UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 2017September 27, 2020
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 1-5353
TELEFLEX INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware

23-1147939
Delaware
23-1147939
(State or other jurisdiction of

incorporation or organization)
(I.R.S. employer

identification no.)
550 E. Swedesford Rd., Suite 400 Wayne, PA 19087
550 E. Swedesford Rd., Suite 400, Wayne, PA19087
(Address of principal executive offices)(Zip Code)
(Address of principal executive offices and zip code)
(610) 225-6800
(Registrant’s telephone number, including area code)
(None)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesCommon Stock, par value $1.00 per share
TFXNew York Stock 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   x    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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Large accelerated filerxAccelerated filer¨
Non-accelerated filer¨ (Do not check if a smaller reporting company)Smaller reporting company¨
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ¨    No  x
The registrant had 45,049,267 shares of common stock, par value $1.00 per share, outstanding as of October 30, 2017.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  ☒
The registrant had 46,566,715 shares of common stock, par value $1.00 per share, outstanding as of October 27, 2020.




TELEFLEX INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 1, 2017SEPTEMBER 27, 2020
TABLE OF CONTENTS
Page
Item 1:
2
2
3
4
5
6
7
Item 2:
3621
Item 3:
4731
Item 4:
4731
Item 1:
4932
Item 1A:
4932
Item 2:
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Item 3:
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Item 4:
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Item 5:
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Item 6:
5034
5135




1

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars and shares in thousands, except per share)
Net revenues$534,703
 $455,648
 $1,551,197
 $1,354,094
Cost of goods sold239,476
 214,046
 710,126
 630,946
Gross profit295,227
 241,602
 841,071
 723,148
Selling, general and administrative expenses163,771
 139,797
 486,674
 419,128
Research and development expenses21,194
 15,067
 59,299
 42,892
Restructuring (credits) charges(92) 3,027
 13,723
 12,876
Gain on sale of assets—
 (2,776) —
 (4,173)
Income from continuing operations before interest, loss on extinguishment of debt and taxes110,354
 86,487
 281,375
 252,425
Interest expense21,264
 12,888
 58,884
 38,579
Interest income(286) (115) (616) (324)
Loss on extinguishment of debt—
 —
 5,593
 19,261
Income from continuing operations before taxes89,376
 73,714
 217,514
 194,909
Taxes on income from continuing operations9,978
 7,514
 19,404
 18,134
Income from continuing operations79,398
 66,200
 198,110
 176,775
Operating (loss) income from discontinued operations(3,749) 260
 (4,597) (116)
(Benefit) taxes on income (loss) from discontinued operations(1,366) 138
 (1,675) (119)
(Loss) income from discontinued operations(2,383) 122
 (2,922) 3
Net income77,015
 66,322
 195,188
 176,778
Less: Income from continuing operations attributable to noncontrolling interest—
 —
 —
 464
Net income attributable to common shareholders$77,015
 $66,322
 $195,188
 $176,314
Earnings per share available to common shareholders:       
Basic:       
Income from continuing operations$1.76
 $1.50
 $4.40
 $4.09
Income (loss) from discontinued operations(0.05) 0.01
 (0.06) —
Net income$1.71
 $1.51
 $4.34
 $4.09
Diluted:       
Income from continuing operations$1.70
 $1.40
 $4.24
 $3.69
Loss from discontinued operations(0.05) —
 (0.06) —
Net income$1.65
 $1.40
 $4.18
 $3.69
Dividends per share$0.34
 $0.34
 $1.02
 $1.02
Weighted average common shares outstanding       
Basic45,035
 44,045
 44,975
 43,081
Diluted46,587
 47,446
 46,673
 47,824
Amounts attributable to common shareholders:       
Income from continuing operations, net of tax$79,398
 $66,200
 $198,110
 $176,311
(Loss) income from discontinued operations, net of tax(2,383) 122
 (2,922) 3
Net income$77,015
 $66,322
 $195,188
 $176,314
The accompanying notes are an integral part of the condensed consolidated financial statements.


TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in thousands)
Net income$77,015
 $66,322
 $195,188
 $176,778
Other comprehensive income (loss), net of tax:       
Foreign currency translation, net of tax of $(8,429), $(327), $(26,910), and $(2,978) for the three and nine month periods, respectively43,345
 (130) 156,012
 11,088
Pension and other postretirement benefit plans adjustment, net of tax of $(479), $(737), $(1,476) $(2,007) for the three and nine month periods, respectively743
 1,430
 2,337
 3,914
Derivatives qualifying as hedges, net of tax of $141, $(393), $(1,029), and $212 for the three and nine month periods, respectively(243) (223) 4,918
 761
Other comprehensive income (loss), net of tax:43,845
 1,077
 163,267
 15,763
Comprehensive income120,860
 67,399
 358,455
 192,541
Less: comprehensive income attributable to noncontrolling interest—
 24
 —
 421
Comprehensive income attributable to common shareholders$120,860
 $67,375
 $358,455
 $192,120
The accompanying notes are an integral part of the condensed consolidated financial statements.


TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 October 1, 2017 December 31, 2016
 (Dollars in thousands)
ASSETS   
Current assets   
Cash and cash equivalents$1,017,573
 $543,789
Accounts receivable, net306,472
 271,993
Inventories, net382,417
 316,171
Prepaid expenses and other current assets51,599
 40,382
Prepaid taxes8,690
 8,179
Assets held for sale—
 2,879
Total current assets1,766,751
 1,183,393
Property, plant and equipment, net374,461
 302,899
Goodwill1,886,157
 1,276,720
Intangible assets, net1,606,943
 1,091,663
Deferred tax assets2,020
 1,712
Other assets44,401
 34,826
Total assets$5,680,733
 $3,891,213
LIABILITIES AND EQUITY   
Current liabilities   
Current borrowings$77,250
 $183,071
Accounts payable85,419
 69,400
Accrued expenses88,095
 65,149
Current portion of contingent consideration591
 587
Payroll and benefit-related liabilities88,091
 82,679
Accrued interest13,430
 10,450
Income taxes payable12,857
 7,908
Other current liabilities8,912
 8,402
Total current liabilities374,645
 427,646
Long-term borrowings2,172,805
 850,252
Deferred tax liabilities471,667
 271,377
Pension and postretirement benefit liabilities116,441
 133,062
Noncurrent liability for uncertain tax positions14,238
 17,520
Other liabilities58,460
 52,015
Total liabilities3,208,256
 1,751,872
Commitments and contingencies
 
Convertible notes - redeemable equity component—
 1,824
Mezzanine equity—
 1,824
Total shareholders' equity2,472,477
 2,137,517
Total liabilities and shareholders' equity$5,680,733
 $3,891,213
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
 (Dollars and shares in thousands, except per share)
Net revenues$628,301 $648,319 $1,825,977 $1,914,410 
Cost of goods sold298,977 293,244 884,657 883,127 
Gross profit329,324 355,075 941,320 1,031,283 
Selling, general and administrative expenses171,673 209,291 510,662 631,712 
Research and development expenses29,218 27,984 85,978 82,729 
Restructuring and impairment (credits) charges(3,659)1,268 16,692 20,348 
Gain on sale of assets0 (1,089)0 (3,828)
Income from continuing operations before interest and taxes132,092 117,621 327,988 300,322 
Interest expense16,652 19,545 47,773 62,995 
Interest income(214)(470)(956)(1,281)
Income from continuing operations before taxes115,654 98,546 281,171 238,608 
(Benefit) taxes on income from continuing operations(951)(130,383)21,971 (115,567)
Income from continuing operations116,605 228,929 259,200 354,175 
Operating loss from discontinued operations(29)(9)(11)(1,291)
Tax benefit on operating loss from discontinued operations(11)(9)(4)(317)
Loss from discontinued operations(18)0 (7)(974)
Net income$116,587 $228,929 $259,193 $353,201 
Earnings per share:  
Basic:  
Income from continuing operations$2.51 $4.95 $5.58 $7.67 
Loss from discontinued operations0 0 0 (0.02)
Net income$2.51 $4.95 $5.58 $7.65 
Diluted:  
Income from continuing operations$2.46 $4.85 $5.48 $7.53 
Loss from discontinued operations0 0 0 (0.02)
Net income$2.46 $4.85 $5.48 $7.51 
Weighted average common shares outstanding  
Basic46,530 46,248 46,451 46,156 
Diluted47,333 47,176 47,269 47,051 
The accompanying notes are an integral part of the condensed consolidated financial statements.

2



TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCOMPREHENSIVE INCOME
(Unaudited)
 Nine Months Ended
 October 1, 2017 September 25, 2016
 (Dollars in thousands)
Cash flows from operating activities of continuing operations:   
Net income$195,188
 $176,778
Adjustments to reconcile net income to net cash provided by operating activities:   
Loss (income) from discontinued operations2,922
 (3)
Depreciation expense42,390
 40,272
Amortization expense of intangible assets63,976
 47,486
Amortization expense of deferred financing costs and debt discount3,940
 8,506
Loss on extinguishment of debt5,593
 19,261
Gain on sale of assets—
 (4,173)
Fair value step up of acquired inventory sold10,442
 —
Changes in contingent consideration(109) 1,672
Stock-based compensation14,519
 12,540
Deferred income taxes, net(15,682) (8,699)
Other(13,559) (15,132)
Changes in operating assets and liabilities, net of effects of acquisitions and disposals:   
Accounts receivable6,428
 4,316
Inventories(20,257) (5,617)
Prepaid expenses and other current assets(4,009) 1,184
Accounts payable and accrued expenses24,128
 17,390
Income taxes receivable and payable, net3,798
 5,817
   Net cash provided by operating activities from continuing operations319,708
 301,598
Cash flows from investing activities of continuing operations:   
Expenditures for property, plant and equipment(53,977) (35,912)
Proceeds from sale of assets6,332
 9,792
Payments for businesses and intangibles acquired, net of cash acquired(1,010,711) (14,040)
Net cash used in investing activities from continuing operations(1,058,356) (40,160)
Cash flows from financing activities of continuing operations:   
Proceeds from new borrowings1,963,500
 671,700
Reduction in borrowings(747,576) (714,487)
Debt extinguishment, issuance and amendment fees(19,114) (8,958)
Net proceeds from share based compensation plans and the related tax impacts4,739
 7,647
Payments to noncontrolling interest shareholders—
 (464)
Payments for contingent consideration(245) (133)
Payments for acquisition of noncontrolling interest—
 (9,231)
Dividends paid(45,905) (43,980)
Net cash provided by (used in) financing activities from continuing operations1,155,399
 (97,906)
Cash flows from discontinued operations:   
Net cash used in operating activities(1,140) (1,451)
Net cash used in discontinued operations(1,140) (1,451)
Effect of exchange rate changes on cash and cash equivalents58,173
 (988)
Net increase in cash and cash equivalents473,784
 161,093
Cash and cash equivalents at the beginning of the period543,789
 338,366
Cash and cash equivalents at the end of the period$1,017,573
 $499,459
    
Non cash financing activities of continuing operations:   
Settlement and exchange of convertible notes with common or treasury stock                                $53,207
 $35,205
Acquisition of treasury stock associated with settlement and exchange of convertible note hedge and warrant agreements                   $127,158
 $85,909
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in thousands)
Net income$116,587 $228,929 $259,193 $353,201 
Other comprehensive income (loss), net of tax:  
Foreign currency translation, net of tax of $6,957, $(7,045), $1,671, and $(8,804) for the three and nine month periods, respectively20,632 (39,894)20,087 (27,562)
Pension and other postretirement benefit plans adjustment, net of tax of $(303), $(494), $(1,229), and $(1,330) for the three and nine months periods, respectively1,037 1,560 4,071 4,248 
Derivatives qualifying as hedges, net of tax of $(184), $64, $252, and $146 for the three and nine months periods, respectively1,454 (260)(3,458)(102)
Other comprehensive income (loss), net of tax:23,123 (38,594)20,700 (23,416)
Comprehensive income$139,710 $190,335 $279,893 $329,785 
The accompanying notes are an integral part of the condensed consolidated financial statements.

3


TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYBALANCE SHEETS
(Unaudited)

 Common Stock 
Additional
Paid In
Capital
 Retained
Earnings		 Accumulated Other Comprehensive Loss Treasury Stock Total
 Shares Dollars    Shares Dollars 
 (Dollars and shares in thousands, except per share)
Balance at December 31, 201645,814
 $45,814
 $506,800
 $2,194,593
 $(438,717) 1,741
 $(170,973) $2,137,517
Net income   
  
 195,188
  
  
  
 195,188
Cash dividends ($1.02 per share) 
  
  
 (45,905)  
  
  
 (45,905)
Other comprehensive income 
  
  
  
 163,267
  
  
 163,267
Settlements of convertible notes927
 927
 (48,375)  
  
 (503) 52,279
 4,831
Settlements of note hedges associated with convertible notes and warrants    127,158
     622
 (127,155) 3
Shares issued under compensation plans119
 119
 15,050
  
  
 (46) 2,319
 17,488
Deferred compensation 
  
  
  
  
 (2) 88
 88
Balance as of October 1, 201746,860
 $46,860
 $600,633
 $2,343,876
 $(275,450) 1,812
 $(243,442) $2,472,477
 September 27, 2020December 31, 2019
 (Dollars in thousands)
ASSETS  
Current assets  
Cash and cash equivalents$347,480 $301,083 
Accounts receivable, net390,476 418,673 
Inventories526,125 476,557 
Prepaid expenses and other current assets101,452 97,943 
Prepaid taxes55,028 12,076 
Total current assets1,420,561 1,306,332 
Property, plant and equipment, net445,242 430,719 
Operating lease assets102,924 113,160 
Goodwill2,363,837 2,245,305 
Intangible assets, net2,228,930 2,156,285 
Deferred tax assets4,915 5,572 
Other assets46,879 52,447 
Total assets$6,613,288 $6,309,820 
LIABILITIES AND EQUITY  
Current liabilities  
Current borrowings$91,750 $50,000 
Accounts payable96,917 102,916 
Accrued expenses117,493 100,466 
Current portion of contingent consideration4,744 148,090 
Payroll and benefit-related liabilities98,828 115,981 
Accrued interest22,547 5,514 
Income taxes payable10,873 6,692 
Other current liabilities32,095 33,396 
Total current liabilities475,247 563,055 
Long-term borrowings2,035,823 1,858,943 
Deferred tax liabilities486,350 439,558 
Pension and postretirement benefit liabilities55,795 82,719 
Noncurrent liability for uncertain tax positions12,562 10,294 
Noncurrent contingent consideration16,872 71,818 
Noncurrent operating lease liabilities91,379 101,372 
Other liabilities203,057 202,741 
Total liabilities3,377,085 3,330,500 
Commitments and contingencies
Total shareholders' equity3,236,203 2,979,320 
Total liabilities and shareholders' equity$6,613,288 $6,309,820 
The accompanying notes are an integral part of the condensed consolidated financial statements.


4

TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months Ended
September 27, 2020September 29, 2019
(Dollars in thousands)
Cash flows from operating activities of continuing operations:  
Net income$259,193 $353,201 
Adjustments to reconcile net income to net cash provided by operating activities:  
Loss from discontinued operations7 974 
Depreciation expense51,329 47,286 
Intangible asset amortization expense118,649 112,661 
Deferred financing costs and debt discount amortization expense3,191 3,313 
Gain on sale of assets0 (3,828)
Fair value step up of acquired inventory sold1,707 0 
Changes in contingent consideration(54,585)40,894 
Impairment of long-lived assets0 6,911 
Stock-based compensation14,759 20,037 
Deferred income taxes, net2,600 (140,963)
Payments for contingent consideration(79,771)(26,092)
Interest benefit on swaps designated as net investment hedges(14,488)(13,820)
Other(15,703)(7,142)
Changes in assets and liabilities, net of effects of acquisitions and disposals:  
Accounts receivable35,546 (41,221)
Inventories(38,096)(53,259)
Prepaid expenses and other assets9,393 (13,184)
Accounts payable, accrued expenses and other liabilities(4,243)31,631 
Income taxes receivable and payable, net(48,000)(28,232)
   Net cash provided by operating activities from continuing operations241,488 289,167 
Cash flows from investing activities of continuing operations:  
Expenditures for property, plant and equipment(62,369)(83,797)
Proceeds from sale of assets400 3,135 
Payments for businesses and intangibles acquired, net of cash acquired(266,843)(1,265)
Net interest proceeds on swaps designated as net investment hedges9,986 8,330 
Net cash used in investing activities from continuing operations(318,826)(73,597)
Cash flows from financing activities of continuing operations:  
Proceeds from new borrowings1,013,807 25,000 
Reduction in borrowings(788,807)(185,500)
Debt extinguishment, issuance and amendment fees(8,440)(4,964)
Net proceeds from share based compensation plans and the related tax impacts11,177 14,014 
Payments for contingent consideration(64,135)(112,006)
Dividends paid(47,384)(47,071)
Net cash provided by (used in) financing activities from continuing operations116,218 (310,527)
Cash flows from discontinued operations:  
Net cash (used in) provided by operating activities(540)2,651 
Net cash (used in) provided by discontinued operations(540)2,651 
Effect of exchange rate changes on cash and cash equivalents8,057 (7,311)
Net increase (decrease) in cash and cash equivalents46,397 (99,617)
Cash and cash equivalents at the beginning of the period301,083 357,161 
Cash and cash equivalents at the end of the period$347,480 $257,544 
The accompanying notes are an integral part of the condensed consolidated financial statements.
5

TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)

Common StockAdditional
Paid In
Capital		Retained
Earnings		Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
Balance at December 31, 201947,536 $47,536 $616,980 $2,824,916 $(344,392)1,182 $(165,720)$2,979,320 
Cumulative effect adjustment resulting from the adoption of new accounting standards(791)(791)
Net income131,150 131,150 
Cash dividends ($0.34 per share)(15,767)(15,767)
Other comprehensive loss(20,327)(20,327)
Shares issued under compensation plans24 24 (3,074)(37)1,748 (1,302)
Deferred compensation383 (5)358 741 
Balance at March 29, 202047,560 47,560 614,289 2,939,508 (364,719)1,140 (163,614)3,073,024 
Net income11,456 11,456 
Cash dividends ($0.34 per share)(15,791)(15,791)
Other comprehensive income17,904 17,904 
Shares issued under compensation plans35 35 10,516 (3)175 10,726 
Deferred compensation0 (1)83 83 
Balance at June 28, 202047,595 47,595 624,805 2,935,173 (346,815)1,136 (163,356)3,097,402 
Net income116,587 116,587 
Cash dividends ($0.34 per share)(15,826)(15,826)
Other comprehensive income23,123 23,123 
Shares issued under compensation plans102 102 14,671 (1)13 14,786 
Deferred compensation(228)— 359 131 
Balance at September 27, 202047,697 $47,697 $639,248 $3,035,934 $(323,692)1,135 $(162,984)$3,236,203 
Common StockAdditional
Paid In
Capital		Retained
Earnings		Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
Balance at December 31, 201847,248 $47,248 $574,761 $2,427,599 $(341,085)1,232 $(168,545)$2,539,978 
Cumulative effect adjustment resulting from the adoption of new accounting standards(1,321)(1,321)
Net income40,897 40,897 
Cash dividends ($0.34 per share)(15,650)(15,650)
Other comprehensive income396 396 
Shares issued under compensation plans75 75 3,094 (40)2,029 5,198 
Deferred compensation127 (4)253 380 
Balance at March 31, 201947,323 47,323 577,982 2,451,525 (340,689)1,188 (166,263)2,569,878 
Net income83,375 83,375 
Cash dividends ($0.34 per share)(15,697)(15,697)
Other comprehensive income14,782 14,782 
Shares issued under compensation plans77 77 12,252 (2)177 12,506 
Balance as of June 30, 201947,400 47,400 590,234 2,519,203 (325,907)1,186 (166,086)2,664,844 
Net income228,929 228,929 
Cash dividends ($0.34 per share)(15,724)(15,724)
Other comprehensive income(38,594)(38,594)
Shares issued under compensation plans63 63 13,400 (2)58 13,521 
Balance as of September 29, 201947,463 $47,463 603,634 $2,732,408 $(364,501)1,184 (166,028)2,852,976 

The accompanying notes are an integral part of the condensed consolidated financial statements.
6

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)





Note 1 — Basis of presentation
The accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated and its subsidiaries (“we,” “us,” “our,”“our" and “Teleflex” and the “Company”) are prepared on the same basis as its annual consolidated financial statements.
In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair statement of the financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("GAAP") and with Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X, which sets forth the instructions for the form and content of presentation of financial statements included in Form 10-Q. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.estimates particularly as it relates to estimates reliant on forecasts and other assumptions impacted by the COVID-19 pandemic, which are described in more detail in the "Risks and Uncertainties" section below. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.
In accordance with applicable accounting standards and as permitted by Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements do not include all of the information and footnote disclosures that are required to be included in the Company'sour annual consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from the Company's audited financial statements, but, as permitted by Rule 10-01 of Regulation S-X, does not include all disclosures required by GAAP for complete financial statements. Accordingly, the Company'sTherefore, our quarterly condensed consolidated financial statements should be read in conjunction with the Company'sour consolidated financial statements included in itsour Annual Report on Form 10-K for the year ended December 31, 2016.2019. For the three and nine months ended September 27, 2020 intangible asset amortization expense of $21.2 million and $63.2 million, respectively, is included within costs of good sold. For the three and nine months ended September 29, 2019, we reclassified intangible asset amortization expense of $20.6 million and $62.1 million, respectively, from selling, general and administrative expenses to cost of goods sold for comparability.
Risks and Uncertainties
We are subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict due to the rapidly evolving environment and continued uncertainties created by the COVID-19 pandemic. Among other things, the response to the COVID-19 pandemic has had the effect of reducing the number of elective procedures being carried out by our customers, thereby reducing demand for products used in elective procedures, while creating an increase in demand for products used in the treatment of patients with COVID-19. The COVID-19 pandemic has significantly impacted economic activity and markets around the world through government-mandated and self-imposed shut-downs in many countries, which were implemented to protect individuals and control the spread of COVID-19. If the pandemic continues and conditions worsen, it could negatively impact our business, results of operations, financial condition and liquidity in numerous ways, including, but not limited to, lower revenues in our product categories dependent on elective procedures; further disruption in the manufacture of our products including increased manufacturing and distribution costs; extended delays in or defaults on payments of outstanding receivables; and increased volatility and pricing in capital markets. Further, the COVID-19 pandemic may cause disruption to our suppliers or their suppliers and/or the distribution of our products, whether through our direct sales force or our distributors.
The severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on our employees, contractors, suppliers, customers and other business partners, all of which are uncertain and cannot be predicted. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact our financial condition, liquidity, or results of operations is uncertain.
Note 2 — NewRecently issued accounting standards
In May 2014,June 2016, the Financial Accounting Standards Board ("FASB"), in a joint effort with the International Accounting Standards Board ("IASB"), issued new accounting guidance that changes the methodology to clarify the principlesbe used to measure credit losses for recognizing revenue. This new guidance, collectively with related guidance provided by the FASB, is designed to enhance the comparability of revenue recognition practices across entities, industries, jurisdictionscertain financial instruments and capital markets, and will affect any entity that enters into contracts with customers or enters into contracts for the transfer of nonfinancialfinancial assets, unless those contracts are within the scope of other standards.including trade receivables. The new guidance establishes principles for reporting information to usersrequires the recognition of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle of the new guidance is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amountallowance that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company will adopt this standard in the first quarter 2018 and expects to use the modified retrospective methodcurrent estimate of adoption by recognizing the cumulative effect of adopting this guidance as an adjustment to the Company's opening balance of retained earnings at January 1, 2018. Although the Company's evaluation of this guidance is ongoing, based on its assessment to date, the Company believes that the adoption of this guidance will not have a material impact on its consolidated results of operations, cash flows and financial position.
In February 2016, the FASB issued guidance that will change the requirements for accounting for leases. Under the new guidance, lessees (including lessees under both leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; the guidance provides certain practical expedients. The Company is currently evaluating this guidance to determine its impact on the Company’s consolidated results of operations, cash flows and financial position.
In March 2016, the FASB issued new guidance designed to simplify several aspects of the accounting for share-based payment transactions, including, among other things, guidance related to accounting for income taxes,

7

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



modificationcredit losses expected to be incurred over the life of the criteria for classificationfinancial asset, based not only on historical experience and current conditions, but also on reasonable forecasts. The main objective of awards as either equity awards or liability awards where an employer withholds shares from an employee's share-based award for tax withholding purposes, and classification on the statement of cash flows of cash payments to a tax authority by an employer that withholds shares from an employee's award for tax withholding purposes. The Company adopted this guidance as of January 1, 2017. The Company has applied the new guidance requiring recognition of excess tax deficienciesis to provide financial statement users with more useful information in making decisions about the expected credit losses on financial instruments and tax benefitsother commitments to extend credit held by a reporting entity at each reporting date. Under previous guidance, an entity reflects credit losses on financial assets measured on an amortized cost basis only when it is probable that losses have been incurred, generally considering only past events and current conditions in determining the income statement, rather than in additional paid-in-capital, as previously required. The adoption ofincurred loss. We adopted the new standard increased net incomeon January 1, 2020 using a modified retrospective transition approach by recognizing a cumulative-effect adjustment of $0.8 million to reduce our opening balance of retained earnings as of the adoption date. Prior period amounts have not been adjusted and cash flows from operating activities by $1.5 million and $5.9 million and increased diluted earnings per share by $0.03 and $0.13 for the three and nine months ended October 1, 2017, respectively. The Company will continue to estimate forfeitures of share-based awards at the time of grant, rather than recognize actual forfeitures as they occur, as permitted under the new guidance.reflect our historical accounting.
In August 2016,December 2019, the FASB issued new guidance with regard to eight specific issues pertainingthat simplifies various aspects of accounting for income taxes including those related to the classificationstep-up in the tax basis of certain cash receiptsgoodwill, intraperiod tax allocations and cash payments within the statementinterim period effects of cash flows.changes in tax laws or rates. The new guidance is effective for fiscal years andbeginning after December 15, 2020, including interim periods within those fiscal years, beginning after December 15, 2017.years. Early adoption is permitted. The new guidance should generally be adopted using a retrospective transition method for each period presented. The Company believes that its adoptionmajority of the modifications under the new guidance will not have a material impact on its cash flows.
In October 2016, the FASB issued new guidance requiring companies to recognize the income tax effects of intra-entity sales and transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period in which the transfer occurs. Previously, recognition was prohibited until the assets were sold to an outside party or otherwise utilized. The guidance is effective for annual periods beginning after December 15, 2017. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption. The Company ison January 1, 2021. We are currently evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on itsour consolidated financial position or results of operations.
In January 2017, the FASB issued new guidance to clarify the definition of a “business,” with the objective of assisting entities in evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or as an acquisition of a business. The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwillstatements and consolidation. The guidance generally defines a business as an integrated set of activities and assets (collectively referred to as a “set”) that is capable of being conducted and managed for the purpose of providing a return to investors or other owners, members, or participants. The guidance further provides that, to be considered a business, a set must meet specified requirements. However, the guidance also states that, if substantially all of the fair value of gross assets acquired (subject to specified exceptions) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business and no further analysis is required. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance permits early adoption, and the Company adopted this guidance during the fourth quarter 2017. The Company does not anticipate that the guidance will have a material impact on its consolidated financial position or results of operations.
In January 2017, the FASB issued guidance to simplify the quantitative test for goodwill impairment. Under current guidance, if a reporting unit’s carrying value exceeds its fair value, the entity must determine the implied value of goodwill. This determination is made by deducting the fair value of a reporting unit’s identifiable assets and liabilities from the fair value of the reporting unit as a whole as if the reporting unit had just been acquired. Under the new guidance, a determination of the implied value of goodwill will no longer be required; a goodwill impairment will be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The revised guidance is effective for fiscal years, and any interim goodwill impairment tests within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any impairment tests performed after January 1, 2017. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated financial position or results of operations.related disclosures.
In March 2017,2020, the FASB issued guidance for employersSEC adopted final rules that sponsor defined benefit pension or other postretirement benefit plans. The guidance requires that these employers disaggregate specified components of net periodic pension cost and net periodic postretirement benefit cost (collectively, "net benefit cost"). Specifically, the guidance generally requires employers to present in the income statement the service cost component of net benefit cost in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


statement separately from the service cost component and outside a subtotal of income from operations. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and generally is required to be applied retrospectively. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated results of operations.
In August 2017, the FASB issued guidance with the objective of improvingamend the financial reportingdisclosure requirements for subsidiary issuers and guarantors of hedging relationshipsregistered debt securities in Rule 3-10 of Regulation S-X. The SEC amended its financial disclosure requirements for companies that conduct registered debt offerings involving subsidiaries as either issuers or guarantors and affiliates whose securities are pledged as collateral. The SEC narrowed the circumstances that require separate financial statements of subsidiary issuers and guarantors and streamlined the alternative disclosures required in lieu of those statements. The SEC replaced the requirement for separate financial statements of affiliates whose securities are pledged as collateral for registered securities with requirements similar to better portraythose adopted for subsidiary issuers and guarantors. The new disclosures may be located, in all cases, outside of the economic results of an entity's risk management activities in its financial statements. The new guidance provides for changes to current designation and measurement guidance for qualifying hedging relationships and to the method of presenting hedge results. In addition,rule is effective January 4, 2021, but earlier compliance is permitted. We adopted the new guidance includes certain targeted improvements to easerule during the applicationfirst quarter of current guidance related to2020. The disclosures are now located within the assessmentLiquidity and Capital Resources section of hedge effectiveness. The new guidance is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impactItem 2 - Management's Discussion and Analysis of the adoptionFinancial Condition and Results of this guidance on its consolidated results of operations and financial position.Operations.
From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by the Companyus as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. The Company hasWe have assessed the recently issued guidance that is not yet effective and, unless otherwise indicated above, believes the new guidance will not have a material impact on the its consolidated results of operations, cash flows or financial position.
Note 3 — Acquisitions- Net revenues
On October 2, 2017,We primarily generate revenue from the Company acquired NeoTract, Inc.sale of medical devices including single use disposable devices and, to a lesser extent, reusable devices, instruments and capital equipment. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; this occurs upon the transfer of control of the products. Generally, transfer of control to the customer occurs at the point in time when our products are shipped from the manufacturing or distribution facility. For our Original Equipment and Development Services ("NeoTract"OEM"). See Note 16, Subsequent events, for additional information related segment, most revenue is recognized over time because the OEM segment generates revenue from the sale of custom products that have no alternative use and we have an enforceable right to this acquisition.
Duringpayment to the extent that performance has been completed. We market and sell products through our direct sales force and distributors to customers within the following end markets: (1) hospitals and healthcare providers; (2) other medical device manufacturers; and (3) home care providers such as pharmacies, which comprised 87%, 10% and 3% of consolidated net revenues, respectively, for the nine months ended October 1, 2017,September 27, 2020. Revenue is measured as the Company completed three acquisitions, allamount of which were accountedconsideration we expect to receive in exchange for as business combinations.
Tianjin Medis Medical Device Co.
On September 15, 2017,transferring goods. With respect to the Company acquired certain assets from one of its contract manufacturers, Tianjin Medis Medical Co. LTD ("Tianjin Medis"), consisting of substantially all ofcustom products sold in the assets used by Tianjin Medis to manufacture a line ofOEM segment, revenue is measured using the Company's laryngeal masks. The aggregate consideration for the assets was $21.3 million, which included payments of $16.0 million and $5.3 million in estimated fair value of contingent consideration. The assets acquired include goodwill and finite-lived intangible assets (consisting of intellectual property, customer lists and a non-compete agreement) of $14.7 million and $6.9 million, respectively.
Pyng
On April 3, 2017, the Company completed the acquisition of Pyng Medical Corp ("Pyng"), a medical device company that develops and markets sternal intraosseous infusion products, which complement the Company's anesthesia product portfolio. The Company acquired all of the issued and outstanding common shares of Pyng utilizing available cash. The aggregate consideration was $17.9 million, net of cash acquired. The assets acquired include goodwill and finite-lived intangible assets (primarily intellectual property and customer lists) of $13.0 million and $5.5 million, respectively. The goodwill resultingunits produced output method. Payment is generally due 30 days from the acquisition primarily reflects synergies currently expected to be realized from the integrationdate of the acquired business.invoice.


8

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



Vascular Solutions
On February 17, 2017, the Company completed the acquisition of Vascular Solutions, Inc. (“Vascular Solutions”) pursuant to a merger transaction. Vascular Solutions is a medical device company that develops and markets productsThe following table disaggregates revenue by global product category for use in minimally invasive coronary and peripheral vascular procedures. In connection with the merger, subject to specified exclusions, each share of common stock of Vascular Solutions (each, a "Share" and collectively, the “Shares”) was converted into the right to receive $56.00 per Share in cash, without interest and subject to applicable withholding tax. In addition, each outstanding option or similar right to purchase Shares issued under the Vascular Solutions’ Stock Option and Stock Award Plan (the "Company Options") was cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the total number of Shares subject to such Company Option immediately prior to the acquisition and (ii) the excess, if any, of $56.00 over the exercise price of such Company Option. The aggregate consideration paid by the Company in connection with the merger was approximately $975.5 million, net of cash acquired.
For the three and nine months ended October 1, 2017September 27, 2020 and September 29, 2019.
Three Months EndedNine Months Ended
September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in thousands)
Vascular access$160,052 $148,681 $475,252 $446,225 
Anesthesia75,647 87,123 216,204 253,098 
Interventional93,187 106,883 275,704 314,852 
Surgical82,223 92,621 224,928 274,911 
Interventional urology81,773 73,629 196,114 201,312 
OEM49,399 55,444 168,618 166,110 
Other (1)
86,020 83,938 269,157 257,902 
Net revenues (2)
$628,301 $648,319 $1,825,977 $1,914,410 
(1) Includes revenues generated from sales of our respiratory and urology products (other than interventional urology products).
(2) The product categories listed above are presented on a global basis, while each of our reportable segments other than the Company incurred $0.1 millionOEM reportable segment are defined based on the geographic location of its operations; the OEM reportable segment operates globally. Each of the geographically based reportable segments include net revenues from each of the non-OEM product categories listed above.
Note 4 — Acquisitions
On February 18, 2020, we acquired IWG High Performance Conductors, Inc. (HPC), a privately-held original equipment manufacturer of minimally invasive medical products and $8.3 million, respectively, in transaction expenses associated with the Vascular Solutionshigh performance conductors, for $260.0 million. The acquisition, which are included in selling, general and administrative expenses in the condensed consolidated statement of income. For the three months ended October 1, 2017, the Company recorded post acquisition revenue and operating profit of $43.9 million and $4.8 million, respectively, related to Vascular Solutions. For the nine months ended October 1, 2017, the Company recorded post acquisition revenue and operating loss of $110.5 million and $6.8 million, respectively. Financial information of Vascular Solutions is presented within the "All Other" category in the Company's presentation of segment information.
The Vascular Solutions acquisitioncomplements our OEM product portfolio, was financed utilizingusing borrowings under our revolving credit facility. Based on the Amended and Restated Credit Agreement, dated January 20, 2017 (the "Credit Agreement"), which is described in Note 7.
The following table presents thepreliminary purchase price allocation, among the assets acquired principally consist of customer relationships of $139.0 million, intellectual property of $40.0 million and liabilities assumedgoodwill of $107.1 million. The intangible assets are being amortized over a useful life of 20 years. Goodwill arising from the acquisition represents costs synergies, revenue growth attributable to anticipated increased market penetration from acquired products and future customers and is not tax deductible.
Note 5 — Restructuring and impairment (credits) charges
2020 Workforce reduction plan
During the second quarter of 2020, we committed to a workforce reduction designed to improve profitability and reduce cost primarily by streamlining certain sales and marketing functions in our EMEA segment and certain manufacturing operations in our OEM segment. The workforce reduction was initiated to further align the business with respectour high growth strategic objectives. We estimate that we will incur aggregate pre-tax restructuring charges of $10 million to the Vascular Solutions acquisition:
 (Dollars in thousands)
Assets 
Current assets$63,867
Property, plant and equipment46,616
Intangible assets539,250
Goodwill522,614
Other assets728
Total assets acquired1,173,075
Less: 
Current liabilities15,079
Deferred tax liabilities182,472
Liabilities assumed197,551
Net assets acquired$975,524
The Company is continuing to evaluate the initial purchase price allocations,$13 million, consisting primarily of termination benefits, all of which will result in future cash outlays. This program will be substantially complete during 2020 and further adjustments may be necessary as a result most of the Company's assessment of additional information related to the fair values of the assets acquired and liabilities assumed, primarily deferred tax liabilities, certain intangible assets and goodwill. The goodwill resulting from the Vascular Solutions acquisition primarily reflects synergies currentlythese charges are expected to be realized fromincurred prior to the integrationend of the acquired businesses.2020.


9

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



Footprint realignment plans
The following table sets forth the components of identifiable intangible assets acquired and the ranges of the useful lives as of the date of the Vascular Solutions acquisition:
 Fair value Useful life range
 (Dollars in thousands) (Years)
Intellectual property248,200
 10- 20
In-process research and development ("IPR&D")15,600
 Indefinite
Trade names16,650
 20
Customer lists258,800
 25
Pro forma combined financial information 
The following unaudited pro forma combined financial information for the three and nine months ended October 1, 2017 and September 25, 2016, respectively, gives effect to the Vascular Solutions acquisition as if it was completed at the beginning of the earliest period presented. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually wouldWe have occurred under the ownership and management of the Company.
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars and shares in thousands, except per share)
Net revenue$534,703
 $497,253
 $1,574,021
 $1,475,950
Net income$76,194
 $63,578
 $209,630
 $136,493
Basic earnings per common share:       
Net income$1.69
 $1.44
 $4.66
 $3.17
Diluted earnings per common share:       
Net income$1.64
 $1.34
 $4.49
 $2.85
Weighted average common shares outstanding:       
Basic45,035
 44,045
 44,975
 43,081
Diluted46,587
 47,446
 46,673
 47,824
The unaudited pro forma combined financial information presented above includes the accounting effects of the Vascular Solutions business combination, including amortization charges from acquired intangible assets, adjustments for depreciation of property, plant and equipment; interest expense; the revaluation of inventory; and the related tax effects. The unaudited pro forma financial information also includes non-recurring charges specificallyongoing restructuring programs primarily related to the Vascular Solutions acquisitionrelocation of manufacturing operations to existing lower-cost locations and interest expenserelated workforce reductions (referred to as the 2019, 2018 and 2014 Footprint realignment plans). The following tables provide a summary of our cost estimates and other information associated with these ongoing Footprint realignment plans:
2019 Footprint realignment plan (3)
2018 Footprint realignment plan
2014 Footprint realignment plan (4)
Program expense estimates:(Dollars in millions)
Termination benefits$16 to $20$60 to $70$12 to $13
Other costs (1)
2 to 22 to 41 to 2
Restructuring charges18 to 2262 to 7413 to 15
Restructuring related charges (2)
40 to 4540 to 5938 to 40
Total restructuring and restructuring related charges$58 to $67$102 to $133$51 to $55
Other program estimates:
Expected cash outlays$55 to $63$99 to $127$42 to $46
Expected capital expenditures$27 to $33$19 to $23$25 to $26
Other program information:
Period initiatedFebruary 2019May 2018April 2014
Estimated period of substantial completion2022
2022 (5)
2022
Aggregate restructuring charges$14.6$59.1$13.5
Restructuring reserve:
Balance as of September 27, 2020$7.9$47.2$3.7
Restructuring related charges incurred:
Three Months Ended September 27, 2020$4.3$3.3$1.0
Nine Months Ended September 27, 2020$10.7$6.0$2.7
Aggregate restructuring related charges$17.3$13.2$35.0
(1)Includes facility closure, employee relocation, equipment relocation and outplacement costs.
(2)Restructuring related charges represent costs that are directly related to the programs and principally constitute costs to transfer manufacturing operations to the existing lower-cost locations, project management costs and accelerated depreciation. The 2018 Footprint realignment plan also includes a bridge loan facilitycharge associated with our exit from the facilities that was putis expected to be imposed by the taxing authority in placethe affected jurisdiction. Excluding this tax charge, substantially all of the restructuring related charges are expected to among other things, assistbe recognized within cost of goods sold.
(3)During the Company in financingsecond quarter of 2020, we refined the acquisition of Vascular Solutions.
The unaudited pro forma combined financial informationdisclosed ranges for the threeprogram expense and nine months ended September 25, 2016 reflects the historical results of Vascular Solutions for its three and nine months ended September 30, 2016, respectively, and the effectsother program estimates in consideration of the pro forma adjustments listed above.progress made to date as well as the actions remaining.
2016 acquisitions
(4)During the second quarter of 2020, we delayed the timing of substantial completion from our prior estimate of 2021 due to an extension in the development and qualification timeline, identified during the second quarter of 2020, for a component to be included in certain of our kits sold by our anesthesia business in North America. The Company madeshift in timing also resulted in an increase in the following acquisitions during 2016 (the "2016 acquisitions"), which, withtotal program cost estimate and related cash outlays and as a result, we increased the exception of its acquisitionhigh end of the outstanding noncontrolling interest in Teleflex Medical Private Limited, were accounted for as business combinations:ranges by $3 million. With respect to capital expenditures, we have also refined the range.
On September 2, 2016,(5)We accelerated the Company acquired certain assetstiming of CarTika Medical, Inc., ("CarTika"),substantial completion from our prior estimate of 2024 to take advantage of an original equipment manufacturer (OEM)opportunity we identified during the second quarter of catheters and other medical devices that complement2020 to accelerate the Company's OEM product portfolio.recognition of estimated savings.
Three Months Ended September 27, 2020
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2020 Workforce reduction plan$(471)$255 $(216)
2019 Footprint realignment plan(785)368 (417)
2018 Footprint realignment plan(3,006)83 (2,923)
Other restructuring programs (2)
(151)48 (103)
Restructuring (credits) charges$(4,413)$754 $(3,659)

10

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



Three Months Ended September 29, 2019
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2019 Footprint realignment plan$584 $38 $622 
2018 Footprint realignment plan315 74 389 
Other restructuring programs (3)
7 250 257 
Restructuring charges$906 $362 $1,268 
On July 1,
Nine Months Ended September 27, 2020
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2020 Workforce reduction plan$10,093 $255 $10,348 
2019 Footprint realignment plan367 459 826 
2018 Footprint realignment plan4,853 216 5,069 
Other restructuring programs (2)
(89)538 449 
Restructuring charges$15,224 $1,468 $16,692 

Nine Months Ended September 29, 2019
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2019 Footprint realignment plan$13,100 $68 $13,168 
2018 Footprint realignment plan(1,523)782 (741)
Other restructuring programs (3)
195 815 1,010 
Restructuring charges11,772 1,665 13,437 
Asset impairment charges0 6,911 6,911 
Restructuring and impairment charges$11,772 $8,576 $20,348 
(1) Other costs include facility closure, contract termination and other exit costs.
(2) Includes the program initiated during third quarter of 2019 as well as the 2016 and 2014 Footprint realignment plans.
(3) Includes the Company, which previously owned a 74% controlling interestprogram initiated during third quarter of 2019, the Vascular Solutions integration program (initiated in its Indian affiliate, Teleflex Medical Private Limited, acquired2017) as well as the remaining 26% ownership interest from the noncontrolling shareholders. Teleflex Medical Private Limited is part2016 and 2014 Footprint realignment plans.
Note 6 — Inventories
Inventories as of September 27, 2020 and December 31, 2019 consisted of the Company's Asia reportable operating segment. As this acquisition did not result in a change in the Company's control of the entity, the Company recognized the $7.5 million excess of the purchase price of the noncontrolling interest over its carrying value as equity.following:
During the second quarter 2016, the Company acquired certain assets of two medical device and supplies distributors in New Zealand.
 September 27, 2020December 31, 2019
 (Dollars in thousands)
Raw materials$135,059 $114,302 
Work-in-process73,375 71,479 
Finished goods317,691 290,776 
Inventories$526,125 $476,557 
The aggregate purchase price paid in connection with the 2016 acquisitions was $22.8 million. The results of operations of the acquired businesses and assets are included in the condensed consolidated statements of income from their respective acquisition dates. Pro forma information is not presented, as the operations of the acquired businesses are not significant to the overall operations of the Company.

11

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



Note 4 — Restructuring (credits) charges
The following tables provide information regarding restructuring (credits) charges recognized by the Company for the three and nine months ended October 1, 2017 and September 25, 2016:
Three Months Ended October 1, 2017         
 Termination Benefits Facility Closure Costs Contract Termination Costs Other Exit Costs Total
 (Dollars in thousands)
2017 Vascular Solutions integration program$(319) $—
 $—
 $58
 $(261)
2017 EMEA restructuring program(714) —
 —
 84
 (630)
2016 Footprint realignment plan274
 72
 —
 85
 431
2014 Footprint realignment plan197
 46
 —
 6
 249
Other restructuring programs (1)
8
 —
 104
 7
 119
Total restructuring (credits) charges$(554) $118
 $104
 $240
 $(92)
Three Months Ended September 25, 2016         
 Termination Benefits Facility Closure Costs Contract Termination Costs Other Exit Costs Total
 (Dollars in thousands)
2016 Other Restructuring programs$1,713
 $—
 $—
 $—
 $1,713
2016 Footprint realignment plan851
 —
 —
 74
 925
2014 Footprint realignment plan308
 —
 —
 6
 314
Other restructuring programs (2)
(88) 54
 107
 2
 75
Total restructuring charges$2,784
 $54
 $107
 $82
 $3,027
Nine Months Ended October 1, 2017         
 Termination Benefits Facility Closure Costs Contract Termination Costs Other Exit Costs Total
 (Dollars in thousands)
2017 Vascular Solutions integration program$4,534
 $—
 $—
 $92
 $4,626
2017 EMEA restructuring program5,822
 —
 —
 84
 5,906
2016 Footprint realignment plan1,099
 94
 (75) 214
 1,332
2014 Footprint realignment plan379
 60
 —
 7
 446
Other restructuring programs (3)
973
 58
 313
 69
 1,413
Total restructuring charges$12,807
 $212
 $238
 $466
 $13,723

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


Nine Months Ended September 25, 2016         
 Termination Benefits Facility Closure Costs Contract Termination Costs Other Exit Costs Total
 (Dollars in thousands)
2016 Other Restructuring programs$1,713
 $—
 $—
 $—
 $1,713
2016 Footprint realignment plan10,919
 —
 —
 360
 11,279
2014 Footprint realignment plan(118) —
 —
 17
 (101)
Other restructuring programs (4)
(487) $232
 $114
 126
 (15)
Total restructuring charges$12,027
 $232
 $114
 $503
 $12,876
(1)Other restructuring programs include the 2017 Pyng Integration program and the 2016 Other Restructuring programs. The Company committed to the 2017 Pyng Integration program, which relates to the integration of Pyng into Teleflex, during the second quarter 2017.

(2) Other restructuring programs include the 2015 Restructuring programs and the 2014 European Restructuring Plan.

(3) Other restructuring programs include the 2017 Pyng Integration program, the 2016 Other Restructuring programs, the 2015 Restructuring programs and the 2014 European Restructuring plan.

(4) Other restructuring programs include the 2014 European Restructuring Plan and the 2012 Restructuring program.
2017 Vascular Solutions Integration Program
During the first quarter 2017, the Company committed to a restructuring program related to the integration of Vascular Solutions into Teleflex. The program commenced in the first quarter 2017 and is expected to be substantially completed by the end of the second quarter 2018. The Company estimates that it will record aggregate pre-tax restructuring charges of $6.0 million to $7.5 million related to this program, of which $4.5 million to $5.3 million will constitute termination benefits, while $1.5 million to $2.2 million will relate to other exit costs, including employee relocation and outplacement costs. Additionally, the Company expects to incur $2.5 million to $3.0 million of restructuring related charges consisting primarily of retention bonuses offered to certain employees expected to remain with the Company after completion of the program. All of these charges will result in future cash outlays. As of October 1, 2017, the Company has a restructuring reserve of $1.7 million related to this program.
2017 EMEA Restructuring Program
During the first quarter 2017, the Company committed to a restructuring program to centralize certain administrative functions in Europe. The program commenced in the second quarter 2017 and is expected to be substantially completed by the end of 2018. The Company estimates that it will record aggregate pre-tax restructuring charges of $7.1 million to $8.5 million related to this program, almost all of which constitute termination benefits, and all of which will result in future cash outlays. As of October 1, 2017, the Company has a restructuring reserve of $6.0 million related to this program.
2016 Other Restructuring Programs
During 2016, the Company committed to programs designed to improve operating efficiencies and reduce costs. The programs involve the consolidation of certain global administrative functions and manufacturing operations. The programs commenced in the second half of 2016 and are expected to be substantially complete by the end of the first quarter 2018. The Company estimates that it will record aggregate pre-tax charges of $3.8 million to $4.7 million related to these programs, substantially all of which constitute termination benefits that will result in future cash outlays. Additionally, the Company expects to incur approximately $1.5 million of accelerated depreciation and other costs directly related to these programs, which the Company anticipates will be recognized in cost of goods sold. Approximately $1.0 million of these costs are expected to result in future outlays. As of October 1, 2017, the Company has a restructuring reserve of $0.8 million related to these programs.

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


2016 Footprint Realignment Plan
In 2016, the Company initiated a restructuring plan (the “2016 footprint realignment plan") designed to reduce costs, improve operating efficiencies and enhance the Company’s long term competitive position.  The plan involves the relocation of certain manufacturing operations, the relocation and outsourcing of certain distribution operations and a related workforce reduction at certain of the Company's facilities. These actions commenced in the first quarter of 2016 and are expected to be substantially completed by the end of 2018. The Company estimates that it will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2016 footprint realignment plan of between approximately $34 million to $44 million, of which an estimated $27 million to $31 million are expected to result in future cash outlays. Most of these charges, and the related cash outlays, are expected to be made prior to the end of 2018.
In addition to the restructuring charges shown in the tables above, the Company recorded charges related to the 2016 footprint realignment plan of $1.4 millionand $5.5 million for the three and nine months ended October 1, 2017, respectively, and $1.9 million and $4.2 million for the three and nine months ended September 25, 2016, respectively. The majority of these restructuring related charges in both periods constituted accelerated depreciation and other costs arising principally as a result of the transfer of manufacturing operations to new locations.
As of October 1, 2017, the Company has incurred restructuring charges in connection with the 2016 footprint realignment plan aggregating to $13.8 million. Additionally, as of October 1, 2017, the Company has incurred restructuring related charges aggregating to $12.0 million related to the 2016 footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations to new locations. These costs primarily were included in cost of goods sold. As of October 1, 2017, the Company has a restructuring reserve of $7.9 million related to this plan, the majority of which relates to termination benefits.
2014 Footprint Realignment Plan
In 2014, the Company initiated a restructuring plan (“the 2014 footprint realignment plan”) involving the consolidation of operations and a related reduction in workforce at certain facilities, and the relocation of manufacturing operations from certain higher-cost locations to existing lower-cost locations. These actions commenced in the second quarter 2014 and are expected to be substantially completed by the end of the first half of 2020. The Company estimates that it will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2014 footprint realignment plan of approximately $43 million to $48 million, of which an estimated $33 million to $38 million are expected to result in future cash outlays. The Company expects to incur $24 million to $30 million in aggregate capital expenditures under the plan.

In addition to the restructuring charges set forth in the tables above, the Company recorded charges related to the 2014 footprint realignment plan of $1.0 million and $3.1 million for the three and nine months ended October 1, 2017, respectively, and $2.5 million and $6.9 million for the three and nine months ended September 25, 2016, respectively. The majority of these restructuring related charges in both periods constituted accelerated depreciation and other costs arising principally as a result of the transfer of manufacturing operations to new locations.

As of October 1, 2017, the Company has incurred restructuring charges in connection with the 2014 footprint realignment plan aggregating to $11.5 million. Additionally, as of October 1, 2017, the Company has incurred restructuring related charges aggregating to $25.9 million related to the 2014 footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations from the existing locations to new locations. These restructuring related charges primarily were included in cost of goods sold. As of October 1, 2017, the Company has a restructuring reserve of $4.2 million in connection with the plan, all of which relates to termination benefits.

For additional information regarding the Company's restructuring programs, see Note 4 to the Company's consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2016.

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


Restructuring (credits) charges by reportable operating segment, and by all other operating segments in the aggregate, for the three and nine months ended October 1, 2017 and September 25, 2016 are set forth in the following table:
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in thousands) (Dollars in thousands)
Restructuring (credits) charges       
Vascular North America$606
 $960
 $1,715
 $5,474
Anesthesia North America220
 946
 1,031
 3,185
Surgical North America—
 277
 —
 257
EMEA(632) 89
 6,503
 3,012
OEM—
 187
 —
 191
All other(286) 568
 4,474
 757
Total restructuring (credits) charges$(92) $3,027
 $13,723
 $12,876
Note 5 — Inventories, net
Inventories as of October 1, 2017 and December 31, 2016 consisted of the following:
 October 1, 2017 December 31, 2016
 (Dollars in thousands)
Raw materials$98,322
 $65,319
Work-in-process60,020
 54,555
Finished goods224,075
 196,297
Inventories, net$382,417
 $316,171
Note 67 — Goodwill and other intangible assets net
The following table provides information relating to changes in the carrying amount of goodwill by reportable operating segment and by all other operating segments in the aggregate, for the nine months ended OctoberSeptember 27, 2020:
 AmericasEMEAAsiaOEMTotal
 (Dollars in thousands)
December 31, 2019$1,550,925 $475,772 $213,725 $4,883 $2,245,305 
Goodwill related to acquisitions0 0 0 107,127 107,127 
Currency translation adjustment(2,824)12,636 1,593 0 11,405 
September 27, 2020$1,548,101 $488,408 $215,318 $112,010 $2,363,837 
The gross carrying amount of, and accumulated amortization relating to, intangible assets as of September 27, 2020 and December 31, 2019 were as follows:
 Gross Carrying AmountAccumulated Amortization
 September 27, 2020December 31, 2019September 27, 2020December 31, 2019
 (Dollars in thousands)
Customer relationships$1,169,307 $1,021,852 $(408,372)$(367,585)
In-process research and development28,735 27,940 0 0 
Intellectual property1,394,676 1,351,990 (466,330)(402,340)
Distribution rights23,604 23,369 (19,829)(18,859)
Trade names566,532 563,315 (61,911)(50,718)
Non-compete agreements23,479 22,618 (20,961)(15,297)
 $3,206,333 $3,011,084 $(977,403)$(854,799)

Note 8 — Borrowings
Our borrowings at September 27, 2020 and December 31, 2019 were as follows:
 September 27, 2020December 31, 2019
 (Dollars in thousands)
Senior Credit Facility:  
Revolving credit facility, at a rate of 1.65% at September 27, 2020, due 2024$0 $300,000 
Term loan facility, at a rate of 1.65% at September 27, 2020, due 2024673,000 673,000 
4.875% Senior Notes due 2026400,000 400,000 
4.625% Senior Notes due 2027500,000 500,000 
4.25% Senior Notes due 2028500,000 0 
Securitization program, at a rate of 1.25% at September 27, 202075,000 50,000 
2,148,000 1,923,000 
Less: Unamortized debt issuance costs(20,427)(14,057)
 2,127,573 1,908,943 
Current borrowings(91,750)(50,000)
Long-term borrowings$2,035,823 $1,858,943 
4.25% Senior Notes due 2028
On May 27, 2020, we issued $500.0 million of 4.25% Senior Notes due 2028 (the "2028 Notes"). We will pay interest on the 2028 Notes semi-annually on June 1 2017:and December 1, commencing on December 1, 2020, at a rate of 4.25% per year. The 2028 Notes mature on June 1, 2028 unless earlier redeemed at our option, as described below, or purchased at the holder’s option under specified circumstances following a Change of Control or Event of
12
 Vascular
North America
Anesthesia
North America
Surgical
North America
EMEA
Asia OEM
All
Other
Total
 (Dollars in thousands)
Balance as of December 31, 2016$345,546

$141,253

$250,912

$290,041

$138,185
 $4,883

$105,900

$1,276,720
Goodwill related to acquisitions—

15,594

—

9,139

2,927
 —

522,614

550,274
Currency translation and other adjustments(1,590)
458

—

33,665

8,585
 —

18,045

59,163
Balance as of October 1, 2017$343,956
 $157,305
 $250,912
 $332,845
 $149,697
 $4,883
 $646,559
 $1,886,157


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



The following table provides information as of October 1, 2017 and December 31, 2016 regarding the gross carrying amount of, and accumulated amortization relating to, intangible assets:
 Gross Carrying Amount Accumulated Amortization
 October 1, 2017 December 31, 2016 October 1, 2017 December 31, 2016
 (Dollars in thousands)
Customer relationships$901,367
 $622,428
 $(269,447) $(239,055)
In-process research and development34,296
 16,532
 —
 —
Intellectual property778,292
 519,962
 (238,236) (203,390)
Distribution rights23,637
 23,021
 (16,663) (15,239)
Trade names408,362
 379,724
 (18,343) (13,974)
Non-compete agreements5,354
 2,692
 (1,676) (1,038)
 $2,151,308
 $1,564,359
 $(544,365) $(472,696)
Note 7 — Borrowings
The Company's borrowings at October 1, 2017 and December 31, 2016 were as follows:
 October 1, 2017 December 31, 2016
 (Dollars in thousands)
Senior Credit Facility:   
Revolving credit facility, at a rate of 3.24% at October 1, 2017, due 2022$841,000
 $210,000
Term loan facility, at a rate of 3.24% at October 1, 2017, due 2022721,000
 —
3.875% Convertible Senior Subordinated Notes due 2017—
 136,076
4.875% Senior Notes due 2026400,000
 400,000
5.25% Senior Notes due 2024250,000
 250,000
Securitization program, at a rate of 1.98% at October 1, 201750,000
 50,000

2,262,000
 1,046,076
Less: Unamortized debt discount on 3.875% Convertible Senior Subordinated Notes due 2017—
 (2,707)
Less: Unamortized debt issuance costs(11,945) (10,046)
 2,250,055

1,033,323
Current borrowings(77,250) (183,071)
Long-term borrowings$2,172,805
 $850,252
Amended and restated senior credit facility
On January 20, 2017, the Company entered into the Credit Agreement, which provides for a five year revolving credit facility of $1.0 billion and a term loan facility of $750.0 million. The obligations under the Credit Agreement are guaranteed (subject to certain exceptions and limitations) by substantially all of the material domestic subsidiaries of the Company and are secured by a lien on substantially all of the assets owned by the Company and each guarantor. The maturity date of the revolving credit facility under the Credit Agreement is January 20, 2022, and the term loan facility will mature on February 17, 2022.
At the Company’s option, loans under the Credit Agreement will bear interest at a rate equal to adjusted LIBOR plus an applicable margin ranging from 1.25% to 2.50% or at an alternate base rate, which generally is defined as the highest of (i) the publicly announced prime rate of JPMorgan Chase Bank, N.A., the administrative agent under the Credit Agreement, (ii) 0.5% above the federal funds rate and (iii) 1% above adjusted LIBOR for a one month interest period, plus an applicable margin ranging from 0.25% to 1.50%, in each case subject to adjustment based on the Company’s consolidated total leverage ratio (generally, Consolidated Total Funded Indebtedness,Default (each as defined in the

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


Credit Agreement, on indenture related to the date of determination to Consolidated EBITDA, as defined2028 Notes), coupled with a downgrade in the Credit Agreement, forratings of the four most recent fiscal quarters ending on2028 Notes, or preceding the dateupon our election to exercise its optional redemption rights, as described below. We incurred transaction fees of determination). Overdue loans will bear interest at the rate otherwise applicable to such loans plus 2.00%.
The Company is required to maintain a total consolidated leverage ratio of not more than 4.50 to 1.00 and a consolidated senior secured leverage ratio (generally, Consolidated Senior Secured Funded Indebtedness, as defined in the Credit Agreement, on the date of determination to Consolidated EBITDA for the four most recent quarters ending on or preceding the date of determination) of not more than 3.50 to 1.00. The Company is further required to maintain a consolidated interest coverage ratio (generally, Consolidated EBITDA for the four most recent fiscal quarters ending on or preceding the date of determination to Consolidated Interest Expense, as defined in the Credit Agreement, paid in cash for such period) of not less than 3.50 to 1.00.
The Company capitalized $12.0$8.4 million, related to transaction fees, including underwriters’ discounts and commissions, incurred in connection with the Credit Agreement. In addition, becauseoffering of the Company's entry into2028 Notes, which were recorded on the consolidated balance sheet as a reduction to long-term borrowings and are being amortized over the term of the 2028 Notes. We used the net proceeds from the offering to repay borrowings under our revolving credit facility.
Our obligations under the 2028 Notes are fully and unconditionally guaranteed, jointly and severally, by each of our existing and future 100% owned domestic subsidiaries that is a guarantor or other obligor under the Credit Agreement was considered a partial extinguishmentand by certain of our other 100% owned domestic subsidiaries.
At any time on or after June 1, 2023, we may, on one or more occasions, redeem some or all of the indebtedness under its previously outstanding credit agreement,2028 Notes at a redemption price of 102.125% of the Company recognizedprincipal amount of the 2028 Notes subject to redemption, declining, in annual increments of 1.0625%, to 100% of the principal amount on June 1, 2025, plus accrued and unpaid interest. In addition, at any time prior to June 1, 2023, we may, on one or more occasions, redeem some or all of the 2028 Notes at a lossredemption price equal to 100% of the principal amount of the 2028 Notes redeemed, plus a “make-whole” premium and any accrued and unpaid interest. The “make-whole” premium is the greater of (a) 1.0% of the principal amount of the 2028 Notes subject to redemption or (b) the excess, if any, over the principal amount of the 2028 Notes, of the present value, on extinguishmentthe redemption date, of debtthe sum of $0.4 million during(i) the first quarter 2017.
3.875% Convertible Senior Subordinated Notes
Exchange Transactions
On January 5, 2017, pursuant to separate, privately negotiated agreements betweenJune 1, 2023, optional redemption price plus (ii) all required interest payments on the Company2028 Notes through June 1, 2023, (other than accrued and certain holders (the "Holders") of its 3.875% Convertible Senior Subordinated Notes due 2017 (the "Convertible Notes"), the Company paid cash and common stock (the "Exchange Consideration")unpaid interest to the Holdersredemption date), generally computed using a discount rate equal to the yield to maturity of U.S. Treasury securities with a constant maturity for the period most nearly equal to the period from the redemption date to June 1, 2023 (unless the period is less than one year, in exchange for $91.7 millionwhich case the weekly average yield on traded U.S. Treasury securities adjusted to a constant maturity of one year will be used), plus 50 basis points.
In addition, at any time prior to June 1, 2023, we may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the Convertible2028 Notes, (the "Exchange Transactions"). The Exchange Consideration paidusing the proceeds of specified types of our equity offerings and subject to each of the Holders per $1,000 principal amount of Convertible Notes was equal to: (i) $1,000 in cash, (ii)specified conditions, at a number of shares of the Company's common stockredemption price equal to the amount104.25% of the conversion value of the Convertible Notes in excess of the $1,000 principal amount (the "Conversion Shares"), calculated on the basis of the average daily volume weighted average price per share of Company common stock over a specified period (the "Average Daily VWAP"), (iii) an inducement payment in additional shares of common stock (the "Inducement Shares") calculated based on the Average Daily VWAP; and (iv) cash in an amount equal to accrued and unpaid interest to, but not including, the closing date. As a result of the Exchange Transactions, the Company paid the Holders aggregate cash consideration of approximately $93.2 million (which includes approximately $1.5 million in accrued but previously unpaid interest) and issued and delivered to the Holders approximately 0.93 million shares of Company common stock (including both Conversion Shares and Inducement Shares). The Company funded the $93.2 million cash payment constituting part of the Exchange Consideration through borrowings under its revolving credit facility. As a result of the Exchange Transactions, the Company recognized a loss on extinguishment of debt of $5.2 million during the first quarter 2017.
In connection with its entry into the Exchange Transactions, the Company also entered into bond hedge unwind agreements (the "Hedge Unwind Agreements") and warrant unwind agreements (the "Warrant Unwind Agreements") with the dealer counterparties to the convertible note hedge transactions and warrant transactions that were effected at the time of the initial issuance of the Convertible Notes. Under the Hedge Unwind Agreements, the number of then-outstanding call options issued to the Company under the Convertible Note hedge transactions (the "Call Options") was reduced to reflect proportionately the reduction in the outstanding principal amount of the Convertible Notes following the Exchange Transactions. Under the Warrant Unwind Agreements, the number of warrants then held by the dealer counterparties also was reduced. On a net basis, after giving effectredeemed, plus accrued and unpaid interest.
The indenture relating to the Hedge Unwind Agreements and Warrant Unwind Agreements, the Company received 0.12 million shares of Company common stock from the dealer counterparties.
Settlement and Conversions Upon Maturity
The Convertible2028 Notes matured on August 1, 2017 (the "Maturity Date"). On the Maturity Date, the Company repaid the remaining $44.3 million in aggregate principal amount of the Convertible Notes outstanding, together with unpaid interest due and owing on the Convertible Notes (the “Cash Payment”). In connection with the maturity of the Convertible Notes, $44.2 million in aggregate principal amount of the Convertible Notes were tendered to the Company

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


for conversion (the "Converted Notes"). On the Maturity Date, in addition to the Cash Payment, the Company delivered to the holders of the Converted Notes, in the aggregate, 0.5 million shares of Company common stock.
In connection with the conversions described above, the Company exercised the outstanding Call Options,contains covenants that, among other things, limit or restrict our ability, and the counterpartiesability of our subsidiaries, to create liens; merge, consolidate, sell or otherwise dispose of all or substantially all of our assets; and enter into sale leaseback transactions.
Securitization program
On March 30, 2020, we amended our accounts receivable securitization facility to increase the Convertible Note hedge transactions deliveredmaximum available capacity from $50 million to the Company 0.5 million shares of Company common stock. The counterparties continue to hold warrants to purchase Company common stock that they acquired at the time of the initial issuance of the Convertible Notes. At October 1, 2017, the warrants, which entitle the holders to purchase 724,648 shares at an exercise price of $74.65 per share, had an intrinsic value of $121.3$75 million. The warrants are divided into components that expire ratably over a 180 day period commencing November 1, 2017.
Fair Value of Long-Term Borrowings
The following table provides information regarding the fair value of the Company’s debt as of October 1, 2017 and December 31, 2016, categorized by the level of inputs within the fair value hierarchy used to measure fair value:
 October 1, 2017 December 31, 2016
 (Dollars in thousands)
Level 1$—
 $344,765
Level 22,254,376
 929,362
Total$2,254,376
 $1,274,127
To determine the fair value of the debt categorized as Level 2 in the table above, the Company uses a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality and risk profile. The Company’s implied credit rating is a factor in determining the market interest yield curve.
Note 89 — Financial instruments
Foreign Currency Forward Contractscurrency forward contracts
The Company usesWe use derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage exposure related to foreign currency transactions.transaction exposure. Foreign currency forward contracts not designated as hedges for accounting purposes are used to manage exposure related to near term foreign currency denominated monetary assets and liabilities. We enter into the non-designated foreign currency forward contracts for periods consistent with our currency translation exposures, which generally approximate one month. For the three and ninemonths ended October 1, 2017, the CompanySeptember 27, 2020 we recognized a loss of $0.9 million and $0.1 million, respectively, related to non-designated foreign currency forward contracts of $0.6 million and $3.7 million, respectively.contracts. For the three and nine months ended September 25, 2016, the Company29, 2019 we recognized a losslosses of $1.9 million and $3.5 million, respectively, related to non-designated foreign currency forward contracts.
The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of $0.1September 27, 2020 and December 31, 2019 was $136.9 million and $1.7$132.0 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of September 27, 2020 and
13

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

December 31, 2019 was $166.2 million and $145.1 million, respectively. All open foreign currency forward contracts as of September 27, 2020 have durations of 12 months or less.
Cross-currency interest rate swaps
During 2019, we entered into cross-currency swap agreements with 5 different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, we have notionally exchanged $250 million at an annual interest rate of 4.875% for €219.2 million at an annual interest rate of 2.4595%. The swap agreements are designed as net investment hedges and expire on March 4, 2024.
During 2018, we entered into cross-currency swap agreements with 6 different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, we have notionally exchanged $500 million at an annual interest rate of 4.625% for €433.9 million at an annual interest rate of 1.942%. The swap agreements are designed as net investment hedges and expire on October 4, 2023.
The swap agreements described above require an exchange of the notional amounts upon expiration or earlier termination of the agreements. We and the counterparties have agreed to effect the exchange through a net settlement.
The cross-currency swaps are marked to market at each reporting date and any changes in fair value are recognized as a component of accumulated other comprehensive income (loss) ("AOCI"). For the three and nine months ended September 27, 2020, we recognized foreign exchange losses of $23.2 million and $5.6 million, respectively, within AOCI related to the cross-currency swaps. For the three and nine months ended September 29, 2019, we recognized foreign exchange gains of $23.5 million and $29.4 million, respectively, within AOCI related to the cross-currency swaps. For the three and nine months ended September 27, 2020, we recognized $4.7 million and $14.5 million, respectively, in interest benefit related to the cross-currency swaps. For the three and nine months ended September 29, 2019, we recognized $5.0 million and $13.8 million, respectively, in interest benefit related to the cross-currency swaps.
Balance sheet presentation
The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of October 1, 2017September 27, 2020 and December 31, 2016:2019:
September 27, 2020December 31, 2019
 (Dollars in thousands)
Asset derivatives:  
Designated foreign currency forward contracts$916 $1,659 
Non-designated foreign currency forward contracts81 192 
Cross-currency interest rate swaps25,796 21,575 
Prepaid expenses and other current assets26,793 23,426 
Cross-currency interest rate swaps6,113 13,066 
Other assets6,113 13,066 
Total asset derivatives$32,906 $36,492 
Liability derivatives:  
Designated foreign currency forward contracts$2,449 $1,285 
Non-designated foreign currency forward contracts223 102 
Other current liabilities2,672 1,387 
Total liability derivatives$2,672 $1,387 
See Note 11 for information on the location and amount of gains and losses attributable to derivatives that were reclassified from AOCI to expense (income), net of tax.
14
 October 1, 2017 December 31, 2016
 Fair Value
 (Dollars in thousands)
Asset derivatives:   
Designated foreign currency forward contracts$1,684
 $667
Non-designated foreign currency forward contracts318
 490
Prepaid expenses and other current assets$2,002
 $1,157
Total asset derivatives$2,002
 $1,157
Liability derivatives:   
Designated foreign currency forward contracts$237
 $2,139
Non-designated foreign currency forward contracts93
 118
Other current liabilities$330
 $2,257
Total liability derivatives$330
 $2,257


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of October 1, 2017 and December 31, 2016 was $76.1 million and $101.8 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of October 1, 2017 and December 31, 2016 was $112.3 million and $73.4 million, respectively. All open foreign currency forward contracts as of October 1, 2017 have durations of twelve months or less.
There was no0 ineffectiveness related to the Company’sour cash flow hedges during the three and nine months ended October 1, 2017September 27, 2020 and September 25, 2016.29, 2019.
ConcentrationTrade receivables
In the ordinary course of Credit Risk
Concentrations ofbusiness, we grant non-interest bearing trade credit to our customers on normal credit terms. In an effort to reduce our credit risk, with respect towe (i) establish credit limits for all of our customer relationships, (ii) perform ongoing credit evaluations of our customers’ financial condition, (iii) monitor the payment history and aging of our customers’ receivables, and (iv) monitor open orders against an individual customer’s outstanding receivable balance.
Our allowance for credit losses is maintained for trade accounts receivable are generally limitedbased on the expected collectability of accounts receivable, after considering our historical collection experience, the length of time an account is outstanding, the financial position of the customer, information provided by credit rating services in addition to new requirements under the accounting guidance, effective January 1, 2020, that includes the consideration of events or circumstances indicating historic collection rates may not be indicative of future collectability, for example, potential customer liquidity concerns resulting from COVID-19, that may impact the collectability of our receivables as well as our estimate of credit losses expected to be incurred over the life of our receivables. To date, we have not experienced significant payment defaults by, or identified other significant collectability concerns with, our customers. The assumptions utilized in our current estimates may change due to changes in circumstances, additional future developments and the Company’s large numberresolution of customersother contingencies.
The allowance for credit losses as of September 27, 2020 and their diversity across many geographic areas. ADecember 31, 2019 was $12.9 million and $9.1 million, respectively. The current portion of the Company’s trade accounts receivable outside the United States, however, include sales to government-owned or supported healthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the creditworthiness of those countries and the financial stability of their economies. Certain of the Company’s customers, particularly in Greece, Italy, Spain and Portugal, have extended or delayed payments for products and services already provided, raising collectability concerns regarding the Company’s accounts receivable from these customers. As a result, the Company continues to closely monitor the allowance for doubtful accounts with respect to these customers. The following table provides information regarding the Company's allowance for doubtful accounts, the aggregate net currentcredit losses, which was $8.4 million and long-term trade accounts receivable related to customers in Greece, Italy, Spain and Portugal and the percentage$5.3 million as of the Company’s total net current and long-term trade accounts receivable represented by these customers' trade accounts receivable at October 1, 2017September 27, 2020 and December 31, 2016:2019, respectively, was recognized as a reduction of accounts receivable, net.

October 1, 2017
December 31, 2016

(Dollars in thousands)
Allowance for doubtful accounts(1)
$10,084
 $8,630
Current and long-term trade accounts receivable in Greece, Italy, Spain and Portugal (2)
$50,613

$51,098
Percentage of total net current and long-term trade accounts receivable - Greece, Italy, Spain and Portugal16.9%
19.3%
(1)The current portion of the allowance for doubtful accounts was $3.1 million and $2.0 million as of October 1, 2017 and December 31, 2016, respectively, and was recognized in accounts receivable, net.
(2)The long-term portion of trade accounts receivable, net from customers in Greece, Italy, Spain and Portugal at October 1, 2017 and December 31, 2016 was $3.5 million and $2.7 million, respectively. In January 2017, the Company sold $16.1 million of receivables outstanding with respect to publicly funded hospitals in Italy for $16.0 million.
For the nine months ended October 1, 2017 and September 25, 2016, net revenues from customers in Greece, Italy, Spain and Portugal were $96.0 million and $95.8 million, respectively.
Note 910 — Fair value measurement
For a description of the fair value hierarchy, see Note 10 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2016.
The following tables provide information regarding the Company'sour financial assets and liabilities that are measured at fair value on a recurring basis as of October 1, 2017September 27, 2020 and December 31, 2016:2019:
 
Total carrying
 value at
 September 27, 2020
Quoted prices in active
markets (Level 1)		Significant other
observable
Inputs (Level 2)		Significant
unobservable
Inputs (Level 3)
 (Dollars in thousands)
Investments in marketable securities$11,155 $11,155 $0 $0 
Derivative assets32,906 0 32,906 0 
Derivative liabilities2,672 0 2,672 0 
Contingent consideration liabilities21,616 0 0 21,616 

 Total carrying
value at December 31, 2019		Quoted prices in active
markets (Level 1)		Significant other
observable
Inputs (Level 2)		Significant
unobservable
Inputs (Level 3)
 (Dollars in thousands)
Investments in marketable securities$10,926 $10,926 $0 $0 
Derivative assets36,492 0 36,492 0 
Derivative liabilities1,387 0 1,387 0 
Contingent consideration liabilities219,908 0 0 219,908 
15
 Total carrying
value at
October 1, 2017		 Quoted prices in active
markets (Level 1)		 Significant other
observable
Inputs (Level 2)		 Significant
unobservable
Inputs (Level 3)
 (Dollars in thousands)
Investments in marketable securities$8,563
 $8,563
 $—
 $—
Derivative assets2,002
 —
 2,002
 —
Derivative liabilities330
 —
 330
 —
Contingent consideration liabilities (1)
12,117
 —
 —
 12,117


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



 Total carrying
value at
December 31, 2016		 Quoted prices in active
markets (Level 1)		 Significant other
observable
Inputs (Level 2)		 Significant
unobservable
Inputs (Level 3)
 (Dollars in thousands)
Investments in marketable securities$7,660
 $7,660
 $—
 $—
Derivative assets1,157
 —
 1,157
 —
Derivative liabilities2,257
 —
 2,257
 —
Contingent consideration liabilities (1)
7,102
 —
 —
 7,102
(1)As of October 1, 2017 and December 31, 2016, (a) $0.6 million of contingent consideration liabilities were recognized in the current portion of contingent consideration, and (b) $11.5 million and $6.5 million of contingent consideration liabilities, respectively, were recognized in other liabilities in the condensed consolidated balance sheet.
There were no transfers of financial assets or liabilities reported at fair value among Level 1, Level 2 or Level 3 within the fair value hierarchy during the nine months ended October 1, 2017.
The following table provides information regarding changes, during the nine months ended October 1, 2017, in Level 3 financial liabilities related to contingent consideration, which are described below in this Note 9 under "Valuation Techniques":
 Contingent consideration
 2017
 (Dollars in thousands)
Balance - December 31, 2016$7,102
Additions (1)
5,369
Payment(245)
Revaluations(109)
Balance - October 1, 2017$12,117
(1) The Company established a liability related to the estimated fair value of contingent consideration associated with the Tianjin Medis acquisition.
Valuation Techniques
The Company’sOur financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to satisfy benefit obligations under Companyour benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.
The Company’sOur financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward contracts. The Company usescontracts and cross-currency interest rate swap agreements. We use foreign currency forward contractsforwards and cross-currency interest rate swaps to manage foreign currency transaction exposure, as well as exposure to foreign currency denominated monetary assets and liabilities. The Company measuresWe measure the fair value of the foreign currency forward contractsforwards and cross-currency swaps by calculating the amount required to enter into offsetting contracts with similar remaining maturities, as of the measurement date, based on quoted market prices, and taking into account the creditworthiness of the counterparties.
The Company’s
Our financial liabilities valued based upon Level 3 inputs (inputs that are not observable in the market) are comprised of contingent consideration arrangements pertaining to our acquisitions, which are discussed immediately below.
Contingent consideration
Contingent consideration liabilities, which primarily consist of payment obligations that are contingent upon the Company’s acquisitions. The Company determinesachievement of revenue-based goals, but also can be based on other milestones such as regulatory approvals, are remeasured to fair value each reporting period using assumptions including estimated revenues (based on internal operational budgets and long-range strategic plans), discount rates, probability of payment and projected payment dates.
We determine the fair value of the liabilities for contingent consideration based onliabilities using a Monte Carlo simulation (which involves a simulation of future revenues during the earn-out period using management's best estimates) or discounted cash flow analysis. ThisIncreases in projected revenues, estimated cash flows and probabilities of payment may result in significantly higher fair value measurement is based on significant inputs unobservablemeasurements; decreases in these items may have the opposite effect. Increases in the market, primarily estimated sales royaltiesdiscount rates in periods prior to payment may result in significantly lower fair value measurements and decreases in the discount raterates may have the opposite effect.
The table below provides additional information regarding the valuation technique and therefore, constitutes a Level 3 measurement withininputs used in determining the fair value hierarchy.of contingent consideration.
Contingent Consideration LiabilityValuation TechniqueUnobservable InputRange (Weighted average)
Milestone-based payments
Discounted cash flowDiscount rate2.5% - 3.3% (3.0%)
Projected year of payment2020 - 2023
Revenue-based payments
Monte Carlo simulationRevenue volatility 22.0%
Risk free rateCost of debt structure
Projected year of payment2021 - 2022
Discounted cash flowDiscount rate2.2% - 10.0% (8.9%)
Projected year of payment2020 - 2029

16

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



The following table provides information regarding changes in the contingent consideration liabilities during the nine months ended September 27, 2020:
Contingent consideration
(Dollars in thousands)
Balance - December 31, 2019$219,908 
Payments (1)
(143,906)
Revaluations (2)
(54,585)
Translation adjustment199 
Balance - September 27, 2020$21,616 
(1) Consists mainly of a $140.6 million payment associated with our acquisition of NeoTract, Inc. resulting from the achievement of a revenue-based goal for the period from January 1, 2019 to December 31, 2019.
(2) The decrease, which is included within selling, general and administrative expenses, is mainly due to adverse financial projections resulting from the COVID-19 pandemic.
Note 1011 — Shareholders’ equity
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased to include dilutive securities. The following table provides a reconciliation of basic to diluted weighted average number of common shares outstanding:
Three Months EndedNine Months Ended
September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Shares in thousands)
Basic46,530 46,248 46,451 46,156 
Dilutive effect of share-based awards803 928 818 895 
Diluted47,333 47,176 47,269 47,051 
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Shares in thousands)
Basic45,035
 44,045
 44,975
 43,081
Dilutive effect of share-based awards934
 639
 873
 574
Dilutive effect of 3.875% Convertible Notes and warrants (1)
618
 2,762
 825
 4,169
Diluted46,587
 47,446
 46,673
 47,824
(1)The reduction in the dilutive effect of the Convertible Notes and warrants during the three and nine months ended October 1, 2017 as compared to three and nine months ended September 25, 2016 is due principally to the Company’s repurchase of Convertible Notes and conversions by holders of the Convertible Notes.
The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.60.1 million for the three and nine months ended October 1, 2017 and 1.4 million and 3.9 million for the three and nine months ended September 25, 2016, respectively.
In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge27, 2020 and warrant agreements. The convertible note hedge, consisting of call options held by the Company, economically reduced the dilutive impact of the Convertible Notes. However, applicable accounting guidance requires the Company to separately address the dilutive impact of the warrants issued under the warrant agreements in computing diluted weighted average number of common shares outstanding, without giving effect to the anti-dilutive impact of the call options. The reduction in the weighted average number of diluted shares that would result from giving effect to the anti-dilutive impact of the call options would have been 0.1 millionand 0.4 millionfor the three and nine months ended October 1, 2017, respectively, and 1.5 millionand2.3 million for the three and nine months ended September 25, 2016, respectively. The treasury stock method is applied to the warrants because the average market price of the Company's common stock during the reporting periods presented exceeds the warrant exercise price of $74.65 per share, and assumes the proceeds from the exercise of the warrants are used by the Company to repurchase shares based on such average market price. Shares issuable upon exercise of the warrants that were included in the total diluted shares outstanding were 0.5 millionfor the three and nine months ended October 1, 2017 and 1.3 millionand1.9 million for the three and nine months ended September 25, 2016, respectively.

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


29, 2019.
The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the nine months ended October 1, 2017September 27, 2020 and September 25, 2016:29, 2019:
Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated Other Comprehensive (Loss) Income
(Dollars in thousands)
Balance as of December 31, 2019$735 $(138,810)$(206,317)$(344,392)
Other comprehensive (loss) income before reclassifications(4,479)(109)20,087 15,499 
Amounts reclassified from accumulated other comprehensive income1,021 4,180 0 5,201 
Net current-period other comprehensive (loss) income(3,458)4,071 20,087 20,700 
Balance as of September 27, 2020$(2,723)$(134,739)$(186,230)$(323,692)
17

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

 Cash Flow Hedges Pension and Other Postretirement Benefit Plans Foreign Currency Translation Adjustment Accumulated Other Comprehensive (Loss) Income
 (Dollars in thousands)
Balance as of December 31, 2016$(2,424) $(136,596) $(299,697) $(438,717)
Other comprehensive income (loss) before reclassifications3,383
 (1,050) 156,012
 158,345
Amounts reclassified from accumulated other comprehensive income1,535
 3,387
 —
 4,922
Net current-period other comprehensive income4,918
 2,337
 156,012
 163,267
Balance as of October 1, 2017$2,494
 $(134,259) $(143,685) $(275,450)
 Cash Flow Hedges Pension and Other Postretirement Benefit Plans Foreign Currency Translation Adjustment Accumulated Other Comprehensive (Loss) Income
 (Dollars in thousands)
Balance at December 31, 2015$(2,491) $(138,887) $(229,746) $(371,124)
Other comprehensive (loss) before reclassifications(2,255) 618
 11,131
 9,494
Amounts reclassified from accumulated other comprehensive loss3,016
 3,296
 —
 6,312
Net current-period other comprehensive income761
 3,914
 11,131
 15,806
Reclassification related to acquisition of noncontrolling interest—
 —
 (832) (832)
Balance at September 25, 2016$(1,730) $(134,973) $(219,447) $(356,150)
 Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated Other Comprehensive (Loss) Income
 (Dollars in thousands)
Balance as of December 31, 2018$807 $(131,380)$(210,512)$(341,085)
Other comprehensive income (loss) before reclassifications646 215 (27,562)(26,701)
Amounts reclassified from accumulated other comprehensive loss(748)4,033 0 3,285 
Net current-period other comprehensive income(102)4,248 (27,562)(23,416)
Balance as of September 29, 2019$705 $(127,132)$(238,074)$(364,501)
  
The following table provides information relating to the location in the statements of operations and amount of reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three and nine months ended October 1, 2017September 27, 2020 and September 25, 2016:29, 2019:
Three Months EndedNine Months Ended
September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in thousands)
(Gains) losses on foreign exchange contracts:
Cost of goods sold$1,899 $(523)$1,148 $(888)
Total before tax1,899 (523)1,148 (888)
Taxes(155)46 (127)140 
Net of tax$1,744 $(477)$1,021 $(748)
Amortization of pension and other postretirement benefit items (1):
Actuarial losses$1,731 $1,716 $5,433 $5,194 
Prior-service costs9 21 25 65 
Total before tax1,740 1,737 5,458 5,259 
Tax benefit(411)(405)(1,278)(1,226)
Net of tax$1,329 $1,332 $4,180 $4,033 
Total reclassifications, net of tax$3,073 $855 $5,201 $3,285 
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in thousands)
(Gains) losses on foreign exchange contracts:       
Cost of goods sold$(1,179) $535
 $1,769
 $3,907
Total before tax(1,179) 535
 1,769
 3,907
Taxes (benefit)237
 (187) (234) (891)
Net of tax$(942) $348
 $1,535
 $3,016
Amortization of pension and other postretirement benefit items:
Actuarial losses (1)
$1,723
 $1,829
 $5,176
 $5,071
Prior-service costs(1)
20
 15
 79
 43
Total before tax1,743
 1,844
 5,255
 5,114
Tax benefit(619) (657) (1,868) (1,818)
Net of tax$1,124
 $1,187
 $3,387
 $3,296
        
Total reclassifications, net of tax$182
 $1,535
 $4,922
 $6,312

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


(1) These accumulated other comprehensive (loss) income components are included in the computation of net benefit expense for pension and other postretirement benefit plans (see Note 12 for additional information).plans.
Mezzanine Equity
As of December 31, 2016, the Company reclassified $1.8 million from additional paid-in capital to convertible notes in the mezzanine equity section of the Company's consolidated balance sheet. The reclassified amount represents the aggregate difference between the principal amount and the carrying value of the Convertible Notes purchased by the Company pursuant to the Exchange Transactions (see "3.875% Convertible Senior Subordinated Notes - Exchange Transactions" within Note 7) under agreements that were entered into prior to December 31,2016, but not consummated until January 5, 2017. No reclassification was required as of October 1, 2017.
Note 1112 — Taxes on income from continuing operations
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
Effective income tax rate(0.8)%(132.3)%7.8%(48.4)%
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
Effective income tax rate11.2% 10.2% 8.9% 9.3%
The effective income tax rate for the three and nine months ended October 1, 2017 was 11.2% and 8.9%, respectively, and 10.2% and 9.3%rates for the three and nine months ended September 25, 2016, respectively.27, 2020 reflect a significant net tax benefit related to share-based compensation. The effective income tax rates for the three and nine months ended September 29, 2019 reflect a discrete tax benefit related to the reduction of a deferred tax liability associated with foreign withholding taxes. Additionally, the effective income tax rate for the threenine months ended October 1, 2017, as compared to the prior year period,September 29, 2019 reflects a significant net tax cost associated with an increase in the estimated deferred tax with respectbenefit related to non-permanently reinvested income.share-based compensation.

Note 12 — Pension and other postretirement benefits
The Company has a number of defined benefit pension and postretirement plans covering eligible U.S. and non-U.S. employees. As of October 1, 2017, no further benefits are being accrued under the Company’s U.S. defined benefit pension plans and the Company’s other postretirement benefit plans, other than certain postretirement benefit plans covering employees subject to a collective bargaining agreement.
Net pension and other postretirement benefits expense (income) consist of the following:
 Pension
Three Months Ended		 Other Postretirement Benefits
Three Months Ended		 Pension
Nine Months Ended		 Other Postretirement Benefits
Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in thousands)
Service cost$725
 $656
 $61
 $44
 $2,162
 $1,963
 $210
 $266
Interest cost3,773
 3,948
 426
 383
 11,347
 11,797
 1,183
 1,196
Expected return on plan assets(6,607) (6,209) —
 —
 (20,100) (18,606) —
 —
Net amortization and deferral1,668
 1,781
 75
 63
 5,049
 4,937
 206
 177
Net benefits expense (income)$(441) $176
 $562
 $490
 $(1,542) $91
 $1,599
 $1,639
Note 13 — Commitments and contingent liabilities
Environmental: The Company is We are subject to contingencies as a result of environmental laws and regulations that in the future may require the Companyus to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Companyus or other parties. Much of this liability results from the U.S.
18

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

Comprehensive Environmental Response, Compensation and Liability Act, often referred to as Superfund, the U.S. Resource Conservation and Recovery Act and similar state laws. These laws require the Companyus to undertake

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


certain investigative and remedial activities at sites where the Company conductswe conduct or once conducted operations or at sites where Company-generated waste was disposed.
Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, the regulatory agencies involved and their enforcement policies, as well as the presence or absence of other potentially responsible parties. At October 1, 2017, the Company hasSeptember 27, 2020, we have recorded $1.1$0.7 million and $5.8$5.7 million in accrued liabilities and other liabilities, respectively, relating to these matters. Considerable uncertainty exists with respect to these liabilities and, if adverse changes in circumstances occur, the potential liability may exceed the amount accrued as of October 1, 2017.September 27, 2020. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 15-2010-15 years.
Litigation: The Company isLegal matters: We are a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, product warranty, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of October 1, 2017, the Company hasSeptember 27, 2020, we have recorded accrued liabilities of $8.6$0.2 million in connection with such contingencies, representing itsour best estimate of the cost within the range of estimated possible losses that will be incurred to resolve these matters. Of the amount accrued as of October 1, 2017, $5.0 million pertains to discontinued operations.
During the first quarter 2017, Teleflex Medical Trading (Shanghai) Company, Ltd. (“Teleflex Shanghai”), one of the Company’s subsidiaries, eliminated a key distributor within its sales channel in China and undertook a distributor to direct sales conversion within that channel. On March 24, 2017, the distributor submitted an application with the Shanghai International Economy and Trade Arbitration Commission (“SHIAC”) for arbitration alleging, among other things, that Teleflex Shanghai wrongfully terminated its relationship with the distributor. Pursuant to a supplementary submission filed by the distributor with SHIAC in July 2017, the distributor is seeking to recover RMB 51.2 million ($7.5 million) in damages, and is also seeking to compel Teleflex Shanghai to repurchase Teleflex products that the distributor claims it purchased from Teleflex Shanghai at a total price of RMB 97.5 million ($14.4 million). Teleflex Shanghai has filed a counterclaim seeking payment from the distributor of RMB 61.2 million ($9.0 million) in respect of outstanding trade receivables owed by the distributor to Teleflex Shanghai. Although the parties are exploring settlement of the claims, Teleflex Shanghai continues to vigorously contest the distributor's claim for damages. The Company has accrued a liability representing its best estimate of probable loss associated with this matter, which is included in the Company’s accrued liabilities for litigation matters.
In 2006, the Company was named as a defendant in a wrongful death product liability lawsuit filed in the Louisiana State District Court for the Parish of Calcasieu, involving a product manufactured by the Company’s former marine business. In September 2014, the case was tried before a jury, which returned a verdict in favor of the Company. The plaintiff subsequently filed a motion for a new trial, which was granted, and the case was re-tried before a jury in December 2014. On December 5, 2014, the jury returned a verdict in favor of the plaintiff, awarding $0.1 million in compensatory damages and $23.0 million in punitive damages, plus pre- and post-judgment interest on the compensatory damages and post-judgment interest on the punitive damages. The Company filed an appeal with the Louisiana Court of Appeal, and the plaintiff filed a cross-appeal, seeking to overturn the trial court’s denial of pre-judgment interest on the punitive damages award. On June 29, 2016, the Louisiana Court of Appeal affirmed the trial court verdict in all respects. The Company and the plaintiff filed applications for a writ of certiorari (a request for review) to the Louisiana Supreme Court. On January 13, 2017, the Louisiana Supreme Court granted the Company's writ application, and oral arguments were held on May 1, 2017. On October 18, 2017, the Louisiana Supreme Court issued its decision, affirming the lower court’s judgment in part and reducing the amount of punitive damages awarded to the plaintiff from $23.0 million to $4.3 million. On November 1, 2017, the Company filed an application for a rehearing before the Louisiana Supreme Court. As of October 1, 2017, the Company has accrued a $5.0 million liability, including punitive and compensatory damages as well as interest, representing its best estimate of probable loss associated with this matter, which is included in the Company’s accrued liabilities for litigation matters relating to discontinued operations.
Based on information currently available, advice of counsel, established reserves and other resources, the Company doeswe do not believe that the outcome of any outstanding litigation and claims is likely to be, individually or in the aggregate, material to itsour business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’sour business, financial condition, results of operations or

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


liquidity. Legal costs such as outside counsel fees and expenses are charged to selling, general and administrative expenses in the period incurred.
In June 2020, we began producing documents and information in response to a Civil Investigative Demand (a “CID”) received in March 2020 by one of our subsidiaries, NeoTract, Inc. (“NeoTract”), from the U.S. Department of Justice through the United States Attorney’s Office for the Northern District of Georgia (collectively, the “DOJ”). The CID relates to the DOJ’s investigation of a single NeoTract customer, requires the production of documents and information pertaining to communications with, and certain rebate programs offered to, that customer and pertains to communications and activities occurring both prior to our acquisition of NeoTract in October 2017 and thereafter. In July 2020, the DOJ advised us that it had opened an investigation under the civil False Claims Act, 31 U.S.C. §3729, with respect to NeoTract’s operations broadly in addition to the customer investigation.
We maintain policies and procedures to promote compliance with the Anti-Kickback Statute, False Claims Acts and other applicable laws and regulations and intend to provide information sought by the government. We cannot at this time reasonably predict, however, the ultimate scope or outcome of this matter, including whether an investigation may raise other compliance issues of interest, including those beyond the scope described above or how any such issues might be resolved. We also cannot at this time reasonably estimate any potential liabilities or penalty, if any, that may arise from this matter, which could have a material adverse effect on our results of operations and financial condition.
Tax audits and examinations: The Company and its subsidiariesWe are routinely subject to tax examinations by various tax authorities. As of October 1, 2017,September 27, 2020, the most significant tax examinationsexamination in process arewas in Canada, Germany and the United States. The CompanyGermany. We may establish reserves with respect to itsour uncertain tax positions, after which it adjusts itswe adjust the reserves to address developments with respect to theseour uncertain tax positions.positions, including developments in this tax examination. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to the Company’sour recorded tax liabilities, which could impact the Company’sour financial results.
Other: The Company has various purchase commitments for materials, supplies and other items occurring in the ordinary conduct of its business. On average, such commitments are not at prices in excess of current market prices.
Note 14 — Segment information
The following tables present the Company’s segment results for the three and nine months ended October 1, 2017 and September 25, 2016:
19
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in thousands) (Dollars in thousands)
Revenue       
Vascular North America$90,979
 $85,118
 $278,350
 $254,817
Anesthesia North America50,819
 48,670
 148,107
 143,821
Surgical North America40,804
 41,827
 131,464
 123,904
EMEA131,517
 121,398
 394,212
 375,198
Asia72,387
 64,087
 185,328
 176,434
OEM48,589
 41,418
 137,067
 115,693
All other99,608
 53,130
 276,669
 164,227
Consolidated net revenues$534,703
 $455,648
 $1,551,197
 $1,354,094
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in thousands) (Dollars in thousands)
Operating profit       
Vascular North America$25,212
 $21,781
 $75,286
 $63,431
Anesthesia North America15,684
 13,954
 49,727
 41,181
Surgical North America13,618
 14,050
 47,285
 39,654
EMEA24,187
 16,576
 69,677
 61,563
Asia20,217
 18,072
 49,619
 52,831
OEM12,256
 10,201
 31,714
 24,605
All other11,987
 3,444
 16,953
 16,623
Total segment operating profit (1)
123,161
 98,078
 340,261
 299,888
Unallocated expenses (2)
(12,807) (11,591) (58,886) (47,463)
Income from continuing operations before interest, loss on extinguishment of debt and taxes$110,354
 $86,487
 $281,375
 $252,425
(1)Segment operating profit includes segment net revenues from external customers reduced by the segment's standard cost of goods sold, adjusted for fixed manufacturing cost absorption variances, selling, general and administrative expenses, research and development expenses and an allocation of corporate expenses. Corporate expenses are allocated among the segments in proportion to the respective


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)



Note 14 — Segment information
The following tables present our segment results for the three and nine months ended September 27, 2020 and September 29, 2019:
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
 (Dollars in thousands)
Americas$375,040 $374,493 $1,045,532 $1,092,321 
EMEA135,649 140,518 423,416 442,110 
Asia68,213 77,864 188,411 213,869 
OEM49,399 55,444 168,618 166,110 
Net revenues$628,301 $648,319 $1,825,977 $1,914,410 
Three Months EndedNine Months Ended
September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in thousands)
Americas$121,760 $81,405 $310,267 $229,513 
EMEA17,702 21,820 53,044 69,670 
Asia10,099 21,460 33,957 50,699 
OEM8,281 16,008 35,624 43,213 
Total segment operating profit (1)
157,842 140,693 432,892 393,095 
Unallocated expenses (2)
(25,750)(23,072)(104,904)(92,773)
Income from continuing operations before interest and taxes$132,092 $117,621 $327,988 $300,322 
(1)Segment operating profit includes segment net revenues from external customers reduced by the segment's standard cost of goods sold, adjusted for fixed manufacturing cost absorption variances, selling, general and administrative expenses, research and development expenses and an allocation of corporate expenses. Corporate expenses are allocated among the segments in proportion to the respective amounts of one of several items (such as net revenues, numbers of employees, and amount of time spent), depending on the category of expense involved.
(2)Unallocated expenses primarily include manufacturing variances other than fixed manufacturing cost absorption variances, restructuring charges and gain on sale of assets.
(2)Unallocated expenses primarily include manufacturing variances other than fixed manufacturing cost absorption variances, restructuring and impairment charges and gain on sale of assets.

Note 15 — Condensed consolidating guarantor financial information
Teleflex Incorporated (the "Parent Company") is the issuer of its 5.25% Senior Notes due 2024 (the "2024 Notes") and 4.875% Senior Notes due 2026 (the "2026 Notes"). Payment of the Parent Company's obligations under the 2024 Notes and 2026 Notes is guaranteed, jointly and severally, by certain of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. The Company’s condensed consolidating statements of income and comprehensive income for the three and nine months ended October 1, 2017 and September 25, 2016, condensed consolidating balance sheets as of October 1, 2017 and December 31, 2016 and condensed consolidating statements of cash flows for the nine months ended October 1, 2017 and September 25, 2016, provide consolidated information for:
a.Parent Company, the issuer of the guaranteed obligations;
b.Guarantor Subsidiaries, on a combined basis;
c.
Non-Guarantor Subsidiaries (i.e., those subsidiaries of the Parent Company that have not guaranteed
payment of the 2024 Notes and 2026 Notes), on a combined basis; and
d.Parent Company and its subsidiaries on a consolidated basis.
The same accounting policies as described in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 are used by the Parent Company and each of its subsidiaries in connection with the condensed consolidating financial information, except for the use of the equity method of accounting to reflect ownership interests in subsidiaries, which are eliminated upon consolidation.
Consolidating entries and eliminations in the following condensed consolidated financial statements represent adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, (b) eliminate the investments in subsidiaries and (c) record consolidating entries.



TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 Three Months Ended October 1, 2017
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
Net revenues$—
 $335,051
 $303,676
 $(104,024) $534,703
Cost of goods sold—
 194,262
 149,302
 (104,088) 239,476
Gross profit—
 140,789
 154,374
 64
 295,227
Selling, general and administrative expenses10,536
 89,315
 64,046
 (126) 163,771
Research and development expenses220
 14,788
 6,186
 —
 21,194
Restructuring charges (credits)—
 552
 (644) —
 (92)
(Loss) income from continuing operations before interest and taxes(10,756) 36,134
 84,786
 190
 110,354
Interest, net53,521
 (33,392) 849
 —
 20,978
(Loss) income from continuing operations before taxes(64,277) 69,526
 83,937
 190
 89,376
(Benefit) taxes on (loss) income from continuing operations(30,845) 23,453
 17,364
 6
 9,978
Equity in net income of consolidated subsidiaries112,830
 61,027
 257
 (174,114) —
Income from continuing operations79,398
 107,100
 66,830
 (173,930) 79,398
Operating loss from discontinued operations(3,749) —
 —
 —
 (3,749)
Benefit on loss from discontinued operations(1,366) —
 —
 —
 (1,366)
Loss from discontinued operations(2,383) —
 —
 —
 (2,383)
Net income77,015
 107,100
 66,830
 (173,930) 77,015
Other comprehensive income43,845
 30,196
 56,286
 (86,482) 43,845
Comprehensive income$120,860
 $137,296
 $123,116
 $(260,412) $120,860


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


          
 Three Months Ended September 25, 2016
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
Net revenues$—
 $270,610
 $281,258
 $(96,220) $455,648
Cost of goods sold—
 163,052
 147,240
 (96,246) 214,046
Gross profit—
 107,558
 134,018
 26
 241,602
Selling, general and administrative expenses11,208
 80,333
 48,285
 (29) 139,797
Research and development expenses179
 8,422
 6,466
 —
 15,067
Restructuring charges380
 1,712
 935
 —
 3,027
(Gain) loss on sale of assets(2,707) 104
 (173) —
 (2,776)
(Loss) income from continuing operations before interest and taxes(9,060) 16,987
 78,505
 55
 86,487
Interest, net41,344
 (29,612) 1,041
 —
 12,773
(Loss) income from continuing operations before taxes(50,404) 46,599
 77,464
 55
 73,714
(Benefit) taxes on (loss) income from continuing operations(18,017) 13,166
 12,437
 (72) 7,514
Equity in net income of consolidated subsidiaries98,544
 57,837
 183
 (156,564) —
Income from continuing operations66,157
 91,270
 65,210
 (156,437) 66,200
Operating income from discontinued operations260
 —
 —
 —
 260
Taxes on income from discontinued operations95
 —
 43
 —
 138
Income (loss) from discontinued operations165
 —
 (43) —
 122
Net income attributable to common shareholders66,322
 91,270
 65,167
 (156,437) 66,322
Other comprehensive income (loss) attributable to common shareholders1,053
 (501) 1,243
 (742) 1,053
Comprehensive income attributable to common shareholders$67,375
 $90,769
 $66,410
 $(157,179) $67,375



TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


 Nine Months Ended October 1, 2017
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
Net revenues$—
 $989,314
 $876,968
 $(315,085) $1,551,197
Cost of goods sold—
 576,465
 445,638
 (311,977) 710,126
Gross profit—
 412,849
 431,330
 (3,108) 841,071
Selling, general and administrative expenses38,523
 278,529
 169,224
 398
 486,674
Research and development expenses719
 39,568
 19,012
 —
 59,299
Restructuring charges—
 7,261
 6,462
 —
 13,723
(Loss) income from continuing operations before interest, extinguishment of debt and taxes(39,242) 87,491
 236,632
 (3,506) 281,375
Interest, net152,268
 (96,776) 2,776
 —
 58,268
Loss on extinguishment of debt5,593
 —
 —
 —
 5,593
(Loss) income from continuing operations before taxes(197,103) 184,267
 233,856
 (3,506) 217,514
(Benefit) taxes on (loss) income from continuing operations(83,867) 60,061
 43,803
 (593) 19,404
Equity in net income of consolidated subsidiaries311,346
 175,690
 713
 (487,749) —
Income from continuing operations198,110
 299,896
 190,766
 (490,662) 198,110
Operating loss from discontinued operations(4,597) —
 —
 —
 (4,597)
Benefit on loss from discontinued operations(1,675) —
 —
 —
 (1,675)
Loss from discontinued operations(2,922) —
 —
 —
 (2,922)
Net income195,188
 299,896
 190,766
 (490,662) 195,188
Other comprehensive income163,267
 147,727
 179,561
 (327,288) 163,267
Comprehensive income$358,455
 $447,623
 $370,327
 $(817,950) $358,455

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


          
 Nine Months Ended September 25, 2016
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
Net revenues$—
 $809,951
 $833,390
 $(289,247) $1,354,094
Cost of goods sold—
 489,293
 427,200
 (285,547) 630,946
Gross profit—
 320,658
 406,190
 (3,700) 723,148
Selling, general and administrative expenses30,822
 248,195
 139,641
 470
 419,128
Research and development expenses319
 23,501
 19,072
 —
 42,892
Restructuring charges380
 7,027
 5,469
 —
 12,876
Gain on sale of assets(2,707) (274) (1,192) —
 (4,173)
(Loss) income from continuing operations before interest, extinguishment of debt and taxes(28,814) 42,209
 243,200
 (4,170) 252,425
Interest, net107,534
 (72,367) 3,088
 —
 38,255
Loss on extinguishment of debt19,261
 —
 —
 —
 19,261
(Loss) income from continuing operations before taxes(155,609) 114,576
 240,112
 (4,170) 194,909
(Benefit) taxes on (loss) income from continuing operations(56,942) 39,347
 36,210
 (481) 18,134
Equity in net income of consolidated subsidiaries275,296
 179,342
 526
 (455,164) —
Income from continuing operations176,629
 254,571
 204,428
 (458,853) 176,775
Operating (loss) income from discontinued operations(495) —
 379
 —
 (116)
(Benefit) taxes on (loss) income from discontinued operations(180) —
 61
 —
 (119)
(Loss) income from discontinued operations(315) —
 318
 —
 3
Net income176,314
 254,571
 204,746
 (458,853) 176,778
Less: Income from continuing operations attributable to noncontrolling interest—
 —
 464
 —
 464
Net income attributable to common shareholders176,314
 254,571
 204,282
 (458,853) 176,314
Other comprehensive income attributable to common shareholders15,806
 8,387
 12,277
 (20,664) 15,806
Comprehensive income attributable to common shareholders$192,120
 $262,958
 $216,559
 $(479,517) $192,120




TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
 October 1, 2017
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
ASSETS         
Current assets         
Cash and cash equivalents$45,189
 $748,412
 $223,972
 $—
 $1,017,573
Accounts receivable, net2,232
 36,055
 263,725
 4,460
 306,472
Accounts receivable from consolidated subsidiaries9,095
 2,273,240
 359,560
 (2,641,895) —
Inventories, net—
 236,355
 174,561
 (28,499) 382,417
Prepaid expenses and other current assets15,492
 8,722
 24,048
 3,337
 51,599
Prepaid taxes—
 —
 8,690
 —
 8,690
Total current assets72,008
 3,302,784
 1,054,556
 (2,662,597) 1,766,751
Property, plant and equipment, net2,247
 209,966
 162,248
 —
 374,461
Goodwill—
 902,429
 983,728
 —
 1,886,157
Intangibles assets, net—
 612,745
 994,198
 —
 1,606,943
Investments in consolidated subsidiaries7,245,740
 1,801,602
 23,546
 (9,070,888) —
Deferred tax assets—
 —
 5,496
 (3,476) 2,020
Notes receivable and other amounts due from consolidated subsidiaries2,082,206
 2,256,368
 —
 (4,338,574) —
Other assets29,378
 6,308
 8,715
 —
 44,401
Total assets$9,431,579
 $9,092,202
 $3,232,487
 $(16,075,535) $5,680,733
LIABILITIES AND EQUITY         
Current liabilities         
Current borrowings$27,250
 $—
 $50,000
 $—
 $77,250
Accounts payable2,343
 47,014
 36,062
 —
 85,419
Accounts payable to consolidated subsidiaries2,307,797
 275,465
 58,633
 (2,641,895) —
Accrued expenses20,127
 24,398
 43,570
 —
 88,095
Current portion of contingent consideration—
 591
 —
 —
 591
Payroll and benefit-related liabilities19,973
 28,011
 40,107
 —
 88,091
Accrued interest13,402
 —
 28
 —
 13,430
Income taxes payable2,168
 —
 11,282
 (593) 12,857
Other current liabilities344
 5,335
 3,233
 —
 8,912
Total current liabilities2,393,404
 380,814
 242,915
 (2,642,488) 374,645
Long-term borrowings2,172,805
 —
 —
 —
 2,172,805
Deferred tax liabilities118,891
 314,168
 42,084
 (3,476) 471,667
Pension and postretirement benefit liabilities67,836
 30,928
 17,677
 —
 116,441
Noncurrent liability for uncertain tax positions2,035
 9,175
 3,028
 —
 14,238
Notes payable and other amounts due to consolidated subsidiaries2,178,181
 1,954,051
 206,342
 (4,338,574) —
Other liabilities25,950
 13,943
 18,567
 —
 58,460
Total liabilities6,959,102
 2,703,079
 530,613
 (6,984,538) 3,208,256
Total shareholders' equity2,472,477
 6,389,123
 2,701,874
 (9,090,997) 2,472,477
Total liabilities and shareholders' equity$9,431,579
 $9,092,202
 $3,232,487
 $(16,075,535) $5,680,733

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


 December 31, 2016
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
ASSETS         
Current assets         
Cash and cash equivalents$14,571
 $1,031
 $528,187
 $—
 $543,789
Accounts receivable, net2,551
 8,768
 255,815
 4,859
 271,993
Accounts receivable from consolidated subsidiaries4,861
 2,176,059
 309,149
 (2,490,069) —
Inventories, net—
 200,852
 140,406
 (25,087) 316,171
Prepaid expenses and other current assets14,239
 5,332
 17,474
 3,337
 40,382
Prepaid taxes—
 —
 7,766
 413
 8,179
Assets held for sale—
 —
 2,879
 —
 2,879
Total current assets36,222
 2,392,042
 1,261,676
 (2,506,547) 1,183,393
Property, plant and equipment, net2,566
 163,847
 136,486
 —
 302,899
Goodwill—
 708,546
 568,174
 —
 1,276,720
Intangibles assets, net—
 640,999
 450,664
 —
 1,091,663
Investments in consolidated subsidiaries6,022,042
 1,519,031
 23,685
 (7,564,758) —
Deferred tax assets73,051
 —
 5,185
 (76,524) 1,712
Notes receivable and other amounts due from consolidated subsidiaries1,387,615
 2,085,538
 —
 (3,473,153) —
Other assets22,295
 6,254
 6,277
 —
 34,826
Total assets$7,543,791
 $7,516,257
 $2,452,147
 $(13,620,982) $3,891,213
LIABILITIES AND EQUITY         
Current liabilities         
Current borrowings$133,071
 $—
 $50,000
 $—
 $183,071
Accounts payable4,540
 30,924
 33,936
 —
 69,400
Accounts payable to consolidated subsidiaries2,242,814
 214,203
 33,052
 (2,490,069) —
Accrued expenses16,827
 18,126
 30,196
 —
 65,149
Current portion of contingent consideration—
 587
 —
 —
 587
Payroll and benefit-related liabilities20,610
 26,672
 35,397
 —
 82,679
Accrued interest10,429
 —
 21
 —
 10,450
Income taxes payable1,246
 —
 6,577
 85
 7,908
Other current liabilities2,262
 3,643
 2,497
 —
 8,402
Total current liabilities2,431,799
 294,155
 191,676
 (2,489,984) 427,646
Long-term borrowings850,252
 —
 —
 —
 850,252
Deferred tax liabilities—
 316,526
 31,375
 (76,524) 271,377
Pension and postretirement benefit liabilities85,645
 31,561
 15,856
 —
 133,062
Noncurrent liability for uncertain tax positions1,169
 13,684
 2,667
 —
 17,520
Notes payable and other amounts due to consolidated subsidiaries2,011,737
 1,264,004
 197,412
 (3,473,153) —
Other liabilities23,848
 15,695
 12,472
 —
 52,015
Total liabilities5,404,450
 1,935,625
 451,458
 (6,039,661) 1,751,872
Convertible notes - redeemable equity component1,824
 —
 —
 —
 1,824
Mezzanine equity1,824
 —
 —
 —
 1,824
Total shareholders' equity2,137,517
 5,580,632
 2,000,689
 (7,581,321) 2,137,517
Total liabilities and shareholders' equity$7,543,791
 $7,516,257
 $2,452,147
 $(13,620,982) $3,891,213

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 Nine Months Ended October 1, 2017
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
Net cash (used in) provided by operating activities from continuing operations$(156,643) $300,961
 $237,308
 $(61,918) $319,708
Cash flows from investing activities of continuing operations:         
Expenditures for property, plant and equipment(233) (27,527) (26,217) —
 (53,977)
Proceeds from sale of assets and investments464,982
 —
 6,332
 (464,982) 6,332
Payments for businesses and intangibles acquired, net of cash acquired(975,524) —
 (35,187) —
 (1,010,711)
Net cash used in investing activities from continuing operations(510,775) (27,527) (55,072) (464,982) (1,058,356)
Cash flows from financing activities of continuing operations:         
Proceeds from new borrowings1,963,500
 —
 —
 —
 1,963,500
Reduction in borrowings(747,576) —
 —
 —
 (747,576)
Debt extinguishment, issuance and amendment fees(19,114) —
 —
 —
 (19,114)
Net proceeds from share based compensation plans and the related tax impacts4,739
 —
 —
 —
 4,739
Payments for contingent consideration—
 (245) —
 —
 (245)
Dividends paid(45,905) —
 —
 —
 (45,905)
Intercompany transactions(456,468) 474,192
 (482,706) 464,982
 —
Intercompany dividends paid—
 —
 (61,918) 61,918
 —
Net cash provided by (used in) financing activities from continuing operations699,176
 473,947
 (544,624) 526,900
 1,155,399
Cash flows from discontinued operations:         
Net cash used in operating activities(1,140) —
 —
 —
 (1,140)
Net cash used in discontinued operations(1,140) —
 —
 —
 (1,140)
Effect of exchange rate changes on cash and cash equivalents—
 —
 58,173
 —
 58,173
Net increase in cash and cash equivalents30,618
 747,381
 (304,215) —
 473,784
Cash and cash equivalents at the beginning of the period14,571
 1,031
 528,187
 —
 543,789
Cash and cash equivalents at the end of the period$45,189
 $748,412
 $223,972
 $—
 $1,017,573

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


 Nine Months Ended September 25, 2016
 Parent
Company		 Guarantor
Subsidiaries		 Non-Guarantor
Subsidiaries		 Eliminations Condensed
Consolidated
 (Dollars in thousands)
Net cash (used in) provided by operating activities from continuing operations$(72,542) $123,249
 $253,166
 $(2,275) $301,598
Cash flows from investing activities of continuing operations:        
Expenditures for property, plant and equipment(191) (15,713) (20,008) —
 (35,912)
Proceeds from sale of assets5,607
 49,571
 1,451
 (46,837) 9,792
Payments for businesses and intangibles acquired, net of cash acquired—
 (10,305) (50,572) 46,837
 (14,040)
Net cash (used in) provided by investing activities from continuing operations5,416
 23,553
 (69,129) —
 (40,160)
Cash flows from financing activities of continuing operations:   
  
  
  
Proceeds from new borrowings665,000
 —
 6,700
 —
 671,700
Reduction in borrowings(714,487) —
 —
 —
 (714,487)
Debt extinguishment, issuance and amendment fees(8,958) —
 —
 —
 (8,958)
Net proceeds from share based compensation plans and the related tax impacts7,647
 —
 —
 —
 7,647
Payments to noncontrolling interest shareholders—
 —
 (464) —
 (464)
Payments for contingent consideration—
 (133) —
 —
 (133)
Payments for acquisition of noncontrolling interest—
 —
 (9,231) —
 (9,231)
Dividends paid(43,980) —
 —
 —
 (43,980)
     Intercompany transactions175,203
 (145,645) (29,558) —
 —
Intercompany dividends paid—
 —
 (2,275) 2,275
 —
Net cash provided by (used in) financing activities from continuing operations80,425
 (145,778) (34,828) 2,275
 (97,906)
Cash flows from discontinued operations: 
  
  
  
  
Net cash used in operating activities(1,451) —
 —
 —
 (1,451)
Net cash used in discontinued operations(1,451) —
 —
 —
 (1,451)
Effect of exchange rate changes on cash and cash equivalents—
 —
 (988) —
 (988)
Net increase in cash and cash equivalents11,848
 1,024
 148,221
 —
 161,093
Cash and cash equivalents at the beginning of the period21,612
 —
 316,754
 —
 338,366
Cash and cash equivalents at the end of the period$33,460
 $1,024
 $464,975
 $—
 $499,459



TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


Note 16 — Subsequent event

NeoTract Acquisition
On October 2, 2017, the Company completed the acquisition of NeoTract,11, 2020, we executed a privately-held company, pursuantdefinitive agreement to an Agreement and Plan of Merger, dated as of September 4, 2017. NeoTract isacquire Z-Medica, LLC. ("Z-Medica"), a privately held medical device company that has developedmanufactures and commercializedsells hemostatic (hemorrhage control) products, which are marketed under the UroLift® System, a minimally invasive medical device for treating lower urinary tract symptoms due to benign prostatic hyperplasia, or BPH. Under the terms of the agreement, the Company acquired NeoTractQuikClot, Combat Gauze and QuickClot Control+ brand names and will complement our anesthesia product portfolio. We will acquire Z-Medica for an initial cash purchase price $725 million in cash, subject to customary purchase price adjustments. In addition, theof $500 million. The agreement also provides for four milestone payments by the Companyan additional payment of up to $375$25 million upon the achievement of certain commercial milestones. The acquisition is subject to customary closing conditions, including receipt of certain regulatory approvals, and is expected to be completed in the fourth quarter of 2020. In anticipation of the expected completion of this transaction, in October 2020, we drew $500 million in the aggregate if certain sales goals are met. The milestone payments are based on net sales (as defined in the agreement) for the periods from January 1, 2018 through April 30, 2018 and the years ended December 31, 2018, 2019 and 2020. The acquisition was financed usingadditional borrowings under the Company'sour revolving credit facility.
20



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward-looking statements due to a number of factors, including changes in business relationships with and purchases by or from major customers or suppliers; delays or cancellations in shipments; demand for and market acceptance of new and existing products; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; our inability to effectively execute our restructuring programs; our inability to realize anticipated savings from restructuring plans and programs; the impact of healthcare reform legislation and proposals to amend the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; global economic factors, including currency exchange rates, interest rates, sovereign debt issues and the impact of the United Kingdom’s vote to leave the European Union; difficulties entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2016. We expressly disclaim any obligation to update these forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation.
Overview
Teleflex Incorporated (“we,” “us,” “our" and “Teleflex”) is a global provider of medical technology products that enhancefocused on enhancing clinical benefits, improveimproving patient and provider safety and reducereducing total procedural costs. We primarily design, develop, manufacture and supply single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications. We market and sell our products worldwide through a combination of our direct sales force and distributors. Because our products are used in numerous markets and for a variety of procedures, we are not dependent upon any one end-market or procedure. We are focused on achieving consistent, sustainable and profitable growth by increasing our market share and improving our operating efficiencies.
We evaluate our portfolio of products and businesses on an ongoing basis to ensure alignment with our overall objectives. Based on our evaluation, we may identify opportunities to divest businesses and product lines that do not meet our objectives. In addition, we may seek to optimize utilization of our facilities through restructuring initiatives designed to further improve our cost structure and enhance our competitive position. We also may continue to explore opportunities to expand the size of our business and improve operating margins through a combination of acquisitions and distributor to direct sales conversions, which generally involve eliminatingour elimination of a distributor from the sales channel, either by acquiring the distributor or terminating the distributor relationship (in some instances, particularly in Asia, the conversions involve our acquisition or termination of a master distributor and the continued sale of our products through sub-distributors


or through new distributors). Distributor to direct sales conversions enable usare designed to obtainfacilitate improved product pricing and more direct access to the end users of our products within the sales channel.
On February 17, 2017,October 11, 2020, we acquired Vascular Solutions, Inc. (“Vascular Solutions”executed a definitive agreement to acquire Z-Medica, LLC. ("Z-Medica") for $975.5 million, net of cash acquired. Vascular Solutions was, a privately held medical device company that developedmanufactures and sells hemostatic (hemorrhage control) products, which are marketed clinical products for use in minimally invasive coronaryunder the QuikClot, Combat Gauze and peripheral vascular procedures.QuickClot Control+ brand names. The acquisition, is expectedwhich will complement our anesthesia product portfolio, includes an initial cash purchase price of $500 million and also provides for an additional payment of up to meaningfully accelerate$25 million upon the growthachievement of certain commercial milestones. We expect the acquisition to be completed in the fourth quarter of 2020, subject to the satisfaction of customary closing conditions, including receipt of certain regulatory approvals.
COVID-19 pandemic
We continue to experience the effects of the global pandemic caused by the COVID-19 novel strain of coronavirus. Among other things, the response to the COVID-19 pandemic has had the effect of reducing the number of elective procedures being carried out, which has impacted and continues to impact some of our vascularproduct categories, including our interventional urology, surgical, interventional, anesthesia and interventionalOEM products, which have experienced and continue to experience decreased demand. We have also experienced and continue to experience increased demand for products used in the treatment of patients with COVID-19, which are mostly concentrated in our respiratory and vascular access product portfolioscategories. For the three and nine months ended September 27, 2020, each of our segments were negatively impacted by facilitatingthe COVID-19 pandemic due to the reduction in elective procedures and, to a lesser extent, as a result of government-mandated and self-imposed shut-downs in several countries, which were implemented to protect individuals and control the spread of COVID-19. The COVID-19 pandemic is impacting other elements of our further penetrationoperations, as well as our employees, contractors, suppliers, customers and other business partners. To date, we have not experienced significant disruptions in the global supply chain for our products that are in high demand, but, in some cases, delivery times have lengthened, resulting in backorders for some of our products.
In addition, there have been and continues to be impacts on our cost structure resulting from measures that we and other businesses are taking or will take, in accordance with governmental requirements and otherwise, to protect our employees and business partners. We continue to assess the impact on our business (including our employees, customers and suppliers) of travel restrictions, border closures and quarantines as they affect our various sites, including our 35 global manufacturing sites. In most jurisdictions, our manufacturing and distribution sites remain open because we are considered an essential business. However, we have experienced temporary or partial work stoppages in some manufacturing sites in North America and Asia. During the three and nine months ended September 27, 2020, we experienced, and we continue to experience, inefficiencies in our manufacturing operations due to government-mandated and self-imposed restrictions placed on and safety measures implemented at our facilities globally. From an operating expense perspective, we have experienced and continue to experience net decreases in selling, general and administrative expenses as a result of the coronaryCOVID-19 pandemic due to cost
21

mitigation efforts implemented to control discretionary spending including selling, marketing and peripheral vascular market,travel and entertainment related costs and lower performance related employee-benefit costs.
During the third quarter of 2020 and into the fourth quarter, we have begun to experience instances of improvement in revenue trends for the product categories most impacted by the postponement of non-emergent procedures because of the COVID-19 pandemic. However, we have yet to return to the revenue growth levels that we achieved prior to the onset of the pandemic. In addition, the degree of improvement has varied by product category and by generating increased cross-portfolio selling opportunitiesregion. It is uncertain whether this trend will continue or if we will again experience a decrease in the number of elective procedures performed as the COVID-19 pandemic evolves, particularly if the virus becomes more prevalent over the fall and winter seasons in the Northern Hemisphere. Overall, we believe that the COVID-19 pandemic will continue to bothnegatively affect our revenues and Vascular Solutions' customer bases. We financedoperations, at least over the acquisition through a combination of borrowings under our revolving credit facility, which was increased in anticipationnear-term. Because of the acquisition,dynamic nature of the crisis, such as recent regional COVID-19 outbreaks that are impacting the recovery, we cannot accurately predict the extent or duration of the impacts of the pandemic.
Government investigation
In June 2020, we began producing documents and information in response to a new senior secured term loan facility, bothCivil Investigative Demand (a “CID”) received in March 2020 by one of which were provided under our amended and restated credit agreement (the "Credit Agreement"subsidiaries, NeoTract, Inc. (“NeoTract”), which is described in more detail below under "Borrowings" within "Liquidityfrom the U.S. Department of Justice through the United States Attorney’s Office for the Northern District of Georgia (collectively, the “DOJ”). The CID relates to the DOJ’s investigation of a single NeoTract customer, requires the production of documents and Capital Resources".
On October 2, 2017, we completed theinformation pertaining to communications with, and certain rebate programs offered to, that customer and pertains to communications and activities occurring both prior to our acquisition of NeoTract Inc. ("NeoTract"), a privately-held medical device companyin October 2017 and thereafter. In July 2020, the DOJ advised us that has developed and commercializedit had opened an investigation under the UroLift® System, a minimally invasive medical device for treating lower urinary tract symptoms duecivil False Claims Act, 31 U.S.C. §3729, with respect to benign prostatic hyperplasia, or BPH. Under the terms of the agreement, we acquired NeoTract for an upfront cash payment of $725 million, subject to customary purchase price adjustments. We may pay additional consideration of up to $375 million if specified net sales goals through the end of 2020 are achieved. The acquisition of NeoTract was financed using borrowings under our revolving credit facility. See Note 16NeoTract’s operations broadly in addition to the condensed consolidated financial statements included incustomer investigation.
We maintain policies and procedures to promote compliance with the Anti-Kickback Statute, False Claims Acts and other applicable laws and regulations and intend to provide information sought by the government. We cannot at this report for additional information.
Duringtime reasonably predict, however, the nine months ended October 1, 2017, weultimate scope or outcome of this matter, including whether an investigation may raise other compliance issues of interest, including those beyond the scope described above or how any such issues might be resolved. We also completed acquisitions related tocannot at this time reasonably estimate any potential liabilities or penalty, if any, that may arise from this matter, which could have a material adverse effect on our anesthesia and respiratory product portfolios. The total fair value of the consideration related to these acquisitions was $39.2 million.
During 2016, we completed acquisitions of businesses that are included in our OEM and Asia reportable operating segments. In addition, during 2016, we acquired the remaining 26% ownership interest in an Indian affiliate from the noncontrolling shareholders. The total fair value of the consideration we paid in these transactions was $22.8 million.
See Note 3 to the condensed consolidated financial statements included in this report for additional information.
Critical Accounting Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
In our Annual Report on Form 10-K for the year ended December 31, 2016, we provided disclosure regarding our critical accounting estimates, which are reflective of significant judgments and uncertainties, are important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions and conditions.financial condition.
Results of Operations
As used in this discussion, "new products" are products for which commercial sales have commenced within the past 36 months, and “existing products” are products for which commercial sales commenced more than 36 months ago. Discussion of results of operations items that reference the effect of one or more acquired and/or divested businesses or assets (except as noted below with respect to acquired distributors) generally reflects the impact of the acquisitions and/or divestitures within the first 12 months following the date of the acquisition.acquisition and/or divestiture. In addition to increases and decreases in the per unit selling prices of our products to our customers, our discussion of the impact of product price increases and decreases also reflects for the first 12 months following the acquisition or termination of a distributor, the impact on the pricing of our products resulting from the elimination of the distributor, either through acquisition or termination of the distributor, from the sales channel. To the extent an acquired distributor had pre-acquisition sales of products other than ours, the impact of the post-acquisition sales of those products on our results of operations is included within our discussion of the impact of acquired businesses.
Certain financial information is presented on a rounded basis, which may cause minor differences.

Net revenues

Net Revenues
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in millions) (Dollars in millions)
Net Revenues$534.7
 $455.6
 $1,551.2
 $1,354.1
Three Months EndedNine Months Ended
September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in millions)
Net revenues$628.3 $648.3 $1,826.0 $1,914.4 
Net revenues for the three months ended October 1, 2017 increased $79.1September 27, 2020 decreased $20.0 million, or 17.4%3.1%, compared to the prior year period. The increase isperiod, which was primarily attributable to a $37.9 million net revenues of $48.2 million generated by acquired businesses, mainly Vascular Solutions, and to a lesser extent by increasesdecrease in sales volumes of existing products of $11.0 millioncaused by the COVID-19 pandemic partially offset by favorable fluctuations in foreign currency exchange rates and new product sales.net revenues generated by the IWG High Performance Conductors, Inc. (HPC) acquisition.
Net revenues for the nine months ended October 1, 2017 increased $197.1September 27, 2020 decreased $88.4 million, or 14.6%4.6%, compared to the prior year period. The increase isperiod, which was primarily attributable to a $110.8 million net revenues of $122.2 million generated by acquired businesses, mainly Vascular Solutions, and to a lesser extent by increasesdecrease in sales volumes of existing products of $44.7 million and new product sales.caused by the COVID-19 pandemic partially offset by net revenues generated by the HPC acquisition.
22

Gross profit
Three Months Ended Nine Months Ended Three Months EndedNine Months Ended
October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in millions) (Dollars in millions) (Dollars in millions)
Gross profit$295.2
 $241.6
 $841.1
 $723.1
Gross profit$329.3 $355.1 $941.3 $1,031.3 
Percentage of sales55.2% 53.0% 54.2% 53.4%Percentage of sales52.4 %54.8 %51.6 %53.9 %
Gross margin for the three months ended October 1, 2017 increased 220September 27, 2020 decreased 240 basis points, or 4.2%4.4%, compared to the prior year period. The increaseperiod primarily due to lower sales volumes and higher manufacturing costs, both caused by the COVID-19 pandemic, and unfavorable fluctuations in gross margin reflects the impact of an increase in sales of higher margin products, manufacturing cost improvements resulting from the 2016 and 2015 footprint realignment plans and gross margin generated by our acquired businesses, primarily Vascular Solutions.

foreign currency exchange rates.
Gross margin for the nine months ended October 1, 2017 increased 80September 27, 2020 decreased 230 basis points, or 1.5%4.3%, compared to the prior year period. The increase in gross margin reflects the impact of increases in prices andperiod primarily due to lower sales volumes primarily in our Vascular North America and Asia operating segments, as well as lowerhigher manufacturing costs. Manufacturing costs, were impacted by cost improvement initiatives, including the 2016 and 2014 footprint realignment plans partially offset by higher logistics and distribution costs. The increases in gross margin were partially offsetboth caused by the unfavorable $10.4 million impact of the step-up in carrying value of inventory recognized in connection with the Vascular Solutions acquisition, that was sold during the nine months ended October 1, 2017.

COVID-19 pandemic.
Selling, general and administrative
Three Months Ended Nine Months Ended Three Months EndedNine Months Ended
October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in millions) (Dollars in millions) (Dollars in millions)
Selling, general and administrative$163.8
 $139.8
 $486.7
 $419.1
Selling, general and administrative$171.7 $209.3 $510.7 $631.7 
Percentage of sales30.6% 30.7% 31.4% 31.0%Percentage of sales27.3 %32.3 %28.0 %33.0 %
Selling, general and administrative expenses for the three months ended October 1, 2017 increased $24.0September 27, 2020 decreased $37.6 million compared to the prior year period. The increase isdecrease was primarily attributable to $16.5 milliona benefit from reductions in expensesthe estimated fair value of our contingent consideration liabilities, which largely related to acquired businesses and distributorrevenue-based milestone payments, due to direct conversions and a $5.3 million increase in general and administrative expenses.adverse financial projections resulting from the COVID-19 pandemic.
Selling, general and administrative expenses for the nine months ended October 1, 2017 increased $67.6September 27, 2020 decreased $121.0 million compared to the prior year period. The increase isdecrease was primarily attributable to $51.5a $95.5 million benefit from reductions in expenses related to acquired businesses and distributor to direct conversions, a $13.6 million increasethe estimated fair value of our contingent consideration liabilities, which is described above in the section detailing the changes in selling, general and administrative expenses


for the three months ended September 27, 2020. The decrease was also attributable to cost mitigation efforts implemented to control discretionary spending in response to the COVID-19 pandemic including litigationreduced selling, marketing and travel and entertainment related costs,activities and a $7.8 million increase in selling expenses. These increases were partially offset by a gain of $6.4 million resulting from a favorable ruling in a lawsuit involving an insurance provider.lower performance related employee-benefit costs.
Research and development
Three Months Ended Nine Months Ended Three Months EndedNine Months Ended
October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
(Dollars in millions) (Dollars in millions) (Dollars in millions)
Research and development$21.2
 $15.1
 $59.3
 $42.9
Research and development$29.2 $28.0 $86.0 $82.7 
Percentage of sales4.0% 3.3% 3.8% 3.2%Percentage of sales4.7 %4.3 %4.7 %4.3 %
The increaseincreases in research and development expenseexpenses for the three and nine months ended October 1, 2017September 27, 2020 compared to the prior year periods isperiod were primarily attributable to expenses incurredEuropean Union Medical Device Regulation ("EU MDR") related costs partially offset by our Vascular Solutions operating segment. Additionally, research and development expenses for the nine months ended October 1, 2017 were impacted by increased spending on new product development with respect tolower project spend across several of our segments.product portfolios.
23

Restructuring and impairment (credits) charges
2020 Workforce reduction plan
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in millions) (Dollars in millions)
Restructuring (credits) charges$(0.1) $3.0
 $13.7
 $12.9
During the second quarter of 2020, we committed to a workforce reduction designed to improve profitability and reduce cost primarily by streamlining certain sales and marketing functions in our EMEA segment and certain manufacturing operations in our OEM segment. The workforce reduction was initiated to further align the business with our high growth strategic objectives. We estimate that we will incur aggregate pre-tax restructuring charges of $10 million to $13 million, consisting primarily of termination benefits, all of which will result in future cash outlays. This plan will be substantially complete during 2020 and as a result, most of these charges are expected to be incurred prior to the end of 2020. We expect to begin realizing plan-related savings in 2020 and expect to achieve annual pre-tax savings of $11 million to $13 million once the plans are fully implemented.

For the three months ended October 1, 2017, we recorded $0.1 million in net restructuring credits, which primarilyAnticipated charges and pre-tax savings related to changes in estimates with respect to termination benefits.
For the nine months ended October 1, 2017, we recorded $13.7 million in restructuring charges. The charges primarily related to termination benefits associated with the 2017 EMEA restructuring program and the 2017 Vascular Solutions integration program, which were $5.8 million and $4.5 million, respectively.
For the three and nine months ended September 25, 2016, we recorded $3.0 million and $12.9 million, respectively, in restructuring charges primarily related to termination benefits associated with our 2016 other restructuring programs and 2016 Footprint realignment plan (both of which are described in Note 4 to the consolidated condensed financial statements included in this report).other similar cost savings initiatives
In addition to the restructuring programs initiated during 2017,2020 Workforce reduction plan, we have other ongoing restructuring programs primarily related to the consolidation of our manufacturing operations (referred to as our 20162019, 2018 and 2014 footprintFootprint realignment plans) as well as. We also have similar ongoing activities to relocate certain manufacturing operations within our OEM segment (the "OEM initiative") that was initiated in 2018 and does not meet the criteria for a restructuring program under applicable accounting guidance; nevertheless, the activities should result in cost savings (we expect only minimal costs to be incurred in connection with the OEM initiative). With respect to our currently ongoing restructuring programs designedand the OEM initiative, the table below summarizes charges incurred or estimated to improve operatingbe incurred and estimated annual pre-tax savings to be realized as follows: (1) with respect to charges (a) the estimated total charges that will have been incurred once the restructuring programs and OEM initiative are completed; (b) the charges incurred through December 31, 2019; and (c) the estimated charges to be incurred from January 1, 2020 through the last anticipated completion date of the restructuring programs and OEM initiative, December 31, 2024 and (2) with respect to estimated annual pre-tax savings, (a) the estimated total annual pre-tax savings to be realized once the restructuring programs and OEM initiative are completed; (b) the estimated annual pre-tax savings realized based on the progress of the restructuring programs and OEM initiative through December 31, 2019; and (c) the estimated additional annual pre-tax savings to be realized from January 1, 2020 through the last anticipated completion date of the restructuring programs and the OEM initiative, December 31, 2024.
Estimated charges and pre-tax savings are subject to change based on, among other things, the nature and timing of restructuring activities and similar activities, changes in the scope of restructuring programs and the OEM initiative, unanticipated expenditures and other developments including the uncertainties created by the COVID-19 pandemic, the effect of additional acquisitions or dispositions, the failure to realize anticipated savings associated with the development and qualification of a component included in certain kits sold by our anesthesia business in North America and other factors that were not reflected in the assumptions made by management in previously estimating restructuring and restructuring related charges and estimated pre-tax savings. Moreover, estimated pre-tax savings constituting efficiencies with respect to increased costs that otherwise would have resulted from business acquisitions involve, among other things, assumptions regarding the cost structure and reduce costs. Seeintegration of businesses that previously were not administered by our management, which are subject to a particularly high degree of risk and uncertainty. It is likely that estimates of charges and pre-tax savings will change from time to time, and the table below reflects changes from amounts previously estimated. In addition, the table below does not include estimated charges and pre-tax savings related to substantially completed programs. Additional details, including estimated charges expected to be incurred in connection with our restructuring programs, are described in Note 45 to the condensed consolidated financial statements included in this report. With
Pre-tax savings also can be affected by increases or decreases in sales volumes generated by the businesses subject to the consolidation of manufacturing operations; such variations in revenues can increase or decrease pre-tax savings generated by the consolidation of manufacturing operations. For example, an increase in sales volumes generated by the affected businesses, although likely increasing manufacturing costs, may generate additional savings with respect to our restructuring plans and programs,costs that otherwise would have been incurred if the table below summarizes (1) the estimated total cost and estimated annual pre-tax savings and synergies once the programs are completed; (2) the costs incurred and estimated pre-tax savings realized through December 31, 2016; and (3) the costs expected to be incurred and estimated incremental pre-tax savings and synergies estimated to be realized for these programs from January 1, 2017 through the anticipated completion dates. During the quarter ended October 1, 2017, we increased the range of estimated aggregate annual pre-tax savings we expect to realize from these programs from $60 million to $71 million to $67 million to $75 million to reflect incremental savings identified across several of our restructuring programs.


manufacturing operations were not consolidated.
24

Ongoing restructuring programs and other similar cost savings initiatives
Estimated TotalActual results through
December 31, 2019		Estimated remaining from January 1, 2020 through
December 31, 2024
(Dollars in millions)
Restructuring charges (1)
$103 - $124$83$20 - $41
Restructuring related charges (2)
118 - 1444672 - 98
Total charges (3)
$221 - $268$129$92 - $139
OEM initiative annual pre-tax savingsOngoing Restructuring Plans and Programs
$6 - $7Estimated Total$1
Through
December 31, 2016
Estimated Remaining from January 1, 2017 through
December 31, 2021(2)
(Dollars in millions)
Restructuring charges$525 - $60$33$19 - $27$6
Restructuring related charges (1)Pre-tax savings- 2020 Workforce reduction plan (4)
5311 - 651330—2311 - 35
Total charges$105 - $125$63$42 - $62
13
Pre-tax savings (3)savings- ongoing restructuring plans (5)(6)
$6768 - $7578$3125$3643 - $4453
Vascular Solutions and Pyng integration programsTotal annual pre-tax savings
$85 - synergies (4)$98$2126$59 - $27$72
—$21 - $27


(1)Restructuring related charges principally constitute accelerated depreciation and other costs primarily related to the transfer of manufacturing operations to new locations and are expected to be recognized primarily in cost of goods sold.
(2)We expect to incur substantially all of the costs prior to the end of 2018, and to have realized substantially all of the estimated annual pre-tax savings and synergies by the year ended December 31, 2019.
(3)Approximately 65% of the savings is expected to result in reductions to cost of goods sold. During 2016, in connection with our execution of the 2014 footprint realignment plan, we implemented changes to medication delivery devices included in certain of our kits, which are expected to result in increased product costs (and therefore reduce the annual savings that were estimated at the inception of the program). However, we also expect to achieve improved pricing on these kits to offset the cost, which is expected to result in estimated annual increased revenues of $5 million to $6 million. We expect to begin realizing the benefits of this incremental pricing in 2017. Savings generated from restructuring programs are difficult to estimate, given the nature and timing of the restructuring activities and the possibility that unanticipated expenditures may be required as the programs progress. Moreover, predictions of revenues related to increased pricing are particularly uncertain and can be affected by a number of factors, including customer resistance to price increases and competition.
(4)While pre-tax savings address anticipated cost savings to be realized with respect to our historical expense items, synergies reflect anticipated efficiencies to be realized with respect to increased costs that otherwise would have resulted from our acquisition of Vascular Solutions and Pyng Medical Corp. ("Pyng," which we acquired in April 2017). In this regard, the synergies are expected to result from the elimination of redundancies between our operations and Vascular Solutions’ and Pyng's operations, principally through the elimination of personnel redundancies.
The following provides additional details(1)Includes estimated charges associated with respectthe 2020 Workforce reduction plan of $10 million to our programs initiated in 2017:$13 million.
2017 Vascular Solutions Integration Program
During the first quarter 2017, we committed to a restructuring program(2)Represents charges that are directly related to the integrationrestructuring programs and principally constitute costs to transfer manufacturing operations to existing lower-cost locations, project management costs and accelerated depreciation, as well as a charge that is expected to be imposed by a taxing authority as a result of Vascular Solutions' operations with our operations. We initiated the programexit from facilities in the first quarter 2017 and expectauthority's jurisdiction. Most of these charges (other than the programtax charge) are expected to be substantially completed by the endrecognized as cost of goods sold.
(3)During the second quarter 2018. We estimate thatof 2020, we will record aggregate pre-taxadjusted the estimated ranges for restructuring, charges of $6.0 million to $7.5 million related to this program, of which $4.5 million to $5.3 million will constitute termination benefits, and $1.5 million to $2.2 million will relate to other exit costs, including employee relocation and outplacement costs. Additionally, we expect to incur $2.5 million to $3.0 million of restructuring related and total charges consisting primarily of retention bonuses offered to certain employees expected to remain withreflect the Company after completionimpacts of the program. All of these charges will result in future cash outlays. We began realizing program-related synergies in the first quarter 2017 and expect to achieve annualized pre-tax synergies of $20 million to $25 million once the program is fully implemented.
2017 EMEA Restructuring Program
During the first quarter 2017, we committed to a restructuring program to centralize certain administrative functions in Europe. The program commenced2020 Workforce reduction plan (which was initiated in the second quarter 2017of 2020) and is expected to be substantially completed by the end of 2018. We estimate that we will record aggregate pre-tax restructuring charges of $7.1 millionreflect changes in estimates related primarily to $8.5 million related to this program, almost all of which constitute termination benefits and transfer validation associated with the ongoing restructuring programs. The prior range of total charges for the ongoing restructuring plans was $205 million to $255 million as compared to the current range of $211 million to $255 million.
(4)Most all of which willthe pre-tax savings are expected to result in future cash outlays. We expectreductions to achieve annualizedselling, general and administrative expenses.
(5)Substantially all of the pre-tax savings are expected to result in reductions to cost of $2.7goods sold.
(6)During the second quarter of 2020, we updated our estimated annual pre-tax savings associated with our 2019 and 2014 realignment plans. We now estimate our savings will be $15 million to $3.3$17 million once the program is fully implemented and expect$28 million to begin realizing plan related savings$31 million, respectively, compared to our prior estimates of $12 million to $14 million and $26 million to $29 million, respectively. The increases in the first quarter 2018.savings ranges are the result of additional cost reduction measures and changes in assumptions identified as the programs progressed.

Restructuring and impairment charges (credits) incurred

 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
 (Dollars in millions)
Restructuring and impairment (credits) charges$(3.7)$1.3 $16.7 $20.3 
Interest expense
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in millions) (Dollars in millions)
Interest expense$21.3
 $12.9
 $58.9
 $38.6
Average interest rate on debt3.8% 4.1% 3.6% 3.7%
The increase in interest expenseRestructuring and impairment credits for the three months ended October 1, 2017 comparedSeptember 27, 2020 primarily consisted of changes in estimates with respect to termination benefits associated with the prior year period was primarily due to an increase in average debt outstanding, mainly attributable to borrowings under the Credit Agreement that were utilized to fund the Vascular Solutions acquisition2018 Footprint realignment plan.
Restructuring and the pending NeoTract acquisition partially offset by a slight decline in the average interest rate on debt.
The increase in interest expenseimpairment charges for the nine months ended October 1, 2017 compared to the prior year period wasSeptember 27, 2020 primarily due to an increase in average debt outstanding, as well as interest expenseconsisted of $2.1 million incurred in connection with a bridge facility and backstop commitmenttermination benefits related to our entry into the agreement2020 Workforce reduction plan and plan of merger under which we ultimately acquired Vascular Solutions. 2018 Footprint realignment plan.
Interest expense
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
 (Dollars in millions)
Interest expense$16.7 $19.5 $47.8 $63.0 
Average interest rate on debt2.5 %3.4 %2.5 %3.6 %
The bridge facility and backstop commitment were putdecrease in place on December 1, 2016 to, among other things, enable us to finance the acquisition of Vascular Solutions. The bridge facility and backstop commitment were not utilized, as the required financing was provided under the Credit Agreement. The increases were partially offset by a slight decline in the average interest rate on debt.
Loss on extinguishment of debt
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
 (Dollars in millions) (Dollars in millions)
Loss on extinguishment of debt$—
 $—
 $5.6
 $19.3
For the nine months ended October 1, 2017, we recognized a $5.6 million loss on the extinguishment of debt, of which $5.2 million related to our repurchase, on January 5, 2017, of our 3.875% Convertible Senior Subordinated Notes due 2017 (the "Convertible Notes") through exchange transactions we entered into with certain holders of the Convertible Notes and $0.4 million related to the amendment and restatement of our previous credit agreement, which was considered a partial extinguishment of debt.
For the nine months ended September 25, 2016, we recognized a $19.3 million loss on the extinguishment of debt, of which $16.3 million related to our repurchase, on April 4, 2016, of Convertible Notes through exchange transactions we entered into with certain holders of the Convertible Notes and $3.0 million related to conversions of $44.3 million aggregate principal amount of the Convertible Notes.
Taxes on income from continuing operations
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 October 1, 2017 September 25, 2016
Effective income tax rate11.2% 10.2% 8.9% 9.3%

The effective income tax rate for the three and nine months ended October 1, 2017 was 11.2% and 8.9%, respectively, and 10.2% and 9.3%expense for the three and nine months ended September 27, 2020 compared to the prior year periods was primarily due to a lower average interest rate resulting from decreases in interest rates associated with our variable interest rate debt instruments partially offset by increases in average debt outstanding.
25 2016, respectively.

Taxes on income from continuing operations
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019September 27, 2020September 29, 2019
Effective income tax rate(0.8)%(132.3)%7.8 %(48.4)%
The effective income tax rates for the three and nine months ended September 27, 2020 reflect a significant net tax benefit related to share-based compensation. The effective income tax rates for the three and nine months ended September 29, 2019 reflect a discrete tax benefit related to the reduction of a deferred tax liability associated with foreign withholding taxes. Additionally, the effective income tax rate for the threenine months ended October 1, 2017, as compared to the prior year period,September 29, 2019 reflects a significant net tax cost associated with an increase in the estimated deferred tax with respectbenefit related to non-permanently reinvested income.



share-based compensation.
Segment Financial Information
Segment net revenues
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019% Increase/
(Decrease)		September 27, 2020September 29, 2019% Increase/
(Decrease)
(Dollars in millions)
Americas$375.0 $374.5 0.1 $1,045.6 $1,092.3 (4.3)
EMEA135.7 140.5 (3.5)423.4 442.1 (4.2)
Asia68.2 77.9 (12.4)188.4 213.9 (11.9)
OEM49.4 55.4 (10.9)168.6 166.1 1.5 
Segment net revenues$628.3 $648.3 (3.1)$1,826.0 $1,914.4 (4.6)
Segment operating profit
 Three Months EndedNine Months Ended
 September 27, 2020September 29, 2019% Increase/
(Decrease)		September 27, 2020September 29, 2019% Increase/
(Decrease)
(Dollars in millions)
Americas$121.8 $81.4 49.6 $310.3 $229.5 35.2 
EMEA17.7 21.8 (18.9)53.0 69.7 (23.9)
Asia10.1 21.5 (52.9)34.0 50.7 (33.0)
OEM8.2 16.0 (48.3)35.6 43.2 (17.6)
Segment operating profit (1)
$157.8 $140.7 12.2 $432.9 $393.1 10.1 
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 % Increase/
(Decrease)		 October 1, 2017 September 25, 2016 % Increase/
(Decrease)
Segment Revenue(Dollars in millions)   (Dollars in millions)  
Vascular North America$91.0
 $85.1
 6.9
 $278.3
 $254.8
 9.2
Anesthesia North America50.8
 48.7
 4.4
 148.1
 143.9
 3.0
Surgical North America40.8
 41.9
 (2.4) 131.5
 123.9
 6.1
EMEA131.5
 121.4
 8.3
 394.2
 375.2
 5.1
Asia72.4
 64.0
 13.0
 185.3
 176.4
 5.0
OEM48.6
 41.4
 17.3
 137.1
 115.7
 18.5
All other99.6
 53.1
 87.5
 276.7
 164.2
 68.5
Segment net revenues$534.7
 $455.6
 17.4
 $1,551.2
 $1,354.1
 14.6
            
 Three Months Ended Nine Months Ended
 October 1, 2017 September 25, 2016 % Increase/
(Decrease)		 October 1, 2017 September 25, 2016 % Increase/
(Decrease)
Segment Operating Profit(Dollars in millions)  
 (Dollars in millions)  
Vascular North America$25.2
 $21.7
 15.8
 $75.3
 $63.4
 18.7
Anesthesia North America15.7
 14.0
 12.4
 49.7
 41.2
 20.8
Surgical North America13.6
 14.1
 (3.1) 47.3
 39.7
 19.2
EMEA24.2
 16.6
 45.9
 69.7
 61.6
 13.2
Asia20.2
 18.1
 11.9
 49.6
 52.9
 (6.1)
OEM12.3
 10.2
 20.1
 31.7
 24.6
 28.9
All other12.0
 3.4
 248.1
 17.0
 16.5
 2.0
Segment operating profit (1)
$123.2
 $98.1
 25.6
 $340.3
 $299.9
 13.5
(1)(1)See Note 14 to our condensed consolidated financial statements included in this report for a reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest, loss on extinguishment of debt and taxes.
Comparison of the three and nine months ended October 1, 2017 and September 25, 2016
Vascular North America
Vascular North America net revenues for the three months ended October 1, 2017 increased $5.9 million, or 6.9% compared to the prior year period. The increase is primarily attributable to an increase in sales volumes of existing products of $3.1 million, as well as increases in new product sales and prices.
Vascular North America net revenues for the nine months ended October 1, 2017 increased $23.5 million, or 9.2% compared to the prior year period. The increase is primarily attributable to a $15.0 million increase in sales volumes of existing products, reflecting, in part, the impact of a 4 day increase in the number of shipping days within the nine months ended October 1, 2017, as well as an increase in new product sales.
Vascular North America operating profit for the three months ended October 1, 2017 increased $3.5 million, or 15.8%, compared to the prior year period. The increase is primarily attributable to an increase in gross profit resulting from higher sales volumes and price increases, partially offset by higher research and development expenses as well as higher general and administrative expenses.
Vascular North America operating profit for the nine months ended October 1, 2017 increased $11.9 million, or 18.7% compared to the prior year period. The increase is primarily attributable to an increase in gross profit resulting from higher sales volumes, partially offset by higher research and development expenses as well as higher general and administrative expenses.


Anesthesia North America
Anesthesia North America net revenues for the three months ended October 1, 2017 increased $2.1 million, or 4.4% compared to the prior year period. The increase in net revenues is primarily attributable to net revenues of $1.7 million generated by an acquired business.
Anesthesia North America net revenues for the nine months ended October 1, 2017 increased $4.2 million, or 3.0%, compared to the prior year period. The increase is primarily attributable to a $2.9 million increase in new product sales and net revenues of $2.8 million generated by an acquired business. These increases were partially offset by a $2.5 million net decrease in sales volumes of existing products despite a 4 day increase in the number of shipping days within the nine months ended October 1, 2017.
Anesthesia North America operating profit for the three months ended October 1, 2017increased $1.7 million, or 12.4% compared to the prior year period. The increase is primarily attributable to gross profit generated by an acquired business.

Anesthesia North America operating profit for the nine months ended October 1, 2017increased $8.5 million, or 20.8% compared to the prior year period. The increase is primarily attributable to a gain of $6.4 million resulting from a favorable ruling in a lawsuit involving an insurance provider and an increase in gross profit resulting from lower manufacturing costs and the impact of an increase in new product sales partially offset by unfavorable mix.
Surgical North America
Surgical North America net revenues for the three months ended October 1, 2017 decreased $1.1 million, or 2.4%, compared to the prior year period. The decrease is primarily attributable to a $2.4 million decrease in sales volumes of existing products partially offset by price increases and new product sales.
Surgical North America net revenues for the nine months ended October 1, 2017 increased $7.6 million, or 6.1%, compared to the prior year period. The increase is primarily attributable to a $4.0 million increase in new product sales as well as increases in prices and sales volumes of existing products resulting from a 4 day increase in the number of shipping days within the nine months ended October 1, 2017.
Surgical North America operating profit for the three months ended October 1, 2017 decreased $0.5 million, or 3.1%, compared to the prior year period. The decrease is primarily attributable to a decline in gross profit due to lower sales volumes.
Surgical North America operating profit for the nine months ended October 1, 2017 increased $7.6 million, or 19.2%, compared to the prior year period. The increase is primarily attributable to an increase in gross profit resulting from increases in new product sales and prices.
EMEA
EMEA net revenues for the three months ended October 1, 2017 increased $10.1 million, or 8.3%, compared to the prior year period. The increase is primarily attributable to favorable fluctuations in foreign currency exchange rates of $6.0 million and an increase in sales volumes of existing products.
EMEA net revenues for the nine months ended October 1, 2017 increased $19.0 million, or 5.1%, compared to the prior year period. The increase is primarily attributable to an increase in sales volumes of existing products of $15.7 million, including the impact of a 4 day increase in the number of shipping days within the nine months ended October 1, 2017, and an increase in new product sales.
EMEA operating profit for the three months ended October 1, 2017 increased $7.6 million, or 45.9%, compared to the prior year period. The increase is primarily attributable to lower operating expenses as well as an increase in gross profit resulting from the impact of favorable fluctuations in foreign currency exchange rates and higher sales volumes.
EMEA operating profit for the nine months ended October 1, 2017 increased $8.1 million, or 13.2%, compared to the prior year period. The increase is primarily attributable to an increase in gross profit resulting from higher sales volumes as well as lower operating expenses, partially offset by the impact of unfavorable fluctuations in foreign currency exchange rates.


Asia
Asia net revenues for the three months ended October 1, 2017 increased $8.4 million, or 13.0%, compared to the prior year period. The increase is primarily attributable to higher sales volumes of existing products of $5.6 million as well as new product sales.
Asia net revenues for the nine months ended October 1, 2017 increased $8.9 million, or 5.0%, compared to the prior year period. The increase is primarily attributable to an increase in sales volumes of existing products of $3.7 million, an increase in new product sales of $2.8 million and price increases of $2.6 million. We experienced a decline in sales volumes in China resulting from the impact of the distributor to direct sales conversion, but this decline was more than offset by a net increase in sales volumes in the remainder of the Asia segment. As previously disclosed, we expected to experience a decline in sales and operating profit in our Asia segment during 2017 as our former distributor liquidates its inventory of our products and we implement our new structure to support these sales. During the first quarter 2017, the distributor commenced an arbitration proceeding against us, seeking, among other things, to compel our repurchase of Teleflex products that the distributor alleges are currently held in its inventory. See Note 13 to the condensed consolidated financial statements included in this report for additional information.
Asiaa reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest and taxes.
Comparison of the three and nine months ended September 27, 2020 and September 29, 2019
Americas
Americas net revenues for the three months ended October 1, 2017September 27, 2020 increased $2.1$0.5 million, or 11.9%0.1%, compared to the prior year period. The increase was primarily attributable to price increases of $1.8 million and an increase in gross profit resulting from highernew product sales volumes, partially offset by greater selling, general and administrative expenses, including thosea $1.5 million net decrease in sales volumes of existing products caused by the COVID-19 pandemic.
Americas net revenues for the nine months ended September 27, 2020 decreased $46.7 million, or 4.3%, compared to the prior year period, which was primarily attributable to a net decrease in sales volumes of existing products caused by the COVID-19 pandemic.
Americas operating profit for the three months ended September 27, 2020 increased $40.4 million, or 49.6%, compared to the prior year period, which was primarily attributable to a benefit from a reduction in the estimated fair value of our contingent consideration liabilities, which largely relate to revenue-based milestone payments, due to adverse financial projections resulting from the distributor to direct conversion and related arbitration in China mentioned above.COVID-19 pandemic.
AsiaAmericas operating profit for the nine months ended October 1, 2017 decreased $3.3September 27, 2020 increased $80.8 million, or 6.1%35.2%, compared to the prior year period. The decreaseperiod, which was primarily attributable to highera benefit from a reduction in the estimated fair
26

value of our contingent consideration liabilities partially offset by a decrease in gross profit resulting from lower sales caused by the COVID-19 pandemic.
EMEA
EMEA net revenues for the three months ended September 27, 2020 decreased $4.8 million, or 3.5%, compared to the prior year period, which was primarily attributable to a $10.8 million net decrease in sales volumes of existing products largely caused by the COVID-19 pandemic partially offset by favorable fluctuations in foreign currency exchange rates of $5.4 million.
EMEA net revenues for the nine months ended September 27, 2020 decreased $18.7 million, or 4.2%, compared to the prior year period, which was primarily attributable to a net decrease in sales volumes of existing products largely caused by the COVID-19 pandemic.
EMEA operating profit for the three months ended September 27, 2020 decreased $4.1 million, or 18.9%, compared to the prior year period, which was primarily attributable to a decrease in gross profit, resulting from lower sales caused by the COVID-19 pandemic partially offset by favorable mix, and an increase in research and development expenses. The decreases in operating profit were partially offset by lower selling, general and administrative expenses, including thosealso caused by the COVID-19 pandemic, and favorable fluctuations in foreign currency exchange rates.
EMEA operating profit for the nine months ended September 27, 2020 decreased $16.7 million, or 23.9%, compared to the prior year period, which was primarily attributable to a decrease in gross profit resulting from lower sales and higher manufacturing costs, both caused by the distributor to direct sales conversionCOVID-19 pandemic, an increase in research and related arbitration in China mentioned above,development expenses and the impact of unfavorable fluctuations in foreign currency exchange rates partially offset by an increaselower selling, general and administrative expenses also caused by the COVID-19 pandemic.
Asia
Asia net revenues for the three months ended September 27, 2020 decreased $9.7 million, or 12.4%, compared to the prior year period, which was primarily attributable to a net decrease in sales volumes of existing products caused by the COVID-19 pandemic.
Asia net revenues for the nine months ended September 27, 2020 decreased $25.5 million, or 11.9%, compared to the prior year period, which was primarily attributable to a net decrease in sales volumes of existing products caused by the COVID-19 pandemic.
Asia operating profit for the three months ended September 27, 2020 decreased $11.4 million, or 52.9%, compared to the prior year period, which was primarily attributable a decrease in gross profit resulting from higherlower sales volumes and unfavorable product mix, both caused by the impact of price increases.COVID-19 pandemic, which were partially offset by lower selling, general and administrative expense also caused by the COVID-19 pandemic.
Asia operating profit for the nine months ended September 27, 2020 decreased $16.7 million, or 33.0%, compared to the prior year period, which was primarily attributable to the COVID-19 pandemic, which caused a decrease in gross profit resulting from lower sales caused by the COVID-19 pandemic and unfavorable fluctuations in foreign currency exchange rates, partially offset by lower selling, general and administrative expenses also caused by the COVID-19 pandemic.
OEM
OEM net revenues for the three months ended October 1, 2017 increased $7.2September 27, 2020 decreased $6.0 million, or 17.3%10.9%, compared to the prior year period. The increase isperiod, which was primarily attributable to an increasea $12.6 million net decrease in sales volumes of existing products of $3.0 million,caused by the COVID-19 pandemic partially offset by net revenues of $2.1$6.1 million generated by an acquired business and an increase in new product sales.the HPC acquisition.
OEM net revenues for the nine months ended October 1, 2017September 27, 2020 increased $21.4$2.5 million, or 18.5%1.5%, compared to the prior year period. The increase isperiod, which was primarily attributable to an increasenet revenues of $20.1 million generated by the HPC acquisition, partially offset by a $17.4 million net decrease in sales volumes of existing products of $12.9 million and net revenues of $7.7 million generatedcaused by an acquired business.the COVID-19 pandemic.
OEM operating profit for the three months ended October 1, 2017 increased $2.1September 27, 2020 decreased $7.8 million, or 20.1%48.3%, compared to the prior year period. The increase isperiod, which was primarily attributable to an increasea decrease in gross profit resulting from greaterlower sales volumes.caused by the COVID-19 pandemic.
27

OEM operating profit for the nine months ended October 1, 2017 increased $7.1September 27, 2020 decreased $7.6 million, or 28.9%17.6%, compared to the prior year period. The increase isperiod, which was primarily attributable to an increasea decrease in gross profit resulting from greaterlower sales volumes and gross profit generated by an acquired business, partially offset by higher operating expenses, including those incurredcaused by the acquired business.
All Other
Net revenues for our other operating segments increased $46.5 million, or 87.5%,COVID-19 pandemic and $112.5 million, or 68.5%, for the three and nine months ended October 1, 2017, respectively, compared to the prior year periods. The increase is primarily attributable to net revenues of $43.9 million and $110.5 million for the three and nine months ended October 1, 2017, respectively, generated by Vascular Solutions.
Operating profit for our other operating segments for the three months ended October 1, 2017 increased $8.6 million, or 248.1%, compared to the prior year period. The increase is primarily attributable to operating profit generated by Vascular Solutions.
Operating profit for our other operating segments increased $0.5 million or 2.0% for the nine months ended October 1, 2017, compared to the prior year period. The increase is primarily attributable to operating profit generated by our Latin America and Cardiac segments. The gross profit generated by Vascular Solutions' product sales was more than offset by expenses incurred in connection with the acquisition and ongoing operations of Vascular Solutions.

HPC acquisition.



Liquidity and Capital Resources
WeWhile the potential economic impact resulting from the COVID-19 pandemic and the extent and duration of the pandemic's impact are difficult to assess or predict, the impact of the pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.In consideration of the significant uncertainty created by the COVID-19 pandemic, we are continuing to assess our liquidity and anticipated capital requirements. For the nine months ended September 27, 2020, we improved our liquidity position by paying off the borrowings outstanding under our revolving credit facility and increasing long-term borrowings by $500.0 million through the issuance of our 2028 Senior Notes. Additionally, we generated operating cash flows of $241.5 million for the nine months ended September 27, 2020. Notwithstanding the significant uncertainty created by the COVID-19 pandemic, we believe our cash flow from operations, available cash and cash equivalents and borrowings under our revolving credit facility will enable us to fund our operating requirements, capital expenditures and debt obligations for the next 12 months and the foreseeable future. We have net cash provided by United States based operating activities as well as non-United States sources of cash available to help fund our debt service requirements in the United States. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost effective basis. We
In consideration of the COVID-19 pandemic, we are not aware of any restrictions on repatriation of these fundsclosely monitoring our receivables and subject to cash payment of additional United States income taxes or foreign withholding taxes, these funds could be repatriated, if necessary. Any resulting additional taxes could be offset, at least in part, by foreign tax credits. The amount of any taxes required to be paid, which could be significant, and the application of tax credits would be determined based on income tax laws in effect at the time of such repatriation. We do not expect any such repatriation to result in additional tax expense because taxes have been provided for on unremitted foreign earnings that we do not consider permanently reinvested. Of our $1.0 billion of cash and cash equivalents at October 1, 2017, $967.5 million was held at non-United States subsidiaries. On October 2, 2017, we utilized $725 million of cash held at a non-United States subsidiary (funded through borrowings under our revolving credit facility) to fund the NeoTract acquisition. As noted above, we may have to pay up to an additional $375 million in connection with our acquisition of NeoTract, if specified net sales goals are achieved. See "Borrowings" below for additional information regarding our debt activity. See also Note 16 to the condensed consolidated financial statements included in this report for additional information regarding the NeoTract acquisition.
payables.To date, we have not experienced significant payment defaults by, or identified other collectability concerns with, our customers, and we have sufficient lending commitments in place to enable us to fund our anticipated additional operating needs. However, although there have been recent improvements
In anticipation of the expected completion of the Z-Medica acquisition in certain countries, global financial markets remain volatile and the globalfourth quarter of 2020, we drew $500 million in additional borrowings under our revolving credit markets are constrained, which creates a risk that our customers and suppliers may be unable to access liquidity. Consequently, we continue to monitor our credit risk, particularly with respect to customersfacility in Greece, Italy, Portugal and Spain, and consider other mitigation strategies. As of October 1, 2017 and December 31, 2016, our net trade accounts receivable from publicly funded hospitals in Italy, Spain, Portugal and Greece were $25.2 million and $29.2 million, respectively. As of October 1, 2017 and December 31, 2016, our net trade accounts receivable from customers in these countries were approximately 16.9% and 19.3%, respectively of our consolidated net trade accounts receivable. For the nine months ended October 1, 2017 and September 25, 2016, net revenues from customers in these countries were 6.2% and 7.1% of total net revenues, respectively, and average days that current and long-term trade accounts receivable were outstanding were 159 days and 190 days, respectively. If economic conditions in these countries deteriorate, we may experience significant credit losses related to the public hospital systems in these countries. Moreover, if global economic conditions generally deteriorate, we may experience further delays in customer payments, reductions in our customers’ purchases and higher credit losses, which could have a material adverse effect on our results of operations and cash flows in 2017 and future years. In January 2017, we sold $16.1 million of receivables payable from publicly funded hospitals in Italy for $16.0 million.2020.
Cash Flows
Cash flows fromNet cash provided by operating activities from continuing operations provided net cash of approximately $319.7 million for the nine months ended October 1, 2017 as compared to $301.6was $241.5 million for the nine months ended September 25, 2016. The $18.1 million increase is attributable27, 2020 as compared to favorable operating results, partially offset by net unfavorable working capital changes, primarily an increase in inventories, and a net cash outflow for income taxesprovided by operating activities of $289.2 million for the nine months ended October 1, 2017 as comparedSeptember 29, 2019. The $47.7 million decrease was primarily attributable to the nine months ended September 25, 2016 resulting from a refund received in 2016. The netan increase in inventories for the nine months ended October 1, 2017 was $20.3 million compared to $5.6 million for nine months ended September 25, 2016.contingent consideration payments and tax payments. The increase is attributable to inventory purchases to support our footprint realignment restructuring plans and achieve desired safety stock levels.

decreases in operating cash flows were partially offset by favorable changes in other working capital driven by higher accounts receivable collections.
Net cash used in investing activities from continuing operations was $1.1 billion$318.8 million for the nine months ended October 1, 2017,September 27, 2020, which included a $260.0 million payment for the acquisition of HPC, capital expenditures of $62.4 million and net interest proceeds on swaps designated as net investment hedges of $10.0 million.
Net cash provided by financing activities from continuing operations was $116.2 million for the nine months ended September 27, 2020, which reflected a net increase in borrowings of $225.0 million primarily resulting from the $1.0 billion payment for businesses acquired, principally Vascular Solutions, and capital expendituresissuance of $54.0the $500 million which wereof 4.25% Senior Notes due 2028 (the "2028 Notes") partially offset by proceeds of $6.3 million from the sale of two properties, one of which was a building that had been classified as held for sale.

repayments on our revolving credit facility. Net cash used in financing activities from continuing operations was $1.2 billion for the nine months ended October 1, 2017, primarily resulting from a net increase in borrowingsSeptember 27, 2020 also reflects contingent consideration payments of $1.2 billion. Our borrowings under the Credit Agreement included $1.0 billion to finance the Vascular Solutions acquisition, together with related fees$64.1 million and expenses, and $725 million to finance the NeoTract acquisition, partially offset by our repayment of $475 million of borrowings


under our revolving credit facility. Additionally, we had a $136.1 million reduction in borrowings under our 3.875% Convertible Senior Subordinated Notes due 2017 (the "Convertible Notes") resulting from the Exchange Transactions and payment upon maturity of all remaining Convertible Notes outstanding, each of which is discussed below under "Borrowings."

Net cash used in financing activities from continuing operations was also impacted by dividend payments of $45.9 million and debt issuance and amendment fees of $19.1 million, which included fees paid in connection with the signing of the Credit Agreement and a bridge facility and backstop commitment that was put in place to assist with the financing of the Vascular Solutions acquisition, but was never utilized because the required financing was provided under the Credit Agreement.

$47.4 million.
Borrowings
Our Convertible Notes matured on August 1, 2017 (the "Maturity Date"). The Convertible Notes were convertible under certain circumstances, as described in Note 8On March 30, 2020, we increased our borrowing capacity related to the consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2016. Since the fourth quarter 2013, our closing stock price has exceeded the threshold for conversion. Moreover, commencing on May 1, 2017 and through July 28, 2017, the Convertible Notes were convertible regardless of the closing price of our stock. We elected a net settlement methodaccounts receivable securitization facility from $50 million to satisfy our conversion obligations, under which we settled the conversion of Convertible Notes by paying the principal amount of the Convertible Notes in cash and providing shares having a value equal to the excess of the conversion value of the Convertible Notes over the principal amount of the notes; however, cash was paid in lieu of fractional shares.
In January 2017, we acquired $91.7 million aggregate outstanding principal amount of the Convertible Notes in exchange for an aggregate of $93.2 million in cash (including approximately $1.5 million in accrued and previously unpaid interest) and approximately 0.93 million shares of our common stock (the “Exchange Transactions”). We funded the cash portion of the consideration paid through borrowings under our revolving credit facility. In advance of the maturity of the Convertible Notes, $44.2 million in aggregate principal amount of the Convertible Notes (the "Converted Notes") were tendered to us for conversion. On the Maturity Date, we repaid the remaining $44.3 million in aggregate principal amount of the Convertible Notes outstanding, together with unpaid interest due and owing on the Convertible Notes (the “Cash Payment”). In addition to the Cash Payment, on the Maturity Date, we delivered to the holders of the Converted Notes, in the aggregate, 0.5 million shares of our common stock. We funded the Cash Payment through borrowings under our revolving credit facility.
Also in January 2017, we entered into the Credit Agreement, which provides for a five-year revolving credit facility of $1.0 billion and a term loan facility of $750.0$75 million. The availability of loans under our revolving credit facility is dependent upon our ability to maintain continued compliance with the financial and other covenants contained in the Credit Agreement. Moreover, additional borrowings would be prohibited if an event resulting in a Material Adverse Effect (as defined in the Credit Agreement) were to occur. Notwithstanding these restrictions, we believe our revolving credit facility provides us with significant flexibility to meet our foreseeable working capital needs.
In August 2017, we paid down $475 million in borrowings under our revolving credit facility utilizing cash generated by our operations. Immediately following the repayment, we borrowed $725 million under the revolving credit facility to fund the acquisition of NeoTract, as described above.
The Credit Agreement and the indentures under which we issued our 5.25%4.875% Senior Notes due 20242026 (the “2024 Notes”"2026 Notes") and 2026 Notes contain covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to incur additional debt or issue preferred stock or other disqualified stock;stock, create liens;liens, merge, consolidate, or dispose of certain assets, pay dividends, make investments or make other restricted payments; sellpayments, or enter into transactions with our affiliates. The indenture governing our 4.625% Senior Notes due 2027 (the “2027 Notes”) contains covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to create liens; consolidate, merge or dispose of certain assets; and enter into sale leaseback transactions. The 2028 Notes contain covenants that, among other things, will restrict our ability and the ability of our subsidiaries to create certain liens,
28

enter into sale lease back transactions, and merge, consolidate, sell or otherwise dispose of all or substantially all of our assets; or enter into transactions with our affiliates. The Credit Agreement also requires us to maintain a consolidated total leverage ratio (generally, Consolidated Total Funded Indebtedness, as defined in the Credit Agreement, on the date of determination to Consolidated EBITDA, as defined in the Credit Agreement, for the four most recent quarters ending on or preceding the date of determination) of not more than 4.50 to 1.00, and a consolidated senior secured leverage ratio (generally, Consolidated Senior Secured Funded Indebtedness, as defined in the Credit Agreement, on the date of determination to Consolidated EBITDA for the four most recent quarters ending on or preceding the date of determination) of not more than 3.50 to 1.00. The Company is further required to maintain a consolidated interest coverage ratio (generally, Consolidated EBITDA for the four most recent fiscal quarters ending on or preceding the date of determination to Consolidated Interest Expense, as defined in the Credit Agreement, paid in cash for such period) of not less than 3.50 to 1.00.


assets.
As of October 1, 2017,September 27, 2020, we were in compliance with these requirements. The obligations under the Credit Agreement, the 20242026 Notes, 2027 Notes and the 20262028 Notes are guaranteed (subject to certain exceptions) by substantially all of our material domestic subsidiaries, and the obligations under the Credit Agreement are (subject to certain exceptions and limitations) secured by a lien on substantially all of the assets owned by us and each guarantor.
SeeSummarized Financial Information – Obligor Group
The 2026 Notes and 2027 Notes (collectively, the "Senior Notes") are issued by Teleflex Incorporated (the “Parent Company”), and payment of the Parent Company's obligations under the Senior Notes is guaranteed, jointly and severally, by an enumerated group of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. Summarized financial information for the Parent and Guarantor Subsidiaries (collectively, the “Obligor Group”) as of September 27, 2020 and December 31, 2019 and for the nine months ended September 27, 2020 is as follows:
Nine Months Ended
September 27, 2020
(Dollars in millions)
Obligor GroupIntercompanyObligor Group (excluding Intercompany)
Net revenue$1,266.8 $140.0 $1,126.8 
Cost of goods sold767.2 227.6 539.6 
Gross profit499.6 (87.6)587.2 
Income from continuing operations134.2 (18.4)152.6 
Net income134.2 (18.4)152.6 
September 27, 2020December 31, 2019
(Dollars in millions)
Obligor GroupIntercompanyObligor Group
(excluding Intercompany)		Obligor GroupIntercompanyObligor Group
(excluding Intercompany)
Total current assets$811.9 $80.9 $731.0 $735.8 $51.8 $684.0 
Total assets5,279.8 1,419.1 3,860.7 4,847.9 1,237.7 3,610.2 
Total current liabilities787.3 574.1 213.2 852.5 500.8 351.7 
Total liabilities3,781.5 878.7 2,902.8 3,659.5 752.4 2,907.1 
The same accounting policies as described in Note 71 to the condensed consolidated financial statements included in this reportour Annual Report on Form 10-K for additionalthe year ended December 31, 2019 are used by the Parent Company and each of its subsidiaries in connection with the summarized financial information regardingpresented above. The Intercompany column in the Exchange Transactionstable above represents transactions between and among the Credit Agreement.Obligor Group and non-guarantor subsidiaries (i.e. those subsidiaries of the Parent Company that have not guaranteed payment of the Senior Notes). Obligor investments in non-guarantor subsidiaries and any related activity are excluded from the financial information presented above. The summarized financial information presented above for the Obligor Group as of and for the nine months ended September 27, 2020 gives effect to the 2028 Notes issued in a private offering in May 2020.
Contractual obligations
The following table sets forth our contractual obligations solely related to our total borrowings and interest as of October 1, 2017,September 27, 2020, which, as a result of the signingissuance of the Credit Agreement during the first quarter 20172028 Notes and the borrowing activity occurring during the nine months ended October 1,2017September 27, 2020 as described above in "Borrowings", hashave significantly changed since December 31, 2016:2019:
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  Payments due by periodPayments due by period
Total Less than
1 year		 1-3
years		 3-5
years		 More than
5 years		TotalLess than 1 year1-3 years3-5 yearsMore than 5 years
  (Dollars in thousands)(Dollars in millions)
Total borrowings$2,262,000
 $77,250
 $84,375
 $1,450,375
 $650,000
Total borrowings$2,148.0 $91.8 $61.2 $595.0 $1,400.0 
Interest obligations(1)
472,048
 85,050
 165,031
 128,045
 93,922
Interest obligations (1)
486.1 78.6 154.0 134.1 119.4 
(1)Interest payments on floating rate debt are based on the interest rate in effect on October 1, 2017 .

(1)Interest payments on floating rate debt are based on the interest rate in effect on September 27, 2020.

Critical Accounting Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
In our Annual Report on Form 10-K for the year ended December 31, 2019, we provided disclosure regarding our critical accounting estimates, which are reflective of significant judgments and uncertainties, are important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions and conditions.
New Accounting Standards
See Note 2 to the condensed consolidated financial statements included in this report for a discussion of recently issued accounting standards,guidance, including estimated effects, if any, of adoption of the guidance on our financial statements.
Forward-Looking Statements
All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. These statements are not guarantees of future performance and are subject to risks and uncertainties, which are difficult to predict. Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward-looking statements due to a number of factors, including the adverse economic conditions associated with the COVID-19 global health pandemic and the associated financial crisis, stay-at-home and other orders, which could cause material delays and cancellations of elective procedures, curtailed or delayed spending by customers and result in disruptions to our supply chain, closure of our facilities, delays in product launches or diversion of management and other resources to respond to the COVID-19 pandemic; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that the COVID-19 pandemic disrupts local economies and causes economies to enter prolonged recessions; changes in business relationships with and purchases by or from major customers or suppliers; delays or cancellations of shipments; demand for and market acceptance of new and existing products; our inability to provide products to our customers, which may be due to, among other things, events that impact key distributors, suppliers and vendors that sterilize our products; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; our inability to effectively execute our restructuring plans and programs; our inability to realize anticipated savings from restructuring plans and programs; the impact of enacted healthcare reform legislation and proposals to amend, replace or repeal the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; the impact of tax legislation and related regulations; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; global economic factors, including currency exchange rates, interest rates, trade disputes and sovereign debt issues; difficulties in entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2019 as well as Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 29, 2020 and June 28, 2020, and of this report. We expressly disclaim any obligation to update these forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk
SeeThere have been no material changes to the information set forth in Part II, Item 7A of the Company’sour Annual Report on Form 10-K for the year ended December 31, 2016.2019.

Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Management’s assessment of disclosure controls and procedures excluded consideration of Vascular Solutions’ internal control over financial reporting.  Vascular Solutions was acquired during the first quarter of 2017, and the exclusion is consistent with guidance provided by the staff of the Securities and Exchange Commission that an assessment of a recently acquired business may be omitted from management’s report on internal control over financial reporting for up to one year from the date of acquisition, subject to specified conditions.  Vascular Solutions’ total assets were $1.2 billion as of October 1, 2017; its revenues during the three and nine months ended October 1, 2017 were $43.9 million and $110.5 million, respectively.


(b) Change in Internal Control over Financial Reporting
No change in our internal control over financial reporting occurred during our most recentrecently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As a result of our acquisition of Vascular Solutions, we are in the process of evaluating Vascular Solutions’ internal controls to determine the extent to which modifications to Vascular Solutions' internal controls would be appropriate.


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PART II — OTHER INFORMATION
 
Item 1. Legal Proceedings
We are party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability and product warranty, commercial disputes, intellectual property, contracts,contract, employment, environmental and environmentalother matters. As of October 1, 2017September 27, 2020 andDecember 31, 2016,2019, we have accrued liabilities of approximately $8.6$0.2 million and $2.5$0.4 million, respectively, in connection with these matters, representing our best estimate of the cost within the range of estimated possible loss that will be incurred to resolve these matters. Of the $8.6 million accrued at October 1, 2017, $5.0 million pertains to discontinued operations. Based on information currently available, advice of counsel, established reserves and other resources, we do not believe that the outcome of any such actions areoutstanding lawsuits or claims is likely to be, individually or in the aggregate, material to our business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or liquidity. See “Litigation” within Note 13 to the condensed consolidated financial statements included in this report for additional information.


Item 1A. Risk Factors
See the information set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 29, 2020 and June 28, 2020. There have been no significant changes in risk factors for the quarter ended October 1, 2017. See the informationSeptember 27, 2020 except as set forth below. The risk factor set forth below replaces in Part I, Item 1A oftheir entireties the Company’srisk factors in our Annual Report on Form 10-K for the year ended December 31, 2016.2019 with the title “Our results of operations and financial condition may be adversely affected by public health epidemics, including the novel coronavirus reported to have originated in Wuhan, China,” and in our Quarterly Reports on Form 10-Q for the quarters ended March 29, 2020 and June 28, 2020 with the title “Our results of operations and financial condition may be adversely affected by public health epidemics, including the ongoing COVID-19 global health pandemic.”:
Our results of operations and financial condition may be adversely affected by public health epidemics, including the ongoing COVID-19 global health pandemic.

On March 11, 2020, the World Health Organization declared the global outbreak of COVID-19 to be a pandemic. The COVID-19 pandemic has significantly impacted economic activity and markets around the world. If the pandemic continues and conditions worsen, particularly if the virus becomes more prevalent over the fall and winter seasons in the Northern Hemisphere, it could negatively impact our business, results of operations, financial condition and liquidity in numerous ways, including, but not limited to, those outlined below:
•It has resulted, and we expect it will continue to result, in lower revenues in certain of our product categories, including our interventional urology (which revenues are primarily concentrated in our Americas segment), surgical, interventional, anesthesia and OEM product categories, in which we sell products largely utilized in elective procedures, which have been significantly reduced or suspended due to the pandemic.
•It has resulted in higher revenues in our respiratory and vascular access product categories. However, we are unable to predict how long this sustained demand will last or how significant it will be.
•It may cause disruptions in the manufacture of our products. We currently rely on our 35 manufacturing sites, with major manufacturing operations located in the Czech Republic, Germany, Malaysia, Mexico and the U.S., to manufacture our products. The COVID-19 pandemic, and/or the governmental or regulatory actions taken in response to COVID-19 pandemic, may interfere with our ability, or that of our employees or suppliers to perform our and their respective responsibilities and obligations relative to the conduct of our business and create a risk to our ability to manufacture our products in a timely manner, or at all. We have experienced and expect to continue to experience inefficiencies in our manufacturing operations due to government-mandated and self-imposed restrictions placed on facilities in certain locations primarily in North America and Asia. Additionally, we have experienced and continue to experience a higher than normal level of absenteeism across our global manufacturing sites. In an effort to increase the wider availability of needed medical device products, we may elect to, or the government may require us to, allocate manufacturing capacity (for example, pursuant to the U.S. Defense Production Act) in a way that adversely affects our regular operations and financial results, results in differential treatment of customers and/or adversely affects our customer relationships and reputation.
•While we have not experienced significant payment defaults by, or identified other significant collectability concerns with, our customers to date, we may be adversely impacted by delays in payments of outstanding
32

receivables if our customers experience financial difficulties or are unable to borrow money to fund their operations, which may adversely impact their ability to pay for our products on a timely basis, if at all.
•The COVID-19 pandemic, including related illness, border closures, travel restrictions, quarantines, lockdowns or other workforce disruptions, could disrupt our suppliers or our suppliers’ suppliers and/or the distribution of our products, whether through our direct sales force or our distributors. These disruptions, or our failure to respond to them, could increase manufacturing or distribution costs or cause delays in delivering, or an inability to deliver, products to our customers.
•The COVID-19 pandemic has increased volatility and pricing in the capital markets, and volatility if likely to continue. We might not be able to continue to access preferred sources of liquidity when we would like, and our borrowing costs could increase.
These and other impacts of the COVID-19 pandemic, or other pandemics or epidemics, could have the effect of heightening many of the other risks described in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2019. We might not be able to predict or respond to all impacts on a timely basis to prevent near- or long-term adverse impacts to our results. The severity, magnitude and duration of the COVID-19 pandemic is uncertain, rapidly changing and hard to predict. We do not yet know the full extent of potential delays or impacts on our business, our results of operations or financial condition or on healthcare systems or the global economy as a whole. However, these effects could have an adverse impact on our liquidity, capital resources, operations and business and those of the third parties on which we rely, and such impact could be material.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.


Item 3. Defaults Upon Senior Securities
Not applicable.


Item 4. Mine Safety Disclosures
Not applicable.


Item 5. Other Information
Not applicable.


On October 27, 2020, James J. Leyden notified us that he will retire from the company on March 31, 2021 to pursue a career in public interest. Leading up to his retirement, Mr. Leyden will continue to serve in his current role as our Corporate Vice President, General Counsel and Secretary until December 31, 2020. Thereafter, Mr. Leyden will remain employed as a senior advisor until his retirement date to assist with the transition of his duties and responsibilities. From January 1, 2021 to his retirement date, Mr. Leyden’s base salary and benefits will be reduced to a level commensurate with his senior advisor role.


On October 27, 2020, our Board of Directors appointed Daniel V. Logue to succeed Mr. Leyden as Corporate Vice President, General Counsel and Secretary of Teleflex, effective January 1, 2021. Mr. Logue, who joined Teleflex in 2004, has served as Deputy General Counsel of the company since February 2017. Previously, Mr. Logue held the positions of Associate General Counsel from March 2013 to January 2017 and Assistant General Counsel from June 2004 to February 2013.
33

Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this report:
 
Exhibit No.Description
Exhibit No.10.1—Description
Employment Agreement, dated September 1, 2020, between Teleflex Medical Europe Limited and Mario Wijker.
31.1
10.2		—
—Senior Executive Officer Severance Agreement, dated September 1, 2020, between Teleflex Medical Europe Limited and Mario Wijker.
10.3—
 31.1—
31.2
—
—
Certification of Chief Financial Officer, pursuant to Rule 13a–14(a) under the Securities Exchange Act of 1934.
32.1
—
—
Certification of 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.

32.2
—
—
Certification of 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.
101.1
—
The following materials from the Company’sour Quarterly Report on Form 10-Q for the quarter ended October 1, 2017,September 27, 2020, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Cover Page; (ii) the Condensed Consolidated Statements of Income for the three and nine months ended October 1, 2017September 27, 2020 and September 25, 2016; (ii)29, 2019; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 1, 2017September 27, 2020 and September 25, 2016; (iii)29, 2019; (iv) the Condensed Consolidated Balance Sheets as of October 1, 2017September 27, 2020 and December 31, 2016; (iv)2019; (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended October 1, 2017September 27, 2020 and September 25, 2016; (v)29, 2019; (vi) the Condensed Consolidated Statements of Changes in Equity for the three and nine months ended October 1, 2017September 27, 2020 and September 25, 2016;29, 2019; and (vi)(vii) Notes to Condensed Consolidated Financial Statements.
 104.1—The cover page of the Company's Quarterly Report on Form 10-Q for the quarter ended September 27, 2020, formatted in inline XBRL (included in Exhibit 101.1).







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SIGNATURES
Pursuant to the requirements 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.


TELEFLEX INCORPORATED
By:/s/ Benson F. SmithLiam J. Kelly
Benson F. SmithLiam J. Kelly
ChairmanPresident and Chief Executive Officer
(Principal Executive Officer)
By:/s/ Thomas E. Powell
Thomas E. Powell
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Dated: November 2, 2017October 29, 2020



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