross profit percentage was due primarily to a more favorable product mix resulting from higher relative sales of our Colilert products which yield higher margins, lower overall manufacturing costs resulting from  a decrease in materials costs and higher average unit sales prices due to price increases.  These favorable factors were partly offset by the unfavorable impact of currency due primarily to lower relative hedging gains during the year ended December 31, 2014 as compared to the prior year.

Livestock, Poultry and Dairy. Gross profit for LPD increased due to an improvement in the gross profit percentage to 62% from 55% and higher sales. The increase in the gross profit percentage resulted from lower overall manufacturing costs, driven by higher production volumes, a decrease in royalty expense and higher average unit sales prices. The decrease in royalty expense was due primarily to an agreement executed in the first quarter of 2014 with a licensor of patents related to the sale of certain swine tests.

Other. Gross profit for Other increased due to higher sales and an improvement in the gross profit percentage to 53% from 50%. The increase in the gross profit percentage was due primarily to lower overall manufacturing costs in our OPTI Medical business, resulting from a reduction in material costs and higher production volumes, and an increase in milestone revenue related to our pharmaceutical out-licensing arrangements, for which there is no associated costs of revenue. These favorable factors were partly offset by higher cost of service associated with OPTI Medical instruments and a decrease in average unit sales prices on related consumables.

Unallocated Amounts. Gross profit for Unallocated Amounts decreased due primarily to an increase in certain manufacturing costs and changes in certain currency exchange rates.

The manufacturing costs reported in our operating segments include our standard cost for products sold and any variances from standard cost for products purchased or manufactured within the period. We capitalize these variances for inventory on hand at the end of the period to record inventory in accordance with U.S. GAAP. We then record these variances as cost of product revenue as that inventory is sold. The impact to cost of product revenue resulting from this variance capitalization and subsequent recognition is reported within the caption “Unallocated Amounts.” The net unfavorable impact to gross profit as a result of increased manufacturing costs was due to the capitalization of favorable manufacturing variances, primarily within our LPD business, during the year ended December 31, 2014.

In certain geographies where we maintain inventories in currencies other than the U.S. dollar, the product costs reported in our operating segments include our standard cost for products sold, which is stated at the budgeted currency exchange rate from the beginning of the fiscal year. In these geographies, the variances from standard cost for products sold related to changes in currency exchange rates are reported within the caption “Unallocated Amounts.” The U.S. dollar strengthened significantly against the Japanese yen during the year ended December 31, 2013. The strengthening in the value of the U.S. dollar relative to the Japanese yen during the year ended December 31, 2014 was less significant, as compared to the prior year, resulting in a lower favorable variance within Unallocated Amounts relating to the cost of products sold in Japanese yen.

Operating Expenses and Operating Income

Total Company. The following tables present operating expenses and operating income by operating segment:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2014		Revenue	2013		Revenue		Change	Change
CAG	$	452,368	36.6%	$	397,690	34.6%	$	54,678	13.7%
Water		23,662	25.0%		20,897	23.8%		2,765	13.2%
LPD		55,024	43.2%		48,375	42.5%		6,649	13.7%
Other		11,757	43.8%		10,245	40.8%		1,512	14.8%
Unallocated amounts		13,050	N/A		12,149	N/A		901	7.4%
Total Company	$	555,861	37.4%	$	489,356	35.5%	$	66,505	13.6%

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	For the Year			For the Year
	Ended			Ended
Operating Income	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2014		Revenue	2013		Revenue		Change	Change
CAG	$	213,109	17.2%	$	218,645	19.0%	$	(5,536)	(2.5%)
Water		39,262	41.4%		37,321	42.4%		1,941	5.2%
LPD		24,215	19.0%		14,159	12.4%		10,056	71.0%
Other		2,479	9.2%		2,405	9.6%		74	3.1%
Unallocated amounts		(18,810)	N/A		(5,768)	N/A		(13,042)	(226.1%)
Total Company	$	260,255	17.5%	$	266,762	19.4%	$	(6,507)	(2.4%)

The transition to an all-direct sales strategy in the U.S. within our CAG segment reduced operating profit by $35.3 million during the year ended December 31, 2014. These impacts consisted of a one-time reduction in operating profit related to the drawdown of inventory held by our U.S. distributors, which reduced operating income by $20.8 million, $5.0 million in incremental expenses related to the ramp up of sales and operating resources and approximately $9.5 million of non-recurring expenses during the year ended December 31, 2014.  For the year ended December 31, 2014, adjusted operating income, which istotal Company operating income adjusted for the aforementioned transition impacts was approximately $295.6 million and 19.6% of revenue, which represents an increase in adjusted operating income of $24.7 million and 9.1%, as compared to the year ended December 31, 2013, which is adjusted for the 2013 bankruptcy of a third-party service provider of approximately $4.1 million. Adjusted operating income is a non-GAAP financial measure and should be considered in addition to, and not as a replacement for or as a superior measure to, operating income reported in accordance with U.S. GAAP. Management believes that reporting adjusted operating income provides useful information to investors by facilitating easier comparisons of our operating income performance with prior and future periods and to the performance of our peers.

See the subsection above titled “Effects of Certain Factors on Results of Operations – Distributor Purchasing and Inventories” for details regarding anticipated transitional costs related to moving to an all-direct sales strategy for VetLab consumables and rapid assay products and services within our CAG segment in the U.S.

Companion Animal Group. The following table presents CAG operating expenses by functional area:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2014		Revenue	2013		Revenue		Change	Change
Sales and marketing	$	244,414	19.8%	$	208,991	18.2%	$	35,423	16.9%
General and administrative		137,675	11.1%		125,877	10.9%		11,798	9.4%
Research and development		70,279	5.7%		62,822	5.5%		7,457	11.9%
Total operating expenses	$	452,368	36.6%	$	397,690	34.6%	$	54,678	13.7%

The increase in sales and marketing expense resulted from higher personnel-related costs across all major regions, including our North American sales force transformation started in the second half of 2013 and increased commissions resulting from improved sales performance; and non-recurring consulting costs related to the aforementioned implementation of an all-direct sales strategy in the U.S. The increase in general and administrative expense resulted primarily from higher personnel-related costs and, to a lesser extent, depreciation of internal-use software, partly offset by the favorable impact of changes in foreign currency exchange rates. The increase in research and development expense resulted primarily from higher personnel-related costs and increased materials costs, partly offset by lower external consulting and development costs.

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Water. The following table presents Water operating expenses by functional area:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2014		Revenue	2013		Revenue		Change	Change
Sales and marketing	$	11,494	12.1%	$	9,942	11.3%	$	1,552	15.6%
General and administrative		9,226	9.7%		8,398	9.5%		828	9.9%
Research and development		2,942	3.1%		2,557	2.9%		385	15.1%
Total operating expenses	$	23,662	25.0%	$	20,897	23.8%	$	2,765	13.2%

The increase in sales and marketing expense was due primarily to higher personnel-related costs and incremental spending on promotional activities. Personnel-related costs included commissions related to improved sales performance, and incremental costs associated with the acquisition of our distributor in South Africa in the fourth quarter of 2013. The increase in general and administrative expense resulted primarily from higher personnel-related costs. The increase in research and development expense was due primarily to higher materials costs.

Livestock, Poultry and Dairy. The following table presents LPD operating expenses by functional area:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2014		Revenue	2013		Revenue		Change	Change
Sales and marketing	$	25,144	19.7%	$	20,972	18.4%	$	4,172	19.9%
General and administrative		16,870	13.2%		14,855	13.1%		2,015	13.6%
Research and development		13,010	10.2%		12,548	11.0%		462	3.7%
Total operating expenses	$	55,024	43.2%	$	48,375	42.5%	$	6,649	13.7%

The increase in sales and marketing expense resulted from higher personnel-related costs, including incremental costs associated with the acquisition of a Brazilian distributor in the third quarter of 2013 and commercial team investments worldwide, most significantly in the Asia-Pacific region. The increase in general and administrative expense resulted from incremental costs associated with the acquisition of the Brazilian distributor, primarily personnel-related costs and higher amortization of the acquired intangible assets. The increase in research and development expense was due primarily to higher personnel-related costs. 

Other. Operating expenses for Other increased $1.5 million to $11.8 million for the year ended December 31, 2014, as compared to the prior year due primarily to higher personnel-related costs and an increase in external development and consulting costs in our OPTI Medical line of business.

Unallocated Amounts.Operating expenses that are not allocated to our operating segments increased by $0.9 million to $13.1 million for the year ended December 31, 2014, as compared to the prior year, due primarily to certain foreign exchange losses and an increase in certain personnel-related costs. These unfavorable factors were partly offset by the absence of a $4.1 million loss incurred during the year ended December 31, 2013 resulting from the bankruptcy of a freight payment and audit service provider.

Over the second half of 2014, the U.S. dollar experienced a continued and persistent strengthening relative to all major foreign currencies in which we transact, resulting in realized and unrealized losses on monetary assets, partly offset by gains on liabilities denominated in a currency other than the U.S. dollar.

We estimate certain personnel-related costs and allocate the estimated expenses to the operating segments. This allocation differs from actual expense and consequently yields a difference that is reported under the caption “Unallocated Amounts.”

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Interest Income and Interest Expense

Interest income was $1.7 million for the year ended December 31, 2014 as compared to $1.9 million for the prior year. The decrease in interest income resulted from our June 2014 disposition of a debt investment and repayment of the related notes receivable, partly offset by increased interest income earned on higher average cash balances. See Note 3 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding the disposition of this strategic investment.

Interest expense was $15.4 million for the year ended December 31, 2014, as compared to $5.4 million for the prior year. The increase in interest expense was due primarily to senior notes that we issued and sold through three private placements between December 2013 and September 2014 in an aggregate principal amount of $350 million. Fixed interest rates on the senior notes range from 3.32% to 4.04%. See Note 10 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our senior notes.

Provision for Income Taxes

Our effective income tax rate was 26.2% for the year ended December 31, 2014 and 28.7% for the year ended December 31, 2013. The decrease in our effective income tax rate for the year ended December 31, 2014, as compared to the year ended December 31, 2013, was related to higher relative earnings subject to international tax rates that are lower than domestic tax rates, a non-recurring benefit related to the deferral of intercompany profits that were included in prior year tax provisions in error, which is not material to current or prior interim or annual periods, and the resolution of domestic and international tax audits, which resulted in a net reduction in our provision for uncertain tax positions.  These favorable factors were partly offset by a reduction in the benefit from the U.S. research and development (“R&D”) tax credit.  During the three months ended March 31, 2013, legislation in the U.S. retroactively allowed the R&D tax credit for all of 2012 and extended the R&D tax credit through the year ending December 31, 2013.  As a result, in the year ending December 31, 2013 we recorded the benefit of two years of R&D tax credit as compared to the year ending December 31, 2014 in which we have recorded only the benefit related to that year’s activities.

In 2015, it is reasonably possible that we could recognize up to $0.4 million of income tax benefits that have not been recognized at December 31, 2014. The income tax benefits are primarily due to the lapse in the statutes of limitations for various tax jurisdictions.

Twelve Months Ended December 31, 2013 Compared to Twelve Months Ended December 31, 2012

Revenue

The following revenue analysis and discussion focuses on organic revenue growth. Organic revenue growth is a non-GAAP financial measure and represents the percentage change in revenue during the twelve months ended December 31, 2013, as compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates and acquisitions. Organic revenue growth should be considered in addition to, and not as a replacement for or as a superior measure to, revenues reported in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. We exclude the effect of changes in foreign currency exchange rates because changes in foreign currency exchange rates are not under management’s control, are subject to volatility and can obscure underlying business trends. We exclude the effect of acquisitions because the nature, size and number of acquisitions can vary dramatically from period to period and therefore can also obscure underlying business trends. 

The percentage changes in revenue from foreign currency exchange rates and acquisitions are non-GAAP financial measures. See the subsection above titled “Effects of Certain Factors on Results of Operations – Currency Impact” for a description of the calculation of the percentage change in revenue resulting from changes in foreign currency exchange rates. The percentage change in revenue resulting from acquisitions represents incremental revenues attributable to acquisitions that have occurred since the beginning of the prior year period.

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Total Company. The following table presents revenue by operating segment:

	For the Year		For the Year
	Ended		Ended					Percentage	Percentage	Organic
Net Revenue	December 31,		December 31,		Dollar		Percentage	Change from	Change from	Revenue
(dollars in thousands)	2013		2012		Change		Change	Currency	Acquisitions	Growth
CAG	$	1,150,169	$	1,072,211	$	77,958	7.3%	(0.8%)	0.3%	7.8%
Water		87,959		84,680		3,279	3.9%	(0.6%)	0.3%	4.2%
LPD		113,811		111,308		2,503	2.2%	0.2%	2.6%	(0.6%)
Other		25,119		25,139		(20)	(0.1%)	0.1%	-	(0.2%)
Total	$	1,377,058	$	1,293,338	$	83,720	6.5%	(0.7%)	0.5%	6.7%

U.S. and International Revenue. The following table provides further analysis of total company revenue by U.S. markets and non-U.S., or international, markets:

	For the Year		For the Year
	Ended		Ended					Percentage	Percentage	Organic
Net Revenue	December 31,		December 31,		Dollar		Percentage	Change from	Change from	Revenue
(dollars in thousands)	2013		2012		Change		Change	Currency	Acquisitions	Growth
United States	$	802,346	$	759,419	$	42,927	5.7%	-	0.5%	5.2%
International		574,712		533,919		40,793	7.6%	(1.8%)	0.7%	8.7%
Total	$	1,377,058	$	1,293,338	$	83,720	6.5%	(0.7%)	0.5%	6.7%

The increase in both U.S. and international revenues was primarily driven by CAG Diagnostics recurring revenue. The increase in international revenues was driven by strong growth in Europe and Asia-Pacific markets, most significantly within the Nordic countries as a result of our move to a direct sales model in this region during the first quarter of 2013, Germany and China. The impact of changes in distributors’ inventory levels reduced U.S. revenue growth by approximately 1% and did not have a significant impact on reported international revenue growth.

Companion Animal Group. The following table presents revenue by product and service category for CAG:

	For the Year		For the Year
	Ended		Ended					Percentage	Percentage	Organic
Net Revenue	December 31,		December 31,		Dollar		Percentage	Change from	Change from	Revenue
(dollars in thousands)	2013		2012		Change		Change	Currency	Acquisitions	Growth
CAG Diagnostics recurring revenue:	$	973,886	$	896,449	$	77,437	8.6%	(0.8%)	0.1%	9.3%
VetLab consumables		312,457		278,818		33,639	12.1%	(0.7%)	-	12.8%
VetLab service and accessories		50,675		48,056		2,619	5.4%	(2.5%)	-	7.9%
Rapid assay products		169,547		162,232		7,315	4.5%	(0.7%)	-	5.2%
Reference laboratory diagnostic and consulting services		441,207		407,343		33,864	8.3%	(0.8%)	0.3%	8.8%
CAG Diagnostics capital instruments		83,492		90,177		(6,685)	(7.4%)	(1.5%)	-	(5.9%)
Customer information management and digital imaging systems		92,791		85,585		7,206	8.4%	(0.3%)	3.1%	5.6%
Net CAG revenue	$	1,150,169	$	1,072,211	$	77,958	7.3%	(0.8%)	0.3%	7.8%

The increase in CAG Diagnostics recurring revenue is due primarily to increased volumes and higher realized prices in both our reference laboratory diagnostic services and our VetLab consumables.

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VetLab consumables revenue growth was due to higher unit volumes and higher realized prices. The increase in unit volumes resulted primarily from growth of our installed base for our Catalyst Dx and ProCyte Dxinstruments as a result of customer acquisitions, as well as an increase in testing from existing customers who upgraded to these instruments, partially offset by lower sales of consumables used with our VetTest chemistry instrument. Higher realized prices were the result of changes in certain distributor arrangements and list price increases. The impact of changes in distributors’ inventory levels reduced reported consumables revenue growth by approximately 1%. 

VetLabservice and accessories revenue growth was primarily a result of the increase in our active installed base of instruments.

 The increase in rapid assay product revenue was due primarily to both higher unit volumes and higher realized prices resulting from price increases and a change in a distributor arrangement. Higher sales volumes were driven by an increase in U.S. canine practice-level sales volumes and increased volumes of our canine pancreatitis products. The impact of changes in distributors’ inventory levels did not have a significant impact on revenue growth.

The increase in reference laboratory diagnostic and consulting services revenue resulted from the impact of both increased testing volumes and price increases. Higher testing volumes were driven by the acquisition of new customers, increased testing volumes from existing customers and improved customer retention.

The decrease in CAG Diagnostics capital instruments revenue was due primarily to the impact of customer programs. The impact from customer programs includes a reagent rental program that we launched in North America during the fourth quarter of 2012. Under the reagent rental program, VetLab instrument revenue is recognized over the term of the minimum purchase agreement instead of at the time we place the instrument.

The increase in customer information management and digital imaging systems revenue resulted primarily from higher support revenue due to an increase in our active installed base and revenue from Pet Health Network Pro, which launched commercially in the first quarter of 2013. These favorable factors were partly offset by a decrease in digital radiography system placements.

Water. The increase in Water revenue was due primarily to higher sales volumes of our Colilert products and related accessories in Europe and North America, driven by new account acquisitions and higher average unit sales prices.

Livestock, Poultry and Dairy. The decrease in LPD revenue resulted primarily from lower sales volumes of BSE tests resulting from changes in European testing requirements and a reduction in sales volumes of our Dairy SNAP tests used for the detection of the contaminant Aflatoxin M1 and antibiotic residues in milk. In early 2012, Dairy SNAP sales volumes were favorably impacted by testing as a result of an Aflatoxin M1 outbreak in China; testing volumes in China subsided over the remainder of 2012. These unfavorable factors were partly offset by higher sales of certain bovine tests resulting from increased testing levels from government programs and higher sales volumes of certain poultry and swine tests.

Other. Other revenue for the year ended December 31, 2013 was generally consistent with the prior year as lower sales volumes associated with our pharmaceutical product line were almost entirely offset by higher sales volumes of consumables and accessories used with our OPTI Medical instruments.

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Gross Profit

Total Company. The following table presents gross profit and gross profit percentages by operating segment:

	For the Year			For the Year
	Ended			Ended
Gross Profit	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2013		Revenue	2012		Revenue		Change	Change
CAG	$	616,335	53.6%	$	561,043	52.3%	$	55,292	9.9%
Water		58,218	66.2%		56,133	66.3%		2,085	3.7%
LPD		62,534	54.9%		66,166	59.4%		(3,632)	(5.5%)
Other		12,650	50.4%		10,645	42.3%		2,005	18.8%
Unallocated amounts		6,381	N/A		5,161	N/A		1,220	23.6%
Total Company	$	756,118	54.9%	$	699,148	54.1%	$	56,970	8.1%

Companion Animal Group. Gross profit for CAG increased due to higher sales and an increase in the gross profit percentage to 54% from 52%. The increase in the gross profit percentage was due primarily to price increases for our reference laboratory diagnostic and consulting services, VetLab consumables and, to a lesser extent, rapid assay products and volume-related efficiencies realized throughout our reference laboratory operations.

Water. Gross profit for Water increased due primarily to higher sales. The gross profit percentage for the year ended December 31, 2013 was generally consistent with the prior year, as the unfavorable impact of currency was mostly offset by higher average unit sales prices. The unfavorable impact of currency was due primarily to hedging losses during the year ended December 31, 2013 compared to hedging gains during the prior year.

Livestock, Poultry and Dairy. Gross profit for LPD decreased due to a decrease in the gross profit percentage to 55% from 59%, partly offset by higher sales. The decrease in the gross profit percentage was due primarily to higher overall manufacturing costs and the unfavorable impact of currency. Higher manufacturing costs were due primarily to an increase in materials costs and lower production volumes in certain product lines. The unfavorable impact of currency was due primarily to hedging losses during the year ended December 31, 2013 compared to hedging gains during the prior year. 

Other. Gross profit for Other increased due to an increase in the gross profit percentage to 50% from 42%, due primarily to lower overall OPTI Medical manufacturing costs resulting from a reduction in materials costs and higher relative sales of consumables used with our OPTI Medical instruments and milestone and royalty revenue earned from our remaining pharmaceutical out-licensing arrangements, both of which yield higher relative margins.

Unallocated Amounts. Gross profit for Unallocated Amounts increased due primarily to changes in certain currency exchange rates and a decrease in certain manufacturing costs, partly offset by an increase in personnel-related costs.

In certain geographies where we maintain inventories in currencies other than the U.S. dollar, the product costs reported in our operating segments include our standard cost for products sold, which is stated at the budgeted currency exchange rate from the beginning of the fiscal year. In these geographies, the variances from standard cost for products sold related to changes in currency exchange rates are reported within the caption “Unallocated Amounts.” For the year ended December 31, 2013, these variances were due primarily to the cost of products sold in Japanese yen.

The manufacturing costs reported in our operating segments include our standard cost for products sold and any variances from standard cost for products purchased or manufactured within the period. We capitalize these variances for inventory on hand at the end of the period to record inventory in accordance with U.S. GAAP. We then record these variances as cost of product revenue as that inventory is sold. The impact to cost of product revenue resulting from this variance capitalization and subsequent recognition is reported within the caption “Unallocated Amounts.” The decrease in certain manufacturing costs is due primarily to the recognition of previously favorable capitalized variances.

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We estimate certain personnel-related costs and allocate the estimated expenses to the operating segments. This allocation differs from actual expense and consequently yields a difference that is reported under the caption “Unallocated Amounts.” The increase in personnel-related costs for Unallocated Amounts is due primarily to higher self-insured healthcare costs during the year ended December 31, 2013 compared to the prior year.

Operating Expenses and Operating Income

Total Company. The following tables present operating expenses and operating income by operating segment:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2013		Revenue	2012		Revenue		Change	Change
CAG	$	397,690	34.6%	$	357,807	33.4%	$	39,883	11.1%
Water		20,897	23.8%		18,446	21.8%		2,451	13.3%
LPD		48,375	42.5%		45,358	40.7%		3,017	6.7%
Other		10,245	40.8%		7,743	30.8%		2,502	32.3%
Unallocated amounts		12,149	N/A		7,231	N/A		4,918	68.0%
Total Company	$	489,356	35.5%	$	436,585	33.8%	$	52,771	12.1%

	For the Year			For the Year
	Ended			Ended
Operating Income	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2013		Revenue	2012		Revenue		Change	Change
CAG	$	218,645	19.0%	$	203,236	19.0%	$	15,409	7.6%
Water		37,321	42.4%		37,687	44.5%		(366)	(1.0%)
LPD		14,159	12.4%		20,808	18.7%		(6,649)	(32.0%)
Other		2,405	9.6%		2,902	11.5%		(497)	(17.1%)
Unallocated amounts		(5,768)	N/A		(2,070)	N/A		(3,698)	(178.6%)
Total Company	$	266,762	19.4%	$	262,563	20.3%	$	4,199	1.6%

Companion Animal Group. The following table presents CAG operating expenses by functional area:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2013		Revenue	2012		Revenue		Change	Change
Sales and marketing	$	208,991	18.2%	$	186,287	17.4%	$	22,704	12.2%
General and administrative		125,877	10.9%		115,266	10.8%		10,611	9.2%
Research and development		62,822	5.5%		56,254	5.2%		6,568	11.7%
Total operating expenses	$	397,690	34.6%	$	357,807	33.4%	$	39,883	11.1%

The increase in sales and marketing expense was due primarily to increased personnel-related costs from investment in our commercial organizations in all major regions, including the completion of our North American sales force expansion and associated marketing and consulting costs related to this transformation. The increase in general and administrative expense resulted primarily from increased personnel-related costs and an increase in costs attributable to investments in information technology. The increase in research and development expense resulted primarily from higher personnel-related costs and an increase in consulting and external development costs.

Water. The following table presents Water operating expenses by functional area:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2013		Revenue	2012		Revenue		Change	Change
Sales and marketing	$	9,942	11.3%	$	9,398	11.1%	$	544	5.8%
General and administrative		8,398	9.5%		6,546	7.7%		1,852	28.3%
Research and development		2,557	2.9%		2,502	3.0%		55	2.2%
Total operating expenses	$	20,897	23.8%	$	18,446	21.8%	$	2,451	13.3%

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The increase in sales and marketing and general and administrative expense resulted primarily from higher personnel-related costs. Research and development expense for the year ended December 31, 2013 was generally consistent with the prior year.

Livestock, Poultry and Dairy. The following table presents LPD operating expenses by functional area:

	For the Year			For the Year
	Ended			Ended
Operating Expenses	December 31,		Percent of	December 31,		Percent of		Dollar	Percentage
(dollars in thousands)	2013		Revenue	2012		Revenue		Change	Change
Sales and marketing	$	20,972	18.4%	$	18,517	16.6%	$	2,455	13.3%
General and administrative		14,855	13.1%		14,388	12.9%		467	3.2%
Research and development		12,548	11.0%		12,453	11.2%		95	0.8%
Total operating expenses	$	48,375	42.5%	$	45,358	40.7%	$	3,017	6.7%

The increase in sales and marketing expense resulted primarily from higher personnel-related costs, including costs associated with the acquisition of a Brazilian distributor, and increased spending on promotional activities in the Asia-Pacific region. The increase in general and administrative expense was due primarily to costs associated with the acquisition and integration of the Brazilian distributor, a portion of which will not recur, partly offset by lower personnel-related costs and a decrease in intangible asset amortization. Research and development expense during the year ended December 31, 2013 was generally consistent with the prior year.

Other. Operating expenses for Other increased $2.5 million to $10.2 million for the year ended December 31, 2013, due primarily to a $3.5 million milestone payment earned during the year ended December 31, 2012 related to the 2008 sale of product rights previously included in our pharmaceutical product line, partly offset by lower personnel-related costs in our OPTI Medical line of business. The pharmaceutical milestone payment was not classified as revenue because the transaction was accounted for as the sale of a business; rather it was reflected as a reduction to general and administrative expenses as earned.

Unallocated Amounts. Operating expenses that are not allocated to our operating segments increased $4.9 million to $12.1 million for the year ended December 31, 2013 as compared to the prior year due primarily to losses incurred resulting from the bankruptcy of a freight payment and audit service provider (“freight service company”), partly offset by lower legal and other professional fees incurred as a  result of the resolution of the FTC investigation in February 2013 and proceeds received during 2013 in connection with the demutualization of an insurance provider. In March 2013, the freight service company provided notice to us that all freight payment services would cease immediately and that certain amounts paid by us to the freight service company were not subsequently remitted to our freight carriers due to an employee fraud and a breakdown in internal controls, both at the freight service company, concluding in significant losses and the resulting bankruptcy. In response, we recorded a $3.9 million loss related to these unremitted amounts in general and administrative expense during the year ended December 31, 2013. We continue to monitor the freight service company’s bankruptcy proceeding, but we cannot be certain of any recovery at this time. 

Interest Income and Interest Expense

Interest income was $1.9 million for both the years ended December 31, 2013 and 2012.

Interest expense was $5.4 million for the year ended December 31, 2013 compared to $3.8 million for the same period of the prior year. The increase in interest expense was due primarily to higher average balances outstanding on our unsecured revolving credit facility and senior notes that we issued and sold through a private placement in an aggregate amount of $150 million in December 2013. The senior notes consist of $75 million of 3.94% Series A Senior Notes due December 11, 2023 and $75 million of 4.04% Series B Senior Notes due December 11, 2025. See Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information about our senior notes.

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Provision for Income Taxes

Our effective income tax rate was 28.7% for the year ended December 31, 2013 and 31.6% for the year ended December 31, 2012. The decrease in our effective income tax rate for the year ended December 31, 2013, as compared to the year ended December 31, 2012, was due primarily to the research and development (“R&D”) tax credit. For the year ended December 31, 2012, the U.S. legislation authorizing the R&D tax credit had expired and no associated tax benefit was recognized within this period. On January 2, 2013, U.S. federal legislation was enacted that retroactively allowed an R&D tax credit for all of 2012 and extended the R&D tax credit through the year ending December 31, 2013. Because the related legislation was enacted in 2013, the full benefit of the R&D tax credit related to the prior year’s activities was recognized in 2013. In addition, higher relative earnings subject to international tax rates that are lower than domestic tax rates also contributed to the decrease in our effective income tax rate.

RECENT ACCOUNTING PRONOUNCEMENTS

A discussion of recent accounting pronouncements is included in Note 2 to the consolidated financial statements for the year ended December 31, 2014 included in this Annual Report on Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

We fund the capital needs of our business through cash on hand, funds generated from operations, and amounts available under our unsecured revolving credit facility, which we refinanced in June 2014 by entering into an amended and restated five-year unsecured revolving credit facility in the principal amount of $700 million (the amended and restated credit facility and the previous credit facility are referred to collectively as the “Credit Facility”). In addition, we issued $150 million, $125 million, $75 million and $150 million of our senior notes in December 2013, July 2014, September 2014 and February 2015, respectively. At December 31, 2014 and December 31, 2013, we had $322.5 million and $279.1 million, respectively, of cash and cash equivalents, and negative working capital of ($61.5) million and working capital of $174.4 million, respectively. Additionally, at December 31, 2014, we had remaining borrowing availability of $150 million under our $700 million Credit Facility. We believe that, if necessary, we could obtain additional borrowings at similar rates to our existing borrowings to fund our growth objectives. We further believe that current cash and cash equivalents, funds generated from operations, and committed borrowing availability will be sufficient to fund our operations, capital purchase requirements, and anticipated growth needs for the next twelve months. We believe that these resources, coupled with our ability, as needed, to obtain additional financing on favorable terms will be sufficient for the foreseeable future to fund our business as currently conducted.

We consider the majority of the operating earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the U.S. No provision has been made for the payment of U.S. federal and state or international taxes that may result from future remittances of these undistributed earnings of non-U.S. subsidiaries. Changes to this position could have adverse tax consequences. A determination of the related tax liability that would be paid on these undistributed earnings if repatriated is not practicable. We manage our worldwide cash requirements considering available funds among all of our subsidiaries. Our foreign cash balances are generally available without restrictions to fund ordinary business operations outside the U.S. Of our total cash and cash equivalents at December 31, 2014, approximately $321.5 million was held by our foreign subsidiaries and was subject to material repatriation tax effects. As of December 31, 2014, 64% of the cash and cash equivalents held by our foreign subsidiaries was invested in money market funds restricted to U.S. government and agency securities and 36% was held as bank deposits. As of December 31, 2014, approximately 66% of the cash and cash equivalents held by our foreign subsidiaries was held in U.S. dollars.

Should we require more capital in the U.S. than is generated by our operations domestically, for example to fund significant discretionary activities, we could elect to repatriate future earnings from foreign jurisdictions or raise capital in the U.S. through debt or equity issuances. These alternatives could result in higher effective tax rates or increased interest expense and other dilution of our earnings. We have borrowed funds domestically and continue to have the ability to borrow funds domestically at reasonable interest rates. 

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The following table presents additional key information concerning working capital:

	For the Three Months Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
		2014		2014		2014		2014		2013
Days sales outstanding(1)		40.6		39.2		40.8		42.8		39.9
Inventory turns (2)		1.7		1.8		1.8		1.8		1.9

(1) Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that quarter, the result of which is then multiplied by 91.25 days.

(2) Inventory turns represent inventory-related cost of product revenue for the 12 months preceding each quarter-end divided by the inventory balance at the end of the quarter.

Sources and Uses of Cash

The following table presents cash provided (used):

	For the Years Ended December 31,
(dollars in thousands)	2014		2013		Dollar Change
Net cash provided by operating activities	$	235,846	$	245,996	$	(10,150)
Net cash used by investing activities		(80,413)		(86,059)		5,646
Net cash used by financing activities		(103,438)		(102,451)		(987)
Net effect of changes in exchange rates on cash		(8,517)		(2,414)		(6,103)
Net increase in cash and cash equivalents	$	43,478	$	55,072	$	(11,594)

Operating Activities. Cash provided by operating activities was $235.8 million for the year ended December 31, 2014 compared to $246.0 million for the same period in 2013. The total of net income and net non-cash charges, excluding the impact of reclassifying the tax benefit from share-based compensation arrangements to a financing activity, was $261.6 million for the year ended December 31, 2014 compared to $263.2 million for the same period in 2013, resulting in a reduction in operating cash flows of $1.6 million driven primarily by the decrease in net income, partly offset by higher depreciation and amortization. The total of changes in operating assets and liabilities and the tax benefit from share-based compensation arrangements decreased cash by $25.8 million during the year ended December 31, 2014, compared to a decrease of $17.2 million for the year ended December 31, 2013, resulting in an incremental increase in cash of $8.6 million.

The following table presents cash flows from changes in operating assets and liabilities and the tax benefit from share-based compensation arrangements:

	For the Years Ended December 31,
(dollars in thousands)	2014		2013		Dollar Change
Accounts receivable	$	(3,626)	$	(15,946)	$	12,320
Inventories		(38,310)		(1,347)		(36,963)
Other assets		(25,073)		(4,325)		(20,748)
Accounts Payable		6,703		(4,399)		11,102
Accrued liabilities		36,392		16,512		19,880
Deferred revenue		14,195		6,442		7,753
Tax benefit from share-based compensation arrangements		(16,078)		(14,158)		(1,920)
Total change in cash due to changes in operating assets and liabilities and the tax benefit from share-based compensation arrangements	$	(25,797)	$	(17,221)	$	(8,576)

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The incremental cash used by inventory during the year ended December 31, 2014 as compared to the prior year was due primarily to support higher expected demand for our CAG diagnostic instruments, as well as higher inventory levels for our kits and consumables to support our all-direct strategy in the U.S. The increase in cash used by other assets during the year ended December 31, 2014 as compared to the prior year was due primarily to higher income taxes receivable resulting from the Tax Increase Prevention Act that was enacted late in the year and the deferred cost of Catalyst instrument placements under our Catalyst One introductory offer launched in the first quarter of 2014. The Tax Increase Prevention Act retroactively extended the R&D tax credit and bonus depreciation and reduced our income taxes due related to the year ended December 31, 2014. The increase in cash provided by accrued liabilities during the year ended December 31, 2014 was greater than the prior year due primarily to the timing of income tax payments, higher accruals related to employee incentive programs, contingent consideration related to business combinations and accrued interest related to higher borrowings under our senior notes at December 31, 2014 as compared to the prior year end. The decrease in cash used by accounts receivable during the year ended December 31, 2014 resulted primarily from the impact of lower revenues in the fourth quarter of 2014 as compared to the fourth quarter of 2013 related to our all-direct strategy in the U.S. The increase in cash provided by accounts payable during the year ended December 31, 2014 as compared to the prior year was due primarily to the timing of vendor payments. The incremental cash provided by deferred revenue for the year ended December 31, 2014 as compared to the prior year was due primarily to sales under our Catalyst One introductory offer.  

We historically have experienced proportionally lower net cash flows from operating activities during the firstquarter and proportionally higher cash flows from operating activities for the remainder of the year and for the annual perioddriven primarily by payments related to annual employee incentive programs in the first quarter following the year for whichthe bonuses were earned and the seasonality of vector-borne disease testing, which has historically resulted in significantincreases in accounts receivable balances during the first quarter of the year.

Investing Activities. Cash used by investing activities was $80.4 million for the year ended December 31, 2014 compared to $86.1 million for the same period in 2013. The decrease in cash used by investing activities during the year ended December 31, 2014 was due primarily to reduced capital expenditures, resulting from the completion of our headquarters facility expansion in August 2013, partly offset by incremental cash used to acquire businesses during the year ended December 31, 2014. See Note 3 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information about our business acquisitions.

Our total capital expenditure plan for 2015 is estimated to be approximately $85 million, which includes capital investments in manufacturing and reference laboratory equipment, investments in internal use software and information technology infrastructure and the renovation and expansion of our facilities and reference laboratories.

Financing Activities. Cash used by financing activities was $103.4 million for  the year ended December 31, 2014 compared to cash used of $102.5 million for the same period in 2013. The increase in cash used to repurchase common stock was offset by higher relative net borrowings under the Credit Facility and a $50 million increase in the issuance of long-term debt during the year ended December 31, 2014 as compared to the prior year.

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Cash used to repurchase shares of our common stock increased by $250.4 million during the year ended December 31, 2014 compared to the prior year. From the inception of our share repurchase program in August 1999 to December 31, 2014, we have repurchased 53.9 million shares. During the year ended December 31, 2014, we purchased 4.9 million shares for an aggregate cost of $618.2 million compared to purchases of 4.0 million shares for an aggregate cost of $367.8 million during 2013. We believe that the repurchase of our common stock is a favorable means of returning value to our shareholders and we also repurchase our stock to offset the dilutive effect of our share-based compensation programs. Repurchases of our common stock may vary depending upon the level of other investing activities and the share price. See Note 17 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information about our share repurchases.

As noted above, in June 2014, we refinanced our existing $450 million Credit Facility and increased the principal amount thereunder to $700 million. The Credit Facility matures on June 18, 2019 and requires no scheduled prepayments before that date. Although the Credit Facility does not mature until June 18, 2019, all individual borrowings under the terms of the Credit Facility have a stated term between 30 and 180 days. At the end of each term, the obligation is either repaid or rolled over into a new borrowing. The Credit Facility contains a subjective material adverse event clause, which allows the debt holders to call the loans under the Credit Facility if we fail to provide prompt written notice to the syndicate of such an event. Based on the stated term and the existence of the subjective material adverse event clause, this Credit Facility is reflected in the current liabilities section of our consolidated balance sheets. Applicable interest rates on borrowings under the Credit Facility generally range from 0.875 to 1.375 percentage points above the London interbank offered rate or the Canadian Dollar-denominated bankers’ acceptance rate, based on our leverage ratio, or the prevailing prime rate plus a maximum spread of up to 0.375%, based on our leverage ratio.

Net borrowing and repayment activity under the Credit Facility resulted in incremental cash provided of $207.0 million during the year ended December 31, 2014 compared to the prior year. At December 31, 2014, we had $549.0 million outstanding under the Credit Facility. The general availability of funds under the Credit Facility was further reduced by $1.0 million for a letter of credit that was issued in connection with claims under our workers’ compensation policy. The Credit Facility contains affirmative, negative and financial covenants customary for financings of this type. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, investments, transactions with affiliates and certain restrictive agreements. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization and share-based compensation not to exceed 3.5-to-1. At December 31, 2014, we were in compliance with the covenants of the Credit Facility.The obligations under the Credit Facility may be accelerated upon the occurrence of an event of default under the Credit Facility, which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness, cross-acceleration to specified indebtedness and a change of control default.

In December 2013, we issued and sold through a private placement an aggregate principal amount of $150 million of senior notes consisting of $75 million of 3.94% Series A Senior Notes due December 11, 2023 (the “2023 Notes”) and $75 million of 4.04% Series B Senior Notes due December 11, 2025 (the “2025 Notes” and together with the 2023 Notes, the “December Notes”) under a Note Purchase Agreement among the Company, New York Life Insurance Company and the accredited institutional purchasers named therein (the “December 2013 Note Agreement”).

In July 2014, we issued and sold through a private placement an aggregate principal amount of $125 million of senior notes consisting of $75 million of 3.76% Series B Senior Notes due July 21, 2024 (the “2024 Notes”) and $50 million of 3.32% Series A Senior Notes due July 21, 2021 (the “2021 Notes” and together with the 2024 Notes, the “Prudential Notes”) under a Note Purchase and Private Shelf Agreement among the Company, Prudential Investment Management, Inc. and the accredited institutional purchasers named therein (the “July 2014 Note Agreement”).

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In September 2014, we issued and sold through a private placement an aggregate principal amount of $75 million of 3.72% Senior Notes due September 4, 2026 (the “2026 Notes” and together with the Prudential Notes and the December Notes, the “Senior Notes”) under a Note Purchase Agreement dated as of July 22, 2014 among the Company, New York Life Insurance Company and the accredited institutional purchasers named therein (such agreement, together with July 2014 Note Agreement and December 2013 Note Agreement, the “Senior Note Agreements”).

The Senior Note Agreements contain affirmative, negative and financial covenants customary for agreements of this type. The negative covenants include restrictions on liens, indebtedness of our subsidiaries, priority indebtedness, fundamental changes, investments, transactions with affiliates, certain restrictive agreements and violations of laws and regulations. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization and share-based compensation, as defined in the Senior Note Agreements, not to exceed 3.5-to-1. At December 31, 2014, we were in compliance with the covenants of the Senior Note Agreements.

Should we elect to prepay the Senior Notes, such aggregate prepayment will include the applicable make-whole amount(s), as defined within the applicable Senior Note Agreements. Additionally, in the event of a change in control of the Company or upon the disposition of certain assets of the Company the proceeds of which are not reinvested (as defined in the Senior Note Agreements), we may be required to prepay all or a portion of the Senior Notes. The obligations under the Senior Notes may be accelerated upon the occurrence of an event of default under the applicable Senior Note Agreement, each of which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness and cross-acceleration to specified indebtedness.

Other Commitments, Contingencies and Guarantees

Under our workers’ compensation insurance policies for U.S. employees, we have retained the first $300,000, $250,000 and $250,000 in claim liability per incident with aggregate maximum claim liabilities per year of $2.3 million for the year ended December 31, 2014 and $2.0 million for each of the years ended December 31, 2013 and 2012, respectively. We have recognized cumulative expenses of $1.1 million, $0.5 million, and $0.6 million for claims incurred during the years ended December 31, 2014, 2013 and 2012, respectively. Our estimated liability for workers’ compensation was $1.4 million and $1.2 million as of December 31, 2014 and 2013, respectively. Claims incurred during the years ended December 31, 2014 and 2013 are relatively undeveloped as of December 31, 2014. Therefore, it is possible that we could incur additional healthcare and wage indemnification costs beyond those previously recognized up to our aggregate liability for each of the respective claim years. For the years ended on or prior to December 31, 2012, based on our retained claim liability per incident and our aggregate claim liability per year, our maximum liability in excess of the amounts deemed probable and previously recognized is not material as of December 31, 2014. As of December 31, 2014, we had outstanding letters of credit totaling $1.3 million to the insurance companies as security for these claims in connection with these policies.

Under our current employee healthcare insurance policy for U.S. employees, we retain claims liability risk up to $375,000, $325,000 and $300,000 per incident per year in 2014, 2013 and 2012, respectively. We recognized employee healthcare claim expense of $32.0 million, $29.2 million and $23.0 million during the years ended December 31, 2014, 2013 and 2012, respectively, which includes actual claims paid and an estimate of our liability for the uninsured portion of employee healthcare obligations that have been incurred but not paid. Should employee health insurance claims exceed our estimated liability, we would have further obligations. Our estimated liability for healthcare claims that have been incurred but not paid as of December 31, 2014 and 2013 was $4.1 million and $4.3 million, respectively.

We have total contingent liabilities outstanding of up to $11.8 million primarily related to the achievement of certain revenue milestones. We have recorded $6.3 million of contingent commitments on our consolidated balance sheet at December 31, 2014. The amount of contingent consideration recorded on our consolidated balance sheet at December 31, 2013 was not material. We have not accrued for $5.5 million of contingent liabilities, related to the acquisition of an intangible asset in 2008, as we do not deem the achievement of associated revenue milestones to be probable of occurring as of December 31, 2014.

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We are contractually obligated to make the following payments in the years below:

Contractual obligations (in thousands)	Total		Less than  1 year		1-3 years		3-5 years		More than 5 years
Long-term debt obligations (1)	$	480,661	$	13,255	$	26,510	$	26,510	$	414,386
Operating leases		77,492		17,228		28,229		16,779		15,256
Purchase obligations (2)		154,947		146,189		5,798		1,840		1,120
Minimum royalty payments		3,265		665		1,091		1,031		478
Total contractual cash obligations	$	716,365	$	177,337	$	61,628	$	46,160	$	431,240

(1) Long-term debt amounts include interest payments associated with long-term debt.

(2) Purchase obligations include agreements and purchase orders to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities, pricing, and approximate timing of purchase transactions.

These commitments do not reflect unrecognized tax benefits of $5.9 million and deferred compensation liabilities of $2.7 million as of December 31, 2014 as the timing of recognition is uncertain. Refer to Note 11 of the consolidated financial statements for the year ended December 31, 2014 included in this Annual Report on Form 10-K for additional discussion of unrecognized tax benefits.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Our market risk consists primarily of foreign currency exchange risk and interest rate risk. Our functional currency is the U.S. dollar and our primary manufacturing operations and inventory supply contracts are in the U.S., but we distribute our products worldwide both through direct export and through our foreign subsidiaries. Our primary foreign currency transaction risk consists of intercompany purchases and sales of products and we attempt to mitigate this risk through our hedging program described below. Approximately 28% of our consolidated revenue for the year ended December 31, 2014 and 26% of our consolidated revenue for each of the years ended December 31, 2013 and 2012 was derived from products manufactured in the U.S. and sold internationally in local currencies.The functional currency of most of our subsidiaries is their local currency. For two of our subsidiaries located in the Netherlands and Singapore, the functional currency is the U.S. dollar.

The primary purpose of our foreign currency hedging activities is to protect against the volatility associated with foreign currency transactions. We also utilize natural hedges to mitigate our transaction and commitment exposures. Our corporate policy prescribes the range of allowable hedging activity. We enter into foreign currency exchange contracts with large multinational financial institutions and we do not hold or engage in transactions involving derivative instruments for purposes other than risk management. Our accounting policies for these contracts are based on our designation of such instruments as hedging transactions. If a derivative instrument qualifies for hedge accounting, changes in the fair value of the derivative instrument from the effective portion of the hedge are deferred in accumulated other comprehensive income, net of tax, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We immediately record in earnings the extent to which a hedge instrument is not effective in achieving offsetting changes in fair value. We primarily utilize foreign currency exchange contracts with durations of less than 24 months.

Our subsidiaries enter into foreign currency exchange contracts to manage the exchange risk associated with their forecasted intercompany inventory purchases and sales for the next year. From time to time, we may also enter into foreign currency exchange contracts to minimize the impact of foreign currency fluctuations associated with specific, significant transactions. As of December 31, 2014 and 2013, we were not hedging any specific, significant transactions.

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Our foreign currency hedging strategy is consistent with prior periods and there were no material changes in our market risk exposure during the year ended December 31, 2014.  We enter into foreign currency exchange contracts designated as cash flow hedges for amounts that are less than the full value of forecasted intercompany purchases and sales and for amounts that are equivalent to, or less than, other significant transactions. As a result, no significant ineffectiveness has resulted or been recorded through the statements of operations for the years ended December 31, 2014, 2013 and 2012.  Our hedging strategy related to intercompany inventory purchases and sales is to employ the full amount of our hedges for the succeeding year at the conclusion of our budgeting process for that year. Quarterly, we enter into contracts to hedge incremental portions of anticipated foreign currency transactions for the current and following year. Accordingly, our risk with respect to foreign currency exchange rate fluctuations may vary throughout each annual cycle.

We enter into hedge agreements where we believe we have meaningful exposure to foreign currency exchange risk. The notional amount of foreign currency exchange contracts to hedge forecasted intercompany purchases and sales totaled $186.7 million and $168.3 million at December 31, 2014 and December 31, 2013, respectively. At December 31, 2014, we had $8.1 million of net unrealized gains on foreign currency exchange contracts recorded in accumulated other comprehensive income, net of tax expense.

Our foreign currency exchange risk is comprised of three components: 1) local currency revenues and expenses; 2) the impact of settled hedge contracts; and 3) intercompany and monetary balances for our subsidiaries that are denominated in a currency that is different from the functional currency used by each subsidiary. Based on projected revenues and expenses for 2015, excluding the impact of intercompany and trade balances denominated in currencies other than the functional subsidiary currencies, a 10% strengthening of the U.S. dollar would reduce operating income by approximately $9 million. The impact of the intercompany and monetary balances referred to in the third component above have been excluded, as they are transacted at multiple times during the year and we are not able to reliably forecast the impact that changes in exchange rates would have.

In June 2014, we refinanced our existing $450.0 million unsecured revolving credit facility by entering into an amended and restated credit agreement relating to a five-year unsecured revolving credit facility in the principal amount of $700 million with a syndicate of multinational banks, which matures on June 18, 2019. We are subject to interest rate risk based on the terms of the Credit Facility to the extent that the London interbank rate (“LIBOR”) or the Canadian Dollar-denominated bankers’ acceptance rate (“CDOR”) increases. Borrowings under the Credit Facility bear interest in the range from 0.875 to 1.375 percentage points (“Credit Spread”) above the LIBOR or the CDOR, dependent on our consolidated leverage ratio, and the interest period terms for the outstanding borrowings, which range from one to six months. As discussed below, we have entered into forward fixed interest rate swaps to mitigate a portion of our interest rate risk in future periods. Borrowings outstanding under the Credit Facility at December 31, 2014 were $549 million at a weighted-average effective interest rate of 1.5%. Based on amounts outstanding and our interest rate swap effective at December 31, 2014, an increase in the LIBOR or the CDOR of 1% would increase interest expense by approximately $4.7 million on an annualized basis.

Beginning on March 30, 2012, the variable interest rate associated with $40 million of borrowings outstanding under the Credit Facility became effectively fixed at 1.36% plus the Credit Spread through June 30, 2016. Beginning on March 28, 2013, the variable interest rate associated with an additional $40 million of borrowings outstanding under the Credit Facility became effectively fixed at 1.64% plus the Credit Spread through June 30, 2016. We have designated these swaps as qualifying instruments to be accounted for as cash flow hedges. At December 31, 2014, we had $0.7 million in unrealized losses, net of income tax benefit, on interest rate swaps designated as hedging instruments. See Note 16 to the consolidated financial statements included in this Annual Report on Form 10-K for a discussion of our derivative instruments and hedging activities.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is submitted as a separate section of this report commencing on page F-1.

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

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ITEM 9A.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining disclosure controls and procedures, as defined by the SEC in its Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures at December 31, 2014, our chief executive officer and chief financial officer have concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Report of Management on Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that:

· Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

· Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies and procedures may deteriorate.

We conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, we concluded that, at December 31, 2014, our internal control over financial reporting was effective.

The effectiveness of the Company's internal control over financial reporting at December 31, 2014 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

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Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2014 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Certifications

The certifications with respect to disclosure controls and procedures and internal control over financial reporting of the Company’s chief executive officer and chief financial officer are attached as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K.

ITEM 9B.OTHER INFORMATION

Not applicable.

PART III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item with respect to Directors, executive officers, compliance with Section 16(a)  of the Exchange Act, our code of ethics and corporate governance is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Proposal One - Election of Directors,” “Directors and Executive Officers of the Company,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance – Corporate Governance Guidelines and Code of Ethics” and “Corporate Governance – Committees of the Board – Audit Committee” in the Company’s definitive Proxy Statement with respect to its 2015 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 11.EXECUTIVE COMPENSATION

The information required by this Item is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Executive Compensation – Compensation Discussion and Analysis,” “Executive Compensation – Executive Compensation Tables,” “Executive Compensation – Potential Payments Upon Termination or Change-in-Control,” “Corporate Governance – Committees of the Board – Compensation Committee – Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” in the Company’s definitive Proxy Statement with respect to its 2015 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item with respect to Item 201(d) of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the section entitled “Equity Compensation Plan Information” in the Company’s definitive Proxy Statement with respect to its 2015 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.  The information required by this Item with respect to Item 403 of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Ownership of Common Stock by Directors and Officers” and “Ownership of More Than Five Percent of Our Common Stock” in the Company’s definitive Proxy Statement with respect to its 2015 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

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ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Corporate Governance – Related Person Transactions” and “Corporate Governance – Director Independence” in the Company’s definitive Proxy Statement with respect to its 2015 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the section entitled “Independent Auditors’ Fees” in the Company’s definitive Proxy Statement with respect to its 2015 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this report.

PART IV

ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES

b
The following documents are filed as part of this Form 10-K:
(a) (1) and (a) (2)	The financial statements set forth in the Index to Consolidated Financial Statements and the Consolidated Financial Statement Schedule are filed as a part of this Annual Report on Form 10-K commencing on page F-1.
(a)(3) and (b)	The exhibits listed in the accompanying Exhibit Index are filed as part of this Annual Report on Form 10-K and either filed herewith or incorporated by reference herein, as applicable.

66

FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND

CONSOLIDATED FINANCIAL STATEMENT SCHEDULE

	Page No.
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2014 and 2013	F-3
Consolidated Statements of Income for the Years Ended December 31, 2014, 2013 and 2012	F-4
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2014, 2013 and 2012	F-5
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2014, 2013 and 2012	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012	F-7
Notes to Consolidated Financial Statements	F-8
Schedule II
Valuation and Qualifying Accounts	F-44

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of IDEXX Laboratories, Inc.

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of IDEXX Laboratories, Inc. and its subsidiaries at December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the Report of Management on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 17, 2015

F-2

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	December 31,		December 31,
	2014		2013
ASSETS
Current Assets:
Cash and cash equivalents	$	322,536	$	279,058
Accounts receivable, net of reserves of $4,306 in 2014 and $3,533 in 2013		152,380		158,038
Inventories		160,342		133,427
Deferred income tax assets		37,689		33,226
Other current assets		86,451		48,957
Total current assets		759,398		652,706
Long-Term Assets:
Property and equipment, net		303,587		281,214
Goodwill		184,450		180,521
Intangible assets, net		65,122		58,844
Other long-term assets, net		71,654		57,231
Total long-term assets		624,813		577,810
TOTAL ASSETS	$	1,384,211	$	1,230,516
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	44,743	$	29,941
Accrued liabilities		195,351		148,919
Line of credit		549,000		277,000
Current portion of long-term debt		-		1,035
Current portion of deferred revenue		31,812		21,458
Total current liabilities		820,906		478,353
Long-Term Liabilities:
Deferred income tax liabilities		41,688		33,948
Long-term debt, net of current portion		350,000		150,359
Long-term deferred revenue, net of current portion		21,665		18,427
Other long-term liabilities		32,363		31,215
Total long-term liabilities		445,716		233,949
Total liabilities		1,266,622		712,302
Commitments and Contingencies (Note 13)
Stockholders’ Equity:
Common stock, $0.10 par value: Authorized: 120,000 shares;  Issued: 101,947 and 101,188 shares in 2014 and 2013, respectively		10,195		10,119
Additional paid-in capital		888,293		825,320
Deferred stock units: Outstanding: 118 and 122 units in 2014 and 2013, respectively		5,066		5,110
Retained earnings		1,675,299		1,493,393
Accumulated other comprehensive (loss) income		(8,071)		13,622
Treasury stock, at cost: 54,574 and 49,649 shares in 2014 and 2013, respectively		(2,453,266)		(1,829,378)
Total IDEXX Laboratories, Inc. stockholders’ equity		117,516		518,186
Noncontrolling interest		73		28
Total stockholders’ equity		117,589		518,214
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,384,211	$	1,230,516
The accompanying notes are an integral part of these consolidated financial statements.

F-3

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

	For the Years Ended December 31,
		2014		2013		2012
Revenue:
Product revenue	$	899,412	$	854,531	$	816,992
Service revenue		586,395		522,527		476,346
Total revenue		1,485,807		1,377,058		1,293,338
Cost of Revenue:
Cost of product revenue		335,046		318,685		305,910
Cost of service revenue		334,645		302,255		288,280
Total cost of revenue		669,691		620,940		594,190
Gross profit		816,116		756,118		699,148
Expenses:
Sales and marketing		283,708		243,492		216,962
General and administrative		173,890		157,861		137,609
Research and development		98,263		88,003		82,014
Income from operations		260,255		266,762		262,563
Interest expense		(15,429)		(5,386)		(3,848)
Interest income		1,729		1,885		1,902
Income before provision for income taxes		246,555		263,261		260,617
Provision for income taxes		64,604		75,467		82,330
Net income		181,951		187,794		178,287
Less: Net income (loss) attributable to noncontrolling interest		45		(6)		20
Net income attributable to IDEXX Laboratories, Inc. stockholders	$	181,906	$	187,800	$	178,267
Earnings per Share:
Basic	$	3.63	$	3.53	$	3.24
Diluted	$	3.58	$	3.48	$	3.17
Weighted Average Shares Outstanding:
Basic		50,047		53,159		54,985
Diluted		50,751		53,985		56,155
The accompanying notes are an integral part of these consolidated financial statements.

F-4

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	For the Years Ended December 31,
		2014		2013		2012
Net income	$	181,951	$	187,794	$	178,287
Other comprehensive income, net of tax:
Foreign currency translation adjustments		(29,126)		(4,502)		5,671
Unrealized (loss) gain on investments, net of tax (benefit) expense of ($63),  $165 and $68 in 2014, 2013, and 2012, respectively		(107)		279		116
Unrealized gain (loss) on derivative instruments:
Unrealized gain (loss), net of tax expense (benefit) of $4,073,  $1,555 and ($921) in 2014, 2013 and 2012, respectively		9,542		3,781		(1,651)
Less: reclassification adjustment for gains included in net income, net of tax expense of $756,  $679 and $1,623 in 2014, 2013 and 2012, respectively		(2,002)		(1,890)		(3,625)
Unrealized gain (loss) on derivative instruments		7,540		1,891		(5,276)
Other comprehensive (loss) income, net of tax		(21,693)		(2,332)		511
Comprehensive income		160,258		185,462		178,798
Less: comprehensive income (loss) attributable to noncontrolling interest		45		(6)		20
Comprehensive income attributable to IDEXX Laboratories, Inc.	$	160,213	$	185,468	$	178,778
The accompanying notes are an integral part of these consolidated financial statements.

F-5

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except per share amounts)

																Total IDEXX
												Accumulated				Laboratories,
	Common Stock					Additional		Deferred				Other				Inc.				Total
		Number of Shares		$0.10 Par Value		Paid-in Capital		Stock Units		Retained Earnings		Comprehensive Income (Loss)		Treasury Stock		Stockholders’ Equity		Noncontrolling Interest		Stockholders’ Equity
Balance January 1, 2012		99,229	$	9,923	$	702,575	$	4,688	$	1,127,326	$	15,443	$	(1,320,376)	$	539,579	$	14	$	539,593
Comprehensive income:
Net income		-		-		-		-		178,267		-		-		178,267		20		178,287
Other comprehensive income, net of tax		-		-		-		-		-		511		-		511		-		511
Total comprehensive income		-		-		-		-		-		-		-		178,778		20		178,798
Repurchases of common stock		-		-		-		-		-		-		(136,808)		(136,808)		-		(136,808)
Common stock issued under stock plans, including excess tax benefit		931		93		38,943		(365)		-		-		-		38,671		-		38,671
Issuance of deferred stock units		-		-		-		142		-		-		-		142		-		142
Vesting of deferred stock units		-		-		(165)		165		-		-		-		-		-		-
Share-based compensation cost		-		-		15,861		-		-		-		-		15,861		-		15,861
Balance December 31, 2012		100,160	$	10,016	$	757,214	$	4,630	$	1,305,593	$	15,954	$	(1,457,184)	$	636,223	$	34	$	636,257
Comprehensive income:
Net income (loss)		-		-		-		-		187,800		-		-		187,800		(6)		187,794
Other comprehensive loss, net of tax		-		-		-		-		-		(2,332)		-		(2,332)		-		(2,332)
Total comprehensive income		-		-		-		-		-		-		-		185,468		(6)		185,462
Repurchases of common stock		-		-		-		-		-		-		(372,194)		(372,194)		-		(372,194)
Common stock issued under stock plans, including excess tax benefit		1,028		103		51,861		(38)		-		-		-		51,926		-		51,926
Issuance of deferred stock units		-		-		-		189		-		-		-		189		-		189
Vesting of deferred stock units		-		-		(259)		259		-		-		-		-		-		-
Share-based compensation cost		-		-		16,504		70		-		-		-		16,574		-		16,574
Balance December 31, 2013		101,188	$	10,119	$	825,320	$	5,110	$	1,493,393	$	13,622	$	(1,829,378)	$	518,186	$	28	$	518,214
Comprehensive income:
Net income		-		-		-		-		181,906		-		-		181,906		45		181,951
Other comprehensive loss, net of tax		-		-		-		-		-		(21,693)		-		(21,693)		-		(21,693)
Total comprehensive income		-		-		-		-		-		-		-		160,213		45		160,258
Repurchases of common stock		-		-		-		-		-		-		(623,888)		(623,888)		-		(623,888)
Common stock issued under stock plans, including excess tax benefit		759		76		45,162				-		-		-		45,238		-		45,238
Settlement of deferred stock units		-		-		-		(332)		-		-		-		(332)		-		(332)
Vesting of deferred stock units		-		-		(218)		218		-		-		-		-		-		-
Share-based compensation cost		-		-		18,029		70		-		-		-		18,099		-		18,099
Balance December 31, 2014		101,947	$	10,195	$	888,293	$	5,066	$	1,675,299	$	(8,071)	$	(2,453,266)	$	117,516	$	73	$	117,589
The accompanying notes are an integral part of these consolidated financial statements.

F-6

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	For the Years Ended December 31,
		2014		2013		2012
Cash Flows from Operating Activities:
Net income	$	181,951	$	187,794	$	178,287
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		58,888		54,596		52,408
Gain on disposition of pharmaceutical product lines		-		-		(3,500)
Provision for uncollectible accounts		2,035		1,601		1,108
Provision for (benefit of) deferred income taxes		830		2,073		(1,970)
Share-based compensation expense		18,099		16,539		15,952
Other		(160)		614		410
Tax benefit from share-based compensation arrangements		(16,078)		(14,158)		(14,676)
Changes in assets and liabilities:
Accounts receivable		(3,626)		(15,946)		3,487
Inventories		(38,310)		(1,347)		(17,208)
Other assets		(25,073)		(4,325)		3,933
Accounts payable		6,703		(4,399)		(2,898)
Accrued liabilities		36,392		16,512		187
Deferred revenue		14,195		6,442		6,888
Net cash provided by operating activities		235,846		245,996		222,408
Cash Flows from Investing Activities:
Purchases of property and equipment		(60,523)		(77,612)		(57,618)
Proceeds from disposition of pharmaceutical product lines		-		3,500		3,000
Proceeds from sale of equity investment		5,400		-		-
Proceeds from sale of property and equipment		-		-		45
Acquisitions of intangible assets		(175)		(1,024)		(900)
Acquisition of businesses, net of cash acquired		(25,115)		(10,923)		(2,658)
Net cash used by investing activities		(80,413)		(86,059)		(58,131)
Cash Flows from Financing Activities:
Borrowings (payments) on revolving credit facilities, net		272,000		65,000		(31,000)
Issuance of senior notes		200,000		150,000		-
Debt issue costs		(1,406)		(976)		-
Payment of notes payable		(1,394)		(1,107)		(917)
Repurchases of common stock		(618,158)		(367,761)		(132,268)
Proceeds from exercises of stock options and employee stock purchase plans		29,442		38,235		24,166
Tax benefit from share-based compensation arrangements		16,078		14,158		14,676
Net cash used by financing activities		(103,438)		(102,451)		(125,343)
Net effect of changes in exchange rates on cash		(8,517)		(2,414)		1,157
Net increase in cash and cash equivalents		43,478		55,072		40,091
Cash and cash equivalents at beginning of period		279,058		223,986		183,895
Cash and cash equivalents at end of period	$	322,536	$	279,058	$	223,986
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	12,284	$	5,024	$	3,944
Income taxes paid	$	60,239	$	67,721	$	68,921
Supplemental Disclosure of Non-Cash Information:
Market value of common shares received from employees in connection with share-based compensation – see Note 17	$	5,809	$	4,548	$	4,662
Receivable on disposition of pharmaceutical product lines	$	-	$	-	$	3,500
The accompanying notes are an integral part of these consolidated financial statements.

F-7

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.      NATURE OF BUSINESS, BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements of IDEXX Laboratories, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the requirements of Regulation S-X.

These statements include the accounts of IDEXX Laboratories, Inc. and our wholly-owned and majority-owned subsidiaries (“IDEXX,” the “Company,” “we” or “our”). We do not have any variable interest entities for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

We develop, manufacture and distribute products and provide services for the veterinary, bioresearch, water, livestock, poultry and dairy markets. We also sell a line of portable electrolytes and blood gas analyzers for the human point-of-care medical diagnostics market. Our principal line of business, which we refer to as our Companion Animal Group (“CAG”) operating segment, provides diagnostic capabilities and information management solutions for the veterinary market as well as and biological materials testing and services for the bioresearch market. Our principal markets for these products and services are the United States (“U.S.”) and Europe, but we also sell to customers and distributors in many other countries around the world. Our Water operating segment provides innovative testing solutions for the quality and safety of water in our principal markets the U.S. and Europe, but we also sell to customers in many other countries around the world. Our Livestock, Poultry and Dairy (“LPD”) operating segment provides diagnostic tests and related instrumentation that are used to manage the health status of livestock and poultry, to improve bovine reproductive efficiency, and to ensure the quality and safety of milk and food. Our principal market for these tests and products is Europe but we also sell to customers in many other countries around the world. We also operate a smaller operating segment that comprises products for the human point-of-care medical diagnostics market (“OPTI Medical”). Financial information about the OPTI Medical operating segment is combined and presented with our pharmaceutical product line and out-licensing arrangements remaining from our pharmaceutical business in an “Other” category because they do not meet the quantitative or qualitative thresholds for reportable segments. See Note 14 for additional information regarding our reportable operating segments, products and services and geographical areas.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation. Reclassifications had no material impact on previously reported results of operations, financial position or cash flows.

F-8

NOTE 2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Estimates

The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates, including those related to reserves for accounts receivable; goodwill and other intangible assets; income taxes; inventory valuation; revenue recognition, product returns, customer programs and multiple element arrangements; share-based compensation; warranty reserves; self-insurance reserves; fair value measurements and loss contingencies. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

(b)Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of ninety days or less to be cash equivalents. Cash and cash equivalents consist primarily of demand deposits and money market funds.

As of December 31, 2013, our reported cash and cash equivalents balances contained restricted cash in the aggregate of $0.7 million securing various obligations. There is no restricted cash on our consolidated balance sheet for the year ended December 31, 2014.

(c)Inventories

Inventories, which are stated at the lower of cost (first-in, first-out) or market,include material, conversion costs and inbound freight charges. We write down the carrying value of inventory for estimated obsolescence by an amount equal to the difference between the cost of inventory and the estimated market value when warranted based on assumptions of future demand, market conditions, remaining shelf life, or product functionality. If actual market conditions or results of estimated functionality are less favorable than those we estimated, additional inventory write-downs may be required, which would have a negative effect on results of operations.

(d)Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. When an item is sold or retired, the cost and related accumulated depreciation is relieved, and the resulting gain or loss, if any, is recognized in the consolidated statements of income. We provide for depreciation and amortization primarily using the straight-line method by charges to income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows:

Asset Classification	Estimated Useful Life
Land improvements	15 to 20 years
Buildings and improvements	10 to 40 years
Leasehold improvements	Shorter of remaining lease term or useful life of improvements
Machinery and equipment	3 to 8 years
Office furniture and equipment	3 to 7 years
Computer hardware and software	3 to 7 years

F-9

We capitalize interest on the acquisition and construction of significant assets that require a substantial period of time to be made ready for use. The capitalized interest is included in the cost of the completed asset and depreciated over the asset’s estimated useful life. The amount of interest capitalized during the years ended December 31, 2014 and 2013 was not material.

We capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Qualifying costs incurred during the application development stage, which consist primarily of internal payroll and direct fringe benefits and external direct project costs, including labor and travel, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset. Costs incurred during the preliminary project and post-implementation and operation phases are expensed as incurred. These costs are general and administrative in nature and relate primarily to the determination of performance requirements, data conversion and training. Software developed to deliver hosted services to our customers has been designated as internal use. See Note 6 for further information regarding costs capitalized in connection with software developed for internal use.

(e)Goodwill and Other Intangible Assets

A significant portion of the purchase price for acquired businesses is generally assigned to intangible assets. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to IDEXX. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When material, we utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. We assess contingent consideration to determine if it is part of the business combination or if it should be accounted for separately from the business combination in the postcombination period. Contingent consideration is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. Changes in fair value of contingent consideration are recognized in earnings.

We provide for amortization primarily using the straight-line method by charges to income in amounts that allocate the intangible assets over their estimated useful lives as follows:

Asset Classification	Estimated Useful Life
Patents	13 to 15 years
Product rights(1)	5 to 15 years
Customer-related  intangible assets(2)	5 to 17 years
Noncompete agreements	3 to 7 years

(1) Product rights comprise certain technologies, intellectual property, licenses and trade names acquired from third parties.

(2) Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

F-10

We assess goodwill for impairment annually, at the reporting unit level, in the fourth quarter and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we would then perform step one of the two-step impairment test; otherwise, no further impairment test would be required. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the two-step impairment test. Doing so does not preclude us from performing the qualitative assessment in any subsequent period.

In the fourth quarter of 2014, we elected to bypass the qualitative approach and instead proceeded directly to step one of the two-step impairment test to assess the fair value of all of our reporting units. As part of step one of the two-step impairment test, we estimate the fair values of applicable reporting units using an income approach based on discounted forecasted cash flows. We make significant assumptions about the extent and timing of future cash flows, growth rates and discount rates. Model assumptions are based on our projections and best estimates, using appropriate and customary market participant assumptions. In addition, we make certain assumptions in allocating shared assets and liabilities to individual reporting units in determining the carrying value of each reporting unit. Changes in forecasted cash flows or the discount rate would affect the estimated fair values of our reporting units and could result in a goodwill impairment charge in a future period.

No goodwill impairments were identified during the years ended December 31, 2014, 2013 or 2012.

We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of an intangible asset exceeds the related estimated undiscounted future cash flows, an impairment to write the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset, and applying a risk-adjusted discount rate. No material impairments of our intangible assets were identified during the years ended December 31, 2014, 2013 and 2012. See Note 8 for further information regarding our goodwill and intangible assets.

(f)Warranty Reserves

We provide a standard twelve month warranty on all instruments sold. We recognize the cost of instrument warranties in cost of product revenue at the time revenue is recognized based on the estimated cost to repair the instrument over its warranty period. Cost of product revenue reflects not only estimated warranty expense for instruments sold in the current period, but also any changes in estimated warranty expense for the portion of the aggregate installed base that is under warranty. Estimated warranty expense is based on a variety of inputs, including historical instrument performance in the customers’ environment, historical costs incurred in servicing instruments and projected instrument reliability. Should actual service rates or costs differ from our estimates, revisions to the estimated warranty liability would be required. The liability for warranties is included in accrued liabilities in the accompanying consolidated balance sheets.

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(g)Income Taxes

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. While we consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, a reduction to the deferred tax asset would be charged to income in the period such determination was made.

We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes.

Significant judgment is required in determining our worldwide provision for income taxes and our income tax filings are regularly under audit by tax authorities. Any audit result differing from amounts recorded would increase or decrease income in the period that we determine such adjustment is likely. Interest expense and penalties associated with the underpayment of income taxes are included in income tax expense. See Note 11 for additional information regarding income taxes.

(h)Taxes Remitted to Governmental Authorities by IDEXX on Behalf of Customer

We calculate, collect from our customers, and remit to governmental authorities sales, value added and excise taxes assessed by governmental authorities in connection with revenue-producing transactions with our customers. We report these taxes on a net basis and do not include these tax amounts in revenue or cost of product or service revenue.

(i)Revenue Recognition

We recognize revenue when four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales price is fixed or determinable; and (iv)collectability is reasonably assured. Revenue-generating transactions generally fall into one of the following categories of revenue recognition:

· Revenue from substantially all U.S. distributors is recognized upon delivery to the distributor because title and risk of loss remains with IDEXX until the product is delivered. Effective December 31, 2014, we did not renew our existing contracts with our key U.S. distribution partners and transitioned to an all-direct sales strategy for our rapid assay test kits and instrument consumables.  We recognize revenue for the remainder of our customers, including most distributors outside of the U.S., when the product is delivered to the customer, except as noted below.

· We recognize revenue from the sales of instruments, non-cancelable software licenses and hardware systems upon installation and the customer’s acceptance of the instrument or system as we have no significant further obligations after this point in time.

· We recognize service revenue at the time the service is performed.

· We recognize revenue associated with extended maintenance agreements (“EMAs”) over the life of the contracts using the straight-line method, which approximates the expected timing in which applicable services are performed. Amounts collected in advance of revenue recognition are recorded as current or long-term deferred revenue based on the time from the balance sheet date to the future date of revenue recognition.

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· We recognize revenue on certain instrument systems under rental programs over the life of the rental agreement using the straight-line method. Amounts collected in advance of revenue recognition are recorded as current or long-term deferred revenue based on the time from the balance sheet date to the future date of revenue recognition.

· We recognize revenue on practice management systems sales, where the system includes software that is considered more than incidental, either by allocating the revenue to each element of the sale based on relative fair values of the elements, including post-contract support when fair value for all elements is available, or by use of the residual method when only the fair value of the post-contract support is available. We recognize revenue for the system upon installation and customer acceptance and recognize revenue equal to the fair value of the post-contract support over the support period.

· Shipping costs reimbursed by the customer are included in revenue. These same costs are also included in cost of product revenue.

Multiple Element Arrangements (“MEAs”). Arrangements to sell products to customers frequently include multiple deliverables. Our most significant MEAs include the sale of one or more of the instruments from the IDEXX VetLab suite of analyzers, digital imaging systems or practice management software, combined with one or more of the following products: EMAs, consumables and reference laboratory diagnostic and consulting services. Practice management software is frequently sold with post-contract customer support and implementation services. Delivery of the various products or performance of services within the arrangement may or may not coincide. Delivery of our IDEXX VetLab instruments, digital imaging systems, and practice management software generally occurs at the onset of the arrangement. EMAs, consumables, and reference laboratory diagnostic and consulting services typically are delivered over future periods, generally one to six years. In certain arrangements, revenue recognized is limited to the amount invoiced or received that is not contingent on the delivery of products and services in the future.

We allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element. If available, we establish the selling price of each element based on vendor-specific objective evidence (“VSOE”), which represents the price charged for a deliverable when it is sold separately. We use third-party evidence (“TPE”) if VSOE is not available or best estimate of selling price if neither VSOE nor TPE is available. When these arrangements include a separately-priced EMA, we recognize revenue related to the EMA at the stated contractual price on a straight-line basis over the life of the agreement to the extent the separately stated price is substantive. If there is no stated contractual price for an EMA, or the separately stated price is not substantive, we allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element.

When arrangements within the scope of software revenue recognition guidance include multiple elements, we allocate revenue to each element based on relative fair value, when VSOE exists for all elements, or by using the residual method when there is VSOE for the undelivered elements but no such evidence for the delivered elements. Under the residual method, the fair value of the undelivered elements is deferred and the residual revenue is allocated to the delivered elements. Revenue is recognized on any delivered elements when the four criteria for revenue recognition have been met for each element. If VSOE does not exist for the undelivered element, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE does exist or all elements of the arrangement have been delivered. We determine fair value based on amounts charged separately for the delivered and undelivered elements to similar customers in standalone sales of the specific elements.

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Certain arrangements with customers include discounts on future sales of products and services. We apply judgment in determining whether future discounts are significant and incremental. When the future discount offered is not considered significant and incremental, we do not account for the discount as an element of the original arrangement. If the future discount is significant and incremental, we recognize that discount as an element of the original arrangement and allocate the discount to the other elements of the arrangement based on relative selling price. To determine whether a discount is significant and incremental, we look to the discount provided in comparison to standalone sales of the same product or service to similar customers, the level of discount provided on other elements in the arrangement, and the significance of the discount to the overall arrangement. If the discount in the MEA approximates the discount typically provided in standalone sales, that discount is not considered incremental.

Customer Programs. We record reductions to revenue related to customer marketing and incentive programs, which include end-user rebates and other volume-based incentives. Incentives may be provided in the form of IDEXX Points, credits or cash and are earned by end users upon achieving defined volume purchases or utilization levels or upon entering an agreement to purchase products or services in future periods. Our most significant customer programs are categorized as follows:

Customer Loyalty Programs. Our customer loyalty programs offer customers the opportunity to earn incentives on a variety of IDEXX products and services as those products and services are purchased and utilized. Revenue reductions related to customer loyalty programs are recorded based on the actual issuance of incentives, incentives earned but not yet issued and estimates of incentives to be earned in the future.

Up-Front Customer Loyalty Programs. Our up-front loyalty programs provide incentives to customers in the form of cash payments or IDEXX Points upon entering multi-year agreements to purchase annual minimum amounts of future products or services. If a customer breaches its agreement, it is required to refund a prorated portion of the up-front cash or IDEXX Points, among other things. These incentives are considered to be customer acquisition costs and are capitalized and recognized as a reduction to revenue over the term of the customer agreement. If these up-front incentives are subsequently utilized to purchase IDEXX VetLab instruments, digital imaging systems or Cornerstone practice management systems, product revenue and cost is deferred and recognized over the term of the customer agreement as products and services are provided to the customer. We monitor customer purchases over the term of their agreement to assess the realizability of our capitalized customer acquisition costs. For the years ended December 31, 2014, 2013 and 2012, impairments of customer acquisition costs were immaterial.

IDEXX InstrumentMarketing Programs. Our instrumentmarketing programs require the customer to enroll at the time of instrument purchase and offer customers the opportunity to earn incentives in future periods based on the volume of the products they purchase and utilize over the term of the program. These arrangements are considered MEAs in accordance with our revenue recognition policy stated above. Revenue reductions related to instrument marketing programs are recorded based on an estimate of customer purchase and utilization levels and the incentive the customer will earn over the term of the program. Our estimates are based on historical experience and the specific terms and conditions of the marketing program and require us to apply judgment to approximate future product purchases and utilization. Differences between our estimates and actual incentives earned are accounted for as a change in estimate. These differences were not material for the years ended December 31, 2014, 2013 and 2012.  

Reagent Rental Programs. Our reagent rental programs provide our customers the right to use our instruments in consideration for multi-year agreements to purchase annual minimum amounts of consumables. No instrument revenue is recognized at the time of instrument installation. We recognize a portion of the revenue allocated to the instrument concurrent with the future sale of consumables. We determine the amount of revenue allocated from the consumable to the instrument based on relative selling prices and determine the rate of instrument revenue recognition in proportion to the customer’s minimum volume commitment. The cost of the instrument is charged to cost of product revenue on a straight-line basis over the term of the minimum purchase agreement.

F-14

IDEXX Points may be applied against the purchase price of IDEXX products and services purchased in the future or applied to trade receivables due to us. IDEXX Points that have not yet been used by customers are classified as a liability until use or expiration occurs. We estimate the amount of IDEXX Points expected to expire, or breakage, based on historical expirations and we recognize the estimated benefit of breakage in proportion to actual redemptions of IDEXX Points by customers. On November 30 of each year, unused IDEXX Points earned before January 1 of the prior year generally expire and any variance from the breakage estimate is accounted for as a change in estimate. This variance was not material for the years ended December 31, 2014, 2013 and 2012.

Future market conditions and changes in product offerings may cause us to change marketing strategies to increase or decrease customer incentive offerings, possibly resulting in incremental reductions of revenue in future periods as compared to reductions in the current or prior periods. Additionally, certain customer programs require us to estimate, based on historical experience, and apply judgment to approximate the number of customers who will actually redeem the incentive. In determining estimated revenue reductions we utilize data supplied from distributors and collected directly from end users, which includes the volume of qualifying products purchased and the number of qualifying tests run as reported to us by end users via IDEXX SmartService, a secure Internet link that enables us to extract data and provide diagnostic service and support for certain IDEXX VetLab instruments through remote access. Differences between estimated and actual customer participation in programs may impact the amount and timing of revenue recognition.

Doubtful Accounts Receivable. We recognize revenue when collection from the customer is reasonably assured. We maintain allowances for doubtful accounts for potentially uncollectible receivables. We base our estimates on a detailed analysis of specific customer situations and a percentage of our accounts receivable by aging category. If the financial condition of our customers were to deteriorate, resulting in their inability to make payments, additional allowances might be required. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. We do not have any off-balance sheet credit exposure related to our customers.

(j)Research and Development Costs

Research and development costs, which consist of salaries, employee benefits, materials and external consulting and product development costs, are expensed as incurred. We evaluate our software research and development costs for capitalization after the technological feasibility of software and products containing software has been established. No costs were capitalized during the years ended December 31, 2014, 2013 and 2012.

(k)Advertising Costs

Advertising costs, which are recognized as sales and marketing expense in the period in which they are incurred, were $1.2 million, $1.5 million and $1.1 million for the years ended December 31, 2014, 2013 and 2012, respectively.

(l)Legal Costs

Legal costs are considered period costs and accordingly are expensed in the year services are provided.

(m)Share-Based Compensation

We provide for various forms of share-based compensation awards to our employees and non-employee directors. With the exception of stock options, the fair value of our awards is equal to the closing stock price of IDEXX common stock on the date of grant. We calculate the fair value of our stock option awards using the Black-Scholes-Merton option-pricing model. Share-based compensation expense is recognized net of estimated forfeitures, on a straight-line basis over the requisite service period of the award. See Note 4 for additional information regarding share-based compensation.

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(n)Self-Insurance Accruals

We self-insure costs associated with workers’ compensation and health and general welfare claims incurred by our U.S. employees up to certain limits. The insurance company provides insurance for claims above these limits. Claim liabilities are recorded for estimates of the loss that we will ultimately incur on reported claims, as well as estimates of claims that have been incurred but not yet reported. Such liabilities are based on individual coverage, the average time from when a claim is incurred to the time it is paid and judgments about the present and expected levels of claim frequency and severity. Estimated claim liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. Estimated claim liabilities are included in accrued liabilities in the accompanying consolidated balance sheets.

(o)Earnings per Share

Basic earnings per share is computed by dividing net income attributable to IDEXX Laboratories, Inc. stockholders by the weighted average number of shares of common stock and vested deferred stock units outstanding during the year. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and assumed issuance of unvested restricted stock units and unvested deferred stock units using the treasury stock method unless the effect is anti-dilutive. The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options, the total unrecognized compensation expense for unvested share-based compensation awards and the excess tax benefits resulting from share-based compensation tax deductions in excess of the related expense recognized for financial reporting purposes, would be used to purchase our common stock at the average market price during the period. Vested deferred stock units outstanding are included in shares outstanding for basic and diluted earnings per share because the associated shares of our common stock are issuable for no cash consideration, the number of shares of our common stock to be issued is fixed and issuance is not contingent. See Note 4 for additional information regarding deferred stock units.

(p)Foreign Currency

The functional currency of all but two of our subsidiaries is their local currency. Assets and liabilities of these foreign subsidiaries are translated to the U.S. dollar using the exchange rate in effect at the balance sheet date. Revenue and expense accounts are translated to the U.S. dollar using the exchange rate at the date which those elements are recognized, and where it is impractical to do so, an average exchange rate in effect during the period is used to translate those elements. Cumulative translation gains and losses are shown in the accompanying consolidated balance sheets as a separate component of accumulated other comprehensive income (“AOCI”).  

Revenues and expenses denominated in a currency other than the respective subsidiary’s functional currency are recorded at the current exchange rate when the transaction is recognized. Monetary assets and liabilities denominated in a currency other than the respective subsidiary’s functional currency are remeasured at each balance sheet date using the exchange rate in effect at each balance sheet date. These foreign currency gains and losses are included in general and administrative expenses. We recognized aggregate foreign currency losses of $2.0 million, less than $0.1 million and $0.2 million for the years ended December 31, 2014, 2013 and 2012, respectively.

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(q)Derivative Instruments and Hedging

We recognize all derivative instruments, including our foreign currency exchange contracts and interest rate swap agreements, on the balance sheet at fair value at the balance sheet date. Derivative instruments that do not qualify for hedge accounting treatment must be recorded at fair value through earnings. To qualify for hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. If a derivative instrument qualifies for hedge accounting, changes in the fair value of the derivative instrument from the effective portion of the hedge are deferred in AOCI, net of tax, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We immediately record in earnings the extent to which a hedge instrument is not effective in achieving offsetting changes in fair value. We de-designate derivative instruments from hedge accounting when the likelihood of the hedged transaction occurring becomes less than probable. For de-designated instruments, the gain or loss from the time of de-designation through maturity of the instrument is recognized in earnings. Any gain or loss in AOCI at the time of de-designation is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

We enter into master netting arrangements with the counterparties to our derivative transactions which permit outstanding receivables and payables to be offset in the event of default. Our derivative contracts do not require either party to post cash collateral. We elect to present our derivative assets and liabilities in the accompanying consolidated balance sheets on a gross basis. All cash flows related to our foreign currency exchange contracts and interest rate swaps are classified as operating cash flows, which is consistent with the cash flow treatment of the underlying items being hedged. See Note 16 for additional information regarding our derivative and hedging instruments.

(r)Fair Value Measurements

U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

The Company has certain financial assets and liabilities that are measured at fair value on a recurring basis, certain nonfinancial assets and liabilities that may be measured at fair value on a nonrecurring basis and certain financial assets and liabilities that are not measured at fair value in our consolidated balance sheets but for which we disclose the fair value. The fair value disclosures of these assets and liabilities are based on a three-level hierarchy, which is defined as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

F-17

Our foreign currency exchange contracts and interest rate swap agreements are measured at fair value on a recurring basis in our accompanying consolidated balance sheets. We measure the fair value of our foreign currency exchange contracts classified as derivative instruments using an income approach, based on prevailing market forward rates less the contract rate multiplied by the notional amount. The product of this calculation is then adjusted for counterparty risk. We measure the fair value of our interest rate swaps classified as derivative instruments using an income approach, utilizing a discounted cash flow analysis based on the terms of the contract and the interest rate curve adjusted for counterparty risk.

The amount outstanding under our unsecured revolving credit facility, notes receivable and long-term debt are measured at carrying value in our accompanying consolidated balance sheets though we disclose the fair value of these financial instruments. We determine the fair value of the amount outstanding under our credit facility, notes receivable and long-term debt using an income approach, utilizing a discounted cash flow analysis based on current market interest rates for debt issues with similar remaining years to maturity, adjusted for applicable credit risk. Our credit facility and long-term debt are valued using Level 2 inputs. The estimated fair value of our credit facility approximates its carrying value. At December 31, 2014, the estimated fair value and carrying value of our long-term debt were $367.3 million and $350.0 million, respectively. As of December 31, 2013, the carrying value of our long-term debt approximated its fair value. During the year ended December 31, 2014, we disposed of notes receivable representing a strategic investment in a privately held company. As of December 31, 2013, these notes receivable had a carrying value that approximated their fair value of $5.1 million and were valued using Level 3 inputs. See Note 3 for further information regarding the disposition of the notes receivable during June 2014.

(s)Comprehensive Income

We report all changes in equity during a period, resulting from net income and transactions or other events and circumstances from non-owner sources, in a financial statement for the period in which they are recognized. We have chosen to retrospectively present comprehensive income, which encompasses net income, foreign currency translation adjustments and the difference between the cost and the fair market value of investments in debt and equity securities, forward currency exchange contracts and interest rate swap agreements, in the consolidated statements of comprehensive income. See Note 18 for information about the effects on net income of significant amounts reclassified out of each component of AOCI for the years ended December 31, 2014 and 2013. We consider the foreign currency cumulative translation adjustment to be permanently invested and, therefore, have not provided income taxes on those amounts.

(t)Concentrations of Risk

Financial Instruments. Financial instruments that potentially subject us to concentrations of credit risk are principally cash, cash equivalents, accounts and notes receivable and derivatives. To mitigate such risk with respect to cash and cash equivalents, we place our cash with highly-rated financial institutions, in non-interest bearing accounts that are insured by the U.S. government and money market funds invested in government securities.

Concentration of credit risk with respect to accounts receivable is limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our most significant customers and monitor the amounts owed to us, taking appropriate action when necessary. As a result, we believe that accounts receivable credit risk exposure is limited. We maintain an allowance for doubtful accounts, but historically have not experienced any material losses related to an individual customer or group of customers in any particular industry or geographic area.

To mitigate concentration of credit risk with respect to derivatives we enter into transactions with highly-rated financial institutions, enter into master netting arrangements with the counterparties to our derivative transactions and frequently monitor the credit worthiness of our counterparties. Our master netting arrangements reduce our exposure in that they permit outstanding receivables and payables with the counterparties to our derivative transactions to be offset in the event of default. We have not incurred such losses and consider the risk of counterparty default to be minimal.

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Inventory. If we are unable to obtain adequate quantities of the inventory we need to sell our products, we could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on our results of operations. Many of the third parties that provide us with the instruments we sell and certain components, raw materials and consumables used in or with our products are obtained from sole or single source suppliers. Some of the products that we purchase from these sources are proprietary or complex in nature, and, therefore, cannot be readily or easily replaced by alternative sources.

Customers. Our largest customers are our U.S. distributors of our products in the CAG segment. Our two largest CAG distributors are Henry Schein Animal Health Supply, LLC (“Henry Schein”) and MWI Veterinary Supply (“MWI”). Henry Schein accounted for 8% of our 2014 consolidated revenue and 9% of our 2013 and 2012 consolidated revenue, and 2% and 7% of our net accounts receivable at December 31, 2014 and 2013. MWI accounted for 8% of our 2014, 2013 and 2012 consolidated revenue, respectively, and 8% and 11% of our net accounts receivable at December 31, 2014 and 2013, respectively. Effective January 1, 2015, most U.S. distributors are no longer our customers as  a result of our transition to an all-direct sales strategy in the U.S.

(u)New Accounting Pronouncements Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an amendment which will replace most of the existing revenue recognition guidance within U.S. GAAP. The core principle of this guidance is that an entity should recognize revenue for the transfer of goods or services to customers in an amount that it expects to be entitled to receive for those goods or services. In doing so, companies will be required to make certain judgments and estimates, including identifying contract performance obligations, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price among separate performance obligations. Additionally, the amendment requires disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, significant judgments reached in the application of the guidance and assets recognized from the costs to obtain or fulfill a contract. Effective for the Company beginning on January 1, 2017, the amendment allows for two methods of adoption, a full retrospective method or a modified retrospective approach with the cumulative effect recognized at the date of initial application. Early adoption is not permitted. We are in the process of determining the method of adoption and the impact of this amendment on our consolidated financial statements.

In August 2014, the FASB issued an amendment that requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The amendments in this update provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for one year after the date that the financial statements are issued and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this update apply to all entities and are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. This amendment is not expected to have a material impact on our financial statements.

NOTE 3.      ACQUISITIONS AND DISPOSITION OF STRATEGIC INVESTMENT

We believe that our acquisitions of businesses and other assets enhance our existing businesses by either expanding our geographic range or expanding our existing product lines.

During the year ended December 31, 2014, we paid an aggregate of $25.1 million, to acquire seven businesses, each accounted for as separate business combinations.

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We paid an aggregate of $18.7 million in cash and recorded contingent consideration of $4.2 million upon the acquisition of substantially all outstanding shares of a business and the assets of two other businesses, both that offer cloud-based veterinary practice software. As part of the business acquisitions, we recorded $11.7 million in amortizable intangible assets and $12.4 million in goodwill. Amortizable intangible assets primarily consisted of customer lists and software which were assigned weighted average useful lives of 16.4 years and 7.0 years, respectively. The weighted average useful life of all recognized amortizable intangible assets was  11.4 years.Goodwill is calculated as the consideration in excess of net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Of the total goodwill and amortizable assets acquired, $5.6 million of amortizable intangible assets are deductible for income tax purposes. All assets acquired in connection with these business combinations were assigned to our Companion Animal Group segment. Two out of three businesses acquired are located outside of the U.S. and, as such, the assets and liabilities recorded are subject to impacts of changes in foreign currency exchange rates.  The results of operations of these acquired businesses have been included since the acquisition date.  Pro forma information has not been presented for these business acquisitions because such information is not material to the financial statements.

We paid an aggregate of $6.2 million in cash and recorded contingent consideration of $1.5 million upon the acquisition of all outstanding shares of two veterinary reference laboratory testing businesses and to acquire the assets of two veterinary reference laboratory testing businesses. The purchase price in these business acquisitions was allocated primarily to customer list intangible assets, which were assigned a weighted average useful life of 13.3 years.$4.9 million of amortizable intangible assets associated with these acquisitions are deductible for income tax purposes. All assets acquired in connection with these business acquisitions were assigned to our Companion Animal Group segment. Certain of these business acquisitions were of businesses located outside of the U.S. and, as such, the assets and liabilities recorded are subject to impacts of changes in foreign currency exchange rates.  The results of operations of these acquired businesses have been included since the acquisition date.  Pro forma information has not been presented for these business acquisitions because such information is not material to the financial statements.

In June 2014, we divested our investment in a company that owns and operates veterinary hospitals. Upon the closing date, we received proceeds of $5.4 million in exchange for two outstanding promissory notes of the company and its subsidiaries and our 11% equity interest in the company. This investment has been accounted for under the equity method of accounting since acquisition in the fourth quarter of 2010. Upon the disposition of this strategic investment, we realized a $0.7 million gain, which has been reflected as a reduction to general and administrative.

During the year ended December 31, 2013, we paid an aggregate of $10.8 million in cash to acquire all outstanding shares of a distributor of certain of our bovine and dairy test products, as well as other food safety testing products, in Brazil. As part of this business acquisition, we recorded $4.8 million in amortizable intangible assets other than goodwill and $6.5 million in goodwill. The amortizable assets acquired consisted of a customer list, non-compete agreement and a trademark, which were assigned useful lives of 10,  5, and 15 years, respectively. The weighted average useful life of all recognized amortizable intangible assets was 9.9 years. Additionally, we recorded$0.7 million of cash and cash equivalents,$1.0 million in working capital, $0.5 million of fixed assets,$2.1 million in other assets and net deferred tax liabilities of $1.7 million. We deemed certain pre-acquisition contingent liabilities probable and recorded $3.1 million in other liabilities at December 31, 2013. Goodwill is calculated as the consideration in excess of net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill and amortizable intangible assets recorded from this business acquisition are not deductible for income tax purposes. All assets acquired in connection with this business acquisition were assigned to our LPD segment. The results of operations of this acquired business have been included since the acquisition date.  Pro forma information has not been presented for this business acquisition because such information is not material to the financial statements.

F-20

During the year ended December 31, 2012, we paid an aggregate of $3.6 million in cash to acquire three businesses, each accounted for as separate business combinations, and to acquire a product right unrelated to business acquisitions. As part of these business acquisitions, we acquired amortizable intangible assets consisting of customer lists with a fair value of $1.7 million and other intangible assets of $0.7 million, which were assigned weighted average useful lives of 10 years and 8 years, respectively. All assets acquired in connection with these business acquisitions were assigned to the CAG segment. The results of operations of these acquired businesses have been included since the acquisition date. Pro forma information has not been presented for these acquisitions because such information is not material to the financial statements.

NOTE 4.      SHARE-BASED COMPENSATION

Share-Based Awards

Our share-based compensation plans allow for the issuance of a mix of stock options, restricted stock, stock appreciation rights, employee stock purchase rights and other stock unit awards. Other stock unit awards include restricted stock units (“RSUs”) and deferred stock units (“DSUs”). Stock options permit a holder to buy IDEXX stock upon vesting at the stock’s price on the date the option was granted. An RSU is an agreement to issue shares of IDEXX stock at the time of vesting. DSUs are granted under our Executive Deferred Compensation Plan (the “Executive Plan”) and non-employee Director Deferred Compensation Plan (the “Director Plan”). DSUs may or may not have vesting conditions depending on the plan under which they are issued. We did not issue any restricted stock or stock appreciation rights during the years ended December 31, 2014, 2013 and 2012 nor were any restricted stock or stock appreciation rights outstanding as of those years ended. There were no material modifications to the terms of outstanding options, RSUs or DSUs during the years ended December 31, 2014, 2013 or 2012.

We primarily issue shares of common stock to satisfy stock option exercises and employee stock purchase rights and to settle RSUs and DSUs. We issue shares of treasury stock to settle certain restricted stock units and upon the exercise of certain stock options. The number of shares of treasury stock issued during the years ended December 31, 2014, 2013 and 2012 was not material. The number of shares of common stock and treasury stock issued are equivalent to the number of awards exercised or settled.

With the exception of employee stock purchase rights, equity awards are issued to employees and non-employee directors under the 2009 Stock Incentive Plan (the “2009 Stock Plan”). Our board of directors has authorized the issuance of 9,950,000 shares of our common stock under this share-based incentive plan. Any shares that are subject to awards of stock options or stock appreciation rights will be counted against the share limit as one share for every share granted. Any shares that are issued other than stock options and stock appreciation rights will be counted against the share limit as two shares for every share granted. If any shares issued under our prior plans are forfeited, settled for cash or expire, these shares, to the extent of such forfeiture, cash settlement or expiration, will again be available for issuance under the 2009 Stock Plan. As of December 31, 2014, there were 6,578,907 remaining shares available for issuance under the 2009 Stock Plan.

Employee stock purchase rights are issued under the 1997 Employee Stock Purchase Plan, under which we reserved and may issue up to an aggregate of 1,590,000 shares of common stock in periodic offerings. Under this plan, stock is sold to employees at a 15% discount off the closing price of the stock on the last day of each quarter. The dollar value of this discount is equal to the fair value of purchase rights recognized as share-based compensation. We issued 47,000,  55,000 and 51,000 shares of common stock in connection with the Employee Stock Purchase Plan during the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, there were 49,564 remaining shares available for issuance under the 1997 Employee Stock Purchase Plan.

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Share-Based Compensation

Share-based compensation costs are classified in our consolidated financial statements consistent with the classification of cash compensation paid to the employees receiving such share-based compensation. The following is a summary of share-based compensation costs and related tax benefits recorded in our consolidated statements of income for the years ended December 31, 2014, 2013 and 2012(in thousands):

		For the Years Ended December 31,
		2014			2013			2012
Share-based compensation expense included in cost of revenue	$	1,937		$	1,841		$	1,770
Share-based compensation expense included in operating expenses		16,162			14,733			14,152
Total share-based compensation expense included in consolidated statements of income		18,099			16,574			15,922
Income tax benefit resulting from share-based compensation arrangements		(6,107	)		(5,584	)		(5,403	)
Net impact of share-based compensation on net income	$	11,992		$	10,990		$	10,519

Share-based compensation expense is reduced for an estimate of the number of awards that are expected to be forfeited. We use historical data and other factors to estimate employee termination behavior and to evaluate whether particular groups of employees have significantly different forfeiture behaviors.

The total unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards at December 31, 2014 was $35.9 million, which will be recognized over a weighted average period of approximately 1.6 years.

Stock Options

Option awards are granted with an exercise price equal to the closing market price of our common stock at the date of grant. Options granted to employees primarily vest ratably over five years on each anniversary of the date of grant and options granted to non-employee directors vest fully on the first anniversary of the date of grant. Vesting of option awards issued is conditional based on continuous service. Options granted after May 8, 2013 have a contractual term of ten years, options granted between January 1, 2006 and May 8, 2013 have contractual terms of seven years and options granted prior to January 1, 2006 have contractual terms of ten years. Upon any change in control of the company, 25% of the unvested stock options then outstanding will vest and become exercisable. However, if the acquiring entity does not assume outstanding options, then all options will vest immediately prior to the change in control.

We use the Black-Scholes-Merton option-pricing model to determine the fair value of options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. Our expected stock price volatility assumptions are based on the historical volatility of our stock over periods that are similar to the expected terms of grants and other relevant factors. We derive the expected term based on historical experience and other relevant factors concerning expected employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. We have never paid any cash dividends on our common stock and we have no intention to pay a dividend at this time; therefore, we assume that no dividends will be paid over the expected terms of option awards.

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We determine the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, we may use different assumptions for options granted throughout the year. The weighted averages of the valuation assumptions used to determine the fair value of each option award on the date of grant and the weighted average estimated fair values were as follows:

	For the Years Ended December 31,
		2014			2013			2012
Expected stock price volatility		28	%		32	%		34	%
Expected term, in years		5.7			4.9			4.6
Risk-free interest rate		1.5	%		1.0	%		0.8	%
Weighted average fair value of options granted	$	36.14		$	27.17		$	26.38

A summary of the status of options granted under our share-based compensation plans at December 31, 2014, and changes during the year then ended, are presented in the table below:

	Number of Options (000)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding as of December 31, 2013	2,131	$	63.96
Granted	297		123.24
Exercised	(585)		41.63
Forfeited	(62)		92.53
Expired	(1)		91.68
Outstanding as of December 31, 2014	1,780	$	80.16	4.3	$	121,250
Fully vested as of December 31, 2014	888	$	63.50	2.7	$	75,286
Fully vested and expected to vest as of December 31, 2014	1,710	$	79.13	4.2	$	118,220

The total fair value of options vested during the years ended December 31, 2014, 2013 and 2012 was  $7.8million, $8.4 million and $8.3 million, respectively.

Intrinsic value of stock options exercised represents the amount by which the market price of the common stock exceeded the exercise price, before applicable income taxes. During the years ended December 31, 2014, 2013 and 2012 the total intrinsic value of stock options exercised was $51.2 million, $49.0 million and $45.8 million, respectively.

Restricted Stock Units

RSUs granted to employees vest ratably over five years on each anniversary of the date of grant or fully on the third anniversary of the date of grant, depending on the employee group receiving the award. RSUs granted to non-employee directors vest fully on the first anniversary of the date of grant. Vesting as it relates to RSUs issued is conditional based on continuous service.  Upon any change in control of the company, 25% of the unvested RSUs then outstanding will vest, provided, however, that if the acquiring entity does not assume the RSUs, then all such units will vest immediately prior to the change in control.

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A summary of the status of RSUs granted under our share-based compensation plans at December 31, 2014, and changes during the period then ended, are presented in the table below:

	Number of Units (000)	Weighted Average Grant-Date Fair Value
Nonvested as of December 31, 2013	336	$	76.67
Granted	98		122.92
Vested	(122)		64.71
Forfeited	(23)		89.25
Nonvested as of December 31, 2014	289	$	96.47
Expected to vest as of December 31, 2014	267	$	95.97

The total fair value of RSUs vested during the years ended December 31, 2014, 2013 and 2012 was $15.4 million, $12.7 million and $13.3 million, respectively. The aggregate intrinsic value of nonvested RSUs as of December 31, 2014 is equal to the fair value of IDEXX’s common stock as of December 31, 2014 multiplied by the number of nonvested units as of December 31, 2014.

Deferred Stock Units

Under our Director Plan, non-employee directors may defer a portion of their cash fees in the form of vested DSUs. Prior to 2014, certain members of our management could elect to defer a portion of their cash compensation in the form of vested deferred stock units under our Executive Plan. Each DSU represents the right to receive one unissued share of our common stock. These recipients receive a number of DSUs equal to the amount of cash fees or compensation deferred divided by the closing sale price of the common stock on the date of deferral. Also under the Director Plan, non-employee directors are awarded annual grants of DSUs that vest fully on the first anniversary of the date of grant. Vesting for these annual DSU grants is conditional based on continuous service. DSUs are exchanged for a fixed number of shares of common stock, upon vesting if vesting criteria apply, subject to the limitations of the Director and Executive Plans and applicable law.

There were approximately 118,000 and 122,000 vested DSUs outstanding under our share-based compensation plans as of December 31, 2014 and 2013, respectively. Unvested DSUs as of December 31, 2014 and 2013 were not material.

NOTE 5.INVENTORIES

The components of inventories are as follows (in thousands):

	December 31,		December 31,
		2014		2013
Raw materials	$	26,908	$	23,766
Work-in-process		16,859		14,359
Finished goods		116,575		95,302
	$	160,342	$	133,427

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NOTE 6.      PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following (in thousands):  

	December 31,		December 31,
		2014		2013
Land and improvements	$	7,417	$	7,471
Buildings and improvements		159,298		158,382
Leasehold improvements		45,655		39,266
Machinery and equipment		183,575		162,144
Office furniture and equipment		35,696		35,271
Computer hardware and software		151,404		136,008
Construction in progress		20,890		11,473
		603,935		550,015
Less accumulated depreciation and amortization		300,348		268,801
Total property and equipment, net	$	303,587	$	281,214

Depreciation and amortization expense of property and equipment was $48.8 million, $42.8 million and $39.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.

In 2011, we began the construction of a new administrative building adjacent to our primary facility on our worldwide headquarters in Westbrook, Maine, which was complete as of December 31, 2013. We capitalized $19.9 million and  $13.9 million related to this project during the years ended December 31, 2013 and 2012, respectively.

During the years ended December 31, 2014, 2013 and 2012, we capitalized $11.9 million, $10.9 million and $12.4 million, respectively, related to computer software developed for internal use.

NOTE 7.OTHER CURRENT AND NONCURRENT ASSETS

Other current assets consisted of the following (in thousands):

	December 31,		December 31,
		2014		2013
Prepaid expenses	$	32,672	$	20,810
Taxes receivable		28,926		14,910
Customer acquisition costs, net		11,262		8,098
Other assets		13,591		5,139
	$	86,451	$	48,957

Other noncurrent assets consisted of the following (in thousands):  

	December 31,		December 31,
		2014		2013
Investment in long-term product supply arrangements	$	10,765	$	13,075
Customer acquisition costs, net		28,165		21,199
Other assets		32,724		22,957
	$	71,654	$	57,231

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NOTE 8.GOODWILL AND INTANGIBLE ASSETS, NET

Intangible assets other than goodwill consisted of the following (in thousands):

	December 31, 2014				December 31, 2013
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
Patents	$	4,871	$	4,308	$	9,547	$	8,619
Product rights (1)		36,912		20,657		38,670		25,796
Customer-related intangible assets (2)		88,494		40,933		82,940		38,800
Noncompete agreements		1,125		382		7,131		6,229
	$	131,402	$	66,280	$	138,288	$	79,444

(1) Product rights comprise certain technologies, licenses and trade names acquired from third parties.

(2) Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

Amortization expense of intangible assets other than goodwill was $9.8 million, $9.7 million and $9.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. The increase in intangible assets other than goodwill during the twelve months ended December 31, 2014 resulted from intangibles recognized in connection with the acquisition of businesses, partly offset by the amortization of our intangible assets and, to a lesser extent, changes in foreign currency exchange rates.

At December 31, 2014, the aggregate amortization expense associated with intangible assets is estimated to be as follows for each of the next five years and thereafter (in thousands):

	Amortization Expense
2015	$	10,678
2016		10,332
2017		9,438
2018		8,068
2019		6,560
Thereafter		20,046
	$	65,122

The increase in goodwill during the twelve months ended December 31, 2014 resulted from goodwill recognized in connection with the acquisition of businesses, partly offset by changes in foreign currency exchange rates. See Note 3 for information regarding goodwill and other intangible assets recognized in connection with the acquisition of businesses and other assets during the years ended December 31, 2014, 2013 and 2012.

The changes in the carrying amount of goodwill for the years ended December 31, 2014, 2013, and 2012 were as follows (in thousands):

		CAG		Water		LPD		Other		Consolidated Total
Balance as of December 31, 2011	$	141,677	$	13,576	$	10,826	$	6,531	$	172,610
Impact of Changes in Foreign Currency Exchange Rates		1,478		603		303		-		2,384
Balance as of December 31, 2012	$	143,155	$	14,179	$	11,129	$	6,531	$	174,994
Business Combinations		250		-		6,491		-		6,741
Impact of Changes in Foreign Currency Exchange Rates		(1,997)		336		447		-		(1,214)
Balance as of December 31, 2013	$	141,408	$	14,515	$	18,067	$	6,531	$	180,521
Business Combinations		13,077		-		-		-		13,077
Impact of Changes in Foreign Currency Exchange Rates		(6,334)		(826)		(1,988)		-		(9,148)
Balance as of December 31, 2014	$	148,151	$	13,689	$	16,079	$	6,531	$	184,450

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See Note 3 for information regarding the recognition of goodwill in connection with the acquisition of businesses during the years ended December 31, 2014 and 2013. We have no history of impairment charges to the carrying value of our goodwill.

NOTE 9.ACCRUED LIABILITIES

Accrued liabilities consisted of the following (in thousands):

	December 31,		December 31,
	2014		2013
Accrued expenses	$	55,655	$	44,274
Accrued employee compensation and related expenses		75,232		62,474
Accrued taxes		28,439		16,508
Accrued customer programs		36,025		25,663
	$	195,351	$	148,919

NOTE 10.      DEBT

In June 2014, we refinanced our existing $450.0 million unsecured revolving credit facility by entering into an amended and restated credit agreement relating to a five-year unsecured revolving credit facility in the principal amount of $700 million with a syndicate of multinational banks, which matures on June 18, 2019 (the new credit facility and the previous credit facility are referred to collectively as the “Credit Facility”) and requires no scheduled prepayments before that date. Although the Credit Facility does not mature until June18, 2019, all individual borrowings under the terms of the Credit Facility have a stated term between 30 and 180 days. At the end of each term, the obligation is either repaid or rolled over into a new borrowing. The Credit Facility contains a subjective material adverse event clause, which allows the debt holders to call the loans under the Credit Facility if we fail to provide prompt written notice to the syndicate of such an event. Based on the stated term and the existence of the subjective material adverse event clause, this Credit Facility is reflected in the current liabilities section of our consolidated balance sheets. At December 31, 2014 and 2013, we had $549.0 million and $277.0 million, respectively, outstanding under the Credit Facility with weighted average effective interest rates of 1.5% and 1.6%, respectively. The funds available under the Credit Facility at December 31, 2014 and December 31, 2013 reflect a further reduction due to the issuance of a letter of credit for $1.0 million, which was issued in connection with our workers’ compensation policy.

Applicable interest rates on borrowings under the Credit Facility generally range from 0.875 to 1.375 percentage points (“Credit Spread”) above the London interbank offered rate or the Canadian Dollar-denominated bankers’ acceptance rate, based on our leverage ratio, or the prevailing prime rate plus a maximum spread of up to 0.375%, based on our leverage ratio. We have entered into forward fixed interest rate swap agreements to manage the economic effect of the first $80 million of variable interest rate borrowings. As such, we continue to designate the existing interest rate swaps as cash flow hedges. See Note 16 for a discussion of our derivative instruments and hedging activities. Under the Credit Facility, we pay quarterly commitment fees of 0.15% to 0.35%, based on our leverage ratio, on any unused commitment.

The obligations under the Credit Facility may be accelerated upon the occurrence of an event of default under the Credit Facility, which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness,cross-acceleration to specified indebtedness and a change of control default. The Credit Facility contains affirmative, negative and financial covenants customary for financings of this type. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, investments, transactions with affiliates and certain restrictive agreements. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization and share-based compensation defined as the consolidated leverage ratio under the terms of the Credit Facility, not to exceed 3.5-to-1. At December 31, 2014, we were in compliance with the covenants of the Credit Facility.

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In December 2013, we issued and sold through a private placement an aggregate principal amount of $150 million of senior notes consisting of lose$75 million of 3.94% Series A Senior Notes due December 11, 2023 (the “2023 Notes”) and $75 million of 4.04% Series B Senior Notes due December 11, 2025 (the “2025 Notes” and together with the 2023 Notes, the “December Notes”) under a Note Purchase Agreement among the Company, New York Life Insurance Company and the accredited institutional purchasers named therein (the “December 2013 Note Agreement”).

In July 2014, we issued and sold through a private placement an aggregate principal amount of $125 million of senior notes consisting of $75 million of 3.76% Series B Senior Notes due July 21, 2024 (the “2024 Notes”) and $50 million of 3.32% Series A Senior Notes due July 21, 2021 (the “2021 Notes” and together with the 2024 Notes, the “Prudential Notes”) under a Note Purchase and Private Shelf Agreement among the Company, Prudential Investment Management, Inc. and the accredited institutional purchasers named therein (the “July 2014 Note Agreement”).

In September 2014, we issued and sold through a private placement an aggregate principal amount of $75 million of 3.72% Senior Notes due September 4, 2026 (the “2026 Notes” and together with the Prudential Notes and the December Notes, the “Senior Notes”) under a Note Purchase Agreement dated as of July 22, 2014 among the Company, New York Life Insurance Company and the accredited institutional purchasers named therein (such agreement, together with July 2014 Note Agreement and December 2013 Note Agreement, the “Senior Note Agreements”).

In December 2014, we entered into a Multicurrency Note Purchase and Private Shelf Agreement among the Company, Metropolitan Life Insurance Company (“MetLife”), and the accredited institutional purchasers named therein pursuant to which the Company agreed to issue and sell $75 million of its 3.25% Series A Senior Notes having a seven-year term, and $75 million of its 3.72% Series B Senior Notes having a twelve-year term. The issuance, sale and purchase of the 2022 Notes and 2027 Notes occurred in February 2015. The Agreement also provides for an uncommitted shelf facility by which the Company may request that MetLife purchase, over the next three years, up to $50 million of additional senior promissory notes of the Company at a fixed interest rate to be determined at the time of purchase and with a maturity date not to exceed fifteen years.

The Senior Note Agreements contain affirmative, negative and financial covenants customary for agreements of this type. The negative covenants include restrictions on liens, indebtedness of our subsidiaries, priority indebtedness, fundamental changes, investments, transactions with affiliates, certain restrictive agreements and violations of laws and regulations. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization and share-based compensation, as defined in the Senior Note Agreements, not to exceed 3.5-to-1. At December 31, 2014, we were in compliance with the covenants of the Senior Note Agreements.

Should we elect to prepay the Senior Notes, such aggregate prepayment will include the applicable make-whole amount(s), as defined within the applicable Senior Note Agreements. Additionally, in the event of a change in control of the Company or upon the disposition of certain assets of the Company the proceeds of which are not reinvested (as defined in the Senior Note Agreements), we may be required to prepay all or a portion of the Senior Notes. The obligations under the Senior Notes may be accelerated upon the occurrence of an event of default under the applicable Senior Note Agreement, each of which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness and cross-acceleration to specified indebtedness.

In June 2014, we paid off the remaining outstanding principal balance on the mortgage related to our worldwide headquarters in Westbrook, Maine.

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Annual principal payments on long-term debt at December 31, 2014 are as follows (in thousands):

Years Ending December 31,		Amount
2015	$	-
2016		-
2017		-
2018		-
2019		-
Thereafter		350,000
	$	350,000

NOTE 11.INCOME TAXES

Earnings before income taxes were as follows (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Domestic	$	148,510	$	184,086	$	184,159
International		98,045		79,175		76,458
	$	246,555	$	263,261	$	260,617

The provision (benefit) for income taxes comprised the following (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Current
Federal	$	39,713	$	50,999	$	59,887
State		4,692		5,639		5,879
International		20,213		16,657		18,534
		64,618		73,295		84,300
Deferred
Federal		2,301		3,203		(198)
State		33		329		72
International		(2,348)		(1,360)		(1,844)
		(14)		2,172		(1,970)
	$	64,604	$	75,467	$	82,330

The provision for income taxes differs from the amounts computed by applying the statutory federal income tax rate as follows:

	For the Years Ended December 31,
		2014		2013		2012
U.S. federal statutory rate		35.0	%	35.0	%	35.0	%
State income tax, net of federal tax benefit		1.5		1.5		1.5
International income taxes		(7.0)		(4.6)		(3.8)
Domestic manufacturing exclusions		(1.2)		(1.4)		(1.5)
Research and development credit		(1.3)		(2.3)		-
Other, net		(0.8)		0.5		0.4
Effective tax rate		26.2	%	28.7	%	31.6	%

Our effective income tax rate was 26.2% for the year ended December 31, 2014 and 28.7% for the year ended December 31, 2013. The decrease in our effective income tax rate for the year ended December 31, 2014, as compared to the year ended December 31, 2013, was related to higher relative earnings subject to international tax rates that are lower than domestic tax rates, a non-recurring benefit related to the deferral of intercompany profits that were included in prior year tax provisions in error, which is not material to current or prior interim or annual periods, and the resolution of domestic and international tax audits, which resulted in a net reduction in our provision for uncertain tax positions.  These favorable factors were partly offset by a reduction in the benefit from the U.S. research and development (“R&D”) tax credit.  During the three months ended March 31, 2013, legislation

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in the U.S. retroactively allowed the R&D tax credit for all of 2012 and extended the R&D tax credit through the year ending December 31, 2013.  As a result, in the year ending December 31, 2013 we recorded the benefit of two years of R&D tax credit as compared to the year ending December 31, 2014 in which we have recorded only the benefit related to that year’s activities.

Our effective income tax rate was 28.7% for the year ended December 31, 2013 and 31.6% for the year ended December 31, 2012.  The decrease in our effective income tax rate for the year ended December 31, 2013, as compared to the year ended December 31, 2012, was due primarily to the R&D tax credit. For the year ended December 31, 2012, the U.S. legislation authorizing the R&D tax credit had expired and no associated tax benefit was recognized within this period. On January 2, 2013, U.S. federal legislation was enacted that retroactively allowed an R&D tax credit for all of 2012 and extended the R&D tax credit through the year ended December 31, 2013. Because the related legislation was enacted in 2013, the full benefit of the R&D tax credit related to the prior year’s activities was recognized in 2013. In addition, higher relative earnings subject to international tax rates that are lower than domestic tax rates also contributed to the decrease in our effective income tax rate.

We have business operations in Switzerland and the Netherlands and have been granted tax rulings by each jurisdiction. Our tax rulings in Switzerland and the Netherlands are set to expire on December 31, 2015 and December 31, 2022, respectively. As a result of the tax rulings, our net income was higher by $8.5 million, $6.5 million and $6.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. The benefit from these tax rulings is reflected within the overall benefit received from international income taxes in the table above.

We consider the majority of the operating earnings of non-U.S. subsidiaries to be indefinitely invested outside the U.S. The cumulative earnings of these subsidiaries were $431.7 million at December 31, 2014. No provision has been made for U.S. federal and state, or international taxes that may result from future remittances of the undistributed earnings of non-U.S. subsidiaries. Should we repatriate these earnings in the future, we would have to adjust the income tax provision in the period in which the decision to repatriate earnings is made. A determination of the related tax liability that would be paid on these undistributed earnings if repatriated is not practicable. For the operating earnings not considered to be indefinitely invested outside the U.S., we have accounted for the tax impact on a current basis.

The components of the net deferred tax assets (liabilities) included in the accompanying consolidated balance sheets are as follows (in thousands):

	December 31, 2014				December 31, 2013
		Current		Long-Term		Current		Long-Term
Assets
Accrued expenses	$	20,377	$	7,824	$	19,833	$	1,622
Accounts receivable reserves		2,591		-		1,153		-
Deferred revenue		8,697		3,084		5,872		1,552
Inventory basis differences		3,154		347		2,670		-
Property-based differences		-		1,601		-		1,728
Share-based compensation		2,490		8,936		2,325		7,923
Other		171		255		13		150
Net operating loss carryforwards		65		4,368		500		4,182
Unrealized losses on foreign currency exchange contracts, interest rate swaps and investments		-		-		1,580		-
Total assets		37,545		26,415		33,946		17,157
Valuation allowance		(457)		(4,221)		(642)		(4,559)
Total assets, net of valuation allowance		37,088		22,194		33,304		12,598
Liabilities
Deferred instrument costs		-		(10,149)		-		(3,093)
Property-based differences		-		(33,978)		-		(25,823)
Intangible asset basis differences		-		(16,882)		-		(15,513)
Other		(610)		(517)		(190)		(790)
Unrealized gains on foreign currency exchange contracts, interest rate swaps and investments		(2,603)		-		(1,303)		-
Total liabilities		(3,213)		(61,526)		(1,493)		(45,219)
Net deferred tax assets (liabilities)	$	33,875	$	(39,332)	$	31,811	$	(32,621)

F-30

We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes. We classify certain uncertain tax positions as long-term liabilities.

The total amount of unrecognized tax benefits at December 31, 2014 and December 31, 2013 was $5.9 million and $6.3 million, respectively. Of the total unrecognized tax benefits at December 31, 2014 and 2013, $5.0 million and $5.7 million, respectively, comprise unrecognized tax positions that would, if recognized, affect our effective tax rate. The ultimate deductibility of the remaining unrecognized tax positions is highly certain but there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

During each of the years ended December 31, 2014, 2013 and 2012, we recorded interest expense and penalties of $0.3 million as income tax expense in our consolidated statement of income. At December 31, 2014 and 2013, we had $0.5 million and $0.6 million, respectively, of estimated interest expense and penalties accrued in our consolidated balance sheets.

The following table summarizes the changes in unrecognized tax benefits during the years ended December 31, 2014, 2013 and 2012  (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Total amounts of unrecognized tax benefits, beginning of period	$	6,325	$	5,906	$	5,149
Gross increases in unrecognized tax benefits as a result of tax positions taken during a prior period		432		8		290
Gross increases in unrecognized tax benefits as a result of tax positions taken in the current period		1,789		1,954		1,436
Decreases in unrecognized tax benefits relating to settlements with taxing authorities		(2,242)		(317)		-
Decreases in unrecognized tax benefits as a result of a lapse of the applicable statutes of limitations		(362)		(1,226)		(969)
Total amounts of unrecognized tax benefits, end of period	$	5,942	$	6,325	$	5,906

In 2015, it is reasonably possible that we could recognize up to $0.4 million of income tax benefits that have not been recognized at December 31, 2014. The income tax benefits are due primarily to the lapse in the statutes of limitations for various U.S. and international tax jurisdictions.

In the ordinary course of our business, our income tax filings are regularly under audit by tax authorities. While we believe we have appropriately provided for all uncertain tax positions, amounts asserted by taxing authorities could be greater or less than our accrued position. Accordingly, additional provisions on income tax matters, or reductions of previously accrued provisions, could be recorded in the future as we revise our estimates due to changing facts and circumstances or the underlying matters are settled or otherwise resolved. We are currently under tax examinations by various state and international tax authorities. We anticipate that these examinations will be concluded within the next year. We are no longer subject to U.S. federal examinations for tax years before 2013. With few exceptions, we are no longer subject to income tax examinations in any state and local, or international jurisdictions in which we conduct significant taxable activities for years before 2006.

At December 31, 2014, we had net operating loss carryforwards in certain state and international jurisdictions of approximately $41.6 million available to offset future taxable income. Most of these net operating loss carryforwards will expire at various dates through 2018 and the remainder have indefinite lives. We have recorded a valuation allowance of $4.7 million against certain deferred tax assets related to temporary differences including net operating loss carryforwards, as it is more likely than not that they will not be realized or utilized within the carryforward period.

F-31

NOTE 12.EARNINGS PER SHARE

The following is a reconciliation of shares outstanding for basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012  (in thousands):

	For the Years Ended December 31,
	2014	2013	2012
Shares outstanding for basic earnings per share:	50,047	53,159	54,985
Shares outstanding for diluted earnings per share:
Shares outstanding for basic earnings per share	50,047	53,159	54,985
Dilutive effect of share-based payment awards	704	826	1,170
	50,751	53,985	56,155

Certain options to acquire shares have been excluded from the calculation of shares outstanding for dilutive earnings per share because they were anti-dilutive. The following table presents information concerning those anti-dilutive options for the years ended December 31, 2014, 2013 and 2012(in thousands):

	For the Years Ended December 31,
	2014	2013	2012
Weighted average number of shares underlying anti-dilutive options	322	527	696

NOTE 13.COMMITMENTS, CONTINGENCIES AND GUARANTEES

Commitments

We determine the lease period of any executed agreements using the noncancelable lease term plus any renewal options by which the failure to renew imposes a penalty in such amount that renewal is reasonably assured. We lease multiple facilities under operating leases with various expiration dates through 2030. In addition, we are responsible for the real estate taxes and operating expenses related to these facilities. We also have lease commitments for automobiles and office equipment. Rent expense charged to operations under operating leases was approximately $17.2 million, $15.8 million and $15.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Minimum annual rental payments under these agreements are estimated as follows (in thousands):

Years Ending December 31,		Amount
2015	$	17,228
2016		15,245
2017		12,984
2018		10,048
2019		6,731
Thereafter		15,256
	$	77,492

We have various minimum royalty payments due through 2027 of $3.3 million. If these obligations are not satisfied, the related license arrangements may be terminated, resulting in either a loss in exclusivity or the right to use the technology.

We are required to annually purchase a minimum amount of inventory from certain suppliers. Through 2022, we have a total of $11.4 million in minimum purchase commitments under these arrangements.

F-32

Contingencies

We are subject to claims that arise in the ordinary course of business, including with respect to actual and threatened litigation and other matters. We accrue for loss contingencies when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. However, our actual losses with respect to these contingencies could exceed our accruals.

Under our workers’ compensation insurance policies for U.S. employees, we have retained the first $300,000,  $250,000 and $250,000 in claim liability per incident with aggregate maximum claim liabilities per year of  $2.3 million for the year ended December 31, 2014 and $2.0 million for each of the years ended December 31, 2013 and 2012, respectively. We have recognized cumulative expenses of $1.1 million, $0.5 million and $0.6 million for claims incurred during the years ended December 31, 2014, 2013 and 2012, respectively. Our estimated liability for workers’ compensation was $1.4 million and $1.2 million as of December 31, 2014 and 2013, respectively. Claims incurred during the years ended December 31, 2014 and 2013 are relatively undeveloped as of December 31, 2014. Therefore, it is possible that we could incur additional healthcare and wage indemnification costs beyond those previously recognized up to our aggregate liability for each of the respective claim years. For the years ended on or prior to December 31, 2012, based on our retained claim liability per incident and our aggregate claim liability per year, our maximum liability in excess of the amounts deemed probable and previously recognized is not material as of December 31, 2014. As of December 31, 2014, we had outstanding letters of credit totaling $1.3 million to the insurance companies as security for these claims in connection with these policies.

Under our current employee healthcare insurance policy for U.S. employees, we retain claims liability risk up to $375,000, $325,000 and $300,000 per incident per year in 2014, 2013 and 2012, respectively. We recognized employee healthcare claim expense of $32.0 million, $29.2 million and $23.0 million during the years ended December 31, 2014, 2013 and 2012, respectively, which includes actual claims paid and an estimate of our liability for the uninsured portion of employee healthcare obligations that have been incurred but not paid. Should employee health insurance claims exceed our estimated liability, we would have further obligations. Our estimated liability for healthcare claims that have been incurred but not paid as of December 31, 2014 and 2013 was $4.1 million and $4.3 million, respectively.

We have entered into an employment agreement with our chief executive officer whereby payment may be required if we terminate his employment without cause other than following a change in control. The amount payable is based upon the executive’s salary at the time of termination and the cost to us of continuing to provide certain benefits. Had this officer been terminated without cause at December 31, 2014, other than following a change in control, we would have had an obligation for salaries and benefits of approximately $1.6 million under such agreement. In addition, the agreement provides for continued vesting of his outstanding equity awards for a period of two years.  

We have entered into employment agreements with each of our officers that require us to make certain payments in the event the officer’s employment is terminated under certain circumstances within a certain period following a change in control. The amount payable by us under each of these agreements is based on the officer’s salary and bonus history at the time of termination and the cost to us of continuing to provide certain benefits. Had all of our officers been terminated in qualifying terminations following a change in control at December 31, 2014, we would have had aggregate obligations of approximately $24.8million under these agreements. These agreements also provide for the acceleration of the vesting of all stock options and restricted stock units upon any qualifying termination following a change in control. At this time, we believe the likelihood of terminations as a result of the scenarios described is remote, and therefore, we have not accrued for such loss contingencies.

We have total contingent liabilities outstanding of up to $11.8 million primarily related to the achievement of certain revenue milestones. We have recorded $6.3 million of contingent commitments on our consolidated balance sheet at December 31, 2014. The amount of contingent consideration recorded on our consolidated balance sheet at December 31, 2013 was not material. We have not accrued for $5.5 million of contingent liabilities, related to the acquisition of an intangible asset in 2008, as we do not deem the achievement of associated revenue milestones to be probable of occurring as of December 31, 2014.

F-33

From time to time, we have received notices alleging that our products infringe third-party proprietary rights, although we are not aware of any pending litigation with respect to such claims. Patent litigation frequently is complex and expensive, and the outcome of patent litigation can be difficult to predict. There can be no assurance that we will prevail in any infringement proceedings that may be commenced against us. If we lose any such litigation, we may be stopped from selling certain products and/or we may be required to pay damages as a result of the litigation.

Guarantees

We enter into agreements with third parties in the ordinary course of business under which we are obligated to indemnify such third parties for and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In many cases, we limit the maximum amount of our indemnification obligations, but in some cases those obligations may be theoretically unlimited. We have not incurred material expenses in discharging any of these indemnification obligations, and based on our analysis of the nature of the risks involved, we believe that the fair value of these agreements is minimal. Accordingly, we have recorded no liabilities for these obligations at December 31, 2014 and 2013.

When acquiring a business, we sometimes assume liability for certain events or occurrences that took place prior to the date of acquisition. We have recorded $2.5 million and $3.1 million of probable pre-acquisition liabilities in the accompanying consolidated balance sheets at December 31, 2014 and 2013, respectively.

NOTE 14.      SEGMENT REPORTING

Prior to January 1, 2013, we operated primarily through three business segments: diagnostic and information technology-based products and services for the veterinary market, which we continue to refer to as CAG; water quality products (“Water”); and diagnostic products for livestock and poultry health, which we referred to as Livestock and Poultry Diagnostics. We also operated two smaller operating segments that comprised products for milk quality and safety (“Dairy”) and products for the human point-of-care medical diagnostics market (“OPTI Medical”). Financial information about our Dairy and OPTI Medical operating segments was combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they did not meet the quantitative or qualitative thresholds for reportable segments. 

In 2013, we combined the management of our Livestock and Poultry Diagnostics and Dairy lines of business into our LPD segment to more effectively realize the market synergies between the product lines and to achieve operational efficiencies. Our OPTI Medical operating segment remains combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they do not meet the quantitative or qualitative thresholds for reportable segments. The segment income (loss) from operations discussed within this report for the years ended December 31, 2012 has been retrospectively revised to reflect this change in the composition of our reportable segments.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-maker is our Chief Executive Officer. Our operating segments include: CAG, Water, LPD, and Other. Assets are not allocated to segments for internal reporting purposes.

F-34

CAG develops, designs, manufactures and distributes products and performs services for veterinarians and the bioresearch market, primarily related to diagnostics and information management. Water develops, designs, manufactures and distributes a range of products used in the detection of various microbiological parameters in water. LPD develops, designs, manufactures and distributes diagnostic tests and related instrumentation that are used to manage the health status of livestock and poultry, to improve bovine reproductive efficiency, and to ensure the quality and safety of milk and food. OPTI Medical develops, designs, manufactures and distributes point-of-care electrolyte and blood gas analyzers and related consumable products for the human medical diagnostics market.

The accounting policies of our segments are the same as those described in the summary of significant accounting policies in Note 2 except for inventories, as discussed below. Intersegment revenues, which are not included in the table below, were not material for the years ended December 31, 2014, 2013 and 2012.

Items that are not allocated to our operating segments are as follows: a portion of corporate support function and personnel-related expenses; certain manufacturing costs; corporate research and development expenses that do not align with one of our existing business or service categories; the difference between estimated and actual share-based compensation expense; and certain foreign currency exchange gains and losses. These amounts are shown under the caption “Unallocated Amounts.”

We estimate our share-based compensation expense, corporate support function expenses and certain personnel-related costs and allocate the estimated expenses to the operating segments. This allocation differs from actual expense and consequently yields a difference that is reported under the caption “Unallocated Amounts.” 

With respect to manufacturing costs, the costs reported in our operating segments include our standard cost for products sold and any variances from standard cost for products purchased or manufactured within the period. We capitalize these variances for inventory on hand at the end of the period to record inventory in accordance with U.S. GAAP. We then record these variances as cost of product revenue as that inventory is sold. The impact to cost of product revenue resulting from this variance capitalization and subsequent recognition is reported within the caption “Unallocated Amounts.”

Additionally, in certain geographies where we maintain inventories in currencies other than the U.S. dollar, the product costs reported in our operating segments include our standard cost for products sold, which is stated at the budgeted currency exchange rate from the beginning of the fiscal year. In these geographies, the variances from standard cost for products sold related to changes in currency exchange rates are reported within the caption “Unallocated Amounts.”

F-35

Below is our segment information (in thousands):

For the Years Ended December 31,
	CAG		Water		LPD		Other		Unallocated Amounts		Consolidated Total
2014
Revenue	$	1,236,855	$	94,725	$	127,388	$	26,839	$	-	$	1,485,807
Income (loss) from operations	$	213,109	$	39,262	$	24,215	$	2,479	$	(18,810)	$	260,255
Interest expense, net												(13,700)
Income before provision for income taxes												246,555
Provision for income taxes												64,604
Net income												181,951
Less: Net income attributable to noncontrolling interest												45
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	181,906
Depreciation and amortization	$	48,740	$	2,553	$	5,144	$	2,451	$	-	$	58,888
Expenditures for long-lived assets (1)	$	49,270	$	2,499	$	4,025	$	4,729	$	-	$	60,523
2013
Revenue	$	1,150,169	$	87,959	$	113,811	$	25,119	$	-	$	1,377,058
Income (loss) from operations	$	218,645	$	37,321	$	14,159	$	2,405	$	(5,768)	$	266,762
Interest expense, net												(3,501)
Income before provision for income taxes												263,261
Provision for income taxes												75,467
Net income												187,794
Less: Net loss attributable to noncontrolling interest												(6)
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	187,800
Depreciation and amortization	$	45,079	$	2,470	$	4,906	$	2,141	$	-	$	54,596
Expenditures for long-lived assets (1)	$	66,134	$	3,254	$	5,569	$	2,655	$	-	$	77,612
2012
Revenue	$	1,072,211	$	84,680	$	111,308	$	25,139	$	-	$	1,293,338
Income (loss) from operations	$	203,236	$	37,687	$	20,808	$	2,902	$	(2,070)	$	262,563
Interest expense, net												(1,946)
Income before provision for income taxes												260,617
Provision for income taxes												82,330
Net income												178,287
Less: Net income attributable to noncontrolling interest												20
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	178,267
Depreciation and amortization	$	43,042	$	2,358	$	4,943	$	2,065	$	-	$	52,408
Expenditures for long-lived assets (1)	$	47,531	$	2,099	$	5,767	$	2,221	$	-	$	57,618

__________

(1)     Expenditures for long-lived assets exclude expenditures for intangible assets. See Note 3 for information regarding acquisitions of intangible assets during the years ended December 31, 2014, 2013 and 2012.

F-36

Revenue by product and service categories was as follows (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
CAG segment revenue:
CAG Diagnostics recurring revenue:	$	1,053,410	$	973,886	$	896,449
VetLab consumables		341,397		312,457		278,818
VetLab service and accessories		53,383		50,675		48,056
Rapid assay products		165,647		169,547		162,232
Reference laboratory diagnostic and consulting services		492,983		441,207		407,343
CAG Diagnostics capital instruments		79,626		83,492		90,177
Customer information management and digital imaging systems		103,819		92,791		85,585
CAG segment revenue		1,236,855		1,150,169		1,072,211
Water segment revenue		94,725		87,959		84,680
LPD segment revenue		127,388		113,811		111,308
Other segment revenue		26,839		25,119		25,139
Total revenue	$	1,485,807	$	1,377,058	$	1,293,338

Revenue by principal geographic area, based on customers’ domiciles, was as follows (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Americas
United States	$	848,928	$	802,345	$	759,419
Canada		69,743		69,947		66,405
Latin America		34,086		26,893		22,901
		952,757		899,185		848,725
Europe, the Middle East and Africa
Germany		85,189		78,109		72,983
United Kingdom		74,131		65,027		64,412
France		53,322		49,093		45,927
Italy		28,794		26,443		24,625
Spain		21,566		20,194		19,776
Switzerland		14,544		12,246		12,967
Other		88,844		75,573		59,948
		366,390		326,685		300,638
Asia Pacific Region
Australia		58,448		53,063		50,658
Japan		44,132		44,869		49,204
China		34,674		29,044		24,628
Other		29,406		24,212		19,485
		166,660		151,188		143,975
Total	$	1,485,807	$	1,377,058	$	1,293,338

F-37

Net long-lived assets, consisting of net property and equipment, are subject to geographic risks because they are generally difficult to move and to effectively utilize in another geographic area in a reasonable time period and because they are relatively illiquid. Net long-lived assets by principal geographic areas were as follows (in thousands):

	December 31,		December 31,
		2014		2013
Americas
United States	$	262,475	$	245,511
Brazil		3,206		869
Canada		2,270		2,114
		267,951		248,494
Europe, the Middle East and Africa
United Kingdom		14,366		12,959
Germany		4,836		5,733
France		3,172		3,127
Netherlands		3,456		2,956
Switzerland		2,631		3,076
Other		1,674		1,190
		30,135		29,041
Asia Pacific Region
Japan		2,204		690
Australia		1,789		1,801
Other		1,508		1,188
		5,501		3,679
Total	$	303,587	$	281,214

NOTE 15.FAIR VALUE MEASUREMENTS

The following table sets forth our assets and liabilities that were measured at fair value on a recurring basis at December 31, 2014 and at December 31, 2013 by level within the fair value hierarchy (in thousands):

	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance at
As of December 31, 2014	(Level 1)		(Level 2)		(Level 3)		December 31, 2014
Assets
Money market funds(1)	$	204,743	$	-	$	-	$	204,743
Equity mutual funds(2)		2,654		-		-		2,654
Foreign currency exchange contracts(3)		-		12,226		-		12,226
Liabilities
Foreign currency exchange contracts(3)		-		1,323		-		1,323
Deferred compensation(4)		2,654		-		-		2,654
Interest rate swaps(5)		-		1,117		-		1,117

	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance at
As of December 31, 2013	(Level 1)		(Level 2)		(Level 3)		December 31, 2013
Assets
Money market funds(1)	$	153,109	$	-	$	-	$	153,109
Equity mutual funds(2)		2,847		-		-		2,847
Foreign currency exchange contracts(3)		-		4,044		-		4,044
Liabilities
Foreign currency exchange contracts(3)		-		3,096		-		3,096
Deferred compensation(4)		2,847		-		-		2,847
Interest rate swaps(5)		-		1,821		-		1,821

__________

F-38

(1) Money market funds are included within cash and cash equivalents. The remaining balance of cash and cash equivalents as of December 31, 2014 and December 31, 2013 consisted of demand deposits.

(2) Equity mutual funds relate to a deferred compensation plan that was assumed as part of a previous business combination. This amount is included within other long-term assets, net. See number (4) below for a discussion of the related deferred compensation liability.

(3) Foreign currency exchange contracts are included within other current assets or accrued liabilities depending on the gain (loss) position.

(4) A deferred compensation plan assumed as part of a business combination is included within other long-term liabilities. The fair value of our deferred compensation plan is indexed to the performance of the underlying equity mutual funds discussed in number (2) above.

(5) Interest rate swaps are included within accrued liabilities.

We did not have any transfers between Level 1 and Level 2 or transfers in or out of Level 3 of the fair value hierarchy during the years ended December 31, 2014 and 2013.

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate carrying value due to their short maturity. See Note 2 for additional information regarding the fair values of our unsecured revolving credit facility, notes receivable and long-term debt.

Note 16.Derivative Instruments and Hedging

Disclosure within this footnote is presented to provide transparency about how and why we use derivative instruments and how the instruments and related hedged items affect our financial position, results of operations, and cash flows. See Note 2 for a discussion surrounding our derivative instrument and hedging accounting policies, Note 15 for additional information regarding the fair value of our derivative instruments and Note 18 for additional information regarding the effect of derivative instruments designated as cash flow hedges on the consolidated statement of operations.

We are exposed to certain risks related to our ongoing business operations. The primary risks that we manage by using derivative instruments are foreign currency exchange risk and interest rate risk. Our subsidiaries enter into foreign currency exchange contracts to manage the exchange risk associated with their forecasted intercompany inventory purchases and sales for the next year. From time to time, we may also enter into foreign currency exchange contracts to minimize the impact of foreign currency fluctuations associated with specific, significant transactions. We enter into interest rate swaps to minimize the impact of interest rate fluctuations associated with our variable-rate Credit Facility.

The primary purpose of our foreign currency hedging activities is to protect against the volatility associated with foreign currency transactions, including transactions denominated in euro, British pound, Japanese yen, Canadian dollar, Australian dollar and Swiss franc. We also utilize natural hedges to mitigate our transaction and commitment exposures. Our corporate policy prescribes the range of allowable hedging activity. We enter into foreign currency exchange contracts with large multinational financial institutions and we do not hold or engage in transactions involving derivative instruments for purposes other than risk management. Our accounting policies for these contracts are based on our designation of such instruments as hedging transactions.

Cash Flow Hedges

We have designated our foreign currency exchange contracts and variable-to-fixed interest rate swaps as cash flow hedges as these derivative instruments mitigate the exposure to variability in the cash flows of forecasted transactions attributable to foreign currency exchange and interest rates. Unless noted otherwise, we have also designated our derivative instruments as qualifying for hedge accounting treatment.

We did not de-designate any instruments from hedge accounting treatment during the years ended December 31, 2014, 2013 and 2012. Gains or losses related to hedge ineffectiveness recognized in earnings during the years ended December 31, 2014, 2013 and 2012 were not material.  At December 31, 2014, the estimated amount of net gains, net of income tax expense, which are expected to be reclassified out of AOCI and into earnings within the next twelve months is $7.4 million if exchange and interest rates do not fluctuate from the levels at December 31, 2014.

F-39

We enter into foreign currency exchange contracts for amounts that are less than the full value of forecasted intercompany inventory purchases and sales. Our hedging strategy related to intercompany inventory purchases and sales is to employ the full amount of our hedges for the succeeding year at the conclusion of our budgeting process for that year. We primarily utilize foreign currency exchange contracts with durations of less than 24 months. Quarterly, we enter into contracts to hedge incremental portions of anticipated foreign currency transactions for the current and following year. As a result, our risk with respect to foreign currency exchange rate fluctuations and the notional value of foreign currency exchange contracts may vary throughout the year. The U.S. dollar is the currency purchased or sold in all of our foreign currency exchange contracts. The notional amount of foreign currency exchange contracts to hedge forecasted intercompany inventory purchases and sales totaled $186.7 million and $168.3 million at December 31, 2014 and December 31, 2013, respectively.

We have entered into forward fixed interest rate swap agreements to manage the economic effect of variable interest obligations on amounts borrowed under the terms of the Credit Facility. Beginning on March 30, 2012, the variable interest rate associated with $40 million of borrowings outstanding under the Credit Facility became effectively fixed at 1.36% plus the Credit Spread through June 30, 2016. Beginning on March 28, 2013, the variable interest rate associated with an additional $40 million of borrowings outstanding under the Credit Facility became effectively fixed at 1.64% plus the Credit Spread through June 30, 2016. Two of our forward fixed interest rate swap agreements expired on March 31, 2012. Under these agreements, the variable interest rate associated with $80 million of borrowings outstanding under the Credit Facility had been effectively fixed at 2% plus the Credit Spread.

The fair values of derivative instruments, their respective classification on the consolidated balance sheets and amounts subject to offset under master netting arrangements consisted of the following (in thousands):

		Asset Derivatives
			December 31,		December 31,
			2014		2013
Derivatives designated as hedging instruments	Balance Sheet Classification
Foreign currency exchange contracts	Other current assets	$	12,226	$	4,044
Gross amounts subject to master netting arrangements not offset on the balance sheet			1,323		2,965
Net amount		$	10,903	$	1,079

		Liability Derivatives
			December 31,		December 31,
			2014		2013
Derivatives designated as hedging instruments	Balance Sheet Classification
Foreign currency exchange contracts	Accrued liabilities	$	1,323	$	3,096
Interest rate swaps	Accrued liabilities		1,117		1,821
Total derivative instruments presented on the balance sheet			2,440		4,917
Gross amounts subject to master netting arrangements not offset on the balance sheet			1,323		2,965
Net amount		$	1,117	$	1,952

The effect of derivative instruments designated as cash flow hedges on the consolidated balance sheets for the years ended December 31, 2014, 2013 and 2012 consisted of the following (in thousands):

	Gain (Loss) Recognized in AOCI on Derivative Instruments (Effective Portion)
	For Year Ended December 31,
Derivative instruments		2014		2013		2012
Foreign currency exchange contracts, net of tax	$	7,098	$	1,350	$	(4,481)
Interest rate swaps, net of tax		442		541		(795)
Total derivative instruments, net of tax	$	7,540	$	1,891	$	(5,276)

F-40

NOTE 17.REPURCHASES OF COMMON STOCK

Our board of directors has authorized the repurchase of up to 57,000,000 shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program. We believe that the repurchase of our common stock is a favorable means of returning value to our shareholders, and we also repurchase to offset the dilutive effect of our share-based compensation programs. Repurchases of our common stock may vary depending upon the level of other investing activities and the share price. As of December 31, 2014, there are 3,081,303 remaining shares available for repurchase under this authorization.

The following is a summary of our open market common stock repurchases for the years ended December 31, 2014, 2013 and 2012(in thousands, except per share amounts):

	For the Years Ended December 31,
	2014		2013		2012
Shares repurchased		4,881		3,952		1,474
Total cost of shares repurchased	$	618,158	$	367,761	$	132,268
Average cost per share	$	126.66	$	93.06	$	89.72

We primarily acquire shares by means of repurchases in the open market. However, we also acquire shares that are surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and the settlement of deferred stock units, otherwise referred to herein as employee surrenders. We acquired 46,190 shares at a total cost of $5.8 million in connection with employee surrenders for the year ended December 31, 2014 compared to 49,475 shares at a total cost of $4.5 million for the year ended December 31, 2013 and 53,272 shares at a total cost of $4.7 million for the year ended December 31, 2012.

We  issue shares of treasury stock upon the vesting of certain restricted stock units and upon the exercise of certain stock options. The number of shares of treasury stock issued during the years ended December 31, 2014, 2013 and 2012 was not material.

NOTE 18.ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in accumulated other comprehensive income, net of tax, for the years ended December 31, 2014 and 2013 consisted of the following (in thousands):

		Unrealized (loss) gain on investments, net of tax		Unrealized (loss) gain on derivatives instruments, net of tax		Cumulative translation adjustment		Total
Balance as of December 31, 2012	$	(171)	$	(2,070)	$	18,195	$	15,954
Other comprehensive income (loss) before reclassifications		279		3,781		(4,502)		(442)
Gains reclassified from accumulated other comprehensive income		-		(1,890)		-		(1,890)
Balance as of December 31, 2013		108		(179)		13,693		13,622
Other comprehensive (loss) income before reclassifications		(107)		9,542		(29,126)		(19,691)
Gains reclassified from accumulated other comprehensive income		-		(2,002)		-		(2,002)
Balance as of December 31, 2014	$	1	$	7,361	$	(15,433)	$	(8,071)

F-41

The following is a summary of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2014, 2013 and 2012 (in thousands):

		Amounts Reclassified from Accumulated Other
	Affected Line Item in the	Comprehensive Income
Details about Accumulated Other	Statement Where	For the Years Ended December 31,
Comprehensive Income Components	Net Income is Presented		2014		2013		2012
Gains (losses) on derivative instruments included in net income:
Foreign currency exchange contracts	Cost of revenue	$	3,822	$	3,469	$	5,938
Interest rate swaps	Interest expense		(1,064)		(900)		(690)
	Total gains before tax		2,758		2,569		5,248
	Tax expense		756		679		1,623
	Gains, net of tax	$	2,002	$	1,890	$	3,625

NOTE 19.PREFERRED STOCK

Our board of directors is authorized, subject to any limitations prescribed by law, without further stockholder approval, to issue from time to time up to 500,000 shares of Preferred Stock, $1.00 par value per share (“Preferred Stock”), in one or more series. Each such series of Preferred Stock shall have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by the board of directors, which may include, among others, dividend rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights and preemptive rights. There are no shares of Preferred Stock outstanding as of December 31, 2014.

NOTE 20.IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN

We have established the IDEXX Retirement and Incentive Savings Plan (the “401(k) Plan”). Employees eligible to participate in the 401(k) Plan may contribute specified percentages of their salaries, a portion of which will be matched by us. We matched $8.8 million, $7.8 million and $7.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, we may make contributions to the 401(k) Plan at the discretion of the board of directors. There were no discretionary contributions in 2014, 2013 or 2012.

We also have established defined contribution plans for regional employees in Europe and in Canada. With respect to these plans, we contributed $3.7 million, $3.1 million and $2.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.

NOTE 21.DISPOSITION OF PHARMACEUTICAL PRODUCT LINES AND RESTRUCTURING

In the fourth quarter of 2008, we sold our Acarexx® and SURPASS® veterinary pharmaceutical products and a feline insulin product under development, which were a part of our CAG segment, for cash proceeds of $7.0 million, a short-term receivable of $1.4 million and up to $11.5 million of future payments based on the achievement of certain development and sales milestones by the acquirer of the feline insulin product. In the fourth quarter of 2009 we earned and received a milestone payment of $2.0 million in connection with the achievement of certain development milestones by the acquirer. We earned milestone payments of $3.5 million, $3.0 million and $3.0 million in 2012, 2011 and 2010, respectively, in connection with the achievement of certain sales milestones by the acquirer following commercialization of the feline insulin product. These aggregate milestone payments were received in the first quarter of 2013, 2012 and 2011 respectively. The 2013 milestone payment was included in other current assets on the accompanying consolidated balance sheet for the year ended December 31, 2012. Because we had no obligation to deliver product or services, or otherwise provide support to the third party under this agreement, and because collectability was reasonably assured, these milestone payments were included in results of operations when earned. The payments were not classified as revenue because the transaction was accounted for as the sale of a business; rather they were reflected as reductions to general and administrative expenses as earned. We are not eligible to receive any further milestone payments under this agreement.

F-42

In the fourth quarter of 2008, we also entered into a separate royalty bearing license agreement related to certain intellectual property of our pharmaceutical division. Under this agreement we received $0.3 million up front, $1.6 million in the fourth quarter of 2014 and $0.3 million in the fourth quarters of 2013 and 2010 in connection with the achievement of certain production and clinical field trial milestones by the licensee. We had no obligation to deliver product or services, or otherwise provide support to the third party under this agreement. Due to these circumstances, and because collectability is reasonably assured, milestone payments earned under this agreement were included in results of operations when earned. The payments received during the year ended December 31, 2014 satisfied the licensee’s milestone payment obligation. Under the agreement, future royalties are due to us contingent upon commercialization of the product.

NOTE 22.SUMMARY OF QUARTERLY DATA (UNAUDITED)

A summary of quarterly data follows (in thousands, except per share data):

	For the Three Months Ended
		March 31,		June 30,		September 30,		December 31,
2014
Revenue	$	360,203	$	390,122	$	383,523	$	351,959
Gross profit		202,097		218,518		213,336		182,165
Operating income		70,046		83,219		72,189		34,801
Net income attributable to IDEXX Laboratories, Inc. stockholders		46,585		57,218		52,142		25,961
Earnings per share:
Basic	$	0.90	$	1.12	$	1.05	$	0.54
Diluted	$	0.89	$	1.10	$	1.03	$	0.54
2013
Revenue	$	332,106	$	352,583	$	338,297	$	354,073
Gross profit		183,974		197,698		185,783		188,665
Operating income		61,188		78,763		65,485		61,328
Net income attributable to IDEXX Laboratories, Inc. stockholders		44,860		53,995		45,688		43,258
Earnings per share:
Basic	$	0.82	$	1.01	$	0.87	$	0.83
Diluted	$	0.81	$	0.99	$	0.86	$	0.82

F-43

SCHEDULE II

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

		Balance at Beginning of Year		Charges to Costs and Expenses		Charges to Other Accounts1		Write-Offs/Cash Payments		Foreign Currency Translation		Balance at End of Year
Reserves for doubtful accounts receivable:
December 31, 2012	$	3,239	$	1,108	$	-	$	(1,732)	$	17	$	2,632
December 31, 2013		2,632		1,601		-		(762)		62		3,533
December 31, 2014		3,533		2,035		-		(1,146)		(116)		4,306
Valuation allowance for deferred tax assets:
December 31, 2012	$	4,614	$	265	$	-	$	(358)	$	26	$	4,547
December 31, 2013		4,547		735		742		(701)		(122)		5,201
December 31, 2014		5,201		799		-		(1,042)		(280)		4,678
1 Amount relates to net operating losses obtained through acquisitions where uncertainty exists as to our ability to use the tax attribute.

F-44

EXHIBIT INDEX

Exhibit No.	Description
3.1	Restated Certificate of Incorporation of the Company, as amended (filed as Exhibit No. 3(i) to Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, File No. 0-19271, and incorporated herein by reference).
3.2	Amended and Restated By-Laws of the Company (filed as Exhibit No. 3.1 to Form 8-K filed July 21, 2009, File No. 0-19271, and incorporated herein by reference).
4.1	Note Purchase Agreement, dated as of December 11, 2013, among the Company, as issuer, New York Life Insurance Company, and New York Life Investment Management LLC, as investment manager for New York Life Insurance and Annuity Corporation and New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 30C), as purchasers (filed as Exhibit No. 99.1 to Current Report on Form 8-K filed December 11, 2013, File No. 0-19271, and incorporated herein by reference).
4.2	Note Purchase and Private Shelf Agreement, dated as of July 21, 2014, among the Company, as issuer, Prudential Investment Management, Inc., Pruco Life Insurance Company, The Prudential Insurance Company of America, Prudential Investment Japan Co., Ltd., as investment manager, and Prudential Investment Management, Inc., as sub-adviser for The Gibraltar Life Insurance Co., Ltd., Prudential Arizona Reinsurance Universal Company, as grantor, and Prudential Investment Management, Inc., as investment manager for PAR U Hartford Life Insurance Comfort Trust, Prudential Private Placement Investors, L.P., as investment advisor, and Prudential Private Placement Investors, Inc., as general partner to each of, The Independent Order of Foresters, Zurich American Insurance Company, Globe Life and Accident Insurance Company, Family Heritage Life Insurance Company of America, MTL Insurance Company, The Lincoln National Life Insurance Company, William Penn Life Insurance Company of New York, Farmers Insurance Exchange and Mid Century Insurance Company, as purchasers (filed as Exhibit No. 99.1 to Current Report on Form 8-K filed July 25, 2014, File No. 0-19271, and incorporated herein by reference).
4.3	Note Purchase Agreement, dated as of July 22, 2014, among the Company, as issuer, New York Life Insurance Company, and NYL Investors LLC, as investment manager for New York Life Insurance and Annuity Corporation and New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 30C), as purchasers (filed as Exhibit No. 99.2 to Current Report on Form 8-K file July 25, 2014, File No. 0-19271, and incorporated herein by reference).
4.4	Multicurrency Note Purchase and Private Shelf Agreement, dated as of December 19, 2014, among the Company, as issuer, and Metropolitan Life Insurance Company, White Mountains Advisors, LLC, as investment manager, and MetLife Investment Management, LLC, as sub-investment manager for Symetra Life Insurance Company, and MetLife Investment Management, LLC, as investment manager for each of MetLife Insurance K.K., AXIS Reinsurance Company, and Union Fidelity Life Insurance Company, as purchasers (filed as Exhibit No. 99.1 to Current Report on Form 8-K filed December 29, 2014, File No. 0-19271, and incorporated herein by reference). Instruments with respect to other long-term debt of the Company and its consolidated subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K since the total amount authorized under each such omitted instrument does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.
10.1*	U.S. Supply Agreement, effective as of October 16, 2003, between the Company and Ortho-Clinical Diagnostics, Inc. (“Ortho”) (filed as Exhibit No. 10.7 to Annual Report on Form 10-K for the year ended December 31, 2003, File No. 0-19271 (“2003 Form 10-K”), and incorporated herein by reference).

10.2*	Amendment No. 1 to U.S. Supply Agreement effective as of January 1, 2005, between the Company and Ortho (filed as Exhibit No. 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, File No. 0-19271 (“June 2005 Form 10-Q”), and incorporated herein by reference).
10.3	Amendment No. 2 to U.S. Supply Agreement effective as of October 15, 2006, between the Company and Ortho (filed as Exhibit No. 10.4 to Annual Report on Form 10-K for the year ended December 31, 2007, File No. 0-19271 (“2007 Form 10-K”), and incorporated herein by reference).
10.4*	Amendment No. 3 to U.S. Supply Agreement effective as of January 18, 2008, between the Company and Ortho (filed as Exhibit No. 10.5 to 2007 Form 10-K, and incorporated herein by reference).
10.5*	Amendment No. 4 to U.S. Supply Agreement effective as of December 28, 2011, between the Company and Ortho (filed as Exhibit No. 10.5 to Annual Report on Form 10-K for the year ended December 31, 2011, File No. 0-19271 (“2011 Form 10-K”), and incorporated herein by reference).
10.6*	Amendment No. 5 to U.S. Supply Agreement effective as of December 9, 2013, between the Company and Ortho (filed as Exhibit No. 10.6 to Annual Report on Form 10-K for the year ended December 31, 2013, File No. 0-19271 (“2013 Form 10-K”), and incorporated herein by reference).
10.7*	European Supply Agreement, effective as of October 17, 2003, between the Company and Ortho (filed as Exhibit No. 10.8 to 2003 Form 10-K, and incorporated herein by reference).
10.8*	Amendment No. 1 to European Supply Agreement effective as of January 1, 2005, between the Company and Ortho (filed as Exhibit No. 10.2 to June 2005 10-Q, and incorporated herein by reference).
10.9*	Amendment No. 2 to European Supply Agreement effective as of January 18, 2008, between the Company and Ortho (filed as Exhibit No. 10.8 to 2007 Form 10-K, and incorporated herein by reference).
10.10*	Amendment No. 3 to European Supply Agreement effective as of December 28, 2011, between the Company and Ortho (filed as Exhibit No. 10.9 to 2011 Form 10-K, and incorporated herein by reference).
10.11*	Amendment No. 4 to European Supply Agreement effective as of December 9, 2013, between the Company and Ortho (filed as Exhibit No. 10.11 to 2013 Form 10-K, and incorporated herein by reference).
10.12	Amendment, Release and Settlement Agreement dated as of September 12, 2002, among the Company, IDEXX Europe B.V., and Ortho (filed as Exhibit No. 10.1 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-19271, and incorporated herein by reference).
10.13*	Supply Agreement, effective as of May 7, 2007 between the Company and Moss, Inc. (filed as Exhibit No. 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, File No. 0-19271 (“June 2010 Form 10-Q”), and incorporated herein by reference).
10.14**	Employment Agreement dated January 22, 2002, between the Company and Jonathan W. Ayers (filed as Exhibit No. 10.13 to Annual Report on Form 10-K for the year ended December 31, 2001, File No. 0-19271, and incorporated herein by reference).
10.15**	Amended and Restated Executive Employment Agreement dated May 26, 2013, between the Company and Jonathan W. Ayers (filed as Exhibit No. 10.2 to July 23, 2013 Form 10-Q for the quarter ended June 30, 2013, File No. 0-19271 (“June 2013 Form 10-Q”), and incorporated herein by reference).
10.16**	Form of Executive Employment Agreement dated May 26, 2013, between the Company and each of the Company’s Executive Officers, other than the Chief Executive Officer (filed as Exhibit No. 10.3 to June 2013 Form 10-Q, and incorporated herein by reference).

10.17**	Restated Director Deferred Compensation Plan, as amended (filed as Exhibit No. 10.1 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, File No. 0-19271, and incorporated herein by reference).
10.18*	Restated Executive Deferred Compensation Plan, as amended (filed as Exhibit No. 10.3 to June 2010 Form 10-Q, and incorporated herein by reference).
10.19**	Form of Director Stock Option Agreement, as amended pursuant to the 2009 Stock Incentive Plan (filed as Exhibit No. 10.1 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 0-19271 (“March 2010 Form 10-Q”), and incorporated herein by reference).
10.20**	Form of Employee Stock Option Agreement, as amended pursuant to the 2009 Stock Incentive Plan (filed as Exhibit No. 10.2 to March 2010 Form 10-Q, and incorporated herein by reference).
10.21**	1997 Employee Stock Purchase Plan, as amended (filed as Exhibit No. 99.1 to Registration Statement on Form S-8 filed June 19, 2009, File No. 333-160085, and incorporated herein by reference).
10.22**	Form of Restricted Stock Unit Agreement, as amended pursuant to the 2009 Stock Incentive Plan (filed as Exhibit 10.24 to Annual Report on Form 10-K for the year ended December 31, 2009, File No. 0-19271, and incorporated herein by reference).
10.23**	2009 Stock Incentive Plan, as amended (filed as Exhibit No. 99.1 to Registration Statement on Form S-8 filed December 30, 2013, File No. 333-193136, and incorporated herein by reference).
10.24**	2014 Incentive Compensation Plan, (filed as Exhibit No. 10.2 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, File No. 0-19271 (“June 2014 Form 10-Q”), and incorporated herein by reference).
10.25	Amended and Restated Credit Agreement, dated as of June 18, 2014, among the Company, IDEXX Distribution, Inc., IDEXX Operations, Inc., IDEXX Reference Laboratories, Inc., OPTI Medical Systems, Inc., IDEXX Laboratories Canada Corporation and IDEXX Europe B.V., as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Toronto agent, and J.P. Morgan Europe Limited, as London agent (filed as Exhibit No. 10.1 to June 2014 Form 10-Q, and incorporated herein by reference).
10.26	Note Purchase Agreement, dated as of December 11, 2013, among the Company, as issuer, New York Life Insurance Company, and New York Life Investment Management LLC, as investment manager for New York Life Insurance and Annuity Corporation and New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 30C), as purchasers (filed as Exhibit No. 99.1 to Current Report on Form 8-K Filed December 11, 2013, File No. 0-19271, and incorporated herein by reference).
10.27	Note Purchase and Private Shelf Agreement, dated as of July 21, 2014, among the Company, as issuer, Prudential Investment Management, Inc., Pruco Life Insurance Company, The Prudential Insurance Company of America, Prudential Investment Japan Co., Ltd., as investment manager, and Prudential Investment Management, Inc., as sub-adviser for The Gibraltar Life Insurance Co., Ltd., Prudential Arizona Reinsurance Universal Company, as grantor, and Prudential Investment Management, Inc., as investment manager for PAR U Hartford Life Insurance Comfort Trust, Prudential Private Placement Investors, L.P., as investment advisor, and Prudential Private Placement Investors, Inc., as general partner to each of, The Independent Order of Foresters, Zurich American Insurance Company, Globe Life and Accident Insurance Company, Family Heritage Life Insurance Company of America, MTL Insurance Company, The Lincoln National Life Insurance Company, William Penn Life Insurance Company of New York, Farmers Insurance Exchange and Mid Century Insurance Company, as purchasers (filed as Exhibit No. 99.1 to Current Report on Form 8-K Filed July 25, 2014, File No. 0-19271, and incorporated herein by reference).

10.28	Note Purchase Agreement, dated as of July 22, 2014, among the Company, as issuer, New York Life Insurance Company, and NYL Investors LLC, as investment manager for New York Life Insurance and Annuity Corporation and New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 30C), as purchasers (filed as Exhibit No. 99.2 to Current Report on Form 8-K filed July 25, 2014, File No. 0-19271, and incorporated herein by reference).
10.29	Multicurrency Note Purchase and Private Shelf Agreement, dated as of December 19, 2014, among the Company, as issuer, and Metropolitan Life Insurance Company, White Mountains Advisors, LLC, as investment manager, and MetLife Investment Management, LLC, as sub-investment manager for Symetra Life Insurance Company, and MetLife Investment Management, LLC, as investment manager for each of MetLife Insurance K.K., AXIS Reinsurance Company, and Union Fidelity Life Insurance Company, as purchasers (filed as Exhibit No. 99.1 to Current Report on Form 8-K filed December 29, 2014, File No. 0-19271, and incorporated herein by reference).
21	Subsidiaries of the Company (filed herewith).
23	Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm (filed herewith).
31.1	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
*	Confidential treatment requested as to certain portions.
**	Management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IDEXX LABORATORIES, INC.
	By:  /s/ Jonathan W. Ayers
Date: February 17, 2015	Jonathan W. Ayers
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

SIGNATURE	TITLE	DATE
/s/ Jonathan W. Ayers	President, Chief Executive Officer and	February 17, 2015
Jonathan W. Ayers	Chairman of the Board of Directors (Principal Executive Officer)
/s/ Brian P. McKeon	Executive Vice President, Chief Financial	February 17, 2015
Brian P. McKeon	Officer and Treasurer (Principal Financial and Accounting Officer)
/s/ Thomas Craig	Director	February 17, 2015
Thomas Craig
/s/ William T. End	Director	February 17, 2015
William T. End
/s/ Rebecca M. Henderson, PhD	Director	February 17, 2015
Rebecca M. Henderson, PhD
/s/ Barry C. Johnson, PhD	Director	February 17, 2015
Barry C. Johnson, PhD
/s/ Daniel M. Junius	Director	February 17, 2015
Daniel M. Junius
/s/ Robert J. Murray	Director	February 17, 2015
Robert J. Murray
/s/ M. Anne Szostak	Director	February 17, 2015
M. Anne Szostak
/s/ Sophie V. Vandebroek, PhD	Director	February 17, 2015
Sophie V. Vandebroek, PhD

EX-21

Exhibit 21

Exhibit 21
IDEXX LABORATORIES, INC.
SUBSIDIARIES OF THE COMPANY
(as of December 31, 2014)
Legal Entity Name	Jurisdiction of Incorporation
Animana B.V.	Netherlands
Beijing IDEXX-Yuanheng Laboratories Co. Limited	China
Genera Technologies Limited	United Kingdom
IDEXX Animana B.V.	Netherlands
IDEXX Brasil Laboratórios Ltda.	Brazil
IDEXX Brasil Participações Ltda.	Brazil
IDEXX Diavet AG	Schwyz
IDEXX Distribution, Inc.	Massachusetts
IDEXX Europe B.V.	Netherlands
IDEXX GmbH	Germany
IDEXX Holding B.V.	Netherlands
IDEXX Holding GmbH	Germany
IDEXX Holdings, Inc.	Delaware
IDEXX Laboratories (NZ) Limited	New Zealand
IDEXX Laboratories (Proprietary) Limited	South Africa
IDEXX Laboratories (Shanghai) Company Limited	China
IDEXX Laboratories B.V.	Netherlands
IDEXX Laboratories Canada 1, ULC	Nova Scotia
IDEXX Laboratories Canada 2, ULC	Nova Scotia
IDEXX Laboratories Canada Corporation	Canada
IDEXX Laboratories Canada LP	Ontario
IDEXX Laboratories Danmark ApS	Denmark
IDEXX Laboratories Inc.	Taiwan Province of China
IDEXX Laboratories Italia S.r.l.	Italy
IDEXX Laboratories Limited	United Kingdom
IDEXX Laboratories Ltd.	Korea, Republic of
IDEXX Laboratories Norge AS	Norway
IDEXX Laboratories Oy	Finland
IDEXX Laboratories Pty Limited	New South Wales
IDEXX Laboratories Singapore Pte. Ltd.	Singapore
IDEXX Laboratories Sp. z o.o.	Poland
IDEXX Laboratories SPRL	Belgium
IDEXX Laboratories Sverige AB	Sweden
IDEXX Laboratories, Inc.	Delaware
IDEXX Laboratories, KK	Japan
IDEXX Laboratories, S.de R.L. de C.V.	Mexico
IDEXX Laboratorios, S.L.	Spain

Exhibit 21

IDEXX Montpellier SAS	France
IDEXX Operations, Inc.	Delaware
IDEXX Pharmaceuticals, Inc.	Delaware
IDEXX Real Estate Holdings, LLC	Maine
IDEXX Reference Laboratories Ltd.	Canada
IDEXX Reference Laboratories, Inc.	Delaware
IDEXX SARL	France
IDEXX Service, S.A. De C.V.	Mexico
IDEXX Switzerland AG	Bern/Berne
IDEXX Technologies Limited	United Kingdom
IDEXX UK Acquisition Limited	United Kingdom
IDEXX Vet Med Labor GmbH	Austria
Labor Laupeneck AG	Switzerland
Laboratoire IDEXX SARL	France
OPTI Medical Systems GmbH	Germany
OPTI Medical Systems, Inc.	Delaware
Vet Med Lab (UK) Limited	United Kingdom
Vet Med Labor GmbH	Germany
Vetlab Oy	Finland

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (Nos. 333-36007 and 333-70846) and Form S-8 (333-11201, 333-11199, 333-36009, 333-56685, 333-78765, 333-78769, 333-43172, 333-43170, 333-27733, 333-105426, 333-108905, 333-108906, 333-146479, 333-160083,333-160085 and 333-193136) of IDEXX Laboratories, Inc. of our report dated February 17, 2015 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

Boston, Massachusetts

February 17, 2015

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jonathan W. Ayers, certify that:

1) I have reviewed this report on Form 10-K for the year ended December  31, 2014 of IDEXX Laboratories, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February17, 2015	/s/ Jonathan W. Ayers
	Jonathan W. Ayers
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian P. McKeon, certify that:

1) I have reviewed this report on Form 10-K for the year ended December  31,  2014of IDEXX Laboratories, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this  report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 17, 2015	/s/Brian P. McKeon
	Brian P. McKeon
	Executive Vice President, Chief Financial Officer
	and Treasurer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C.SECTION 1350

AS ADOPTED BY

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-K of IDEXX Laboratories, Inc. (the “Company”) for the year ended December  31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies, pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February17, 2015	/s/ Jonathan W. Ayers
	Jonathan W. Ayers Chairman, President and Chief Executive Officer

A signed original of this written statement required by Section 906, has been provided to IDEXX Laboratories, Inc. and will be retained by IDEXX Laboratories, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C.SECTION 1350

AS ADOPTED BY

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-K of IDEXX Laboratories, Inc. (the “Company”) for the year ended December  31,  2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies, pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 17, 2015	/s/ Brian P. McKeon
	Brian P. McKeon Executive Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906, has been provided to IDEXX Laboratories, Inc. and will be retained by IDEXX Laboratories, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2014

Accrued Liabilities [Abstract]

Schedule Of Accrued Liabilities

	December 31,		December 31,
	2014		2013
Accrued expenses	$	55,655	$	44,274
Accrued employee compensation and related expenses		75,232		62,474
Accrued taxes		28,439		16,508
Accrued customer programs		36,025		25,663
	$	195,351	$	148,919

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Share-Based Compensation (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued in connection with the Employee Stock Purchase Plan	47,000	55,000	51,000
Unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards outstanding	$ 35.9
Weighted average recognition period for unrecognized compensation expense, in years	1 year 7 months 6 days
Intrinsic value of stock options exercised	51.2	49.0	45.8
Number of unissued shares of common stock each DSU represents right to receive	1
Fair value of options vested during period	7.8	8.4	8.3
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years	7 years
2009 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for grant under share-based incentive plans	9,950,000
Shares available for grant under share-based incentive plans	6,578,907
1997 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for grant under share-based incentive plans	1,590,000
Shares available for grant under share-based incentive plans	49,564
Discount from market value for employee stock purchase rights	15.00%
Stock Options Granted To Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Restricted Stock Units Granted To Employees With Ratable Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years
Restricted Stock Units Granted To Employees With Cliff Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Restricted Stock Units Granted To Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of unvested share-based awards to vest upon change in control	25%
Fair value of awards vested during period	$ 15.4	$ 12.7	$ 13.3
Stock Options And Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ratio of shares issued under share-based awards to shares authorized under stock plans	1 to 1
Awards Other Than Stock Options And Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ratio of shares issued under share-based awards to shares authorized under stock plans	2 to 1
Stock Options Granted To Employees With Ratable Vesting [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of unvested share-based awards to vest upon change in control	25%

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Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Income [Abstract]

Schedule Of Accumulated Other Comprehensive Income

		Unrealized (loss) gain on investments, net of tax		Unrealized (loss) gain on derivatives instruments, net of tax		Cumulative translation adjustment		Total
Balance as of December 31, 2012	$	(171)	$	(2,070)	$	18,195	$	15,954
Other comprehensive income (loss) before reclassifications		279		3,781		(4,502)		(442)
Gains reclassified from accumulated other comprehensive income		-		(1,890)		-		(1,890)
Balance as of December 31, 2013		108		(179)		13,693		13,622
Other comprehensive (loss) income before reclassifications		(107)		9,542		(29,126)		(19,691)
Gains reclassified from accumulated other comprehensive income		-		(2,002)		-		(2,002)
Balance as of December 31, 2014	$	1	$	7,361	$	(15,433)	$	(8,071)

Summary Of Reclassifications Out Of Accumulated Other Comprehensive Income

		Amounts Reclassified from Accumulated Other
	Affected Line Item in the	Comprehensive Income
Details about Accumulated Other	Statement Where	For the Years Ended December 31,
Comprehensive Income Components	Net Income is Presented		2014		2013		2012
Gains (losses) on derivative instruments included in net income:
Foreign currency exchange contracts	Cost of revenue	$	3,822	$	3,469	$	5,938
Interest rate swaps	Interest expense		(1,064)		(900)		(690)
	Total gains before tax		2,758		2,569		5,248
	Tax expense		756		679		1,623
	Gains, net of tax	$	2,002	$	1,890	$	3,625

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Debt (Schedule Of Annual Principal Payments On Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Debt [Abstract]
Thereafter	$ 350,000
Annual Principal Payments on Long-Term Debt, Total	$ 350,000

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Share-Based Compensation (Schedule Of Selected Financial Impact Of Share-Based Compensation) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefit resulting from share-based compensation arrangements	$ (6,107)	$ (5,584)	$ (5,403)
Net impact of share-based compensation on net income	11,992	10,990	10,519
Cost Of Revenue [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	1,937	1,841	1,770
Operating Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	16,162	14,733	14,152
Total Share-Based Compensation Expense Included In Consolidated Statements Of Income [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 18,099	$ 16,574	$ 15,922

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Earnings Per Share (Schedule Of Number Of Anti-Dilutive Stock Options) (Details) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Weighted average number of shares underlying anti-dilutive options	322	527	696

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Derivative Instruments And Hedging (Tables)

12 Months Ended

Dec. 31, 2014

Derivative [Line Items]

Gain/(Loss) Recognized In Other Comprehensive Income On Derivative Instruments (Effective Portion)

	Gain (Loss) Recognized in AOCI on Derivative Instruments (Effective Portion)
	For Year Ended December 31,
Derivative instruments		2014		2013		2012
Foreign currency exchange contracts, net of tax	$	7,098	$	1,350	$	(4,481)
Interest rate swaps, net of tax		442		541		(795)
Total derivative instruments, net of tax	$	7,540	$	1,891	$	(5,276)

Assets [Member]

Derivative [Line Items]

Schedule Of Fair Values And Balance Sheet Classifications Of Derivatives Designated As Hedging Instruments

		Asset Derivatives
			December 31,		December 31,
			2014		2013
Derivatives designated as hedging instruments	Balance Sheet Classification
Foreign currency exchange contracts	Other current assets	$	12,226	$	4,044
Gross amounts subject to master netting arrangements not offset on the balance sheet			1,323		2,965
Net amount		$	10,903	$	1,079

Liabilities [Member]

Derivative [Line Items]

Schedule Of Fair Values And Balance Sheet Classifications Of Derivatives Designated As Hedging Instruments

		Liability Derivatives
			December 31,		December 31,
			2014		2013
Derivatives designated as hedging instruments	Balance Sheet Classification
Foreign currency exchange contracts	Accrued liabilities	$	1,323	$	3,096
Interest rate swaps	Accrued liabilities		1,117		1,821
Total derivative instruments presented on the balance sheet			2,440		4,917
Gross amounts subject to master netting arrangements not offset on the balance sheet			1,323		2,965
Net amount		$	1,117	$	1,952

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Summary Of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Summary Of Significant Accounting Policies [Abstract]

Schedule Of Estimated Useful Lives For Property And Equipment

Asset Classification	Estimated Useful Life
Land improvements	15 to 20 years
Buildings and improvements	10 to 40 years
Leasehold improvements	Shorter of remaining lease term or useful life of improvements
Machinery and equipment	3 to 8 years
Office furniture and equipment	3 to 7 years
Computer hardware and software	3 to 7 years

Schedule Of Estimated Useful Lives For Intangible Assets

Asset Classification	Estimated Useful Life
Patents	13 to 15 years
Product rights(1)	5 to 15 years
Customer-related  intangible assets(2)	5 to 17 years
Noncompete agreements	3 to 7 years

(1) Product rights comprise certain technologies, intellectual property, licenses and trade names acquired from third parties.

(2) Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

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Commitments, Contingencies And Guarantees (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Payment Required Upon Termination Of Employment [Line Items]
Rent expense charged to operations	$ 17,200,000	$ 15,800,000	$ 15,400,000
Minimum royalty payments due through 2027	3,300,000
Contingent commitments, not accrued	5,500,000
Business Combination, Contingent Consideration, Liability	6,300,000
Total contingent liabilities	11,800,000
Purchase Obligation	11,400,000
Other Liabilities	2,500,000	3,100,000
Outstanding letters of credit to insurance company as security for workers' compensation claims	1,300,000
Period for continued vesting of outstanding equity awards upon termination of CEO without cause other than following a change in control, years	two years
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability		3,100,000
Payment Required To CEO Upon Termination Of Employment Without Cause Other Than Following Change In Control [Member]
Payment Required Upon Termination Of Employment [Line Items]
Employee agreement contingencies	1,600,000
Payment Required To Officers Upon Termination Of Employment Following Change Of Control [Member]
Payment Required Upon Termination Of Employment [Line Items]
Employee agreement contingencies	24,800,000
Workers Compensation Insurance Policies [Member]
Payment Required Upon Termination Of Employment [Line Items]
Retained claim liability per incident	300,000	250,000	250,000
Loss contingency, range of possible loss, maximum	2,300,000	2,000,000	2,000,000
Self Insurance Reserve	1,400,000	1,200,000
Workers Compensation Insurance Policies [Member] | Cumulative Expense for Claims Incurred in 2014 [Member]
Payment Required Upon Termination Of Employment [Line Items]
General insurance expense	1,100,000
Workers Compensation Insurance Policies [Member] | Cumulative Expense for Claims Incurred in 2013 [Member]
Payment Required Upon Termination Of Employment [Line Items]
General insurance expense	500,000
Workers Compensation Insurance Policies [Member] | Cumulative Expense For Claims Incurred In 2012 [Member]
Payment Required Upon Termination Of Employment [Line Items]
General insurance expense	600,000
Employee Health Care Insurance Policy [Member]
Payment Required Upon Termination Of Employment [Line Items]
Retained claim liability per incident	375,000	325,000	300,000
General insurance expense	32,000,000	29,200,000	23,000,000
Self Insurance Reserve	$ 4,100,000	$ 4,300,000

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Income Taxes (Schedule Of Components Of Provision (Benefit) For Income Taxes) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Provision Benefit For Income Taxes [Line Items]
Provision (benefit) for deferred income taxes	$ 830	$ 2,073	$ (1,970)
Provision for income taxes	64,604	75,467	82,330
Current [Member]
Provision Benefit For Income Taxes [Line Items]
Federal	39,713	50,999	59,887
State	4,692	5,639	5,879
International	20,213	16,657	18,534
Provision for current income taxes	64,618	73,295	84,300
Deferred [Member]
Provision Benefit For Income Taxes [Line Items]
Federal	2,301	3,203	(198)
State	33	329	72
International	(2,348)	(1,360)	(1,844)
Provision (benefit) for deferred income taxes	$ (14)	$ 2,172	$ (1,970)

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Repurchases Of Common Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Repurchases Of Common Stock [Abstract]
Shares of common stock repurchases authorized	57,000,000
Remaining shares available for repurchase under authorization	3,081,303
Shares repurchased	4,881,000	3,952,000	1,474,000
Total cost of shares repurchased	$ 618,158	$ 367,761	$ 132,268
Average cost per share	$ 126.66	$ 93.06	$ 89.72
Shares acquired through employee surrenders	46,190	49,475	53,272
Cost of shares acquired through employee surrenders	$ 5,809	$ 4,548	$ 4,662

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Share-Based Compensation (Schedule Of Stock Option Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Share-Based Compensation [Abstract]
Outstanding as of December 31, 2013	2,131
Granted	297
Exercised	(585)
Forfeited	(62)
Expired	(1)
Outstanding as of December 31, 2014	1,780
Fully vested as of December 31, 2014	888
Fully vested and expected to vest as of December 31, 2014	1,710
Weighted average exercise price of beginning balance of options outstanding	$ 63.96
Weighted average exercise price of options granted	$ 123.24
Weighted average exercise price of options exercised	$ 41.63
Weighted average exercise price of options forfeited	$ 92.53
Weighted average exercise price of options expired	$ 91.68
Weighted average exercise price of ending balance of options outstanding	$ 80.16
Weighted average exercise price of options fully vested	$ 63.50
Weighted average exercise price of options fully vested and expected to vest	$ 79.13
Weighted average remaining contractual term of ending balance of options outstanding	4 years 3 months 18 days
Weighted average remaining contractual term of options fully vested	2 years 8 months 12 days
Weighted average remaining contractual term of options fully vested and expected to vest	4 years 2 months 12 days
Aggregate Intrinsic Value	$ 121,250
Aggregate intrinsic value of options fully vested	75,286
Aggregate intrinsic value of options expected to vest	$ 118,220

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Income Taxes (Schedule Of Changes In Unrecognized Tax Benefits) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Abstract]
Total amounts of unrecognized tax benefits, beginning of period	$ 6,325	$ 5,906	$ 5,149
Gross increases in unrecognized tax benefits as a result of tax positions taken during a prior period	432	8	290
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions	1,789	1,954	1,436
Decreases in unrecognized tax benefits relating to settlements with taxing authorities	(2,242)	(317)
Decreases in unrecognized tax benefits as a result of a lapse of the applicable statutes of limitations	(362)	(1,226)	(969)
Total amounts of unrecognized tax benefits, end of period	$ 5,942	$ 6,325	$ 5,906

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Derivative Instruments And Hedging (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Derivative [Line Items]
Estimated net amount of gains expected to be reclassified out of accumulated other comprehensive income and into earnings within next 12 months	$ 7,400,000
General duration of foreign currency exchange contracts	2 years
Credit Facility borrowings hedged	80,000,000
Notional Amount of Foreign Currency Exchange Contracts	186,700,000	168,300,000
Interest Rate Swap Effective On March 30, 2012 [Member]
Derivative [Line Items]
Fixed portion of interest rate associated with interest rate swap	1.36%
Credit Facility borrowings hedged	40,000,000
Interest Rate Swap Effective On March 30, 2010 [Member]
Derivative [Line Items]
Fixed portion of interest rate associated with interest rate swap	2.00%
Credit Facility borrowings hedged	80,000,000
Interest Rate Swap Effective On March 28, 2013 [Member]
Derivative [Line Items]
Fixed portion of interest rate associated with interest rate swap	1.64%
Credit Facility borrowings hedged	$ 40,000,000

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Segment Reporting (Summary Of Segment Performance) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012 segment
Segment Reporting Information [Line Items]
Number of business segments													3
Revenue	$ 351,959	$ 383,523	$ 390,122	$ 360,203	$ 354,073	$ 338,297	$ 352,583	$ 332,106	$ 1,485,807		$ 1,377,058		$ 1,293,338
Income (loss) from operations	34,801	72,189	83,219	70,046	61,328	65,485	78,763	61,188	260,255		266,762		262,563
Interest expense, net									(13,700)		(3,501)		(1,946)
Income before provision for income taxes									246,555		263,261		260,617
Provision for income taxes									64,604		75,467		82,330
Net income									181,951		187,794		178,287
Less: Net income (loss) attributable to noncontrolling interest									45		(6)		20
Net income attributable to IDEXX Laboratories, Inc. stockholders	25,961	52,142	57,218	46,585	43,258	45,688	53,995	44,860	181,906		187,800		178,267
Depreciation and amortization									58,888		54,596		52,408
Expenditures for long-lived assets									60,523	[1]	77,612	[1]	57,618
CAG Segment [Member]
Segment Reporting Information [Line Items]
Revenue									1,236,855		1,150,169		1,072,211
Income (loss) from operations									213,109		218,645		203,236
Depreciation and amortization									48,740		45,079		43,042
Expenditures for long-lived assets									49,270	[1]	66,134	[1]	47,531
Water Segment [Member]
Segment Reporting Information [Line Items]
Revenue									94,725		87,959		84,680
Income (loss) from operations									39,262		37,321		37,687
Depreciation and amortization									2,553		2,470		2,358
Expenditures for long-lived assets									2,499	[1]	3,254	[1]	2,099
LPD Segment [Member]
Segment Reporting Information [Line Items]
Revenue									127,388		113,811		111,308
Income (loss) from operations									24,215		14,159		20,808
Depreciation and amortization									5,144		4,906		4,943
Expenditures for long-lived assets									4,025	[1]	5,569	[1]	5,767
Other Segment [Member]
Segment Reporting Information [Line Items]
Revenue									26,839		25,119		25,139
Income (loss) from operations									2,479		2,405		2,902
Depreciation and amortization									2,451		2,141		2,065
Expenditures for long-lived assets									4,729	[1]	2,655	[1]	2,221
Unallocated Amounts [Member]
Segment Reporting Information [Line Items]
Income (loss) from operations									$ (18,810)		$ (5,768)		$ (2,070)

[1] Expenditures for long-lived assets exclude expenditures for intangible assets. See Note 3 for information regarding acquisitions of intangible assets during the years ended December 31, 2014, 2013 and 2012.

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Derivative Instruments And Hedging (Schedule Of Fair Values And Balance Sheet Classifications Of Derivatives Designated As Hedging Instruments) (Details) (Derivatives Designated As Hedging Instruments [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Derivatives, Fair Value [Line Items]
Total derivative instruments, fair value of liabilities	$ 2,440	$ 4,917
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	1,323	2,965
Derivative Asset	10,903	1,079
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	1,323	2,965
Derivative Liability	1,117	1,952
Foreign Currency Exchange Contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, fair value of assets	12,226	4,044
Foreign Currency Exchange Contracts [Member] | Accrued Expenses [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, fair value of liabilities	1,323	3,096
Interest Rate Swaps [Member] | Accrued Expenses [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, fair value of liabilities	$ 1,117	$ 1,821

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Earnings Per Share (Schedule Of Reconciliation Of Shares Outstanding For Basic And Diluted Earnings Per Share) (Details) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Shares outstanding for basic earnings per share	50,047	53,159	54,985
Dilutive effect of share-based payment awards	704	826	1,170
Shares outstanding for diluted earnings per share	50,751	53,985	56,155

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Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Effective Tax Rate	26.20%	28.70%	31.60%
Income tax ruling exemption	$ 8,500,000	$ 6,500,000	$ 6,000,000
Cumulative earnings of non-United States subsidiaries considered to be indefinitely invested outside of United States	431,700,000
Unrecognized tax benefits	5,942,000	6,325,000	5,906,000	5,149,000
Unrecognized tax benefits that would impact effective tax rate if recognized	5,000,000	5,700,000
Interest expense and penalties related to unrecognized tax benefits	300,000	300,000	300,000
Interest expense and penalties accrued	500,000	600,000
Positions for which it is reasonably possible that total amount of unrecognized tax benefits will significantly increase or decrease within 12 months of reporting date	400,000
Net operating loss carryforwards in certain state and international jurisdictions	41,600,000
Valuation allowance against certain deferred tax assets related to net operating loss carryforwards	$ 4,700,000
Tax years no longer subject to U.S. federal examination [Member]
Years before	2013
With few exceptions, tax years no longer subject to state or local and international jurisdicition examination [Member]
Years before	2006
Switzerland [Member]
Expiration date for tax holidays	December 31, 2015
Netherlands [Member]
Expiration date for tax holidays	December 31, 2022

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Repurchases Of Common Stock

12 Months Ended

Dec. 31, 2014

Repurchases Of Common Stock [Abstract]

Repurchases Of Common Stock

NOTE 17.REPURCHASES OF COMMON STOCK

Our board of directors has authorized the repurchase of up to 57,000,000 shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program. We believe that the repurchase of our common stock is a favorable means of returning value to our shareholders, and we also repurchase to offset the dilutive effect of our share-based compensation programs. Repurchases of our common stock may vary depending upon the level of other investing activities and the share price. As of December 31, 2014, there are 3,081,303 remaining shares available for repurchase under this authorization.

The following is a summary of our open market common stock repurchases for the years ended December 31, 2014, 2013 and 2012(in thousands, except per share amounts):

	For the Years Ended December 31,
	2014		2013		2012
Shares repurchased		4,881		3,952		1,474
Total cost of shares repurchased	$	618,158	$	367,761	$	132,268
Average cost per share	$	126.66	$	93.06	$	89.72

We primarily acquire shares by means of repurchases in the open market. However, we also acquire shares that are surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and the settlement of deferred stock units, otherwise referred to herein as employee surrenders. We acquired 46,190 shares at a total cost of $5.8 million in connection with employee surrenders for the year ended December 31, 2014 compared to 49,475 shares at a total cost of $4.5 million for the year ended December 31, 2013 and 53,272 shares at a total cost of $4.7 million for the year ended December 31, 2012.

We  issue shares of treasury stock upon the vesting of certain restricted stock units and upon the exercise of certain stock options. The number of shares of treasury stock issued during the years ended December 31, 2014, 2013 and 2012 was not material.

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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)

12 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Dec. 31, 2012

Summary Of Significant Accounting Policies [Line Items]

Restricted cash

$ 0

$ 700,000

Goodwill impairments

0

0

0

Intangible assets impairments

0

0

0

Revenue recognition, multiple-deliverable arrangements, years

one to six years

Advertising costs

1,200,000

1,500,000

1,100,000

Foreign currency transaction losses

(2,000,000)

(100,000)

(200,000)

Fair value of long-term debt

367,300,000

Carrying value of long-term debt

350,000,000

150,359,000

Fair value of notes receivable

$ 5,100,000

Percentage of Revenue From Henry Schein [Member]

Summary Of Significant Accounting Policies [Line Items]

Percentage of IDEXX consolidated total

8.00%

9.00%

9.00%

Percentage of Accounts Receivable From Henry Schein [Member]

Summary Of Significant Accounting Policies [Line Items]

Percentage of IDEXX consolidated total

2.00%

7.00%

Percentage of Revenue From MWI Veterinary Supply [Member]

Summary Of Significant Accounting Policies [Line Items]

Percentage of IDEXX consolidated total

8.00%

8.00%

8.00%

Percentage of Accounts Receivable From MWI Veterinary Supply [Member]

Summary Of Significant Accounting Policies [Line Items]

Percentage of IDEXX consolidated total

8.00%

11.00%

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule Of Reconciliation Of Shares Outstanding For Basic And Diluted Earnings Per Share

	For the Years Ended December 31,
	2014	2013	2012
Shares outstanding for basic earnings per share:	50,047	53,159	54,985
Shares outstanding for diluted earnings per share:
Shares outstanding for basic earnings per share	50,047	53,159	54,985
Dilutive effect of share-based payment awards	704	826	1,170
	50,751	53,985	56,155

Schedule Of Number Of Anti-Dilutive Stock Options

	For the Years Ended December 31,
	2014	2013	2012
Weighted average number of shares underlying anti-dilutive options	322	527	696

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Income Taxes (Schedule Of Components Of Net Deferred Tax Assets And Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Current [Member]
Assets:
Accrued expenses	$ 20,377	$ 19,833
Accounts receivable reserves	2,591	1,153
Deferred revenue	8,697	5,872
Inventory basis differences	3,154	2,670
Share-based compensation	2,490	2,325
Other	171	13
Net operating loss carryforwards	65	500
Unrealized losses on foreign currency exchange contracts, interest rate swaps and investments		1,580
Total assets	37,545	33,946
Valuation allowance	(457)	(642)
Total assets, net of valuation allowance	37,088	33,304
Liabilities:
Other	(610)	(190)
Unrealized gains on foreign currency exchange	(2,603)	(1,303)
Total liabilities	(3,213)	(1,493)
Net deferred tax assets (liabilities)	33,875	31,811
Long-Term [Member]
Assets:
Accrued expenses	7,824	1,622
Deferred revenue	3,084	1,552
Inventory basis differences	347
Property-based differences	1,601	1,728
Share-based compensation	8,936	7,923
Other	255	150
Net operating loss carryforwards	4,368	4,182
Total assets	26,415	17,157
Valuation allowance	(4,221)	(4,559)
Total assets, net of valuation allowance	22,194	12,598
Liabilities:
Deferred instrument costs	(10,149)	(3,093)
Property-based differences	(33,978)	(25,823)
Intangible assst basis differences	(16,882)	(15,513)
Other	(517)	(790)
Total liabilities	(61,526)	(45,219)
Net deferred tax assets (liabilities)	$ (39,332)	$ (32,621)

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Other Current and Noncurrent Assets (Tables)

12 Months Ended

Dec. 31, 2014

Other Current and Noncurrent Assets [Abstract]

Schedule Of Other Current Assets

	December 31,		December 31,
		2014		2013
Prepaid expenses	$	32,672	$	20,810
Taxes receivable		28,926		14,910
Customer acquisition costs, net		11,262		8,098
Other assets		13,591		5,139
	$	86,451	$	48,957

Schedule Of Other Noncurrent Assets

	December 31,		December 31,
		2014		2013
Investment in long-term product supply arrangements	$	10,765	$	13,075
Customer acquisition costs, net		28,165		21,199
Other assets		32,724		22,957
	$	71,654	$	57,231

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Summary Of Significant Accounting Policies (Schedule Of Estimated Useful Lives For Intangible Assets) (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life	5 years
Maximum [Member] | Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		15 years
Maximum [Member] | Product Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		15 years	[1]
Maximum [Member] | Customer-Related Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		17 years	[2]
Maximum [Member] | Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		7 years
Minimum [Member] | Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		13 years
Minimum [Member] | Product Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		5 years	[1]
Minimum [Member] | Customer-Related Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		5 years	[2]
Minimum [Member] | Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life		3 years

[1] Product rights comprise certain technologies, intellectual property, licenses and trade names acquired from third parties.Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

[2] Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

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Goodwill And Intangible Assets, Net (Schedule Of Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Segments Of Goodwill [Line Items]
Beginning balance	$ 180,521	$ 174,994	$ 172,610
Business Combinations	13,077	6,741
Impact of Changes in Foreign Currency Exchange Rates	(9,148)	(1,214)	2,384
Ending balance	184,450	180,521	174,994
CAG [Member]
Segments Of Goodwill [Line Items]
Beginning balance	141,408	143,155	141,677
Business Combinations	13,077	250
Impact of Changes in Foreign Currency Exchange Rates	(6,334)	(1,997)	1,478
Ending balance	148,151	141,408	143,155
Water Segment [Member]
Segments Of Goodwill [Line Items]
Beginning balance	14,515	14,179	13,576
Impact of Changes in Foreign Currency Exchange Rates	(826)	336	603
Ending balance	13,689	14,515	14,179
LPD [Member]
Segments Of Goodwill [Line Items]
Beginning balance	18,067	11,129	10,826
Business Combinations		6,491
Impact of Changes in Foreign Currency Exchange Rates	(1,988)	447	303
Ending balance	16,079	18,067	11,129
Other Segment [Member]
Segments Of Goodwill [Line Items]
Beginning balance				6,531
Ending balance	$ 6,531	$ 6,531	$ 6,531	$ 6,531

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Property And Equipment, Net (Schedule Of Property And Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Gross amount	$ 603,935	$ 550,015
Less accumulated depreciation and amortization	300,348	268,801
Total property and equipment, net	303,587	281,214
Land And Improvements [Member]
Property, Plant and Equipment [Line Items]
Gross amount	7,417	7,471
Building And Improvements [Member]
Property, Plant and Equipment [Line Items]
Gross amount	159,298	158,382
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Gross amount	45,655	39,266
Machinery And Equipment [Member]
Property, Plant and Equipment [Line Items]
Gross amount	183,575	162,144
Office Furniture And Equipment [Member]
Property, Plant and Equipment [Line Items]
Gross amount	35,696	35,271
Computer Hardware And Software [Member]
Property, Plant and Equipment [Line Items]
Gross amount	151,404	136,008
Construction In Progress [Member]
Property, Plant and Equipment [Line Items]
Gross amount	$ 20,890	$ 11,473

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Repurchases Of Common Stock (Tables)

12 Months Ended

Dec. 31, 2014

Repurchases Of Common Stock [Abstract]

Schedule Of Common Stock Repurchases

	For the Years Ended December 31,
	2014		2013		2012
Shares repurchased		4,881		3,952		1,474
Total cost of shares repurchased	$	618,158	$	367,761	$	132,268
Average cost per share	$	126.66	$	93.06	$	89.72

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Nature Of Business, Basis Of Presentation And Principles Of Consolidation

12 Months Ended

Dec. 31, 2014

Nature Of Business, Basis Of Presentation And Principles Of Consolidation [Abstract]

Nature Of Business, Basis Of Presentation And Principles Of Consolidation

NOTE 1.      NATURE OF BUSINESS, BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements of IDEXX Laboratories, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the requirements of Regulation S-X.

These statements include the accounts of IDEXX Laboratories, Inc. and our wholly-owned and majority-owned subsidiaries (“IDEXX,” the “Company,” “we” or “our”). We do not have any variable interest entities for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

We develop, manufacture and distribute products and provide services for the veterinary, bioresearch, water, livestock, poultry and dairy markets. We also sell a line of portable electrolytes and blood gas analyzers for the human point-of-care medical diagnostics market. Our principal line of business, which we refer to as our Companion Animal Group (“CAG”) operating segment, provides diagnostic capabilities and information management solutions for the veterinary market as well as and biological materials testing and services for the bioresearch market. Our principal markets for these products and services are the United States (“U.S.”) and Europe, but we also sell to customers and distributors in many other countries around the world. Our Water operating segment provides innovative testing solutions for the quality and safety of water in our principal markets the U.S. and Europe, but we also sell to customers in many other countries around the world. Our Livestock, Poultry and Dairy (“LPD”) operating segment provides diagnostic tests and related instrumentation that are used to manage the health status of livestock and poultry, to improve bovine reproductive efficiency, and to ensure the quality and safety of milk and food. Our principal market for these tests and products is Europe but we also sell to customers in many other countries around the world. We also operate a smaller operating segment that comprises products for the human point-of-care medical diagnostics market (“OPTI Medical”). Financial information about the OPTI Medical operating segment is combined and presented with our pharmaceutical product line and out-licensing arrangements remaining from our pharmaceutical business in an “Other” category because they do not meet the quantitative or qualitative thresholds for reportable segments. See Note 14 for additional information regarding our reportable operating segments, products and services and geographical areas.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation. Reclassifications had no material impact on previously reported results of operations, financial position or cash flows.

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Other Current and Noncurrent Assets (Schedule Of Other Current Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Other Current and Noncurrent Assets [Abstract]
Prepaid expenses	$ 32,672	$ 20,810
Taxes receivable	28,926	14,910
Customer acquisition costs, net	11,262	8,098
Other assets	13,591	5,139
Other current assets	$ 86,451	$ 48,957

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Commitments, Contingencies And Guarantees (Tables)

12 Months Ended

Dec. 31, 2014

Commitments, Contingencies And Guarantees [Abstract]

Schedule Of Minimum Annual Rental Payments

Years Ending December 31,		Amount
2015	$	17,228
2016		15,245
2017		12,984
2018		10,048
2019		6,731
Thereafter		15,256
	$	77,492

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Disposition Of Pharmaceutical Product Lines And Restructuring

12 Months Ended

Dec. 31, 2014

Disposition Of Pharmaceutical Product Lines And Restructuring [Abstract]

Disposition Of Pharmaceutical Product Lines And Restructuring

NOTE 21.DISPOSITION OF PHARMACEUTICAL PRODUCT LINES AND RESTRUCTURING

In the fourth quarter of 2008, we sold our Acarexx® and SURPASS® veterinary pharmaceutical products and a feline insulin product under development, which were a part of our CAG segment, for cash proceeds of $7.0 million, a short-term receivable of $1.4 million and up to $11.5 million of future payments based on the achievement of certain development and sales milestones by the acquirer of the feline insulin product. In the fourth quarter of 2009 we earned and received a milestone payment of $2.0 million in connection with the achievement of certain development milestones by the acquirer. We earned milestone payments of $3.5 million, $3.0 million and $3.0 million in 2012, 2011 and 2010, respectively, in connection with the achievement of certain sales milestones by the acquirer following commercialization of the feline insulin product. These aggregate milestone payments were received in the first quarter of 2013, 2012 and 2011 respectively. The 2013 milestone payment was included in other current assets on the accompanying consolidated balance sheet for the year ended December 31, 2012. Because we had no obligation to deliver product or services, or otherwise provide support to the third party under this agreement, and because collectability was reasonably assured, these milestone payments were included in results of operations when earned. The payments were not classified as revenue because the transaction was accounted for as the sale of a business; rather they were reflected as reductions to general and administrative expenses as earned. We are not eligible to receive any further milestone payments under this agreement.

In the fourth quarter of 2008, we also entered into a separate royalty bearing license agreement related to certain intellectual property of our pharmaceutical division. Under this agreement we received $0.3 million up front, $1.6 million in the fourth quarter of 2014 and $0.3 million in the fourth quarters of 2013 and 2010 in connection with the achievement of certain production and clinical field trial milestones by the licensee. We had no obligation to deliver product or services, or otherwise provide support to the third party under this agreement. Due to these circumstances, and because collectability is reasonably assured, milestone payments earned under this agreement were included in results of operations when earned. The payments received during the year ended December 31, 2014 satisfied the licensee’s milestone payment obligation. Under the agreement, future royalties are due to us contingent upon commercialization of the product.

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IDEXX Retirement And Incentive Savings Plan

12 Months Ended

Dec. 31, 2014

IDEXX Retirement And Incentive Savings Plan [Abstract]

IDEXX Retirement And Incentive Savings Plan

NOTE 20.IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN

We have established the IDEXX Retirement and Incentive Savings Plan (the “401(k) Plan”). Employees eligible to participate in the 401(k) Plan may contribute specified percentages of their salaries, a portion of which will be matched by us. We matched $8.8 million, $7.8 million and $7.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, we may make contributions to the 401(k) Plan at the discretion of the board of directors. There were no discretionary contributions in 2014, 2013 or 2012.

We also have established defined contribution plans for regional employees in Europe and in Canada. With respect to these plans, we contributed $3.7 million, $3.1 million and $2.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.

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Share-Based Compensation (Schedule Of Weighted Averages Of The Assumptions Used In Estimating The Fair Value Of Stock Option Awards) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-Based Compensation [Abstract]
Expected stock price volatility	28.00%	32.00%	34.00%
Expected term, in years	5 years 8 months 12 days	4 years 10 months 24 days	4 years 7 months 6 days
Risk-free interest rate	1.50%	1.00%	0.80%
Weighted average fair value of options granted	$ 36.14	$ 27.17	$ 26.38

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Summary Of Segment Performance

For the Years Ended December 31,
	CAG		Water		LPD		Other		Unallocated Amounts		Consolidated Total
2014
Revenue	$	1,236,855	$	94,725	$	127,388	$	26,839	$	-	$	1,485,807
Income (loss) from operations	$	213,109	$	39,262	$	24,215	$	2,479	$	(18,810)	$	260,255
Interest expense, net												(13,700)
Income before provision for income taxes												246,555
Provision for income taxes												64,604
Net income												181,951
Less: Net income attributable to noncontrolling interest												45
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	181,906
Depreciation and amortization	$	48,740	$	2,553	$	5,144	$	2,451	$	-	$	58,888
Expenditures for long-lived assets (1)	$	49,270	$	2,499	$	4,025	$	4,729	$	-	$	60,523
2013
Revenue	$	1,150,169	$	87,959	$	113,811	$	25,119	$	-	$	1,377,058
Income (loss) from operations	$	218,645	$	37,321	$	14,159	$	2,405	$	(5,768)	$	266,762
Interest expense, net												(3,501)
Income before provision for income taxes												263,261
Provision for income taxes												75,467
Net income												187,794
Less: Net loss attributable to noncontrolling interest												(6)
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	187,800
Depreciation and amortization	$	45,079	$	2,470	$	4,906	$	2,141	$	-	$	54,596
Expenditures for long-lived assets (1)	$	66,134	$	3,254	$	5,569	$	2,655	$	-	$	77,612
2012
Revenue	$	1,072,211	$	84,680	$	111,308	$	25,139	$	-	$	1,293,338
Income (loss) from operations	$	203,236	$	37,687	$	20,808	$	2,902	$	(2,070)	$	262,563
Interest expense, net												(1,946)
Income before provision for income taxes												260,617
Provision for income taxes												82,330
Net income												178,287
Less: Net income attributable to noncontrolling interest												20
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	178,267
Depreciation and amortization	$	43,042	$	2,358	$	4,943	$	2,065	$	-	$	52,408
Expenditures for long-lived assets (1)	$	47,531	$	2,099	$	5,767	$	2,221	$	-	$	57,618

__________

(1)Expenditures for long-lived assets exclude expenditures for intangible assets. See Note 3 for information regarding acquisitions of intangible assets during the years ended December 31, 2014, 2013 and 2012.

Summary Of Revenue By Product And Service Category

	For the Years Ended December 31,
		2014		2013		2012
CAG segment revenue:
CAG Diagnostics recurring revenue:	$	1,053,410	$	973,886	$	896,449
VetLab consumables		341,397		312,457		278,818
VetLab service and accessories		53,383		50,675		48,056
Rapid assay products		165,647		169,547		162,232
Reference laboratory diagnostic and consulting services		492,983		441,207		407,343
CAG Diagnostics capital instruments		79,626		83,492		90,177
Customer information management and digital imaging systems		103,819		92,791		85,585
CAG segment revenue		1,236,855		1,150,169		1,072,211
Water segment revenue		94,725		87,959		84,680
LPD segment revenue		127,388		113,811		111,308
Other segment revenue		26,839		25,119		25,139
Total revenue	$	1,485,807	$	1,377,058	$	1,293,338

Schedule Of Revenue By Principal Geographic Area

	For the Years Ended December 31,
		2014		2013		2012
Americas
United States	$	848,928	$	802,345	$	759,419
Canada		69,743		69,947		66,405
Latin America		34,086		26,893		22,901
		952,757		899,185		848,725
Europe, the Middle East and Africa
Germany		85,189		78,109		72,983
United Kingdom		74,131		65,027		64,412
France		53,322		49,093		45,927
Italy		28,794		26,443		24,625
Spain		21,566		20,194		19,776
Switzerland		14,544		12,246		12,967
Other		88,844		75,573		59,948
		366,390		326,685		300,638
Asia Pacific Region
Australia		58,448		53,063		50,658
Japan		44,132		44,869		49,204
China		34,674		29,044		24,628
Other		29,406		24,212		19,485
		166,660		151,188		143,975
Total	$	1,485,807	$	1,377,058	$	1,293,338

Schedule Of Net Long-Lived Assets By Principal Geographic Areas

	December 31,		December 31,
		2014		2013
Americas
United States	$	262,475	$	245,511
Brazil		3,206		869
Canada		2,270		2,114
		267,951		248,494
Europe, the Middle East and Africa
United Kingdom		14,366		12,959
Germany		4,836		5,733
France		3,172		3,127
Netherlands		3,456		2,956
Switzerland		2,631		3,076
Other		1,674		1,190
		30,135		29,041
Asia Pacific Region
Japan		2,204		690
Australia		1,789		1,801
Other		1,508		1,188
		5,501		3,679
Total	$	303,587	$	281,214

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Summary Of Quarterly Data

12 Months Ended

Dec. 31, 2014

Summary Of Quarterly Data [Abstract]

Summary Of Quarterly Data

NOTE 22.SUMMARY OF QUARTERLY DATA (UNAUDITED)

A summary of quarterly data follows (in thousands, except per share data):

	For the Three Months Ended
		March 31,		June 30,		September 30,		December 31,
2014
Revenue	$	360,203	$	390,122	$	383,523	$	351,959
Gross profit		202,097		218,518		213,336		182,165
Operating income		70,046		83,219		72,189		34,801
Net income attributable to IDEXX Laboratories, Inc. stockholders		46,585		57,218		52,142		25,961
Earnings per share:
Basic	$	0.90	$	1.12	$	1.05	$	0.54
Diluted	$	0.89	$	1.10	$	1.03	$	0.54
2013
Revenue	$	332,106	$	352,583	$	338,297	$	354,073
Gross profit		183,974		197,698		185,783		188,665
Operating income		61,188		78,763		65,485		61,328
Net income attributable to IDEXX Laboratories, Inc. stockholders		44,860		53,995		45,688		43,258
Earnings per share:
Basic	$	0.82	$	1.01	$	0.87	$	0.83
Diluted	$	0.81	$	0.99	$	0.86	$	0.82

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Valuation And Qualifying Accounts

12 Months Ended

Dec. 31, 2014

Valuation and Qualifying Accounts [Abstract]

Valuation And Qualifying Accounts

SCHEDULE II

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

		Balance at Beginning of Year		Charges to Costs and Expenses		Charges to Other Accounts1		Write-Offs/Cash Payments		Foreign Currency Translation		Balance at End of Year
Reserves for doubtful accounts receivable:
December 31, 2012	$	3,239	$	1,108	$	-	$	(1,732)	$	17	$	2,632
December 31, 2013		2,632		1,601		-		(762)		62		3,533
December 31, 2014		3,533		2,035		-		(1,146)		(116)		4,306
Valuation allowance for deferred tax assets:
December 31, 2012	$	4,614	$	265	$	-	$	(358)	$	26	$	4,547
December 31, 2013		4,547		735		742		(701)		(122)		5,201
December 31, 2014		5,201		799		-		(1,042)		(280)		4,678
1Amount relates to net operating losses obtained through acquisitions where uncertainty exists as to our ability to use the tax attribute.

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Cash Flows from Operating Activities:
Net income	$ 181,951		$ 187,794		$ 178,287
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	58,888		54,596		52,408
Gain on disposition of pharmaceutical product lines					(3,500)
Provision for uncollectible accounts	2,035		1,601		1,108
Provision for (benefit of) deferred income taxes	830		2,073		(1,970)
Share-based compensation expense	18,099		16,539		15,952
Other	(160)		614		410
Tax benefit from share-based compensation arrangements	(16,078)		(14,158)		(14,676)
Changes in assets and liabilities:
Accounts receivable	(3,626)		(15,946)		3,487
Inventories	(38,310)		(1,347)		(17,208)
Other assets	(25,073)		(4,325)		3,933
Accounts payable	6,703		(4,399)		(2,898)
Accrued liabilities	36,392		16,512		187
Deferred revenue	14,195		6,442		6,888
Net cash provided by operating activities	235,846		245,996		222,408
Cash Flows from Investing Activities:
Purchases of property and equipment	(60,523)	[1]	(77,612)	[1]	(57,618)
Proceeds from disposition of pharmaceutical product lines			3,500		3,000
Proceeds from sale of equity investment	5,400
Proceeds from sale of property and equipment					45
Acquisitions of intangible assets	(175)		(1,024)		(900)
Acquisitions of a business, net of cash acquired	(25,115)		(10,923)		(2,658)
Net cash used by investing activities	(80,413)		(86,059)		(58,131)
Cash Flows from Financing Activities:
Borrowings (payments) on revolving credit facilities, net	272,000		65,000		(31,000)
Issuance of senior notes	200,000		150,000
Debt issue costs	(1,406)		(976)
Payment of notes payable	(1,394)		(1,107)		(917)
Repurchases of common stock	(618,158)		(367,761)		(132,268)
Proceeds from exercises of stock options and employee stock purchase plans	29,442		38,235		24,166
Tax benefit from share-based compensation arrangements	16,078		14,158		14,676
Net cash used by financing activities	(103,438)		(102,451)		(125,343)
Net effect of changes in exchange rates on cash	(8,517)		(2,414)		1,157
Net increase in cash and cash equivalents	43,478		55,072		40,091
Cash and cash equivalents at beginning of period	279,058		223,986		183,895
Cash and cash equivalents at end of period	322,536		279,058		223,986
Supplemental Disclosures of Cash Flow Information
Interest paid	12,284		5,024		3,944
Income taxes paid	60,239		67,721		68,921
Supplemental Disclosure of Non-Cash Information:
Market value of common shares received from employees in connection with share-based compensation - see Note 17	5,809		4,548		4,662
Receivable on disposition of pharmaceutical product lines					$ 3,500

[1] Expenditures for long-lived assets exclude expenditures for intangible assets. See Note 3 for information regarding acquisitions of intangible assets during the years ended December 31, 2014, 2013 and 2012.

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2014

Summary Of Significant Accounting Policies [Abstract]

Estimates

(a) Estimates

The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates, including those related to reserves for accounts receivable; goodwill and other intangible assets; income taxes; inventory valuation; revenue recognition, product returns, customer programs and multiple element arrangements; share-based compensation; warranty reserves; self-insurance reserves; fair value measurements and loss contingencies. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Cash And Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of ninety days or less to be cash equivalents. Cash and cash equivalents consist primarily of demand deposits and money market funds.

As of December 31, 2013, our reported cash and cash equivalents balances contained restricted cash in the aggregate of $0.7 million securing various obligations. There is no restricted cash on our consolidated balance sheet for the year ended December 31, 2014.

Inventories

Inventories

Inventories, which are stated at the lower of cost (first-in, first-out) or market,include material, conversion costs and inbound freight charges. We write down the carrying value of inventory for estimated obsolescence by an amount equal to the difference between the cost of inventory and the estimated market value when warranted based on assumptions of future demand, market conditions, remaining shelf life, or product functionality. If actual market conditions or results of estimated functionality are less favorable than those we estimated, additional inventory write-downs may be required, which would have a negative effect on results of operations.

Property And Equipment

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. When an item is sold or retired, the cost and related accumulated depreciation is relieved, and the resulting gain or loss, if any, is recognized in the consolidated statements of income. We provide for depreciation and amortization primarily using the straight-line method by charges to income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows:

Asset Classification	Estimated Useful Life
Land improvements	15 to 20 years
Buildings and improvements	10 to 40 years
Leasehold improvements	Shorter of remaining lease term or useful life of improvements
Machinery and equipment	3 to 8 years
Office furniture and equipment	3 to 7 years
Computer hardware and software	3 to 7 years

We capitalize interest on the acquisition and construction of significant assets that require a substantial period of time to be made ready for use. The capitalized interest is included in the cost of the completed asset and depreciated over the asset’s estimated useful life. The amount of interest capitalized during the years ended December 31, 2014 and 2013 was not material.

We capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Qualifying costs incurred during the application development stage, which consist primarily of internal payroll and direct fringe benefits and external direct project costs, including labor and travel, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset. Costs incurred during the preliminary project and post-implementation and operation phases are expensed as incurred. These costs are general and administrative in nature and relate primarily to the determination of performance requirements, data conversion and training. Software developed to deliver hosted services to our customers has been designated as internal use. See Note 6 for further information regarding costs capitalized in connection with software developed for internal use.

Goodwill And Other Intangible Assets

Goodwill and Other Intangible Assets

A significant portion of the purchase price for acquired businesses is generally assigned to intangible assets. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to IDEXX. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When material, we utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. We assess contingent consideration to determine if it is part of the business combination or if it should be accounted for separately from the business combination in the postcombination period. Contingent consideration is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. Changes in fair value of contingent consideration are recognized in earnings.

We provide for amortization primarily using the straight-line method by charges to income in amounts that allocate the intangible assets over their estimated useful lives as follows:

Asset Classification	Estimated Useful Life
Patents	13 to 15 years
Product rights(1)	5 to 15 years
Customer-related  intangible assets(2)	5 to 17 years
Noncompete agreements	3 to 7 years

(1) Product rights comprise certain technologies, intellectual property, licenses and trade names acquired from third parties.

(2) Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

We assess goodwill for impairment annually, at the reporting unit level, in the fourth quarter and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we would then perform step one of the two-step impairment test; otherwise, no further impairment test would be required. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the two-step impairment test. Doing so does not preclude us from performing the qualitative assessment in any subsequent period.

In the fourth quarter of 2014, we elected to bypass the qualitative approach and instead proceeded directly to step one of the two-step impairment test to assess the fair value of all of our reporting units. As part of step one of the two-step impairment test, we estimate the fair values of applicable reporting units using an income approach based on discounted forecasted cash flows. We make significant assumptions about the extent and timing of future cash flows, growth rates and discount rates. Model assumptions are based on our projections and best estimates, using appropriate and customary market participant assumptions. In addition, we make certain assumptions in allocating shared assets and liabilities to individual reporting units in determining the carrying value of each reporting unit. Changes in forecasted cash flows or the discount rate would affect the estimated fair values of our reporting units and could result in a goodwill impairment charge in a future period.

No goodwill impairments were identified during the years ended December 31, 2014, 2013 or 2012.

We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of an intangible asset exceeds the related estimated undiscounted future cash flows, an impairment to write the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset, and applying a risk-adjusted discount rate. No material impairments of our intangible assets were identified during the years ended December 31, 2014, 2013 and 2012. See Note 8 for further information regarding our goodwill and intangible assets.

Warranty Reserves

Warranty Reserves

We provide a standard twelve month warranty on all instruments sold. We recognize the cost of instrument warranties in cost of product revenue at the time revenue is recognized based on the estimated cost to repair the instrument over its warranty period. Cost of product revenue reflects not only estimated warranty expense for instruments sold in the current period, but also any changes in estimated warranty expense for the portion of the aggregate installed base that is under warranty. Estimated warranty expense is based on a variety of inputs, including historical instrument performance in the customers’ environment, historical costs incurred in servicing instruments and projected instrument reliability. Should actual service rates or costs differ from our estimates, revisions to the estimated warranty liability would be required. The liability for warranties is included in accrued liabilities in the accompanying consolidated balance sheets.

Income Taxes

Income Taxes

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. While we consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, a reduction to the deferred tax asset would be charged to income in the period such determination was made.

We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes.

Significant judgment is required in determining our worldwide provision for income taxes and our income tax filings are regularly under audit by tax authorities. Any audit result differing from amounts recorded would increase or decrease income in the period that we determine such adjustment is likely. Interest expense and penalties associated with the underpayment of income taxes are included in income tax expense. See Note 11 for additional information regarding income taxes.

Taxes Remitted To Governmental Authorities By IDEXX On Behalf Of Customer

Taxes Remitted to Governmental Authorities by IDEXX on Behalf of CustomerWe calculate, collect from our customers, and remit to governmental authorities sales, value added and excise taxes assessed by governmental authorities in connection with revenue-producing transactions with our customers. We report these taxes on a net basis and do not include these tax amounts in revenue or cost of product or service revenue.

Revenue Recognition

Revenue Recognition

We recognize revenue when four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales price is fixed or determinable; and (iv)collectability is reasonably assured. Revenue-generating transactions generally fall into one of the following categories of revenue recognition:

· Revenue from substantially all U.S. distributors is recognized upon delivery to the distributor because title and risk of loss remains with IDEXX until the product is delivered. Effective December 31, 2014, we did not renew our existing contracts with our key U.S. distribution partners and transitioned to an all-direct sales strategy for our rapid assay test kits and instrument consumables.  We recognize revenue for the remainder of our customers, including most distributors outside of the U.S., when the product is delivered to the customer, except as noted below.

· We recognize revenue from the sales of instruments, non-cancelable software licenses and hardware systems upon installation and the customer’s acceptance of the instrument or system as we have no significant further obligations after this point in time.

· We recognize service revenue at the time the service is performed.

· We recognize revenue associated with extended maintenance agreements (“EMAs”) over the life of the contracts using the straight-line method, which approximates the expected timing in which applicable services are performed. Amounts collected in advance of revenue recognition are recorded as current or long-term deferred revenue based on the time from the balance sheet date to the future date of revenue recognition.

· We recognize revenue on certain instrument systems under rental programs over the life of the rental agreement using the straight-line method. Amounts collected in advance of revenue recognition are recorded as current or long-term deferred revenue based on the time from the balance sheet date to the future date of revenue recognition.

· We recognize revenue on practice management systems sales, where the system includes software that is considered more than incidental, either by allocating the revenue to each element of the sale based on relative fair values of the elements, including post-contract support when fair value for all elements is available, or by use of the residual method when only the fair value of the post-contract support is available. We recognize revenue for the system upon installation and customer acceptance and recognize revenue equal to the fair value of the post-contract support over the support period.

· Shipping costs reimbursed by the customer are included in revenue. These same costs are also included in cost of product revenue.

Multiple Element Arrangements (“MEAs”). Arrangements to sell products to customers frequently include multiple deliverables. Our most significant MEAs include the sale of one or more of the instruments from the IDEXX VetLab suite of analyzers, digital imaging systems or practice management software, combined with one or more of the following products: EMAs, consumables and reference laboratory diagnostic and consulting services. Practice management software is frequently sold with post-contract customer support and implementation services. Delivery of the various products or performance of services within the arrangement may or may not coincide. Delivery of our IDEXX VetLab instruments, digital imaging systems, and practice management software generally occurs at the onset of the arrangement. EMAs, consumables, and reference laboratory diagnostic and consulting services typically are delivered over future periods, generally one to six years. In certain arrangements, revenue recognized is limited to the amount invoiced or received that is not contingent on the delivery of products and services in the future.

We allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element. If available, we establish the selling price of each element based on vendor-specific objective evidence (“VSOE”), which represents the price charged for a deliverable when it is sold separately. We use third-party evidence (“TPE”) if VSOE is not available or best estimate of selling price if neither VSOE nor TPE is available. When these arrangements include a separately-priced EMA, we recognize revenue related to the EMA at the stated contractual price on a straight-line basis over the life of the agreement to the extent the separately stated price is substantive. If there is no stated contractual price for an EMA, or the separately stated price is not substantive, we allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element.

When arrangements within the scope of software revenue recognition guidance include multiple elements, we allocate revenue to each element based on relative fair value, when VSOE exists for all elements, or by using the residual method when there is VSOE for the undelivered elements but no such evidence for the delivered elements. Under the residual method, the fair value of the undelivered elements is deferred and the residual revenue is allocated to the delivered elements. Revenue is recognized on any delivered elements when the four criteria for revenue recognition have been met for each element. If VSOE does not exist for the undelivered element, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE does exist or all elements of the arrangement have been delivered. We determine fair value based on amounts charged separately for the delivered and undelivered elements to similar customers in standalone sales of the specific elements.

Certain arrangements with customers include discounts on future sales of products and services. We apply judgment in determining whether future discounts are significant and incremental. When the future discount offered is not considered significant and incremental, we do not account for the discount as an element of the original arrangement. If the future discount is significant and incremental, we recognize that discount as an element of the original arrangement and allocate the discount to the other elements of the arrangement based on relative selling price. To determine whether a discount is significant and incremental, we look to the discount provided in comparison to standalone sales of the same product or service to similar customers, the level of discount provided on other elements in the arrangement, and the significance of the discount to the overall arrangement. If the discount in the MEA approximates the discount typically provided in standalone sales, that discount is not considered incremental.

Customer Programs. We record reductions to revenue related to customer marketing and incentive programs, which include end-user rebates and other volume-based incentives. Incentives may be provided in the form of IDEXX Points, credits or cash and are earned by end users upon achieving defined volume purchases or utilization levels or upon entering an agreement to purchase products or services in future periods. Our most significant customer programs are categorized as follows:

Customer Loyalty Programs. Our customer loyalty programs offer customers the opportunity to earn incentives on a variety of IDEXX products and services as those products and services are purchased and utilized. Revenue reductions related to customer loyalty programs are recorded based on the actual issuance of incentives, incentives earned but not yet issued and estimates of incentives to be earned in the future.

Up-Front Customer Loyalty Programs. Our up-front loyalty programs provide incentives to customers in the form of cash payments or IDEXX Points upon entering multi-year agreements to purchase annual minimum amounts of future products or services. If a customer breaches its agreement, it is required to refund a prorated portion of the up-front cash or IDEXX Points, among other things. These incentives are considered to be customer acquisition costs and are capitalized and recognized as a reduction to revenue over the term of the customer agreement. If these up-front incentives are subsequently utilized to purchase IDEXX VetLab instruments, digital imaging systems or Cornerstone practice management systems, product revenue and cost is deferred and recognized over the term of the customer agreement as products and services are provided to the customer. We monitor customer purchases over the term of their agreement to assess the realizability of our capitalized customer acquisition costs. For the years ended December 31, 2014, 2013 and 2012, impairments of customer acquisition costs were immaterial.

IDEXX InstrumentMarketing Programs. Our instrumentmarketing programs require the customer to enroll at the time of instrument purchase and offer customers the opportunity to earn incentives in future periods based on the volume of the products they purchase and utilize over the term of the program. These arrangements are considered MEAs in accordance with our revenue recognition policy stated above. Revenue reductions related to instrument marketing programs are recorded based on an estimate of customer purchase and utilization levels and the incentive the customer will earn over the term of the program. Our estimates are based on historical experience and the specific terms and conditions of the marketing program and require us to apply judgment to approximate future product purchases and utilization. Differences between our estimates and actual incentives earned are accounted for as a change in estimate. These differences were not material for the years ended December 31, 2014, 2013 and 2012.  

Reagent Rental Programs. Our reagent rental programs provide our customers the right to use our instruments in consideration for multi-year agreements to purchase annual minimum amounts of consumables. No instrument revenue is recognized at the time of instrument installation. We recognize a portion of the revenue allocated to the instrument concurrent with the future sale of consumables. We determine the amount of revenue allocated from the consumable to the instrument based on relative selling prices and determine the rate of instrument revenue recognition in proportion to the customer’s minimum volume commitment. The cost of the instrument is charged to cost of product revenue on a straight-line basis over the term of the minimum purchase agreement.

IDEXX Points may be applied against the purchase price of IDEXX products and services purchased in the future or applied to trade receivables due to us. IDEXX Points that have not yet been used by customers are classified as a liability until use or expiration occurs. We estimate the amount of IDEXX Points expected to expire, or breakage, based on historical expirations and we recognize the estimated benefit of breakage in proportion to actual redemptions of IDEXX Points by customers. On November 30 of each year, unused IDEXX Points earned before January 1 of the prior year generally expire and any variance from the breakage estimate is accounted for as a change in estimate. This variance was not material for the years ended December 31, 2014, 2013 and 2012.

Future market conditions and changes in product offerings may cause us to change marketing strategies to increase or decrease customer incentive offerings, possibly resulting in incremental reductions of revenue in future periods as compared to reductions in the current or prior periods. Additionally, certain customer programs require us to estimate, based on historical experience, and apply judgment to approximate the number of customers who will actually redeem the incentive. In determining estimated revenue reductions we utilize data supplied from distributors and collected directly from end users, which includes the volume of qualifying products purchased and the number of qualifying tests run as reported to us by end users via IDEXX SmartService, a secure Internet link that enables us to extract data and provide diagnostic service and support for certain IDEXX VetLab instruments through remote access. Differences between estimated and actual customer participation in programs may impact the amount and timing of revenue recognition.

Doubtful Accounts Receivable. We recognize revenue when collection from the customer is reasonably assured. We maintain allowances for doubtful accounts for potentially uncollectible receivables. We base our estimates on a detailed analysis of specific customer situations and a percentage of our accounts receivable by aging category. If the financial condition of our customers were to deteriorate, resulting in their inability to make payments, additional allowances might be required. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. We do not have any off-balance sheet credit exposure related to our customers.

Research And Development Costs

Research and Development Costs

Research and development costs, which consist of salaries, employee benefits, materials and external consulting and product development costs, are expensed as incurred. We evaluate our software research and development costs for capitalization after the technological feasibility of software and products containing software has been established. No costs were capitalized during the years ended December 31, 2014, 2013 and 2012.

Advertising Costs

Advertising Costs

Advertising costs, which are recognized as sales and marketing expense in the period in which they are incurred, were $1.2 million, $1.5 million and $1.1 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Legal Costs

Legal Costs

Legal costs are considered period costs and accordingly are expensed in the year services are provided.

Share-Based Compensation

Share-Based Compensation

We provide for various forms of share-based compensation awards to our employees and non-employee directors. With the exception of stock options, the fair value of our awards is equal to the closing stock price of IDEXX common stock on the date of grant. We calculate the fair value of our stock option awards using the Black-Scholes-Merton option-pricing model. Share-based compensation expense is recognized net of estimated forfeitures, on a straight-line basis over the requisite service period of the award. See Note 4 for additional information regarding share-based compensation.

Self-Insurnace Accruals

Self-Insurance Accruals

We self-insure costs associated with workers’ compensation and health and general welfare claims incurred by our U.S. employees up to certain limits. The insurance company provides insurance for claims above these limits. Claim liabilities are recorded for estimates of the loss that we will ultimately incur on reported claims, as well as estimates of claims that have been incurred but not yet reported. Such liabilities are based on individual coverage, the average time from when a claim is incurred to the time it is paid and judgments about the present and expected levels of claim frequency and severity. Estimated claim liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. Estimated claim liabilities are included in accrued liabilities in the accompanying consolidated balance sheets.

Earnings Per Share

Earnings per Share

Basic earnings per share is computed by dividing net income attributable to IDEXX Laboratories, Inc. stockholders by the weighted average number of shares of common stock and vested deferred stock units outstanding during the year. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and assumed issuance of unvested restricted stock units and unvested deferred stock units using the treasury stock method unless the effect is anti-dilutive. The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options, the total unrecognized compensation expense for unvested share-based compensation awards and the excess tax benefits resulting from share-based compensation tax deductions in excess of the related expense recognized for financial reporting purposes, would be used to purchase our common stock at the average market price during the period. Vested deferred stock units outstanding are included in shares outstanding for basic and diluted earnings per share because the associated shares of our common stock are issuable for no cash consideration, the number of shares of our common stock to be issued is fixed and issuance is not contingent. See Note 4 for additional information regarding deferred stock units.

Foreign Currency

Foreign Currency

The functional currency of all but two of our subsidiaries is their local currency. Assets and liabilities of these foreign subsidiaries are translated to the U.S. dollar using the exchange rate in effect at the balance sheet date. Revenue and expense accounts are translated to the U.S. dollar using the exchange rate at the date which those elements are recognized, and where it is impractical to do so, an average exchange rate in effect during the period is used to translate those elements. Cumulative translation gains and losses are shown in the accompanying consolidated balance sheets as a separate component of accumulated other comprehensive income (“AOCI”).  

Revenues and expenses denominated in a currency other than the respective subsidiary’s functional currency are recorded at the current exchange rate when the transaction is recognized. Monetary assets and liabilities denominated in a currency other than the respective subsidiary’s functional currency are remeasured at each balance sheet date using the exchange rate in effect at each balance sheet date. These foreign currency gains and losses are included in general and administrative expenses. We recognized aggregate foreign currency losses of $2.0 million, less than $0.1 million and $0.2 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Derivative Instruments And Hedging

Derivative Instruments and Hedging

We recognize all derivative instruments, including our foreign currency exchange contracts and interest rate swap agreements, on the balance sheet at fair value at the balance sheet date. Derivative instruments that do not qualify for hedge accounting treatment must be recorded at fair value through earnings. To qualify for hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. If a derivative instrument qualifies for hedge accounting, changes in the fair value of the derivative instrument from the effective portion of the hedge are deferred in AOCI, net of tax, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We immediately record in earnings the extent to which a hedge instrument is not effective in achieving offsetting changes in fair value. We de-designate derivative instruments from hedge accounting when the likelihood of the hedged transaction occurring becomes less than probable. For de-designated instruments, the gain or loss from the time of de-designation through maturity of the instrument is recognized in earnings. Any gain or loss in AOCI at the time of de-designation is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

We enter into master netting arrangements with the counterparties to our derivative transactions which permit outstanding receivables and payables to be offset in the event of default. Our derivative contracts do not require either party to post cash collateral. We elect to present our derivative assets and liabilities in the accompanying consolidated balance sheets on a gross basis. All cash flows related to our foreign currency exchange contracts and interest rate swaps are classified as operating cash flows, which is consistent with the cash flow treatment of the underlying items being hedged. See Note 16 for additional information regarding our derivative and hedging instruments.

Fair Value Measurements

Fair Value Measurements

U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

The Company has certain financial assets and liabilities that are measured at fair value on a recurring basis, certain nonfinancial assets and liabilities that may be measured at fair value on a nonrecurring basis and certain financial assets and liabilities that are not measured at fair value in our consolidated balance sheets but for which we disclose the fair value. The fair value disclosures of these assets and liabilities are based on a three-level hierarchy, which is defined as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Our foreign currency exchange contracts and interest rate swap agreements are measured at fair value on a recurring basis in our accompanying consolidated balance sheets. We measure the fair value of our foreign currency exchange contracts classified as derivative instruments using an income approach, based on prevailing market forward rates less the contract rate multiplied by the notional amount. The product of this calculation is then adjusted for counterparty risk. We measure the fair value of our interest rate swaps classified as derivative instruments using an income approach, utilizing a discounted cash flow analysis based on the terms of the contract and the interest rate curve adjusted for counterparty risk.

The amount outstanding under our unsecured revolving credit facility, notes receivable and long-term debt are measured at carrying value in our accompanying consolidated balance sheets though we disclose the fair value of these financial instruments. We determine the fair value of the amount outstanding under our credit facility, notes receivable and long-term debt using an income approach, utilizing a discounted cash flow analysis based on current market interest rates for debt issues with similar remaining years to maturity, adjusted for applicable credit risk. Our credit facility and long-term debt are valued using Level 2 inputs. The estimated fair value of our credit facility approximates its carrying value. At December 31, 2014, the estimated fair value and carrying value of our long-term debt were $367.3 million and $350.0 million, respectively. As of December 31, 2013, the carrying value of our long-term debt approximated its fair value. During the year ended December 31, 2014, we disposed of notes receivable representing a strategic investment in a privately held company. As of December 31, 2013, these notes receivable had a carrying value that approximated their fair value of $5.1 million and were valued using Level 3 inputs. See Note 3 for further information regarding the disposition of the notes receivable during June 2014.

Comprehensive Income

Comprehensive Income

We report all changes in equity during a period, resulting from net income and transactions or other events and circumstances from non-owner sources, in a financial statement for the period in which they are recognized. We have chosen to retrospectively present comprehensive income, which encompasses net income, foreign currency translation adjustments and the difference between the cost and the fair market value of investments in debt and equity securities, forward currency exchange contracts and interest rate swap agreements, in the consolidated statements of comprehensive income. See Note 18 for information about the effects on net income of significant amounts reclassified out of each component of AOCI for the years ended December 31, 2014 and 2013. We consider the foreign currency cumulative translation adjustment to be permanently invested and, therefore, have not provided income taxes on those amounts.

Concentrations Of Risk

Concentrations of Risk

Financial Instruments. Financial instruments that potentially subject us to concentrations of credit risk are principally cash, cash equivalents, accounts and notes receivable and derivatives. To mitigate such risk with respect to cash and cash equivalents, we place our cash with highly-rated financial institutions, in non-interest bearing accounts that are insured by the U.S. government and money market funds invested in government securities.

Concentration of credit risk with respect to accounts receivable is limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our most significant customers and monitor the amounts owed to us, taking appropriate action when necessary. As a result, we believe that accounts receivable credit risk exposure is limited. We maintain an allowance for doubtful accounts, but historically have not experienced any material losses related to an individual customer or group of customers in any particular industry or geographic area.

To mitigate concentration of credit risk with respect to derivatives we enter into transactions with highly-rated financial institutions, enter into master netting arrangements with the counterparties to our derivative transactions and frequently monitor the credit worthiness of our counterparties. Our master netting arrangements reduce our exposure in that they permit outstanding receivables and payables with the counterparties to our derivative transactions to be offset in the event of default. We have not incurred such losses and consider the risk of counterparty default to be minimal.

Inventory. If we are unable to obtain adequate quantities of the inventory we need to sell our products, we could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on our results of operations. Many of the third parties that provide us with the instruments we sell and certain components, raw materials and consumables used in or with our products are obtained from sole or single source suppliers. Some of the products that we purchase from these sources are proprietary or complex in nature, and, therefore, cannot be readily or easily replaced by alternative sources.

Customers. Our largest customers are our U.S. distributors of our products in the CAG segment. Our two largest CAG distributors are Henry Schein Animal Health Supply, LLC (“Henry Schein”) and MWI Veterinary Supply (“MWI”). Henry Schein accounted for 8% of our 2014 consolidated revenue and 9% of our 2013 and 2012 consolidated revenue, and 2% and 7% of our net accounts receivable at December 31, 2014 and 2013. MWI accounted for 8% of our 2014, 2013 and 2012 consolidated revenue, respectively, and 8% and 11% of our net accounts receivable at December 31, 2014 and 2013, respectively. Effective January 1, 2015, most U.S. distributors are no longer our customers as  a result of our transition to an all-direct sales strategy in the U.S.

New Accounting Pronouncements Not Yet Adopted

New Accounting Pronouncements Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an amendment which will replace most of the existing revenue recognition guidance within U.S. GAAP. The core principle of this guidance is that an entity should recognize revenue for the transfer of goods or services to customers in an amount that it expects to be entitled to receive for those goods or services. In doing so, companies will be required to make certain judgments and estimates, including identifying contract performance obligations, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price among separate performance obligations. Additionally, the amendment requires disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, significant judgments reached in the application of the guidance and assets recognized from the costs to obtain or fulfill a contract. Effective for the Company beginning on January 1, 2017, the amendment allows for two methods of adoption, a full retrospective method or a modified retrospective approach with the cumulative effect recognized at the date of initial application. Early adoption is not permitted. We are in the process of determining the method of adoption and the impact of this amendment on our consolidated financial statements.

In August 2014, the FASB issued an amendment that requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The amendments in this update provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for one year after the date that the financial statements are issued and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this update apply to all entities and are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. This amendment is not expected to have a material impact on our financial statements.

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Segment Reporting (Schedule Of Revenue By Principal Geographic Area) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 351,959	$ 383,523	$ 390,122	$ 360,203	$ 354,073	$ 338,297	$ 352,583	$ 332,106	$ 1,485,807	$ 1,377,058	$ 1,293,338
Americas [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									952,757	899,185	848,725
Americas [Member] | United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									848,928	802,345	759,419
Americas [Member] | Canada [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									69,743	69,947	66,405
Americas [Member] | Latin America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									34,086	26,893	22,901
Europe, The Middle East And Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									366,390	326,685	300,638
Europe, The Middle East And Africa [Member] | Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									85,189	78,109	72,983
Europe, The Middle East And Africa [Member] | United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									74,131	65,027	64,412
Europe, The Middle East And Africa [Member] | France [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									53,322	49,093	45,927
Europe, The Middle East And Africa [Member] | Italy [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									28,794	26,443	24,625
Europe, The Middle East And Africa [Member] | Spain [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									21,566	20,194	19,776
Europe, The Middle East And Africa [Member] | Switzerland [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									14,544	12,246	12,967
Europe, The Middle East And Africa [Member] | Other Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									88,844	75,573	59,948
Asia Pacific Region [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									166,660	151,188	143,975
Asia Pacific Region [Member] | Australia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									58,448	53,063	50,658
Asia Pacific Region [Member] | Japan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									44,132	44,869	49,204
Asia Pacific Region [Member] | China [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									34,674	29,044	24,628
Asia Pacific Region [Member] | Other Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue									$ 29,406	$ 24,212	$ 19,485

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Debt (Tables)

12 Months Ended

Dec. 31, 2014

Debt [Abstract]

Schedule Of Annual Principal Payments On Long-Term Debt

Years Ending December 31,		Amount
2015	$	-
2016		-
2017		-
2018		-
2019		-
Thereafter		350,000
	$	350,000

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Acquisitions And Disposition Of Strategic Investment (Details) (USD $)	1 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2014 item	Dec. 31, 2013	Dec. 31, 2012 item
Acquisitions And Strategic Investments [Line Items]
Acquisition of a business, net of cash acquired		$ 25,115,000	$ 10,923,000	$ 2,658,000
Number of businesses acquired		7		3
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill			4,800,000
Business Combinations, goodwill		13,077,000	6,741,000
Weighted average useful lives of amortizable intangible assets			9 years 10 months 24 days
Proceeds from sale of equity investment	5,400,000	(5,400,000)
Equity method investment, ownership percentage	11.00%
Gain on sale of equity investment	700,000
Cash payments to acquire businesses			10,800,000	3,600,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents			700,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets			1,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment			500,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets			2,100,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent			1,700,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability			3,100,000
Cloud-based Veterinary Practice Software Businesses [Member]
Acquisitions And Strategic Investments [Line Items]
Acquisition of a business, net of cash acquired		18,700,000
Number of businesses acquired		3
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		11,700,000
Business Combinations, goodwill		12,400,000
Weighted average useful lives of amortizable intangible assets		11 years 4 months 24 days
Amortizable intangible assets deductible for income tax purposes		5,600,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability		4,200,000
Assets Of Cloud-based Veterinary Practice Software Businesses [Member]
Acquisitions And Strategic Investments [Line Items]
Number of businesses acquired		2
Cloud-based Veterinary Practice Software Businesses, Foreign [Member]
Acquisitions And Strategic Investments [Line Items]
Number of businesses acquired		2
Veterinary Reference Laboratory Testing Businesses [Member]
Acquisitions And Strategic Investments [Line Items]
Acquisition of a business, net of cash acquired		6,200,000
Number of businesses acquired		2
Weighted average useful lives of amortizable intangible assets		13 years 3 months 18 days
Amortizable intangible assets deductible for income tax purposes		4,900,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability		1,500,000
Assets Of Veterinary Reference Laboratory Testing Businesses [Member]
Acquisitions And Strategic Investments [Line Items]
Number of businesses acquired		2
Computer Software, Intangible Asset [Member] | Cloud-based Veterinary Practice Software Businesses [Member]
Acquisitions And Strategic Investments [Line Items]
Weighted average useful lives of amortizable intangible assets		7 years
Customer Lists [Member]
Acquisitions And Strategic Investments [Line Items]
Useful life assigned to intangible asset, years			10 years
Weighted average useful lives of amortizable intangible assets				10 years
Intangibles acquired as result of business combination				1,700,000
Customer Lists [Member] | Cloud-based Veterinary Practice Software Businesses [Member]
Acquisitions And Strategic Investments [Line Items]
Weighted average useful lives of amortizable intangible assets		16 years 4 months 24 days
Other Intangible Assets [Member]
Acquisitions And Strategic Investments [Line Items]
Weighted average useful lives of amortizable intangible assets				8 years
Intangibles acquired as result of business combination				$ 700,000
Noncompete Agreements [Member]
Acquisitions And Strategic Investments [Line Items]
Useful life assigned to intangible asset, years			5 years
Trademarks [Member]
Acquisitions And Strategic Investments [Line Items]
Useful life assigned to intangible asset, years			15 years

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Income Taxes (Schedule Of Earnings Before Income Taxes) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Abstract]
Domestic	$ 148,510	$ 184,086	$ 184,159
International	98,045	79,175	76,458
Income before provision for income taxes	$ 246,555	$ 263,261	$ 260,617

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Consolidated Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
Current Assets:
Cash and cash equivalents	$ 322,536,000	$ 279,058,000
Accounts receivable, net of reserves of $4,306 in 2014 and $3,533 in 2013	152,380,000	158,038,000
Inventories	160,342,000	133,427,000
Deferred income tax assets	37,689,000	33,226,000
Other current assets	86,451,000	48,957,000
Total current assets	759,398,000	652,706,000
Long-Term Assets:
Property and equipment, net	303,587,000	281,214,000
Goodwill	184,450,000	180,521,000
Intangible assets, net	65,122,000	58,844,000
Other long-term assets, net	71,654,000	57,231,000
Total long-term assets	624,813,000	577,810,000
TOTAL ASSETS	1,384,211,000	1,230,516,000
Current Liabilities:
Accounts payable	44,743,000	29,941,000
Accrued liabilities	195,351,000	148,919,000
Line of credit	549,000,000	277,000,000
Current portion of long-term debt		1,035,000
Current portion of deferred revenue	31,812,000	21,458,000
Total current liabilities	820,906,000	478,353,000
Long-Term Liabilities:
Deferred income tax liabilities	41,688,000	33,948,000
Long-term debt, net of current portion	350,000,000	150,359,000
Long-term deferred revenue, net of current portion	21,665,000	18,427,000
Other long-term liabilities	32,363,000	31,215,000
Total long-term liabilities	445,716,000	233,949,000
Total liabilities	1,266,622,000	712,302,000
Commitments and Contingencies (Note 13)
Stockholders' Equity:
Common stock, $0.10 par value: Authorized: 120,000 shares; Issued: 101,947 and 101,188 shares in 2014 and 2013, respectively	10,195,000	10,119,000
Additional paid-in capital	888,293,000	825,320,000
Deferred stock units: Outstanding: 118 and 122 units in 2014 and 2013, respectively	5,066,000	5,110,000
Retained earnings	1,675,299,000	1,493,393,000
Accumulated other comprehensive (loss) income	(8,071,000)	13,622,000
Treasury stock, at cost: 54,574 and 49,649 shares in 2014 and 2013, respectively	(2,453,266,000)	(1,829,378,000)
Total IDEXX Laboratories, Inc. stockholders' equity	117,516,000	518,186,000
Noncontrolling interest	73,000	28,000
Total stockholders' equity	117,589,000	518,214,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,384,211,000	$ 1,230,516,000

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Measurements [Abstract]

Schedule Of Fair Value Of Assets And Liabilities Measured On Recurring Basis

	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance at
As of December 31, 2014	(Level 1)		(Level 2)		(Level 3)		December 31, 2014
Assets
Money market funds(1)	$	204,743	$	-	$	-	$	204,743
Equity mutual funds(2)		2,654		-		-		2,654
Foreign currency exchange contracts(3)		-		12,226		-		12,226
Liabilities
Foreign currency exchange contracts(3)		-		1,323		-		1,323
Deferred compensation(4)		2,654		-		-		2,654
Interest rate swaps(5)		-		1,117		-		1,117

	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance at
As of December 31, 2013	(Level 1)		(Level 2)		(Level 3)		December 31, 2013
Assets
Money market funds(1)	$	153,109	$	-	$	-	$	153,109
Equity mutual funds(2)		2,847		-		-		2,847
Foreign currency exchange contracts(3)		-		4,044		-		4,044
Liabilities
Foreign currency exchange contracts(3)		-		3,096		-		3,096
Deferred compensation(4)		2,847		-		-		2,847
Interest rate swaps(5)		-		1,821		-		1,821

__________

(1) Money market funds are included within cash and cash equivalents. The remaining balance of cash and cash equivalents as of December 31, 2014 and December 31, 2013 consisted of demand deposits.

(2) Equity mutual funds relate to a deferred compensation plan that was assumed as part of a previous business combination. This amount is included within other long-term assets, net. See number (4) below for a discussion of the related deferred compensation liability.

(3) Foreign currency exchange contracts are included within other current assets or accrued liabilities depending on the gain (loss) position.

(4) A deferred compensation plan assumed as part of a business combination is included within other long-term liabilities. The fair value of our deferred compensation plan is indexed to the performance of the underlying equity mutual funds discussed in number (2) above.

(5) Interest rate swaps are included within accrued liabilities.

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Valuation And Qualifying Accounts (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013		Dec. 31, 2012
Reserves For Doubtful Accounts Receivable [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Year	$ 3,533	$ 2,632		$ 3,239
Charges to Costs and Expenses	2,035	1,601		1,108
Write-Offs/Cash Payments	(1,146)	(762)		(1,732)
Foreign Currency Translation	(116)	62		17
Balance at End of Year	4,306	3,533		2,632
Valuation Allowance of Deferred Tax Assets [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Year	5,201	4,547		4,614
Charges to Costs and Expenses	799	735		265
Valuation Allowances and Reserves, Charged to Other Accounts		742	[1]
Write-Offs/Cash Payments	(1,042)	(701)		(358)
Foreign Currency Translation	(280)	(122)		26
Balance at End of Year	$ 4,678	$ 5,201		$ 4,547

[1] Amount relates to net operating losses obtained through acquisitions where uncertainty exists as to our ability to use the tax attribute.

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Consolidated Statements Of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements Of Comprehensive Income [Abstract]
Unrealized (loss) gain on investments, tax (benefit) expense	$ (63)	$ 165	$ 68
Unrealized gain (loss), tax (benefit) expense	4,073	1,555	(921)
Reclassification adjustment for gains included in net income, tax expense	$ 756	$ 679	$ 1,623

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Disposition Of Pharmaceutical Product Lines And Restructuring (Details) (USD $)	12 Months Ended		1 Months Ended	12 Months Ended			3 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Jan. 31, 2009	Dec. 31, 2008	Dec. 31, 2014	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2011
Disposition Of Pharmaceutical Product Lines And Restructuring [Line Items]
Proceeds from disposition of pharmaceutical product lines	$ 3,500,000	$ 3,000,000
Acarexx And SURPASS Products And Feline Insulin Product Under Development [Member]
Disposition Of Pharmaceutical Product Lines And Restructuring [Line Items]
Proceeds from disposition of pharmaceutical product lines			1,400,000	7,000,000
Royalty Bearing License Agreement [Member]
Disposition Of Pharmaceutical Product Lines And Restructuring [Line Items]
Proceeds from disposition of pharmaceutical product lines				300,000
Milestone payment earned	300,000				1,600,000	300,000
Feline Insulin Product [Member]
Disposition Of Pharmaceutical Product Lines And Restructuring [Line Items]
Milestone payment earned		3,500,000				3,000,000	2,000,000	3,000,000
Feline Insulin Product Total Potential Milestone Payments [Member]
Disposition Of Pharmaceutical Product Lines And Restructuring [Line Items]
Potential milestone payments				$ 11,500,000

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Inventories (Schedule Of Components Of Inventories) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Inventories [Abstract]
Raw materials	$ 26,908	$ 23,766
Work-in-process	16,859	14,359
Finished goods	116,575	95,302
Inventories	$ 160,342	$ 133,427

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Inventories (Tables)

12 Months Ended

Dec. 31, 2014

Inventories [Abstract]

Schedule Of Components Of Inventories

	December 31,		December 31,
		2014		2013
Raw materials	$	26,908	$	23,766
Work-in-process		16,859		14,359
Finished goods		116,575		95,302
	$	160,342	$	133,427

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Goodwill And Intangible Assets, Net (Schedule Of Intangible Assets Other Than Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014		Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Cost	$ 131,402		$ 138,288
Accumulated Amortization	66,280		79,444
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	4,871		9,547
Accumulated Amortization	4,308		8,619
Product Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	36,912	[1]	38,670	[1]
Accumulated Amortization	20,657	[1]	25,796	[1]
Customer-Related Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	88,494	[2]	82,940	[2]
Accumulated Amortization	40,933	[2]	38,800	[2]
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	1,125		7,131
Accumulated Amortization	$ 382		$ 6,229

[1] Product rights comprise certain technologies, intellectual property, licenses and trade names acquired from third parties.Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

[2] Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

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Segment Reporting

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting

NOTE 14.      SEGMENT REPORTING

Prior to January 1, 2013, we operated primarily through three business segments: diagnostic and information technology-based products and services for the veterinary market, which we continue to refer to as CAG; water quality products (“Water”); and diagnostic products for livestock and poultry health, which we referred to as Livestock and Poultry Diagnostics. We also operated two smaller operating segments that comprised products for milk quality and safety (“Dairy”) and products for the human point-of-care medical diagnostics market (“OPTI Medical”). Financial information about our Dairy and OPTI Medical operating segments was combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they did not meet the quantitative or qualitative thresholds for reportable segments. 

In 2013, we combined the management of our Livestock and Poultry Diagnostics and Dairy lines of business into our LPD segment to more effectively realize the market synergies between the product lines and to achieve operational efficiencies. Our OPTI Medical operating segment remains combined and presented with our remaining pharmaceutical product line and our out-licensing arrangements in an “Other” category because they do not meet the quantitative or qualitative thresholds for reportable segments. The segment income (loss) from operations discussed within this report for the years ended December 31, 2012 has been retrospectively revised to reflect this change in the composition of our reportable segments.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision-maker is our Chief Executive Officer. Our operating segments include: CAG, Water, LPD, and Other. Assets are not allocated to segments for internal reporting purposes.

CAG develops, designs, manufactures and distributes products and performs services for veterinarians and the bioresearch market, primarily related to diagnostics and information management. Water develops, designs, manufactures and distributes a range of products used in the detection of various microbiological parameters in water. LPD develops, designs, manufactures and distributes diagnostic tests and related instrumentation that are used to manage the health status of livestock and poultry, to improve bovine reproductive efficiency, and to ensure the quality and safety of milk and food. OPTI Medical develops, designs, manufactures and distributes point-of-care electrolyte and blood gas analyzers and related consumable products for the human medical diagnostics market.

The accounting policies of our segments are the same as those described in the summary of significant accounting policies in Note 2 except for inventories, as discussed below. Intersegment revenues, which are not included in the table below, were not material for the years ended December 31, 2014, 2013 and 2012.

Items that are not allocated to our operating segments are as follows: a portion of corporate support function and personnel-related expenses; certain manufacturing costs; corporate research and development expenses that do not align with one of our existing business or service categories; the difference between estimated and actual share-based compensation expense; and certain foreign currency exchange gains and losses. These amounts are shown under the caption “Unallocated Amounts.”

We estimate our share-based compensation expense, corporate support function expenses and certain personnel-related costs and allocate the estimated expenses to the operating segments. This allocation differs from actual expense and consequently yields a difference that is reported under the caption “Unallocated Amounts.” 

With respect to manufacturing costs, the costs reported in our operating segments include our standard cost for products sold and any variances from standard cost for products purchased or manufactured within the period. We capitalize these variances for inventory on hand at the end of the period to record inventory in accordance with U.S. GAAP. We then record these variances as cost of product revenue as that inventory is sold. The impact to cost of product revenue resulting from this variance capitalization and subsequent recognition is reported within the caption “Unallocated Amounts.”

Additionally, in certain geographies where we maintain inventories in currencies other than the U.S. dollar, the product costs reported in our operating segments include our standard cost for products sold, which is stated at the budgeted currency exchange rate from the beginning of the fiscal year. In these geographies, the variances from standard cost for products sold related to changes in currency exchange rates are reported within the caption “Unallocated Amounts.”

Below is our segment information (in thousands):

For the Years Ended December 31,
	CAG		Water		LPD		Other		Unallocated Amounts		Consolidated Total
2014
Revenue	$	1,236,855	$	94,725	$	127,388	$	26,839	$	-	$	1,485,807
Income (loss) from operations	$	213,109	$	39,262	$	24,215	$	2,479	$	(18,810)	$	260,255
Interest expense, net												(13,700)
Income before provision for income taxes												246,555
Provision for income taxes												64,604
Net income												181,951
Less: Net income attributable to noncontrolling interest												45
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	181,906
Depreciation and amortization	$	48,740	$	2,553	$	5,144	$	2,451	$	-	$	58,888
Expenditures for long-lived assets (1)	$	49,270	$	2,499	$	4,025	$	4,729	$	-	$	60,523
2013
Revenue	$	1,150,169	$	87,959	$	113,811	$	25,119	$	-	$	1,377,058
Income (loss) from operations	$	218,645	$	37,321	$	14,159	$	2,405	$	(5,768)	$	266,762
Interest expense, net												(3,501)
Income before provision for income taxes												263,261
Provision for income taxes												75,467
Net income												187,794
Less: Net loss attributable to noncontrolling interest												(6)
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	187,800
Depreciation and amortization	$	45,079	$	2,470	$	4,906	$	2,141	$	-	$	54,596
Expenditures for long-lived assets (1)	$	66,134	$	3,254	$	5,569	$	2,655	$	-	$	77,612
2012
Revenue	$	1,072,211	$	84,680	$	111,308	$	25,139	$	-	$	1,293,338
Income (loss) from operations	$	203,236	$	37,687	$	20,808	$	2,902	$	(2,070)	$	262,563
Interest expense, net												(1,946)
Income before provision for income taxes												260,617
Provision for income taxes												82,330
Net income												178,287
Less: Net income attributable to noncontrolling interest												20
Net income attributable to IDEXX Laboratories, Inc. stockholders											$	178,267
Depreciation and amortization	$	43,042	$	2,358	$	4,943	$	2,065	$	-	$	52,408
Expenditures for long-lived assets (1)	$	47,531	$	2,099	$	5,767	$	2,221	$	-	$	57,618

__________

(1)Expenditures for long-lived assets exclude expenditures for intangible assets. See Note 3 for information regarding acquisitions of intangible assets during the years ended December 31, 2014, 2013 and 2012.

Revenue by product and service categories was as follows (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
CAG segment revenue:
CAG Diagnostics recurring revenue:	$	1,053,410	$	973,886	$	896,449
VetLab consumables		341,397		312,457		278,818
VetLab service and accessories		53,383		50,675		48,056
Rapid assay products		165,647		169,547		162,232
Reference laboratory diagnostic and consulting services		492,983		441,207		407,343
CAG Diagnostics capital instruments		79,626		83,492		90,177
Customer information management and digital imaging systems		103,819		92,791		85,585
CAG segment revenue		1,236,855		1,150,169		1,072,211
Water segment revenue		94,725		87,959		84,680
LPD segment revenue		127,388		113,811		111,308
Other segment revenue		26,839		25,119		25,139
Total revenue	$	1,485,807	$	1,377,058	$	1,293,338

Revenue by principal geographic area, based on customers’ domiciles, was as follows (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Americas
United States	$	848,928	$	802,345	$	759,419
Canada		69,743		69,947		66,405
Latin America		34,086		26,893		22,901
		952,757		899,185		848,725
Europe, the Middle East and Africa
Germany		85,189		78,109		72,983
United Kingdom		74,131		65,027		64,412
France		53,322		49,093		45,927
Italy		28,794		26,443		24,625
Spain		21,566		20,194		19,776
Switzerland		14,544		12,246		12,967
Other		88,844		75,573		59,948
		366,390		326,685		300,638
Asia Pacific Region
Australia		58,448		53,063		50,658
Japan		44,132		44,869		49,204
China		34,674		29,044		24,628
Other		29,406		24,212		19,485
		166,660		151,188		143,975
Total	$	1,485,807	$	1,377,058	$	1,293,338

Net long-lived assets, consisting of net property and equipment, are subject to geographic risks because they are generally difficult to move and to effectively utilize in another geographic area in a reasonable time period and because they are relatively illiquid. Net long-lived assets by principal geographic areas were as follows (in thousands):

	December 31,		December 31,
		2014		2013
Americas
United States	$	262,475	$	245,511
Brazil		3,206		869
Canada		2,270		2,114
		267,951		248,494
Europe, the Middle East and Africa
United Kingdom		14,366		12,959
Germany		4,836		5,733
France		3,172		3,127
Netherlands		3,456		2,956
Switzerland		2,631		3,076
Other		1,674		1,190
		30,135		29,041
Asia Pacific Region
Japan		2,204		690
Australia		1,789		1,801
Other		1,508		1,188
		5,501		3,679
Total	$	303,587	$	281,214

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Property And Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2014

Property And Equipment, Net [Abstract]

Schedule Of Property And Equipment

	December 31,		December 31,
		2014		2013
Land and improvements	$	7,417	$	7,471
Buildings and improvements		159,298		158,382
Leasehold improvements		45,655		39,266
Machinery and equipment		183,575		162,144
Office furniture and equipment		35,696		35,271
Computer hardware and software		151,404		136,008
Construction in progress		20,890		11,473
		603,935		550,015
Less accumulated depreciation and amortization		300,348		268,801
Total property and equipment, net	$	303,587	$	281,214

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Derivative Instruments And Hedging

12 Months Ended

Dec. 31, 2014

Derivative Instruments And Hedging [Abstract]

Derivative Instruments And Hedging

Note 16.Derivative Instruments and Hedging

Disclosure within this footnote is presented to provide transparency about how and why we use derivative instruments and how the instruments and related hedged items affect our financial position, results of operations, and cash flows. See Note 2 for a discussion surrounding our derivative instrument and hedging accounting policies, Note 15 for additional information regarding the fair value of our derivative instruments and Note 18 for additional information regarding the effect of derivative instruments designated as cash flow hedges on the consolidated statement of operations.

We are exposed to certain risks related to our ongoing business operations. The primary risks that we manage by using derivative instruments are foreign currency exchange risk and interest rate risk. Our subsidiaries enter into foreign currency exchange contracts to manage the exchange risk associated with their forecasted intercompany inventory purchases and sales for the next year. From time to time, we may also enter into foreign currency exchange contracts to minimize the impact of foreign currency fluctuations associated with specific, significant transactions. We enter into interest rate swaps to minimize the impact of interest rate fluctuations associated with our variable-rate Credit Facility.

The primary purpose of our foreign currency hedging activities is to protect against the volatility associated with foreign currency transactions, including transactions denominated in euro, British pound, Japanese yen, Canadian dollar, Australian dollar and Swiss franc. We also utilize natural hedges to mitigate our transaction and commitment exposures. Our corporate policy prescribes the range of allowable hedging activity. We enter into foreign currency exchange contracts with large multinational financial institutions and we do not hold or engage in transactions involving derivative instruments for purposes other than risk management. Our accounting policies for these contracts are based on our designation of such instruments as hedging transactions.

Cash Flow Hedges

We have designated our foreign currency exchange contracts and variable-to-fixed interest rate swaps as cash flow hedges as these derivative instruments mitigate the exposure to variability in the cash flows of forecasted transactions attributable to foreign currency exchange and interest rates. Unless noted otherwise, we have also designated our derivative instruments as qualifying for hedge accounting treatment.

We did not de-designate any instruments from hedge accounting treatment during the years ended December 31, 2014, 2013 and 2012. Gains or losses related to hedge ineffectiveness recognized in earnings during the years ended December 31, 2014, 2013 and 2012 were not material.  At December 31, 2014, the estimated amount of net gains, net of income tax expense, which are expected to be reclassified out of AOCI and into earnings within the next twelve months is $7.4 million if exchange and interest rates do not fluctuate from the levels at December 31, 2014.

We enter into foreign currency exchange contracts for amounts that are less than the full value of forecasted intercompany inventory purchases and sales. Our hedging strategy related to intercompany inventory purchases and sales is to employ the full amount of our hedges for the succeeding year at the conclusion of our budgeting process for that year. We primarily utilize foreign currency exchange contracts with durations of less than 24 months. Quarterly, we enter into contracts to hedge incremental portions of anticipated foreign currency transactions for the current and following year. As a result, our risk with respect to foreign currency exchange rate fluctuations and the notional value of foreign currency exchange contracts may vary throughout the year. The U.S. dollar is the currency purchased or sold in all of our foreign currency exchange contracts. The notional amount of foreign currency exchange contracts to hedge forecasted intercompany inventory purchases and sales totaled $186.7 million and $168.3 million at December 31, 2014 and December 31, 2013, respectively.

We have entered into forward fixed interest rate swap agreements to manage the economic effect of variable interest obligations on amounts borrowed under the terms of the Credit Facility. Beginning on March 30, 2012, the variable interest rate associated with $40 million of borrowings outstanding under the Credit Facility became effectively fixed at 1.36% plus the Credit Spread through June 30, 2016. Beginning on March 28, 2013, the variable interest rate associated with an additional $40 million of borrowings outstanding under the Credit Facility became effectively fixed at 1.64% plus the Credit Spread through June 30, 2016. Two of our forward fixed interest rate swap agreements expired on March 31, 2012. Under these agreements, the variable interest rate associated with $80 million of borrowings outstanding under the Credit Facility had been effectively fixed at 2% plus the Credit Spread.

The fair values of derivative instruments, their respective classification on the consolidated balance sheets and amounts subject to offset under master netting arrangements consisted of the following (in thousands):

		Asset Derivatives
			December 31,		December 31,
			2014		2013
Derivatives designated as hedging instruments	Balance Sheet Classification
Foreign currency exchange contracts	Other current assets	$	12,226	$	4,044
Gross amounts subject to master netting arrangements not offset on the balance sheet			1,323		2,965
Net amount		$	10,903	$	1,079

		Liability Derivatives
			December 31,		December 31,
			2014		2013
Derivatives designated as hedging instruments	Balance Sheet Classification
Foreign currency exchange contracts	Accrued liabilities	$	1,323	$	3,096
Interest rate swaps	Accrued liabilities		1,117		1,821
Total derivative instruments presented on the balance sheet			2,440		4,917
Gross amounts subject to master netting arrangements not offset on the balance sheet			1,323		2,965
Net amount		$	1,117	$	1,952

The effect of derivative instruments designated as cash flow hedges on the consolidated balance sheets for the years ended December 31, 2014, 2013 and 2012 consisted of the following (in thousands):

	Gain (Loss) Recognized in AOCI on Derivative Instruments (Effective Portion)
	For Year Ended December 31,
Derivative instruments		2014		2013		2012
Foreign currency exchange contracts, net of tax	$	7,098	$	1,350	$	(4,481)
Interest rate swaps, net of tax		442		541		(795)
Total derivative instruments, net of tax	$	7,540	$	1,891	$	(5,276)

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Accrued Liabilities (Schedule Of Accrued Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Accrued Liabilities [Abstract]
Accrued expenses	$ 55,655	$ 44,274
Accrued employee compensation and related expenses	75,232	62,474
Accrued taxes	28,439	16,508
Accrued customer programs	36,025	25,663
Accrued liabilities	$ 195,351	$ 148,919

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Consolidated Statements Of Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock [Member]	Additional Paid-in Capital [Member]	Deferred Stock Units [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Total IDEXX Laboratories, Inc.Stockholders' Equity [Member]	Noncontrolling Interest [Member]	Total
Balance, value at Dec. 31, 2011	$ 9,923	$ 702,575	$ 4,688	$ 1,127,326	$ 15,443	$ (1,320,376)	$ 539,579	$ 14	$ 539,593
Balance, shares at Dec. 31, 2011	99,229,000
Comprehensive Income:
Net income (loss)				178,267			178,267	20	178,287
Other comprehensive (loss) income, net of tax					511		511		511
Total comprehensive income							178,778	20	178,798
Repurchases of common stock						(136,808)	(136,808)		(136,808)
Common stock issued under stock plans, including excess tax benefit, shares	931,000
Common stock issued under stock plans, including excess tax benefit, value	93	38,943	(365)				38,671		38,671
Issuance of deferred stock units			142				142		142
Vesting of deferred stock units		(165)	165
Share-based compensation cost recognized		15,861					15,861		15,861
Balance, value at Dec. 31, 2012	10,016	757,214	4,630	1,305,593	15,954	(1,457,184)	636,223	34	636,257
Balance, shares at Dec. 31, 2012	100,160,000
Comprehensive Income:
Net income (loss)				187,800			187,800	(6)	187,794
Other comprehensive (loss) income, net of tax					(2,332)		(2,332)		(2,332)
Total comprehensive income							185,468	(6)	185,462
Repurchases of common stock						(372,194)	(372,194)		(372,194)
Common stock issued under stock plans, including excess tax benefit, shares	1,028,000
Common stock issued under stock plans, including excess tax benefit, value	103	51,861	(38)				51,926		51,926
Issuance of deferred stock units			189				189		189
Vesting of deferred stock units		(259)	259
Share-based compensation cost recognized		16,504	70				16,574		16,574
Balance, value at Dec. 31, 2013	10,119	825,320	5,110	1,493,393	13,622	(1,829,378)	518,186	28	518,214
Balance, shares at Dec. 31, 2013	101,188,000								101,188,000
Comprehensive Income:
Net income (loss)				181,906			181,906	45	181,951
Other comprehensive (loss) income, net of tax					(21,693)		(21,693)		(21,693)
Total comprehensive income							160,213	45	160,258
Repurchases of common stock						(623,888)	(623,888)		(623,888)
Common stock issued under stock plans, including excess tax benefit, shares	759,000
Common stock issued under stock plans, including excess tax benefit, value	76	45,162					45,238		45,238
Issuance of deferred stock units			(332)				(332)		(332)
Vesting of deferred stock units		(218)	218
Share-based compensation cost recognized		18,029	70				18,099		18,099
Balance, value at Dec. 31, 2014	$ 10,195	$ 888,293	$ 5,066	$ 1,675,299	$ (8,071)	$ (2,453,266)	$ 117,516	$ 73	$ 117,589
Balance, shares at Dec. 31, 2014	101,947,000								101,947,000

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Consolidated Balance Sheets [Abstract]
Accounts receivable, reserves	$ 4,306	$ 3,533
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	101,947,000	101,188,000
Deferred stock units, outstanding	118,000	122,000
Treasury stock, shares	54,574,000	49,649,000

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Accrued Liabilities

12 Months Ended

Dec. 31, 2014

Accrued Liabilities [Abstract]

Accrued Liabilities

NOTE 9.ACCRUED LIABILITIES

Accrued liabilities consisted of the following (in thousands):

	December 31,		December 31,
	2014		2013
Accrued expenses	$	55,655	$	44,274
Accrued employee compensation and related expenses		75,232		62,474
Accrued taxes		28,439		16,508
Accrued customer programs		36,025		25,663
	$	195,351	$	148,919

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IDEXX Retirement And Incentive Savings Plan (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
401(k) Plan [Member]
Retirement And Incentive Savings Plan [Line Items]
Employer contributions	$ 8.8	$ 7.8	$ 7.1
Discretionary contributions	0	0	0
European And Canadian Based Defined Contribution Plan [Member]
Retirement And Incentive Savings Plan [Line Items]
Employer contributions	$ 3.7	$ 3.1	$ 2.8

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Accumulated Other Comprehensive Income (Schedule of Reclassifications out of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Provision for income taxes	$ 64,604	$ 75,467	$ 82,330
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	2,002	1,890
Reclassifications out of Accumulated Other Comprehensive Income [Member]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	2,758	2,569	5,248
Provision for income taxes	756	679	1,623
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	2,002	1,890	3,625
Interest Rate Swaps [Member] | Reclassifications out of Accumulated Other Comprehensive Income [Member]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	(1,064)	(900)	(690)
Foreign Currency Exchange Contracts [Member] | Reclassifications out of Accumulated Other Comprehensive Income [Member]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	$ 3,822	$ 3,469	$ 5,938

XML

Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Feb. 06, 2015	Jun. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Registrant Name	IDEXX LABORATORIES INC /DE
Entity Central Index Key	0000874716
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding		47,125,601
Entity Public Float			$ 6,663,805,564

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Debt

12 Months Ended

Dec. 31, 2014

Debt [Abstract]

Debt

NOTE 10.      DEBT

In June 2014, we refinanced our existing $450.0 million unsecured revolving credit facility by entering into an amended and restated credit agreement relating to a five-year unsecured revolving credit facility in the principal amount of $700 million with a syndicate of multinational banks, which matures on June 18, 2019 (the new credit facility and the previous credit facility are referred to collectively as the “Credit Facility”) and requires no scheduled prepayments before that date. Although the Credit Facility does not mature until June18, 2019, all individual borrowings under the terms of the Credit Facility have a stated term between 30 and 180 days. At the end of each term, the obligation is either repaid or rolled over into a new borrowing. The Credit Facility contains a subjective material adverse event clause, which allows the debt holders to call the loans under the Credit Facility if we fail to provide prompt written notice to the syndicate of such an event. Based on the stated term and the existence of the subjective material adverse event clause, this Credit Facility is reflected in the current liabilities section of our consolidated balance sheets. At December 31, 2014 and 2013, we had $549.0 million and $277.0 million, respectively, outstanding under the Credit Facility with weighted average effective interest rates of 1.5% and 1.6%, respectively. The funds available under the Credit Facility at December 31, 2014 and December 31, 2013 reflect a further reduction due to the issuance of a letter of credit for $1.0 million, which was issued in connection with our workers’ compensation policy.

Applicable interest rates on borrowings under the Credit Facility generally range from 0.875 to 1.375 percentage points (“Credit Spread”) above the London interbank offered rate or the Canadian Dollar-denominated bankers’ acceptance rate, based on our leverage ratio, or the prevailing prime rate plus a maximum spread of up to 0.375%, based on our leverage ratio. We have entered into forward fixed interest rate swap agreements to manage the economic effect of the first $80 million of variable interest rate borrowings. As such, we continue to designate the existing interest rate swaps as cash flow hedges. See Note 16 for a discussion of our derivative instruments and hedging activities. Under the Credit Facility, we pay quarterly commitment fees of 0.15% to 0.35%, based on our leverage ratio, on any unused commitment.

The obligations under the Credit Facility may be accelerated upon the occurrence of an event of default under the Credit Facility, which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness,cross-acceleration to specified indebtedness and a change of control default. The Credit Facility contains affirmative, negative and financial covenants customary for financings of this type. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, investments, transactions with affiliates and certain restrictive agreements. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization and share-based compensation defined as the consolidated leverage ratio under the terms of the Credit Facility, not to exceed 3.5-to-1. At December 31, 2014, we were in compliance with the covenants of the Credit Facility.

In December 2013, we issued and sold through a private placement an aggregate principal amount of $150 million of senior notes consisting of lose$75 million of 3.94% Series A Senior Notes due December 11, 2023 (the “2023 Notes”) and $75 million of 4.04% Series B Senior Notes due December 11, 2025 (the “2025 Notes” and together with the 2023 Notes, the “December Notes”) under a Note Purchase Agreement among the Company, New York Life Insurance Company and the accredited institutional purchasers named therein (the “December 2013 Note Agreement”).

In July 2014, we issued and sold through a private placement an aggregate principal amount of $125 million of senior notes consisting of $75 million of 3.76% Series B Senior Notes due July 21, 2024 (the “2024 Notes”) and $50 million of 3.32% Series A Senior Notes due July 21, 2021 (the “2021 Notes” and together with the 2024 Notes, the “Prudential Notes”) under a Note Purchase and Private Shelf Agreement among the Company, Prudential Investment Management, Inc. and the accredited institutional purchasers named therein (the “July 2014 Note Agreement”).

In September 2014, we issued and sold through a private placement an aggregate principal amount of $75 million of 3.72% Senior Notes due September 4, 2026 (the “2026 Notes” and together with the Prudential Notes and the December Notes, the “Senior Notes”) under a Note Purchase Agreement dated as of July 22, 2014 among the Company, New York Life Insurance Company and the accredited institutional purchasers named therein (such agreement, together with July 2014 Note Agreement and December 2013 Note Agreement, the “Senior Note Agreements”).

In December 2014, we entered into a Multicurrency Note Purchase and Private Shelf Agreement among the Company, Metropolitan Life Insurance Company (“MetLife”), and the accredited institutional purchasers named therein pursuant to which the Company agreed to issue and sell $75 million of its 3.25% Series A Senior Notes having a seven-year term, and $75 million of its 3.72% Series B Senior Notes having a twelve-year term. The issuance, sale and purchase of the 2022 Notes and 2027 Notes occurred in February 2015. The Agreement also provides for an uncommitted shelf facility by which the Company may request that MetLife purchase, over the next three years, up to $50 million of additional senior promissory notes of the Company at a fixed interest rate to be determined at the time of purchase and with a maturity date not to exceed fifteen years.

The Senior Note Agreements contain affirmative, negative and financial covenants customary for agreements of this type. The negative covenants include restrictions on liens, indebtedness of our subsidiaries, priority indebtedness, fundamental changes, investments, transactions with affiliates, certain restrictive agreements and violations of laws and regulations. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization and share-based compensation, as defined in the Senior Note Agreements, not to exceed 3.5-to-1. At December 31, 2014, we were in compliance with the covenants of the Senior Note Agreements.

Should we elect to prepay the Senior Notes, such aggregate prepayment will include the applicable make-whole amount(s), as defined within the applicable Senior Note Agreements. Additionally, in the event of a change in control of the Company or upon the disposition of certain assets of the Company the proceeds of which are not reinvested (as defined in the Senior Note Agreements), we may be required to prepay all or a portion of the Senior Notes. The obligations under the Senior Notes may be accelerated upon the occurrence of an event of default under the applicable Senior Note Agreement, each of which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness and cross-acceleration to specified indebtedness.

In June 2014, we paid off the remaining outstanding principal balance on the mortgage related to our worldwide headquarters in Westbrook, Maine.

Annual principal payments on long-term debt at December 31, 2014 are as follows (in thousands):

Years Ending December 31,		Amount
2015	$	-
2016		-
2017		-
2018		-
2019		-
Thereafter		350,000
	$	350,000

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Commitments, Contingencies And Guarantees (Schedule Of Minimum Annual Rental Payments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Commitments, Contingencies And Guarantees [Abstract]
2015	$ 17,228
2016	15,245
2017	12,984
2018	10,048
2019	6,731
Thereafter	15,256
Total minimum annual rental payments	$ 77,492

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Accumulated Other Comprehensive Income (Schedule Of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accumulated Other Comprehensive Income [Abstract]
Beginning balance, Unrealized Gain on Investments, Net of Tax	$ 108	$ (171)
Beginning balance, Unrealized Loss on Derivative Instruments, Net of Tax	(179)	(2,070)
Beginning balance, Cumulative Translation Adjustment	13,693	18,195
Other comprehensive income (loss) before reclassifications, Unrealized Gain on Investments, Net of Tax	(107)	279	116
Other comprehensive income (loss) before reclassifications, Unrealized Loss on Derivative Instruments, Net of Tax	9,542	3,781	(1,651)
Other comprehensive income (loss) before reclassifications, Cumulative Translation Adjustment	(29,126)	(4,502)	5,671
Gains reclassified from accumulated other comprehensive income, Unrealized Loss on Derivative Instruments, Net of Tax	(2,002)	(1,890)	(3,625)
Ending balance, Unrealized Gain on Investments, Net of Tax	1	108	(171)
Ending balance, Unrealized Gain on Derivative Instruments, Net of Tax	7,361	(179)	(2,070)
Ending balance, Cumulative Translation Adjustment	(15,433)	13,693	18,195
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance	13,622	15,954
Accumulated Other Comprehensive Income, before Tax	(19,691)	(442)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(2,002)	(1,890)
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance	$ (8,071)	$ 13,622	$ 15,954

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Consolidated Statements Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue:
Product revenue	$ 899,412	$ 854,531	$ 816,992
Service revenue	586,395	522,527	476,346
Total revenue	1,485,807	1,377,058	1,293,338
Cost of Revenue:
Cost of product revenue	335,046	318,685	305,910
Cost of service revenue	334,645	302,255	288,280
Total cost of revenue	669,691	620,940	594,190
Gross profit	816,116	756,118	699,148
Expenses:
Sales and marketing	283,708	243,492	216,962
General and administrative	173,890	157,861	137,609
Research and development	98,263	88,003	82,014
Income from operations	260,255	266,762	262,563
Interest expense	(15,429)	(5,386)	(3,848)
Interest income	1,729	1,885	1,902
Income before provision for income taxes	246,555	263,261	260,617
Provision for income taxes	64,604	75,467	82,330
Net income	181,951	187,794	178,287
Less: Net income (loss) attributable to noncontrolling interest	45	(6)	20
Net income attributable to IDEXX Laboratories, Inc. stockholders	$ 181,906	$ 187,800	$ 178,267
Earnings per Share:
Basic	$ 3.63	$ 3.53	$ 3.24
Diluted	$ 3.58	$ 3.48	$ 3.17
Weighted Average Shares Outstanding:
Basic	50,047	53,159	54,985
Diluted	50,751	53,985	56,155

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Share-Based Compensation

12 Months Ended

Dec. 31, 2014

Share-Based Compensation [Abstract]

Share-Based Compensation

NOTE 4.      SHARE-BASED COMPENSATION

Share-Based Awards

Our share-based compensation plans allow for the issuance of a mix of stock options, restricted stock, stock appreciation rights, employee stock purchase rights and other stock unit awards. Other stock unit awards include restricted stock units (“RSUs”) and deferred stock units (“DSUs”). Stock options permit a holder to buy IDEXX stock upon vesting at the stock’s price on the date the option was granted. An RSU is an agreement to issue shares of IDEXX stock at the time of vesting. DSUs are granted under our Executive Deferred Compensation Plan (the “Executive Plan”) and non-employee Director Deferred Compensation Plan (the “Director Plan”). DSUs may or may not have vesting conditions depending on the plan under which they are issued. We did not issue any restricted stock or stock appreciation rights during the years ended December 31, 2014, 2013 and 2012 nor were any restricted stock or stock appreciation rights outstanding as of those years ended. There were no material modifications to the terms of outstanding options, RSUs or DSUs during the years ended December 31, 2014, 2013 or 2012.

We primarily issue shares of common stock to satisfy stock option exercises and employee stock purchase rights and to settle RSUs and DSUs. We issue shares of treasury stock to settle certain restricted stock units and upon the exercise of certain stock options. The number of shares of treasury stock issued during the years ended December 31, 2014, 2013 and 2012 was not material. The number of shares of common stock and treasury stock issued are equivalent to the number of awards exercised or settled.

With the exception of employee stock purchase rights, equity awards are issued to employees and non-employee directors under the 2009 Stock Incentive Plan (the “2009 Stock Plan”). Our board of directors has authorized the issuance of9,950,000 shares of our common stock under this share-based incentive plan. Any shares that are subject to awards of stock options or stock appreciation rights will be counted against the share limit as one share for every share granted. Any shares that are issued other than stock options and stock appreciation rights will be counted against the share limit as two shares for every share granted. If any shares issued under our prior plans are forfeited, settled for cash or expire, these shares, to the extent of such forfeiture, cash settlement or expiration, will again be available for issuance under the 2009 Stock Plan. As of December 31, 2014, there were 6,578,907 remaining shares available for issuance under the 2009 Stock Plan.

Employee stock purchase rights are issued under the 1997 Employee Stock Purchase Plan, under which we reserved and may issue up to an aggregate of 1,590,000 shares of common stock in periodic offerings. Under this plan, stock is sold to employees at a 15% discount off the closing price of the stock on the last day of each quarter. The dollar value of this discount is equal to the fair value of purchase rights recognized as share-based compensation. We issued 47,000,  55,000 and 51,000 shares of common stock in connection with the Employee Stock Purchase Plan during the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, there were 49,564 remaining shares available for issuance under the 1997 Employee Stock Purchase Plan.

Share-Based Compensation

Share-based compensation costs are classified in our consolidated financial statements consistent with the classification of cash compensation paid to the employees receiving such share-based compensation. The following is a summary of share-based compensation costs and related tax benefits recorded in our consolidated statements of income for the years ended December 31, 2014, 2013 and 2012(in thousands):

		For the Years Ended December 31,
		2014			2013			2012
Share-based compensation expense included in cost of revenue	$	1,937		$	1,841		$	1,770
Share-based compensation expense included in operating expenses		16,162			14,733			14,152
Total share-based compensation expense included in consolidated statements of income		18,099			16,574			15,922
Income tax benefit resulting from share-based compensation arrangements		(6,107	)		(5,584	)		(5,403	)
Net impact of share-based compensation on net income	$	11,992		$	10,990		$	10,519

Share-based compensation expense is reduced for an estimate of the number of awards that are expected to be forfeited. We use historical data and other factors to estimate employee termination behavior and to evaluate whether particular groups of employees have significantly different forfeiture behaviors.

The total unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards at December 31, 2014 was $35.9 million, which will be recognized over a weighted average period of approximately 1.6 years.

Stock Options

Option awards are granted with an exercise price equal to the closing market price of our common stock at the date of grant. Options granted to employees primarily vest ratably over five years on each anniversary of the date of grant and options granted to non-employee directors vest fully on the first anniversary of the date of grant. Vesting of option awards issued is conditional based on continuous service. Options granted after May 8, 2013 have a contractual term of ten years, options granted between January 1, 2006 and May 8, 2013 have contractual terms of seven years and options granted prior to January 1, 2006 have contractual terms of ten years. Upon any change in control of the company, 25% of the unvested stock options then outstanding will vest and become exercisable. However, if the acquiring entity does not assume outstanding options, then all options will vest immediately prior to the change in control.

We use the Black-Scholes-Merton option-pricing model to determine the fair value of options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. Our expected stock price volatility assumptions are based on the historical volatility of our stock over periods that are similar to the expected terms of grants and other relevant factors. We derive the expected term based on historical experience and other relevant factors concerning expected employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. We have never paid any cash dividends on our common stock and we have no intention to pay a dividend at this time; therefore, we assume that no dividends will be paid over the expected terms of option awards.

We determine the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, we may use different assumptions for options granted throughout the year. The weighted averages of the valuation assumptions used to determine the fair value of each option award on the date of grant and the weighted average estimated fair values were as follows:

	For the Years Ended December 31,
		2014			2013			2012
Expected stock price volatility		28	%		32	%		34	%
Expected term, in years		5.7			4.9			4.6
Risk-free interest rate		1.5	%		1.0	%		0.8	%
Weighted average fair value of options granted	$	36.14		$	27.17		$	26.38

A summary of the status of options granted under our share-based compensation plans at December 31, 2014, and changes during the year then ended, are presented in the table below:

	Number of Options (000)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding as of December 31, 2013	2,131	$	63.96
Granted	297		123.24
Exercised	(585)		41.63
Forfeited	(62)		92.53
Expired	(1)		91.68
Outstanding as of December 31, 2014	1,780	$	80.16	4.3	$	121,250
Fully vested as of December 31, 2014	888	$	63.50	2.7	$	75,286
Fully vested and expected to vest as of December 31, 2014	1,710	$	79.13	4.2	$	118,220

The total fair value of options vested during the years ended December 31, 2014, 2013 and 2012 was  $7.8million, $8.4 million and $8.3 million, respectively.

Intrinsic value of stock options exercised represents the amount by which the market price of the common stock exceeded the exercise price, before applicable income taxes. During the years ended December 31, 2014, 2013 and 2012 the total intrinsic value of stock options exercised was $51.2 million, $49.0 million and $45.8 million, respectively.

Restricted Stock Units

RSUs granted to employees vest ratably over five years on each anniversary of the date of grant or fully on the third anniversary of the date of grant, depending on the employee group receiving the award. RSUs granted to non-employee directors vest fully on the first anniversary of the date of grant. Vesting as it relates to RSUs issued is conditional based on continuous service.  Upon any change in control of the company, 25% of the unvested RSUs then outstanding will vest, provided, however, that if the acquiring entity does not assume the RSUs, then all such units will vest immediately prior to the change in control.

A summary of the status of RSUs granted under our share-based compensation plans at December 31, 2014, and changes during the period then ended, are presented in the table below:

	Number of Units (000)	Weighted Average Grant-Date Fair Value
Nonvested as of December 31, 2013	336	$	76.67
Granted	98		122.92
Vested	(122)		64.71
Forfeited	(23)		89.25
Nonvested as of December 31, 2014	289	$	96.47
Expected to vest as of December 31, 2014	267	$	95.97

The total fair value of RSUs vested during the years ended December 31, 2014, 2013 and 2012 was $15.4 million, $12.7 million and $13.3 million, respectively. The aggregate intrinsic value of nonvested RSUs as of December 31, 2014 is equal to the fair value of IDEXX’s common stock as of December 31, 2014 multiplied by the number of nonvested units as of December 31, 2014.

Deferred Stock Units

Under our Director Plan, non-employee directors may defer a portion of their cash fees in the form of vested DSUs. Prior to 2014, certain members of our management could elect to defer a portion of their cash compensation in the form of vested deferred stock units under our Executive Plan. Each DSU represents the right to receive one unissued share of our common stock. These recipients receive a number of DSUs equal to the amount of cash fees or compensation deferred divided by the closing sale price of the common stock on the date of deferral. Also under the Director Plan, non-employee directors are awarded annual grants of DSUs that vest fully on the first anniversary of the date of grant. Vesting for these annual DSU grants is conditional based on continuous service. DSUs are exchanged for a fixed number of shares of common stock, upon vesting if vesting criteria apply, subject to the limitations of the Director and Executive Plans and applicable law.

There were approximately 118,000 and 122,000 vested DSUs outstanding under our share-based compensation plans as of December 31, 2014 and 2013, respectively. Unvested DSUs as of December 31, 2014 and 2013 were not material.

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Acquisitions And Disposition Of Strategic Investment

12 Months Ended

Dec. 31, 2014

Acquisitions And Disposition Of Strategic Investments [Abstract]

Acquisitions And Disposition of Strategic Investment

NOTE 3.      ACQUISITIONS AND DISPOSITION OF STRATEGIC INVESTMENT

We believe that our acquisitions of businesses and other assets enhance our existing businesses by either expanding our geographic range or expanding our existing product lines.

During the year ended December 31, 2014, we paid an aggregate of $25.1 million, to acquire seven businesses, each accounted for as separate business combinations.

We paid an aggregate of $18.7 million in cash and recorded contingent consideration of $4.2 million upon the acquisition of substantially all outstanding shares of a business and the assets of two other businesses, both that offer cloud-based veterinary practice software. As part of the business acquisitions, we recorded $11.7 million in amortizable intangible assets and $12.4 million in goodwill. Amortizable intangible assets primarily consisted of customer lists and software which were assigned weighted average useful lives of 16.4 years and 7.0 years, respectively. The weighted average useful life of all recognized amortizable intangible assets was  11.4 years.Goodwill is calculated as the consideration in excess of net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Of the total goodwill and amortizable assets acquired, $5.6 million of amortizable intangible assets are deductible for income tax purposes. All assets acquired in connection with these business combinations were assigned to our Companion Animal Group segment. Two out of three businesses acquired are located outside of the U.S. and, as such, the assets and liabilities recorded are subject to impacts of changes in foreign currency exchange rates.  The results of operations of these acquired businesses have been included since the acquisition date.  Pro forma information has not been presented for these business acquisitions because such information is not material to the financial statements.

We paid an aggregate of $6.2 million in cash and recorded contingent consideration of $1.5 million upon the acquisition of all outstanding shares of two veterinary reference laboratory testing businesses and to acquire the assets of two veterinary reference laboratory testing businesses. The purchase price in these business acquisitions was allocated primarily to customer list intangible assets, which were assigned a weighted average useful life of 13.3 years.$4.9 million of amortizable intangible assets associated with these acquisitions are deductible for income tax purposes. All assets acquired in connection with these business acquisitions were assigned to our Companion Animal Group segment. Certain of these business acquisitions were of businesses located outside of the U.S. and, as such, the assets and liabilities recorded are subject to impacts of changes in foreign currency exchange rates.  The results of operations of these acquired businesses have been included since the acquisition date.  Pro forma information has not been presented for these business acquisitions because such information is not material to the financial statements.

In June 2014, we divested our investment in a company that owns and operates veterinary hospitals. Upon the closing date, we received proceeds of $5.4 million in exchange for two outstanding promissory notes of the company and its subsidiaries and our 11% equity interest in the company. This investment has been accounted for under the equity method of accounting since acquisition in the fourth quarter of 2010. Upon the disposition of this strategic investment, we realized a $0.7 million gain, which has been reflected as a reduction to general and administrative.

During the year ended December 31, 2013, we paid an aggregate of $10.8 million in cash to acquire all outstanding shares of a distributor of certain of our bovine and dairy test products, as well as other food safety testing products, in Brazil. As part of this business acquisition, we recorded $4.8 million in amortizable intangible assets other than goodwill and $6.5 million in goodwill. The amortizable assets acquired consisted of a customer list, non-compete agreement and a trademark, which were assigned useful lives of 10,  5, and 15 years, respectively. The weighted average useful life of all recognized amortizable intangible assets was 9.9 years. Additionally, we recorded$0.7 million of cash and cash equivalents,$1.0 million in working capital, $0.5 million of fixed assets,$2.1 million in other assets and net deferred tax liabilities of $1.7 million. We deemed certain pre-acquisition contingent liabilities probable and recorded $3.1 million in other liabilities at December 31, 2013. Goodwill is calculated as the consideration in excess of net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill and amortizable intangible assets recorded from this business acquisition are not deductible for income tax purposes. All assets acquired in connection with this business acquisition were assigned to our LPD segment. The results of operations of this acquired business have been included since the acquisition date.  Pro forma information has not been presented for this business acquisition because such information is not material to the financial statements.

During the year ended December 31, 2012, we paid an aggregate of $3.6 million in cash to acquire three businesses, each accounted for as separate business combinations, and to acquire a product right unrelated to business acquisitions. As part of these business acquisitions, we acquired amortizable intangible assets consisting of customer lists with a fair value of $1.7 million and other intangible assets of $0.7 million, which were assigned weighted average useful lives of 10 years and 8 years, respectively. All assets acquired in connection with these business acquisitions were assigned to the CAG segment. The results of operations of these acquired businesses have been included since the acquisition date. Pro forma information has not been presented for these acquisitions because such information is not material to the financial statements.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Measurements [Abstract]

Fair Value Measurements

NOTE 15.FAIR VALUE MEASUREMENTS

The following table sets forth our assets and liabilities that were measured at fair value on a recurring basis at December 31, 2014 and at December 31, 2013 by level within the fair value hierarchy (in thousands):

	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance at
As of December 31, 2014	(Level 1)		(Level 2)		(Level 3)		December 31, 2014
Assets
Money market funds(1)	$	204,743	$	-	$	-	$	204,743
Equity mutual funds(2)		2,654		-		-		2,654
Foreign currency exchange contracts(3)		-		12,226		-		12,226
Liabilities
Foreign currency exchange contracts(3)		-		1,323		-		1,323
Deferred compensation(4)		2,654		-		-		2,654
Interest rate swaps(5)		-		1,117		-		1,117

	Quoted Prices		Significant
	in Active		Other		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance at
As of December 31, 2013	(Level 1)		(Level 2)		(Level 3)		December 31, 2013
Assets
Money market funds(1)	$	153,109	$	-	$	-	$	153,109
Equity mutual funds(2)		2,847		-		-		2,847
Foreign currency exchange contracts(3)		-		4,044		-		4,044
Liabilities
Foreign currency exchange contracts(3)		-		3,096		-		3,096
Deferred compensation(4)		2,847		-		-		2,847
Interest rate swaps(5)		-		1,821		-		1,821

__________

(1) Money market funds are included within cash and cash equivalents. The remaining balance of cash and cash equivalents as of December 31, 2014 and December 31, 2013 consisted of demand deposits.

(2) Equity mutual funds relate to a deferred compensation plan that was assumed as part of a previous business combination. This amount is included within other long-term assets, net. See number (4) below for a discussion of the related deferred compensation liability.

(3) Foreign currency exchange contracts are included within other current assets or accrued liabilities depending on the gain (loss) position.

(4) A deferred compensation plan assumed as part of a business combination is included within other long-term liabilities. The fair value of our deferred compensation plan is indexed to the performance of the underlying equity mutual funds discussed in number (2) above.

(5) Interest rate swaps are included within accrued liabilities.

We did not have any transfers between Level 1 and Level 2 or transfers in or out of Level 3 of the fair value hierarchy during the years ended December 31, 2014 and 2013.

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate carrying value due to their short maturity. See Note 2 for additional information regarding the fair values of our unsecured revolving credit facility, notes receivable and long-term debt.

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income Taxes

NOTE 11.INCOME TAXES

Earnings before income taxes were as follows (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Domestic	$	148,510	$	184,086	$	184,159
International		98,045		79,175		76,458
	$	246,555	$	263,261	$	260,617

The provision (benefit) for income taxes comprised the following (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Current
Federal	$	39,713	$	50,999	$	59,887
State		4,692		5,639		5,879
International		20,213		16,657		18,534
		64,618		73,295		84,300
Deferred
Federal		2,301		3,203		(198)
State		33		329		72
International		(2,348)		(1,360)		(1,844)
		(14)		2,172		(1,970)
	$	64,604	$	75,467	$	82,330

The provision for income taxes differs from the amounts computed by applying the statutory federal income tax rate as follows:

	For the Years Ended December 31,
		2014		2013		2012
U.S. federal statutory rate		35.0	%	35.0	%	35.0	%
State income tax, net of federal tax benefit		1.5		1.5		1.5
International income taxes		(7.0)		(4.6)		(3.8)
Domestic manufacturing exclusions		(1.2)		(1.4)		(1.5)
Research and development credit		(1.3)		(2.3)		-
Other, net		(0.8)		0.5		0.4
Effective tax rate		26.2	%	28.7	%	31.6	%

Our effective income tax rate was 26.2% for the year ended December 31, 2014 and 28.7% for the year ended December 31, 2013. The decrease in our effective income tax rate for the year ended December 31, 2014, as compared to the year ended December 31, 2013, was related to higher relative earnings subject to international tax rates that are lower than domestic tax rates, a non-recurring benefit related to the deferral of intercompany profits that were included in prior year tax provisions in error, which is not material to current or prior interim or annual periods, and the resolution of domestic and international tax audits, which resulted in a net reduction in our provision for uncertain tax positions.  These favorable factors were partly offset by a reduction in the benefit from the U.S. research and development (“R&D”) tax credit.  During the three months ended March 31, 2013, legislation in the U.S. retroactively allowed the R&D tax credit for all of 2012 and extended the R&D tax credit through the year ending December 31, 2013.  As a result, in the year ending December 31, 2013 we recorded the benefit of two years of R&D tax credit as compared to the year ending December 31, 2014 in which we have recorded only the benefit related to that year’s activities.

Our effective income tax rate was 28.7% for the year ended December 31, 2013 and 31.6% for the year ended December 31, 2012.  The decrease in our effective income tax rate for the year ended December 31, 2013, as compared to the year ended December 31, 2012, was due primarily to the R&D tax credit. For the year ended December 31, 2012, the U.S. legislation authorizing the R&D tax credit had expired and no associated tax benefit was recognized within this period. On January 2, 2013, U.S. federal legislation was enacted that retroactively allowed an R&D tax credit for all of 2012 and extended the R&D tax credit through the year ended December 31, 2013. Because the related legislation was enacted in 2013, the full benefit of the R&D tax credit related to the prior year’s activities was recognized in 2013. In addition, higher relative earnings subject to international tax rates that are lower than domestic tax rates also contributed to the decrease in our effective income tax rate.

We have business operations in Switzerland and the Netherlands and have been granted tax rulings by each jurisdiction. Our tax rulings in Switzerland and the Netherlands are set to expire on December 31, 2015 and December 31, 2022, respectively. As a result of the tax rulings, our net income was higher by $8.5 million, $6.5 million and $6.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. The benefit from these tax rulings is reflected within the overall benefit received from international income taxes in the table above.

We consider the majority of the operating earnings of non-U.S. subsidiaries to be indefinitely invested outside the U.S. The cumulative earnings of these subsidiaries were $431.7 million at December 31, 2014. No provision has been made for U.S. federal and state, or international taxes that may result from future remittances of the undistributed earnings of non-U.S. subsidiaries. Should we repatriate these earnings in the future, we would have to adjust the income tax provision in the period in which the decision to repatriate earnings is made. A determination of the related tax liability that would be paid on these undistributed earnings if repatriated is not practicable. For the operating earnings not considered to be indefinitely invested outside the U.S., we have accounted for the tax impact on a current basis.

The components of the net deferred tax assets (liabilities) included in the accompanying consolidated balance sheets are as follows (in thousands):

	December 31, 2014				December 31, 2013
		Current		Long-Term		Current		Long-Term
Assets
Accrued expenses	$	20,377	$	7,824	$	19,833	$	1,622
Accounts receivable reserves		2,591		-		1,153		-
Deferred revenue		8,697		3,084		5,872		1,552
Inventory basis differences		3,154		347		2,670		-
Property-based differences		-		1,601		-		1,728
Share-based compensation		2,490		8,936		2,325		7,923
Other		171		255		13		150
Net operating loss carryforwards		65		4,368		500		4,182
Unrealized losses on foreign currency exchange contracts, interest rate swaps and investments		-		-		1,580		-
Total assets		37,545		26,415		33,946		17,157
Valuation allowance		(457)		(4,221)		(642)		(4,559)
Total assets, net of valuation allowance		37,088		22,194		33,304		12,598
Liabilities
Deferred instrument costs		-		(10,149)		-		(3,093)
Property-based differences		-		(33,978)		-		(25,823)
Intangible asset basis differences		-		(16,882)		-		(15,513)
Other		(610)		(517)		(190)		(790)
Unrealized gains on foreign currency exchange contracts, interest rate swaps and investments		(2,603)		-		(1,303)		-
Total liabilities		(3,213)		(61,526)		(1,493)		(45,219)
Net deferred tax assets (liabilities)	$	33,875	$	(39,332)	$	31,811	$	(32,621)

We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes. We classify certain uncertain tax positions as long-term liabilities.

The total amount of unrecognized tax benefits at December 31, 2014 and December 31, 2013 was $5.9 million and $6.3 million, respectively. Of the total unrecognized tax benefits at December 31, 2014 and 2013, $5.0 million and $5.7 million, respectively, comprise unrecognized tax positions that would, if recognized, affect our effective tax rate. The ultimate deductibility of the remaining unrecognized tax positions is highly certain but there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

During each of the years ended December 31, 2014, 2013 and 2012, we recorded interest expense and penalties of $0.3 million as income tax expense in our consolidated statement of income. At December 31, 2014 and 2013, we had $0.5 million and $0.6 million, respectively, of estimated interest expense and penalties accrued in our consolidated balance sheets.

The following table summarizes the changes in unrecognized tax benefits during the years ended December 31, 2014, 2013 and 2012  (in thousands):

	For the Years Ended December 31,
		2014		2013		2012
Total amounts of unrecognized tax benefits, beginning of period	$	6,325	$	5,906	$	5,149
Gross increases in unrecognized tax benefits as a result of tax positions taken during a prior period		432		8		290
Gross increases in unrecognized tax benefits as a result of tax positions taken in the current period		1,789		1,954		1,436
Decreases in unrecognized tax benefits relating to settlements with taxing authorities		(2,242)		(317)		-
Decreases in unrecognized tax benefits as a result of a lapse of the applicable statutes of limitations		(362)		(1,226)		(969)
Total amounts of unrecognized tax benefits, end of period	$	5,942	$	6,325	$	5,906

In 2015, it is reasonably possible that we could recognize up to $0.4 million of income tax benefits that have not been recognized at December 31, 2014. The income tax benefits are due primarily to the lapse in the statutes of limitations for various U.S. and international tax jurisdictions.

In the ordinary course of our business, our income tax filings are regularly under audit by tax authorities. While we believe we have appropriately provided for all uncertain tax positions, amounts asserted by taxing authorities could be greater or less than our accrued position. Accordingly, additional provisions on income tax matters, or reductions of previously accrued provisions, could be recorded in the future as we revise our estimates due to changing facts and circumstances or the underlying matters are settled or otherwise resolved. We are currently under tax examinations by various state and international tax authorities. We anticipate that these examinations will be concluded within the next year. We are no longer subject to U.S. federal examinations for tax years before 2013. With few exceptions, we are no longer subject to income tax examinations in any state and local, or international jurisdictions in which we conduct significant taxable activities for years before 2006.

At December 31, 2014, we had net operating loss carryforwards in certain state and international jurisdictions of approximately $41.6 million available to offset future taxable income. Most of these net operating loss carryforwards will expire at various dates through 2018 and the remainder have indefinite lives. We have recorded a valuation allowance of $4.7 million against certain deferred tax assets related to temporary differences including net operating loss carryforwards, as it is more likely than not that they will not be realized or utilized within the carryforward period.

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Segment Reporting (Schedule Of Net Long-Lived Assets By Principal Geographic Areas) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	$ 303,587	$ 281,214
Americas [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	267,951	248,494
Americas [Member] | United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	262,475	245,511
Americas [Member] | Brazil [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	3,206	869
Americas [Member] | Canada [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	2,270	2,114
Europe, The Middle East And Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	30,135	29,041
Europe, The Middle East And Africa [Member] | United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	14,366	12,959
Europe, The Middle East And Africa [Member] | Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	4,836	5,733
Europe, The Middle East And Africa [Member] | France [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	3,172	3,127
Europe, The Middle East And Africa [Member] | Netherlands [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	3,456	2,956
Europe, The Middle East And Africa [Member] | Switzerland [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	2,631	3,076
Europe, The Middle East And Africa [Member] | Other Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	1,674	1,190
Asia Pacific Region [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	5,501	3,679
Asia Pacific Region [Member] | Japan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	2,204	690
Asia Pacific Region [Member] | Australia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	1,789	1,801
Asia Pacific Region [Member] | Other Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net Assets	$ 1,508	$ 1,188

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Other Current and Noncurrent Assets

12 Months Ended

Dec. 31, 2014

Other Current and Noncurrent Assets [Abstract]

Other Noncurrent Assets

NOTE 7.OTHER CURRENT AND NONCURRENT ASSETS

Other current assets consisted of the following (in thousands):

	December 31,		December 31,
		2014		2013
Prepaid expenses	$	32,672	$	20,810
Taxes receivable		28,926		14,910
Customer acquisition costs, net		11,262		8,098
Other assets		13,591		5,139
	$	86,451	$	48,957

Other noncurrent assets consisted of the following (in thousands):  

	December 31,		December 31,
		2014		2013
Investment in long-term product supply arrangements	$	10,765	$	13,075
Customer acquisition costs, net		28,165		21,199
Other assets		32,724		22,957
	$	71,654	$	57,231

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Property And Equipment, Net (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense of property and equipment	$ 48.8	$ 42.8	$ 39.8
New Westbrook Administrative Facility [Member]
Property, Plant and Equipment [Line Items]
Current year additions		19.9	13.9
Software Developed For Internal Use [Member]
Property, Plant and Equipment [Line Items]
Current year additions	$ 11.9	$ 10.9	$ 12.4

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Inventories

12 Months Ended

Dec. 31, 2014

Inventories [Abstract]

Inventories

NOTE 5.INVENTORIES

The components of inventories are as follows (in thousands):

	December 31,		December 31,
		2014		2013
Raw materials	$	26,908	$	23,766
Work-in-process		16,859		14,359
Finished goods		116,575		95,302
	$	160,342	$	133,427

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Property And Equipment, Net

12 Months Ended

Dec. 31, 2014

Property And Equipment, Net [Abstract]

Property And Equipment, Net

NOTE 6.      PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following (in thousands):  

	December 31,		December 31,
		2014		2013
Land and improvements	$	7,417	$	7,471
Buildings and improvements		159,298		158,382
Leasehold improvements		45,655		39,266
Machinery and equipment		183,575		162,144
Office furniture and equipment		35,696		35,271
Computer hardware and software		151,404		136,008
Construction in progress		20,890		11,473
		603,935		550,015
Less accumulated depreciation and amortization		300,348		268,801
Total property and equipment, net	$	303,587	$	281,214

Depreciation and amortization expense of property and equipment was $48.8million, $42.8 million and $39.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.

In 2011, we began the construction of a new administrative building adjacent to our primary facility on our worldwide headquarters in Westbrook, Maine, which was complete as of December 31, 2013. We capitalized $19.9 million and  $13.9 million related to this project during the years ended December 31, 2013 and 2012, respectively.

During the years ended December 31, 2014, 2013 and 2012, we capitalized $11.9 million, $10.9 million and $12.4 million, respectively, related to computer software developed for internal use.

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Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets, Net [Abstract]

Goodwill And Intangible Assets, Net

NOTE 8.GOODWILL AND INTANGIBLE ASSETS, NET

Intangible assets other than goodwill consisted of the following (in thousands):

	December 31, 2014				December 31, 2013
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
Patents	$	4,871	$	4,308	$	9,547	$	8,619
Product rights (1)		36,912		20,657		38,670		25,796
Customer-related intangible assets (2)		88,494		40,933		82,940		38,800
Noncompete agreements		1,125		382		7,131		6,229
	$	131,402	$	66,280	$	138,288	$	79,444

(1) Product rights comprise certain technologies, licenses and trade names acquired from third parties.

(2) Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

Amortization expense of intangible assets other than goodwill was $9.8 million, $9.7 million and $9.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. The increase in intangible assets other than goodwill during the twelve months ended December 31, 2014 resulted from intangibles recognized in connection with the acquisition of businesses, partly offset by the amortization of our intangible assets and, to a lesser extent, changes in foreign currency exchange rates.

At December 31, 2014, the aggregate amortization expense associated with intangible assets is estimated to be as follows for each of the next five years and thereafter (in thousands):

	Amortization Expense
2015	$	10,678
2016		10,332
2017		9,438
2018		8,068
2019		6,560
Thereafter		20,046
	$	65,122

The increase in goodwill during the twelve months ended December 31, 2014 resulted from goodwill recognized in connection with the acquisition of businesses, partly offset by changes in foreign currency exchange rates. See Note 3 for information regarding goodwill and other intangible assets recognized in connection with the acquisition of businesses and other assets during the years ended December 31, 2014, 2013 and 2012.

The changes in the carrying amount of goodwill for the years ended December 31, 2014, 2013, and 2012 were as follows (in thousands):

		CAG		Water		LPD		Other		Consolidated Total
Balance as of December 31, 2011	$	141,677	$	13,576	$	10,826	$	6,531	$	172,610
Impact of Changes in Foreign Currency Exchange Rates		1,478		603		303		-		2,384
Balance as of December 31, 2012	$	143,155	$	14,179	$	11,129	$	6,531	$	174,994
Business Combinations		250		-		6,491		-		6,741
Impact of Changes in Foreign Currency Exchange Rates		(1,997)		336		447		-		(1,214)
Balance as of December 31, 2013	$	141,408	$	14,515	$	18,067	$	6,531	$	180,521
Business Combinations		13,077		-		-		-		13,077
Impact of Changes in Foreign Currency Exchange Rates		(6,334)		(826)		(1,988)		-		(9,148)
Balance as of December 31, 2014	$	148,151	$	13,689	$	16,079	$	6,531	$	184,450

See Note 3 for information regarding the recognition of goodwill in connection with the acquisition of businesses during the years ended December 31, 2014 and 2013. We have no history of impairment charges to the carrying value of our goodwill.

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Goodwil And Intangible Assets, Net (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Goodwill and Intangible Assets, Net [Abstract]
Aggregate amortization expense	$ 9.8	$ 9.7	$ 9.8

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Fair Value Measurements (Schedule Of Fair Value Of Assets And Liabilities Measured On Recurring Basis) (Details) (Measured At Fair Value On Recurring Basis [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2014		Dec. 31, 2013
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Assets	$ 204,743	[1]	$ 153,109	[1]
Money Market Funds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Assets	204,743	[1]	153,109	[1]
Equity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Assets	2,654	[2]	2,847	[2]
Equity Mutual Funds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Assets	2,654	[2]	2,847	[2]
Foreign Currency Exchange Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Assets	12,226	[3]	4,044	[3]
Fair value of Liabilities	1,323	[3]	3,096	[3]
Foreign Currency Exchange Contracts [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Assets	12,226	[3]	4,044	[3]
Fair value of Liabilities	1,323	[3]	3,096	[3]
Deferred Compensation [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Liabilities	2,654	[4]	2,847	[4]
Deferred Compensation [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Liabilities	2,654	[4]	2,847	[4]
Interest Rate Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Liabilities	1,117		1,821	[5]
Interest Rate Swaps [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of Liabilities	$ 1,117		$ 1,821	[5]

[1] Money market funds are included within cash and cash equivalents. The remaining balance of cash and cash equivalents as of December 31, 2014 and December 31, 2013 consisted of demand deposits.

[2] Equity mutual funds relate to a deferred compensation plan that was assumed as part of a previous business combination. This amount is included within other long-term assets, net. See number (4) below for a discussion of the related deferred compensation liability.

[3] Foreign currency exchange contracts are included within other current assets or accrued liabilities depending on the gain (loss) position.

[4] A deferred compensation plan assumed as part of a business combination is included within other long-term liabilities. The fair value of our deferred compensation plan is indexed to the performance of the underlying equity mutual funds discussed in number (2) above.

[5] Interest rate swaps are included within accrued liabilities.

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Goodwill And Intangible Assets, Net (Schedule Of Expected Amortization Expense) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Goodwill and Intangible Assets, Net [Abstract]
2015	$ 10,678
2016	10,332
2017	9,438
2018	8,068
2019	6,560
Thereafter	20,046
Total estimated amortization expense to be incurred after December 31, 2014	$ 65,122

XML

Other Current and Noncurrent Assets (Schedule Of Other Noncurrent Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Other Current and Noncurrent Assets [Abstract]
Investment in long-term product supply arrangements	$ 10,765	$ 13,075
Customer acquisition costs, net	28,165	21,199
Other assets	32,724	22,957
Other long-term assets, net	$ 71,654	$ 57,231

XML

Preferred Stock (Details) (USD $)	Dec. 31, 2014
Preferred Stock [Abstract]
Shares of preferred stock authorized	500,000
Par value per share	$ 1.00
Preferred Stock outstanding	0

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Share-Based Compensation [Abstract]

Schedule Of Selected Financial Impact Of Share-Based Compensation

		For the Years Ended December 31,
		2014			2013			2012
Share-based compensation expense included in cost of revenue	$	1,937		$	1,841		$	1,770
Share-based compensation expense included in operating expenses		16,162			14,733			14,152
Total share-based compensation expense included in consolidated statements of income		18,099			16,574			15,922
Income tax benefit resulting from share-based compensation arrangements		(6,107	)		(5,584	)		(5,403	)
Net impact of share-based compensation on net income	$	11,992		$	10,990		$	10,519

Schedule Of Weighted Averages Of The Assumptions Used In Estimating The Fair Value Of Stock Option Awards

	For the Years Ended December 31,
		2014			2013			2012
Expected stock price volatility		28	%		32	%		34	%
Expected term, in years		5.7			4.9			4.6
Risk-free interest rate		1.5	%		1.0	%		0.8	%
Weighted average fair value of options granted	$	36.14		$	27.17		$	26.38

Schedule Of Stock Option Activity

	Number of Options (000)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding as of December 31, 2013	2,131	$	63.96
Granted	297		123.24
Exercised	(585)		41.63
Forfeited	(62)		92.53
Expired	(1)		91.68
Outstanding as of December 31, 2014	1,780	$	80.16	4.3	$	121,250
Fully vested as of December 31, 2014	888	$	63.50	2.7	$	75,286
Fully vested and expected to vest as of December 31, 2014	1,710	$	79.13	4.2	$	118,220

Schedule Of Restricted Stock Unit Activity

	Number of Units (000)	Weighted Average Grant-Date Fair Value
Nonvested as of December 31, 2013	336	$	76.67
Granted	98		122.92
Vested	(122)		64.71
Forfeited	(23)		89.25
Nonvested as of December 31, 2014	289	$	96.47
Expected to vest as of December 31, 2014	267	$	95.97

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Summary Of Significant Accounting Policies (Schedule Of Estimated Useful Lives For Property And Equipment) (Details)	12 Months Ended
	Dec. 31, 2014
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	Shorter of remaining lease term or useful life of improvements
Maximum [Member] | Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	20
Maximum [Member] | Building And Improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	40
Maximum [Member] | Machinery And Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	8
Maximum [Member] | Office Furniture And Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	7
Maximum [Member] | Computer Hardware And Software [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	7
Minimum [Member] | Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	15
Minimum [Member] | Building And Improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	10
Minimum [Member] | Machinery And Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3
Minimum [Member] | Office Furniture And Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3
Minimum [Member] | Computer Hardware And Software [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3

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Commitments, Contingencies And Guarantees

12 Months Ended

Dec. 31, 2014

Commitments, Contingencies And Guarantees [Abstract]

Commitments, Contingencies And Guarantees

NOTE 13.COMMITMENTS, CONTINGENCIES AND GUARANTEES

Commitments

We determine the lease period of any executed agreements using the noncancelable lease term plus any renewal options by which the failure to renew imposes a penalty in such amount that renewal is reasonably assured. We lease multiple facilities under operating leases with various expiration dates through 2030. In addition, we are responsible for the real estate taxes and operating expenses related to these facilities. We also have lease commitments for automobiles and office equipment. Rent expense charged to operations under operating leases was approximately $17.2 million, $15.8 million and $15.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Minimum annual rental payments under these agreements are estimated as follows (in thousands):

Years Ending December 31,		Amount
2015	$	17,228
2016		15,245
2017		12,984
2018		10,048
2019		6,731
Thereafter		15,256
	$	77,492

We have various minimum royalty payments due through 2027 of $3.3 million. If these obligations are not satisfied, the related license arrangements may be terminated, resulting in either a loss in exclusivity or the right to use the technology.

We are required to annually purchase a minimum amount of inventory from certain suppliers. Through 2022, we have a total of $11.4 million in minimum purchase commitments under these arrangements.

Contingencies

We are subject to claims that arise in the ordinary course of business, including with respect to actual and threatened litigation and other matters. We accrue for loss contingencies when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. However, our actual losses with respect to these contingencies could exceed our accruals.

Under our workers’ compensation insurance policies for U.S. employees, we have retained the first $300,000,  $250,000 and $250,000 in claim liability per incident with aggregate maximum claim liabilities per year of  $2.3 million for the year ended December 31, 2014 and $2.0 million for each of the years ended December 31, 2013 and 2012, respectively. We have recognized cumulative expenses of $1.1 million, $0.5 million and $0.6 million for claims incurred during the years ended December 31, 2014, 2013 and 2012, respectively. Our estimated liability for workers’ compensation was $1.4 million and $1.2 million as of December 31, 2014 and 2013, respectively. Claims incurred during the years ended December 31, 2014 and 2013 are relatively undeveloped as of December 31, 2014. Therefore, it is possible that we could incur additional healthcare and wage indemnification costs beyond those previously recognized up to our aggregate liability for each of the respective claim years. For the years ended on or prior to December 31, 2012, based on our retained claim liability per incident and our aggregate claim liability per year, our maximum liability in excess of the amounts deemed probable and previously recognized is not material as of December 31, 2014. As of December 31, 2014, we had outstanding letters of credit totaling $1.3 million to the insurance companies as security for these claims in connection with these policies.

Under our current employee healthcare insurance policy for U.S. employees, we retain claims liability risk up to $375,000, $325,000 and $300,000 per incident per year in 2014, 2013 and 2012, respectively. We recognized employee healthcare claim expense of $32.0 million, $29.2 million and $23.0 million during the years ended December 31, 2014, 2013 and 2012, respectively, which includes actual claims paid and an estimate of our liability for the uninsured portion of employee healthcare obligations that have been incurred but not paid. Should employee health insurance claims exceed our estimated liability, we would have further obligations. Our estimated liability for healthcare claims that have been incurred but not paid as of December 31, 2014 and 2013 was $4.1 million and $4.3 million, respectively.

We have entered into an employment agreement with our chief executive officer whereby payment may be required if we terminate his employment without cause other than following a change in control. The amount payable is based upon the executive’s salary at the time of termination and the cost to us of continuing to provide certain benefits. Had this officer been terminated without cause at December 31, 2014, other than following a change in control, we would have had an obligation for salaries and benefits of approximately $1.6 million under such agreement. In addition, the agreement provides for continued vesting of his outstanding equity awards for a period of two years.  

We have entered into employment agreements with each of our officers that require us to make certain payments in the event the officer’s employment is terminated under certain circumstances within a certain period following a change in control. The amount payable by us under each of these agreements is based on the officer’s salary and bonus history at the time of termination and the cost to us of continuing to provide certain benefits. Had all of our officers been terminated in qualifying terminations following a change in control at December 31, 2014, we would have had aggregate obligations of approximately $24.8million under these agreements. These agreements also provide for the acceleration of the vesting of all stock options and restricted stock units upon any qualifying termination following a change in control. At this time, we believe the likelihood of terminations as a result of the scenarios described is remote, and therefore, we have not accrued for such loss contingencies.

We have total contingent liabilities outstanding of up to $11.8 million primarily related to the achievement of certain revenue milestones. We have recorded $6.3 million of contingent commitments on our consolidated balance sheet at December 31, 2014. The amount of contingent consideration recorded on our consolidated balance sheet at December 31, 2013 was not material. We have not accrued for $5.5 million of contingent liabilities, related to the acquisition of an intangible asset in 2008, as we do not deem the achievement of associated revenue milestones to be probable of occurring as of December 31, 2014.

From time to time, we have received notices alleging that our products infringe third-party proprietary rights, although we are not aware of any pending litigation with respect to such claims. Patent litigation frequently is complex and expensive, and the outcome of patent litigation can be difficult to predict. There can be no assurance that we will prevail in any infringement proceedings that may be commenced against us. If we lose any such litigation, we may be stopped from selling certain products and/or we may be required to pay damages as a result of the litigation.

Guarantees

We enter into agreements with third parties in the ordinary course of business under which we are obligated to indemnify such third parties for and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In many cases, we limit the maximum amount of our indemnification obligations, but in some cases those obligations may be theoretically unlimited. We have not incurred material expenses in discharging any of these indemnification obligations, and based on our analysis of the nature of the risks involved, we believe that the fair value of these agreements is minimal. Accordingly, we have recorded no liabilities for these obligations at December 31, 2014 and 2013.

When acquiring a business, we sometimes assume liability for certain events or occurrences that took place prior to the date of acquisition. We have recorded $2.5 million and $3.1 million of probable pre-acquisition liabilities in the accompanying consolidated balance sheets at December 31, 2014 and 2013, respectively.

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Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

NOTE 18.ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in accumulated other comprehensive income, net of tax, for the years ended December 31, 2014 and 2013 consisted of the following (in thousands):

		Unrealized (loss) gain on investments, net of tax		Unrealized (loss) gain on derivatives instruments, net of tax		Cumulative translation adjustment		Total
Balance as of December 31, 2012	$	(171)	$	(2,070)	$	18,195	$	15,954
Other comprehensive income (loss) before reclassifications		279		3,781		(4,502)		(442)
Gains reclassified from accumulated other comprehensive income		-		(1,890)		-		(1,890)
Balance as of December 31, 2013		108		(179)		13,693		13,622
Other comprehensive (loss) income before reclassifications		(107)		9,542		(29,126)		(19,691)
Gains reclassified from accumulated other comprehensive income		-		(2,002)		-		(2,002)
Balance as of December 31, 2014	$	1	$	7,361	$	(15,433)	$	(8,071)

The following is a summary of reclassifications out of accumulated other comprehensive income for the years ended December 31, 2014, 2013 and 2012 (in thousands):

		Amounts Reclassified from Accumulated Other
	Affected Line Item in the	Comprehensive Income
Details about Accumulated Other	Statement Where	For the Years Ended December 31,
Comprehensive Income Components	Net Income is Presented		2014		2013		2012
Gains (losses) on derivative instruments included in net income:
Foreign currency exchange contracts	Cost of revenue	$	3,822	$	3,469	$	5,938
Interest rate swaps	Interest expense		(1,064)		(900)		(690)
	Total gains before tax		2,758		2,569		5,248
	Tax expense		756		679		1,623
	Gains, net of tax	$	2,002	$	1,890	$	3,625

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Summary Of Quarterly Data (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Summary Of Quarterly Data [Abstract]
Revenue	$ 351,959	$ 383,523	$ 390,122	$ 360,203	$ 354,073	$ 338,297	$ 352,583	$ 332,106	$ 1,485,807	$ 1,377,058	$ 1,293,338
Gross profit	182,165	213,336	218,518	202,097	188,665	185,783	197,698	183,974	816,116	756,118	699,148
Operating income	34,801	72,189	83,219	70,046	61,328	65,485	78,763	61,188	260,255	266,762	262,563
Net income attributable to stockholders	$ 25,961	$ 52,142	$ 57,218	$ 46,585	$ 43,258	$ 45,688	$ 53,995	$ 44,860	$ 181,906	$ 187,800	$ 178,267
Earnings per Share:
Basic	$ 0.54	$ 1.05	$ 1.12	$ 0.90	$ 0.83	$ 0.87	$ 1.01	$ 0.82	$ 3.63	$ 3.53	$ 3.24
Diluted	$ 0.54	$ 1.03	$ 1.10	$ 0.89	$ 0.82	$ 0.86	$ 0.99	$ 0.81	$ 3.58	$ 3.48	$ 3.17

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Summary Of Quarterly Data (Tables)

12 Months Ended

Dec. 31, 2014

Summary Of Quarterly Data [Abstract]

Schedule Of Quarterly Data

	For the Three Months Ended
		March 31,		June 30,		September 30,		December 31,
2014
Revenue	$	360,203	$	390,122	$	383,523	$	351,959
Gross profit		202,097		218,518		213,336		182,165
Operating income		70,046		83,219		72,189		34,801
Net income attributable to IDEXX Laboratories, Inc. stockholders		46,585		57,218		52,142		25,961
Earnings per share:
Basic	$	0.90	$	1.12	$	1.05	$	0.54
Diluted	$	0.89	$	1.10	$	1.03	$	0.54
2013
Revenue	$	332,106	$	352,583	$	338,297	$	354,073
Gross profit		183,974		197,698		185,783		188,665
Operating income		61,188		78,763		65,485		61,328
Net income attributable to IDEXX Laboratories, Inc. stockholders		44,860		53,995		45,688		43,258
Earnings per share:
Basic	$	0.82	$	1.01	$	0.87	$	0.83
Diluted	$	0.81	$	0.99	$	0.86	$	0.82

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Schedule Of Earnings Before Income Taxes

	For the Years Ended December 31,
		2014		2013		2012
Domestic	$	148,510	$	184,086	$	184,159
International		98,045		79,175		76,458
	$	246,555	$	263,261	$	260,617

Schedule Of Components Of Provision (Benefit) For Income Taxes

	For the Years Ended December 31,
		2014		2013		2012
Current
Federal	$	39,713	$	50,999	$	59,887
State		4,692		5,639		5,879
International		20,213		16,657		18,534
		64,618		73,295		84,300
Deferred
Federal		2,301		3,203		(198)
State		33		329		72
International		(2,348)		(1,360)		(1,844)
		(14)		2,172		(1,970)
	$	64,604	$	75,467	$	82,330

Schedule Of Effective Income Tax Rate Reconciliation

	For the Years Ended December 31,
		2014		2013		2012
U.S. federal statutory rate		35.0	%	35.0	%	35.0	%
State income tax, net of federal tax benefit		1.5		1.5		1.5
International income taxes		(7.0)		(4.6)		(3.8)
Domestic manufacturing exclusions		(1.2)		(1.4)		(1.5)
Research and development credit		(1.3)		(2.3)		-
Other, net		(0.8)		0.5		0.4
Effective tax rate		26.2	%	28.7	%	31.6	%

Schedule Of Components Of Net Deferred Tax Assets And Liabilities

	December 31, 2014				December 31, 2013
		Current		Long-Term		Current		Long-Term
Assets
Accrued expenses	$	20,377	$	7,824	$	19,833	$	1,622
Accounts receivable reserves		2,591		-		1,153		-
Deferred revenue		8,697		3,084		5,872		1,552
Inventory basis differences		3,154		347		2,670		-
Property-based differences		-		1,601		-		1,728
Share-based compensation		2,490		8,936		2,325		7,923
Other		171		255		13		150
Net operating loss carryforwards		65		4,368		500		4,182
Unrealized losses on foreign currency exchange contracts, interest rate swaps and investments		-		-		1,580		-
Total assets		37,545		26,415		33,946		17,157
Valuation allowance		(457)		(4,221)		(642)		(4,559)
Total assets, net of valuation allowance		37,088		22,194		33,304		12,598
Liabilities
Deferred instrument costs		-		(10,149)		-		(3,093)
Property-based differences		-		(33,978)		-		(25,823)
Intangible asset basis differences		-		(16,882)		-		(15,513)
Other		(610)		(517)		(190)		(790)
Unrealized gains on foreign currency exchange contracts, interest rate swaps and investments		(2,603)		-		(1,303)		-
Total liabilities		(3,213)		(61,526)		(1,493)		(45,219)
Net deferred tax assets (liabilities)	$	33,875	$	(39,332)	$	31,811	$	(32,621)

Schedule Of Changes In Unrecognized Tax Benefits

	For the Years Ended December 31,
		2014		2013		2012
Total amounts of unrecognized tax benefits, beginning of period	$	6,325	$	5,906	$	5,149
Gross increases in unrecognized tax benefits as a result of tax positions taken during a prior period		432		8		290
Gross increases in unrecognized tax benefits as a result of tax positions taken in the current period		1,789		1,954		1,436
Decreases in unrecognized tax benefits relating to settlements with taxing authorities		(2,242)		(317)		-
Decreases in unrecognized tax benefits as a result of a lapse of the applicable statutes of limitations		(362)		(1,226)		(969)
Total amounts of unrecognized tax benefits, end of period	$	5,942	$	6,325	$	5,906

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements Of Comprehensive Income [Abstract]
Net income	$ 181,951	$ 187,794	$ 178,287
Other comprehensive income, net of tax:
Foreign currency translation adjustments	(29,126)	(4,502)	5,671
Unrealized (loss) gain on investments, net of tax (benefit) expense of ($63), $165 and $68 in 2014, 2013, and 2012, respectively	(107)	279	116
Unrealized gain (loss) on derivative instruments:
Unrealized gain (loss), net of tax expense (benefit) of $4,073, $1,555 and ($921) in 2014, 2013 and 2012, respectively	9,542	3,781	(1,651)
Less: reclassification adjustment for gains included in net income, net of tax expense of $756, $679 and $1,623 in 2014, 2013 and 2012, respectively	(2,002)	(1,890)	(3,625)
Unrealized gain (loss) on derivative instruments	7,540	1,891	(5,276)
Other comprehensive (loss) income, net of tax	(21,693)	(2,332)	511
Total comprehensive income	160,258	185,462	178,798
Less: comprehensive income (loss) attributable to noncontrolling interest	45	(6)	20
Comprehensive income attributable to IDEXX Laboratories, Inc.	$ 160,213	$ 185,468	$ 178,778

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Derivative Instruments And Hedging (Gain (Loss) Recognized In Other Comprehensive Income On Derivative Instruments (Effective Portion)) (Details) (Cash Flow Hedges [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion), Net of Tax	$ 7,540	$ 1,891	$ (5,276)
Foreign Currency Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion), Net of Tax	7,098	1,350	(4,481)
Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI on Derivative Instruments (Effective Portion), Net of Tax	$ 442	$ 541	$ (795)

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Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

NOTE 2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Estimates

The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates, including those related to reserves for accounts receivable; goodwill and other intangible assets; income taxes; inventory valuation; revenue recognition, product returns, customer programs and multiple element arrangements; share-based compensation; warranty reserves; self-insurance reserves; fair value measurements and loss contingencies. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

(b)Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of ninety days or less to be cash equivalents. Cash and cash equivalents consist primarily of demand deposits and money market funds.

As of December 31, 2013, our reported cash and cash equivalents balances contained restricted cash in the aggregate of $0.7 million securing various obligations. There is no restricted cash on our consolidated balance sheet for the year ended December 31, 2014.

(c)Inventories

Inventories, which are stated at the lower of cost (first-in, first-out) or market,include material, conversion costs and inbound freight charges. We write down the carrying value of inventory for estimated obsolescence by an amount equal to the difference between the cost of inventory and the estimated market value when warranted based on assumptions of future demand, market conditions, remaining shelf life, or product functionality. If actual market conditions or results of estimated functionality are less favorable than those we estimated, additional inventory write-downs may be required, which would have a negative effect on results of operations.

(d)Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. When an item is sold or retired, the cost and related accumulated depreciation is relieved, and the resulting gain or loss, if any, is recognized in the consolidated statements of income. We provide for depreciation and amortization primarily using the straight-line method by charges to income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows:

Asset Classification	Estimated Useful Life
Land improvements	15 to 20 years
Buildings and improvements	10 to 40 years
Leasehold improvements	Shorter of remaining lease term or useful life of improvements
Machinery and equipment	3 to 8 years
Office furniture and equipment	3 to 7 years
Computer hardware and software	3 to 7 years

We capitalize interest on the acquisition and construction of significant assets that require a substantial period of time to be made ready for use. The capitalized interest is included in the cost of the completed asset and depreciated over the asset’s estimated useful life. The amount of interest capitalized during the years ended December 31, 2014 and 2013 was not material.

We capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Qualifying costs incurred during the application development stage, which consist primarily of internal payroll and direct fringe benefits and external direct project costs, including labor and travel, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset. Costs incurred during the preliminary project and post-implementation and operation phases are expensed as incurred. These costs are general and administrative in nature and relate primarily to the determination of performance requirements, data conversion and training. Software developed to deliver hosted services to our customers has been designated as internal use. See Note 6 for further information regarding costs capitalized in connection with software developed for internal use.

(e)Goodwill and Other Intangible Assets

A significant portion of the purchase price for acquired businesses is generally assigned to intangible assets. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to IDEXX. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When material, we utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. We assess contingent consideration to determine if it is part of the business combination or if it should be accounted for separately from the business combination in the postcombination period. Contingent consideration is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. Changes in fair value of contingent consideration are recognized in earnings.

We provide for amortization primarily using the straight-line method by charges to income in amounts that allocate the intangible assets over their estimated useful lives as follows:

Asset Classification	Estimated Useful Life
Patents	13 to 15 years
Product rights(1)	5 to 15 years
Customer-related  intangible assets(2)	5 to 17 years
Noncompete agreements	3 to 7 years

(1) Product rights comprise certain technologies, intellectual property, licenses and trade names acquired from third parties.

(2) Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

We assess goodwill for impairment annually, at the reporting unit level, in the fourth quarter and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we would then perform step one of the two-step impairment test; otherwise, no further impairment test would be required. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the two-step impairment test. Doing so does not preclude us from performing the qualitative assessment in any subsequent period.

In the fourth quarter of 2014, we elected to bypass the qualitative approach and instead proceeded directly to step one of the two-step impairment test to assess the fair value of all of our reporting units. As part of step one of the two-step impairment test, we estimate the fair values of applicable reporting units using an income approach based on discounted forecasted cash flows. We make significant assumptions about the extent and timing of future cash flows, growth rates and discount rates. Model assumptions are based on our projections and best estimates, using appropriate and customary market participant assumptions. In addition, we make certain assumptions in allocating shared assets and liabilities to individual reporting units in determining the carrying value of each reporting unit. Changes in forecasted cash flows or the discount rate would affect the estimated fair values of our reporting units and could result in a goodwill impairment charge in a future period.

No goodwill impairments were identified during the years ended December 31, 2014, 2013 or 2012.

We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of an intangible asset exceeds the related estimated undiscounted future cash flows, an impairment to write the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset, and applying a risk-adjusted discount rate. No material impairments of our intangible assets were identified during the years ended December 31, 2014, 2013 and 2012. See Note 8 for further information regarding our goodwill and intangible assets.

(f)Warranty Reserves

We provide a standard twelve month warranty on all instruments sold. We recognize the cost of instrument warranties in cost of product revenue at the time revenue is recognized based on the estimated cost to repair the instrument over its warranty period. Cost of product revenue reflects not only estimated warranty expense for instruments sold in the current period, but also any changes in estimated warranty expense for the portion of the aggregate installed base that is under warranty. Estimated warranty expense is based on a variety of inputs, including historical instrument performance in the customers’ environment, historical costs incurred in servicing instruments and projected instrument reliability. Should actual service rates or costs differ from our estimates, revisions to the estimated warranty liability would be required. The liability for warranties is included in accrued liabilities in the accompanying consolidated balance sheets.

(g)Income Taxes

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. While we consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, a reduction to the deferred tax asset would be charged to income in the period such determination was made.

We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes.

Significant judgment is required in determining our worldwide provision for income taxes and our income tax filings are regularly under audit by tax authorities. Any audit result differing from amounts recorded would increase or decrease income in the period that we determine such adjustment is likely. Interest expense and penalties associated with the underpayment of income taxes are included in income tax expense. See Note 11 for additional information regarding income taxes.

(h)Taxes Remitted to Governmental Authorities by IDEXX on Behalf of Customer

We calculate, collect from our customers, and remit to governmental authorities sales, value added and excise taxes assessed by governmental authorities in connection with revenue-producing transactions with our customers. We report these taxes on a net basis and do not include these tax amounts in revenue or cost of product or service revenue.

(i)Revenue Recognition

We recognize revenue when four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales price is fixed or determinable; and (iv)collectability is reasonably assured. Revenue-generating transactions generally fall into one of the following categories of revenue recognition:

· Revenue from substantially all U.S. distributors is recognized upon delivery to the distributor because title and risk of loss remains with IDEXX until the product is delivered. Effective December 31, 2014, we did not renew our existing contracts with our key U.S. distribution partners and transitioned to an all-direct sales strategy for our rapid assay test kits and instrument consumables.  We recognize revenue for the remainder of our customers, including most distributors outside of the U.S., when the product is delivered to the customer, except as noted below.

· We recognize revenue from the sales of instruments, non-cancelable software licenses and hardware systems upon installation and the customer’s acceptance of the instrument or system as we have no significant further obligations after this point in time.

· We recognize service revenue at the time the service is performed.

· We recognize revenue associated with extended maintenance agreements (“EMAs”) over the life of the contracts using the straight-line method, which approximates the expected timing in which applicable services are performed. Amounts collected in advance of revenue recognition are recorded as current or long-term deferred revenue based on the time from the balance sheet date to the future date of revenue recognition.

· We recognize revenue on certain instrument systems under rental programs over the life of the rental agreement using the straight-line method. Amounts collected in advance of revenue recognition are recorded as current or long-term deferred revenue based on the time from the balance sheet date to the future date of revenue recognition.

· We recognize revenue on practice management systems sales, where the system includes software that is considered more than incidental, either by allocating the revenue to each element of the sale based on relative fair values of the elements, including post-contract support when fair value for all elements is available, or by use of the residual method when only the fair value of the post-contract support is available. We recognize revenue for the system upon installation and customer acceptance and recognize revenue equal to the fair value of the post-contract support over the support period.

· Shipping costs reimbursed by the customer are included in revenue. These same costs are also included in cost of product revenue.

Multiple Element Arrangements (“MEAs”). Arrangements to sell products to customers frequently include multiple deliverables. Our most significant MEAs include the sale of one or more of the instruments from the IDEXX VetLab suite of analyzers, digital imaging systems or practice management software, combined with one or more of the following products: EMAs, consumables and reference laboratory diagnostic and consulting services. Practice management software is frequently sold with post-contract customer support and implementation services. Delivery of the various products or performance of services within the arrangement may or may not coincide. Delivery of our IDEXX VetLab instruments, digital imaging systems, and practice management software generally occurs at the onset of the arrangement. EMAs, consumables, and reference laboratory diagnostic and consulting services typically are delivered over future periods, generally one to six years. In certain arrangements, revenue recognized is limited to the amount invoiced or received that is not contingent on the delivery of products and services in the future.

We allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element. If available, we establish the selling price of each element based on vendor-specific objective evidence (“VSOE”), which represents the price charged for a deliverable when it is sold separately. We use third-party evidence (“TPE”) if VSOE is not available or best estimate of selling price if neither VSOE nor TPE is available. When these arrangements include a separately-priced EMA, we recognize revenue related to the EMA at the stated contractual price on a straight-line basis over the life of the agreement to the extent the separately stated price is substantive. If there is no stated contractual price for an EMA, or the separately stated price is not substantive, we allocate revenue to each element based on the relative selling price and recognize revenue when the elements have standalone value and the four criteria for revenue recognition, as discussed above, have been met for each element.

When arrangements within the scope of software revenue recognition guidance include multiple elements, we allocate revenue to each element based on relative fair value, when VSOE exists for all elements, or by using the residual method when there is VSOE for the undelivered elements but no such evidence for the delivered elements. Under the residual method, the fair value of the undelivered elements is deferred and the residual revenue is allocated to the delivered elements. Revenue is recognized on any delivered elements when the four criteria for revenue recognition have been met for each element. If VSOE does not exist for the undelivered element, all revenue from the arrangement is deferred until the earlier of the point at which such sufficient VSOE does exist or all elements of the arrangement have been delivered. We determine fair value based on amounts charged separately for the delivered and undelivered elements to similar customers in standalone sales of the specific elements.

Certain arrangements with customers include discounts on future sales of products and services. We apply judgment in determining whether future discounts are significant and incremental. When the future discount offered is not considered significant and incremental, we do not account for the discount as an element of the original arrangement. If the future discount is significant and incremental, we recognize that discount as an element of the original arrangement and allocate the discount to the other elements of the arrangement based on relative selling price. To determine whether a discount is significant and incremental, we look to the discount provided in comparison to standalone sales of the same product or service to similar customers, the level of discount provided on other elements in the arrangement, and the significance of the discount to the overall arrangement. If the discount in the MEA approximates the discount typically provided in standalone sales, that discount is not considered incremental.

Customer Programs. We record reductions to revenue related to customer marketing and incentive programs, which include end-user rebates and other volume-based incentives. Incentives may be provided in the form of IDEXX Points, credits or cash and are earned by end users upon achieving defined volume purchases or utilization levels or upon entering an agreement to purchase products or services in future periods. Our most significant customer programs are categorized as follows:

Customer Loyalty Programs. Our customer loyalty programs offer customers the opportunity to earn incentives on a variety of IDEXX products and services as those products and services are purchased and utilized. Revenue reductions related to customer loyalty programs are recorded based on the actual issuance of incentives, incentives earned but not yet issued and estimates of incentives to be earned in the future.

Up-Front Customer Loyalty Programs. Our up-front loyalty programs provide incentives to customers in the form of cash payments or IDEXX Points upon entering multi-year agreements to purchase annual minimum amounts of future products or services. If a customer breaches its agreement, it is required to refund a prorated portion of the up-front cash or IDEXX Points, among other things. These incentives are considered to be customer acquisition costs and are capitalized and recognized as a reduction to revenue over the term of the customer agreement. If these up-front incentives are subsequently utilized to purchase IDEXX VetLab instruments, digital imaging systems or Cornerstone practice management systems, product revenue and cost is deferred and recognized over the term of the customer agreement as products and services are provided to the customer. We monitor customer purchases over the term of their agreement to assess the realizability of our capitalized customer acquisition costs. For the years ended December 31, 2014, 2013 and 2012, impairments of customer acquisition costs were immaterial.

IDEXX InstrumentMarketing Programs. Our instrumentmarketing programs require the customer to enroll at the time of instrument purchase and offer customers the opportunity to earn incentives in future periods based on the volume of the products they purchase and utilize over the term of the program. These arrangements are considered MEAs in accordance with our revenue recognition policy stated above. Revenue reductions related to instrument marketing programs are recorded based on an estimate of customer purchase and utilization levels and the incentive the customer will earn over the term of the program. Our estimates are based on historical experience and the specific terms and conditions of the marketing program and require us to apply judgment to approximate future product purchases and utilization. Differences between our estimates and actual incentives earned are accounted for as a change in estimate. These differences were not material for the years ended December 31, 2014, 2013 and 2012.  

Reagent Rental Programs. Our reagent rental programs provide our customers the right to use our instruments in consideration for multi-year agreements to purchase annual minimum amounts of consumables. No instrument revenue is recognized at the time of instrument installation. We recognize a portion of the revenue allocated to the instrument concurrent with the future sale of consumables. We determine the amount of revenue allocated from the consumable to the instrument based on relative selling prices and determine the rate of instrument revenue recognition in proportion to the customer’s minimum volume commitment. The cost of the instrument is charged to cost of product revenue on a straight-line basis over the term of the minimum purchase agreement.

IDEXX Points may be applied against the purchase price of IDEXX products and services purchased in the future or applied to trade receivables due to us. IDEXX Points that have not yet been used by customers are classified as a liability until use or expiration occurs. We estimate the amount of IDEXX Points expected to expire, or breakage, based on historical expirations and we recognize the estimated benefit of breakage in proportion to actual redemptions of IDEXX Points by customers. On November 30 of each year, unused IDEXX Points earned before January 1 of the prior year generally expire and any variance from the breakage estimate is accounted for as a change in estimate. This variance was not material for the years ended December 31, 2014, 2013 and 2012.

Future market conditions and changes in product offerings may cause us to change marketing strategies to increase or decrease customer incentive offerings, possibly resulting in incremental reductions of revenue in future periods as compared to reductions in the current or prior periods. Additionally, certain customer programs require us to estimate, based on historical experience, and apply judgment to approximate the number of customers who will actually redeem the incentive. In determining estimated revenue reductions we utilize data supplied from distributors and collected directly from end users, which includes the volume of qualifying products purchased and the number of qualifying tests run as reported to us by end users via IDEXX SmartService, a secure Internet link that enables us to extract data and provide diagnostic service and support for certain IDEXX VetLab instruments through remote access. Differences between estimated and actual customer participation in programs may impact the amount and timing of revenue recognition.

Doubtful Accounts Receivable. We recognize revenue when collection from the customer is reasonably assured. We maintain allowances for doubtful accounts for potentially uncollectible receivables. We base our estimates on a detailed analysis of specific customer situations and a percentage of our accounts receivable by aging category. If the financial condition of our customers were to deteriorate, resulting in their inability to make payments, additional allowances might be required. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. We do not have any off-balance sheet credit exposure related to our customers.

(j)Research and Development Costs

Research and development costs, which consist of salaries, employee benefits, materials and external consulting and product development costs, are expensed as incurred. We evaluate our software research and development costs for capitalization after the technological feasibility of software and products containing software has been established. No costs were capitalized during the years ended December 31, 2014, 2013 and 2012.

(k)Advertising Costs

Advertising costs, which are recognized as sales and marketing expense in the period in which they are incurred, were $1.2 million, $1.5 million and $1.1 million for the years ended December 31, 2014, 2013 and 2012, respectively.

(l)Legal Costs

Legal costs are considered period costs and accordingly are expensed in the year services are provided.

(m)Share-Based Compensation

We provide for various forms of share-based compensation awards to our employees and non-employee directors. With the exception of stock options, the fair value of our awards is equal to the closing stock price of IDEXX common stock on the date of grant. We calculate the fair value of our stock option awards using the Black-Scholes-Merton option-pricing model. Share-based compensation expense is recognized net of estimated forfeitures, on a straight-line basis over the requisite service period of the award. See Note 4 for additional information regarding share-based compensation.

(n)Self-Insurance Accruals

We self-insure costs associated with workers’ compensation and health and general welfare claims incurred by our U.S. employees up to certain limits. The insurance company provides insurance for claims above these limits. Claim liabilities are recorded for estimates of the loss that we will ultimately incur on reported claims, as well as estimates of claims that have been incurred but not yet reported. Such liabilities are based on individual coverage, the average time from when a claim is incurred to the time it is paid and judgments about the present and expected levels of claim frequency and severity. Estimated claim liabilities could be significantly affected if future occurrences and claims differ from these assumptions and historical trends. Estimated claim liabilities are included in accrued liabilities in the accompanying consolidated balance sheets.

(o)Earnings per Share

Basic earnings per share is computed by dividing net income attributable to IDEXX Laboratories, Inc. stockholders by the weighted average number of shares of common stock and vested deferred stock units outstanding during the year. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and assumed issuance of unvested restricted stock units and unvested deferred stock units using the treasury stock method unless the effect is anti-dilutive. The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options, the total unrecognized compensation expense for unvested share-based compensation awards and the excess tax benefits resulting from share-based compensation tax deductions in excess of the related expense recognized for financial reporting purposes, would be used to purchase our common stock at the average market price during the period. Vested deferred stock units outstanding are included in shares outstanding for basic and diluted earnings per share because the associated shares of our common stock are issuable for no cash consideration, the number of shares of our common stock to be issued is fixed and issuance is not contingent. See Note 4 for additional information regarding deferred stock units.

(p)Foreign Currency

The functional currency of all but two of our subsidiaries is their local currency. Assets and liabilities of these foreign subsidiaries are translated to the U.S. dollar using the exchange rate in effect at the balance sheet date. Revenue and expense accounts are translated to the U.S. dollar using the exchange rate at the date which those elements are recognized, and where it is impractical to do so, an average exchange rate in effect during the period is used to translate those elements. Cumulative translation gains and losses are shown in the accompanying consolidated balance sheets as a separate component of accumulated other comprehensive income (“AOCI”).  

Revenues and expenses denominated in a currency other than the respective subsidiary’s functional currency are recorded at the current exchange rate when the transaction is recognized. Monetary assets and liabilities denominated in a currency other than the respective subsidiary’s functional currency are remeasured at each balance sheet date using the exchange rate in effect at each balance sheet date. These foreign currency gains and losses are included in general and administrative expenses. We recognized aggregate foreign currency losses of $2.0 million, less than $0.1 million and $0.2 million for the years ended December 31, 2014, 2013 and 2012, respectively.

(q)Derivative Instruments and Hedging

We recognize all derivative instruments, including our foreign currency exchange contracts and interest rate swap agreements, on the balance sheet at fair value at the balance sheet date. Derivative instruments that do not qualify for hedge accounting treatment must be recorded at fair value through earnings. To qualify for hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. If a derivative instrument qualifies for hedge accounting, changes in the fair value of the derivative instrument from the effective portion of the hedge are deferred in AOCI, net of tax, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We immediately record in earnings the extent to which a hedge instrument is not effective in achieving offsetting changes in fair value. We de-designate derivative instruments from hedge accounting when the likelihood of the hedged transaction occurring becomes less than probable. For de-designated instruments, the gain or loss from the time of de-designation through maturity of the instrument is recognized in earnings. Any gain or loss in AOCI at the time of de-designation is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

We enter into master netting arrangements with the counterparties to our derivative transactions which permit outstanding receivables and payables to be offset in the event of default. Our derivative contracts do not require either party to post cash collateral. We elect to present our derivative assets and liabilities in the accompanying consolidated balance sheets on a gross basis. All cash flows related to our foreign currency exchange contracts and interest rate swaps are classified as operating cash flows, which is consistent with the cash flow treatment of the underlying items being hedged. See Note 16 for additional information regarding our derivative and hedging instruments.

(r)Fair Value Measurements

U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

The Company has certain financial assets and liabilities that are measured at fair value on a recurring basis, certain nonfinancial assets and liabilities that may be measured at fair value on a nonrecurring basis and certain financial assets and liabilities that are not measured at fair value in our consolidated balance sheets but for which we disclose the fair value. The fair value disclosures of these assets and liabilities are based on a three-level hierarchy, which is defined as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Our foreign currency exchange contracts and interest rate swap agreements are measured at fair value on a recurring basis in our accompanying consolidated balance sheets. We measure the fair value of our foreign currency exchange contracts classified as derivative instruments using an income approach, based on prevailing market forward rates less the contract rate multiplied by the notional amount. The product of this calculation is then adjusted for counterparty risk. We measure the fair value of our interest rate swaps classified as derivative instruments using an income approach, utilizing a discounted cash flow analysis based on the terms of the contract and the interest rate curve adjusted for counterparty risk.

The amount outstanding under our unsecured revolving credit facility, notes receivable and long-term debt are measured at carrying value in our accompanying consolidated balance sheets though we disclose the fair value of these financial instruments. We determine the fair value of the amount outstanding under our credit facility, notes receivable and long-term debt using an income approach, utilizing a discounted cash flow analysis based on current market interest rates for debt issues with similar remaining years to maturity, adjusted for applicable credit risk. Our credit facility and long-term debt are valued using Level 2 inputs. The estimated fair value of our credit facility approximates its carrying value. At December 31, 2014, the estimated fair value and carrying value of our long-term debt were $367.3 million and $350.0 million, respectively. As of December 31, 2013, the carrying value of our long-term debt approximated its fair value. During the year ended December 31, 2014, we disposed of notes receivable representing a strategic investment in a privately held company. As of December 31, 2013, these notes receivable had a carrying value that approximated their fair value of $5.1 million and were valued using Level 3 inputs. See Note 3 for further information regarding the disposition of the notes receivable during June 2014.

(s)Comprehensive Income

We report all changes in equity during a period, resulting from net income and transactions or other events and circumstances from non-owner sources, in a financial statement for the period in which they are recognized. We have chosen to retrospectively present comprehensive income, which encompasses net income, foreign currency translation adjustments and the difference between the cost and the fair market value of investments in debt and equity securities, forward currency exchange contracts and interest rate swap agreements, in the consolidated statements of comprehensive income. See Note 18 for information about the effects on net income of significant amounts reclassified out of each component of AOCI for the years ended December 31, 2014 and 2013. We consider the foreign currency cumulative translation adjustment to be permanently invested and, therefore, have not provided income taxes on those amounts.

(t)Concentrations of Risk

Financial Instruments. Financial instruments that potentially subject us to concentrations of credit risk are principally cash, cash equivalents, accounts and notes receivable and derivatives. To mitigate such risk with respect to cash and cash equivalents, we place our cash with highly-rated financial institutions, in non-interest bearing accounts that are insured by the U.S. government and money market funds invested in government securities.

Concentration of credit risk with respect to accounts receivable is limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our most significant customers and monitor the amounts owed to us, taking appropriate action when necessary. As a result, we believe that accounts receivable credit risk exposure is limited. We maintain an allowance for doubtful accounts, but historically have not experienced any material losses related to an individual customer or group of customers in any particular industry or geographic area.

To mitigate concentration of credit risk with respect to derivatives we enter into transactions with highly-rated financial institutions, enter into master netting arrangements with the counterparties to our derivative transactions and frequently monitor the credit worthiness of our counterparties. Our master netting arrangements reduce our exposure in that they permit outstanding receivables and payables with the counterparties to our derivative transactions to be offset in the event of default. We have not incurred such losses and consider the risk of counterparty default to be minimal.

Inventory. If we are unable to obtain adequate quantities of the inventory we need to sell our products, we could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on our results of operations. Many of the third parties that provide us with the instruments we sell and certain components, raw materials and consumables used in or with our products are obtained from sole or single source suppliers. Some of the products that we purchase from these sources are proprietary or complex in nature, and, therefore, cannot be readily or easily replaced by alternative sources.

Customers. Our largest customers are our U.S. distributors of our products in the CAG segment. Our two largest CAG distributors are Henry Schein Animal Health Supply, LLC (“Henry Schein”) and MWI Veterinary Supply (“MWI”). Henry Schein accounted for 8% of our 2014 consolidated revenue and 9% of our 2013 and 2012 consolidated revenue, and 2% and 7% of our net accounts receivable at December 31, 2014 and 2013. MWI accounted for 8% of our 2014, 2013 and 2012 consolidated revenue, respectively, and 8% and 11% of our net accounts receivable at December 31, 2014 and 2013, respectively. Effective January 1, 2015, most U.S. distributors are no longer our customers as  a result of our transition to an all-direct sales strategy in the U.S.

(u)New Accounting Pronouncements Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an amendment which will replace most of the existing revenue recognition guidance within U.S. GAAP. The core principle of this guidance is that an entity should recognize revenue for the transfer of goods or services to customers in an amount that it expects to be entitled to receive for those goods or services. In doing so, companies will be required to make certain judgments and estimates, including identifying contract performance obligations, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price among separate performance obligations. Additionally, the amendment requires disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, significant judgments reached in the application of the guidance and assets recognized from the costs to obtain or fulfill a contract. Effective for the Company beginning on January 1, 2017, the amendment allows for two methods of adoption, a full retrospective method or a modified retrospective approach with the cumulative effect recognized at the date of initial application. Early adoption is not permitted. We are in the process of determining the method of adoption and the impact of this amendment on our consolidated financial statements.

In August 2014, the FASB issued an amendment that requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The amendments in this update provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for one year after the date that the financial statements are issued and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this update apply to all entities and are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. This amendment is not expected to have a material impact on our financial statements.

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Share-Based Compensation (Schedule Of Restricted Stock Unit Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Outstanding as of December 31, 2013	336
Granted	98
Vested	(122)
Forfeited	(23)
RSUs Outstanding as of December 31, 2014	289
Weighted Average Grant-Date Fair Value of Beginning Balance of Outstanding Awards as of December 31, 2013	$ 76.67
Weighted Average Grant-Date Fair Value, Granted	$ 122.92
Weighted Average Grant-Date Fair Value of Awards Vested	$ 64.71
Weighted Average Grant-Date Fair Value of Awards Forfeited	$ 89.25
Weighted Average Grant-Date Fair Value of Ending Balance of Outstanding Awards as of December 31, 2014	$ 96.47
Restricted Stock Units Expected To Vest, Reduced For Estimated Forfeitures [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs Outstanding as of December 31, 2014	267
Weighted Average Grant-Date Fair Value of Ending Balance of Outstanding Awards as of December 31, 2014	$ 95.97

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Segment Reporting (Summary Of Revenue By Product And Service Category) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Revenue	$ 351,959	$ 383,523	$ 390,122	$ 360,203	$ 354,073	$ 338,297	$ 352,583	$ 332,106	$ 1,485,807	$ 1,377,058	$ 1,293,338
CAG Segment [Member]
Segment Reporting Information [Line Items]
Revenue									1,236,855	1,150,169	1,072,211
CAG Segment [Member] | CAG Diagnostics Recurring Revenue [Member]
Segment Reporting Information [Line Items]
Revenue									1,053,410	973,886	896,449
CAG Segment [Member] | Vetlab Consumables [Member]
Segment Reporting Information [Line Items]
Revenue									341,397	312,457	278,818
CAG Segment [Member] | VetLab Service and Accessories [Member]
Segment Reporting Information [Line Items]
Revenue									53,383	50,675	48,056
CAG Segment [Member] | Rapid Assay Products [Member]
Segment Reporting Information [Line Items]
Revenue									165,647	169,547	162,232
CAG Segment [Member] | Reference Laboratory Diagnostic And Consulting Services [Member]
Segment Reporting Information [Line Items]
Revenue									492,983	441,207	407,343
CAG Segment [Member] | CAG Diagnostic Capital - Instruments [Member]
Segment Reporting Information [Line Items]
Revenue									79,626	83,492	90,177
CAG Segment [Member] | Customer Information Managment and Digital Imaging Systems [Member]
Segment Reporting Information [Line Items]
Revenue									103,819	92,791	85,585
Water Segment [Member]
Segment Reporting Information [Line Items]
Revenue									94,725	87,959	84,680
LPD Segment [Member]
Segment Reporting Information [Line Items]
Revenue									127,388	113,811	111,308
Other Segment [Member]
Segment Reporting Information [Line Items]
Revenue									$ 26,839	$ 25,119	$ 25,139

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Debt (Narrative) (Details) (USD $)	12 Months Ended	1 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Jul. 26, 2011	May 09, 2013	Sep. 30, 2014	Jul. 31, 2014
Line of Credit Facility [Line Items]
Outstanding Credit Facility balance	$ 549,000,000	$ 549,000,000	$ 277,000,000
Credit Facility weighted average interest rates on outstanding balance	1.50%	1.50%	1.60%
Reduction of Credit Facility Availability	1,000,000	1,000,000	1,000,000
Credit Facility borrowings hedged	80,000,000	80,000,000
Consolidated Leverage Ratio Under Credit Facility & Note Payable, maximum	3.5
Long-term Debt	350,000,000	350,000,000
Fair value of mortgage at inception	367,300,000	367,300,000
Maximum [Member]
Line of Credit Facility [Line Items]
Commitment fees	0.35%
Minimum [Member]
Line of Credit Facility [Line Items]
Commitment fees	0.15%
Outdated Unsecured Short Term Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Borrowing capacity				450,000,000
Amended And Restated Unsecured Short Term Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Borrowing capacity					700,000,000
Credit Facility maturity date	Jun. 18, 2019
Minimum Credit Spread On LIBOR Or CDOR Borrowings [Member]
Line of Credit Facility [Line Items]
Credit spread during period	0.875%
Maximum Credit Spread On LIBOR Or CDOR Borrowings [Member]
Line of Credit Facility [Line Items]
Credit spread during period	1.375%
Maximum Credit Spread On Prime Rate Borrowings [Member]
Line of Credit Facility [Line Items]
Credit spread during period	0.375%
Senior Notes [Member]
Line of Credit Facility [Line Items]
Consolidated Leverage Ratio Under Credit Facility & Note Payable, maximum	3.50
Notes Payable			150,000,000			75,000,000	125,000,000
Debt Instrument, Interest Rate, Stated Percentage						3.72%
Series A Senior Note [Member]
Line of Credit Facility [Line Items]
Notes Payable	75,000,000	75,000,000	75,000,000				50,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.25%	3.25%	3.94%				3.32%
Debt Instrument, Term		7 years
Series B Senior Note [Member]
Line of Credit Facility [Line Items]
Notes Payable	75,000,000	75,000,000	75,000,000				75,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.72%	3.72%	4.04%				3.76%
Debt Instrument, Term		12 years
Uncommitted Shelf Facility [Member]
Line of Credit Facility [Line Items]
Notes Payable	$ 50,000,000	$ 50,000,000
Uncommitted Shelf Facility [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Term		15 years

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Preferred Stock

12 Months Ended

Dec. 31, 2014

Preferred Stock [Abstract]

Preferred Stock

NOTE 19.PREFERRED STOCK

Our board of directors is authorized, subject to any limitations prescribed by law, without further stockholder approval, to issue from time to time up to 500,000 shares of Preferred Stock, $1.00 par value per share (“Preferred Stock”), in one or more series. Each such series of Preferred Stock shall have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by the board of directors, which may include, among others, dividend rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights and preemptive rights. There are no shares of Preferred Stock outstanding as of December 31, 2014.

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Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Abstract]
U.S. federal statutory rate	35.00%	35.00%	35.00%
State income tax, net of federal tax benefit	1.50%	1.50%	1.50%
International income taxes	(7.00%)	(4.60%)	(3.80%)
Domestic manufacturing exclusions	(1.20%)	(1.40%)	(1.50%)
Research and development credit	(1.30%)	(2.30%)
Other, net	(0.80%)	0.50%	0.40%
Effective tax rate	26.20%	28.70%	31.60%

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Goodwill And Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets, Net [Abstract]

Schedule Of Intangible Assets Other Than Goodwill

	December 31, 2014				December 31, 2013
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
Patents	$	4,871	$	4,308	$	9,547	$	8,619
Product rights (1)		36,912		20,657		38,670		25,796
Customer-related intangible assets (2)		88,494		40,933		82,940		38,800
Noncompete agreements		1,125		382		7,131		6,229
	$	131,402	$	66,280	$	138,288	$	79,444

(1) Product rights comprise certain technologies, licenses and trade names acquired from third parties.

Customer-related intangible assets comprise customer lists and customer relationships acquired from third parties.

Schedule Of Expected Amortization Expense

	Amortization Expense
2015	$	10,678
2016		10,332
2017		9,438
2018		8,068
2019		6,560
Thereafter		20,046
	$	65,122

Schedule Of Goodwill

		CAG		Water		LPD		Other		Consolidated Total
Balance as of December 31, 2011	$	141,677	$	13,576	$	10,826	$	6,531	$	172,610
Impact of Changes in Foreign Currency Exchange Rates		1,478		603		303		-		2,384
Balance as of December 31, 2012	$	143,155	$	14,179	$	11,129	$	6,531	$	174,994
Business Combinations		250		-		6,491		-		6,741
Impact of Changes in Foreign Currency Exchange Rates		(1,997)		336		447		-		(1,214)
Balance as of December 31, 2013	$	141,408	$	14,515	$	18,067	$	6,531	$	180,521
Business Combinations		13,077		-		-		-		13,077
Impact of Changes in Foreign Currency Exchange Rates		(6,334)		(826)		(1,988)		-		(9,148)
Balance as of December 31, 2014	$	148,151	$	13,689	$	16,079	$	6,531	$	184,450

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Earnings Per Share

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 12.EARNINGS PER SHARE

The following is a reconciliation of shares outstanding for basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012  (in thousands):

	For the Years Ended December 31,
	2014	2013	2012
Shares outstanding for basic earnings per share:	50,047	53,159	54,985
Shares outstanding for diluted earnings per share:
Shares outstanding for basic earnings per share	50,047	53,159	54,985
Dilutive effect of share-based payment awards	704	826	1,170
	50,751	53,985	56,155

Certain options to acquire shares have been excluded from the calculation of shares outstanding for dilutive earnings per share because they were anti-dilutive. The following table presents information concerning those anti-dilutive options for the years ended December 31, 2014, 2013 and 2012(in thousands):

	For the Years Ended December 31,
	2014	2013	2012
Weighted average number of shares underlying anti-dilutive options	322	527	696