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

(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberMarch 29, 20192020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                    .
Commission file number 1-5353
TELEFLEX INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware 23-1147939
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. employer
identification no.)

550 E. Swedesford Rd., Suite 400 Wayne, PA 19087
550 E. Swedesford Rd., Suite 400Wayne,PA19087
(Address of principal executive offices)(Zip Code)
(Address of principal executive offices and zip code)
(610) 225-6800
(Registrant’s telephone number, including area code)
(None)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareTFXNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
    
Non-accelerated filer☐Smaller reporting company☐
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  ☒
The registrant had 46,295,91546,425,420 shares of common stock, par value $1.00 per share, outstanding as of October 29, 2019.
April 28, 2020.


TELEFLEX INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBERMARCH 29, 20192020
TABLE OF CONTENTSTELEFLEX INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware23-1147939
(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 and zip code)
(610) 225-6800
(Registrant’s telephone number, including area code)
(None)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareTFXNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filerPage
☐
   
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Non-accelerated filer
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☐Smaller reporting company☐
Emerging growth company
44☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  ☒
The registrant had 46,425,420 shares of common stock, par value $1.00 per share, outstanding as of April 28, 2020.
1

PART I — FINANCIAL INFORMATIONTELEFLEX INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
Item 1. Financial StatementsFOR THE QUARTER ENDED MARCH 29, 2020
TELEFLEX INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware23-1147939
(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 and zip code)
(610) 225-6800
(Registrant’s telephone number, including area code)
(None)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareTFXNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
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  ☒
The registrant had 46,425,420 shares of common stock, par value $1.00 per share, outstanding as of April 28, 2020.


TELEFLEX INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 29, 2020
TABLE OF CONTENTS
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7
Item 2:
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Item 3:
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Item 4:
26
Item 1:
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Item 1A:
28
Item 2:
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Item 3:
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Item 4:
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Item 5:
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Item 6:
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31

1

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months EndedNine Months Ended Three Months Ended
September 29, 2019September 30, 2018September 29, 2019September 30, 2018 March 29, 2020March 31, 2019
(Dollars and shares in thousands, except per share) (Dollars and shares in thousands, except per share)
Net revenuesNet revenues$648,319  $609,672  $1,914,410  $1,806,768  Net revenues$630,642  $613,584  
Cost of goods soldCost of goods sold272,639  267,099  821,064  788,147  Cost of goods sold297,018  289,614  
Gross profitGross profit375,680  342,573  1,093,346  1,018,621  Gross profit333,624  323,970  
Selling, general and administrative expensesSelling, general and administrative expenses229,896  214,894  693,775  660,148  Selling, general and administrative expenses147,796  206,921  
Research and development expensesResearch and development expenses27,984  26,365  82,729  78,410  Research and development expenses27,396  27,150  
Restructuring and impairment chargesRestructuring and impairment charges1,268  19,209  20,348  77,625  Restructuring and impairment charges1,346  17,395  
(Gain) on sale of assets(1,089) —  (3,828) —  
Gain on sale of assetsGain on sale of assets—  (2,739) 
Income from continuing operations before interest and taxesIncome from continuing operations before interest and taxes117,621  82,105  300,322  202,438  Income from continuing operations before interest and taxes157,086  75,243  
Interest expenseInterest expense19,545  27,171  62,995  79,763  Interest expense15,439  22,692  
Interest incomeInterest income(470) (320) (1,281) (776) Interest income(579) (339) 
Income from continuing operations before taxesIncome from continuing operations before taxes98,546  55,254  238,608  123,451  Income from continuing operations before taxes142,226  52,890  
(Benefit) taxes on income from continuing operations(130,383) (1,286) (115,567) 14,532  
Taxes on income from continuing operationsTaxes on income from continuing operations11,074  10,972  
Income from continuing operationsIncome from continuing operations228,929  56,540  354,175  108,919  Income from continuing operations131,152  41,918  
Operating (loss) income from discontinued operations(9) (83) (1,291) 1,246  
Tax benefit on operating income (loss) from discontinued operations(9) (67) (317) (47) 
Operating loss from discontinued operationsOperating loss from discontinued operations(4) (1,343) 
Tax benefit on operating loss from discontinued operationsTax benefit on operating loss from discontinued operations(2) (322) 
Loss from discontinued operationsLoss from discontinued operations—  (16) (974) 1,293  Loss from discontinued operations(2) (1,021) 
Net incomeNet income$228,929  $56,524  $353,201  $110,212  Net income$131,150  $40,897  
Earnings per share:Earnings per share:    Earnings per share:  
Basic:Basic:    Basic:  
Income from continuing operationsIncome from continuing operations$4.95  $1.23  $7.67  $2.39  Income from continuing operations$2.83  $0.91  
(Loss) Income from discontinued operations—  —  (0.02) 0.03  
Loss from discontinued operationsLoss from discontinued operations—  (0.02) 
Net incomeNet income$4.95  $1.23  $7.65  $2.42  Net income$2.83  $0.89  
Diluted:Diluted:    Diluted:  
Income from continuing operationsIncome from continuing operations$4.85  $1.21  $7.53  $2.33  Income from continuing operations$2.78  $0.89  
Income (loss) from discontinued operations—  —  (0.02) 0.03  
Loss from discontinued operationsLoss from discontinued operations—  (0.02) 
Net incomeNet income$4.85  $1.21  $7.51  $2.36  Net income$2.78  $0.87  
Weighted average common shares outstandingWeighted average common shares outstanding    Weighted average common shares outstanding  
BasicBasic46,248  45,851  46,156  45,587  Basic46,382  46,050  
DilutedDiluted47,176  46,815  47,051  46,785  Diluted47,231  46,942  
The accompanying notes are an integral part of the condensed consolidated financial statements.
2

TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
Three Months EndedNine Months Ended Three Months Ended
September 29, 2019September 30, 2018September 29, 2019September 30, 2018 March 29, 2020March 31, 2019
(Dollars in thousands) (Dollars in thousands)
Net incomeNet income$228,929  $56,524  $353,201  $110,212  Net income$131,150  $40,897  
Other comprehensive income (loss), net of tax:Other comprehensive income (loss), net of tax:   Other comprehensive income (loss), net of tax:  
Foreign currency translation, net of tax of $(7,045), $(3,505), $(8,804), and $—, for the three and nine months periods, respectively(39,894) 14,387  (27,562) (30,130) 
Pension and other postretirement benefit plans adjustment, net of tax of $(494), $(363), $(1,330), and $(1,253) for the three and nine months periods, respectively1,560  1,215  4,248  4,111  
Derivatives qualifying as hedges, net of tax of $64, $(308), $146, and $(419) for the three and nine months periods, respectively(260) 1,651  (102) 1,943  
Foreign currency translation, net of tax of $(7,581) and $(2,056)Foreign currency translation, net of tax of $(7,581) and $(2,056)(18,199) (236) 
Pension and other postretirement benefit plans adjustment, net of tax of $(522) and $(390)Pension and other postretirement benefit plans adjustment, net of tax of $(522) and $(390)1,689  1,229  
Derivatives qualifying as hedges, net of tax of $372 and $(1)Derivatives qualifying as hedges, net of tax of $372 and $(1)(3,817) (597) 
Other comprehensive (loss) income, net of tax:Other comprehensive (loss) income, net of tax:(38,594) 17,253  (23,416) (24,076) Other comprehensive (loss) income, net of tax:(20,327) 396  
Comprehensive incomeComprehensive income$190,335  $73,777  $329,785  $86,136  Comprehensive income$110,823  $41,293  
The accompanying notes are an integral part of the condensed consolidated financial statements.
3

TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 29, 2019December 31, 2018 March 29, 2020December 31, 2019
(Dollars in thousands) (Dollars in thousands)
ASSETSASSETS  ASSETS  
Current assetsCurrent assets  Current assets  
Cash and cash equivalentsCash and cash equivalents$257,544  $357,161  Cash and cash equivalents$406,477  $301,083  
Accounts receivable, netAccounts receivable, net396,663  366,286  Accounts receivable, net441,714  418,673  
Inventories, net472,594  427,778  
InventoriesInventories488,856  476,557  
Prepaid expenses and other current assetsPrepaid expenses and other current assets81,531  72,481  Prepaid expenses and other current assets101,606  97,943  
Prepaid taxesPrepaid taxes29,278  12,463  Prepaid taxes8,133  12,076  
Total current assetsTotal current assets1,237,610  1,236,169  Total current assets1,446,786  1,306,332  
Property, plant and equipment, netProperty, plant and equipment, net429,568  432,766  Property, plant and equipment, net427,452  430,719  
Operating lease assetsOperating lease assets115,193  —  Operating lease assets107,290  113,160  
GoodwillGoodwill2,231,330  2,246,579  Goodwill2,332,414  2,245,305  
Intangible assets, netIntangible assets, net2,175,673  2,325,052  Intangible assets, net2,297,178  2,156,285  
Deferred tax assetsDeferred tax assets2,952  2,446  Deferred tax assets5,519  5,572  
Other assetsOther assets64,856  34,979  Other assets84,925  52,447  
Total assetsTotal assets$6,257,182  $6,277,991  Total assets$6,701,564  $6,309,820  
LIABILITIES AND EQUITYLIABILITIES AND EQUITY  LIABILITIES AND EQUITY  
Current liabilitiesCurrent liabilities  Current liabilities  
Current borrowingsCurrent borrowings$50,000  $86,625  Current borrowings$53,625  $50,000  
Accounts payableAccounts payable100,630  106,709  Accounts payable104,348  102,916  
Accrued expensesAccrued expenses91,569  97,551  Accrued expenses99,804  100,466  
Current portion of contingent considerationCurrent portion of contingent consideration135,168  136,877  Current portion of contingent consideration9,463  148,090  
Payroll and benefit-related liabilitiesPayroll and benefit-related liabilities99,831  104,670  Payroll and benefit-related liabilities73,632  115,981  
Accrued interestAccrued interest19,686  6,031  Accrued interest16,153  5,514  
Income taxes payableIncome taxes payable3,299  5,943  Income taxes payable6,989  6,692  
Other current liabilitiesOther current liabilities30,180  38,050  Other current liabilities38,286  33,396  
Total current liabilitiesTotal current liabilities530,363  582,456  Total current liabilities402,300  563,055  
Long-term borrowingsLong-term borrowings1,949,068  2,072,200  Long-term borrowings2,340,892  1,858,943  
Deferred tax liabilitiesDeferred tax liabilities468,945  608,221  Deferred tax liabilities489,677  439,558  
Pension and postretirement benefit liabilitiesPension and postretirement benefit liabilities72,016  92,914  Pension and postretirement benefit liabilities66,380  82,719  
Noncurrent liability for uncertain tax positionsNoncurrent liability for uncertain tax positions11,084  10,718  Noncurrent liability for uncertain tax positions12,139  10,294  
Noncurrent contingent considerationNoncurrent contingent consideration71,712  167,370  Noncurrent contingent consideration23,274  71,818  
Noncurrent operating lease liabilitiesNoncurrent operating lease liabilities104,136  —  Noncurrent operating lease liabilities96,333  101,372  
Other liabilitiesOther liabilities196,882  204,134  Other liabilities197,545  202,741  
Total liabilitiesTotal liabilities3,404,206  3,738,013  Total liabilities3,628,540  3,330,500  
Commitments and contingenciesCommitments and contingenciesCommitments and contingencies
Total shareholders' equityTotal shareholders' equity2,852,976  2,539,978  Total shareholders' equity3,073,024  2,979,320  
Total liabilities and shareholders' equityTotal liabilities and shareholders' equity$6,257,182  $6,277,991  Total liabilities and shareholders' equity$6,701,564  $6,309,820  
The accompanying notes are an integral part of the condensed consolidated financial statements.

4

TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended Three Months Ended
September 29, 2019September 30, 2018March 29, 2020March 31, 2019
(Dollars in thousands)(Dollars in thousands)
Cash flows from operating activities of continuing operations:Cash flows from operating activities of continuing operations:  Cash flows from operating activities of continuing operations:  
Net incomeNet income$353,201  $110,212  Net income$131,150  $40,897  
Adjustments to reconcile net income to net cash provided by operating activities:  
Loss (income) from discontinued operations974  (1,293) 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:Adjustments to reconcile net income to net cash (used in) provided by operating activities:  
Loss from discontinued operationsLoss from discontinued operations2  1,021  
Depreciation expenseDepreciation expense47,286  44,517  Depreciation expense16,842  15,645  
Amortization expense of intangible assets112,661  111,974  
Amortization expense of deferred financing costs and debt discount3,313  3,548  
Intangible asset amortization expenseIntangible asset amortization expense38,911  37,751  
Deferred financing costs and debt discount amortization expenseDeferred financing costs and debt discount amortization expense945  1,179  
Gain on sale of assetsGain on sale of assets(3,828) —  Gain on sale of assets—  (2,739) 
Fair value step up of acquired inventory soldFair value step up of acquired inventory sold1,707  —  
Changes in contingent considerationChanges in contingent consideration(46,502) 13,057  
Changes in contingent consideration40,894  47,344  
Impairment of long-lived assetsImpairment of long-lived assets6,911  19,110  Impairment of long-lived assets—  3,030  
Stock-based compensationStock-based compensation20,037  16,469  Stock-based compensation3,522  5,781  
Deferred income taxes, netDeferred income taxes, net(140,963) 8,664  Deferred income taxes, net679  2,603  
Payments for contingent considerationPayments for contingent consideration(26,092) (2,100) Payments for contingent consideration(79,771) (25,935) 
Interest benefit on swaps designated as net investment hedgesInterest benefit on swaps designated as net investment hedges(13,820) —  Interest benefit on swaps designated as net investment hedges(4,874) (3,882) 
OtherOther(7,142) (10,928) Other(18,143) 4,536  
Changes in assets and liabilities, net of effects of acquisitions and disposals:Changes in assets and liabilities, net of effects of acquisitions and disposals:  Changes in assets and liabilities, net of effects of acquisitions and disposals:  
Accounts receivableAccounts receivable(41,221) (29,830) Accounts receivable(23,145) (14,102) 
InventoriesInventories(53,259) (19,665) Inventories(12,346) (19,200) 
Prepaid expenses and other assetsPrepaid expenses and other assets(13,184) (6,468) Prepaid expenses and other assets6,403  (11,524) 
Accounts payable, accrued expenses and other liabilitiesAccounts payable, accrued expenses and other liabilities31,631  54,581  Accounts payable, accrued expenses and other liabilities(31,488) 8,856  
Income taxes receivable and payable, netIncome taxes receivable and payable, net(28,232) (43,191) Income taxes receivable and payable, net4,651  3,192  
Net cash provided by operating activities from continuing operations289,167  302,944  
Net cash (used in) provided by operating activities from continuing operations Net cash (used in) provided by operating activities from continuing operations(11,457) 60,166  
Cash flows from investing activities of continuing operations:Cash flows from investing activities of continuing operations:  Cash flows from investing activities of continuing operations:  
Expenditures for property, plant and equipmentExpenditures for property, plant and equipment(83,797) (55,751) Expenditures for property, plant and equipment(19,684) (23,494) 
Proceeds from sale of assetsProceeds from sale of assets3,135  —  Proceeds from sale of assets400  991  
Payments for businesses and intangibles acquired, net of cash acquiredPayments for businesses and intangibles acquired, net of cash acquired(1,265) (22,550) Payments for businesses and intangibles acquired, net of cash acquired(265,160) (1,025) 
Net interest proceeds on swaps designated as net investment hedges8,330  —  
Net cash used in investing activities from continuing operationsNet cash used in investing activities from continuing operations(73,597) (78,301) Net cash used in investing activities from continuing operations(284,444) (23,528) 
Cash flows from financing activities of continuing operations:Cash flows from financing activities of continuing operations:  Cash flows from financing activities of continuing operations:  
Proceeds from new borrowingsProceeds from new borrowings25,000  —  Proceeds from new borrowings485,000  —  
Reduction in borrowings(185,500) (98,500) 
Debt extinguishment, issuance and amendment fees(4,964) (188) 
Net proceeds from share based compensation plans and the related tax impactsNet proceeds from share based compensation plans and the related tax impacts14,014  18,666  Net proceeds from share based compensation plans and the related tax impacts(3,022) 2,242  
Payments for contingent considerationPayments for contingent consideration(112,006) (73,152) Payments for contingent consideration(60,881) (110,953) 
Dividends paidDividends paid(47,071) (46,526) Dividends paid(15,767) (15,650) 
Net cash used in financing activities from continuing operations(310,527) (199,700) 
Net cash provided by (used in) financing activities from continuing operationsNet cash provided by (used in) financing activities from continuing operations405,330  (124,361) 
Cash flows from discontinued operations:Cash flows from discontinued operations:  Cash flows from discontinued operations:  
Net cash provided by (used in) operating activities2,651  (701) 
Net cash provided by (used in) discontinued operations2,651  (701) 
Net cash (used in) provided by operating activitiesNet cash (used in) provided by operating activities(193) 3,610  
Net cash (used in) provided by discontinued operationsNet cash (used in) provided by discontinued operations(193) 3,610  
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(7,311) (1,524) Effect of exchange rate changes on cash and cash equivalents(3,842) (1,836) 
Net (decrease) increase in cash and cash equivalents(99,617) 22,718  
Net increase (decrease) in cash and cash equivalentsNet increase (decrease) in cash and cash equivalents105,394  (85,949) 
Cash and cash equivalents at the beginning of the periodCash and cash equivalents at the beginning of the period357,161  333,558  Cash and cash equivalents at the beginning of the period301,083  357,161  
Cash and cash equivalents at the end of the periodCash and cash equivalents at the end of the period$257,544  $356,276  Cash and cash equivalents at the end of the period$406,477  $271,212  
Non cash investing activities of continuing operations:
Property, plant and equipment additions due to build-to-suit lease transaction$—  $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 $—  $56,075  
The accompanying notes are an integral part of the condensed consolidated financial statements.
5

TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Common StockAdditional
Paid In
Capital		Retained
Earnings		Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
Balance at December 31, 201847,248  $47,248  $574,761  $2,427,599  $(341,085) 1,232  $(168,545) $2,539,978  
Cumulative effect adjustment resulting from the adoption of new accounting standards(1,321) (1,321) 
Net income40,897  40,897  
Cash dividends ($0.34 per share)(15,650) (15,650) 
Other comprehensive income396  396  
Shares issued under compensation plans75  75  3,094  (40) 2,029  5,198  
Deferred compensation127  (4) 253  380  
Balance at March 31, 201947,323  47,323  577,982  2,451,525  (340,689) 1,188  (166,263) 2,569,878  
Net income83,375  83,375  
Cash dividends ($0.34 per share)(15,697) (15,697) 
Other comprehensive income14,782  14,782  
Shares issued under compensation plans77  77  12,252  (2) 177  12,506  
Balance as of June 30, 201947,400  47,400  590,234  2,519,203  (325,907) 1,186  (166,086) 2,664,844  
Net income228,929  228,929  
Cash dividends ($0.34 per share)(15,724) (15,724) 
Other comprehensive income(38,594) (38,594) 
Shares issued under compensation plans63  63  13,400  (2) 58  13,521  
Balance as of September 29, 201947,463  $47,463  $603,634  $2,732,408  $(364,501) 1,184  $(166,028) $2,852,976  

Common StockAdditional
Paid In
Capital		Retained
Earnings		Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
Balance at December 31, 2019  47,536  $47,536  $616,980  $2,824,916  $(344,392) 1,182  $(165,720) $2,979,320  
Cumulative effect adjustment resulting from the adoption of new accounting standards  (791) (791) 
Net income  131,150  131,150  
Cash dividends ($0.34 per share)(15,767) (15,767) 
Other comprehensive income  (20,327) (20,327) 
Shares issued under compensation plans  24  24  (3,074) (37) 1,748  (1,302) 
Deferred compensation  383  (5) 358  741  
Balance at March 29, 2020  47,560  $47,560  $614,289  $2,939,508  $(364,719) 1,140  $(163,614) $3,073,024  
Common StockAdditional
Paid In
Capital		Retained
Earnings		Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
Balance at December 31, 201847,248  $47,248  $574,761  $2,427,599  $(341,085) 1,232  $(168,545) $2,539,978  
Cumulative effect adjustment resulting from the adoption of new accounting standards  (1,321) (1,321) 
Net income40,897  40,897  
Cash dividends ($0.34 per share)(15,650) (15,650) 
Other comprehensive income396  396  
Shares issued under compensation plans75  75  3,094  (40) 2,029  5,198  
Deferred compensation127  (4) 253  380  
Balance at March 31, 201947,323  $47,323  $577,982  $2,451,525  $(340,689) 1,188  $(166,263) $2,569,878  

Common StockAdditional
Paid In
Capital		Retained
Earnings		Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
Balance at December 31, 201746,871  $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 standards3,076  3,076  
Net income56,184  56,184  
Cash dividends ($0.34 per share)(15,447) (15,447) 
Other comprehensive income82,690  82,690  
Settlements of warrants(17,884) (132) 17,872  (12) 
Shares issued under compensation plans97  97  992  (43) 3,033  4,122  
Deferred compensation(8) 322  322  
Balance at April 1, 201846,968  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 loss(124,019) (124,019) 
Settlements of warrants(19,019) (140) 19,005  (14) 
Shares issued under compensation plans114  114  13,992  (2) 194  14,300  
Deferred compensation235  235  
Balance as of July 1, 201847,082  47,082  570,037  2,311,712  (306,420) 1,379  (188,430) 2,433,981  
Net income56,524  56,524  
Cash dividends ($0.34 per share)(15,588) (15,588) 
Other comprehensive income17,253  17,253  
Settlements of warrants(19,212) (140) 19,198  (14) 
Shares issued under compensation plans110  110  14,331  (2) 157  14,598  
Deferred compensation163  (2) 148  311  
Balance as of September 30, 201847,192  $47,192  $565,319  $2,352,648  $(289,167) 1,235  $(168,927) $2,507,065  
The accompanying notes are an integral part of the condensed consolidated financial statements.

6

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 1 — Basis of presentation
The accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated and its subsidiaries (“we,” “us,” “our,”“our" and “Teleflex” and the “Company”) are prepared on the same basis as its annual consolidated financial statements.
In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair statement of the financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("GAAP") and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X, which sets forth the instructions for the form and content of presentation of financial statements included in Form 10-Q. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.estimates particularly as it relates to estimates reliant on forecasts and other assumptions impacted by the COVID-19 pandemic, which are described in more detail in the 'Risks and uncertainties' section below. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.
In accordance with applicable accounting standards and as permitted by Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements do not include all of the information and footnote disclosures that are required to be included in the Company'sour annual consolidated financial statements. Therefore, the Company'sour quarterly condensed consolidated financial statements should be read in conjunction with the Company'sour consolidated financial statements included in itsour Annual Report on Form 10-K for the year ended December 31, 2018.2019. For the three months ended March 29, 2020 and March 31, 2019, we reclassified intangible asset amortization expense of $20.9 million and $20.8 million, respectively, from selling, general and administrative expenses to cost of goods sold.

Risks and Uncertainties
We are subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict due to the rapidly evolving environment and continued uncertainties created by the COVID-19 pandemic. Among other things, the response to the COVID-19 pandemic has had the effect of reducing the number of elective procedures being carried out by our customers, thereby reducing demand for products used in elective procedures, while creating an increase in demand for products used in the treatment of patients with COVID-19. The COVID-19 pandemic has significantly impacted economic activity and markets around the world. If the pandemic continues and conditions worsen, it could negatively impact our business, results of operations, financial condition and liquidity in numerous ways, including, but not limited to, lower revenues in our product categories dependent on elective procedures; further disruption in the manufacture of our products including increased manufacturing and distribution costs; extended delays in or defaults on payments of outstanding receivables; and increased volatility and pricing in capital markets. Further, the COVID-19 pandemic may cause disruption to our suppliers or their suppliers and/or the distribution of our products, whether through our direct sales force or our distributors.
The severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on our employees, contractors, suppliers, customers and other business partners, all of which are uncertain and cannot be predicted. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact our financial condition, liquidity, or results of operations is uncertain.
Note 2 — Recently issued accounting standards
In February 2016, the FASB issued guidance that changes the requirements for accounting for leases. Under the new guidance, in connection with a lease as to which 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 previous guidance, operating leases were not recognized on the balance sheet. The Company adopted the new standard on January 1, 2019 using a modified retrospective 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 guidance. The difference between the additional lease assets and lease liabilities was recorded as an adjustment to the Company's opening balance of retained earnings. Prior period amounts have not been adjusted and continue to reflect the Company's historical accounting. 
As permitted under the new guidance, 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 short term leases on a straight-line basis over the 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, 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 its entire lease portfolio at the January 1, 2019 adoption date. Furthermore, as permitted under the new guidance, 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 each separate lease component and the non-lease components associated with that lease component as a single lease component. Additional information and disclosures required by the new guidance 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
7

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

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 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 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 FASBFinancial Accounting Standards Board ("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 the incurred loss. The new guidance requires the recognition of an allowance
7

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

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. We adopted the new standard on January 1, 2020 using a modified retrospective transition approach by recognizing a cumulative-effect adjustment of $0.8 million to reduce our opening balance of retained earnings as of the adoption date. Prior period amounts have not been adjusted and continue to reflect our historical accounting.
In December 2019, the FASB issued new guidance that simplifies various aspects of accounting for income taxes including those related to the step-up in the tax basis of goodwill, intraperiod tax allocations and the interim period effects of changes in tax laws or rates. The new guidance is effective for fiscal years beginning after December 15, 2019,2020, including interim periods within those fiscal years. Early adoption is permitted. The majority of the modifications under the new guidance will be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the annual period in which the adoption is effective. The Company ison January 1, 2021. We are currently evaluating the impact the guidance will have on itsour consolidated financial statements and related disclosures.
In March 2020, the SEC adopted final rules that amend the financial disclosure requirements for subsidiary issuers and guarantors of registered debt securities in Rule 3-10 of Regulation S-X. The SEC amended its financial disclosure requirements for companies that conduct registered debt offerings involving subsidiaries as either issuers or guarantors and affiliates whose securities are pledged as collateral. The SEC narrowed the circumstances that require separate financial statements of subsidiary issuers and guarantors and streamlined the alternative disclosures but it is not expectedrequired in lieu of those statements. The SEC replaced the requirement for separate financial statements of affiliates whose securities are pledged as collateral for registered securities with requirements similar to have a material effect onthose adopted for subsidiary issuers and guarantors. The new disclosures may be located, in all cases, outside of the consolidated financial statements. The rule is effective January 4, 2021, but earlier compliance is permitted. We adopted the new rule during the first quarter of 2020. The disclosures are now located within the Liquidity and Capital Resources section of Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.
From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by the Companyus as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. The Company hasWe have assessed the recently issued guidance that is not yet effective and, unless otherwise indicated above, believes the new guidance will not have a material impact on the its consolidated results of operations, cash flows or financial position.

Note 3 - Net revenues
The CompanyWe primarily generatesgenerate 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’sour 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’sour products are shipped from the manufacturing or distribution facility. For the Company’sour 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 alternative use and the Company haswe have an enforceable right to payment to the extent that performance has been completed. The Company marketsWe market and sellssell products through itsour 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 88%86%, 10%12% and 2% of consolidated net revenues, respectively, for the ninethree months ended SeptemberMarch 29, 2019.2020. Revenue is measured as the amount of consideration the Company expectswe expect 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.

8

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

The following table disaggregates revenue by global product category for the three and nine months ended SeptemberMarch 29, 20192020 and September 30, 2018.March 31, 2019.
Three Months EndedNine Months EndedThree Months Ended
September 29, 2019September 30, 2018September 29, 2019September 30, 2018March 29, 2020March 31, 2019
(Dollars in thousands)(Dollars in thousands)
Vascular accessVascular access$148,681  $142,079  $446,225  $426,256  Vascular access$150,256  $143,897  
AnesthesiaAnesthesia87,123  87,531  253,098  261,764  Anesthesia75,702  80,252  
InterventionalInterventional106,883  99,975  314,852  288,306  Interventional99,931  103,184  
SurgicalSurgical92,621  89,908  274,911  266,046  Surgical75,432  86,719  
Interventional urologyInterventional urology73,629  48,995  201,312  138,969  Interventional urology74,194  59,731  
OEMOEM55,444  54,838  166,110  153,286  OEM63,389  54,238  
Other (1)
Other (1)
83,938  86,346  257,902  272,141  
Other (1)
91,738  85,563  
Net revenues (2)
Net revenues (2)
$648,319  $609,672  $1,914,410  $1,806,768  
Net revenues (2)
$630,642  $613,584  
(1) Revenues in the "Other" category in the table above include revenues generated from sales of the Company’sour respiratory and urology products (other than interventional urology products). For the three and nine months ended September 29, 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.
(2) The product categories listed above are presented on a global basis; in contrast,basis, while each of the Company’sour reportable segments other than the OEM reportable segment are defined exclusively based on the geographic location of its operations; the OEM reportable segment operates globally. Each of the Company’s geographically based reportable segments include net revenues from each of the non-OEM product categories listed above.

Note 4 — DivestituresAcquisitions
On February 4, 2019,18, 2020, we acquired IWG High Performance Conductors, Inc., a privately-held original equipment manufacturer of minimally invasive medical products and high performance conductors, for $260.0 million. The acquisition, which complements our OEM product portfolio, was financed using borrowings under our revolving credit facility. Based on the Company sold substantially all ofpreliminary purchase price allocation, the assets related to its vein catheter reprocessing business for $12.6acquired principally consist of customer relationships of $139.0 million, intellectual property of $40.0 million and goodwill of $107.1 million. The Company recognizedintangible assets are being amortized over a $2.7 million pre-tax gain onuseful life of 20 years. Goodwill arising from the sale of assets, whichacquisition 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 notecosts synergies, revenue growth attributable to the Company in the principal amount of $10.5 million. The purchaser's obligations under the notes are secured by a lien on substantially all of the purchaser's assets. The purchaseranticipated increased market penetration from acquired products and future customers and is obligated to repay the principal amount of the promissory note in annual installments of $2.1 million on each of the first five anniversaries of the date of sale. On the date of sale, the fair value of the promissory note was $7.6 million, which the Company calculated by applying a discount rate determined after taking into account the creditworthiness of the purchaser. As of September 29, 2019, the Company had $8.3 million in receivables related to the promissory note, of which $2.1 million and $6.2 million are included in accounts receivable, net and other assets, respectively, within the condensed consolidated balance sheet.not tax deductible.

Note 5 — Restructuring and impairment charges
The following tables provide information regarding restructuring and impairment charges recognized by the Company for the three and nine months ended September 29, 2019 and September 30, 2018:
Three Months Ended September 29, 2019   
Termination benefits
Other costs (1)
Total
(Dollars in thousands) 
2019 Footprint realignment plan$584  $38  $622  
2018 Footprint realignment plan315  74  389  
Other restructuring programs (2)
7  250  257  
Restructuring charges$906  $362  $1,268  
9

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

Three Months Ended September 30, 2018   
Termination benefits
Other costs (1)
Total
(Dollars in thousands) 
2018 Footprint realignment plan$1,119  $145  $1,264  
Other restructuring programs (4)
468  232  700  
Restructuring charges1,587  377  1,964  
Asset impairment charges—  17,245  17,245  
Restructuring and impairment charges$1,587  $17,622  $19,209  
Note 5 — Restructuring and impairment charges
Nine Months Ended September 29, 2019  
Termination Benefits
Other costs (1)
Total
(Dollars in thousands)
2019 Footprint realignment plan$13,100  $68  $13,168  
2018 Footprint realignment plan(1,523) 782  (741) 
Other restructuring programs (2)
195  815  1,010  
Restructuring charges11,772  1,665  13,437  
Asset impairment charges—  6,911  6,911  
Restructuring and impairment charges$11,772  $8,576  $20,348  
Nine Months Ended September 30, 2018  
Termination Benefits
Other costs (1)
Total
(Dollars in thousands)
2018 Footprint realignment plan$53,463  $275  $53,738  
2016 Footprint realignment plan (3)
2,379  417  2,796  
Other restructuring programs (4)
1,318  663  1,981  
Restructuring charges57,160  1,355  58,515  
Asset impairment charges—  19,110  19,110  
Restructuring and impairment charges$57,160  $20,465  $77,625  
(1) OtherWe have ongoing restructuring costs include facility closure, contract termination and other exit costs.
(2) Includes a restructuring program initiated in the third quarter 2019 that is designedprograms primarily related to reduce costs and improve efficiencies through reorganizations within several businesses and certain corporate functions, the Vascular Solutions integration program (initiated in 2017) and the 2016 and 2014 Footprint realignment plans.
(3) The 2016 Footprint realignment plan 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 is substantially complete and the Company expects future restructuring expenses associated with the program, if any, to be immaterial.
(4) Includes the Vascular Solutions integration program, the 2014 Footprint realignment plan and the 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(referred to as 2019, 2018 and 2014 Footprint realignment plan")plans). These actions are expected to be substantially completed during 2022. The following table providestables provide a summary of the Company’sour cost estimates of restructuring and restructuring related charges by major type of expenseother information associated with the 2019these ongoing Footprint realignment plan:plans:
10

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

Type of expenseTotal 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
2019 Footprint realignment plan2018 Footprint realignment plan2014 Footprint realignment plan
Program expense estimates:(Dollars in millions)
Termination benefits$19 to $23$60 to $70$12 to $13
Other costs (1)
1 to 22 to 41 to 2
Restructuring charges20 to 2562 to 7413 to 15
Restructuring related charges (2)
36 to 4540 to 5934 to 37
Total restructuring and restructuring related charges$56 to $70$102 to $133$47 to $52
Other program estimates:
Expected cash outlays$53 to $66$99 to $127$38 to $43
Expected capital expenditures$29 to $35$19 to $23$25 to $30
Other program information:
Period initiatedFebruary 2019May 2018April 2014
Estimated period of substantial completion202220242021
Aggregate restructuring charges$14.6$54.5$13.0
Restructuring reserve:
As of March 29, 2020$12.3$43.9$3.6
Restructuring related charges incurred:
For three months ended March 29, 2020$2.5$1.2$0.9
Aggregate restructuring related charges$9.1$8.4$33.1
(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 planprograms and principally constitute costs to transfer manufacturing operations to the existing lower-cost locations, project management costs and accelerated depreciation. MostThe 2018 Footprint realignment plan also includes a charge associated with our 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 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 $1.9 million and $3.6 million, respectively, for the three and nine months ended September 29, 2019 within cost of goods sold.
As of September 29, 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 existing lower-cost 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 Company recorded restructuring related charges with respect to the 2018 Footprint realignment plan of $0.8 million and $2.1 million for the three and nine months ended September 29, 2019, respectively, and $1.8 million and $2.8 million for the three and nine months ended September 30, 2018, respectively. The restructuring related charges were included within cost of goods sold. The majority of the 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 2018 Footprint realignment plan of approximately $102 million to $133 million, respectively. As of September 29, 2019, the Company has incurred aggregate restructuring charges in connection with the 2018 Footprint realignment plan of $54.3 million, principally related to termination benefits. In addition, as of September 29, 2019, the Company has incurred aggregate restructuring related charges of $6.2 million with respect to the 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 September 29, 2019, the Company has a restructuring reserve of $44.0 million 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 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 during 2021.

The Company recorded restructuring related charges with respect to the 2014 Footprint realignment plan of $0.8 million and $2.1 million for the three and nine months ended September 29, 2019, respectively, and $0.8 million and $1.8 million for the three and nine months ended September 30, 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 $47 million to $52 million, respectively. As of September 29, 2019, the Company has incurred aggregate restructuring charges of $12.8 million in connection with the 2014
Three Months Ended March 29, 2020
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2019 Footprint realignment plan$829  $9  $838  
2018 Footprint realignment plan314  81  395  
Other restructuring programs (2)
(107) 220  113  
Restructuring charges$1,036  $310  $1,346  
1110

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

Footprint realignment plan, principally related to
Three Months Ended March 31, 2019
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2019 Footprint realignment plan$12,975  $—  $12,975  
2018 Footprint realignment plan437  574  1,011  
Other restructuring programs (3)
126  253  379  
Restructuring charges$13,538  $827  $14,365  
Asset impairment charges—  3,030  3,030  
Restructuring and impairment charges$13,538  $3,857  $17,395  
(1) Other costs include facility closure, contract termination benefits. Additionally,and other exit costs.
(2) Includes program initiated during third quarter of 2019 as of September 29, 2019,well as the Company has incurred aggregate restructuring related charges of $31.2 million in connection with the2016 and 2014 Footprint realignment plan, consisting of accelerated depreciationplan.
(3) Includes the Vascular Solutions integration program (initiated in 2017) as well as the 2016 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 September 29, 2019, the Company has a restructuring reserve of $3.7 million in connection with the plan, all of which related to termination benefits.

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 additional information related to the restructuring programs, see Note 5 to the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018.2014 Footprint realignment plans.

Note 6 — Inventories net
Inventories as of SeptemberMarch 29, 20192020 and December 31, 20182019 consisted of the following:
September 29, 2019December 31, 2018 March 29, 2020December 31, 2019
(Dollars in thousands) (Dollars in thousands)
Raw materialsRaw materials$121,080  $111,105  Raw materials$125,115  $114,302  
Work-in-processWork-in-process72,211  62,334  Work-in-process70,012  71,479  
Finished goodsFinished goods279,303  254,339  Finished goods293,729  290,776  
Inventories, net$472,594  $427,778  
InventoriesInventories$488,856  $476,557  

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 for the ninethree months ended SeptemberMarch 29, 2019:2020:
AmericasEMEAAsiaOEMTotal AmericasEMEAAsiaOEMTotal
(Dollars in thousands) (Dollars in thousands)
December 31, 2018$1,549,534  $480,615  $211,547  $4,883  $2,246,579  
December 31, 2019December 31, 2019$1,550,925  $475,772  $213,725  $4,883  $2,245,305  
Goodwill related to acquisitionsGoodwill related to acquisitions441  189  1,211  —  1,841  Goodwill related to acquisitions—  —  —  107,129  107,129  
Currency translation adjustmentCurrency translation adjustment(4,055) (11,667) (1,368) —  (17,090) Currency translation adjustment(5,095) (8,224) (6,701) —  (20,020) 
September 29, 2019$1,545,920  $469,137  $211,390  $4,883  $2,231,330  
March 29, 2020March 29, 2020$1,545,830  $467,548  $207,024  $112,012  $2,332,414  
The Company's gross carrying amount of, and accumulated amortization relating to, intangible assets as of SeptemberMarch 29, 20192020 and December 31, 20182019 were as follows:
 Gross Carrying AmountAccumulated Amortization
 September 29, 2019December 31, 2018September 29, 2019December 31, 2018
 (Dollars in thousands)
Customer relationships$1,011,462  $1,030,194  $(354,140) $(322,972) 
In-process research and development27,432  28,457  —  —  
Intellectual property1,342,956  1,363,516  (379,332) (322,539) 
Distribution rights23,274  23,465  (18,492) (17,860) 
Trade names560,613  565,070  (46,878) (36,379) 
Non-compete agreements22,215  23,004  (13,437) (8,904) 
 $2,987,952  $3,033,706  $(812,279) $(708,654) 

 Gross Carrying AmountAccumulated Amortization
 March 29, 2020December 31, 2019March 29, 2020December 31, 2019
 (Dollars in thousands)
Customer relationships$1,161,837  $1,021,852  $(378,423) $(367,585) 
In-process research and development27,881  27,940  —  —  
Intellectual property1,391,133  1,351,990  (422,454) (402,340) 
Distribution rights23,352  23,369  (19,115) (18,859) 
Trade names561,622  563,315  (54,324) (50,718) 
Non-compete agreements22,497  22,618  (16,828) (15,297) 
 $3,188,322  $3,011,084  $(891,144) $(854,799) 
1211

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


Note 8 — LeasesBorrowings
The Company has operating leases for various types of properties, consisting of manufacturing plants, engineeringOur borrowings at March 29, 2020 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 $6.8 million and $19.5 million for the three and nine months ended September 29, 2019, respectively.

Maturities of lease liabilities
September 29, 2019
(Dollars in thousands)
2019$6,254  
202025,527  
202123,183  
202221,423  
202317,511  
2024 and thereafter54,172  
Total lease payments148,070  
Less: interest(23,544) 
Present value of lease liabilities$124,526  

Supplemental information as of and for the nine months ended September 29, 2019 (dollars in thousands)
Total lease liabilities (1)
$124,526 
Cash paid for amounts included in the measurement of lease liabilities within operating cash flows$19,520 
Right of use assets obtained in exchange for operating lease obligations$34,632 
Weighted average remaining lease term7.4 years
Weighted average discount rate4.4 %
(1) The current portion of the operating lease liabilities of $20.4 million is included in Other current liabilities.
As of December 31, 2018, minimum lease payments under noncancellable operating leases2019 were expected to be as follows:
December 31, 2018
(Dollars in thousands)
2019$25,294  
202023,216  
202121,419  
202219,460  
202317,403  
2024 and thereafter41,368  
 March 29, 2020December 31, 2019
 (Dollars in thousands)
Senior Credit Facility:  
Revolving credit facility, at a rate of 2.13% at March 29, 2020, due 2024$785,000  $300,000  
Term loan facility, at a rate of 2.33% at March 29, 2020, due 2024673,000  673,000  
4.875% Senior Notes due 2026400,000  400,000  
4.625% Senior Notes due 2027500,000  500,000  
Securitization program, at a rate of 1.74% at March 29, 202050,000  50,000  
2,408,000  1,923,000  
Less: Unamortized debt issuance costs(13,483) (14,057) 
 2,394,517  1,908,943  
Current borrowings(53,625) (50,000) 
Long-term borrowings$2,340,892  $1,858,943  
On March 30, 2020, we amended our accounts receivable securitization facility to increase the maximum available capacity from $50 million to $75 million.

13

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

Note 9 — Borrowings
The Company's borrowings at September 29, 2019 and December 31, 2018 were as follows:
 September 29, 2019December 31, 2018
 (Dollars in thousands)
Senior Credit Facility:  
Revolving credit facility, at a rate of 3.55% at September 29, 2019, due 2024$143,000  $293,000  
Term loan facility, at a rate of 3.55% at September 29, 2019, due 2024673,000  683,500  
5.25% Senior Notes due 2024250,000  250,000  
4.875% Senior Notes due 2026400,000  400,000  
4.625% Senior Notes due 2027500,000  500,000  
Securitization program, at a rate of 2.78% at September 29, 201950,000  50,000  
2,016,000  2,176,500  
Less: Unamortized debt issuance costs(16,932) (17,675) 
 1,999,068  2,158,825  
Current borrowings(50,000) (86,625) 
Long-term borrowings$1,949,068  $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 1.250% 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 in each case 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 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 transaction fees, including underwriters' discounts and commissions incurred in connection with the Credit Agreement.

14

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

Note 10 — Financial instruments
Foreign currency forward contracts
The Company usesWe use derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage exposure related to foreign currency transactions.transaction exposure. Foreign currency forward contracts not designated as hedges for accounting purposes are used to manage exposure related to near term foreign currency denominated monetary assets and liabilities. The Company entersWe enter into the non-designated foreign currency forward contracts for periods consistent with itsour currency translation exposures, which generally approximate one month. For the three and nine months ended SeptemberMarch 29, 2019, the Company recognized losses of $1.9 million and $3.5 million, respectively, related to non-designated foreign currency forward contracts. For the three and nine months ended September 30, 2018, the Company2020 we recognized gains related to non-designated foreign currency forward contracts of $1.0$1.6 million, and $0.3 million, respectively.for the three months ended March 31, 2019 we recognized losses related to non-designated foreign currency forward contracts of $3.0 million.
The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of SeptemberMarch 29, 20192020 and December 31, 20182019 was $115.6$130.7 million and $115.3$63.4 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of SeptemberMarch 29, 20192020 and December 31, 20182019 was $170.1$148.6 million and $125.9$132.8 million, respectively. All open foreign currency forward contracts as of SeptemberMarch 29, 20192020 have durations of 12 months or less.
Cross-currency interest rate swaps
On March 4,During 2019, the Companywe entered into cross-currency swap agreements with 5 different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, the Company haswe have 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,During 2018, the Companywe entered into cross-currency swap agreements with 6 different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, the Company haswe have notionally exchanged $500 million at an annual interest rate of 4.625% for €433.9 million at an annual interest rate of 1.942%. The swap agreements are designed as net investment hedges and expire on October 4, 2023.
12

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

The swap agreements described above require an exchange of the notional amounts upon expiration or earlier termination of the agreements. We and the counterparties have agreed to effect the exchange through a net settlement.
The cross-currency swaps are marked to market at each reporting date and any changes in fair value are recognized as a component of accumulated other comprehensive income (loss) ("AOCI"). For the three and nine months ended SeptemberMarch 29, 2020 and March 31, 2019, the Companywe recognized foreign exchange gains of $23.5$25.0 million and 29.4$6.6 million, respectively, within AOCI related to the cross-currency swaps.

15

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

For the three months ended March 29, 2020 and March 31, 2019, we recognized $4.9 million and $3.9 million, respectively, in interest benefit related to the cross-currency swaps.
Balance sheet presentation
The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of SeptemberMarch 29, 20192020 and December 31, 2018:2019:
September 29, 2019December 31, 2018March 29, 2020December 31, 2019
Fair ValueFair Value
(Dollars in thousands) (Dollars in thousands)
Asset derivatives:Asset derivatives:  Asset derivatives:  
Designated foreign currency forward contractsDesignated foreign currency forward contracts$998  $1,216  Designated foreign currency forward contracts$2,144  $1,659  
Non-designated foreign currency forward contractsNon-designated foreign currency forward contracts289  106  Non-designated foreign currency forward contracts1,682  192  
Cross-currency interest rate swap26,754  14,728  
Cross-currency interest rate swapsCross-currency interest rate swaps26,764  21,575  
Prepaid expenses and other current assetsPrepaid expenses and other current assets28,041  16,050  Prepaid expenses and other current assets30,590  23,426  
Cross-currency interest rate swap23,857  —  
Cross-currency interest rate swapsCross-currency interest rate swaps45,347  13,066  
Other assetsOther assets23,857  —  Other assets45,347  13,066  
Total asset derivativesTotal asset derivatives$51,898  $16,050  Total asset derivatives$75,937  $36,492  
Liability derivatives:Liability derivatives:  Liability derivatives:  
Designated foreign currency forward contractsDesignated foreign currency forward contracts$795  $524  Designated foreign currency forward contracts$6,030  $1,285  
Non-designated foreign currency forward contractsNon-designated foreign currency forward contracts137  264  Non-designated foreign currency forward contracts1,380  102  
Other current liabilitiesOther current liabilities932  788  Other current liabilities7,410  1,387  
Cross-currency interest rate swap—  7,793  
Other liabilities—  7,793  
Total liability derivativesTotal liability derivatives$932  $8,581  Total liability derivatives$7,410  $1,387  
See Note 1211 for information on the location and amount of gains and losses attributable to derivatives that were reclassified from AOCI to expense (income), net of tax.
There was 0 ineffectiveness related to the Company’sour cash flow hedges during the three and nine months ended SeptemberMarch 29, 20192020 and September 30, 2018.March 31, 2019.
Trade receivables
TheIn the ordinary course of business, we grant non-interest bearing trade credit to our customers on normal credit terms. In an effort to reduce our credit risk, we (i) establish credit limits for all of our customer relationships, (ii) perform ongoing credit evaluations of our customers’ financial condition, (iii) monitor the payment history and aging of our customers’ receivables, and (iv) monitor open orders against an individual customer’s outstanding receivable balance.
Our allowance for doubtfulcredit losses is maintained for trade accounts as of September 29, 2019 and December 31, 2018 was $9.1 million and $9.3 million, respectively. The current portion ofreceivable based on the allowance for doubtful accounts, which was $5.3 million and $4.4 million as of September 29, 2019 and December 31, 2018, respectively, was recognized as a reductionexpected collectability of accounts receivable, net.

Note 11 — Fair value measurement
For a descriptionafter considering our historical collection experience, the length of time an account is outstanding, the financial position of the fair value hierarchy, see Note 11customer, information provided by credit rating services in addition to new requirements under the Company’s consolidated financial statements included in its Annual Report on Form 10-Kaccounting guidance, effective January 1, 2020, that includes the consideration of events or circumstances indicating historic collection rates may not be indicative of future collectability, for example, potential customer liquidity concerns resulting from COVID-19, that may impact the year ended December 31, 2018.
The following tables provide information regardingcollectability of our receivables as well as our estimate of credit losses expected to be incurred over the Company's financial assets and liabilities that are measured at fair value on a recurring basis aslife of September 29, 2019 and December 31, 2018:
 Total carrying
value at
September 29, 2019		Quoted prices in active
markets (Level 1)		Significant other
observable
Inputs (Level 2)		Significant
unobservable
Inputs (Level 3)
 (Dollars in thousands)
Investments in marketable securities$10,168  $10,168  $—  $—  
Derivative assets51,898  —  51,898  —  
Derivative liabilities932  —  932  —  
Contingent consideration liabilities206,880  —  —  206,880  

our receivables. To date, we have not experienced significant payment defaults by, or identified other significant collectability concerns with, our
1613

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 assets16,050  —  16,050  —  
Derivative liabilities8,581  —  8,581  —  
Contingent consideration liabilities304,248  —  —  304,248  
customers. The assumptions utilized in our current estimates may change due to changes in circumstances, additional future developments and the resolution of other contingencies.
There were no transfers
The allowance for credit losses as of March 29, 2020 and December 31, 2019 was $11.0 million and $9.1 million, respectively. The current portion of the allowance for credit losses, which was $6.9 million and $5.3 million as of March 29, 2020 and December 31, 2019, respectively, was recognized as a reduction of accounts receivable, net.

Note 10 — Fair value measurement
The following tables provide information regarding our financial assets orand liabilities reportedmeasured at fair value among Level 1, Level 2 or Level 3 within the fair value hierarchy during the nine months ended Septemberon a recurring basis as of March 29, 2019.2020 and December 31, 2019:
 Total carrying
value at
March 29, 2020		Quoted prices in active
markets (Level 1)		Significant other
observable
Inputs (Level 2)		Significant
unobservable
Inputs (Level 3)
 (Dollars in thousands)
Investments in marketable securities$9,020  $9,020  $—  $—  
Derivative assets75,937  —  75,937  —  
Derivative liabilities7,410  —  7,410  —  
Contingent consideration liabilities32,737  —  —  32,737  

 Total carrying
value at December 31, 2019		Quoted prices in active
markets (Level 1)		Significant other
observable
Inputs (Level 2)		Significant
unobservable
Inputs (Level 3)
 (Dollars in thousands)
Investments in marketable securities$10,926  $10,926  $—  $—  
Derivative assets36,492  —  36,492  —  
Derivative liabilities1,387  —  1,387  —  
Contingent consideration liabilities219,908  —  —  219,908  
Valuation Techniques
The Company’sOur financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to satisfy benefit obligations under Companyour benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.
The Company’sOur financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward contracts and cross-currency interest rate swap agreements. The Company usesWe use foreign currency forward contractsforwards and cross-currency interest rate swap agreementsswaps to manage foreign currency transaction exposure, as well as exposure to foreign currency denominated monetary assets and liabilities and exposure to the effect of variability in the U.S. dollar to euro exchange rate. The Company measuresliabilities. We measure the fair value of the foreign currency forwardforwards and cross-currency swap agreementsswaps by calculating the amount required to enter into offsetting contracts with similar remaining maturities, based on quoted market prices, and taking into account the creditworthiness of the counterparties.

The Company’sOur 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’sour acquisitions, which are discussed immediately below.
Contingent consideration
Contingent consideration liabilities, which primarily consist of payment obligations that are contingent upon the achievement of revenue-based goals, but also can be based on other milestones such as regulatory approvals, are remeasured to fair value each reporting period using assumptions including estimated revenues (based on internal operational budgets and long-range strategic plans), discount rates, probability of payment and projected payment dates.
The Company determines
14

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

We determine the fair value of the contingent consideration liabilities related to the NeoTract and Essential Medical acquisitions, which represent most of our contingent consideration liabilities as of March 29, 2020 and December 31, 2019, using a Monte Carlo simulation (which involves a simulation of future revenues during the earn out-periodearn-out period using management's best 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 and decreases in the discount rates may have the opposite effect.
17

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.
Contingent Consideration LiabilityValuation TechniqueUnobservable InputRange (Weighted average)
Milestone-based payments
Discounted cash flowDiscount rate3.1%6.2% - 3.7%6.3% (6.3%)
Projected year of payment20202021 - 2023
Revenue-based payments
Monte Carlo simulationRevenue volatility18.6%19.1% - 23.9%23.4% (20.4%)
  Risk free rateCost of debt structure
Projected year of payment2020 - 2022
Discounted cash flowDiscount rate10.0%
Projected year of payment20192020 - 2029
The following table provides information regarding changes in the Company's contingent consideration liabilities during the ninethree months ended SeptemberMarch 29, 2019:2020:
 Contingent consideration
2019
 (Dollars in thousands)
Balance - December 31, 20182019$304,248219,908  
Payments (1)
(138,098)(140,652) 
Revaluations (2)
40,894 (46,502) 
Translation adjustment(164)(17) 
Balance - SeptemberMarch 29, 20192020$206,88032,737  
(1) Consists mainly of a $106.8$140.6 million payment associated with the Company'sour acquisition of NeoTract, Inc. and resulting from the achievement of a revenue-based goal for the period from January 1, 20182019 to December 31, 20182019.
(2) The decrease, which is included within selling, general and $30.0 million of payments associated with the Company's acquisition of Essential Medical, Inc. andadministrative expenses, is mainly due to adverse financial projections resulting from achievement of a regulatory goal.the COVID-19 pandemic.

Note 1211 — Shareholders’ equity
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased to include dilutive securities. The following table provides a reconciliation of basic to diluted weighted average number of common shares outstanding:
Three Months EndedNine Months EndedThree Months Ended
September 29, 2019September 30, 2018September 29, 2019September 30, 2018March 29, 2020March 31, 2019
(Shares in thousands)(Shares in thousands)
BasicBasic46,248  45,851  46,156  45,587  Basic46,382  46,050  
Dilutive effect of share-based awardsDilutive effect of share-based awards928  919  895  1,007  Dilutive effect of share-based awards849  892  
Dilutive effect of convertible warrants—  45  —  191  
DilutedDiluted47,176  46,815  47,051  46,785  Diluted47,231  46,942  
The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.1 million for the three and nine months ended SeptemberMarch 29, 20192020 and 0.7 million for the three and nine months ended September 30, 2018.
March 31, 2019.
1815

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 ninethree months ended SeptemberMarch 29, 20192020 and September 30, 2018:March 31, 2019:
Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated Other Comprehensive (Loss) Income
(Dollars in thousands)
Balance as of December 31, 2018$807  $(131,380) $(210,512) $(341,085) 
Other comprehensive income (loss) before reclassifications646  215  (27,562) (26,701) 
Amounts reclassified from accumulated other comprehensive income(748) 4,033  —  3,285  
Net current-period other comprehensive (loss) income(102) 4,248  (27,562) (23,416) 
Balance as of September 29, 2019$705  $(127,132) $(238,074) $(364,501) 
Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated Other Comprehensive (Loss) Income
(Dollars in thousands)
Balance as of December 31, 2019$735  $(138,810) $(206,317) $(344,392) 
Other comprehensive (loss) income before reclassifications(3,760) 263  (18,199) (21,696) 
Amounts reclassified from accumulated other comprehensive income(57) 1,426  —  1,369  
Net current-period other comprehensive (loss) income(3,817) 1,689  (18,199) (20,327) 
Balance as of March 29, 2020$(3,082) $(137,121) $(224,516) $(364,719) 
 Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated 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 reclassifications2,816  127  (30,130) (27,187) 
Amounts reclassified from accumulated other comprehensive loss(873) 3,984  —  3,111  
Net current-period other comprehensive income (loss)1,943  4,111  (30,130) (24,076) 
Balance as of September 30, 2018$2,283  $(134,697) $(156,753) $(289,167) 
 Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated Other Comprehensive (Loss) Income
 (Dollars in thousands)
Balance as of December 31, 2018$807  $(131,380) $(210,512) $(341,085) 
Other comprehensive (loss) income before reclassifications(434) (122) (236) (792) 
Amounts reclassified from accumulated other comprehensive loss(163) 1,351  —  1,188  
Net current-period other comprehensive (loss) income(597) 1,229  (236) 396  
Balance as of March 31, 2019$210  $(130,151) $(210,748) $(340,689) 
  
19

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

The following table provides information relating to the location in the statements of operations and amount of reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three and nine months ended SeptemberMarch 29, 20192020 and September 30, 2018:March 31, 2019:
Three Months EndedNine Months EndedThree Months Ended
September 29, 2019September 30, 2018September 29, 2019September 30, 2018March 29, 2020March 31, 2019
(Dollars in thousands)(Dollars in thousands)
(Gains) losses on foreign exchange contracts:(Gains) losses on foreign exchange contracts:(Gains) losses on foreign exchange contracts:
Cost of goods soldCost of goods sold$(523) $(87) $(888) $(1,038) Cost of goods sold$(66) $(186) 
Total before taxTotal before tax(523) (87) (888) (1,038) Total before tax(66) (186) 
Taxes (benefit)46  25  140  165  
Net of tax$(477) $(62) $(748) $(873) 
Losses (gains) on cross-currency swaps (net investment hedge):
Interest expense$(5,021) $—  $(13,820) $—  
Total before tax(5,021) —  (13,820) —  
Tax expense$1,164  —  3,204  —  
TaxesTaxes9  23  
Net of taxNet of tax(3,857) $—  $(10,616) $—  Net of tax$(57) $(163) 
Amortization of pension and other postretirement benefit items (1):
Amortization of pension and other postretirement benefit items (1):
Amortization of pension and other postretirement benefit items (1):
Actuarial lossesActuarial losses$1,716  $1,640  $5,194  $5,120  Actuarial losses$1,852  $1,740  
Prior-service costsPrior-service costs21  24  65  71  Prior-service costs8  22  
Total before taxTotal before tax1,737  1,664  5,259  5,191  Total before tax1,860  1,762  
Tax benefitTax benefit(405) (388) (1,226) (1,207) Tax benefit(434) (411) 
Net of taxNet of tax$1,332  $1,276  $4,033  $3,984  Net of tax$1,426  $1,351  
Total reclassifications, net of taxTotal reclassifications, net of tax$(3,002) $1,214  $(7,331) $3,111  Total reclassifications, net of tax$1,369  $1,188  
(1) These accumulated other comprehensive (loss) income components are included in the computation of net benefit expense for pension and other postretirement benefit plans.

16

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

Note 1312 — Taxes on income from continuing operations
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
Effective income tax rate(132.3)% (2.3)% (48.4)% 11.8%  
 Three Months Ended
 March 29, 2020March 31, 2019
Effective income tax rate7.8%20.7%
The effective income tax rate for the three and nine months ended SeptemberMarch 29, 2020 and March 31, 2019 was (132.3)%7.8% and (48.4)%20.7%, respectively, and (2.3)% and 11.8%, respectively, for the three and nine months ended September 30, 2018.respectively. The effective income tax ratesrate for the three and nine months ended SeptemberMarch 29, 2019 reflect2020, as compared to the prior year period, reflects a discrete tax benefitnon-taxable contingent consideration adjustment recognized in connection with a decrease in the fair value of $129 million resulting from a non-U.S. legal entity restructuring that eliminated the requirement to provide for foreign withholding taxes on the future repatriation of certain non-permanently reinvested earnings. Theour contingent consideration liabilities. The effective tax rates for the three and nine months ended September 30, 2018 include a tax benefit associated with asset impairment charges. In addition, the income tax rate for the ninethree months ended September 30, 2018March 31, 2019 reflects significant non-deductible termination benefits and other costs incurred in connection with the 20182019 Footprint realignment plan as describedplan. In addition, the effective tax rates for both the three months ended March 29, 2020 and March 31, 2019 reflect a net excess tax benefit related to share-based compensation.
In April 2020, we became aware of a new interpretation of a non-U.S. tax law that could apply to certain of our previous and current intercompany transactions. We are evaluating this new information and the effect, if any, on our tax positions. The amount of any potential impact on our financial statements is not yet estimable at this time but could be material to our results of operations. We do not expect any additional liability to result in Note 5.a material impact to our liquidity or overall financial position.

Note 1413 — Commitments and contingent liabilities
Environmental: The Company isWe are subject to contingencies as a result of environmental laws and regulations that in the future may require the Companyus to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Companyus or other parties. Much of this liability results from the U.S. 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
20

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

require the Companyus to undertake certain investigative and remedial activities at sites where the Company conductswe conduct or once conducted operations or at sites where Company-generated waste was disposed.
Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, the regulatory agencies involved and their enforcement policies, as well as the presence or absence of other potentially responsible parties. At SeptemberMarch 29, 2019, the Company has2020, we have recorded $0.9$0.7 million and $6.3$6.0 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 SeptemberMarch 29, 2019.2020. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 10-15 years.
Litigation: The Company isWe are a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, product warranty, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of SeptemberMarch 29, 2019, the Company has2020, we have recorded accrued liabilities of $0.2$0.3 million in connection with such contingencies, representing itsour best estimate of the cost within the range of estimated possible losses that will be incurred to resolve these matters.
Based on information currently available, advice of counsel, established reserves and other resources, the Company doeswe do not believe that the outcome of any outstanding litigation and claims is likely to be, individually or in the aggregate, material to itsour business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’sour business, financial condition, results of operations or 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 subsidiariesWe are routinely subject to tax examinations by various tax authorities. As of SeptemberMarch 29, 2019,2020, the most significant tax examination in process is in Germany. The CompanyWe may establish reserves with
17

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

respect to itsour uncertain tax positions, after which it adjustswe adjust the reserves to address developments with respect to itsour uncertain tax positions, including developments in this tax examination. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to the Company’sour recorded tax liabilities, which could impact the Company’sour financial results.

Note 1514 — Segment information
During the first quarter 2019, the chief operating decision maker, or CODM, (the Company's Chief Executive Officer) changed the manner in which he reviews financial information for purposes of assessing business performance and allocating resources by focusing on the geographic location of all non-OEM operations. As a result, the Company changed its segment presentation. Specifically, the Vascular North America, Interventional North America, Anesthesia North America, Surgical North America, Interventional Urology North America, Respiratory North America and Latin America operating segments were combined into a new Americas segment. The Company now has 4 segments: Americas, EMEA (Europe, Middle East and Africa), Asia and OEM. All prior comparative periods presented have been restated to reflect these changes.
21

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

The following tables present the Company’sour segment results for the three and nine months ended SeptemberMarch 29, 20192020 and September 30, 2018:March 31, 2019:
Three Months EndedNine Months Ended Three Months Ended
September 29, 2019September 30, 2018September 29, 2019September 30, 2018 March 29, 2020March 31, 2019
(Dollars in thousands) (Dollars in thousands)
AmericasAmericas$374,493  $338,749  $1,092,321  $993,455  Americas$358,002  $344,024  
EMEAEMEA140,518  139,541  442,110  452,826  EMEA156,124  154,545  
AsiaAsia77,864  76,544  213,869  207,201  Asia53,129  60,777  
OEMOEM55,444  54,838  166,110  153,286  OEM63,387  54,238  
Net revenuesNet revenues$648,319  $609,672  $1,914,410  $1,806,768  Net revenues$630,642  $613,584  
Three Months EndedNine Months EndedThree Months Ended
September 29, 2019September 30, 2018September 29, 2019September 30, 2018March 29, 2020March 31, 2019
(Dollars in thousands)(Dollars in thousands)
AmericasAmericas$81,405  $68,559  $229,513  $174,764  Americas$140,969  $65,599  
EMEAEMEA21,820  21,916  69,670  80,221  EMEA20,419  27,023  
AsiaAsia21,460  20,834  50,699  54,948  Asia10,232  9,979  
OEMOEM16,008  15,049  43,213  37,617  OEM15,099  13,321  
Total segment operating profit (1)
Total segment operating profit (1)
140,693  126,358  393,095  347,550  
Total segment operating profit (1)
186,719  115,922  
Unallocated expenses (2)
Unallocated expenses (2)
(23,072) (44,253) (92,773) (145,112) 
Unallocated expenses (2)
(29,633) (40,679) 
Income from continuing operations before interest and taxesIncome from continuing operations before interest and taxes$117,621  $82,105  $300,322  $202,438  Income from continuing operations before interest and taxes$157,086  $75,243  
(1)Segment operating profit includes segment net revenues from external customers reduced by the segment's standard cost of goods sold, adjusted for fixed manufacturing cost absorption variances, selling, general and administrative expenses, research and development expenses and an allocation of corporate expenses. Corporate expenses are allocated among the segments in proportion to the respective amounts of one of several items (such as net revenues, numbers of employees, and amount of time spent), depending on the category of expense involved.
(2)Unallocated expenses primarily include manufacturing variances other than fixed manufacturing cost absorption variances, restructuring charges and gain on sale of assets.

18


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
Teleflex Incorporated (“we,” “us,” “our" and “Teleflex”) is a global provider of medical technology products focused on enhancing clinical benefits, improving patient and provider safety and 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.
We evaluate our portfolio of products and businesses on an ongoing basis to ensure alignment with our overall objectives. Based on our evaluation, we may identify opportunities to divest businesses and product lines that do not meet our objectives. In addition, we may seek to optimize utilization of our facilities through restructuring initiatives designed to further improve our cost structure and enhance our competitive position. We also may continue to explore opportunities to expand the size of our business and improve operating margins through a combination of acquisitions and distributor to direct sales conversions, which generally involve our elimination of a distributor from the sales channel, either by acquiring the distributor or terminating the distributor relationship (in some instances, particularly in Asia, the conversions involve our acquisition or termination of a master distributor and the continued sale of our products through sub-distributors or through new distributors). Distributor to direct sales conversions are designed to facilitate improved product pricing and more direct access to the end users of our products within the sales channel.
COVID-19 pandemic
We continue to experience the effects of the global pandemic caused by the COVID-19 novel strain of coronavirus. Among other things, the response to the COVID-19 pandemic has had the effect of reducing the number of elective procedures being carried out, which has impacted and continues to impact some of our product categories, including our interventional urology, interventional and surgical products, which have experienced and continue to experience decreased demand. For the three months ended March 29, 2020, we experienced increased demand in our respiratory and vascular access product categories. We continue to experience increased demand primarily in our respiratory product category. From a segment perspective, our Americas segment was negatively impacted, primarily due to the reduction in elective procedures, and our EMEA segment benefited due to increased demand for our products used in the treatment of patients with COVID-19. Conversely, our Asia segment was negatively impacted, in part, due to government mandated shut-downs in certain countries. The COVID-19 pandemic is impacting other elements of our operations, as well as our employees, contractors, suppliers, customers and other business partners. To date, we have not experienced significant disruptions in the global supply chain for our products that are in high demand, but delivery times have lengthened.
In addition, there have been and continues to be impacts on our cost structure resulting from measures that we and other businesses are taking or will take, in accordance with governmental requirements and otherwise, to protect our employees and business partners. We continue to assess the impact on our business (including our employees, customers and suppliers) of travel restrictions, border closures and quarantines as they affect our various sites, including our 35 manufacturing sites located in various countries. In most jurisdictions, our manufacturing and distribution sites remain open because we are considered an essential business. During the three months ended March 29, 2020, we experienced, and we continue to experience, some inefficiencies in our manufacturing operations due to government restrictions placed on facilities in certain locations primarily in Asia. Additionally, we have experienced and continue to experience a higher than normal level of absenteeism across our global manufacturing sites. From an operating expense perspective, we have experienced and continue to experience net decreases in selling, general and administrative expenses as a result of the COVID-19 pandemic due to cost mitigation efforts implemented to control discretionary spending such as certain employee-related costs as well as travel and related expenses. Notwithstanding the above described impacts of the COVID-19 pandemic, the crisis did not have a material adverse effect on our results of operations for the three months ended March 29, 2020. Overall, we believe that the COVID-19 pandemic will continue to negatively affect our revenues and operations, at least over the near-term, and because of the dynamic nature of the crisis, we cannot accurately predict the extent or duration of the impacts of the COVID-19 pandemic.
19

Results of Operations
As used in this discussion, "new products" are products for which commercial sales have commenced within the past 36 months, and “existing products” are products for which commercial sales commenced more than 36 months ago. Discussion of results of operations items that reference the effect of one or more acquired and/or divested businesses or assets (except as noted below with respect to acquired distributors) generally reflects the impact of the acquisitions and/or divestitures within the first 12 months following the date of the acquisition and/or divestiture. In addition to increases and decreases in the per unit selling prices of our products to our customers, our discussion of the impact of product price increases and decreases also reflects the impact on the pricing of our products resulting from the elimination of the distributor, either through acquisition or termination of the distributor, from the sales channel.
Certain financial information is presented on a rounded basis, which may cause minor differences.
Net revenues
 Three Months Ended
 March 29, 2020March 31, 2019
 (Dollars in millions)
Net revenues$630.6  $613.6  
Net revenues for the three months ended March 29, 2020 increased $17.0 million, or 2.8%, compared to the prior year period. The increase was primarily attributable to a $15.7 million increase in sales volumes of existing products, and to a lesser extent, an increase in new product sales and net revenues generated by the acquisition of IWG High Performance Conductors, Inc. (HPC). These increases were partially offset by unfavorable fluctuations in foreign currency exchange rates of $7.4 million and a decrease in revenue caused by the COVID-19 pandemic.
Gross profit
 Three Months Ended
 March 29, 2020March 31, 2019
 (Dollars in millions)
Gross profit$333.6  $324.0  
Percentage of sales52.9 %52.8 %
Gross margin for the three months ended March 29, 2020 increased 10 basis points, or 0.2%, compared to the prior year period. The increase in gross margin was primarily attributable to benefits from cost improvement initiatives and the impact of favorable fluctuations in foreign currency exchange rates. These increases were largely offset by the unfavorable impacts of the COVID-19 pandemic and the adverse impact of the step-up in carrying value of inventory recognized in connection with our HPC acquisition.
Selling, general and administrative
 Three Months Ended
 March 29, 2020March 31, 2019
 (Dollars in millions)
Selling, general and administrative$147.8  $206.9  
Percentage of sales23.4 %33.7 %
Selling, general and administrative expenses for the three months ended March 29, 2020 decreased $59.1 million compared to the prior year period. The decrease was primarily attributable to a $59.5 million reduction in the estimated fair value of our contingent consideration liabilities, which largely relate to revenue-based milestone payments, due to adverse financial projections resulting from the COVID-19 pandemic. Additionally, for the three months ended March 29, 2020 there were net decreases to selling, general and administrative expenses resulting from the COVID-19 pandemic, which were largely offset by increases in normal operating expenses inclusive of selling expenses.


20

Research and development
 Three Months Ended
 March 29, 2020March 31, 2019
 (Dollars in millions)
Research and development$27.4  $27.2  
Percentage of sales4.3 %4.4 %
The increase in research and development expenses for the three months ended March 29, 2020 compared to the prior year period was primarily attributable to European Union Medical Device Regulation ("EU MDR") related costs partially offset by lower project spend across several of our product portfolios.
Restructuring and impairment charges
Anticipated charges and pre-tax savings related to restructuring programs and other similar cost savings initiatives
We have ongoing restructuring programs primarily related to the consolidation of our manufacturing operations (referred to as our 2019, 2018 and 2014 Footprint realignment plans). We also have similar ongoing activities to relocate certain manufacturing operations within our OEM segment (the "OEM initiative") that do not meet the criteria for a restructuring program under applicable accounting guidance; nevertheless, the activities should result in cost savings (we expect only minimal costs to be incurred in connection with the OEM initiative). With respect to our currently ongoing restructuring programs and the OEM initiative, the table below summarizes charges incurred or estimated to be incurred and estimated annual pre-tax savings to be realized as follows: (1) with respect to charges (a) the estimated total charges that will have been incurred once the restructuring programs and OEM initiative are completed; (b) the charges incurred through December 31, 2019; and (c) the estimated charges to be incurred from January 1, 2020 through the last anticipated completion date of the restructuring programs and OEM initiative, December 31, 2026 and (2) with respect to estimated annual pre-tax savings, (a) the estimated total annual pre-tax savings to be realized once the restructuring programs and OEM initiative are completed; (b) the estimated annual pre-tax savings realized based on the progress of the restructuring programs and OEM initiative through December 31, 2019; and (c) the estimated additional annual pre-tax savings to be realized from January 1, 2020 through the last anticipated completion date of the restructuring programs and the OEM initiative, December 31, 2026.
Estimated charges and pre-tax savings are subject to change based on, among other things, the nature and timing of restructuring activities and similar activities, changes in the scope of restructuring programs and the OEM initiative, unanticipated expenditures and other developments including the uncertainties created by the COVID-19 pandemic, the effect of additional acquisitions or dispositions, the failure to realize anticipated savings 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 constituting efficiencies with respect to increased costs that otherwise would have resulted from business acquisitions involve, among other things, assumptions regarding the cost structure and integration of businesses that previously were not administered by our management, which are subject to a particularly high degree of risk and uncertainty. It is likely that estimates of charges and pre-tax savings will change from time to time, and the table below reflects changes from amounts previously estimated. In addition, the table below does not include estimated charges and pre-tax savings related to substantially completed programs. Additional details, including estimated charges expected to be incurred in connection with our restructuring programs, are described in Note 5 to the condensed consolidated financial statements included in this report.

Pre-tax savings also can be affected by increases or decreases in sales volumes generated by the businesses subject to the consolidation of manufacturing operations; such variations in revenues can increase or decrease pre-tax savings generated by the consolidation of manufacturing operations. For example, an increase in sales volumes generated by the affected businesses, although likely increasing manufacturing costs, may generate additional savings with respect to costs that otherwise would have been incurred if the manufacturing operations were not consolidated.
21

Ongoing restructuring programs and other similar cost savings initiatives
Estimated TotalActual results through
December 31, 2019		Estimated remaining from January 1, 2020 through
December 31, 2026
(Dollars in millions)
Restructuring charges$95 - 114$83$12 - $31
Restructuring related charges (1)
110 - 1414664 - 95
Total charges$205 - $255$129$76 - 126
OEM initiative annual pre-tax savings$6 - $7$1$5 - $6
Pre-tax savings (2)
63 - 732538 - 48
Total annual pre-tax savings$69 - $80$26$43 - $54

(1)Restructuring related charges represent costs that are directly related to restructuring programs and principally constitute costs to transfer manufacturing operations to existing lower-cost locations, project management costs and accelerated depreciation, as well as a charge that is expected to be imposed by a taxing authority as a result of our exit from facilities in the authority's jurisdiction. Most of these charges (other than the tax charge) are expected to be recognized as cost of goods sold.
(2)Substantially all of the pre-tax savings are expected to result in reductions to cost of goods sold.
Restructuring and impairment charges incurred
 Three Months Ended
 March 29, 2020March 31, 2019
 (Dollars in millions)
Restructuring and impairment charges$1.3  $17.4  
Restructuring and impairment charges for the three months ended March 29, 2020 and March 31, 2019 primarily consisted of termination benefits related to our 2019 Footprint realignment plan.
Interest expense
 Three Months Ended
 March 29, 2020March 31, 2019
 (Dollars in millions)
Interest expense$15.4  $22.7  
Average interest rate on debt2.7 %3.9 %
The decrease in interest expense for the three months ended March 29, 2020 compared to the prior year period was primarily due to a lower average interest rate resulting from decreases in interest rates associated with our variable interest rate debt instruments and as well as our cross-currency swap agreement that we executed in the latter part of the first quarter of 2019.
Taxes on income from continuing operations
 Three Months Ended
 March 29, 2020March 31, 2019
Effective income tax rate7.8 %20.7 %
The effective income tax rate for the three months ended March 29, 2020 was 7.8%, and 20.7% for the three months ended March 31, 2019, respectively.The effective income tax rate for the three months ended March 29, 2020, as compared to the prior year period, reflects a non-taxable contingent consideration adjustment recognized in connection with a decrease in the fair value of our contingent consideration liabilities. The effective income tax rate for the three months ended March 31, 2019 reflects significant non-deductible termination benefits incurred in connection with the 2019 Footprint realignment plan. In addition, the effective tax rates for both the three months ended March 29, 2020 and March 31, 2019 reflect a net excess tax benefit related to share-based compensation.
In April 2020, we became aware of a new interpretation of a non-U.S. tax law that could apply to certain of our previous and current intercompany transactions. We are evaluating this new information and the effect, if any, on our tax positions. The amount of any potential impact on our financial statements is not yet estimable at this time but
22

TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)could be material to our results of operations. We do not expect any additional liability to result in a material impact to our liquidity or overall financial position.
(Unaudited)Segment Financial Information
Segment net revenues
 Three Months Ended
 March 29, 2020March 31, 2019% Increase/
(Decrease)
(Dollars in millions)
Americas$358.0  $344.0  4.1  
EMEA156.1  154.6  1.0  
Asia53.1  60.8  (12.6) 
OEM63.4  54.2  16.9  
Segment net revenues$630.6  $613.6  2.8  
Segment operating profit
 Three Months Ended
 March 29, 2020March 31, 2019% Increase/
(Decrease)
(Dollars in millions)
Americas$141.0  $65.6  114.9  
EMEA20.4  27.0  (24.4) 
Asia10.2  10.0  2.5  
OEM15.1  13.3  13.3  
Segment operating profit (1)
$186.7  $115.9  61.1  
(1)See Note 14 to our condensed consolidated financial statements included in this report for a reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest, loss on extinguishment of debt and taxes.
Comparison of the three months ended March 29, 2020 and March 31, 2019
Americas
Americas net revenues for the three months ended March 29, 2020 increased $14.0 million, or 4.1%, compared to the prior year period. The increase was primarily attributable to a $12.7 million increase in sales volume of existing products, mostly in interventional urology, as well as an increase in new product sales, which were partially offset by a decrease in revenues caused by the COVID-19 pandemic.
Americas operating profit for the three months ended March 29, 2020 increased $75.4 million, or 114.9%, compared to the prior year period. The increase was primarily attributable to a decrease in the fair value of our contingent consideration liabilities and, to a lesser extent, an increase in gross profit resulting from higher sales.
EMEA
EMEA net revenues for the three months ended March 29, 2020 increased $1.5 million, or 1.0%, compared to the prior year period. The increase was primarily attributable to a $6.1 million increase in sales volumes of existing products, inclusive of a benefit from the COVID-19, partially offset by unfavorable fluctuations in foreign currency exchange rates of $4.2 million.
EMEA operating profit for the three months ended March 29, 2020 decreased $6.6 million, or 24.4%, compared to the prior year period. The decrease was primarily attributable to unfavorable fluctuations in foreign currency exchange rates and an increase in research and development expenses inclusive of higher EU MDR related costs. The decreases in operating profit were partially offset by lower general and administrative expenses.
Asia
Asia net revenues for the three months ended March 29, 2020 decreased $7.7 million, or 12.6%, compared to the prior year period. The decrease was primarily attributable to a $7.3 million decrease in sales volumes of existing products, inclusive of the negative impact from the COVID-19 pandemic, and unfavorable fluctuations in foreign currency exchange rates.
23

Note 16 — Condensed consolidating guarantorAsia operating profit for the three months ended March 29, 2020 increased $0.2 million, or 2.5%, compared to the prior year period. The increase was primarily attributable to lower general and administrative expenses partially offset by the impact of unfavorable fluctuations in foreign currency exchange rates and a decrease in gross profit resulting from lower sales.
OEM
OEM net revenues for the three months ended March 29, 2020 increased $9.2 million, or 16.9%, compared to the prior year period. The increase was primarily attributable to net revenues of $5.0 million generated from our acquisition of HPC and a $4.2 million increase in sales volumes of existing products.
OEM operating profit for the three months ended March 29, 2020 increased $1.8 million, or 13.3% compared to the prior year period. The increase was primarily attributable to an increase in gross profit resulting from higher sales partially offset by expenses incurred in connection with the HPC acquisition.


Liquidity and Capital Resources
While the potential economic impact resulting from the COVID-19 pandemic and the duration of the pandemic's impact are difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial informationmarkets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.In consideration of the significant uncertainty created by the COVID-19 pandemic, we are continuing to assess our liquidity and anticipated capital requirements. Notwithstanding the significant uncertainty created by the COVID-19 pandemic, we believe our cash flow from operations, available cash and cash equivalents and borrowings under our revolving credit facility will enable us to fund our operating requirements, capital expenditures and debt obligations for the next 12 months and the foreseeable future. We have net cash provided by United States based operating activities as well as non-United States sources of cash available to help fund our debt service requirements in the United States. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost effective basis.
In consideration of the COVID-19 pandemic, we are closely monitoring our receivables and payables.To date, we have not experienced significant payment defaults by, or identified other collectability concerns with, our customers, and we have sufficient lending commitments in place to enable us to fund our anticipated additional operating needs.
Cash Flows
Net cash used in operating activities from continuing operations was $11.5 million for the three months ended March 29, 2020 as compared to net cash provided by operating activities of $60.2 million for the three months ended March 31, 2019. The $71.7 million decrease was primarily attributable to an increase in contingent consideration payments. Additionally, for the three months ended March 29, 2020, we made a $10.0 million pension contribution and had an increase in payroll and benefit related payments as compared to the prior year period.
Net cash used in investing activities from continuing operations was $284.4 million for the three months ended March 29, 2020, which included a $260.0 million payment for the acquisition of HPC as well as capital expenditures of $19.7 million.
Net cash provided by financing activities from continuing operations was $405.3 million for the three months ended March 29, 2020, which reflected a net increase in borrowings of $485.0 million. The cash received from the increase in borrowings was utilized to fund the $260.0 million acquisition of HPC; to increase our available cash on hand by $150.0 million to strengthen our liquidity as a precautionary measure in response to the COVID-19 pandemic; and to help fund the NeoTract contingent consideration payment. Net cash used in financing activities for the three months ended March 29, 2020 also reflects contingent consideration payments of $60.9 million and dividend payments of $15.8 million.
Borrowings
On March 30, 2020, we increased our borrowing capacity related to our accounts receivable securitization facility from $50 million to $75 million.
The Company’s $250 million principal amount of 5.25%4.875% Senior Notes due 20242026 (the “2024"2026 Notes") contain covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to incur additional debt or
24

issue preferred stock or other disqualified stock, create liens, merge, consolidate, or dispose of certain assets, pay dividends, make investments or make other restricted payments, or enter into transactions with our affiliates. The indenture governing our 4.625% Senior Notes due 2027 (the “2027 Notes”), contains covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to create liens; consolidate, merge or dispose of certain assets; and enter into sale leaseback transactions.
As of March 29, 2020, we were in compliance with these requirements. The obligations under the Credit Agreement, the 2026 Notes and the 2027 Notes are guaranteed (subject to certain exceptions) by substantially all of our material domestic subsidiaries, and the obligations under the Credit Agreement are (subject to certain exceptions and limitations) secured by a lien on substantially all of the assets owned by us and each guarantor.
Summarized Financial Information – Obligor Group
Our $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 collectivelytogether 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 is guaranteed, jointly and severally, by certainan enumerated group 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 statementsSummarized financial information for the Parent and Guarantor Subsidiaries (collectively, the “Obligor Group”) as of incomeMarch 29, 2020 and comprehensive incomeDecember 31, 2019 and for the three and nine months ended SeptemberMarch 29, 2019 and September 30, 2018, condensed consolidating balance sheets2020 is as of September 29, 2019 and December 31, 2018 and condensed consolidating statements of cash flows for the nine months ended September 29, 2019 and September 30, 2018, provide consolidated information for:follows:
a.Parent Company, the issuer of the guaranteed obligations;
Three Months Ended
March 29, 2020
(Dollars in millions)
Obligor GroupIntercompanyObligor Group
(excluding Intercompany)
Net revenue$444.2  $55.5  $388.7  
Cost of goods sold260.7  73.5  187.2  
Gross profit183.5  (18.0) 201.5  
Income from continuing operations81.9  2.3  79.6  
Net income81.9  2.3  79.6  

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 nine months ended September 30, 2018, the condensed consolidating balance sheet as of December 31, 2018 and the condensed consolidating statement of cash flows for the nine months ended September 30, 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.
March 29, 2020December 31, 2019
(Dollars in millions)
Obligor GroupIntercompanyObligor Group
(excluding Intercompany)		Obligor GroupIntercompanyObligor Group
(excluding Intercompany)
Total current assets$864.2  $63.9  $800.3  $735.8  $51.8  $684.0  
Total assets5,116.3  1,389.0  3,727.3  4,847.9  1,237.7  3,610.2  
Total current liabilities707.8  515.4  192.4  852.5  500.8  351.7  
Total liabilities3,963.5  797.9  3,165.6  3,659.5  752.4  2,907.1  
The same accounting policies as described in Note 1 to the consolidated financial statements included in the Company’sour Annual Report on Form 10-K for the year ended December 31, 20182019 are used by the Parent Company and each of its subsidiaries in connection with the condensed consolidatingsummarized financial information except forpresented above. The Intercompany column in the usetable above represents transactions between and among the Obligor Group and non-guarantor subsidiaries (i.e. those subsidiaries of the equity methodParent Company that have not guaranteed payment of accounting to reflect ownership intereststhe Senior Notes). Obligor investments in non-guarantor subsidiaries whichand any related activity are eliminated upon consolidation.excluded from the financial information presented above.
Consolidating entries and eliminations in the following condensedCritical Accounting Estimates
The preparation of consolidated financial statements represent adjustmentsin conformity with GAAP requires management to (a) eliminate intercompany transactions between or amongmake estimates and assumptions that affect the Parent Company,reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the Guarantor Subsidiariesdate of the financial statements and the Non-Guarantor Subsidiaries, (b) eliminatereported amounts of revenues and expenses during the investments in subsidiariesreporting period. Actual results could differ from those estimates and (c) record consolidating entries.



23

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 September 29, 2019
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed
Consolidated
 (Dollars in thousands)
Net revenues$—  $449,753  $338,889  $(140,323) $648,319  
Cost of goods sold—  290,466  112,090  (129,917) 272,639  
Gross profit—  159,287  226,799  (10,406) 375,680  
Selling, general and administrative expenses14,919  140,053  75,421  (497) 229,896  
Research and development expenses334  20,321  7,329  —  27,984  
Restructuring and impairment charges—  661  607  —  1,268  
Gain on sale of assets—  —  (1,089) —  (1,089) 
(Loss) income from continuing operations before interest and taxes(15,253) (1,748) 144,531  (9,909) 117,621  
Interest, net25,367  (20,911) 14,619  —  19,075  
(Loss) income from continuing operations before taxes(40,620) 19,163  129,912  (9,909) 98,546  
(Benefit) taxes on (loss) income from continuing operations(13,374) 4,393  (119,578) (1,824) (130,383) 
Equity in net income of consolidated subsidiaries256,175  229,630  —  (485,805) —  
Income from continuing operations228,929  244,400  249,490  (493,890) 228,929  
Operating loss from discontinued operations(9) —  —  —  (9) 
Tax benefit on loss from discontinued operations(9) —  —  —  (9) 
Income from discontinued operations—  —  —  —  —  
Net income228,929  244,400  249,490  (493,890) 228,929  
Other comprehensive income(38,594) (58,995) (62,882) 121,877  (38,594) 
Comprehensive income$190,335  $185,405  $186,608  $(372,013) $190,335  


24

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

 Three Months Ended September 30, 2018
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed Consolidated
 (Dollars in thousands)
Net revenues$—  $398,961  $322,010  $(111,299) $609,672  
Cost of goods sold—  232,209  146,301  (111,411) 267,099  
Gross profit—  166,752  175,709  112  342,573  
Selling, general and administrative expenses11,347  130,769  72,800  (22) 214,894  
Research and development expenses378  19,482  6,505  —  26,365  
Restructuring and impairment charges—  17,128  2,081  —  19,209  
(Loss) income from continuing operations before interest and taxes(11,725) (627) 94,323  134  82,105  
Interest, net25,191  (15,391) 17,051  —  26,851  
(Loss) income from continuing operations before taxes(36,916) 14,764  77,272  134  55,254  
(Benefit) taxes on (loss) income from continuing operations(13,449) 1,765  10,385  13  (1,286) 
Equity in net income of consolidated subsidiaries80,007  56,818  372  (137,197) —  
Income from continuing operations56,540  69,817  67,259  (137,076) 56,540  
Operating loss from discontinued operations(83) —  —  —  (83) 
Tax benefit on loss from discontinued operations(67) —  —  —  (67) 
Income from discontinued operations(16) —  —  —  (16) 
Net income56,524  69,817  67,259  (137,076) 56,524  
Other comprehensive loss17,253  14,107  16,947  (31,054) 17,253  
Comprehensive income$73,777  $83,924  $84,206  $(168,130) $73,777  



assumptions.
25

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

 Nine Months Ended September 29, 2019
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed
Consolidated
 (Dollars in thousands)
Net revenues$—  $1,304,385  $987,478  $(377,453) $1,914,410  
Cost of goods sold—  769,639  411,370  (359,945) 821,064  
Gross profit—  534,746  576,108  (17,508) 1,093,346  
Selling, general and administrative expenses45,398  413,380  235,402  (405) 693,775  
Research and development expenses1,414  60,773  20,542  —  82,729  
Restructuring and impairment charges—  6,742  13,606  —  20,348  
Gain on sale of assets—  —  (3,828) —  (3,828) 
(Loss) income from continuing operations before interest and taxes(46,812) 53,851  310,386  (17,103) 300,322  
Interest, net58,782  (42,756) 45,688  —  61,714  
(Loss) income from continuing operations before taxes(105,594) 96,607  264,698  (17,103) 238,608  
(Benefit) taxes on (loss) income from continuing operations(41,765) 31,643  (102,388) (3,057) (115,567) 
Equity in net income of consolidated subsidiaries418,004  330,627  —  (748,631) —  
Income from continuing operations354,175  395,591  367,086  (762,677) 354,175  
Operating loss from discontinued operations(1,291) —  —  —  (1,291) 
Tax benefit on loss from discontinued operations(317) —  —  —  (317) 
Loss from discontinued operations(974) —  —  —  (974) 
Net income353,201  395,591  367,086  (762,677) 353,201  
Other comprehensive income(23,416) (43,389) (48,419) 91,808  (23,416) 
Comprehensive income$329,785  $352,202  $318,667  $(670,869) $329,785  

26

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

 Nine Months Ended September 30, 2018
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed
Consolidated
 (Dollars in thousands)
Net revenues$—  $1,169,684  $968,298  $(331,214) $1,806,768  
Cost of goods sold—  681,300  431,841  (324,994) 788,147  
Gross profit—  488,384  536,457  (6,220) 1,018,621  
Selling, general and administrative expenses32,958  400,987  226,555  (352) 660,148  
Research and development expenses1,094  57,668  19,648  —  78,410  
Restructuring and impairment charges—  20,581  57,044  —  77,625  
(Loss) income from continuing operations before interest and taxes(34,052) 9,148  233,210  (5,868) 202,438  
Interest, net72,120  (41,406) 48,273  —  78,987  
(Loss) income from continuing operations before taxes(106,172) 50,554  184,937  (5,868) 123,451  
(Benefit) taxes on (loss) income from continuing operations(39,859) 23,233  32,248  (1,090) 14,532  
Equity in net income of consolidated subsidiaries176,511  135,425  1,007  (312,943) —  
Income from continuing operations110,198  162,746  153,696  (317,721) 108,919  
Operating (loss) income from discontinued operations(33) —  1,279  —  1,246  
Tax benefit on income (loss) from discontinued operations(47) —  —  —  (47) 
Income from discontinued operations14  —  1,279  —  1,293  
Net income110,212  162,746  154,975  (317,721) 110,212  
Other comprehensive loss(24,076) (30,691) (26,551) 57,242  (24,076) 
Comprehensive income$86,136  $132,055  $128,424  $(260,479) $86,136  

27

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

TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
 September 29, 2019
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed
Consolidated
 (Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents$34,196  $518  $222,830  $—  $257,544  
Accounts receivable, net3,228  69,322  318,375  5,738  396,663  
Accounts receivable from consolidated subsidiaries33,739  469,533  511,784  (1,015,056) —  
Inventories, net—  296,136  224,660  (48,202) 472,594  
Prepaid expenses and other current assets40,513  10,387  26,518  4,113  81,531  
Prepaid taxes19,518  —  9,760  —  29,278  
Total current assets131,194  845,896  1,313,927  (1,053,407) 1,237,610  
Property, plant and equipment, net2,889  246,496  180,183  —  429,568  
Operating lease assets13,136  68,830  33,227  —  115,193  
Goodwill—  1,255,976  975,354  —  2,231,330  
Intangibles assets, net75  1,214,148  961,450  —  2,175,673  
Investments in affiliates5,824,869  2,138,760  924,448  (8,888,077) —  
Deferred tax assets6,850  —  5,298  (9,196) 2,952  
Notes receivable and other amounts due from consolidated subsidiaries1,959,149  3,407,412  287,571  (5,654,132) —  
Other assets42,666  12,017  10,173  —  64,856  
Total assets$7,980,828  $9,189,535  $4,691,631  $(15,604,812) $6,257,182  
LIABILITIES AND EQUITY     
Current liabilities     
Current borrowings$—  $—  $50,000  $—  $50,000  
Accounts payable3,004  61,106  36,520  —  100,630  
Accounts payable to consolidated subsidiaries284,386  428,967  301,703  (1,015,056) —  
Accrued expenses6,287  33,398  51,884  —  91,569  
Current portion of contingent consideration—  124,789  10,379  —  135,168  
Payroll and benefit-related liabilities19,772  35,171  44,888  —  99,831  
Accrued interest19,658  —  28  —  19,686  
Income taxes payable—  —  6,356  (3,057) 3,299  
Other current liabilities4,049  14,849  11,282  —  30,180  
Total current liabilities337,156  698,280  513,040  (1,018,113) 530,363  
Long-term borrowings1,949,068  —  —  —  1,949,068  
Deferred tax liabilities—  345,670  132,471  (9,196) 468,945  
Pension and postretirement benefit liabilities30,594  25,887  15,535  —  72,016  
Noncurrent liability for uncertain tax positions1,162  7,382  2,540  —  11,084  
Notes payable and other amounts due to consolidated subsidiaries2,673,870  1,860,819  1,119,443  (5,654,132) —  
Noncurrent contingent consideration—  44,137  27,575  —  71,712  
Noncurrent operating lease liabilities10,616  68,167  25,353  —  104,136  
Other liabilities125,386  9,619  61,877  —  196,882  
Total liabilities5,127,852  3,059,961  1,897,834  (6,681,441) 3,404,206  
Total shareholders' equity2,852,976  6,129,574  2,793,797  (8,923,371) 2,852,976  
Total liabilities and shareholders' equity$7,980,828  $9,189,535  $4,691,631  $(15,604,812) $6,257,182  
28

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

 December 31, 2018
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed
Consolidated
 (Dollars in thousands)
ASSETS    
Current assets    
Cash and cash equivalents$49,523  $1,701  $305,937  $—  $357,161  
Accounts receivable, net5,885  54,013  301,054  5,334  366,286  
Accounts receivable from consolidated subsidiaries32,036  1,122,107  366,033  (1,520,176) —  
Inventories, net—  266,073  192,659  (30,954) 427,778  
Prepaid expenses and other current assets30,458  9,673  28,237  4,113  72,481  
Prepaid taxes7,029  —  5,434  —  12,463  
Total current assets124,931  1,453,567  1,199,354  (1,541,683) 1,236,169  
Property, plant and equipment, net3,385  253,037  176,344  —  432,766  
Goodwill—  1,254,848  991,731  —  2,246,579  
Intangibles assets, net90  1,277,462  1,047,500  —  2,325,052  
Investments in affiliates5,984,566  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 subsidiaries2,337,737  3,347,815  13,242  (5,698,794) —  
Other assets17,180  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 payable3,448  62,764  40,497  —  106,709  
Accounts payable to consolidated subsidiaries1,058,008  292,093  170,075  (1,520,176) —  
Accrued expenses5,659  41,873  50,019  —  97,551  
Current portion of contingent consideration—  106,514  30,363  —  136,877  
Payroll and benefit-related liabilities17,156  44,982  42,532  —  104,670  
Accrued interest5,995  —  36  —  6,031  
Income taxes payable—  —  5,943  —  5,943  
Other current liabilities843  34,916  2,291  —  38,050  
Total current liabilities1,127,734  583,142  391,756  (1,520,176) 582,456  
Long-term borrowings2,072,200  —  —  —  2,072,200  
Deferred tax liabilities87,671  257,522  265,404  (2,376) 608,221  
Pension and postretirement benefit liabilities49,290  27,454  16,170  —  92,914  
Noncurrent liability for uncertain tax positions801  7,212  2,705  —  10,718  
Notes payable and other amounts due to consolidated subsidiaries2,451,784  2,222,580  1,024,430  (5,698,794) —  
Noncurrent contingent consideration—  131,563  35,807  —  167,370  
Other liabilities138,431  8,204  57,499  204,134  
Total liabilities5,927,911  3,237,677  1,793,771  (7,221,346) 3,738,013  
Total shareholders' equity2,539,978  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  

29

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

TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 Nine Months Ended September 29, 2019
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed
Consolidated
 (Dollars in thousands)
Net cash (used in) provided by operating activities from continuing operations$(72,369) $342,912  $272,115  $(253,491) $289,167  
Cash flows from investing activities of continuing operations:    
Expenditures for property, plant and equipment(460) (57,131) (26,206) —  (83,797) 
Proceeds from sale of assets and investments2,362  2,046  1,089  (2,362) 3,135  
Payments for businesses and intangibles acquired, net of cash acquired—  (1,025) (240) —  (1,265) 
Net interest proceeds on swaps designated as net investment hedges8,330  —  —  —  8,330  
Investments in affiliates—  (146) —  146  —  
Net cash provided by (used in) investing activities from continuing operations10,232  (56,256) (25,357) (2,216) (73,597) 
Cash flows from financing activities of continuing operations:    
Proceeds from new borrowings25,000  —  —  —  25,000  
Reduction in borrowings(185,500) —  —  —  (185,500) 
Debt extinguishment, issuance and amendment fees(4,964) —  —  —  (4,964) 
Net proceeds from share based compensation plans and the related tax impacts14,014  —  —  —  14,014  
Payments for contingent consideration—  (15,122) (96,884) —  (112,006) 
Proceeds from issuance of shares—  —  146  (146) —  
Dividends paid(47,071) —  —  —  (47,071) 
Intercompany transactions242,049  (272,773) 28,362  2,362  —  
Intercompany dividends paid—  —  (253,491) 253,491  —  
Net cash provided by (used in) financing activities from continuing operations43,528  (287,895) (321,867) 255,707  (310,527) 
Cash flows from discontinued operations:    
Net cash provided by (used in) operating activities3,282  —  (631) —  2,651  
Net cash provided by (used in) discontinued operations3,282  —  (631) —  2,651  
Effect of exchange rate changes on cash and cash equivalents—  —  (7,311) —  (7,311) 
Net (decrease) increase in cash and cash equivalents(15,327) (1,239) (83,051) —  (99,617) 
Cash and cash equivalents at the beginning of the period49,523  1,757  305,881  —  357,161  
Cash and cash equivalents at the end of the period$34,196  $518  $222,830  $—  $257,544  
30

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

 Nine Months Ended September 30, 2018
Parent
Company		Guarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsCondensed
Consolidated
 (Dollars in thousands)
Net cash (used in) provided by operating activities from continuing operations$(202,209) $321,389  $329,390  $(145,626) $302,944  
Cash flows from investing activities of continuing operations:    
Expenditures for property, plant and equipment(1,524) (23,686) (30,541) —  (55,751) 
Proceeds from sale of assets28,239  —  —  (28,239) —  
Payments for businesses and intangibles acquired, net of cash acquired(100) —  (22,450) —  (22,550) 
Net cash provided by (used in) investing activities from continuing operations26,615  (23,686) (52,991) (28,239) (78,301) 
Cash flows from financing activities of continuing operations:         
Reduction in borrowings(98,500) —  —  —  (98,500) 
Debt extinguishment, issuance and amendment fees(188) —  —  —  (188) 
Net proceeds from share based compensation plans and the related tax impacts18,666  —  —  —  18,666  
Payments for contingent consideration—  (10,748) (62,404) —  (73,152) 
Dividends paid(46,526) —  —  —  (46,526) 
     Intercompany transactions312,806  (294,600) (46,445) 28,239  —  
Intercompany dividends paid—  —  (145,626) 145,626  —  
Net cash provided by (used in) financing activities from continuing operations186,258  (305,348) (254,475) 173,865  (199,700) 
Cash flows from discontinued operations:            
Net cash used in operating activities(701) —  —  —  (701) 
Net cash used in discontinued operations(701) —  —  —  (701) 
Effect of exchange rate changes on cash and cash equivalents—  —  (1,524) —  (1,524) 
Net increase (decrease) in cash and cash equivalents9,963  (7,645) 20,400  —  22,718  
Cash and cash equivalents at the beginning of the period37,803  8,933  286,822  —  333,558  
Cash and cash equivalents at the end of the period$47,766  $1,288  $307,222  $—  $356,276  

Note 17 — Subsequent event
Redemption of 5.25% Senior Notes due 2024
On OctoberIn our Annual Report on Form 10-K for the year ended December 31, 2019, the Company issued a noticewe provided disclosure regarding our critical accounting estimates, which are reflective of redemption to holders of its outstanding $250 million aggregate principal amount of 5.25% Senior Notes due 2024 (the “2024 Notes”). Pursuantsignificant judgments and uncertainties, are important to the noticepresentation of redemption,our financial condition and results of operations and could potentially result in materially different results under different assumptions and conditions.
New Accounting Standards
See Note 2 to the 2024 Notes will be redeemed on November 15, 2019 (the “Redemption Date”) atcondensed consolidated financial statements included in this report for a redemption price equal to 102.625%discussion of recently issued accounting guidance, including estimated effects, if any, of adoption of the principal amount of the 2024 Notes plus accrued and unpaid interest up to, but not including, the Redemption Date (the “Redemption Price”). The notice of redemption provides that the redemption is subject to the condition that the Company is able to borrow funds under its revolving credit agreementguidance on the Redemption Date in an amount sufficient to pay the aggregate Redemption Price. The Company anticipates it will recognize a loss on extinguishment of debt of $8.8 million in the fourth quarter of 2019 as a result of the redemption of the 2024 Notes.our financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking StatementsSegment Financial Information
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 of shipments; demand for and market acceptance of new and existing products; our inability to provide products
Segment net revenues
 Three Months Ended
 March 29, 2020March 31, 2019% Increase/
(Decrease)
(Dollars in millions)
Americas$358.0  $344.0  4.1  
EMEA156.1  154.6  1.0  
Asia53.1  60.8  (12.6) 
OEM63.4  54.2  16.9  
Segment net revenues$630.6  $613.6  2.8  
Segment operating profit
 Three Months Ended
 March 29, 2020March 31, 2019% Increase/
(Decrease)
(Dollars in millions)
Americas$141.0  $65.6  114.9  
EMEA20.4  27.0  (24.4) 
Asia10.2  10.0  2.5  
OEM15.1  13.3  13.3  
Segment operating profit (1)
$186.7  $115.9  61.1  
(1)See Note 14 to our customers, which may be due to, among other things, events that impact key distributors, suppliers and vendors that sterilize our products; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; our inability to effectively execute our restructuring plans and programs; our inability to realize anticipated savings from restructuring plans and programs; the impact of enacted healthcare reform legislation and proposals to amend, replace or repeal the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; the impact of tax legislation and related regulations; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; global economic factors, including currency exchange rates, interest rates, trade disputes, sovereign debt issues and the impact of the United Kingdom’s pending departure from the European 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, 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.
Overview
Teleflex is a global provider of medical technology products focused on enhancing clinical benefits, improving patient and provider safety and 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.
We evaluate our portfolio of products and businesses on an ongoing basis to ensure alignment with our overall objectives. Based on our evaluation, we may identify opportunities to divest businesses and product lines that do not meet our objectives. In addition, we may seek to optimize utilization of our facilities through restructuring initiatives designed to further improve our cost structure and enhance our competitive position. We also may continue to explore opportunities to expand the size of our business and improve operating margins through a combination of acquisitions and distributor to direct sales conversions, which generally involve our elimination of a distributor from the sales channel, either by acquiring the distributor or terminating the distributor relationship (in some instances, particularly in Asia, the conversions involve our acquisition or termination of a master distributor and the continued sale of our products through sub-distributors or through new distributors). Distributor to direct sales conversions are designed to facilitate improved product pricing and more direct access to the end users of our products within the sales channel.
On February 19, 2019, we 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"). See "Results of Operations - Restructuring and impairment charges" below and Note 5 to the condensed consolidated financial statements included in this report for additional information.



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Disruption in Sterilization Services

We were recently informed by onea reconciliation of our contract sterilizers, Sterigenics U.S., LLC, that operations at its Smyrna, Cobb County, Georgia facility have been suspended by state and local officials due to issues associated with the facility’s use of ethylene oxide in its sterilization operations. The suspension of operations at the Smyrna facility has resulted in a disruption in supply with respect to some of our surgical, intermittent catheter and OEM products. We are pursuing various measures to enable us to continue to provide the affected productssegment operating profit to our customers, including identifying alternate sterilization facilities, provisioning substitute productscondensed consolidated income from continuing operations before interest, loss on extinguishment of debt and instituting targeted global inventory management procedures. However, we cannot provide assurance that any of these initiatives will be successful. Based on currently available information, we believe that the suspension of operations at Sterigenics’ Smyrna facility will adversely affect our revenues by approximately $9 million during the fourth quarter of 2019. In addition, while we are working to identify alternate sterilization facilities for the affected product, if operations at the Smyrna facility remain suspended and we are unable to find adequate sterilization capacity at an alternate facility or facilities, we expect the suspension of operations at the Smyrna facility will continue to adversely affect our revenues in 2020. For additional information see “Risk Factors” in Part II, Item 1A. of this report.taxes.
Change in Reportable Segments
During the first quarter 2019, our chief operating decision maker, or CODM, who is our Chief Executive Officer, changed the manner in which he reviews financial information for purposes of assessing business performance and allocating resources by focusing on the 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, Interventional Urology North America, Respiratory North America and Latin America operating segments 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 period comparative information has been restated to reflect the change in segment presentation.
Results of Operations
As used in this discussion, "new products" are products for which commercial sales have commenced within the past 36 months, and “existing products” are products for which commercial sales commenced more than 36 months ago. Discussion of results of operations items that reference the effect of one or more acquired and/or divested businesses or assets (except as noted below with respect to acquired distributors) generally reflects the impactComparison of the acquisitions and/or divestitures within the first 12three months following the date of the acquisition and/or divestiture. In addition to increasesended March 29, 2020 and decreases in the per unit selling prices of our products to our customers, our discussion of the impact of product price increases and decreases also reflects the impact on the pricing of our products resulting from the elimination of the distributor, either through acquisition or termination of the distributor, from the sales channel.March 31, 2019
Certain financial information is presented on a rounded basis, which may cause minor differences.Americas
Net revenues
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
 (Dollars in millions)
Net revenues$648.3  $609.7  $1,914.4  $1,806.8  
NetAmericas net revenues for the three months ended SeptemberMarch 29, 20192020 increased $38.6$14.0 million, or 6.3%4.1%, compared to the prior year period. The increase was primarily attributable to a $35.1$12.7 million increase in sales volumesvolume of existing products, and, to a lesser extent,mostly in interventional urology, as well as an increase in new product sales, which were partially offset by unfavorable fluctuationsa decrease in foreign currency exchange rates of $9.2 million.revenues caused by the COVID-19 pandemic.
Net revenuesAmericas operating profit for the ninethree months ended SeptemberMarch 29, 20192020 increased $107.6$75.4 million, or 6.0%114.9%, compared to the prior year period. The increase was primarily attributable to a $109.8 million increasedecrease in sales volumesthe fair value of existing productsour contingent consideration liabilities and, to a lesser extent, an increase in new product sales, which were partially offset by unfavorable fluctuations in foreign currency exchange rates of $40.8 million.gross profit resulting from higher sales.
EMEA
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Gross profit
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
 (Dollars in millions)
Gross profit$375.7  $342.6  $1,093.3  $1,018.6  
Percentage of sales57.9 %56.2 %57.1 %56.4 %
Gross marginEMEA net revenues for the three months ended SeptemberMarch 29, 20192020 increased 170 basis points,$1.5 million, or 3.0%1.0%, compared to the prior year period, which was primarily attributable to increased sales volumes, favorable product mix and benefits from cost improvement initiatives partially offset by incremental tariffs.

Gross margin for the nine months ended September 29, 2019 increased 70 basis points, or 1.2%, compared to the prior year period, which was primarily attributable to increased sales volumes and favorable product mix partially offset by higher logistics and distribution costs, incremental tariffs and the impact of unfavorable fluctuations in foreign currency exchange rates.
Selling, general and administrative
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
 (Dollars in millions)
Selling, general and administrative$229.9  $214.9  $693.8  $660.1  
Percentage of sales35.5 %35.2 %36.2 %36.5 %
Selling, general and administrative expenses for the three months ended September 29, 2019 increased $15.0 million compared to the prior year period. The increase was primarily attributable to increasesa $6.1 million increase in sellingsales volumes of existing products, inclusive of a benefit from the COVID-19, partially offset by unfavorable fluctuations in foreign currency exchange rates of $4.2 million.
EMEA operating profit for the three months ended March 29, 2020 decreased $6.6 million, or 24.4%, compared to the prior year period. The decrease was primarily attributable to unfavorable fluctuations in foreign currency exchange rates and an increase in research and development expenses and expenses incurred by our acquired businesses including contingent consideration expense that resulted from a changeinclusive of higher EU MDR related costs. The decreases in the estimated fair value of our contingent consideration liabilities. The increasesoperating profit were partially offset by lower general and administrative expenses.
Asia
Asia net revenues for the three months ended March 29, 2020 decreased $7.7 million, or 12.6%, compared to the prior year period. The decrease was primarily attributable to a $7.3 million decrease in sales volumes of existing products, inclusive of the negative impact of favorablefrom the COVID-19 pandemic, and unfavorable fluctuations in foreign currency exchange rates.
Selling, general and administrative expenses
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Asia operating profit for the ninethree months ended SeptemberMarch 29, 20192020 increased $33.7$0.2 million, or 2.5%, compared to the prior year period. The increase was primarily attributable to expenses incurred by our acquired businesses, an increase in sellinglower general and marketingadministrative expenses principally with respect to our interventional urology products, and higher administrative costs. The increases were partially offset by a decrease in contingent consideration expense resulting from a change in the estimated fair value of our contingent consideration liabilities and the impact of favorableunfavorable fluctuations in foreign currency exchange rates.rates and a decrease in gross profit resulting from lower sales.
Research and developmentOEM
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
 (Dollars in millions)
Research and development$28.0  $26.4  $82.7  $78.4  
Percentage of sales4.3 %4.3 %4.3 %4.3 %
The increase in research and development expensesOEM net revenues for the three months ended SeptemberMarch 29, 20192020 increased $9.2 million, or 16.9%, compared to the prior year periodperiod. The increase was primarily attributable to expenses incurred bynet revenues of $5.0 million generated from our EMEA segment. Additionally, theacquisition of HPC and a $4.2 million increase in research and development expensessales volumes of existing products.
OEM operating profit for the ninethree months ended SeptemberMarch 29, 20192020 increased $1.8 million, or 13.3% compared to the prior periodyear period. The increase was primarily the result ofattributable to an increase in gross profit resulting from higher sales partially offset by expenses incurred in connection with the HPC acquisition.


Liquidity and Capital Resources
While the potential economic impact resulting from the COVID-19 pandemic and the duration of the pandemic's impact are difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our interventional product portfolio.ability to access capital, which could negatively impact our short-term and long-term liquidity.In consideration of the significant uncertainty created by the COVID-19 pandemic, we are continuing to assess our liquidity and anticipated capital requirements. Notwithstanding the significant uncertainty created by the COVID-19 pandemic, we believe our cash flow from operations, available cash and cash equivalents and borrowings under our revolving credit facility will enable us to fund our operating requirements, capital expenditures and debt obligations for the next 12 months and the foreseeable future. We have net cash provided by United States based operating activities as well as non-United States sources of cash available to help fund our debt service requirements in the United States. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost effective basis.
RestructuringIn consideration of the COVID-19 pandemic, we are closely monitoring our receivables and impairment chargespayables.To date, we have not experienced significant payment defaults by, or identified other collectability concerns with, our customers, and we have sufficient lending commitments in place to enable us to fund our anticipated additional operating needs.
Anticipated chargesCash Flows
Net cash used in operating activities from continuing operations was $11.5 million for the three months ended March 29, 2020 as compared to net cash provided by operating activities of $60.2 million for the three months ended March 31, 2019. The $71.7 million decrease was primarily attributable to an increase in contingent consideration payments. Additionally, for the three months ended March 29, 2020, we made a $10.0 million pension contribution and pre-tax savingshad an increase in payroll and benefit related payments as compared to the prior year period.
Net cash used in investing activities from continuing operations was $284.4 million for the three months ended March 29, 2020, which included a $260.0 million payment for the acquisition of HPC as well as capital expenditures of $19.7 million.
Net cash provided by financing activities from continuing operations was $405.3 million for the three months ended March 29, 2020, which reflected a net increase in borrowings of $485.0 million. The cash received from the increase in borrowings was utilized to fund the $260.0 million acquisition of HPC; to increase our available cash on hand by $150.0 million to strengthen our liquidity as a precautionary measure in response to the COVID-19 pandemic; and to help fund the NeoTract contingent consideration payment. Net cash used in financing activities for the three months ended March 29, 2020 also reflects contingent consideration payments of $60.9 million and dividend payments of $15.8 million.
Borrowings
On March 30, 2020, we increased our borrowing capacity related to restructuring programsour accounts receivable securitization facility from $50 million to $75 million.
The 4.875% Senior Notes due 2026 (the "2026 Notes") contain covenants that, among other things and other similar cost savings initiatives
We have ongoing restructuring programs primarily relatedsubject to certain exceptions, limit or restrict our ability, and the consolidationability of our manufacturing operations (referredsubsidiaries, to as our 2019, 2018 and 2014 Footprint realignment plans). We also have similar ongoing activities to relocate certain manufacturing operations within our OEM segment (the "OEM initiative") that do not meet theincur additional debt or
3424

criteriaissue preferred stock or other disqualified stock, create liens, merge, consolidate, or dispose of certain assets, pay dividends, make investments or make other restricted payments, or enter into transactions with our affiliates. The indenture governing our 4.625% Senior Notes due 2027 (the “2027 Notes”) contains covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to create liens; consolidate, merge or dispose of certain assets; and enter into sale leaseback transactions.
As of March 29, 2020, we were in compliance with these requirements. The obligations under the Credit Agreement, the 2026 Notes and the 2027 Notes are guaranteed (subject to certain exceptions) by substantially all of our material domestic subsidiaries, and the obligations under the Credit Agreement are (subject to certain exceptions and limitations) secured by a lien on substantially all of the assets owned by us and each guarantor.
Summarized Financial Information – Obligor Group
Our $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 together with 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 is guaranteed, jointly and severally, by an enumerated group of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. Summarized financial information for a restructuring program under applicablethe Parent and Guarantor Subsidiaries (collectively, the “Obligor Group”) as of March 29, 2020 and December 31, 2019 and for the three months ended March 29, 2020 is as follows:
Three Months Ended
March 29, 2020
(Dollars in millions)
Obligor GroupIntercompanyObligor Group
(excluding Intercompany)
Net revenue$444.2  $55.5  $388.7  
Cost of goods sold260.7  73.5  187.2  
Gross profit183.5  (18.0) 201.5  
Income from continuing operations81.9  2.3  79.6  
Net income81.9  2.3  79.6  

March 29, 2020December 31, 2019
(Dollars in millions)
Obligor GroupIntercompanyObligor Group
(excluding Intercompany)		Obligor GroupIntercompanyObligor Group
(excluding Intercompany)
Total current assets$864.2  $63.9  $800.3  $735.8  $51.8  $684.0  
Total assets5,116.3  1,389.0  3,727.3  4,847.9  1,237.7  3,610.2  
Total current liabilities707.8  515.4  192.4  852.5  500.8  351.7  
Total liabilities3,963.5  797.9  3,165.6  3,659.5  752.4  2,907.1  
The same accounting guidance; nevertheless,policies as described in Note 1 to the activities should resultconsolidated financial statements included in cost savings (we expect only minimal costs to be incurredour Annual Report on Form 10-K for the year ended December 31, 2019 are used by the Parent Company and each of its subsidiaries in connection with the OEM initiative). With respect to our currently ongoing restructuring programs and the OEM initiative,summarized financial information presented above. The Intercompany column in the table below summarizes charges incurred or estimated to be incurredabove represents transactions between and estimated annual pre-tax savings to be realized as follows: (1) with respect to charges (a)among the estimated total charges that will have been incurred once the restructuring programsObligor Group 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 datenon-guarantor subsidiaries (i.e. those subsidiaries of the restructuring programs and OEM initiative, December 31, 2026 and (2) with respect to estimated annual pre-tax savings, (a) the estimated total annual pre-tax savings to be realized once the restructuring programs and OEM initiative are completed; (b) the estimated annual pre-tax savings realized based on the progressParent Company that have not guaranteed payment of the restructuring programsSenior Notes). Obligor investments in non-guarantor subsidiaries and OEM initiative through December 31, 2018; and (c) the estimated additional annual pre-tax savings to be realized from January 1, 2019 through the last anticipated completion date of the restructuring programs and the OEM initiative, December 31, 2026.

Estimated charges and pre-tax savings are subject to change based on, among other things, the nature and timing of restructuring activities and similar activities, changes in the scope of restructuring programs and the OEM initiative, unanticipated expenditures and other developments, the effect of additional acquisitions or dispositions, the failure to realize anticipated savings from a supply contractany 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 constituting efficiencies with respect to increased costs that otherwise would have resulted from business acquisitions involve, among other things, assumptions regarding the cost structure and integration of businesses that previously were not administered by our management, which are subject to a particularly high degree of risk and uncertainty. It is likely that estimates of charges and pre-tax savings will change from time to time, and the table below reflects changes from amounts previously estimated. In addition, the table below does not include estimated charges and pre-tax savings related to substantially completed programs. For example, the 2017 Vascular Solutions integration program, the 2017 EMEA program, the 2016 Footprint realignment plan and other 2016 restructuring programsactivity are excluded from the table below because they were substantially completed priorfinancial information presented above.
Critical Accounting Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to ormake 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 2019. Additional details, including estimated charges expectedthe reporting period. Actual results could differ from those estimates and assumptions.
25

In our Annual Report on Form 10-K for the year ended December 31, 2019, we provided disclosure regarding our critical accounting estimates, which are reflective of significant judgments and uncertainties, are important to be incurredthe presentation of our financial condition and results of operations and could potentially result in connection with our restructuring programs, are described inmaterially different results under different assumptions and conditions.
New Accounting Standards
See Note 52 to the condensed consolidated financial statements included in this report.

Pre-tax savings also can be affected by increases or decreases in sales volumes generated by the businesses subject to the consolidationreport for a discussion of manufacturing operations; such variations in revenues can increase or decrease pre-tax savings generated by the consolidationrecently issued accounting guidance, including estimated effects, if any, of manufacturing operations. For example, an increase in sales volumes generated by the affected businesses, although likely increasing manufacturing costs, may generate additional savings with respect to costs that otherwise would have been incurred if the manufacturing operations were not consolidated.
Ongoing restructuring programs and other similar cost savings initiatives
Estimated TotalActual results through
December 31, 2018		Estimated remaining from January 1, 2019 through
December 31, 2026
(Dollars in millions)
Restructuring charges$95 - $114 $68 $27 - $46 
Restructuring related charges (1)
$110 - $141 $34 $76 - $107 
Total charges$205 - $255 $102 $103 - $153 
OEM initiative annual pre-tax savings$6 - $7 $1 $5 - $6 
Ongoing restructuring programs annual pre-tax savings (2)
$63 - $73 $21 $42 - $52 
Total annual pre-tax savings$69 - $80 $22 $47 - $58 

(1)Restructuring related charges represent costs that are directly related to restructuring programs and principally constitute costs to transfer manufacturing operations to existing lower-cost locations, project management costs and accelerated depreciation, as well as a charge that is expected to be imposed by a taxing authority as a result of our exit from facilities in the authority's jurisdiction. Most of these charges (other than the tax charge) are expected to be recognized as cost of goods sold.
35

(2)Substantially all the pre-tax savings are expected to result in reductions to cost of goods sold. As previously disclosed, during 2016, in connection with our executionadoption of the 2014 Footprint realignment plan, we implemented changes to medication delivery devices included in certain ofguidance on our kits, which are expected to result in increased product costs (and therefore reduce the annual savings we anticipated at the inception of the program). However, we also expect to achieve improved pricing on these kits that will offset the increased costs, resulting in estimated annual increased revenues of $3 million to $4 million, which is not reflected in the table above. Since 2017, we have realized an aggregate benefit of $2.4 million resulting from this incremental pricing. More recently, during the fourth quarter of 2017, we entered into an agreement with an alternate provider for the development and supply of a component to be included in certain kits sold by our Americas segment. The agreement will result in increased development costs but is expected to reduce the cost of the component supply, once the supply becomes commercially available, as compared to the costs incurred with respect to our current suppliers. Therefore, we anticipate a net savings from the agreement, which is reflected in the table above.
2019 Footprint realignment plan
In February 2019, we initiated the 2019 Footprint realignment plan. These actions are expected to be substantially completed during 2022.
We estimate that we will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2019 Footprint realignment plan of $56 million to $70 million, of which, we expect $21 million to be incurred in 2019, with most of the balance expected to be incurred prior to the end of 2021. We estimate that $53 million to $66 million of these charges will result in cash outlays, of which, $7 million is expected to be made in 2019, with most of the balance expected to be made by the end of 2021. Additionally, we expect to incur $29 million to $35 million in aggregate capital expenditures under the plan, of which $19 million is expected to be incurred during 2019, with most of the balance expected to be incurred by the end of 2021.
We expect to begin realizing plan-related savings in 2021 and expect to achieve annual pre-tax savings of $12 million to $14 million once the plan is fully implemented, which will benefit all of our segments except OEM.
Restructuring and impairment charges incurred
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
 (Dollars in millions)
Restructuring and impairment charges$1.3  $19.2  $20.3  $77.6  
Restructuring and impairment charges for the three months ended September 29, 2019 primarily consisted of termination benefits (net of credits resulting from changes in estimates) related to several restructuring programs.
Restructuring and impairment charges for the nine months ended September 29, 2019 primarily related to $11.8 million in termination benefits mostly incurred in connection with the 2019 Footprint realignment plan 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.
Interest expense
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
 (Dollars in millions)
Interest expense$19.5  $27.2  $63.0  $79.8  
Average interest rate on debt3.4 %4.5 %3.6 %4.4 %
The decrease in interest expense for the three and nine months ended September 29, 2019 compared to the respective prior year periods was primarily due to a reduction in our average interest rate as a result of our cross-currency swap agreements.
Taxes on income from continuing operations
 Three Months EndedNine Months Ended
 September 29, 2019September 30, 2018September 29, 2019September 30, 2018
Effective income tax rate(132.3)%(2.3)%(48.4)%11.8 %
The effective income tax rate for the three and nine months ended September 29, 2019 was (132.3)% and (48.4)%, respectively, and (2.3)% and 11.8% for the three and nine months ended September 30, 2018, respectively. The effective income tax rates for the three and nine months ended September 29, 2019 reflect a discrete tax benefit of $129 million resulting from a non-U.S. legal entity restructuring that eliminated the requirement to provide for foreign withholding taxes on the future repatriation of certain non-permanently reinvested earnings. The effective tax rates for the three and nine ended September 30, 2018 include a tax benefit associated
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with asset impairment charges. In addition, the income tax rate for the nine months ended September 30, 2018 reflects non-deductible termination benefits and other costs incurred in connection with the 2018 Footprint realignment plan as described in Note 5 to the condensed consolidated financial statements included in this report.statements.
Segment Financial Information
Segment net revenuesSegment net revenuesSegment net revenues
Three Months EndedNine Months Ended Three Months Ended
September 29, 2019September 30, 2018% Increase/
(Decrease)		September 29, 2019September 30, 2018% Increase/
(Decrease)		 March 29, 2020March 31, 2019% Increase/
(Decrease)
(Dollars in millions)(Dollars in millions)
AmericasAmericas$374.5  $338.7  10.6  $1,092.3  $993.5  10.0  Americas$358.0  $344.0  4.1  
EMEAEMEA140.5  139.6  0.7  442.1  452.9  (2.4) EMEA156.1  154.6  1.0  
AsiaAsia77.9  76.5  1.7  213.9  207.1  3.2  Asia53.1  60.8  (12.6) 
OEMOEM55.4  54.9  1.1  166.1  153.3  8.4  OEM63.4  54.2  16.9  
Segment net revenuesSegment net revenues$648.3  $609.7  6.3  $1,914.4  $1,806.8  6.0  Segment net revenues$630.6  $613.6  2.8  
Segment operating profitSegment operating profitSegment operating profit
Three Months EndedNine Months Ended Three Months Ended
September 29, 2019September 30, 2018% Increase/
(Decrease)		September 29, 2019September 30, 2018% Increase/
(Decrease)		 March 29, 2020March 31, 2019% Increase/
(Decrease)
(Dollars in millions)(Dollars in millions)
AmericasAmericas$81.4  $68.6  18.7  $229.5  $174.8  31.3  Americas$141.0  $65.6  114.9  
EMEAEMEA21.8  21.9  (0.4) 69.7  80.2  (13.2) EMEA20.4  27.0  (24.4) 
AsiaAsia21.5  20.9  3.0  50.7  55.0  (7.7) Asia10.2  10.0  2.5  
OEMOEM16.0  15.0  6.4  43.2  37.6  14.9  OEM15.1  13.3  13.3  
Segment operating profit (1)
Segment operating profit (1)
$140.7  $126.4  11.3  $393.1  $347.6  13.1  
Segment operating profit (1)
$186.7  $115.9  61.1  
(1)See Note 1514 to our condensed consolidated financial statements included in this report for a reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest, loss on extinguishment of debt and taxes.
Comparison of the three and nine months ended SeptemberMarch 29, 20192020 and September 30, 2018March 31, 2019
Americas
Americas net revenues for the three and nine months ended SeptemberMarch 29, 20192020 increased $35.8$14.0 million, or 10.6%4.1%, and $98.8 million, or 10.0%, respectively, compared to the prior year periods.period. The increases wereincrease was primarily attributable to increasesa $12.7 million increase in sales volumesvolume of existing products, of $29.9 million and $81.0 million for the three and nine months ended September 29, 2019, respectively, and increasesmostly in interventional urology, as well as an increase in new productsproduct sales, which were partially offset by a decrease in both periods.revenues caused by the COVID-19 pandemic.
Americas operating profit for the three months ended SeptemberMarch 29, 20192020 increased $12.8$75.4 million, or 18.7%114.9%, compared to the prior year period. The increase was primarily attributable to a decrease in the fair value of our contingent consideration liabilities and, to a lesser extent, an increase in gross profit resulting from higher sales.
EMEA
EMEA net revenues for the three months ended March 29, 2020 increased $1.5 million, or 1.0%, compared to the prior year period. The increase was primarily attributable to a $6.1 million increase in sales volumes of existing products, inclusive of a benefit from the COVID-19, partially offset by unfavorable fluctuations in foreign currency exchange rates of $4.2 million.
EMEA operating profit for the three months ended March 29, 2020 decreased $6.6 million, or 24.4%, compared to the prior year period. The decrease was primarily attributable to unfavorable fluctuations in foreign currency exchange rates and an increase in research and development expenses inclusive of higher EU MDR related costs. The decreases in operating profit were partially offset by lower general and administrative expenses.
Asia
Asia net revenues for the three months ended March 29, 2020 decreased $7.7 million, or 12.6%, compared to the prior year period. The decrease was primarily attributable to a $7.3 million decrease in sales volumes of existing products, inclusive of the negative impact from the COVID-19 pandemic, and unfavorable fluctuations in foreign currency exchange rates.
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Asia operating profit for the three months ended March 29, 2020 increased $0.2 million, or 2.5%, compared to the prior year period. The increase was primarily attributable to lower general and administrative expenses partially offset by the impact of unfavorable fluctuations in foreign currency exchange rates and a decrease in gross profit resulting from lower sales.
OEM
OEM net revenues for the three months ended March 29, 2020 increased $9.2 million, or 16.9%, compared to the prior year period. The increase was primarily attributable to net revenues of $5.0 million generated from our acquisition of HPC and a $4.2 million increase in sales volumes of existing products.
OEM operating profit for the three months ended March 29, 2020 increased $1.8 million, or 13.3% compared to the prior year period. The increase was primarily attributable to an increase in gross profit resulting from higher sales partially offset by higher operating expenses, principally selling expenses incurred to support higher sales, as well as other administrative expenses.
Americas operating profit forin connection with the nine months ended September 29, 2019 increased $54.7 million, or 31.3%, compared to the prior year period. The increase was primarily attributable to an increase in gross profit resulting from higher sales partially offset by higher operating expenses, primarily selling expenses incurred to support the higher sales.
EMEA
EMEA net revenues for the three months ended September 29, 2019 increased $0.9 million, or 0.7%, compared to the prior year period. The increase was primarily attributable to increases in sales volumes of existing products of $3.4 million, new product sales and net revenues generated by acquired businesses, which were partially offset by unfavorable fluctuations in foreign currency exchange rates of $5.9 million.
EMEA net revenues for the nine months ended September 29, 2019 decreased $10.8 million, or 2.4%, compared to the prior year period. The decrease was primarily attributable to unfavorable fluctuations in foreign currency exchange rates of $27.0 million partially offset by increases in sales volumes of existing products and new product sales as well as net revenues generated by acquired businesses.
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EMEA operating profit for the three months ended September 29, 2019 decreased $0.1 million, or 0.4%, compared to the prior year period. The decrease was primarily attributable to higher operating expenses partially offset by the gross profit generated from higher sales and favorable fluctuations in foreign currency exchange rates.
EMEA operating profit for the nine months ended September 29, 2019 decreased $10.5 million, or 13.2%, 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 the gross profit generated from higher sales.
Asia
Asia net revenues for the three months ended September 29, 2019 increased $1.4 million, or 1.7%, compared to the prior year period. The increase was primarily attributable to price increases of $1.7 million and an increase in sales volumes of existing products partially offset by unfavorable fluctuations in foreign currency exchange rate of $2.4 million.
Asia net revenues for the nine months ended September 29, 2019 increased $6.8 million, or 3.2%, compared to the prior year period. The increase was primarily attributable to a $8.0 million increase in sales volumes of existing products and, to a lesser extent, price increases, an increase in new product sales and net revenues generated by acquired businesses. The increases were partially offset by unfavorable fluctuations in foreign currency exchange rates of $9.9 million.
Asia operating profit for the three months ended September 29, 2019 increased $0.6 million, or 3.0%, compared to the prior year period. The increase was primarily attributable to the gross profit generated from higher sales partially offset by increased tariffs in China and higher operating expenses.
Asia operating profit for the nine months ended September 29, 2019 decreased $4.3 million, or 7.7%, compared to the prior year period. The decrease was primarily attributable to the impact of increased tariffs in China, higher operating expenses and unfavorable fluctuations in foreign currency exchange rates. The decreases in operating profit were partially offset by the gross profit generated from higher sales.
OEM
OEM net revenues for the three and nine months ended September 29, 2019 increased $0.5 million, or 1.1%, and $12.8 million, or 8.4%, respectively, compared to the prior year periods. The increases in both periods were primarily attributable to increases in sales volumes of existing products.
OEM operating profit for the three and nine months ended September 29, 2019 increased $1.0 million, or 6.4%, and $5.6 million, or 14.9%, respectively, compared to the prior year period. The increases in both periods were primarily attributable to increases in gross profit resulting from higher sales partially offset by higher operating costs.HPC acquisition.


Liquidity and Capital Resources
WeWhile the potential economic impact resulting from the COVID-19 pandemic and the duration of the pandemic's impact are difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.In consideration of the significant uncertainty created by the COVID-19 pandemic, we are continuing to assess our liquidity and anticipated capital requirements. Notwithstanding the significant uncertainty created by the COVID-19 pandemic, we believe our cash flow from operations, available cash and cash equivalents and borrowings under our revolving credit facility will enable us to fund our operating requirements, capital expenditures and debt obligations for the next 12 months and the foreseeable future. We have net cash provided by United States based operating activities as well as non-United States sources of cash available to help fund our debt service requirements in the United States. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost effective basis.
In consideration of the COVID-19 pandemic, we are closely monitoring our receivables and payables.To date, we have not experienced significant payment defaults by, or identified other collectability concerns with, our customers, and we have sufficient lending commitments in place to enable us to fund our anticipated additional operating needs.
Cash Flows
Cash flows fromNet cash used in operating activities from continuing operations provided net cash of approximately $289.2was $11.5 million for the ninethree months ended SeptemberMarch 29, 20192020 as compared to $302.9net cash provided by operating activities of $60.2 million for the ninethree months ended September 30, 2018.March 31, 2019. The $13.7$71.7 million decrease was primarily attributable to an increase in contingent consideration payments of $26.1payments. Additionally, for the three months ended March 29, 2020, we made a $10.0 million pension contribution and the net unfavorable impact of changes in working capital partially offset by favorable operating results. The net unfavorable impact from changes in working capital was primarily due to a nethad an increase in inventoriespayroll and a net decrease in accounts payable, accrued expenses and other liabilities.
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The increase in inventories for the nine months ended September 29, 2019 was $53.3 million compared to an increase of $19.7 million for nine months ended September 30, 2018. The net increase in inventories for the nine months ended September 29, 2019benefit related payments as compared to the corresponding period in 2018 was attributable to higher inventory purchases to support ongoing business growth and to achieve desired safety stock levels. The net decrease in accounts payable, accrued expenses and other liabilities for the nine months ended September 29, 2019 was $31.6 million compared to an increase of $54.6 million for nine months ended September 30, 2018. The decrease was attributable principally to a decrease in restructuring activity related to the 2018 Footprint realignment plan partially offset by higher payroll related accruals.prior year period.
Net cash used in investing activities from continuing operations was $73.6$284.4 million for the ninethree months ended SeptemberMarch 29, 2019,2020, which included a $260.0 million payment for the acquisition of HPC as well as capital expenditures of $83.8$19.7 million.
Net cash provided by financing activities from continuing operations was $405.3 million partially offsetfor the three months ended March 29, 2020, which reflected a net increase in borrowings of $485.0 million. The cash received from the increase in borrowings was utilized to fund the $260.0 million acquisition of HPC; to increase our available cash on hand by proceeds from cross-currency swap agreements designated$150.0 million to strengthen our liquidity as net investment hedges of $8.3 million.
a precautionary measure in response to the COVID-19 pandemic; and to help fund the NeoTract contingent consideration payment. Net cash used in financing activities from continuing operations was $310.5 million for the ninethree months ended SeptemberMarch 29, 2019, which reflected a net decrease in borrowings of $160.5 million,2020 also reflects contingent consideration payments of $112.0$60.9 million and dividend payments of $47.1$15.8 million.
Borrowings

On October 31, 2019,March 30, 2020, we issued a notice of redemptionincreased our borrowing capacity related to holders of our 2024 Notes. Pursuantaccounts receivable securitization facility from $50 million to the notice of redemption, the 2024 Notes will be redeemed on November 15, 2019 at a redemption price equal to 102.625% of the principal amount of the 2019 Notes plus accrued and unpaid interest to, but not including, the Redemption Date (the "Redemption Price"). We plan to fund the redemption using available borrowings under our revolving credit agreement, and the notice of redemption provides that the redemption is subject to the condition that we are able to borrow funds under its revolving credit agreement on the Redemption Date in an amount sufficient to pay the Redemption Price.

On April 5, 2019, we entered into an amended and restated credit agreement (the "Credit Agreement"), which provides for a $1.0 billion revolving credit facility and a $700 million term loan facility, each of which matures on April 5, 2024. The Credit Agreement replaces a previous credit agreement under which we were provided a $1.0 billion credit facility and a $750 million term loan facility, due 2022 (the “prior term loan”). The $700 million term loan facility under the Credit Agreement principally was applied against the remaining $675 million principal balance of the prior term loan.

At our 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 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 in each case an applicable margin ranging from 0.125% to 1.00%, in each case subject to adjustments based on our consolidated total net leverage ratio (generally, Consolidated Total Funded Indebtedness (which is net of “Qualified Cash”), as defined in the Credit Agreement on the date of determination to Consolidated EBITDA, as defined in the Credit Agreement, for the four most recent fiscal quarters ending on or preceding the date of determination). Overdue loans will bear interest at the rate otherwise applicable to such loans plus 2.00%.

$75 million.
The Credit Agreement contains covenants that, among other things and subject to certain exceptions, place limitations on our ability, and the ability of our subsidiaries, to incur additional indebtedness; create additional liens; enter into a merger, consolidation or amalgamation or other defined "fundamental changes," dispose of certain assets, make certain investments or acquisitions, pay dividends, or make other restricted payments, enter into swap agreements or enter into transactions with our affiliates. Additionally, the Credit Agreement contains financial covenants that, subject to specified exceptions, require us to maintain a consolidated total net leverage ratio of not more than 4.50 to 1.00 and a consolidated interest coverage ratio (generally, Consolidated EBITDA for the four most recent fiscal quarters ending on or preceding the date of determination to Consolidated Interest Expense, as defined in the Credit Agreement, paid in cash for such period) of not less than 3.50 to 1.00.

For additional information regarding the Credit Agreement, see Note 9 to the condensed consolidated financial statements included in this report.

The indentures governing our 5.25% Senior Notes due 2024 (the “2024 Notes”) and 4.875% Senior Notes due 2026 (the "2026 Notes") contain covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to incur additional debt or issue preferred stock or other
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issue preferred stock or other disqualified stock, create liens, merge, consolidate, or dispose of certain assets, pay dividends, make investments or make other restricted payments, or enter into transactions with our affiliates. The indenture governing our 4.625% Senior Notes due 2027 (the “2027 Notes”) contains covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to create liens; consolidate, merge or dispose of certain assets; and enter into sale leaseback transactions.
As of SeptemberMarch 29, 2019,2020, we were in compliance with these requirements. The obligations under the Credit Agreement, the 2024 Notes, the 2026 Notes and the 2027 Notes are guaranteed (subject to certain exceptions) by substantially all of our material domestic subsidiaries, and the obligations under the Credit Agreement are (subject to certain exceptions and limitations) secured by a lien on substantially all of the assets owned by us and each guarantor.
Summarized Financial Information – Obligor Group
Our $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 together with 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 is guaranteed, jointly and severally, by an enumerated group of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. Summarized financial information for the Parent and Guarantor Subsidiaries (collectively, the “Obligor Group”) as of March 29, 2020 and December 31, 2019 and for the three months ended March 29, 2020 is as follows:
Three Months Ended
March 29, 2020
(Dollars in millions)
Obligor GroupIntercompanyObligor Group
(excluding Intercompany)
Net revenue$444.2  $55.5  $388.7  
Cost of goods sold260.7  73.5  187.2  
Gross profit183.5  (18.0) 201.5  
Income from continuing operations81.9  2.3  79.6  
Net income81.9  2.3  79.6  

March 29, 2020December 31, 2019
(Dollars in millions)
Obligor GroupIntercompanyObligor Group
(excluding Intercompany)		Obligor GroupIntercompanyObligor Group
(excluding Intercompany)
Total current assets$864.2  $63.9  $800.3  $735.8  $51.8  $684.0  
Total assets5,116.3  1,389.0  3,727.3  4,847.9  1,237.7  3,610.2  
Total current liabilities707.8  515.4  192.4  852.5  500.8  351.7  
Total liabilities3,963.5  797.9  3,165.6  3,659.5  752.4  2,907.1  
The same accounting policies as described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 are used by the Parent Company and each of its subsidiaries in connection with the summarized financial information presented above. The Intercompany column in the table above represents transactions between and among the Obligor Group and non-guarantor subsidiaries (i.e. those subsidiaries of the Parent Company that have not guaranteed payment of the Senior Notes). Obligor investments in non-guarantor subsidiaries and any related activity are excluded from the financial information presented above.
Critical Accounting Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
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In our Annual Report on Form 10-K for the year ended December 31, 2018,2019, we provided disclosure regarding our critical accounting estimates, which are reflective of significant judgments and uncertainties, are important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions and conditions.
New Accounting Standards
See Note 2 to the condensed consolidated financial statements included in this report for a discussion of recently issued accounting guidance, including estimated effects, if any, of adoption of the guidance on our financial statements.
Forward-Looking Statements
All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. These statements are not guarantees of future performance and are subject to risks and uncertainties, which are difficult to predict. Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward-looking statements due to a number of factors, including the adverse economic conditions associated with the COVID-19 global health pandemic and the associated financial crisis, stay-at-home and other orders, which could cause material delays and cancellations of elective procedures, curtailed or delayed spending by customers and result in disruptions to our supply chain, closure of our facilities, delays in product launches or diversion of management and other resources to respond to the COVID-19 pandemic; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that the COVID-19 pandemic disrupts local economies and causes economies to enter prolonged recessions; changes in business relationships with and purchases by or from major customers or suppliers; delays or cancellations of shipments; demand for and market acceptance of new and existing products; our inability to provide products to our customers, which may be due to, among other things, events that impact key distributors, suppliers and vendors that sterilize our products; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; our inability to effectively execute our restructuring plans and programs; our inability to realize anticipated savings from restructuring plans and programs; the impact of enacted healthcare reform legislation and proposals to amend, replace or repeal the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; the impact of tax legislation and related regulations; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; global economic factors, including currency exchange rates, interest rates, trade disputes and sovereign debt issues; difficulties in entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2019. 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the information set forth in Part II, Item 7A of the Company’sour Annual Report on Form 10-K for the year ended December 31, 2018 and in Part I, Item 3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide
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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.
(b) Change in Internal Control over Financial Reporting
No change in our internal control over financial reporting occurred during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
 
Item 1. Legal Proceedings
We are party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability and product warranty, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of SeptemberMarch 29, 20192020 and December 31, 2018,2019, we have accrued liabilities of approximately $0.2$0.3 million and $0.6$0.4 million, respectively, in connection with these matters, representing our best estimate of the cost within the range of estimated possible loss that will be incurred to resolve these matters. 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
See the information set forth in Part I, Item 1A of the Company’sour Annual Report on Form 10-K for the year ended December 31, 2018.2019. There have been no significant changes in risk factors for the quarter ended SeptemberMarch 29, 2019,2020 except as follows:
Disruptionsset forth below. The risk factor set forth below replaces in sterilization ofits entirety the risk factor in our products by third-party vendors or regulatory initiatives further restrictingAnnual Report on Form 10-K with the use of ethylene oxide in sterilization facilities could adversely affect ourtitle “Our results of operations and financial condition.condition may be adversely affected by public health epidemics, including the novel coronavirus reported to have originated in Wuhan, China”:
ManyOur results of operations and financial condition may be adversely affected by public health epidemics, including the ongoing COVID-19 global health pandemic.

On March 11, 2020, the World Health Organization declared the global outbreak of COVID-19 to be a pandemic. The COVID-19 pandemic has significantly impacted economic activity and markets around the world. If the pandemic continues and conditions worsen, it could negatively impact our business, results of operations, financial condition and liquidity in numerous ways, including, but not limited to, those outlined below:
•It has resulted, and we expect it will continue to result, in lower revenues in certain of our product categories, including our interventional urology (which revenues are primarily concentrated in our Americas segment), interventional and surgical product categories, in which we sell products require sterilization prior to sale, and we utilize third-party vendors to sterilize our products. A common method for sterilizing medical products involves the use of ethylene oxide,largely utilized in elective procedures, which is listed as a hazardous air pollutant under the Clean Air Act, as amended, and emissions of which are regulated by the U.S. Environmental Protection Agency and other regulatory authorities. One of our contract sterilizers, Sterigenics U.S., LLC, uses ethylene oxide in its sterilization process, including at its facility in Smyrna, Cobb County, Georgia, which has sterilized some of our surgical, intermittent catheter and OEM products. In August 2019, the Georgia Environmental Protection Division (EPD) approved Sterigenics’ plans to install new controls designed to reduce ethylene oxide emissions at the Smyrna facility, and, thereafter, Sterigenics commenced installation of the new controls. In October 2019, Cobb County officials revoked a construction permit relatinghave been significantly reduced or suspended due to the Smyrna facility and issued a formal notice requiring Sterigenics to obtain a new certificate of occupancy for the facility, resultingpandemic.
•It has resulted in the continued suspension of operations at the Smyrna facility, which Sterigenics previously had suspended during the installation period. In addition, the EPD issued a notice to Sterigenics requesting additional information and requiring that additional emissions testing be conducted at the facility. As a result of these developments,higher revenues in our ability to provide the affected products to our customers has been impaired. We are pursuing various measures to enable us to continue to provide the affected products to our customers, including identifying alternate sterilization facilities, provisioning substitute products and instituting targeted global inventory management procedures.respiratory product category. However, we cannot provide assurance that any of these initiatives will be successful. In particular, our ability to utilize alternate sterilization facilities may be delayed due to regulations and requirements of the U.S. Food and Drug Administration and other regulatory authorities, as well as due to capacity constraints. Based on currently available information, we believe that the suspension of operations at Sterigenics’ Smyrna facility will adversely affect our revenues by approximately $9 million during the fourth quarter of 2019. In addition, while we are working to identify alternate sterilization facilities for the affected product, if operations at the Smyrna facility remain suspended and we are unable to find adequate sterilization capacitypredict how long this sustained demand will last or how significant it will be.
•It may cause disruptions in the manufacture of our products. We currently rely on our 35 manufacturing sites, with major manufacturing operations located in the Czech Republic, Germany, Malaysia, Mexico and the U.S., to manufacture our products. The COVID-19 pandemic, and/or the governmental or regulatory actions taken in response to COVID-19 pandemic, may interfere with our ability, or that of our employees or suppliers to perform our and their respective responsibilities and obligations relative to the conduct of our business and create a risk to our ability to manufacture our products in a timely manner, or at an alternate facility or facilities, weall. We have experienced and expect the suspension of operations at the Smyrna facility willto continue to adversely affectexperience inefficiencies in our revenuesmanufacturing operations due to government restrictions placed on facilities in 2020.
certain locations primarily in Asia. Additionally, we have experienced and continue to experience a higher than normal level of absenteeism across our global manufacturing sites. In addition, on October 10, 2019,an effort to increase the attorneys generalwider availability of 15 states andneeded medical device products, we may elect to, or the District of Columbia sent a lettergovernment may require us to, allocate manufacturing capacity (for example, pursuant to the EPA urgingU.S. Defense Production Act) in a way that the EPA promptly proposeadversely affects our regular operations and finalize stricter standards for ethylene oxide emissions. Amongfinancial results, results in differential treatment of customers and/or adversely affects our customer relationships and reputation.
•While we have not experienced significant payment defaults by, or identified other things, the attorneys general stated that the current EPA standard for ethylene oxide failssignificant collectability concerns with, our customers to adequately protect workers and communities, and that the usedate, we may be adversely impacted by delays in payments of ethylene oxide, particularly in the medical device sterilization industry, must be reduced. Weoutstanding receivables if our customers experience financial difficulties or are unable to predict the manner inborrow money to fund their operations, which the EPA will respond to the letter. Any additional regulatory restrictions on the emission of ethylene oxide by sterilization facilities might impair ourmay adversely impact their ability to provide sufficient quantitiespay for our products on a timely basis, if at all.
•The COVID-19 pandemic, including related illness, border closures, travel restrictions, quarantines, lockdowns or other workforce disruptions, could disrupt our suppliers or our suppliers’ suppliers and/or the distribution of sterilizedour products, towhether through our customers and compel usdirect sales force or our distributors. These disruptions, or our failure to seek sterilization alternatives that do not entail the use of ethylene oxide. We cannot assure that we would be able to identify such alternatives.

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Inrespond to them, could increase manufacturing or distribution costs or cause delays in delivering, or an inability to deliver, products to our customers.
•The COVID-19 pandemic has increased volatility and pricing in the eventcapital markets, and volatility if likely to continue. We might not be able to continue to access preferred sources of liquidity when we were to experience any further disruptions inwould like, and our ability to sterilize our products, whether due to capacity constraints or regulatoryborrowing costs could increase.
These and other impacts of the COVID-19 pandemic, or other impediments (including, amongpandemics or epidemics, could have the effect of heightening many of the other things, regulatory initiatives directed generallyrisks described in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2019. We might not be able to sterilization facilities that utilize ethylene oxide),predict or we are unablerespond to transition to alternative facilities inall impacts on a timely basis to prevent near- or cost effective manner, we could experience a materiallong-term adverse impact with respectimpacts to our results. The severity, magnitude and duration of the COVID-19 pandemic is uncertain, rapidly changing and hard to predict. We do not yet know the full extent of potential delays or impacts on our business, our results of operations or financial condition or on healthcare systems or the global economy as a whole. However, these effects could have an adverse impact on our liquidity, capital resources, operations and financial condition.business and those of the third parties on which we rely, and such impact could be material.

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

Item 3. Defaults Upon Senior Securities
Not applicable.

Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information
Not applicable.

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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this report:
 
Exhibit No.    Description
+10.1
—
+10.2
—
+10.3
—
+10.4
—
+10.5
—

22
—
 
31.1
 
—
  
 
31.2
 
—
  
 
32.1
 
—
  

32.2
 
—
  
 
101.1
 
—
  The following materials from the Company’sour Quarterly Report on Form 10-Q for the quarter ended SeptemberMarch 29, 2019,2020, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Cover Page; (ii) the Condensed Consolidated Statements of Income for the three and nine months ended SeptemberMarch 29, 20192020 and September 30, 2018;March 31, 2019; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended SeptemberMarch 29, 20192020 and September 30, 2018;March 31, 2019; (iv) the Condensed Consolidated Balance Sheets as of SeptemberMarch 29, 20192020 and December 31, 2018;2019; (v) the Condensed Consolidated Statements of Cash Flows for the ninethree months ended SeptemberMarch 29, 20192020 and September 30, 2018;March 31, 2019; (vi) the Condensed Consolidated Statements of Changes in Equity for the ninethree months ended SeptemberMarch 29, 20192020 and September 30, 2018;March 31, 2019; and (vii) Notes to Condensed Consolidated Financial Statements.
 
104.1
 
—
The cover page of the Company's Quarterly Report on Form 10-Q for the quarter ended SeptemberMarch 29, 2019,2020, formatted in inline XBRL (included in Exhibit 101.1).

+ Indicates management contract or compensatory plan or arrangement required to be filed pursuant to Item 15(b) of this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  TELEFLEX INCORPORATED
   
  By: /s/ 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: October 31, 2019April 30, 2020

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