SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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
(Address of principal executive offices)			(Zip Code)

~~(610)~~ (610) 225-6800

(Registrant’s telephone number, including area code)

(Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report)



~~Indicate by check mark whether the registrant (1) has filed all reports required~~Securities registered pursuant to ~~be filed by~~ Section ~~13 or 15(d)~~12(b) 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 x No ¨ Act:

~~Indicate by check mark whether the registrant has submitted electronically and posted~~Title of each class	Trading Symbol(s)	Name of each exchange 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 ¨which registered

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 theCommon Stock, par value $1.00 per share	TFX	New York Stock 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	x☒		Accelerated 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 45,795,694 shares of common stock, par value $1.00 per share, outstanding as of July 30, 2018.~~

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 46,232,846 shares of common stock, par value $1.00 per share, outstanding as of July 30, 2019.

TELEFLEX INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED ~~JULY 1, 2018~~JUNE 30, 2019

~~PART I~~ — ~~FINANCIAL INFORMATION~~

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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 Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in thousands)
Net (loss) income $ (2,496 ) $ 78,003
$ 53,688
$ 118,173
Other comprehensive income, net of tax:
Foreign currency translation, net of tax of $9,378, $(11,392), $3,505, and $(18,481), for the three and six months periods, respectively (125,705 ) 65,685
(44,517 ) 112,667
Pension and other postretirement benefit plans adjustment, net of tax of $(656), $(465), $(890), and $(997) for the three and six month period, respectively 2,015
704
2,896
1,594
Derivatives qualifying as hedges, net of tax of $100, $(615), $(111) and $(1,170) for the three and six month period, respectively (329 ) 3,433
292
5,161
Other comprehensive (loss) income, net of tax: (124,019 ) 69,822
(41,329 ) 119,422
Comprehensive (loss) income $ (126,515 ) $ 147,825
$ 12,359
$ 237,595

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

~~TELEFLEX INCORPORATED~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~(Unaudited)~~

July 1, 2018 December 31, 2017
(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents $ 346,304
$ 333,558
Accounts receivable, net 359,119
345,875
Inventories, net 405,428
395,744
Prepaid expenses and other current assets 52,105
47,882
Prepaid taxes 19,084
5,748
Assets held for sale 3,239
—
Total current assets 1,185,279
1,128,807
Property, plant and equipment, net 410,979
382,999
Goodwill 2,220,888
2,235,592
Intangible assets, net 2,306,204
2,383,748
Deferred tax assets 2,386
3,810
Other assets 49,585
46,536
Total assets $ 6,175,321
$ 6,181,492
LIABILITIES AND EQUITY
Current liabilities
Current borrowings $ 86,875
$ 86,625
Accounts payable 94,834
92,027
Accrued expenses 104,340
96,853
Current portion of contingent consideration 110,454
74,224
Payroll and benefit-related liabilities 89,669
107,415
Accrued interest 6,771
6,165
Income taxes payable 5,597
11,514
Other current liabilities 37,905
9,053
Total current liabilities 536,445
483,876
Long-term borrowings 2,145,468
2,162,927
Deferred tax liabilities 596,434
603,676
Pension and postretirement benefit liabilities 113,083
121,410
Noncurrent liability for uncertain tax positions 12,765
12,296
Noncurrent contingent consideration 132,205
197,912
Other liabilities 204,940
168,864
Total liabilities 3,741,340
3,750,961
Commitments and contingencies

Total shareholders' equity 2,433,981
2,430,531
Total liabilities and shareholders' equity $ 6,175,321
$ 6,181,492



	Three Months Ended					Six Months Ended
	June 30, 2019		July 1, 2018			June 30, 2019		July 1, 2018
	(Dollars in thousands)
Net income (loss)	$	83,375	$	(2,496	)	$	124,272	$	53,688
Other comprehensive income (loss), net of tax:
Foreign currency translation, net of tax of $0, $9,378, $0, and $3,505, for the three and six months periods, respectively	12,568		(125,705		)	12,332		(44,517		)
Pension and other postretirement benefit plans adjustment, net of tax of $(446), $(656), $(836), and $(890) for the three and six months periods, respectively	1,459		2,015			2,688		2,896
Derivatives qualifying as hedges, net of tax of $83, $100, $82, and $(111) for the three and six months periods, respectively	755		(329		)	158		292
Other comprehensive income (loss), net of tax:	14,782		(124,019		)	15,178		(41,329		)
Comprehensive income (loss)	$	98,157	$	(126,515	)	$	139,450	$	12,359

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

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED ~~STATEMENTS OF CASH FLOWS~~BALANCE SHEETS

(Unaudited)

Six Months Ended
July 1, 2018 July 2, 2017
(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income $ 53,688
$ 118,173
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations (1,309 ) 539
Depreciation expense 29,527
28,084
Amortization expense of intangible assets 75,008
41,375
Amortization expense of deferred financing costs and debt discount 2,368
2,825
Loss on extinguishment of debt —
5,593
Fair value step up of acquired inventory sold —
10,442
Changes in contingent consideration 34,618
(237 )
Impairment of long-lived assets 1,865
—
Stock-based compensation 10,737
9,534
Deferred income taxes, net 4,821
(8,779 )
Other (3,669 ) (3,300 )
Changes in operating assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable (15,886 ) 5,071
Inventories (15,017 ) (12,187 )
Prepaid expenses and other current assets (3,611 ) 4
Accounts payable, accrued expenses and other liabilities 38,112
6,541
Income taxes receivable and payable, net (29,668 ) (5,988 )
   Net cash provided by operating activities from continuing operations 181,584
197,690
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment (38,004 ) (36,833 )
Proceeds from sale of assets —
6,332
Payments for businesses and intangibles acquired, net of cash acquired (22,450 ) (993,459 )
Net cash used in investing activities from continuing operations (60,454 ) (1,023,960 )
Cash flows from financing activities of continuing operations:
Proceeds from new borrowings —
1,194,500
Reduction in borrowings (18,500 ) (228,273 )
Debt extinguishment, issuance and amendment fees (188 ) (19,114 )
Net proceeds from share based compensation plans and the related tax impacts 9,800
1,305
Payments for contingent consideration (62,574 ) (153 )
Dividends paid (30,938 ) (30,590 )
Net cash provided by (used in) financing activities from continuing operations (102,400 ) 917,675
Cash flows from discontinued operations:
Net cash used in operating activities (464 ) (961 )
Net cash used in discontinued operations (464 ) (961 )
Effect of exchange rate changes on cash and cash equivalents (5,520 ) 41,981
Net increase in cash and cash equivalents 12,746
132,425
Cash and cash equivalents at the beginning of the period 333,558
543,789
Cash and cash equivalents at the end of the period $ 346,304
$ 676,214

Non cash investing activities of continuing operations:
Property, plant and equipment additions due to build-to-suit lease transaction
$ 28,147
$ —

Non cash financing activities of continuing operations:
Settlement and exchange of convertible notes with common or treasury stock                                 $ —
$ 983
Acquisition of treasury stock associated with settlement and exchange of convertible note hedge and warrant agreements                    $ 36,877
$ 19,361



	June 30, 2019		December 31, 2018
	(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	303,896	$	357,161
Accounts receivable, net	382,142		366,286
Inventories, net	461,320		427,778
Prepaid expenses and other current assets	78,477		72,481
Prepaid taxes	19,306		12,463
Total current assets	1,245,141		1,236,169
Property, plant and equipment, net	425,475		432,766
Operating lease assets	107,543		—
Goodwill	2,250,219		2,246,579
Intangible assets, net	2,242,267		2,325,052
Deferred tax assets	3,056		2,446
Other assets	40,709		34,979
Total assets	$	6,314,410	$	6,277,991
LIABILITIES AND EQUITY
Current liabilities
Current borrowings	$	50,000	$	86,625
Accounts payable	108,059		106,709
Accrued expenses	87,698		97,551
Current portion of contingent consideration	119,706		136,877
Payroll and benefit-related liabilities	88,888		104,670
Accrued interest	6,009		6,031
Income taxes payable	4,448		5,943
Other current liabilities	29,084		38,050
Total current liabilities	493,892		582,456
Long-term borrowings	2,081,372		2,072,200
Deferred tax liabilities	604,856		608,221
Pension and postretirement benefit liabilities	86,149		92,914
Noncurrent liability for uncertain tax positions	11,029		10,718
Noncurrent contingent consideration	71,965		167,370
Noncurrent operating lease liabilities	96,502		—
Other liabilities	203,801		204,134
Total liabilities	3,649,566		3,738,013
Commitments and contingencies
Total shareholders' equity	2,664,844		2,539,978
Total liabilities and shareholders' equity	$	6,314,410	$	6,277,991

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

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF ~~CHANGES IN EQUITY~~CASH FLOWS

(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, 2017 46,871
$ 46,871
$ 591,721
$ 2,285,886
$ (265,091 ) 1,704
$ (228,856 ) $ 2,430,531
Cumulative effect adjustment resulting from the adoption of new accounting standards 3,076
3,076
Net income

53,688

53,688
Cash dividends ($0.68 per share)

(30,938 )

(30,938 )
Other comprehensive income

(41,329 )

(41,329 )
Settlements of warrants (36,903 ) (272 ) 36,877
(26 )
Shares issued under compensation plans 211
211
14,984

(45 ) 3,227
18,422
Deferred compensation

235

(8 ) 322
557
Balance as of July 1, 2018 47,082
$ 47,082
$ 570,037
$ 2,311,712
$ (306,420 ) 1,379
$ (188,430 ) $ 2,433,981



	Six Months Ended
	June 30, 2019			July 1, 2018
	(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income	$	124,272		$	53,688
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (income) from discontinued operations	974			(1,309		)
Depreciation expense	31,966			29,527
Amortization expense of intangible assets	75,285			75,008
Amortization expense of deferred financing costs and debt discount	2,249			2,368
Gain on sale of assets	(2,739		)	—
Changes in contingent consideration	25,456			34,618
Impairment of long-lived assets	6,911			1,865
Stock-based compensation	12,700			10,737
Deferred income taxes, net	(5,495		)	4,821
Payments for contingent consideration	(26,092		)	—
Other	(4,527		)	(3,669		)
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable	(19,747		)	(15,886		)
Inventories	(33,970		)	(15,017		)
Prepaid expenses and other assets	(6,381		)	(3,611		)
Accounts payable, accrued expenses and other liabilities	(6,231		)	38,112
Income taxes receivable and payable, net	(17,347		)	(29,668		)
Net cash provided by operating activities from continuing operations	157,284			181,584
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment	(56,107		)	(38,004		)
Proceeds from sale of assets	1,178			—
Payments for businesses and intangibles acquired, net of cash acquired	(1,025		)	(22,450		)
Net interest proceeds on swaps designated as net investment hedges	8,330			—
Net cash used in investing activities from continuing operations	(47,624		)	(60,454		)
Cash flows from financing activities of continuing operations:
Proceeds from new borrowings	25,000			—
Reduction in borrowings	(52,500		)	(18,500		)
Debt extinguishment, issuance and amendment fees	(4,703		)	(188		)
Net proceeds from share based compensation plans and the related tax impacts	7,829			9,800
Payments for contingent consideration	(111,928		)	(62,574		)
Dividends paid	(31,347		)	(30,938		)
Net cash used in financing activities from continuing operations	(167,649		)	(102,400		)
Cash flows from discontinued operations:
Net cash provided by (used in) operating activities	2,799			(464		)
Net cash provided by (used in) discontinued operations	2,799			(464		)
Effect of exchange rate changes on cash and cash equivalents	1,925			(5,520		)
Net (decrease) increase in cash and cash equivalents	(53,265		)	12,746
Cash and cash equivalents at the beginning of the period	357,161			333,558
Cash and cash equivalents at the end of the period	$	303,896		$	346,304

Non cash investing activities of continuing operations:
Property, plant and equipment additions due to build-to-suit lease transaction	$	—		$	28,147

Non cash financing activities of continuing operations:
Acquisition of treasury stock associated with settlement and exchange of convertible note hedge and warrant agreements	$	—		$	36,877

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

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)



	Common Stock			Additional Paid In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock					Total
	Shares	Dollars		Additional Paid In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Shares		Dollars			Total
	(Dollars and shares in thousands, except per share)
Balance at December 31, 2018	47,248	$	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 income						40,897											40,897
Cash dividends ($0.34 per share)						(15,650		)									(15,650		)
Other comprehensive income									396								396
Shares issued under compensation plans	75	75		3,094								(40	)	2,029			5,198
Deferred compensation				127								(4	)	253			380
Balance at March 31, 2019	47,323	47,323		577,982		2,451,525			(340,689		)	1,188		(166,263		)	2,569,878
Net income						83,375											83,375
Cash dividends ($0.34 per share)						(15,697		)									(15,697		)
Other comprehensive income									14,782								14,782
Shares issued under compensation plans	77	77		12,252								(2	)	177			12,506
Balance as of June 30, 2019	47,400	$	47,400	$	590,234	$	2,519,203		$	(325,907	)	1,186		$	(166,086	)	$	2,664,844



	Common Stock			Additional Paid In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock					Total
	Shares	Dollars		Additional Paid In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Shares		Dollars			Total
	(Dollars and shares in thousands, except per share)
Balance at December 31, 2017	46,871	$	46,871	$	591,721		$	2,285,886		$	(265,091	)	1,704		$	(228,856	)	$	2,430,531
Cumulative effect adjustment resulting from the adoption of new accounting standards							3,076											3,076
Net income							56,184											56,184
Cash dividends ($0.34 per share)							(15,447		)									(15,447		)
Other comprehensive income										82,690								82,690
Settlements of warrants				(17,884		)							(132	)	17,872			(12		)
Shares issued under compensation plans	97	97		992									(43	)	3,033			4,122
Deferred compensation													(8	)	322			322
Balance at April 1, 2018	46,968	46,968		574,829			2,329,699			(182,401		)	1,521		(207,629		)	2,561,466
Net income							(2,496		)									(2,496		)
Cash dividends ($0.34 per share)							(15,491		)									(15,491		)
Other comprehensive income										(124,019		)						(124,019		)
Settlements of warrants				(19,019		)							(140	)	19,005			(14		)
Shares issued under compensation plans	114	114		13,992									(2	)	194			14,300
Deferred compensation				235														235
Balance as of July 1, 2018	47,082	$	47,082	$	570,037		$	2,311,712		$	(306,420	)	1,379		$	(188,430	)	$	2,433,981

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

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,” “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 presentation of 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. 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's annual consolidated financial statements. ~~Accordingly,~~Therefore, the Company's quarterly condensed consolidated financial statements should be read in conjunction with the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

Note 2 — ~~New~~Recently issued accounting standards

In May 2014, the Financial Accounting Standards Board ("FASB"), in a joint effort with the International Accounting Standards Board ("IASB"), issued new accounting guidance to clarify the principles for recognizing revenue. This new guidance, as amended by additional guidance issued in 2015 and 2016, is encompassed in FASB Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) and is designed to enhance the comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, and affects any entity that enters into contracts with customers or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The new guidance establishes principles for reporting information to users 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 amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The Company adopted the new standard on January 1, 2018, applying the modified retrospective method to all of its contracts; as a result, the Company recognized the cumulative effect of adopting the guidance as a $1.2 million increase to the Company's opening balance of retained earnings on the adoption date. In addition, in connection with its adoption of the new guidance, the Company reclassified the reserve for product returns from a reduction of receivables to a liability. The reserve for returns and allowances was $4.2 million at July 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated results of operations, cash flows and financial position. Additional information and disclosures required by this new standard are contained in Note 3.

In February 2016, the FASB issued guidance that ~~will change~~changes the requirements for accounting for leases. Under the new guidance, ~~lessees (including lessees under both leases classified~~in connection with a lease as ~~finance leases,~~to 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~~an entity is a lessee, the entity generally must 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~~previous guidance, operating leases ~~are~~were 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 with an option to elect a package of practical expedients. Further, companies can elect to apply the transition approach either for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements or those existing at, or entered into after, the adoption date. The Company is currently evaluating this guidance to determine its impact on the Company’s consolidated results of operations, cash flows and financial position.

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

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 Company adopted the new standard on January 1, ~~2018~~2019 using ~~the~~a modified retrospective ~~method of adoption; as a result,~~transition approach, which requires leases existing at, or entered into after, January 1, 2019 to be recognized and measured in the condensed consolidated balance sheet. The Company recognized additional net lease assets and lease liabilities of $105.3 million and $106.6 million, respectively, upon adoption of the ~~cumulative effect of adopting~~guidance. The difference between the ~~guidance~~additional lease assets and lease liabilities was recorded as ~~a $1.8 million increase~~an adjustment to the Company's opening balance of retained ~~earnings on the adoption date. The adoption of this guidance did~~earnings. Prior period amounts have not ~~have a material impact on~~been adjusted and continue to reflect the Company's ~~consolidated results of operations, cash flows and financial position.~~historical accounting.

~~In March 2017,~~As permitted under the FASB issued guidance for employers 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 statement separately from the service cost component and outside a subtotal of income from operations. The Company adopted this guidance on January 1, 2018; the impact was not material to the consolidated financial statements.

In August 2017, the FASB issued guidance with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. The new guidance, ~~provides~~the Company has made an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for ~~changes to current designation and measurement guidance for qualifying hedging relationships and to~~short term leases on a straight-line basis over the ~~method of presenting hedge results.~~lease term. In addition, the Company has elected to apply certain practical expedients available under the new guidance. As a result, and in connection with the transition to the new guidance, ~~includes certain targeted improvements~~the Company did not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the classification of any expired or existing leases, or (iii) initial direct costs for any existing leases. The Company applied the practical expedients described above to ~~ease~~its entire lease portfolio at the ~~application of current guidance related to~~January 1, 2019 adoption date. Furthermore, as permitted under the ~~assessment of hedge effectiveness. The~~ new guidance, ~~is effective~~the Company has made, as a practical expedient, an accounting policy election to not separate lease and non-lease components and instead will account for ~~reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating~~each separate lease component and the ~~impact of the adoption of~~non-lease components associated with that lease component as a single lease component. Additional information and disclosures required by this ~~guidance on its consolidated results of operations and financial position.~~standard are contained in Note 8.

In February 2018, the FASB issued new guidance to address a narrow-scope financial reporting issue that arose as a consequence of federal tax legislation commonly referred to as the Tax Cuts and Jobs Act ("the TCJA"). Existing guidance requires that deferred tax liabilities and assets be adjusted for a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. The guidance is applicable even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income (rather than in net income), such as amounts related

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

to benefit plans and hedging activity. As a result, the tax effects of items within accumulated other comprehensive income (referred to as stranded tax effects) do not reflect the appropriate tax rate. The new guidance, which was effective January 1, 2019, permits ~~for a~~ reclassification of these amounts from accumulated other comprehensive income to retained earnings thereby eliminating the stranded tax effects. The new guidance also requires certain disclosures about the stranded tax effects. The Company elected not to reclassify stranded tax effects from accumulated other comprehensive income to retained earnings.

In June 2016, the FASB issued new guidance that changes the methodology to be used to measure credit losses for certain financial instruments and financial assets, including trade receivables. Under current 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 incurred loss. The new guidance requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset, based not only on historical experience and current conditions, but also on reasonable forecasts. The main objective of the new guidance is to provide financial statement users with more useful information in making decisions about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The new guidance is effective for fiscal years beginning after December 15, ~~2018, and~~2019, including interim periods within those fiscal years. Early adoption is ~~permitted for reporting periods for which financial statements have not yet been issued.~~permitted. The new guidance ~~can~~will be applied ~~either in~~on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the ~~period~~beginning of ~~adoption or retrospectively to each~~the annual period ~~(or periods)~~ in which the ~~effect of the change in the U.S. federal corporate income tax rate in the TCJA~~adoption is ~~recognized.~~effective. The Company is currently evaluating the impact ~~this~~the guidance will have on its consolidated financial statements and related disclosures, but it is not expected to have a material effect on the consolidated financial statements.

From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by the Company as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. The Company has 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 - Net revenues

The Company primarily generates revenue from the 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 the Company’s 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 the Company’s products are shipped from the manufacturing or distribution facility. For the Company’s ~~OEM~~Original Equipment and Development Services ("OEM") segment, most revenue is recognized over time because the OEM segment generates revenue from the sale of custom products that have no

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

alternative use and the Company has an enforceable right to payment ~~for~~to the extent that performance ~~completed to date.~~has been completed. The Company markets and sells products through its 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%~~88%, 9%10% and 4%2% of consolidated net revenues, respectively, for the six months ended ~~July 1, 2018.~~June 30, 2019. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. With respect to the custom products sold in the OEM segment, revenue is measured using the units produced output method. Payment is generally due 30 days from the date of invoice.

The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying ASC 606: (1) the Company accounts for amounts collected from customers for sales and other taxes, net of related amounts remitted to tax authorities; (2) the Company does not adjust the promised amount of consideration for the effects of a significant financing component because, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less; (3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; (4) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service; (5) the Company classifies shipping and handling costs within cost of goods sold; and (6) with respect to the OEM segment, the Company has applied the practical expedient to exclude disclosure of remaining performance obligations as the contracts typically have a term of one year or less.

The amount of consideration the Company receives and revenue the Company recognizes varies as a result of changes in customer sales incentives, including discounts and rebates, and returns offered to customers. The estimate of revenue is adjusted upon the earlier of the following events: (i) the most likely amount of consideration expected to be received changes or (ii) the consideration becomes fixed. The Company’s policy is to accept returns only in cases in which the product is defective and covered under the Company’s standard warranty provisions. When the Company gives customers the right to return products, the Company estimates the expected returns based on an analysis of historical experience. The reserve for returns and allowances was $4.2 million and $4.5 million as of July 1, 2018 and July 2, 2017, respectively. In estimating customer rebates, the Company considers the lag time between the point of sale and the payment of the customer’s rebate claim, customer-specific trend analyses, contractual commitments, including stated rebate rates, historical experience with respect to specific customers and other relevant information as the Company has a history of providing similar rebates on similar products to similar customers. The reserve for customer incentive programs, including customer rebates, was $13.6 million and $10.7 million at July 1, 2018 and July 2, 2017, respectively. The Company expects the amounts subject to the reserve as of July 1, 2018 to be paid within 90 days subsequent to period-end.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table disaggregates revenue by global product category for the three and six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017.~~2018.


	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	July 1, 2018		July 2, 2017		July 1, 2018		July 2, 2017		June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
Revenue by global product category_{(1) (2)}	(Dollars in thousands)
									(Dollars in thousands)
Vascular access	$	140,604	$	133,323	$	284,845	$	263,345	$	153,647	$	140,149	$	297,544	$	284,177
Anesthesia	89,810		85,938		175,229		167,143		85,723		89,311		165,975		174,233
Interventional	77,179		68,425		148,858		112,391		104,785		98,189		207,969		188,331
Surgical	90,489		90,740		176,139		178,044		95,570		90,517		182,289		176,138
Interventional urology	47,674		—		89,974		—		67,952		47,674		127,683		89,974
OEM	52,594		45,132		98,448		88,478		56,428		52,594		110,666		98,448
Other₍₃₎₍₁₎	111,516		105,055		223,603		207,093		88,402		91,432		173,965		185,795
Net revenues(2)	$	609,866	$	528,613	$	1,197,096	$	1,016,494	$	652,507	$	609,866	$	1,266,091	$	1,197,096

(1) Revenues in the "Other" category in the table above include revenues generated from sales of the Company’s respiratory and urology products (other than interventional urology products). For the three and six months ended June 30, 2019, the Company reclassified its cardiac products from "Other" to "Interventional". The comparative prior year period has been restated to conform to the current period presentation.

~~(1)~~(2)

The product categories listed above are presented on a global basis; in contrast, each of the Company’s ~~North American~~ reportable segments ~~generally are defined largely based on~~other than the ~~particular products sold by the segments, and its non-North American~~OEM reportable ~~segments~~segment are defined exclusively based on the geographic location of its operations; the OEM reportable segment ~~operations (with the exception~~operates globally. Each of the ~~Original Equipment and Development Services ("OEM")~~Company’s geographically based reportable ~~segment, which operates globally). The Company’s EMEA and Asia reportable~~ segments ~~as well as its Latin America operating segment,~~ include net revenues from each of the non-OEM product categories listed above.

~~(2)~~

The methodology used to determine the product revenues included within certain of the product categories listed in the table above differs from the methodology used to recognize revenues in our reportable segments, including the similarly named North American reportable segments. The differences are due to the fact that segment classification generally is determined based on the call point within the customer's organization from which the purchase order resulting in the sales originated, while the classification of products within the product categories listed in the table above includes all sales of products within the listed product category, regardless of the call point within the customer's organization from which the sales originated.

~~(3) Other revenues~~

Note 4 — Divestitures

On February 4, 2019, the Company sold substantially all of the assets related to its vein catheter reprocessing business for $12.6 million. The Company recognized a $2.7 million pre-tax gain on the sale of assets, which represents the excess of the $9.7 million fair value of consideration received over the carrying value of the assets sold. In connection with the sale, the purchaser of the assets issued a secured promissory note to the Company in the ~~table above comprise~~principal amount of $10.5 million. The purchaser's obligations under the ~~Company’s respiratory, urology and cardiac product categories.~~

~~Note 4 — Acquisitions~~

notes are secured by a lien on substantially all of the purchaser's assets. The purchaser is obligated to repay the principal amount of the promissory note in annual installments of $2.1 million through the fifth anniversary of the date of sale. On ~~June 21, 2018,~~ the ~~Company acquired certain assets~~date of ~~QT Vascular LTD ("QT Vascular"), a medical device company that developed and marketed coronary balloon catheters, which complement~~sale, the ~~Company's interventional product portfolio. The aggregate consideration transferred for the assets, which primarily consisted of intellectual property, was $20.6 million.~~

~~2017 Acquisitions~~

~~During 2017, the Company completed several acquisitions; the largest of which were NeoTract, Inc. ("NeoTract") and Vascular Solutions, Inc. ("Vascular Solutions"), which are summarized below. The~~ fair value of the ~~consideration transferred for the 2017 acquisitions~~promissory note was ~~$2.0 billion.~~

~~NeoTract~~

~~On October 2, 2017,~~$7.6 million, which the Company ~~acquired NeoTract,~~calculated by applying a ~~medical device company that developed and commercialized~~discount rate determined after taking into account the ~~UroLift System, a minimally invasive medical device for treating lower urinary tract symptoms due to benign prostatic hyperplasia, or BPH. The~~creditworthiness of the purchaser. As of June 30, 2019, the Company ~~made initial payments of $725.6~~had $8.0 million in ~~cash less a favorable working capital adjustment of $1.4 million. Additionally, the estimated fair value of contingent consideration~~receivables related to ~~NeoTract sales-based milestones as of July 1, 2018 was $227.7 million. The contingent consideration liability represents~~ the estimated fair value of the Company’s obligations, under the acquisition agreement, to make payments of up to $375 million in the aggregate if specified sales goals through the end of 2020 are achieved. The Company made an additional payment of $75.0 million ($64.2 millionpromissory note, of which ~~was paid during the second quarter 2018~~$2.0 million and ~~$10.8~~$6.0 million of which was paid during the first week of the third quarter 2018) as a result of the achievement of a sales goal for the period from January 1, 2018 to April 30, 2018. Financial information of NeoTract is primarily presentedare included in accounts receivable, net and other assets, respectively, within the ~~Interventional Urology North America operating segment, which is included in the "all other" category in the Company's presentation of segment information.~~condensed consolidated balance sheet.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The Company is continuing to evaluate the initial purchase price allocations in connection with its acquisition of NeoTract, and further adjustments may be necessary as a result 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.

~~Vascular Solutions~~

On February 17, 2017, the Company acquired Vascular Solutions, a medical device company that developed and marketed products for use in minimally invasive coronary and peripheral vascular procedures. The aggregate consideration paid by the Company in connection with the acquisition was $975.5 million.

~~Pro forma combined financial information~~

The following unaudited pro forma combined financial information for the three and six months ended July 2, 2017 gives effect to the Vascular Solutions and NeoTract acquisitions as if they had occurred on January 1, 2016. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have occurred under the ownership and management of the Company.

Three Months Ended Six Months Ended
July 2, 2017 July 2, 2017
(Dollars and shares in thousands, except per share)
Net revenue $ 558,836
$ 1,092,154
Net income $ 66,726
$ 103,833
Basic earnings per common share:
Net income $ 1.48
$ 2.31
Diluted earnings per common share:
Net income $ 1.43
$ 2.22
Weighted average common shares outstanding:
Basic 44,996
44,945
Diluted 46,818
46,716

The unaudited pro forma combined financial information presented above includes the accounting effects of the Vascular Solutions and NeoTract acquisitions, including, to the extent applicable, amortization charges from acquired intangible assets; adjustments for depreciation of property, plant and equipment; interest expense; and the related tax effects.

Note 5 — Restructuring and impairment charges (credits)

The following tables provide information regarding restructuring and impairment charges recognized by the Company for the three and six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017:~~2018:



Three Months Ended June 30, 2019
	Termination benefits			Other costs ₍₁₎		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	(459	)	$	30	$	(429	)
2018 Footprint realignment plan	(2,275		)	134		$	(2,141	)
Other restructuring programs₍₂₎	62			312		374
Restructuring charges (credits)	(2,672		)	476		(2,196		)
Asset impairment charges	—			3,881		3,881
Restructuring and impairment charges (credits)	$	(2,672	)	$	4,357	$	1,685



Three Months Ended July 1, 2018
	Termination benefits		Other costs ₍₁₎		Total
	(Dollars in thousands)
2018 Footprint realignment plan	$	52,345	$	129	$	52,474
Other restructuring programs ₍₄₎	574		440		1,014
Restructuring charges	52,919		569		53,488
Asset impairment charges	—		1,865		1,865
Restructuring and impairment charges	$	52,919	$	2,434	$	55,353

Three Months Ended July 1, 2018
Termination benefits
Other costs ₍₂₎
Total
(Dollars in thousands)
2018 Footprint realignment plan
$ 52,345
$ 129
$ 52,474
Other restructuring programs ₍₁₎
574
440
1,014
Restructuring charges $ 52,919
$ 569
$ 53,488
Long-lived asset impairment charge —
1,865
1,865
Restructuring and impairment charges
$ 52,919
$ 2,434
$ 55,353

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~



Six Months Ended June 30, 2019
	Termination Benefits			Other costs ₍₁₎		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	12,516		$	30	$	12,546
2018 Footprint realignment plan	(1,838		)	708		(1,130		)
Other restructuring programs₍₂₎	188			565		753
Restructuring charges	10,866			1,303		12,169
Asset impairment charges	—			6,911		6,911
Restructuring and impairment charges	$	10,866		$	8,214	$	19,080

Three Months Ended July 2, 2017
Termination benefits
Other costs ₍₂₎
Total
(Dollars in thousands)
Restructuring charges ₍₃₎
$ 612
$ 258
$ 870

Six Months Ended July 1, 2018
Termination benefits
Other costs ₍₂₎
Total
(Dollars in thousands)
2018 Footprint realignment plan $ 52,345
$ 129
$ 52,474
2016 Footprint realignment plan 2,199
291
2,490
Other restructuring programs ₍₄₎
1,032
555
1,587
Restructuring charges $ 55,576
$ 975
$ 56,551
Long-lived asset impairment charge —
1,865
1,865
Restructuring and impairment charges $ 55,576
$ 2,840
$ 58,416

Six Months Ended July 2, 2017
Termination benefits
Other costs ₍₂₎
Total
(Dollars in thousands)
Vascular Solutions integration program $ 4,853
$ 34
$ 4,887
2017 EMEA restructuring program 6,536
—
6,536
2016 Footprint realignment plan 825
76
901
Other restructuring programs ₍₅₎
1,147
344
1,491
Restructuring charges $ 13,361
$ 454
$ 13,815



Six Months Ended July 1, 2018
	Termination Benefits		Other costs ₍₁₎		Total
	(Dollars in thousands)
2018 Footprint realignment plan	$	52,345	$	129	$	52,474
2016 Footprint realignment plan ₍₃₎	2,199		291		2,490
Other restructuring programs ₍₄₎	1,032		555		1,587
Restructuring charges	55,576		975		56,551
Asset impairment charges	—		1,865		1,865
Restructuring and impairment charges	$	55,576	$	2,840	$	58,416


(1)	Other restructuring ~~programs include the 2016 and 2014 Footprint realignment plans, the Vascular Solutions integration program and the 2017 EMEA restructuring program as well as the other 2016 restructuring programs.~~


~~(2)~~	~~Other~~ costs include facility closure, contract termination and other exit costs.

~~(3)~~(2)

~~Restructuring charges include charges related to~~Includes the Vascular Solutions integration program ~~2017 EMEA restructuring program,~~(initiated in 2017) as well as the 2016 and 2014 ~~footprint~~Footprint realignment plans, 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 Medical Corp. (“Pyng”) into the Company, during the second quarter of 2017, following the Company’s acquisition of Pyng in April 2017.plans.

~~(4) Other restructuring programs include the 2014~~(3) The 2016 Footprint realignment plan ~~Vascular Solutions integration~~involved 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. The program ~~the 2017 EMEA restructuring program~~is substantially complete and the ~~other 2016~~Company expects future restructuring ~~programs.~~expenses associated with the program, if any, to be immaterial.

~~(5) Other restructuring programs include~~

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

(4) Includes the 2014 Footprint realignment plan, the ~~2017 Pyng~~Vascular Solutions integration program and the ~~2016 Other Restructuring programs.~~EMEA restructuring program (initiated in 2017).

2019 Footprint Realignment Plan

In February 2019, the Company initiated a restructuring plan primarily involving the relocation of certain manufacturing operations to existing lower-cost locations and related workforce reductions (the "2019 Footprint realignment plan"). These actions are expected to be substantially completed during 2022. The following table provides a summary of the Company’s cost estimates by major type of expense associated with the 2019 Footprint realignment plan:



Type of expense	Total estimated amount expected to be incurred
Termination benefits	$19 million to $23 million
Other exit costs ₍₁₎	$1 million to $2 million
Restructuring charges	$20 million to $25 million
Restructuring related charges ₍₂₎	$36 million to $45 million
Total restructuring and restructuring related charges	$56 million to $70 million


(1)	Includes facility closure, employee relocation, equipment relocation and outplacement costs.


(2)	Restructuring related charges represent costs that are directly related to the 2019 Footprint realignment plan and principally constitute costs to transfer manufacturing operations to existing lower-cost locations, project management costs and accelerated depreciation. Most of these charges are expected to be recognized within cost of goods sold.

In addition to the restructuring charges shown in the tables above, the Company recorded restructuring related charges with respect to the 2019 Footprint realignment plan of $1.0 million and $1.7 million for the three and six months ended June 30, 2019 within cost of goods sold.

As of June 30, 2019, the Company has a restructuring reserve of $11.8 million in connection with this plan, all of which relate to termination benefits.

2018 Footprint Realignment Plan

On May 1, 2018, the Company initiated a restructuring plan involving the relocation of certain European manufacturing operations to an existing lower-cost ~~location,~~locations, the outsourcing of certain of the Company’s European distribution operations and related workforce reductions (the “2018 Footprint realignment plan"). These actions are expected to be substantially completed by the end of 2024. ~~The following table provides a summary of the Company’s cost estimates by major type of expense associated with the 2018 Footprint realignment plan:~~



~~Type of expense~~	~~Total estimated amount expected to be incurred~~
~~Termination benefits~~	~~$60 million to $70 million~~
~~Other exit costs~~ ₍₁₎	~~$2 million to $4 million~~
~~Restructuring charges~~	~~$62 million to $74 million~~
~~Restructuring related charges~~ ₍₂₎	~~$40 million to $59 million~~
~~Total restructuring and restructuring related charges~~	~~$102 million to $133 million~~

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~


~~(1)~~	~~Includes contract termination, facility closure, employee relocation, equipment relocation and outplacement costs.~~

~~(2)~~

Consists of pre-tax charges related to accelerated depreciation and other costs directly related to the plan, primarily project management costs and costs to transfer manufacturing operations to the new location, as well as a charge associated with the Company’s exit from the facilities that is expected to be imposed by the taxing authority in the affected jurisdiction. Excluding this tax charge, substantially all of the charges are expected to be recognized within costs of goods sold.

In addition to the restructuring charges shown in the tables above, the Company recorded restructuring related charges with respect to the 2018 Footprint realignment plan of ~~$1.0~~$0.7 million and $1.3 million for the three and six months ended June 30, 2019 and July 1, 2018, ~~within cost of goods sold.~~

~~As of July 1, 2018, the Company has a restructuring reserve of $51.4 million related to this plan, all of which related to termination benefits.~~

~~2016 Footprint Realignment Plan~~

~~In 2016, the Company initiated a restructuring plan (the “2016 Footprint realignment plan") involving the relocation of certain manufacturing operations, the relocation~~respectively 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.

~~In addition to the restructuring charges shown in the tables above, the Company recorded restructuring related charges with respect to the 2016 Footprint realignment plan of $2.0 million and $3.3~~$1.0 million for each of the three and six months ended July 1, ~~2018 and $2.0 million and $4.1 million for the three and six months ended July 2, 2017, respectively.~~2018. The restructuring related charges were included within cost of goods sold. The majority of ~~these~~the restructuring related charges in both periods constituted ~~accelerated depreciation and other~~ costs arising ~~principally as a result of~~from the transfer of manufacturing operations to new locations.

The Company estimates that itis will incur aggregate pre-tax restructuring and restructuring related charges in connection with the ~~2016~~2018 Footprint realignment plan of approximately ~~$43~~$102 million to $133 million. As of ~~July 1, 2018,~~June 30, 2019, the Company has incurred aggregate restructuring charges in connection with the ~~2016~~2018 Footprint realignment plan of ~~$17.1~~$53.9 million. ~~Additionally,~~In addition, as of ~~July 1, 2018,~~June 30, 2019, the Company has incurred aggregate restructuring related charges of ~~$18.0~~$5.4 million with respect to the ~~2016~~2018 Footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations to new locations. The restructuring related charges primarily were included in cost of goods sold. As of ~~July 1, 2018,~~June 30, 2019, the Company has a restructuring reserve of ~~$6.3~~$45.0 million ~~related to~~in connection with this plan, all of which related 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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

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 2020.

The Company recorded restructuring related charges with respect to the ~~first half~~2014 Footprint realignment plan of ~~2020.~~ $0.7 million and $1.3 million for the three and six months ended June 30, 2019, respectively, and $0.6 million and $1.0 million for the three and six months ended July 1, 2018, respectively. The majority of these restructuring related charges in both periods constituted costs arising from the transfer of manufacturing operations to new locations.

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 $46~~$47 million to ~~$51~~$52 million.

In addition to the restructuring charges set forth in the tables above, the Company recorded restructuring related charges with respect to the 2014 Footprint realignment plan of $0.6 million and $1.0 million for the three and six months ended July 1, 2018, respectively, and $0.5 million and $2.1 million for the three and six months endedJuly 2, 2017, 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 ~~July 1, 2018,~~June 30, 2019, the Company has incurred aggregate restructuring charges of $12.8 million in connection with the 2014 Footprint realignment plan ~~aggregating to $12.2 million~~. Additionally, as of ~~July 1, 2018,~~June 30, 2019, the Company has incurred aggregate restructuring related charges ~~aggregating to $27.9~~of $30.5 million ~~related to~~in connection with 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 ~~July 1, 2018,~~June 30, 2019, the Company has a restructuring reserve of ~~$3.9~~$3.8 million in connection with the plan, all of which related to termination benefits.

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

As the restructuring programs progress, management will reevaluate the estimated expenses and charges set forth above, and may revise its estimates, as appropriate, consistent with GAAP. For ~~a description of~~additional information related to the Company's restructuring programs, see Note 45 to the Company's consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, ~~2017.~~

Restructuring charges by reportable operating segment, and by all other operating segments in the aggregate, for the three and six months ended July 1, 2018 and July 2, 2017 are set forth in the following table:

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in thousands)
Vascular North America $ 202
$ 353
$ 523
$ 1,081
Interventional North America 362
191
907
4,406
Anesthesia North America 91
564
125
811
EMEA 52,539
(412 ) 52,790
7,115
All other 294
174
2,206
402
Restructuring charges $ 53,488
$ 870
$ 56,551
$ 13,815
2018.

Note 6 — Inventories, net

Inventories as of ~~July 1, 2018~~June 30, 2019 and December 31, ~~2017~~2018 consisted of the following:



	June 30, 2019		December 31, 2018
	(Dollars in thousands)
Raw materials	$	131,252	$	111,105
Work-in-process	63,465		62,334
Finished goods	266,603		254,339
Inventories, net	$	461,320	$	427,778

July 1, 2018 December 31, 2017
(Dollars in thousands)
Raw materials $ 103,005
$ 98,451
Work-in-process 63,386
62,381
Finished goods 239,037
234,912
Inventories, net $ 405,428
$ 395,744

Note 7 — 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 six months ended ~~July 1, 2018:~~June 30, 2019:



	Americas		EMEA		Asia		OEM		Total
	(Dollars in thousands)
December 31, 2018	$	1,549,534	$	480,615	$	211,547	$	4,883	$	2,246,579
Goodwill related to acquisitions	174		75		476		—		725
Currency translation adjustment	1,221		196		1,498		—		2,915
June 30, 2019	$	1,550,929	$	480,886	$	213,521	$	4,883	$	2,250,219

Vascular
North America
Interventional North America Anesthesia
North America
Surgical
North America
EMEA
Asia OEM
All
Other
Total
(Dollars in thousands)
December 31, 2017 $ 264,869

$ 433,049
$ 157,289

$ 250,912

$ 494,548

$ 209,200
$ 4,883

$ 420,842

$ 2,235,592
Goodwill related to acquisitions —

422
—

—

9

3
—

145

579
Currency translation adjustment —

(1,938 ) (395 )
—

(9,836 )
(2,352 ) —

(762 )
(15,283 )
July 1, 2018 $ 264,869
$ 431,533
$ 156,894
$ 250,912
$ 484,721
$ 206,851
$ 4,883
$ 420,225
$ 2,220,888

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The Company's gross carrying amount of, and accumulated amortization relating to, intangible assets as of ~~July 1, 2018~~June 30, 2019 and December 31, ~~2017~~2018 were as follows:



	Gross Carrying Amount				Accumulated Amortization
	June 30, 2019		December 31, 2018		June 30, 2019			December 31, 2018
	(Dollars in thousands)
Customer relationships	$	1,025,516	$	1,030,194	$	(345,715	)	$	(322,972	)
In-process research and development	28,404		28,457		—			—
Intellectual property	1,359,876		1,363,516		(363,396		)	(322,539		)
Distribution rights	23,455		23,465		(18,397		)	(17,860		)
Trade names	565,434		565,070		(43,644		)	(36,379		)
Non-compete agreements	22,981		23,004		(12,247		)	(8,904		)
	$	3,025,666	$	3,033,706	$	(783,399	)	$	(708,654	)

Gross Carrying Amount Accumulated Amortization
July 1, 2018 December 31, 2017 July 1, 2018 December 31, 2017
(Dollars in thousands)
Customer relationships $ 1,016,254
$ 1,023,837
$ (302,216 ) $ (281,263 )
In-process research and development 29,763
34,672
—
—
Intellectual property 1,295,555
1,287,487
(296,217 ) (258,580 )
Distribution rights 23,570
23,697
(17,417 ) (16,996 )
Trade names 568,227
571,510
(29,244 ) (22,069 )
Non-compete agreements 23,507
23,429
(5,578 ) (1,976 )
$ 2,956,876
$ 2,964,632
$ (650,672 ) $ (580,884 )

Note 8 — Leases

The Company has operating leases for various types of properties, consisting of manufacturing plants, engineering and research centers, distribution warehouses, offices and other facilities, and equipment used in operations. Some leases provide the Company with an option, exercisable at the Company's sole discretion, to terminate the lease or extend the lease term for one or more years. When measuring assets and liabilities arising from a lease that provides the Company with an option to extend the lease term, the Company takes into account payments to be made in the optional extension period when it is reasonably certain that the Company will exercise the option. Total lease cost (all of which related to operating leases) was $6.6 million and $12.7 million for the three and six months ended June 30, 2019, respectively.

Maturities of lease liabilities



	June 30, 2019
	(Dollars in thousands)
2019	$	14,045
2020	23,992
2021	21,602
2022	19,924
2023	16,363
2024 and thereafter	42,060
Total lease payments	137,986
Less: interest	(21,334		)
Present value of lease liabilities	$	116,652

Supplemental information as of and for the six months ended June 30, 2019 (dollars in thousands)



Total lease liabilities ₍₁₎	$	116,652
Cash paid for amounts included in the measurement of lease liabilities within operating cash flows	$	12,636
Right of use assets obtained in exchange for operating lease obligations	$	19,728
Weighted average remaining lease term	6.8 years
Weighted average discount rate	4.4		%

(1) The current portion of the operating lease liabilities of $20.1 million is included in Other current liabilities.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

As of December 31, 2018, minimum lease payments under noncancellable operating leases were expected to be as follows:



	December 31, 2018
	(Dollars in thousands)
2019	$	25,294
2020	23,216
2021	21,419
2022	19,460
2023	17,403
2024 and thereafter	41,368

Note 9 — Borrowings

The Company's borrowings at June 30, 2019 and December 31, 2018 were as follows:



	June 30, 2019			December 31, 2018
	(Dollars in thousands)
Senior Credit Facility:
Revolving credit facility, at a rate of 3.90% at June 30, 2019, due 2024	$	276,000		$	293,000
Term loan facility, at a rate of 3.90% at June 30, 2019, due 2024	673,000			683,500
5.25% Senior Notes due 2024	250,000			250,000
4.875% Senior Notes due 2026	400,000			400,000
4.625% Senior Notes due 2027	500,000			500,000
Securitization program, at a rate of 3.15% at June 30, 2019	50,000			50,000
	2,149,000			2,176,500
Less: Unamortized debt issuance costs	(17,628		)	(17,675		)
	2,131,372			2,158,825
Current borrowings	(50,000		)	(86,625		)
Long-term borrowings	$	2,081,372		$	2,072,200

Credit Agreement

On April 5, 2019, the Company amended and restated its existing credit agreement by entering into a Second Amended and Restated Credit Agreement (the "Credit Agreement"), which provides for a five-year revolving credit facility of $1.0 billion and a term loan facility of $700.0 million. The Company's obligations under the Credit Agreement are guaranteed (subject to certain exceptions and limitations) by substantially all of the material domestic subsidiaries of the Company. The obligations under the Credit Agreement are secured, subject to certain exceptions and limitations, by a lien on substantially all of the assets owned by the Company and each guarantor. The maturity date of the revolving credit facility and the term loan facility under the Credit Agreement is April 5, 2024.

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 1.125% to 2.00% or at an alternate base rate, which generally is defined as the highest of (i) the “Prime Rate” in the U.S. last quoted by The Wall Street Journal, (ii) 0.50% above the greater of the federal funds rate and the rate comprised of both overnight federal funds and overnight eurodollar borrowings and (iii) 1.00% above adjusted LIBOR for a one month interest period, plus an applicable margin ranging from 0.125% to 1.00%, in each case subject to adjustments based on the Company’s consolidated total net leverage ratio. Overdue loans will bear interest at the rate otherwise applicable to such loans plus 2.00%.

The Credit Agreement contains customary representations and warranties and covenants that, in each case, subject to certain exceptions, qualifications and thresholds, (a) place limitations on the Company and its subsidiaries regarding the incurrence of additional indebtedness, additional liens, fundamental changes, dispositions of property, investments and acquisitions, dividends and other restricted payments, transactions with affiliates, restrictive

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

agreements, changes in lines of business and swap agreements, and (b) require the Company and its subsidiaries to comply with sanction laws and other laws and agreements, to deliver financial information and certain other information and give notice of certain events, to maintain their existence and good standing, to pay their other obligations, to permit the administrative agent and the lenders to inspect their books and property, to use the proceeds of the Credit Agreement only for certain permitted purposes and to provide collateral in the future. Subject to certain exceptions, the Company is required to maintain a maximum consolidated total net leverage ratio of 4.50 to 1.00. The Company is further required to maintain a minimum consolidated interest coverage ratio of 3.50 to 1.00.

The Company capitalized $3.9 million related to transactions fees, including underwrites' discounts and commissions incurred in connection with the Credit Agreement.

Note 10 — Financial instruments

Foreign ~~Currency Forward Contracts~~currency forward contracts

The Company uses 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. 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. The Company enters into the non-designated foreign currency forward contracts for periods consistent with its currency translation exposures, which generally approximate one month. For the three and sixmonths ended June 30, 2019, the Company recognized a gain of $1.5 million and a loss of $1.6 million, respectively, related to non-designated foreign currency forward contracts. For the three and six months ended July 1, 2018, the Company recognized a loss related to non-designated foreign currency forward contracts of $1.4 million and $0.7 million, respectively.

The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of June 30, 2019 and December 31, 2018 was $118.1 million and $115.3 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of June 30, 2019 and December 31, 2018 was $147.5 million and $125.9 million, respectively. All open foreign currency forward contracts as of June 30, 2019 have durations of twelve months or less.

Cross-currency interest rate swaps

On March 4, 2019, the Company entered into cross-currency swap agreements with five 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, the Company has notionally exchanged $250 million at an annual interest rate of 4.8750% 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.

On October 4, 2018, the Company entered into cross-currency swap agreements with six 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, the Company has 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 six months ended ~~July 2, 2017,~~June 30, 2019, the Company recognized aforeign exchange loss of $0.7 million and gain of $9.8 million, respectively, within AOCI related to ~~non-designated foreign currency forward contracts of $2.3 million and $3.1 million, respectively.~~the cross-currency swaps.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Balance sheet presentation

The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of ~~July 1, 2018~~June 30, 2019 and December 31, ~~2017:~~2018:



	June 30, 2019		December 31, 2018
	Fair Value
	(Dollars in thousands)
Asset derivatives:
Designated foreign currency forward contracts	$	1,344	$	1,216
Non-designated foreign currency forward contracts	159		106
Cross-currency interest rate swap	21,156		14,728
Prepaid expenses and other current assets	22,659		16,050
Total asset derivatives	$	22,659	$	16,050
Liability derivatives:
Designated foreign currency forward contracts	$	992	$	524
Non-designated foreign currency forward contracts	131		264
Other current liabilities	1,123		788
Cross-currency interest rate swap	6,152		7,793
Other liabilities	6,152		7,793
Total liability derivatives	$	7,275	$	8,581

July 1, 2018 December 31, 2017
Fair Value
(Dollars in thousands)
Asset derivatives:
Designated foreign currency forward contracts $ 1,513
$ 914
Non-designated foreign currency forward contracts 441
307
Prepaid expenses and other current assets $ 1,954
$ 1,221
Total asset derivatives $ 1,954
$ 1,221
Liability derivatives:
Designated foreign currency forward contracts $ 759
$ 1,373
Non-designated foreign currency forward contracts 102
53
Other current liabilities $ 861
$ 1,426
Total liability derivatives $ 861
$ 1,426

~~The total notional~~See Note 12 for information on the location and amount ~~for all open foreign currency forward contracts designated as cash flow hedges as~~ of ~~July 1, 2018~~gains and ~~December 31, 2017 was $113.8 million and $88.5 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as~~losses attributable to derivatives that were reclassified from AOCI to expense (income), net of ~~July 1, 2018 and December 31, 2017 was $110.5 million and $110.6 million, respectively. All open foreign currency forward contracts as of July 1, 2018 have durations of twelve months or less.~~tax.

There was no ineffectiveness related to the Company’s cash flow hedges during the three and six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017.~~2018.

Trade receivables

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

~~Concentration of Credit Risk~~

Concentrations of credit risk with respect to trade accounts receivable are generally limited due to the Company’s large number of customers and their diversity across many geographic areas. However, a portion of the Company’s trade accounts receivable outside the United States 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 the healthcare systems in those countries and the financial stability of those countries' 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 theThe 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 current and long-term trade accounts receivable related to customers in Greece, Italy, Spain and Portugal and the percentageas of ~~the Company’s total net current and long-term trade accounts receivable represented by these customers' trade accounts receivable at July 1, 2018~~June 30, 2019 and December 31, ~~2017:~~

July 1, 2018
December 31, 2017

(Dollars in thousands)
Allowance for doubtful accounts ₍₁₎
$ 9,525
$ 10,255
Current and long-term trade accounts receivable, net in Greece, Italy, Spain and Portugal ₍₂₎
$ 52,569

$ 49,054
Percentage of total net current and long-term trade accounts receivable - Greece, Italy, Spain and Portugal 15.0 %
14.6 %

~~(1)~~2018 was $9.9 million and $9.3 million, respectively. The current portion of the allowance for doubtful accounts, which was ~~$3.6~~$5.2 million and ~~$3.5~~$4.4 million as of ~~July 1, 2018~~June 30, 2019 and December 31, ~~2017,~~2018, respectively, ~~and~~ was recognized inas a reduction of accounts receivable, net.


~~(2)~~	~~The long-term portion of trade accounts receivable, net from customers in Greece, Italy, Spain and Portugal at July 1, 2018 and December 31, 2017 was $3.5 million and $3.3 million, respectively.~~

~~For the six months ended July 1, 2018 and July 2, 2017, net revenues from customers in Greece, Italy, Spain and Portugal were $75.7 million and $64.5 million, respectively.~~

Note 911 — Fair value measurement

For a description of the fair value hierarchy, see Note 1011 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

The following tables provide information regarding the Company's financial assets and liabilities that are measured at fair value on a recurring basis as of ~~July 1, 2018~~June 30, 2019 and December 31, ~~2017:~~2018:


	Total carrying value at July 1, 2018		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)		Total carrying value at June 30, 2019		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
	(Dollars in thousands)								(Dollars in thousands)
Investments in marketable securities	$	9,272	$	9,272	$	—	$	—	$	10,034	$	10,034	$	—	$	—
Derivative assets	1,954		—		1,954		—		22,659		—		22,659		—
Derivative liabilities	861		—		861		—		7,275		—		7,275		—
Contingent consideration liabilities	242,659		—		—		242,659		191,671		—		—		191,671

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)



	Total carrying value at December 31, 2018		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	$	8,671	$	8,671	$	—	$	—
Derivative assets	16,050		—		16,050		—
Derivative liabilities	8,581		—		8,581		—
Contingent consideration liabilities	304,248		—		—		304,248

Total carrying
value at
December 31, 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 $ 9,045
$ 9,045
$ —
$ —
Derivative assets 1,221
—
1,221
—
Derivative liabilities 1,426
—
1,426
—
Contingent consideration liabilities 272,136
—
—
272,136

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 six months ended ~~July 1, 2018.~~June 30, 2019.

Valuation Techniques

The Company’s 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 Company benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.

The Company’s financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward ~~contracts.~~contracts and cross-currency interest rate swap agreements. The Company uses foreign currency forward contracts and cross-currency interest rate swap agreements to manage foreign currency transaction exposure, ~~as well as~~ exposure to foreign currency denominated monetary assets and ~~liabilities.~~liabilities and exposure to the effect of variability in the U.S. dollar to euro exchange rate. The Company measures the fair value of the foreign currency forward ~~contracts~~and cross-currency swap agreements 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 financial liabilities valued based upon Level 3 inputs (inputs that are not observable in the market) are comprised of contingent consideration arrangements pertaining to the Company’s acquisitions, which are discussed immediately below.

Contingent consideration

As of July 1, 2018, the Company estimates that contingent consideration payments will occur in 2018 through 2029, and the maximum amount of undiscounted payments the Company could make under contingent consideration arrangements is $335.2 million. The contingentContingent consideration liabilities, which primarily consist of ~~Company~~payment obligations ~~payable if specified net sales~~that are contingent upon the achievement of revenue-based goals, ~~are achieved,~~ 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.

The contingent consideration fair value measurement is based on significant inputs not observable in the market and therefore constitute Level 3 inputs within the fair value hierarchy. The contingent consideration liability related to the NeoTract acquisition represents the estimated fair value of the Company's obligations to make payments of up to $375 million in the aggregate if specified sales goals are achieved. Specifically, the payments are based on net sales (as defined in the NeoTract acquisition agreement) for the periods from January 1, 2018 through April 30, 2018 and the years ended December 31, 2018, 2019 and 2020. The Company ~~made payments of $75.0 million ($64.2 million of which was paid during~~determines the second quarter 2018 and $10.8 million of which was paid during the first week of the third quarter 2018) as a result of the achievement of a sales goal for the period from January 1, 2018 to April 30, 2018. The fair value of the contingent consideration ~~related to the NeoTract acquisition was estimated~~liabilities using a Monte Carlo ~~valuation approach, which simulates~~simulation (which involves a simulation of future revenues during the earn out-period using management's best ~~estimates. The Company determines the value of its other contingent consideration liabilities based on~~estimates) or a probability-weighted discounted cash flow analysis. Increases in projected revenues, estimated cash flows and probabilities of payment may result in significantly higher fair value measurements; decreases in these items may have the opposite effect. Increases in the discount rates in periods prior to payment may result in significantly lower fair value ~~measurements;~~measurements and decreases in ~~these items~~the discount rates may have the opposite effect.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The table below provides additional information regarding the valuation technique and inputs used in determining the fair value of contingent ~~consideration recognized in connection with the NeoTract acquisition.~~consideration.

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~



Contingent Consideration Liability	Valuation Technique	Unobservable Input	Range
~~Contingent consideration~~Milestone-based payments
	Discounted cash flow	Discount rate	3.7% - 4.3%
		Projected year of payment	2019 - 2023
Revenue-based payments
	Monte Carlo simulation	Revenue volatility	~~22.3~~	%19.0% - 24.3%
		Risk free rate	Cost of debt structure
		Projected year of payment	~~2018~~2020 - ~~2021~~2022

	Discounted cash flow	Discount rate	10.0%
		Projected year of payment	2019 - 2029

The following table provides information regarding changes in the Company's contingent consideration liabilities during the six months ended ~~July 1, 2018, in Level 3 financial liabilities related to contingent consideration:~~June 30, 2019:



	Contingent consideration
	2019
	(Dollars in thousands)
Balance - December 31, 2018	$	304,248
Payments ₍₁₎	(138,020		)
Revaluations	25,456
Translation adjustment	(13		)
Balance - June 30, 2019	$	191,671

Contingent consideration
2018
(Dollars in thousands)
Balance - December 31, 2017 $ 272,136
Additions₍₁₎
396
Payment (64,372 )
Revaluations 34,618
Translation adjustment (119 )
Balance - July 1, 2018 $ 242,659

(1) ~~The Company established~~Consists mainly of a ~~liability related to the estimated fair value of contingent consideration~~$106.8 million payment associated with the ~~acquired assets~~Company's acquisition of NeoTract, Inc. and resulting from ~~QT Vascular.~~the achievement of a sales goal for the period from January 1, 2018 to December 31, 2018 and $30.0 million of payments associated with the Company's acquisition of Essential Medical, Inc. and resulting from achievement of a regulatory goal.

Note 1012 — 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 Ended		Six Months Ended
	June 30, 2019	July 1, 2018	June 30, 2019	July 1, 2018
	(Shares in thousands)
Basic	46,172	45,581	46,111	45,455
Dilutive effect of share-based awards	864	—	878	1,052
Dilutive effect of convertible warrants	—	—	—	264
Diluted	47,036	45,581	46,989	46,771

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Shares in thousands)
Basic 45,581
44,996
45,455
44,945
Dilutive effect of share-based awards —
866
1,052
843
Dilutive effect of convertible notes and warrants —
956
264
928
Diluted 45,581
46,818
46,771
46,716

The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.2 million for the three and six months ended June 30, 2019 and 2.0 million (inclusive of 1.2 million potentially dilutive shares that were excluded because of the net loss for the three months ended July 1, 2018) and 0.7 million for the three and six months ended July 1, 2018, ~~respectively, and 0.7 millionand0.6 million for the three and six months ended July 2, 2017,~~ respectively.

In connection with the issuance by the Company in 2010 of convertible notes that matured in August 2017, and as part of hedging arrangements between the Company and two institutional counterparties, the Company issued warrants to the counterparties, entitling them to purchase Company common stock. These transactions are described in greater detail in Note 11 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. At July 1, 2018, warrants to purchase 197,274 shares at an exercise price of $74.65 per share remained outstanding. The remaining warrants expire ratably over a period ending on August 31, 2018. At July 1, 2018, the intrinsic value of the warrants (i.e. the excess of the aggregate market price of the underlying shares over the aggregate exercise price of the warrants) was $38.5 million.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017:~~2018:



	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, 2018	$	807		$	(131,380	)	$	(210,512	)	$	(341,085	)
Other comprehensive income (loss) before reclassifications	429			(13		)	12,332			12,748
Amounts reclassified from accumulated other comprehensive income	(271		)	2,701			—			2,430
Net current-period other comprehensive income (loss)	158			2,688			12,332			15,178
Balance as of June 30, 2019	$	965		$	(128,692	)	$	(198,180	)	$	(325,907	)



	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, 2017	$	340		$	(138,808	)	$	(126,623	)	$	(265,091	)
Other comprehensive (loss) before reclassifications	1,103			188			(44,517		)	(43,226		)
Amounts reclassified from accumulated other comprehensive loss	(811		)	2,708			—			1,897
Net current-period other comprehensive income	292			2,896			(44,517		)	(41,329		)
Balance as of July 1, 2018	$	632		$	(135,912	)	$	(171,140	)	$	(306,420	)

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, 2017 $ 340
$ (138,808 ) $ (126,623 ) $ (265,091 )
Other comprehensive income (loss) before reclassifications 1,103
188
(44,517 ) (43,226 )
Amounts reclassified from accumulated other comprehensive income (811 ) 2,708
—
1,897
Net current-period other comprehensive income (loss) 292
2,896
(44,517 ) (41,329 )
Balance as of July 1, 2018 $ 632
$ (135,912 ) $ (171,140 ) $ (306,420 )

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, 2016 $ (2,424 ) $ (136,596 ) $ (299,697 ) $ (438,717 )
Other comprehensive (loss) before reclassifications 2,684
(669 ) 112,667
114,682
Amounts reclassified from accumulated other comprehensive loss 2,477
2,263
—
4,740
Net current-period other comprehensive income 5,161
1,594
112,667
119,422
Balance at July 2, 2017 $ 2,737
$ (135,002 ) $ (187,030 ) $ (319,295 )

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 six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017:~~2018:

Amortization of pension and other postretirement benefit items_(1):

Amortization of pension and other postretirement benefit items ₍₁₎:

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

Note 1113 — Taxes on income from continuing operations



	Three Months Ended		Six Months Ended
	June 30, 2019	July 1, 2018	June 30, 2019	July 1, 2018
Effective income tax rate	4.4%	136.3%	10.6%	23.2%

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
Effective income tax rate 136.3% 13.4% 23.2% 7.4%

The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017. The legislation significantly changes U.S. tax law by, among other things, permanently reducing corporate income tax rates from a maximum of 35% to 21%, effective January 1, 2018; implementing a territorial tax system, by generally providing for, among other things, a dividends received deduction on the foreign source portion of dividends received from a foreign corporation if specified conditions are met; and imposing a one-time repatriation tax on undistributed post-1986 foreign subsidiary earnings and profits, which are deemed repatriated for purposes of the tax. In addition, the TCJA imposes two new U.S. tax base erosion provisions: (1) the global intangible low-taxed income ("GILTI") provisions and (2) the base erosion and anti-abuse tax ("BEAT") provisions, which are explained in more detail in Note 13 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2017.

In accordance with the applicable provisions of SEC Staff Accounting Bulletin No. 118, the Company included in its consolidated financial statements as of December 31, 2017 provisional amounts reflecting the tax impact related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities. Once the Company's accounting for the income tax effects of the TCJA is complete, the amounts with respect to the income tax effects of the TCJA may differ from the provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the TCJA.

The effective income tax rate for the three and six months ended ~~July 1, 2018~~June 30, 2019 was 4.4% and 10.6%, respectively and 136.3% and 23.2%~~, respectively, and 13.4% and 7.4% for the three and six months ended July 2, 2017, respectively. The effective income tax rate~~ for the three and six months ended July 1, 2018, ~~as compared~~respectively. The effective income tax rates for the three and six months ended June 30, 2019 reflect a net tax benefit related to share-based compensation, partially offset, with respect to the ~~prior year periods~~six months ended June 30, 2019, by the effect of non-deductible costs related to the 2019 Footprint realignment plan, as described in Note 5. The effective tax rates for the three and six months ended July 1, 2018, reflect non-deductible ~~termination benefits and other~~ costs ~~incurred in connection with~~related to the 2018 Footprint realignment plan, as described in Note 5, and a non-deductible contingent consideration expense recognized in connection with an increase in the fair value of the NeoTract contingent consideration liability. ~~In addition,~~

Effective July 3, 2019, the Company merged two of its non-U.S. subsidiaries. The Company is currently evaluating the tax impact of this merger, but it is likely to result in a reduction of approximately $130 million to deferred tax liabilities within 12 months of the effective ~~tax rate for the three and six months ended July 1, 2018 includes the benefit of a lower U.S. corporate tax rate of 21.0% resulting from the enactment~~date of the TCJA, partially offset by a tax cost associated with GILTI and other TCJA related changes. The effective tax rate for the six months ended July 2, 2017 reflects a tax benefit associated with costs incurred in connection with the Vascular Solutions acquisition.merger.

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 July 1, 2018, 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.

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

~~Net pension and other postretirement benefits expense (income) consist of the following:~~

Pension
Three Months Ended Other Postretirement Benefits
Three Months Ended Pension
Six Months Ended Other Postretirement Benefits
Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in thousands)
Service cost $ 376
$ 720
$ 52
$ 75
$ 754
$ 1,437
$ 104
$ 149
Interest cost 3,718
3,789
378
379
7,439
7,574
756
757
Expected return on plan assets (7,415 ) (6,750 ) —
—
(14,836 ) (13,493 ) —
—
Net amortization and deferral 1,695
1,691
62
66
3,403
3,381
124
131
Net benefits expense (income) $ (1,626 ) $ (550 ) $ 492
$ 520
$ (3,240 ) $ (1,101 ) $ 984
$ 1,037

~~Note 13~~14 — Commitments and contingent liabilities

Environmental: The Company is subject to contingencies as a result of environmental laws and regulations that in the future may require the Company to take further action to correct the effects on the environment of prior disposal

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

practices or releases of chemical or petroleum substances by the Company or other parties. Much of this liability results from the U.S. 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 Company to undertake certain investigative and remedial activities at sites where the Company conducts 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 ~~July 1, 2018,~~June 30, 2019, the Company has recorded ~~$1.0~~$0.9 million and ~~$5.7~~$6.4 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 ~~July 1, 2018.~~June 30, 2019. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be ~~15-20~~10-15 years.

Litigation: The Company is 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 ~~July 1, 2018,~~June 30, 2019, the Company has recorded accrued liabilities of ~~$1.7~~$0.2 million in connection with such contingencies, representing its best estimate of the cost within the range of estimated possible losses that will be incurred to resolve these matters.

Based on information currently available, advice of counsel, established reserves and other resources, the Company does not believe that the outcome of any outstanding litigation and claims is likely to be, individually or in the aggregate, material to its 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’s business, financial condition, results of operations or liquidity. Legal costs such as outside counsel fees and expenses are charged to selling, general and administrative expenses in the period incurred.

Tax audits and examinations: The Company and its subsidiaries are routinely subject to tax examinations by various tax authorities. As of ~~July 1, 2018,~~June 30, 2019, the most significant tax ~~examinations~~examination in process ~~are~~is in ~~Germany and Italy.~~Germany. The Company may establish reserves with respect to its uncertain tax positions, after which it adjusts the reserves to address developments with respect to its uncertain tax positions, including developments in ~~these~~this tax ~~examinations.~~examination. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to the Company’s recorded tax liabilities, which could impact the Company’s financial results.

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

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 1415 — Segment information

~~Following~~During the first quarter 2019, the chief operating decision maker, or CODM, (the Company's acquisition of Vascular Solutions, the Company commenced an integration program under which it is combining the Vascular Solutions' business with some of its legacy businesses. As a result, effective during the fourth quarter 2017, the Company realigned its operating segments. The changes to the operating segments were also made to reflectChief Executive Officer) changed the manner in which ~~the Company’s chief operating decision maker assesses~~he reviews financial information for purposes of assessing business performance and ~~allocates resources. The~~allocating resources by focusing on the geographic location of all non-OEM operations. As a result, the Company ~~now has~~changed its segment presentation. Specifically, the ~~following seven reportable segments:~~ Vascular North America, Interventional North America, Anesthesia North America, Surgical North America, Europe, Middle East and Africa ("EMEA"), Asia and Original Equipment and Development Services ("OEM"). In connection with the presentation of segment information, the Company will continue to present certain operating segments, which currently include the Interventional Urology North America, Respiratory North America and Latin America operating segments ~~in the “all other” category because they are not material for separate disclosure.~~were combined into a new Americas segment. The Company now has four segments: Americas, EMEA (Europe, Middle East and Africa), Asia and OEM. All prior comparative periods presented have been restated to reflect these changes.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following tables present the Company’s segment results for the three and six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017:~~2018:

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in thousands)
Vascular North America $ 80,062
$ 78,796
$ 163,110
$ 157,807
Interventional North America 64,956
58,337
125,152
98,283
Anesthesia North America 50,490
49,081
101,055
97,288
Surgical North America 40,708
44,716
81,385
90,660
EMEA 153,415
138,469
313,285
272,043
Asia 72,413
65,998
130,657
116,166
OEM 52,594
45,132
98,448
88,478
All other 95,228
48,084
184,004
95,769
Net revenues $ 609,866
$ 528,613
$ 1,197,096
$ 1,016,494



	Three Months Ended				Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(Dollars in thousands)
Americas	$	373,804	$	331,444	$	717,828	$	654,706
EMEA	147,047		153,415		301,592		313,285
Asia	75,228		72,413		136,005		130,657
OEM	56,428		52,594		110,666		98,448
Net revenues	$	652,507	$	609,866	$	1,266,091	$	1,197,096

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in thousands) (Dollars in thousands)
Vascular North America $ 24,636
$ 18,472
$ 49,298
$ 36,762
Interventional North America 16,510
8,815
30,630
780
Anesthesia North America 14,716
20,056
32,049
33,360
Surgical North America 17,055
17,287
31,803
33,667
EMEA 26,535
23,594
58,305
44,904
Asia 20,746
18,941
34,114
29,825
OEM 13,552
10,337
22,568
19,458
All other (25,602 ) 9,017
(37,575 ) 18,344
Total segment operating profit ⁽¹⁾
108,148
126,519
221,192
217,100
Unallocated expenses ⁽²⁾
(74,658 ) (16,317 ) (100,859 ) (46,079 )
Income from continuing operations before interest, loss on extinguishment of debt and taxes $ 33,490
$ 110,202
$ 120,333
$ 171,021



	Three Months Ended						Six Months Ended
	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018
	(Dollars in thousands)
Americas	$	82,509		$	47,315		$	148,108		$	106,205
EMEA	20,827			26,535			47,850			58,305
Asia	19,260			20,746			29,239			34,114
OEM	13,884			13,552			27,205			22,568
Total segment operating profit ₍₁₎	136,480			108,148			252,402			221,192
Unallocated expenses ₍₂₎	(29,022		)	(74,658		)	(69,701		)	(100,859		)
Income from continuing operations before interest and taxes	$	107,458		$	33,490		$	182,701		$	120,333

(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.

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

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.

~~The following table provides total net revenues by geographic region (based on the Company's selling location) for the three and six months ended July 1, 2018 and July 2, 2017:~~

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in thousands)
United States $ 356,468
$ 310,124
$ 700,825
$ 596,438
Europe 168,879
144,393
340,200
285,415
Asia 60,488
53,901
110,043
96,905
All other 24,031
20,195
46,028
37,736
Net revenues $ 609,866
$ 528,613
$ 1,197,096
$ 1,016,494

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Note 1516 — Condensed consolidating guarantor financial information

The Company’s $250 million principal amount of 5.25% Senior Notes due 2024 (the “2024 Notes”), $400 million principal amount of 4.875% Senior Notes due 2026 (the “2026 Notes”) and $500 million principal amount of 4.625% Senior Notes due 2027 (the “2027 Notes," and collectively with the 2024 Notes and the 2026 Notes, the "Senior Notes") are issued by Teleflex Incorporated (the “Parent Company”), and payment of the Parent Company's obligations under the Senior Notes are guaranteed, jointly and severally, by certain of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The 2024 Notes, 2026 Notes and 2027 Notes are guaranteed by the same 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 six months ended June 30, 2019 and July 1, 2018, ~~and July 2, 2017,~~ condensed consolidating balance sheets as of ~~July 1, 2018~~June 30, 2019 and December 31, ~~2017~~2018 and condensed consolidating statements of cash flows for the six months ended June 30, 2019 and July 1, 2018, ~~and July 2, 2017,~~ 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 Senior Notes), on a combined basis; and



d.	Parent Company and its subsidiaries on a consolidated basis.

In connection with the Company's entry into the Credit Agreement on April 5, 2019 (as described in Note 9), a subsidiary of the Company (the "Released Subsidiary") that was a guarantor of Parent Company’s obligations under the previously outstanding credit agreement and under the Senior Notes was removed as a guarantor of Parent Company’s obligations under the Credit Agreement. Under the indentures governing the Senior Notes, the removal of the Released Subsidiary as a guarantor under the Credit Agreement automatically resulted in the release of the Released Subsidiary from its guarantees of the Senior Notes. Therefore, as of the date of the Credit Agreement, the Released Subsidiary is no longer a Guarantor Subsidiary. The condensed consolidating statements of income and comprehensive income for the three and six months ended July 1, 2018, the condensed consolidating balance sheet as of December 31, 2018 and the condensed consolidating statement of cash flows for the six months ended July 1, 2018 have been restated to exclude the Released Subsidiary from the information relating to the Guarantor Subsidiaries and to include the Released Subsidiary in the information relating to Non-Guarantor Subsidiaries.

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, ~~2017~~2018 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.

During the first quarter 2018, a Guarantor Subsidiary merged with and into Parent; the transaction is reflected as of the beginning of the earliest period presented in the condensed consolidating financial statements.

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 July 1, 2018															Three Months Ended June 30, 2019
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Condensed Consolidated			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Condensed Consolidated
	(Dollars in thousands)															(Dollars in thousands)
Net revenues	$	—		$	391,304		$	326,279		$	(107,717	)	$	609,866		$	—		$	439,489		$	327,596	$	(114,578	)	$	652,507
Cost of goods sold	—			231,487			143,532			(109,931		)	265,088			—			244,956			151,423		(116,796		)	279,583
Gross profit	—			159,817			182,747			2,214			344,778			—			194,533			176,173		2,218			372,924
Selling, general and administrative expenses	12,430			139,565			77,723			199			229,917			14,312			141,628			80,512		(266		)	236,186
Research and development expenses	489			18,818			6,711			—			26,018			596			20,331			6,668		—			27,595
Restructuring and impairment charges	—			2,545			52,808			—			55,353			—			108			1,577		—			1,685
(Loss) income from continuing operations before interest and taxes	(12,919		)	(1,111		)	45,505			2,015			33,490			(14,908		)	32,466			87,416		2,484			107,458
Interest, net	24,788			1,078			600			—			26,466			29,350			(23,439		)	14,375		—			20,286
(Loss) income from continuing operations before taxes	(37,707		)	(2,189		)	44,905			2,015			7,024			(44,258		)	55,905			73,041		2,484			87,172
(Benefit) taxes on (loss) income from continuing operations	(13,218		)	7,486			15,245			63			9,576			(19,519		)	15,681			7,480		202			3,844
Equity in net income of consolidated subsidiaries	21,937			24,457			342			(46,736		)	—			108,067			57,951			—		(166,018		)	—
(Loss) income from continuing operations	(2,552		)	14,782			30,002			(44,784		)	(2,552		)
Income from continuing operations																83,328			98,175			65,561		(163,736		)	83,328
Operating income from discontinued operations	94			—			—			—			94			61			—			—		—			61
Taxes on income from discontinued operations	38			—			—			—			38
Tax on income from discontinued operations																14			—			—		—			14
Income from discontinued operations	56			—			—			—			56			47			—			—		—			47
Net (loss) income	(2,496		)	14,782			30,002			(44,784		)	(2,496		)
Other comprehensive loss	(124,019		)	(114,917		)	(130,725		)	245,642			(124,019		)
Comprehensive loss	$	(126,515	)	$	(100,135	)	$	(100,723	)	$	200,858		$	(126,515	)
Net income																83,375			98,175			65,561		(163,736		)	83,375
Other comprehensive income																14,782			17,107			19,457		(36,564		)	14,782
Comprehensive income																$	98,157		$	115,282		$	85,018	$	(200,300	)	$	98,157

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Three Months Ended July 2, 2017
Parent
Company Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Condensed Consolidated
(Dollars in thousands)
Net revenues $ —
$ 338,620
$ 296,977
$ (106,984 ) $ 528,613
Cost of goods sold —
190,202
152,440
(104,313 ) 238,329
Gross profit —
148,418
144,537
(2,671 ) 290,284
Selling, general and administrative expenses 7,468
95,171
56,334
(39 ) 158,934
Research and development expenses 264
13,594
6,420
—
20,278
Restructuring charges —
1,335
(465 ) —
870
(Loss) income from continuing operations before interest, extinguishment of debt and taxes (7,732 ) 38,318
82,248
(2,632 ) 110,202
Interest, net 27,233
(8,581 ) 1,081
—
19,733
Loss on extinguishment of debt 11
—
—
—
11
(Loss) income from continuing operations before taxes (34,976 ) 46,899
81,167
(2,632 ) 90,458
(Benefit) taxes on (loss) income from continuing operations (14,378 ) 13,386
14,210
(1,123 ) 12,095
Equity in net income of consolidated subsidiaries 98,961
58,861
240
(158,062 ) —
Income from continuing operations 78,363
92,374
67,197
(159,571 ) 78,363
Operating loss from discontinued operations (566 ) —
—
—
(566 )
Tax benefit on loss from discontinued operations (206 ) —
—
—
(206 )
Loss from discontinued operations (360 ) —
—
—
(360 )
Net income 78,003
92,374
67,197
(159,571 ) 78,003
Other comprehensive income 69,822
68,127
69,374
(137,501 ) 69,822
Comprehensive income $ 147,825
$ 160,501
$ 136,571
$ (297,072 ) $ 147,825



	Three Months Ended July 1, 2018
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Condensed Consolidated
	(Dollars in thousands)
Net revenues	$	—		$	391,304		$	326,279		$	(107,717	)	$	609,866
Cost of goods sold	—			231,487			143,532			(109,931		)	265,088
Gross profit	—			159,817			182,747			2,214			344,778
Selling, general and administrative expenses	12,430			139,549			77,739			199			229,917
Research and development expenses	489			18,818			6,711			—			26,018
Restructuring and impairment charges	—			2,545			52,808			—			55,353
(Loss) income from continuing operations before interest and taxes	(12,919		)	(1,095		)	45,489			2,015			33,490
Interest, net	24,788			(13,966		)	15,644			—			26,466
(Loss) income from continuing operations before taxes	(37,707		)	12,871			29,845			2,015			7,024
(Benefit) taxes on (loss) income from continuing operations	(13,218		)	11,272			11,459			63			9,576
Equity in net income of consolidated subsidiaries	21,937			13,183			342			(35,462		)	—
(Loss) income from continuing operations	(2,552		)	14,782			18,728			(33,510		)	(2,552		)
Operating income from discontinued operations	94			—			—			—			94
Tax on income from discontinued operations	38			—			—			—			38
Income from discontinued operations	56			—			—			—			56
Net (loss) income	(2,496		)	14,782			18,728			(33,510		)	(2,496		)
Other comprehensive loss	(124,019		)	(114,917		)	(130,725		)	245,642			(124,019		)
Comprehensive loss	$	(126,515	)	$	(100,135	)	$	(111,997	)	$	212,132		$	(126,515	)

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)



	Six Months Ended July 1, 2018
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Condensed Consolidated
	(Dollars in thousands)
Net revenues	$	—		$	770,723		$	646,288		$	(219,915	)	$	1,197,096
Cost of goods sold	—			449,091			285,540			(213,583		)	521,048
Gross profit	—			321,632			360,748			(6,332		)	676,048
Selling, general and administrative expenses	21,611			270,218			153,755			(330		)	445,254
Research and development expenses	716			38,186			13,143			—			52,045
Restructuring and impairment charges	—			3,453			54,963			—			58,416
(Loss) income from continuing operations before interest and taxes	(22,327		)	9,775			138,887			(6,002		)	120,333
Interest, net	46,929			(26,015		)	31,222			—			52,136
(Loss) income from continuing operations before taxes	(69,256		)	35,790			107,665			(6,002		)	68,197
(Benefit) taxes on (loss) income from continuing operations	(26,410		)	21,468			21,863			(1,103		)	15,818
Equity in net income of consolidated subsidiaries	96,504			78,607			635			(175,746		)	—
Income from continuing operations	53,658			92,929			86,437			(180,645		)	52,379
Operating income from discontinued operations	50			—			1,279			—			1,329
Taxes on income from discontinued operations	20			—			—			—			20
Income from discontinued operations	30			—			1,279			—			1,309
Net income	53,688			92,929			87,716			(180,645		)	53,688
Other comprehensive loss	(41,329		)	(44,798		)	(43,498		)	88,296			(41,329		)
Comprehensive income	$	12,359		$	48,131		$	44,218		$	(92,349	)	$	12,359

Six Months Ended July 2, 2017
Parent
Company Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Condensed
Consolidated
(Dollars in thousands)
Net revenues $ —
$ 654,263
$ 573,292
$ (211,061 ) $ 1,016,494
Cost of goods sold —
382,203
296,336
(207,889 ) 470,650
Gross profit —
272,060
276,956
(3,172 ) 545,844
Selling, general and administrative expenses 27,987
189,214
105,178
524
322,903
Research and development expenses 499
24,780
12,826
—
38,105
Restructuring charges —
6,709
7,106
—
13,815
(Loss) income from continuing operations before interest, extinguishment of debt and taxes (28,486 ) 51,357
151,846
(3,696 ) 171,021
Interest, net 51,506
(16,143 ) 1,927
—
37,290
Loss on extinguishment of debt 5,593
—
—
—
5,593
(Loss) income from continuing operations before taxes (85,585 ) 67,500
149,919
(3,696 ) 128,138
(Benefit) taxes on (loss) income from continuing operations (35,711 ) 19,297
26,439
(599 ) 9,426
Equity in net income of consolidated subsidiaries 168,586
114,663
456
(283,705 ) —
Income from continuing operations 118,712
162,866
123,936
(286,802 ) 118,712
Operating loss from discontinued operations (848 ) —
—
—
(848 )
Tax benefit on loss from discontinued operations (309 ) —
—
—
(309 )
Loss from discontinued operations (539 ) —
—
—
(539 )
Net income 118,173
162,866
123,936
(286,802 ) 118,173
Other comprehensive income 119,422
117,531
123,275
(240,806 ) 119,422
Comprehensive income $ 237,595
$ 280,397
$ 247,211
$ (527,608 ) $ 237,595

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)



	December 31, 2018
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Condensed Consolidated
	(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	49,523	$	1,701	$	305,937	$	—		$	357,161
Accounts receivable, net	5,885		54,013		301,054		5,334			366,286
Accounts receivable from consolidated subsidiaries	32,036		1,122,107		366,033		(1,520,176		)	—
Inventories, net	—		266,073		192,659		(30,954		)	427,778
Prepaid expenses and other current assets	30,458		9,673		28,237		4,113			72,481
Prepaid taxes	7,029		—		5,434		—			12,463
Total current assets	124,931		1,453,567		1,199,354		(1,541,683		)	1,236,169
Property, plant and equipment, net	3,385		253,037		176,344		—			432,766
Goodwill	—		1,254,848		991,731		—			2,246,579
Intangibles assets, net	90		1,277,462		1,047,500		—			2,325,052
Investments in affiliates	5,984,566		1,625,464		837,899		(8,447,929		)	—
Deferred tax assets	—		—		4,822		(2,376		)	2,446
Notes receivable and other amounts due from consolidated subsidiaries	2,337,737		3,347,815		13,242		(5,698,794		)	—
Other assets	17,180		5,776		12,023		—			34,979
Total assets	$	8,467,889	$	9,217,969	$	4,282,915	$	(15,690,782	)	$	6,277,991
LIABILITIES AND EQUITY
Current liabilities
Current borrowings	$	36,625	$	—	$	50,000	$	—		$	86,625
Accounts payable	3,448		62,764		40,497		—			106,709
Accounts payable to consolidated subsidiaries	1,058,008		292,093		170,075		(1,520,176		)	—
Accrued expenses	5,659		41,873		50,019		—			97,551
Current portion of contingent consideration	—		106,514		30,363		—			136,877
Payroll and benefit-related liabilities	17,156		44,982		42,532		—			104,670
Accrued interest	5,995		—		36		—			6,031
Income taxes payable	—		—		5,943		—			5,943
Other current liabilities	843		34,916		2,291		—			38,050
Total current liabilities	1,127,734		583,142		391,756		(1,520,176		)	582,456
Long-term borrowings	2,072,200		—		—		—			2,072,200
Deferred tax liabilities	87,671		257,522		265,404		(2,376		)	608,221
Pension and postretirement benefit liabilities	49,290		27,454		16,170		—			92,914
Noncurrent liability for uncertain tax positions	801		7,212		2,705		—			10,718
Notes payable and other amounts due to consolidated subsidiaries	2,451,784		2,222,580		1,024,430		(5,698,794		)	—
Noncurrent contingent consideration	—		131,563		35,807		—			167,370
Other liabilities	138,431		8,204		57,499					204,134
Total liabilities	5,927,911		3,237,677		1,793,771		(7,221,346		)	3,738,013
Total shareholders' equity	2,539,978		5,980,292		2,489,144		(8,469,436		)	2,539,978
Total liabilities and shareholders' equity	$	8,467,889	$	9,217,969	$	4,282,915	$	(15,690,782	)	$	6,277,991

December 31, 2017
Parent
Company Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Condensed
Consolidated
(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents $ 37,803
$ 8,933
$ 286,822
$ —
$ 333,558
Accounts receivable, net 2,414
57,818
280,980
4,663
345,875
Accounts receivable from consolidated subsidiaries 14,478
1,177,246
343,115
(1,534,839 ) —
Inventories, net —
245,533
176,490
(26,279 ) 395,744
Prepaid expenses and other current assets 14,874
9,236
19,790
3,982
47,882
Prepaid taxes —
—
5,748
—
5,748
Total current assets 69,569
1,498,766
1,112,945
(1,552,473 ) 1,128,807
Property, plant and equipment, net 2,088
213,663
167,248
—
382,999
Goodwill —
1,246,144
989,448
—
2,235,592
Intangibles assets, net —
1,355,275
1,028,473
—
2,383,748
Investments in consolidated subsidiaries 5,806,244
1,674,077
19,620
(7,499,941 ) —
Deferred tax assets —
—
6,071
(2,261 ) 3,810
Notes receivable and other amounts due from consolidated subsidiaries 2,452,101
2,231,832
—
(4,683,933 ) —
Other assets 31,173
6,397
8,966
—
46,536
Total assets $ 8,361,175
$ 8,226,154
$ 3,332,771
$ (13,738,608 ) $ 6,181,492
LIABILITIES AND EQUITY
Current liabilities
Current borrowings $ 36,625
$ —
$ 50,000
$ —
$ 86,625
Accounts payable 4,269
46,992
40,766
—
92,027
Accounts payable to consolidated subsidiaries 1,211,568
261,121
62,150
(1,534,839 ) —
Accrued expenses 17,957
31,827
47,069
—
96,853
Current portion of contingent consideration —
74,224
—
—
74,224
Payroll and benefit-related liabilities 21,145
44,009
42,261
—
107,415
Accrued interest 6,133
—
32
—
6,165
Income taxes payable 4,352
—
7,162
—
11,514
Other current liabilities 1,461
3,775
3,817
—
9,053
Total current liabilities 1,303,510
461,948
253,257
(1,534,839 ) 483,876
Long-term borrowings 2,162,927
—
—
—
2,162,927
Deferred tax liabilities 88,512
265,426
251,999
(2,261 ) 603,676
Pension and postretirement benefit liabilities 70,860
32,750
17,800
—
121,410
Noncurrent liability for uncertain tax positions 1,117
8,196
2,983
—
12,296
Notes payable and other amounts due to consolidated subsidiaries 2,155,146
2,320,611
208,176
(4,683,933 ) —
Noncurrent contingent consideration —
186,923
10,989
—
197,912
Other liabilities 148,572
7,850
12,442
—
168,864
Total liabilities 5,930,644
3,283,704
757,646
(6,221,033 ) 3,750,961
Total shareholders' equity 2,430,531
4,942,450
2,575,125
(7,517,575 ) 2,430,531
Total liabilities and shareholders' equity $ 8,361,175
$ 8,226,154
$ 3,332,771
$ (13,738,608 ) $ 6,181,492

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)



	Six Months Ended July 1, 2018
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Condensed Consolidated
	(Dollars in thousands)
Net cash (used in) provided by operating activities from continuing operations	$	(165,764	)	$	254,769		$	162,952		$	(70,373	)	$	181,584
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment	(795		)	(16,602		)	(20,607		)	—			(38,004		)
Proceeds from sale of assets	22,944			—			—			(22,944		)	—
Payments for businesses and intangibles acquired, net of cash acquired	—			—			(22,450		)	—			(22,450		)
Net cash provided by (used in) investing activities from continuing operations	22,149			(16,602		)	(43,057		)	(22,944		)	(60,454		)
Cash flows from financing activities of continuing operations:
Reduction in borrowings	(18,500		)	—			—			—			(18,500		)
Debt extinguishment, issuance and amendment fees	(188		)	—			—			—			(188		)
Net proceeds from share based compensation plans and the related tax impacts	9,800			—			—			—			9,800
Payments for contingent consideration	—			(170		)	(62,404		)	—			(62,574		)
Dividends paid	(30,938		)	—			—			—			(30,938		)
Intercompany transactions	196,888			(234,304		)	14,472			22,944			—
Intercompany dividends paid	—			—			(70,373		)	70,373			—
Net cash provided by (used in) financing activities from continuing operations	157,062			(234,474		)	(118,305		)	93,317			(102,400		)
Cash flows from discontinued operations:
Net cash used in operating activities	(464		)	—			—			—			(464		)
Net cash used in discontinued operations	(464		)	—			—			—			(464		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(5,520		)	—			(5,520		)
Net increase (decrease) in cash and cash equivalents	12,983			3,693			(3,930		)	—			12,746
Cash and cash equivalents at the beginning of the period	37,803			8,933			286,822			—			333,558
Cash and cash equivalents at the end of the period	$	50,786		$	12,626		$	282,892		$	—		$	346,304

Six Months Ended July 2, 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 $ (121,726 ) $ 232,874
$ 148,460
$ (61,918 ) $ 197,690
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment (173 ) (19,760 ) (16,900 ) —
(36,833 )
Proceeds from sale of assets —
—
6,332
—
6,332
Payments for businesses and intangibles acquired, net of cash acquired (975,524 ) —
(17,935 ) —
(993,459 )
Net cash used in investing activities from continuing operations (975,697 ) (19,760 ) (28,503 ) —
(1,023,960 )
Cash flows from financing activities of continuing operations:

Proceeds from new borrowings 1,194,500
—
—
—
1,194,500
Reduction in borrowings (228,273 ) —
—
—
(228,273 )
Debt extinguishment, issuance and amendment fees (19,114 ) —
—
—
(19,114 )
Net proceeds from share based compensation plans and the related tax impacts 1,305
—
—
—
1,305
Payments for contingent consideration —
(153 ) —
—
(153 )
Dividends paid (30,590 ) —
—
—
(30,590 )
Intercompany transactions 222,684
(203,029 ) (19,655 ) —
—
Intercompany dividends paid —
—
(61,918 ) 61,918
—
Net cash provided by (used in) financing activities from continuing operations 1,140,512
(203,182 ) (81,573 ) 61,918
917,675
Cash flows from discontinued operations:

Net cash used in operating activities (961 ) —
—
—
(961 )
Net cash used in discontinued operations (961 ) —
—
—
(961 )
Effect of exchange rate changes on cash and cash equivalents —
—
41,981
—
41,981
Net increase in cash and cash equivalents 42,128
9,932
80,365
—
132,425
Cash and cash equivalents at the beginning of the period 14,571
1,031
528,187
—
543,789
Cash and cash equivalents at the end of the period $ 56,699
$ 10,963
$ 608,552
$ —
$ 676,214

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 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 changes in business relationships with and purchases by or from major customers or suppliers; delays or cancellations inof 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; 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, sovereign debt issues and the impact of the United Kingdom’s ~~vote to leave~~pending departure from the European ~~Union;~~Union, commonly known as "Brexit"; 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, ~~2017.~~2018. 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.

Teleflex is a global provider of medical technology products ~~that enhance~~focused on enhancing clinical benefits, ~~improve~~improving patient and provider safety and ~~reduce~~reducing 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.

~~See Note 4 to the condensed consolidated financial statements included in this report for additional information.~~

Following our acquisition of Vascular Solutions, we commenced an integration program under which we are combining Vascular Solutions' businesses with some of our legacy businesses. As a result, effective duringDuring the ~~fourth~~first quarter ~~of 2017, we realigned our~~2019, the chief operating ~~segments. The changes to the operating segments were also made to reflect~~decision maker, or CODM, (our Chief Executive Officer) changed the manner in which ~~our chief operating decision maker assesses~~he reviews financial information for purposes of assessing business performance and ~~allocates resources. We now have~~allocating resources by focusing on the ~~following seven reportable segments:~~geographic location of all non-OEM (Original Equipment and Development Services) segment operations. As a result, the Company changed its segment presentation. Specifically, the former Vascular North America, Interventional North America, Anesthesia North America, Surgical North America, Europe, Middle East and Africa ("EMEA"), Asia and Original Equipment and Development Services ("OEM"). In connection with the presentation of segment information, we will continue to present certain segments, which currently include our Interventional Urology

Certain financial information is presented on a rounded basis, which may cause minor differences.

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in millions) (Dollars in millions)
Net Revenues $ 609.9
$ 528.6
$ 1,197.1
$ 1,016.5



	Three Months Ended				Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(Dollars in millions)
Net Revenues	$	652.5	$	609.9	$	1,266.1	$	1,197.1

These increases were partially offset by unfavorable fluctuations in foreign currency exchange rates of $31.6 million.

Gross margin for the three months ended ~~July 1, 2018~~June 30, 2019 increased ~~160~~60 basis points, or ~~2.9%~~1.1%, compared to the prior year ~~period. The increase in gross margin reflects the~~period, primarily due to increased sales volumes and favorable ~~impact of gross profit generated~~product mix partially offset by ~~NeoTract, as well as the impact of favorable manufacturing~~higher logistics and distribution costs ~~including the benefit from cost improvement initiatives such as the 2016~~ and ~~2014 Footprint realignment restructuring plans.~~inflation.

Gross margin for the six months ended ~~July 1, 2018~~June 30, 2019 increased ~~280~~20 basis points, or ~~5.2%~~0.4%, compared to the prior year ~~period. The increase in gross margin reflects the~~period, which is primarily attributable to increased sales volumes and favorable ~~impact of gross profit generated~~product mix partially offset by ~~acquired businesses, mainly NeoTract~~higher logistics and ~~Vascular Solutions,~~distribution costs, the impact of ~~favorable manufacturing costs including the benefit from cost improvement initiatives such as the 2016 and 2014 Footprint realignment plans and the impact of favorable~~unfavorable fluctuations in foreign currency exchange rates. The increase in gross margin also reflects the adverse impact on gross margin for the six months ended July 2, 2017 of the step-up in the carrying value of inventory recognized in connection with the Vascular Solutions acquisition.rates and incremental tariffs.

Selling, general and administrative

Selling, general and administrative expenses for the three months ended ~~July 1, 2018~~June 30, 2019 increased ~~$71.0~~$6.3 million compared to the prior year period. The increase is primarily attributable to ~~$32.7 million~~increases in ~~operating~~selling and marketing expenses, ~~incurred~~principally with respect to our interventional urology products, and higher administrative costs. The increases were partially offset by ~~our NeoTract business (which we acquired in October 2017) and~~ a ~~$25.4 million increase~~decrease in contingent consideration expense resulting from a change in the estimated fair value of our contingent consideration liabilities.

Selling, general and administrative expenses for the six months ended ~~July 1, 2018~~June 30, 2019 increased ~~$122.4~~$18.6 million compared to the prior year period. The increase is primarily attributable to ~~$72.1 million in operating~~ expenses incurred by our acquired businesses, ~~primarily NeoTract,~~an increase in selling and marketing expenses, principally with respect to our interventional urology products, and higher administrative costs. The increases were partially offset by a ~~$34.9 million increase~~decrease in contingent consideration expense resulting from a change in the estimated fair value of our contingent consideration ~~liabilities. These increases were partially offset by a $8.4 million decrease~~liabilities and the impact of favorable fluctuations in ~~transaction and other nonrecurring expenses; in 2017, we incurred transaction and other nonrecurring expenses in connection with several acquisitions, principally including Vascular Solutions.~~foreign currency exchange rates.

Research and development

The increase in research and development expenses for the three and six months ended ~~July 1, 2018~~June 30, 2019 compared to the prior year period is primarily attributable to expenses incurred in connection with our ~~anesthesia and~~ interventional ~~urology product portfolios.~~

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
(Dollars in millions) (Dollars in millions)
Restructuring and impairment charges $ 55.4
$ 0.9
$ 58.4
$ 13.8

~~In addition to the 2018 Footprint realignment plan, we~~We have ongoing restructuring programs related to ~~(i) the integration of Vascular Solutions into Teleflex; (ii) the centralization of certain administrative functions in our EMEA segment; (iii)~~ the consolidation of our manufacturing operations (referred to as our ~~2016~~2019, 2018 and 2014 Footprint realignment plans)~~; and (iv) other restructuring programs designed to improve operating efficiencies and reduce costs. See Note 5 to the condensed consolidated financial statements included in this report.~~. We also have similar ongoing activities to relocate certain manufacturing operations within our OEM segment ~~("the OEM~~(the "OEM initiative") that do not meet the criteria for a restructuring program under applicable accounting ~~guidance, but~~guidance; nevertheless, the activities ~~will~~should result in cost savings (we expect only minimal costs to be ~~incurred)~~incurred in connection with the OEM initiative). With respect to our currently ongoing restructuring programs and the OEM initiative, the table below summarizes ~~(1) the~~charges incurred or estimated ~~total restructuring and restructuring related charges~~to be incurred and estimated annual pre-tax savings ~~(including~~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, 2018; and (c) the estimated charges to be incurred from January 1, 2019 through the last anticipated completion date of the restructuring programs and OEM initiative and (2) with respect to estimated annual pre-tax savings, ~~related~~(a) the estimated total annual pre-tax savings to ~~the OEM initiative)~~be realized once the restructuring programs and OEM initiative are completed; ~~(2)~~(b) the ~~restructuring and restructuring related charges incurred and~~ estimated annual pre-tax savings realized based on the progress of the restructuring programs and OEM initiative through December 31, ~~2017;~~2018; and ~~(3)~~(c) the ~~restructuring and restructuring related charges expected to be incurred and~~ estimated ~~incremental~~additional annual pre-tax savings ~~(including pre-tax savings related to the OEM initiative) estimated~~ to be realized ~~for these programs~~ from January 1, ~~2018~~2019 through the last anticipated completion ~~dates.~~date of the restructuring programs and the OEM initiative.

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 ~~plans and~~ programs and the OEM initiative, unanticipated expenditures and other developments, the effect of additional acquisitions or dispositions, the failure to realize anticipated savings from a supply contract related to a component included in certain kits sold by our Americas segment 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 ~~relating~~constituting efficiencies with respect to

~~programs involving~~ increased costs that otherwise would have resulted from business acquisitions involve, among other things, assumptions regarding the cost structure and integration of ~~acquired~~ businesses ~~are particularly difficult to forecast because the estimate of pre-tax savings, to a considerable extent, involves assumptions regarding operation of businesses during periods when those businesses~~that previously were not administered by our ~~management.~~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. ~~Estimated~~For example, the 2017 Vascular Solutions integration program, the 2017 EMEA program, the 2016 Footprint realignment plan and other 2016 restructuring programs are excluded from the table below because they were substantially completed during 2019. Additional details including

estimated charges expected to be incurred in connection with the restructuring programs are described in ~~more detail in~~ Note 5 to the condensed consolidated financial statements included in this report.

Restructuring related charges ₍₂₎₍₁₎

~~Pre-tax~~Ongoing restructuring programs annual pre-tax savings_(3)(4)(2)

2019 Footprint realignment plan

Restructuring and impairment charges incurred



	Three Months Ended				Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(Dollars in millions)
Restructuring and impairment charges	$	1.7	$	55.4	$	19.1	$	58.4

Restructuring and impairment charges for the six months ended June 30, 2019 primarily related to $10.9 million in net termination benefit costs and $6.9 million in impairment charges related to our decision to abandon certain intellectual property and other assets associated with our interventional product portfolio.

The ~~increase~~decrease in interest expense for the three and six months ended ~~July 1, 2018~~June 30, 2019 compared to the respective prior year period was primarily due to ~~an increase~~a reduction in ~~average debt outstanding resulting from additional borrowings under our principal credit facility,~~interest rates as ~~well as the November 2017 issuance~~a result of our ~~4.625% Senior Notes due 2027 ("2027 Notes"). The increase in interest expense was also the result of a higher average interest rate on our debt.~~

cross-currency swap agreements.

Taxes on income from continuing operations

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
Effective income tax rate 136.3 % 13.4 % 23.2 % 7.4 %



	Three Months Ended				Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
Effective income tax rate	4.4	%	136.3	%	10.6	%	23.2	%

The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017. The legislation significantly changes U.S. tax law by, among other things, permanently reducing corporate income tax rates from a maximum of 35% to 21%, effective January 1, 2018; implementing a territorial tax system, by generally providing for, among other things, a dividends received deduction on the foreign source portion of dividends received from a foreign corporation if specified conditions are met; and imposing a one-time repatriation tax on undistributed post-1986 foreign subsidiary earnings and profits, which are deemed repatriated for purposes of the tax. In addition, the TCJA imposes two new U.S. tax base erosion provisions: (1) the global intangible low-taxed income ("GILTI") provisions and (2) the base erosion and anti-abuse tax ("BEAT") provisions, which are explained in more detail in Note 13 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017.

In accordance with the applicable provisions of SEC Staff Accounting Bulletin No. 118, we included in our consolidated financial statements as of December 31, 2017 provisional amounts reflecting the tax impact related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities. Once our accounting for the income tax effects of the TCJA is complete, the amounts with respect to the income tax effects of the TCJA may differ from the provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the TCJA.

The effective income tax rate for the three and six months ended ~~July 1, 2018~~June 30, 2019 was 4.4% and 10.6%, respectively, and 136.3% and 23.2%~~, respectively, and 13.4% and 7.4% for the three and six months ended July 2, 2017, respectively. The effective income tax rate~~ for the three and six months ended July 1, 2018, ~~as compared~~respectively. The effective income tax rates for the three and six months ended June 30, 2019 reflect a net tax benefit related to share-based compensation, partially offset, with respect to the ~~prior year periods~~six months ended June 30, 2019, by the effect of non-deductible costs related to the 2019 Footprint realignment plan described in Note 5 to the condensed consolidated financial statements included in this report. The effective tax rates for the three and six months ended July 1, 2018, reflect non-deductible ~~termination benefits and other~~ costs ~~incurred in connection with~~related to the 2018 Footprint realignment plan described in Note 5 to the condensed consolidated financial statements included in this report, and a non-deductible contingent consideration expense recognized in connection with an increase in the fair value of the NeoTract contingent consideration liability. ~~In addition,~~

Segment Financial Information

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 % Increase/
(Decrease) July 1, 2018 July 2, 2017 % Increase/
(Decrease)

(Dollars in millions) (Dollars in millions)
Vascular North America $ 80.1
$ 78.8
1.6
$ 163.1
$ 157.8
3.4
Interventional North America 65.0
58.3
11.3
125.2
98.2
27.3
Anesthesia North America 50.5
49.1
2.9
101.1
97.3
3.9
Surgical North America 40.7
44.7
(9.0 ) 81.4
90.7
(10.2 )
EMEA 153.4
138.5
10.8
313.3
272.0
15.2
Asia 72.4
66.0
9.7
130.6
116.2
12.5
OEM 52.6
45.1
16.5
98.4
88.5
11.3
All other 95.2
48.1
98.0
184.0
95.8
92.1
Net revenues $ 609.9
$ 528.6
15.4
$ 1,197.1
$ 1,016.5
17.8

Three Months Ended Six Months Ended
July 1, 2018 July 2, 2017 % Increase/
(Decrease) July 1, 2018 July 2, 2017 % Increase/
(Decrease)

(Dollars in millions)
(Dollars in millions)
Vascular North America $ 24.6
$ 18.5
33.4
$ 49.3
$ 36.8
34.1
Interventional North America 16.5
8.7
87.3
30.6
0.7
3,826.9
Anesthesia North America 14.7
20.1
(26.6 ) 32.0
33.4
(3.9 )
Surgical North America 17.1
17.3
(1.3 ) 31.8
33.7
(5.5 )
EMEA 26.5
23.6
12.5
58.3
44.9
29.8
Asia 20.8
18.9
9.5
34.2
29.8
14.4
OEM 13.6
10.3
31.1
22.6
19.5
16.0
All other (25.6 ) 9.0
(383.9 ) (37.6 ) 18.3
(304.8 )
Segment operating profit ⁽¹⁾
$ 108.2
$ 126.4
(14.5 ) $ 221.2
$ 217.1
1.9



Segment net revenues
	Three Months Ended						Six Months Ended
	June 30, 2019		July 1, 2018		% Increase/ (Decrease)		June 30, 2019		July 1, 2018		% Increase/ (Decrease)
	(Dollars in millions)						(Dollars in millions)
Americas	$	373.8	$	331.5	12.8		$	717.8	$	654.8	9.6
EMEA	147.1		153.4		(4.2	)	301.6		313.3		(3.7	)
Asia	75.2		72.4		3.9		136.0		130.6		4.1
OEM	56.4		52.6		7.3		110.7		98.4		12.4
Segment net revenues	$	652.5	$	609.9	7.0		$	1,266.1	$	1,197.1	5.8

Segment operating profit
	Three Months Ended						Six Months Ended
	June 30, 2019		July 1, 2018		% Increase/ (Decrease)		June 30, 2019		July 1, 2018		% Increase/ (Decrease)
	(Dollars in millions)						(Dollars in millions)
Americas	$	82.5	$	47.3	74.4		$	148.1	$	106.1	39.5
EMEA	20.8		26.5		(21.5	)	47.9		58.3		(17.9	)
Asia	19.3		20.8		(7.2	)	29.2		34.2		(14.3	)
OEM	13.9		13.6		2.4		27.2		22.6		20.5
Segment operating profit ₍₁₎	$	136.5	$	108.2	26.2		$	252.4	$	221.2	14.1

Comparison of the three and six months ended June 30, 2019 and July 1, 2018 ~~and July 2, 2017~~

~~Vascular North America~~Americas net revenues for the three months ended ~~July 1, 2018~~June 30, 2019 increased ~~$1.3~~$42.3 million, or 1.6%, compared to the prior year period. The increase is primarily attributable to a $1.5 million increase in new product sales and, to a lesser extent, price increases partially offset by a $1.0 million decrease in sales volumes of existing products despite an incremental shipping day during the second quarter 2018.

Vascular North America net revenues for the six months ended July 1, 2018 increased $5.3 million, or 3.4%, compared to the prior year period. The increase is primarily attributable to a $3.1 million increase in new product sales and $1.5 million of price increases.

Vascular North America operating profit for the three months ended July 1, 2018 increased $6.1 million, or 33.4%, compared to the prior year period. The increase is primarily attributable to lower selling and administrative expenses and an increase in gross profit as a result of lower manufacturing costs.

~~Vascular North America operating profit for the six months ended July 1, 2018 increased $12.5 million, or 34.1%~~12.8%, compared to the prior year period. The increase is primarily attributable to an increase in sales volumes of existing products.

Americas net revenues for the six months ended June 30, 2019 increased $63.0 million, or 9.6%, compared to the prior year period. The increase is primarily attributable to an increase of $51.1 million in sales volumes of existing products and an increase in new products sales.

Americas operating profit for the three months ended June 30, 2019 increased $35.2 million, or 74.4%, compared to the prior year period. The increase was primarily attributable to an increase in gross profit resulting from higher sales and lower ~~manufacturing costs~~contingent consideration expense partially offset by higher selling expenses.

Americas operating profit for the six months ended June 30, 2019 increased $42.0 million, or 39.5%, compared to the prior year period. The increase was primarily attributable to an increase in gross profit resulting from higher sales and ~~increased new product sales,~~lower contingent consideration expense partially offset by higher selling expenses as well as ~~lower selling~~an increase in general and administrative ~~expenses.~~costs.

EMEA net revenues for the six months ended June 30, 2019 decreased $11.7 million, or 3.7%, compared to the prior year period. The decrease is primarily attributable to unfavorable fluctuations in foreign currency exchange rates of $21.1 million partially offset by an increase in new product sales and an increase in sales volumes of existing products.

EMEA operating profit for the three months ended June 30, 2019 decreased $5.7 million, or 21.5%, compared to the prior year period. The decrease was primarily attributable to unfavorable fluctuations in foreign currency exchange rates and higher operating expenses partially offset by the gross profit generated by higher sales.

EMEA operating profit for the six months ended June 30, 2019 decreased $10.4 million, or 17.9%, compared to the prior year period. The decrease was primarily attributable to higher operating expenses and unfavorable fluctuations in foreign currency exchange rates partially offset by gross profit generated by higher sales.

Asia net revenues for the three months ended June 30, 2019 increased $2.8 million, or 3.9%, compared to the prior year period. The increase is primarily attributable to a $3.7 million increase in sales volumes of existing products and, ~~a $2.5 million increase in new product sales.~~

~~Anesthesia North America~~Asia net revenues for the six months ended ~~July 1, 2018~~June 30, 2019 increased ~~$3.8~~$5.4 million, or ~~3.9%~~4.1%, compared to the prior year period. The increase is primarily attributable to a ~~$2.7 million increase in new product sales and a $1.9~~$7.0 million increase in sales volumes of existing products and, to a lesser extent, an increase in new product sales and revenue generated by an acquired business. These increases were partially offset by ~~$1.9 million~~unfavorable fluctuations in foreign currency exchange rates of ~~price decreases.~~$7.5 million.

~~Anesthesia North America~~Asia operating profit for the three months ended ~~July 1, 2018~~June 30, 2019 decreased ~~$5.4~~$1.5 million, or ~~26.6%~~7.2%, compared to the prior year period. The ~~prior year period~~decrease was primarily attributable to unfavorable fluctuations in foreign currency exchange rates and higher operating ~~profit reflects a favorable ruling in a lawsuit involving an insurance provider, which resulted in a $6.4 million gain recognized in the prior year period.~~

~~Surgical North America~~

Surgical North America net revenues for the three and six months ended July 1, 2018 decreased $4.0 million or 9.0%, and $9.3 million, or 10.2%, respectively, compared to the corresponding prior year periods. The decreases are primarily attributable to decreases in sales volumes of existing products.

~~Surgical North America~~Asia operating profit for the ~~three and~~ six months ended ~~July 1, 2018~~June 30, 2019 decreased ~~$0.2~~$5.0 million, or ~~1.3% and $1.9 million, or 5.5%~~14.3%, ~~respectively,~~ compared to the prior year ~~periods.~~period. The ~~decreases were~~decrease was primarily attributable to ~~decreases in gross profit resulting from decreased sales volumes of existing products~~higher operating expenses and unfavorable fluctuations in foreign currency exchange rates partially offset by ~~favorable mix. Additionally, the decreases in operating profit were partially offset by lower operating expenses including a benefit resulting from a reduction in a contingent consideration liability.~~

EMEA net revenues for the three months ended July 1, 2018 increased $14.9 million, or 10.8%, compared to the prior year period. The increase is primarily attributable to $10.7 million in favorable fluctuations in foreign currency exchange rates and price increases of $4.8 million partially offset by a decrease in sales volumes of existing products.

~~EMEA net revenues for the six months ended July 1, 2018~~ increased $41.3 million, or 15.2%, compared to the prior year period. The increase is primarily attributable to favorable fluctuations in foreign currency exchange rates of $30.0 million and price increases.

EMEA operating profit for the three months ended July 1, 2018 increased $2.9 million, or 12.5%, compared to the prior year period. The increase is primarily attributable to an increase in gross profit driven by favorable fluctuations in foreign currency exchange rates and price increases partially offset by higher operating expenses.

~~EMEA operating profit for the six months ended July 1, 2018~~ ~~increased $13.4 million, or 29.8%, compared to the prior year period. The increase is primarily attributable to~~ an increase in gross profit resulting from ~~favorable fluctuations in foreign currency exchange rates and price increases partially offset by~~ higher ~~operating expenses including selling and amortization expenses.~~

Asia net revenues for the three months ended July 1, 2018 increased $6.4 million, or 9.7%, compared to the prior year period. The increase is primarily attributable to $2.4 million in favorable fluctuations in foreign currency exchange rates a $1.9 million increase in sales volumes of existing products and a $1.8 million increase in new product sales.

Asia net revenues for the six months ended July 1, 2018 increased $14.4 million, or 12.5%, compared to the prior year period. The increase is primarily attributable to $5.6 million in favorable fluctuations in foreign currency exchange rates, a $4.5 million increase in sales volumes of existing products and net revenues generated by acquired businesses.

Asia operating profit for the three months ended July 1, 2018 increased $1.9 million, or 9.5%, compared to the prior year period. The increase was primarily attributable to an increase in gross profit resulting from favorable fluctuations in foreign currency exchange rates partially offset by higher general and administrative expenses.

~~Asia operating profit for the six months ended July 1, 2018~~increased $4.4 million, or 14.4%, compared to the prior year period. The increase was primarily attributable to an increase in gross profit resulting from favorable fluctuations in foreign currency exchange rates partially offset by higher selling, marketing and administrative expenses.

OEM net revenues for the three and six months ended ~~July 1, 2018~~June 30, 2019 increased ~~$7.5~~$3.8 million, or ~~16.5%~~7.3%, and $12.3 million, or 12.4%, respectively, compared to the prior year ~~period.~~periods. The ~~increase is~~increases in both periods are primarily attributable to an increase in sales volumes of existing ~~products of $6.9 million.~~

OEM net revenues for the six months ended July 1, 2018 increased $9.9 million, or 11.3%, compared to the prior year period. The increase is primarily attributable to an $8.5 million increase in sales volumes of existing products and favorable fluctuations in foreign currency exchange rates.products.

~~OEM operating profit for the six months ended July 1, 2018 increased $3.1 million, or 16.0%, compared to the prior year period. The~~an increase ~~is primarily attributable to lower~~in general and administrative ~~expenses and an increase in gross profit. The increase in gross profit is driven by higher sales volumes partially offset by higher manufacturing costs.~~expenses.

Net revenues for our other operating segments increased $47.1 million, or 98.0% and $88.2 million, or 92.1%, for the three and six months ended July 1, 2018, respectively, compared to the prior year periods. The increases are primarily attributable to net revenues generated by NeoTract.

Operating profit for our other operating segments decreased $34.6 million or 383.9% and $55.9 million, or 304.8% for the three and six months ended July 1, 2018, respectively, compared to the corresponding prior year periods. The decreases are primarily attributable to an increase in contingent consideration liabilities and operating expenses associated with NeoTract.

Liquidity and Capital Resources

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.

The TCJA significantly changed U.S. tax law by, among other things, imposing a one-time repatriation tax on undistributed post-1986 earnings and profits of foreign subsidiaries. Previously, we were not taxed in the U.S. on certain foreign earnings unless and until they were repatriated to the U.S. Under the TCJA, we will have to pay $154.0 million over eight years for the deemed repatriation of these foreign earnings, regardless of whether such earnings are actually repatriated. As a result of the repatriation tax provisions of the TCJA, we anticipate that, generally, we will be able to access cash located at our foreign subsidiaries without incurring any additional U.S. federal income tax liabilities. We are not aware of any other restrictions on repatriation of these funds and, subject to cash payment of additional foreign withholding taxes, these funds could be repatriated, if necessary.

To date, we have not experienced significant payment defaults by 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 certain countries, global financial markets remain volatile and the global 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 customers in Greece, Italy, Portugal and Spain, and consider other mitigation strategies. As of July 1, 2018 and December 31, 2017, our net trade accounts receivable from publicly funded hospitals in Italy, Spain, Portugal and Greece were $26.4 million and $24.7 million, respectively. As of July 1, 2018 and December 31, 2017, our net trade accounts receivable from customers in these countries were approximately 15.0%, of our consolidated net trade accounts receivable. For the six months ended July 1, 2018 and July 2, 2017, net revenues from customers in these countries were 6.3% of total net revenues, and average days that current and long-term trade accounts receivable were outstanding were 150 days and 162 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 2018 and future years.

The decrease in incomes taxes payable for the six months ended July 1, 2018 was $29.7 million compared to a decrease of $6.0 million for six months ended July 2, 2017. The decrease in income taxes payable was the result of higher payments in the first half of 2018 as compared to the same period in 2017. The increase in accounts receivable for the six months ended July 1, 2018 was $15.9 million compared to a decrease of $5.1 million for six months ended July 2, 2017. The net increase in accounts receivable is attributable to higher net revenues in the first half of 2018. In addition, in the first quarter of 2017, we sold $16.0 million of outstanding receivables related to sales of our products to public hospitals in Italy. The increase in accounts payable, accrued expenses and other liabilities for the six months ended July 1, 2018 was $38.1 million compared to an increase of $6.5 million for six months ended July 2, 2017. The increase is attributable to increased restructuring activity primarily related to the 2018 Footprint realignment plan.

Net cash used in financing activities from continuing operations was ~~$102.4~~$167.6 million for the six months ended ~~July 1, 2018,~~June 30, 2019, which ~~includes~~included contingent consideration payments of ~~$62.6~~$111.9 million, dividend payments of ~~$30.9~~$31.3 million and a net decrease in borrowings of $27.5 million.

~~and borrowing repayments of $18.5 million, partially offset by proceeds from share based compensation and related tax benefits of $9.8 million.~~

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

(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 NeoTract’s internal control over financial reporting. NeoTract was acquired during the fourth 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. NeoTract's total assets (excluding goodwill and intangible assets) were $84.6 million as of July 1, 2018; its revenues for the three and six months ended July 1, 2018 were $47.7 million and $90.0 million, respectively.

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, contract, employment, environmental and other matters. As of ~~July 1, 2018~~June 30, 2019 andDecember 31, ~~2017,~~2018, we have accrued liabilities of approximately ~~$1.7~~$0.2 million and ~~$3.8~~$0.6 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. Based on information currently available, advice of counsel, established reserves and other resources, we do not believe that the outcome of any outstanding 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.

Item 1A. Risk Factors

~~There have been no significant changes in risk factors for the quarter ended July 1, 2018.~~ See the information set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017.~~

2018. There have been no significant changes in risk factors for the quarter ended June 30, 2019.

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.

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this report:



Exhibit No.		Description

*10.1	—	Amended and Restated Credit Agreement, dated April 5, 2019, among the Company, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., PNC Bank, National Association, Wells Fargo Bank, National Association and HSBC Securities (USA), as co-syndication agents, the guarantors party thereto, the lenders party thereto and each other party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on April 10, 2019).
31.1	—	Certification of Chief Executive Officer, pursuant to Rule 13a–14(a) under the Securities Exchange Act of 1934.
31.2	—	Certification of Chief Financial Officer, pursuant to Rule 13a–14(a) under the Securities Exchange Act of 1934.
32.1	—	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	—	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	—	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~July 1, 2018,~~June 30, 2019, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Cover Page; (ii) the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017; (ii)~~2018; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017; (iii)~~2018; (iv) the Condensed Consolidated Balance Sheets as of ~~July 1, 2018~~June 30, 2019 and December 31, ~~2017; (iv)~~2018; (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and July 1, ~~2018 and July 2, 2017; (v)~~2018; (vi) the Condensed Consolidated Statements of Changes in Equity for the six months ended June 30, 2019 and July 1,31, 2018; and ~~(vi)~~(vii) Notes to Condensed Consolidated Financial Statements.

* Each such exhibit has previously been filed with the Securities and Exchange Commission as part of the filing indicated and is incorporated herein by reference.

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/ Liam J. Kelly
				Liam J. Kelly President 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: August ~~2, 2018~~1, 2019

4643



(Mark One)
x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



		Page
PART I — FINANCIAL INFORMATION

Item 1:	Financial Statements (Unaudited):	2
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Changes in Equity	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	4240
Item 4:	Controls and Procedures	4240

PART II — OTHER INFORMATION

Item 1:	Legal Proceedings	4441
Item 1A:	Risk Factors	4441
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	4441
Item 3:	Defaults Upon Senior Securities	4441
Item 4:	Mine Safety Disclosures	4441
Item 5:	Other Information	4441
Item 6:	Exhibits	4542

SIGNATURES		4643



	July 1, 2018		December 31, 2017
	(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	346,304	$	333,558
Accounts receivable, net	359,119		345,875
Inventories, net	405,428		395,744
Prepaid expenses and other current assets	52,105		47,882
Prepaid taxes	19,084		5,748
Assets held for sale	3,239		—
Total current assets	1,185,279		1,128,807
Property, plant and equipment, net	410,979		382,999
Goodwill	2,220,888		2,235,592
Intangible assets, net	2,306,204		2,383,748
Deferred tax assets	2,386		3,810
Other assets	49,585		46,536
Total assets	$	6,175,321	$	6,181,492
LIABILITIES AND EQUITY
Current liabilities
Current borrowings	$	86,875	$	86,625
Accounts payable	94,834		92,027
Accrued expenses	104,340		96,853
Current portion of contingent consideration	110,454		74,224
Payroll and benefit-related liabilities	89,669		107,415
Accrued interest	6,771		6,165
Income taxes payable	5,597		11,514
Other current liabilities	37,905		9,053
Total current liabilities	536,445		483,876
Long-term borrowings	2,145,468		2,162,927
Deferred tax liabilities	596,434		603,676
Pension and postretirement benefit liabilities	113,083		121,410
Noncurrent liability for uncertain tax positions	12,765		12,296
Noncurrent contingent consideration	132,205		197,912
Other liabilities	204,940		168,864
Total liabilities	3,741,340		3,750,961
Commitments and contingencies
Total shareholders' equity	2,433,981		2,430,531
Total liabilities and shareholders' equity	$	6,175,321	$	6,181,492



Three Months Ended July 1, 2018
	Termination benefits		Other costs ₍₂₎		Total
	(Dollars in thousands)
2018 Footprint realignment plan	$	52,345	$	129	$	52,474
Other restructuring programs ₍₁₎	574		440		1,014
Restructuring charges	$	52,919	$	569	$	53,488
Long-lived asset impairment charge	—		1,865		1,865
Restructuring and impairment charges	$	52,919	$	2,434	$	55,353



Three Months Ended July 2, 2017
	Termination benefits		Other costs ₍₂₎		Total
	(Dollars in thousands)
Restructuring charges ₍₃₎	$	612	$	258	$	870



Six Months Ended July 2, 2017
	Termination benefits		Other costs ₍₂₎		Total
	(Dollars in thousands)
Vascular Solutions integration program	$	4,853	$	34	$	4,887
2017 EMEA restructuring program	6,536		—		6,536
2016 Footprint realignment plan	825		76		901
Other restructuring programs ₍₅₎	1,147		344		1,491
Restructuring charges	$	13,361	$	454	$	13,815



	Vascular North America		Interventional North America			Anesthesia North America			Surgical North America		EMEA			Asia			OEM		All Other			Total
	(Dollars in thousands)
December 31, 2017	$	264,869	$	433,049		$	157,289		$	250,912	$	494,548		$	209,200		$	4,883	$	420,842		$	2,235,592
Goodwill related to acquisitions	—		422			—			—		9			3			—		145			579
Currency translation adjustment	—		(1,938		)	(395		)	—		(9,836		)	(2,352		)	—		(762		)	(15,283		)
July 1, 2018	$	264,869	$	431,533		$	156,894		$	250,912	$	484,721		$	206,851		$	4,883	$	420,225		$	2,220,888



	Contingent consideration
	2018
	(Dollars in thousands)
Balance - December 31, 2017	$	272,136
Additions₍₁₎	396
Payment	(64,372		)
Revaluations	34,618
Translation adjustment	(119		)
Balance - July 1, 2018	$	242,659



	Pension Three Months Ended						Other Postretirement Benefits Three Months Ended				Pension Six Months Ended						Other Postretirement Benefits Six Months Ended
	July 1, 2018			July 2, 2017			July 1, 2018		July 2, 2017		July 1, 2018			July 2, 2017			July 1, 2018		July 2, 2017
	(Dollars in thousands)
Service cost	$	376		$	720		$	52	$	75	$	754		$	1,437		$	104	$	149
Interest cost	3,718			3,789			378		379		7,439			7,574			756		757
Expected return on plan assets	(7,415		)	(6,750		)	—		—		(14,836		)	(13,493		)	—		—
Net amortization and deferral	1,695			1,691			62		66		3,403			3,381			124		131
Net benefits expense (income)	$	(1,626	)	$	(550	)	$	492	$	520	$	(3,240	)	$	(1,101	)	$	984	$	1,037



	Ongoing restructuring programs and other similar cost savings initiatives₍₁₎
	Estimated Total	~~Through~~Actuals through December 31, ~~2017~~2018	Estimated ~~Remaining~~remaining from January 1, ~~2018~~2019 through December 31, ~~2024~~2026
	(Dollars in millions)
Restructuring charges	$~~109~~95 - ~~$126~~$114	$4268	$6727 - ~~$84~~$46
Restructuring related charges ₍₂₎₍₁₎	~~102~~$110 - ~~125~~$141	44$34	58$76 - 81$107
Total charges	$~~211~~205 - ~~$251~~$255	$86102	$~~125~~103 - ~~$165~~$153

OEM initiative annual pre-tax savings	$6 - $7	$—1	$65 - $7$6
~~Pre-tax~~Ongoing restructuring programs annual pre-tax savings_(3)(4)(2)	$~~105~~63 - ~~$121~~$73	$4521	$6042 - ~~$76~~$52
Total annual pre-tax savings	$~~111~~69 - ~~$128~~$80	$4522	$6647 - ~~$83~~$58


(1)	~~Includes estimated financial information related to the 2018 Footprint realignment plan, which was initiated during the second quarter 2018 and is described in more detail above.~~


(1)	See Note 1415 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.