6 Notes to Equity and Liabilities of the Balance Sheet
6.1 ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable were non-interest-bearing and under normal circumstances had payment terms of no more than 30 days.
Accounts payable are listed in the table below.
|in 000’ €||12/31/2016||12/31/2015|
|Trade Accounts Payable||8,457||237|
Accrued expenses mainly included accrued personnel expenses for payments to employees and management amounting to € 2.8 million (December 31, 2015: € 3.1 million), provisions for outstanding invoices in the amount of € 2.6 million (December 31, 2015: € 2.7 million), external laboratory services in the amount of € 16.2 million (December 31, 2015: € 13.9 million), license payments in the amount of € 0.1 million (December 31, 2015: € 0.1 million), audit fees and other audit-related costs in the amount of € 0.1 million (December 31, 2015: € 0.1 million) and expenses for legal advice in the amount of € 1.0 million (December 31, 2015: € 0.4 million).
At the Company’s Annual General Meeting in June 2016, the Supervisory Board was authorized to appoint PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC GmbH), Munich, as the auditor.
In the 2016 financial year, PwC GmbH received compensation from MorphoSys in the amount of € 251,582, which included audit fees of € 190,000, fees for other audit-related and valuation services of € 36,832 for the review of the half-year-report as well as fees for other services of € 24,750. PwC GmbH did not provide any tax advisory services in 2016.
6.2 TAX PROVISIONS AND OTHER PROVISIONS
As of December 31, 2016, the Group recorded tax provisions and other provisions of € 4.9 million (2015: € 3.2 million for the entire Group).
Tax provisions mainly consisted of income tax expenses and other provisions included provisions for onerous contracts and lease obligations for office premises, which will not be used anymore in the future, as well as for obligations resulting from an onerous contract with a contract manufacturing organization for drug substances and drug products for clinical trial use.
As of December 31, 2016, tax provisions and other provisions were uncertain in their amount and are expected to be utilized in 2017.
The table below shows the development of tax provisions and other provisions in the 2016 financial year.
|in 000’ €||01/01/2016||Additions||Utilized||Released||12/31/2016|
6.3 DEFERRED REVENUES
Deferred revenues are payments received from customers for which the services have not been rendered. The table below shows the development of this line item.
|in 000’ €||2016||2015|
|Prepayments Received in the Fiscal Year||17,441||18,133|
|Revenue Recognised through Release of Prepayments in line with Services Performed in the Fiscal Year||(19,043)||(72,378)|
6.4 OTHER LIABILITIES
Other liabilities exclusively consisted of the deferred amount of the rent-free period for the building located at Semmelweisstraße 7, Planegg, as agreed in the lease contract. This item is released over the contractually agreed minimum rent period.
The current portion amounting to € 0.1 million of this liability was included in the item accounts payable and accrued expenses.
6.5 STOCKHOLDERS’ EQUITY
6.5.1 COMMON STOCK
As of December 31, 2016, the Company’s common stock, including treasury stock, had increased by € 2,622,088 to € 29,159,770 from its level of € 26,537,682 as of December 31, 2015. Each no-par value share is entitled to one vote. The increase in common stock resulted entirely from the new shares created in the context of the capital increase in November 2016.
As of December 31, 2016, the Company held 396,010 shares of treasury stock amounting to € 14,648,212 which represents a decrease of € 1,179,734 compared to December 31, 2015 (434,670 shares, € 15,827,946). This decrease was the result of the transfer of 90,955 treasury stock to the Management Board and Senior Management under the 2012 long-term incentive plan (LTI plan) totaling € 3,361,697. The vesting period for this LTI program expired on April 1, 2016 and October 1, 2016 and provided beneficiaries a six-month option to receive a total of 90,955 shares. The decline in treasury stock was partly offset by MorphoSys’s repurchase of 52,295 of its own shares on the stock exchange. The repurchase totaling € 2,179,963 was carried out at a weighted-average share price of € 41.69. Brokerage fees for the repurchase totaled € 1,999. Shares of treasury stock can be used for the purposes named in the authorizations of the Annual General Meetings on May 19, 2011 and May 23, 2014, and particularly for any existing or future employee participation schemes and/or to finance acquisitions. The shares may also be redeemed.
6.5.2 AUTHORIZED CAPITAL
On November 15, 2016, a total of 2,622,088 shares were issued from Authorized Capital 2014-I in the context of a cash capital increase, which fully exhausted the previous Authorized Capital 2014-I. The cash capital increase was recorded in the commercial register on November 17, 2016. Compared to December 31, 2015, the number of authorized ordinary shares declined by 2,622,088 from 13,206,421 to 10,584,333.
6.5.3 CONDITIONAL CAPITAL
Compared to December 31, 2015, the number of ordinary shares of conditional capital decreased from 7,086,000 to 6,752,698. The Annual General Meeting on June 2, 2016 cancelled the Conditional Capital 2003-II amounting to € 36,000 and the Conditional Capital 2011-I amounting to € 6,600,000. At the same time, the Annual General Meeting created the Conditional Capital 2016-I amounting to € 5,307,536 and Conditional Capital 2016-III amounting to € 995,162.
6.5.4 TREASURY STOCK
In the years 2016 and 2015, the Group repurchased own shares. The composition and development of this line item is listed in the following table.
|Number of Shares||Value|
|As of 12/31/2010||79,896||9,774|
|Purchase in 2011||84,019||1,747,067|
|As of 12/31/2011||163,915||1,756,841|
|Purchase in 2012||91,500||1,837,552|
|As of 12/31/2012||255,415||3,594,393|
|Purchase in 2013||84,475||2,823,625|
|As of 12/31/2013||339,890||6,418,018|
|Purchase in 2014||111,000||7,833,944|
|As of 12/31/2014||450,890||14,251,962|
|Purchase in 2015||88,670||5,392,931|
|Transfer in 2015||(104,890)||(3,816,947)|
|As of 12/31/2015||434,670||15,827,946|
|Purchase in 2016||52,295||2,181,963|
|Transfer in 2016||(90,955)||(3,361,697)|
|As of 12/31/2016||396,010||14,648,212|
In 2016, the weighted average price of the repurchased shares was € 41.69 per share (2015: € 60.79 per share). Treasury shares are recognized at acquisition cost.
6.5.5 ADDITIONAL PAID-IN CAPITAL
As of December 31, 2016, additional paid-in capital amounted to € 428,361,175 (December 31, 2015: € 319,394,322). The total increase of € 108,966,853 resulted mainly from the capital increase in November 2016 (€ 109,971,132, net of costs for raising equity totaling € 2,778,652). In addition, additional paid-in capital increased by € 2,357,418 from personnel expenses resulting from share-based payments. The reclassification of treasury shares of € 3,361,697 in the context of the allocation of shares under the 2012 performance-based share plan had a compensating effect.
In 2015, additional paid-in capital increased by € 1,018,602 and resulted from the exercise of convertible bonds granted (€ 1,276,590) and personnel expenses resulting from share-based payments (€ 3,558,959). The reclassification of treasury shares of € 3,816,947 in the context of the allocation of shares under the 2011 performance-based share plan had a compensating effect.
6.5.6 REVALUATION RESERVE
As of December 31, 2016, the revaluation reserve amounted to € 136,101 (December 31, 2015: € –202,158). The increase amounting to a total of € 338,259 arose from a change in the unrealized gains and losses on available-for-sale securities and bonds of € –21,154 and the change in unrealized gains of € 359,413 from cash flow hedges.
6.5.7 ACCUMULATED INCOME/DEFICIT
The consolidated net loss of € –60,382,776 was offset in accumulated deficit. The accumulated income from € 32,834,107 in 2015 inverted to an accumulated deficit of € –27,548,669 in 2016.