Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 16, 2019 | |
Document Document And Entity Information [Abstract] | ||
Entity Registrant Name | INTUITIVE SURGICAL INC | |
Trading Symbol | ISRG | |
Entity Central Index Key | 0001035267 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 115,448,658 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 875.7 | $ 857.9 |
Short-term investments | 1,933 | 2,205.2 |
Accounts receivable, net | 547.6 | 682.3 |
Inventory | 468.3 | 409 |
Prepaids and other current assets | 200.4 | 178.8 |
Total current assets | 4,025 | 4,333.2 |
Property, plant, and equipment, net | 935.4 | 812 |
Long-term investments | 2,255.9 | 1,771.3 |
Deferred tax assets | 392.4 | 428.6 |
Intangible and other assets, net | 378.7 | 261 |
Goodwill | 247.5 | 240.6 |
Total assets | 8,234.9 | 7,846.7 |
Current liabilities: | ||
Accounts payable | 130.6 | 100.7 |
Accrued compensation and employee benefits | 125.1 | 193.8 |
Deferred revenue | 298.4 | 294.3 |
Other accrued liabilities | 186.1 | 231.8 |
Total current liabilities | 740.2 | 820.6 |
Other long-term liabilities | 454.3 | 338.6 |
Total liabilities | 1,194.5 | 1,159.2 |
Contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock, 2.5 shares authorized, $0.001 par value, issuable in series; no shares issued and outstanding as of March 31, 2019, and December 31, 2018 | 0 | 0 |
Common stock, 300.0 shares authorized, $0.001 par value, 115.4 shares and 114.5 shares issued and outstanding as of March 31, 2019, and December 31, 2018, respectively | 0.1 | 0.1 |
Additional paid-in capital | 5,328.8 | 5,170.3 |
Retained earnings | 1,696 | 1,521.7 |
Accumulated other comprehensive loss | (0.7) | (13.3) |
Total Intuitive Surgical, Inc. stockholders’ equity | 7,024.2 | 6,678.8 |
Noncontrolling interest in joint venture | 16.2 | 8.7 |
Total stockholders’ equity | 7,040.4 | 6,687.5 |
Total liabilities and stockholders’ equity | $ 8,234.9 | $ 7,846.7 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 2,500,000 | 2,500,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 115,400,000 | 114,500,000 |
Common stock, shares outstanding (in shares) | 115,400,000 | 114,500,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Total revenue | $ 973.7 | $ 847.5 |
Cost of revenue: | ||
Total cost of revenue | 304.1 | 253.7 |
Gross profit | 669.6 | 593.8 |
Operating expenses: | ||
Selling, general and administrative | 273.4 | 221.6 |
Research and development | 144 | 95.5 |
Total operating expenses | 417.4 | 317.1 |
Income from operations | 252.2 | 276.7 |
Interest and other income, net | 27.5 | 13.2 |
Income before taxes | 279.7 | 289.9 |
Income tax expense (benefit) | (24.3) | 2.6 |
Net income | 304 | 287.3 |
Less: net loss attributable to noncontrolling interest in joint venture | (2.5) | (0.3) |
Net income attributable to Intuitive Surgical, Inc. | $ 306.5 | $ 287.6 |
Net income per share attributable to Intuitive Surgical, Inc.: | ||
Basic (in dollars per share) | $ 2.67 | $ 2.55 |
Diluted (in dollars per share) | $ 2.56 | $ 2.44 |
Shares used in computing net income per share attributable to Intuitive Surgical, Inc.: | ||
Basic (in shares) | 115 | 112.8 |
Diluted (in shares) | 119.6 | 118 |
Total comprehensive income attributable to Intuitive Surgical, Inc. | $ 319.1 | $ 285 |
Product | ||
Revenue: | ||
Total revenue | 799.8 | 694.8 |
Cost of revenue: | ||
Total cost of revenue | 246.4 | 201.5 |
Service | ||
Revenue: | ||
Total revenue | 173.9 | 152.7 |
Cost of revenue: | ||
Total cost of revenue | $ 57.7 | $ 52.2 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 304 | $ 287.3 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and loss on disposal of property, plant, and equipment | 31.6 | 23.7 |
Amortization of intangible assets | 10 | 2.6 |
Loss (gain) on investments, accretion, and amortization, net | (1.2) | 4.7 |
Deferred income taxes | 32.9 | 37.4 |
Share-based compensation expense | 76.1 | 57.5 |
Amortization of contract acquisition asset | 2.8 | 2.7 |
Changes in operating assets and liabilities, net of effects of acquisition: | ||
Accounts receivable | 134.6 | 33 |
Inventory | (94) | (66.2) |
Prepaids and other assets | (62.7) | (20.6) |
Accounts payable | 23 | 8.4 |
Accrued compensation and employee benefits | (68.7) | (64) |
Deferred revenue | (0.5) | 11.4 |
Other liabilities | (54.7) | (37.7) |
Net cash provided by operating activities | 333.2 | 280.2 |
Investing activities: | ||
Purchase of investments | (992.3) | (433.7) |
Proceeds from sales of investments | 44.4 | 226.6 |
Proceeds from maturities of investments | 755.1 | 300.8 |
Purchase of property, plant, and equipment and intellectual property | (114.8) | (40.1) |
Acquisition of businesses, net of cash | (1.3) | 0 |
Net cash provided by (used in) investing activities | (308.9) | 53.6 |
Financing activities: | ||
Proceeds from issuance of common stock relating to employee stock plans | 88.8 | 86.2 |
Taxes paid related to net share settlement of equity awards | (138.6) | (102.5) |
Capital contribution from noncontrolling interest | 10 | 8 |
Other financing activities | (2) | 0 |
Net cash used in financing activities | (41.8) | (8.3) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (1.2) | 1 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (18.7) | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 326.5 | |
Cash, cash equivalents, and restricted cash, beginning of period | 909.4 | 663.2 |
Cash, cash equivalents, and restricted cash, end of period | $ 890.7 | $ 989.7 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESS Intuitive Surgical, Inc. (“Intuitive” or the “Company”) develops, manufactures, and markets the da Vinci ® Surgical System and the Ion TM endoluminal system. The Company’s products and related services enable physicians and healthcare providers to improve the quality of and access to minimally invasive care. The da Vinci Surgical System consists of a surgeon console or consoles, a patient-side cart, a high-performance vision system, and proprietary instruments and accessories. The Ion endoluminal system is a flexible robotic-assisted catheter-based platform that utilizes instruments and accessories for lung biopsies. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) of Intuitive Surgical, Inc. and its wholly- and majority-owned subsidiaries have been prepared on a consistent basis with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2018 , and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and therefore, omit certain information and footnote disclosure necessary to present the Financial Statements in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”). These Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 , which was filed with the SEC on February 4, 2019. The results of operations for the first three months of fiscal year 2019 are not necessarily indicative of the results to be expected for the entire fiscal year or any future periods. The Financial Statements include the results and the balances of the Company’s majority-owned joint venture (referred to herein as the “Joint Venture”) with Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”). The Company holds a controlling financial interest in the Joint Venture and the noncontrolling interest is reflected as a separate component of consolidated stockholders’ equity. The noncontrolling interest’s share of the earnings in the Joint Venture is presented separately in the consolidated statements of income. Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“Topic 842”), which amended prior accounting standards for leases. The Company adopted Topic 842 on January 1, 2019, using the alternative modified transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. There was no cumulative-effect adjustment recorded on January 1, 2019. Please see the description of the Company’s “Leases” accounting policy in the “Significant Accounting Policies” section below. The Company elected the following practical expedients when assessing the transition impact from both the lessee and lessor perspectives: (i) not to reassess whether any expired or existing contracts as of January 1, 2019, are or contain leases; (ii) not to reassess the lease classification for any expired or existing leases as of January 1, 2019; (iii) not to reassess initial direct costs for any existing leases as of January 1, 2019; and (iv) not to reassess whether land easements meet the definition of a lease. The primary impact for the Company was the balance sheet recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases as a lessee. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU No. 2018-15, Intangibles (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard also requires customers to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The Company early adopted this standard, as of January 1, 2019, on a prospective basis for applicable implementation costs. The adoption did not have a material impact on the Company's financial position and the results of operations in the first quarter of 2019. Significant Accounting Policies With the exception of the change for the accounting of leases as a result of the adoption of Topic 842, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 , that are of significance, or potential significance, to the Company. Leases The Company determines if an arrangement contains a lease at inception. For arrangements where the Company is the lessee, operating leases are included in intangible and other assets, net; other accrued liabilities; and other long-term liabilities on the Condensed Consolidated Balance Sheet as of March 31, 2019. The Company currently does not have any finance leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as the Company’s leases generally do not provide an implicit rate. Lease terms may include options to extend or terminate when the Company is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company also has lease arrangements with lease and non-lease components. The Company elected the practical expedient not to separate non-lease components from lease components for the Company’s real estate and automobile leases. Additionally, the Company applied a portfolio approach to effectively account for the operating lease ROU assets and lease liabilities for the Company’s automobile leases. The Company elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for short-term leases. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Cash, Cash Equivalents, and Investments The following tables summarize the Company’s cash and available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents, short-term, or long-term investments as of March 31, 2019 , and December 31, 2018 (in millions): Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short- term Investments Long- term Investments March 31, 2019 Cash $ 251.5 $ — $ — $ 251.5 $ 251.5 $ — $ — Level 1: Money market funds 609.2 — — 609.2 609.2 — — U.S. treasuries 1,582.2 3.7 (3.0 ) 1,582.9 12.0 794.0 776.9 Subtotal 2,191.4 3.7 (3.0 ) 2,192.1 621.2 794.0 776.9 Level 2: Commercial paper 97.3 — — 97.3 3.0 94.3 — Corporate debt securities 1,786.5 7.3 (1.7 ) 1,792.1 — 679.7 1,112.4 U.S. government agencies 709.1 0.6 (2.1 ) 707.6 — 360.3 347.3 Municipal securities 23.9 0.1 — 24.0 — 4.7 19.3 Subtotal 2,616.8 8.0 (3.8 ) 2,621.0 3.0 1,139.0 1,479.0 Total assets measured at fair value $ 5,059.7 $ 11.7 $ (6.8 ) $ 5,064.6 $ 875.7 $ 1,933.0 $ 2,255.9 Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short- term Investments Long- term Investments December 31, 2018 Cash $ 269.4 $ — $ — $ 269.4 $ 269.4 $ — $ — Level 1: Money market funds 569.1 — — 569.1 569.1 — — U.S. treasuries 1,477.8 1.7 (5.3 ) 1,474.2 10.0 897.8 566.4 Subtotal 2,046.9 1.7 (5.3 ) 2,043.3 579.1 897.8 566.4 Level 2: Commercial paper 110.7 — — 110.7 1.4 109.3 — Corporate debt securities 1,607.8 1.3 (4.8 ) 1,604.3 8.0 724.5 871.8 U.S. government agencies 791.8 0.3 (3.8 ) 788.3 — 468.9 319.4 Municipal securities 18.4 — — 18.4 — 4.7 13.7 Subtotal 2,528.7 1.6 (8.6 ) 2,521.7 9.4 1,307.4 1,204.9 Total assets measured at fair value $ 4,845.0 $ 3.3 $ (13.9 ) $ 4,834.4 $ 857.9 $ 2,205.2 $ 1,771.3 As of December 31, 2018 , the Company also recorded $36.5 million of restricted cash equivalents (comprised of money market funds and U.S. treasuries which would be considered highly liquid investments with original maturity dates that are 90 days or less) in connection with a concluded legal matter in prepaids and other current assets in the accompanying Condensed Consolidated Balance Sheets. The following table summarizes the contractual maturities of the Company’s cash equivalents and available-for-sale investments (excluding cash and money market funds), as of March 31, 2019 (in millions): Amortized Cost Fair Value Mature in less than one year $ 1,993.5 $ 1,991.4 Mature in one to five years 2,205.5 2,212.5 Total $ 4,199.0 $ 4,203.9 Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations. Realized gains and losses, recognized on the sale of investments, were not material for any of the periods presented. Foreign Currency Derivatives The objective of the Company’s hedging program is to mitigate the impact of changes in currency exchange rates on cash flow from foreign currency denominated sales, expenses, intercompany balances, and other monetary assets or liabilities denominated in currencies other than the U.S. dollar (“USD”). The terms of the Company’s derivative contracts are generally twelve months or shorter. The derivative assets and liabilities are measured using Level 2 fair value inputs. Cash Flow Hedges The Company enters into currency forward contracts as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the USD, primarily the European Euro (“EUR”), the British Pound (“GBP”), the Japanese Yen (“JPY”), and the Korean Won (“KRW”). The Company also enters into currency forward contracts as cash flow hedges to hedge certain forecasted expense transactions denominated in EUR and the Swiss Franc (“CHF”). For these derivatives, the Company reports the after-tax gain or loss from the hedge as a component of accumulated other comprehensive gain (loss) in stockholders’ equity and reclassifies it into earnings in the same period in which the hedged transaction affects earnings. The amounts reclassified to revenue and expenses related to the hedged transactions and the ineffective portions of cash flow hedges were not material for the periods presented. Other Derivatives Not Designated as Hedging Instruments Other derivatives not designated as hedging instruments consist primarily of forward contracts that the Company uses to hedge intercompany balances and other monetary assets or liabilities denominated in currencies other than the USD, primarily the EUR, GBP, JPY, KRW, CHF, and Indian Rupee. The net gains (losses) recognized in interest and other income, net in the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 , and 2018 , were not material. The notional amounts for derivative instruments provide one measure of the transaction volume. Total gross notional amounts (in USD) for outstanding derivatives and aggregate gross fair value at the end of each period were as follows (in millions): Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments March 31, December 31, March 31, December 31, Notional amounts: Forward contracts $ 178.8 $ 183.0 $ 156.4 $ 182.7 Gross fair value recorded in: Prepaids and other current assets $ 3.2 $ 3.1 $ 4.5 $ 4.1 Other accrued liabilities $ 0.5 $ 0.9 $ 0.9 $ 1.1 |
BALANCE SHEET DETAILS AND OTHER
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION | BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION Balance Sheet Details The following tables provide details of selected balance sheet items (in millions): As of Inventory March 31, December 31, Raw materials $ 188.0 $ 164.1 Work-in-process 48.5 40.0 Finished goods 231.8 204.9 Total inventory $ 468.3 $ 409.0 As of Other accrued liabilities—short-term March 31, December 31, Taxes payable $ 20.0 $ 39.1 Litigation related accruals 12.5 55.0 Other accrued liabilities 153.6 137.7 Total other accrued liabilities—short-term $ 186.1 $ 231.8 As of Other long-term liabilities March 31, December 31, Income taxes—long-term $ 272.4 $ 270.2 Deferred revenue—long-term 30.8 33.0 Other long-term liabilities 151.1 35.4 Total other long-term liabilities $ 454.3 $ 338.6 Goodwill and Intangible Assets The increases in goodwill and intangible assets from December 31, 2018, to March 31, 2019, primarily relate to the Company’s majority-owned Joint Venture with Fosun Pharma acquiring certain assets from Chindex and its affiliates, a subsidiary of Fosun Pharma, including distribution rights, customer relationships, and certain personnel on January 5, 2019, which collectively met the definition of a business. Chindex was the Company’s distributor of da Vinci products and services in China. The transaction enhances the Company’s ability to serve patients, surgeons, and hospitals in China. The total purchase consideration of $66.0 million , as of the acquisition date, included contingent consideration liability of $64.7 million and an upfront cash payment of $1.3 million . The amount and timing of the future contingent consideration payments are based upon achieving certain commercial milestones in 2019 and 2020. The estimated total undiscounted contingent consideration is approximately $81 million . The contingent consideration liability was measured at estimated fair value using a discounted cash flow model, which require significant inputs not observable in the market, and thus represents a Level 3 measurement. Key assumptions include (1) the probability and timing of milestone achievement based on projected future revenues in 2019 and 2020, and (2) the discount rate used to calculate the present value of the milestone payments. On each reporting period until the contingent consideration is settled, the Company will re-measure the contingent consideration liability and record changes in fair value as an adjustment to earnings. Changes to contingent consideration liabilities can result from adjustments to discount rates, accretion due to the passage of time, or changes in estimates of the likelihood or timing of achieving the commercial milestones. The assumptions related to determining the fair value of contingent consideration include a significant amount of judgment, and any changes in the underlying estimates could have a material impact on the amount of contingent consideration adjustment recorded in any given period. The Company preliminarily recorded $1.7 million of net tangible assets, $58.6 million of intangible assets, and $5.7 million of residual goodwill. Intangible assets included distribution rights of $48.2 million and customer relationships of $10.4 million , which are being amortized over a weighted average period of 2.9 years . The goodwill is not amortizable for income tax purposes. The Company has included the results of the acquired business since the acquisition date in its Financial Statements, which have not been material to date. Pro forma results of operations related to the acquisition have not been presented because the operating results of the acquired business is not material to the Financial Statements. Supplemental Cash Flow Information The following table provides supplemental non-cash investing and financing activities (in millions): Three Months Ended March 31, 2019 2018 Equipment transfers, including operating lease assets, from inventory to property, plant, and equipment $ 41.9 $ 26.5 Deferred payments and contingent consideration related to business combinations $ 64.7 $ — |
REVENUE AND CONTRACT ACQUISITIO
REVENUE AND CONTRACT ACQUISITION COSTS | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND CONTRACT ACQUISITION COSTS | REVENUE AND CONTRACT ACQUISITION COSTS The following table presents revenue disaggregated by types and geography (in millions): Three Months Ended March 31, U.S. 2019 2018 Instruments and accessories $ 407.4 $ 337.6 Systems 160.7 124.0 Services 123.5 110.8 Total U.S. revenue $ 691.6 $ 572.4 Outside of U.S. (“OUS”) Instruments and accessories $ 144.9 $ 122.7 Systems 86.8 110.5 Services 50.4 41.9 Total OUS revenue $ 282.1 $ 275.1 Total Instruments and accessories $ 552.3 $ 460.3 Systems 247.5 234.5 Services 173.9 152.7 Total revenue $ 973.7 $ 847.5 The transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which revenue has not yet been recognized. A significant portion of this amount relates to performance obligations in the Company’s service contracts that will be satisfied and recognized as revenue in future periods. Transaction price allocated to remaining performance obligations was approximately $1,444.0 million as of March 31, 2019 . The following information summarizes the Company’s contract assets and liabilities (in millions): As of March 31, 2019 December 31, 2018 Contract assets $ 16.5 $ 12.4 Deferred revenue $ 329.2 $ 327.3 The Company invoices its customers based on the billing schedules in its sales arrangements. Payments are generally due 30 days from date of invoice. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative standalone selling price of the related performance obligations satisfied and the contractual billing terms in the arrangements. Deferred revenue for the periods presented primarily relates to service contracts where the service fees are billed up-front, generally quarterly or annually, prior to those services having been performed. The associated deferred revenue is generally recognized over the term of the service period. The Company did not have any significant impairment losses on its contract assets for the periods presented. Revenue recognized for the three months ended March 31, 2019 , and 2018, that was included in the deferred revenue balance at the beginning of each reporting period was $132.2 million and $115.8 million , respectively. Intuitive Surgical da Vinci System Leasing The Company enters into sales-type lease and operating lease arrangements with certain qualified customers. Sales-type leases have terms that generally range from 24 to 84 months and are usually collateralized by a security interest in the underlying assets. Revenue related to multiple-element arrangements are allocated to lease and non-lease elements based on their relative standalone selling prices as prescribed by the Company’s revenue recognition policy. Lease elements generally include a da Vinci Surgical System or system component, while non-lease elements generally include service, instruments and accessories. For some lease arrangements, the customers are provided with the right to purchase the leased system at some point during and/or at the end of the lease term. Except for certain usage-based lease arrangements, lease arrangements generally do not provide rights for the customers to exit or terminate the lease without incurring a penalty. For some leases, lease payments are based on the usage of the systems and the related revenue is recognized as the systems are used. In determining whether a transaction should be classified as a sales-type or operating lease, the Company considers the following terms at lease commencement: (1) whether title of the system transfers automatically or for a nominal fee by the end of the lease term, (2) whether the present value of the minimum lease payments equals or exceeds substantially all of the fair value of the leased system, (3) whether the lease term is for the major part of the remaining economic life of the leased system, (4) whether the lease grants the lessee an option to purchase the leased system that the lessee is reasonably certain to exercise, and (5) whether the underlying system is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. The Company generally recognizes revenue from sales-type lease arrangements at the time the system is accepted by the customer, assuming all other revenue recognition criteria have been met. Revenue from sales-type leases is presented as product revenue. Revenue from operating lease arrangements is generally recognized on a straight-line basis over the lease term or based upon system usage, and is presented as product revenue. The following table presents revenue from our lease arrangements (in millions): Three Months Ended March 31, 2019 2018 Sales-type lease revenue $ 4.6 $ 12.0 Operating lease revenue $ 20.4 $ 9.5 Assets Recognized from the Costs to Obtain a Contract with a Customer The Company has determined that certain sales incentives provided to the Company’s sales team are required to be capitalized when the Company expects to generate future economic benefits from the related revenue-generating contracts subsequent to the initial capital sales transaction. When determining the economic life of the contract acquisition assets recognized, the Company considers historical service renewal rates, expectations of future customer renewals of service contracts, and other factors that could impact the economic benefits that the Company expects to generate from the relationship with its customers. The costs capitalized as contract acquisition costs included in intangible and other assets, net in the Company’s Condensed Consolidated Balance Sheets were $37.1 million and $34.2 million as of March 31, 2019 , and December 31, 2018 , respectively. The Company did not incur any impairment losses during the periods presented. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES Lessor Sales-type Leases. Lease receivables relating to sales-type lease arrangements are presented on the Condensed Consolidated Balance Sheets as follows (in millions): As of March 31, December 31, Gross lease receivables $ 144.1 $ 150.4 Unearned income (6.0 ) (6.3 ) Allowance for credit loss (1.0 ) (1.0 ) Net investment in sales-type leases $ 137.1 $ 143.1 Reported as: Prepaids and other current assets $ 51.8 $ 51.2 Intangible and other assets, net 85.3 91.9 Total, net $ 137.1 $ 143.1 Contractual maturities of gross lease receivables at March 31, 2019 , are as follows (in millions): Fiscal Year Amount 2019 $ 37.4 2020 48.1 2021 31.3 2022 16.6 2023 9.2 2024 and thereafter 1.5 Total $ 144.1 Operating Leases. The Company’s operating lease terms are generally five years or less with its customers. As of March 31, 2019 , the maturities of lease payments are as follows (in millions): Fiscal Year Amount 2019 $ 73.9 2020 98.2 2021 80.4 2022 63.3 2023 37.7 2024 and thereafter 4.6 Total $ 358.1 Contingent rental revenue relating to operating lease arrangements were not material for the periods presented. Lessee The Company has operating leases for real estate, automobiles, and certain equipment. Operating lease expense was $4.3 million for the three months ended March 31, 2019. Short-term lease expense for the three months ended March 31, 2019, was not material. Supplemental cash flow information, as of March 31, 2019, related to operating leases was as follows (in millions): Cash paid within operating cash flows $ 3.3 Right-of-use assets recognized in exchange for new lease obligations $ 9.6 Supplemental balance sheet information, as of March 31, 2019, related to operating leases was as follows (in millions, except lease term and discount rate): Reported as: Intangible and other assets, net (Right-of-use assets) $ 74.2 Other accrued liabilities $ 5.3 Other long-term liabilities 71.3 Total lease liabilities $ 76.6 Weighted average remaining lease term 7 years Weighted average discount rate 3.6% As of March 31, 2019 , the maturities of the Company’s operating lease liabilities are as follows (in millions): Fiscal Year Amount 2019 $ 8.9 2020 11.2 2021 16.1 2022 12.1 2023 11.0 2024 and thereafter 29.1 Total lease payments $ 88.4 Less imputed interest (11.8 ) Total operating lease liabilities $ 76.6 ASC 840 Disclosures The Company elected the alternative modified transition method and included the following tables previously disclosed. Lessor Sales-type Leases. Contractual maturities of gross lease receivables as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 50.8 2020 46.5 2021 29.7 2022 14.9 2023 7.5 2024 and thereafter 1.0 Total $ 150.4 Operating Leases. Future minimum lease payments related to non-cancellable portion of operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 88.0 2020 85.8 2021 68.8 2022 51.3 2023 25.4 2024 and thereafter 1.9 Total $ 321.2 Lessee Operating Leases. Future minimum lease commitments under the Company’s operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 15.1 2020 14.5 2021 12.7 2022 11.2 2023 11.0 2024 and thereafter 30.9 Total $ 95.4 |
LEASES | LEASES Lessor Sales-type Leases. Lease receivables relating to sales-type lease arrangements are presented on the Condensed Consolidated Balance Sheets as follows (in millions): As of March 31, December 31, Gross lease receivables $ 144.1 $ 150.4 Unearned income (6.0 ) (6.3 ) Allowance for credit loss (1.0 ) (1.0 ) Net investment in sales-type leases $ 137.1 $ 143.1 Reported as: Prepaids and other current assets $ 51.8 $ 51.2 Intangible and other assets, net 85.3 91.9 Total, net $ 137.1 $ 143.1 Contractual maturities of gross lease receivables at March 31, 2019 , are as follows (in millions): Fiscal Year Amount 2019 $ 37.4 2020 48.1 2021 31.3 2022 16.6 2023 9.2 2024 and thereafter 1.5 Total $ 144.1 Operating Leases. The Company’s operating lease terms are generally five years or less with its customers. As of March 31, 2019 , the maturities of lease payments are as follows (in millions): Fiscal Year Amount 2019 $ 73.9 2020 98.2 2021 80.4 2022 63.3 2023 37.7 2024 and thereafter 4.6 Total $ 358.1 Contingent rental revenue relating to operating lease arrangements were not material for the periods presented. Lessee The Company has operating leases for real estate, automobiles, and certain equipment. Operating lease expense was $4.3 million for the three months ended March 31, 2019. Short-term lease expense for the three months ended March 31, 2019, was not material. Supplemental cash flow information, as of March 31, 2019, related to operating leases was as follows (in millions): Cash paid within operating cash flows $ 3.3 Right-of-use assets recognized in exchange for new lease obligations $ 9.6 Supplemental balance sheet information, as of March 31, 2019, related to operating leases was as follows (in millions, except lease term and discount rate): Reported as: Intangible and other assets, net (Right-of-use assets) $ 74.2 Other accrued liabilities $ 5.3 Other long-term liabilities 71.3 Total lease liabilities $ 76.6 Weighted average remaining lease term 7 years Weighted average discount rate 3.6% As of March 31, 2019 , the maturities of the Company’s operating lease liabilities are as follows (in millions): Fiscal Year Amount 2019 $ 8.9 2020 11.2 2021 16.1 2022 12.1 2023 11.0 2024 and thereafter 29.1 Total lease payments $ 88.4 Less imputed interest (11.8 ) Total operating lease liabilities $ 76.6 ASC 840 Disclosures The Company elected the alternative modified transition method and included the following tables previously disclosed. Lessor Sales-type Leases. Contractual maturities of gross lease receivables as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 50.8 2020 46.5 2021 29.7 2022 14.9 2023 7.5 2024 and thereafter 1.0 Total $ 150.4 Operating Leases. Future minimum lease payments related to non-cancellable portion of operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 88.0 2020 85.8 2021 68.8 2022 51.3 2023 25.4 2024 and thereafter 1.9 Total $ 321.2 Lessee Operating Leases. Future minimum lease commitments under the Company’s operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 15.1 2020 14.5 2021 12.7 2022 11.2 2023 11.0 2024 and thereafter 30.9 Total $ 95.4 |
LEASES | LEASES Lessor Sales-type Leases. Lease receivables relating to sales-type lease arrangements are presented on the Condensed Consolidated Balance Sheets as follows (in millions): As of March 31, December 31, Gross lease receivables $ 144.1 $ 150.4 Unearned income (6.0 ) (6.3 ) Allowance for credit loss (1.0 ) (1.0 ) Net investment in sales-type leases $ 137.1 $ 143.1 Reported as: Prepaids and other current assets $ 51.8 $ 51.2 Intangible and other assets, net 85.3 91.9 Total, net $ 137.1 $ 143.1 Contractual maturities of gross lease receivables at March 31, 2019 , are as follows (in millions): Fiscal Year Amount 2019 $ 37.4 2020 48.1 2021 31.3 2022 16.6 2023 9.2 2024 and thereafter 1.5 Total $ 144.1 Operating Leases. The Company’s operating lease terms are generally five years or less with its customers. As of March 31, 2019 , the maturities of lease payments are as follows (in millions): Fiscal Year Amount 2019 $ 73.9 2020 98.2 2021 80.4 2022 63.3 2023 37.7 2024 and thereafter 4.6 Total $ 358.1 Contingent rental revenue relating to operating lease arrangements were not material for the periods presented. Lessee The Company has operating leases for real estate, automobiles, and certain equipment. Operating lease expense was $4.3 million for the three months ended March 31, 2019. Short-term lease expense for the three months ended March 31, 2019, was not material. Supplemental cash flow information, as of March 31, 2019, related to operating leases was as follows (in millions): Cash paid within operating cash flows $ 3.3 Right-of-use assets recognized in exchange for new lease obligations $ 9.6 Supplemental balance sheet information, as of March 31, 2019, related to operating leases was as follows (in millions, except lease term and discount rate): Reported as: Intangible and other assets, net (Right-of-use assets) $ 74.2 Other accrued liabilities $ 5.3 Other long-term liabilities 71.3 Total lease liabilities $ 76.6 Weighted average remaining lease term 7 years Weighted average discount rate 3.6% As of March 31, 2019 , the maturities of the Company’s operating lease liabilities are as follows (in millions): Fiscal Year Amount 2019 $ 8.9 2020 11.2 2021 16.1 2022 12.1 2023 11.0 2024 and thereafter 29.1 Total lease payments $ 88.4 Less imputed interest (11.8 ) Total operating lease liabilities $ 76.6 ASC 840 Disclosures The Company elected the alternative modified transition method and included the following tables previously disclosed. Lessor Sales-type Leases. Contractual maturities of gross lease receivables as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 50.8 2020 46.5 2021 29.7 2022 14.9 2023 7.5 2024 and thereafter 1.0 Total $ 150.4 Operating Leases. Future minimum lease payments related to non-cancellable portion of operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 88.0 2020 85.8 2021 68.8 2022 51.3 2023 25.4 2024 and thereafter 1.9 Total $ 321.2 Lessee Operating Leases. Future minimum lease commitments under the Company’s operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 15.1 2020 14.5 2021 12.7 2022 11.2 2023 11.0 2024 and thereafter 30.9 Total $ 95.4 |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The Company is involved in a variety of claims, lawsuits, investigations and proceedings relating to securities laws, product liability, intellectual property, insurance, contract disputes, employment, and other matters. Certain of these lawsuits and claims are described in further detail below. It is not possible to predict what the outcome of these matters will be and the Company cannot guarantee that any resolution will be reached on commercially reasonable terms, if at all. A liability and related charge to earnings are recorded in the Financial Statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is re-evaluated each accounting period and is based on all available information, including impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to each case. Nevertheless, it is possible that additional future legal costs (including settlements, judgments, legal fees, and other related defense costs) could have a material adverse effect on the Company’s business, financial position, and future results of operations. During the three months ended March 31, 2019 , the Company recorded no pre-tax litigation charges related to the tolled product liability claims described below, compared with $4.5 million during the three months ended March 31, 2018. A total of $10.5 million associated with these matters was included in other accrued liabilities in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2019 , and December 31, 2018 . Product Liability Litigation The Company is currently named as a defendant in a number of individual product liability lawsuits filed in various state and federal courts. The plaintiffs generally allege that they or a family member underwent surgical procedures that utilized the da Vinci Surgical System and sustained a variety of personal injuries and, in some cases death as a result of such surgery. Several of these cases have trial dates in the next 12 months. The cases raise a variety of allegations including, to varying degrees, that plaintiffs’ injuries resulted from purported defects in the da Vinci Surgical System and/or failure on the Company’s part to provide adequate training resources to the healthcare professionals who performed plaintiffs’ surgeries. The cases further allege that the Company failed to adequately disclose and/or misrepresented the potential risks and/or benefits of the da Vinci Surgical System. Plaintiffs also assert a variety of causes of action, including for example, strict liability based on purported design defects, negligence, fraud, breach of express and implied warranties, unjust enrichment, and loss of consortium. Plaintiffs seek recovery for alleged personal injuries and, in many cases, punitive damages. In addition to the filed cases, the Company previously reported on a substantial number of claims relating to alleged complications from surgeries performed with certain versions of Monopolar Curved Scissor (“MCS”) instruments which included an MCS tip cover accessory that was the subject of a market withdrawal in 2012 and MCS instruments that were the subject of a recall in 2013. In an effort to avoid the expense and distraction of defending multiple lawsuits, the Company entered into tolling agreements to pause the applicable statutes of limitations for many of these claims and engaged in confidential mediation efforts. As of March 31, 2019 , all such “tolling agreements” have expired and the majority of the “tolled claims” have either been resolved or the claims have been filed. The Company’s estimate of the anticipated cost of resolving the pending cases is based on negotiations with attorneys for the claimants. The final outcome of the pending lawsuits and claims, and others that might arise, is dependent on many variables that are difficult to predict and the ultimate cost associated with these product liability lawsuits and claims may be materially different than the amount of the current estimate and accruals and could have a material adverse effect on the Company’s business, financial position, and future results of operations. Although there is a reasonable possibility that a loss in excess of the amount recognized exists, the Company is unable to estimate the possible loss or range of loss in excess of the amount recognized at this time. Patent Litigation On June 30, 2017, Ethicon LLC, Ethicon Endo-Surgery, Inc., and Ethicon US LLC (collectively, “Ethicon”) filed a complaint for patent infringement against the Company in the U.S. District Court for the District of Delaware. The complaint, which was served on the Company on July 12, 2017, alleges that the Company’s EndoWrist Stapler instruments infringe several of Ethicon’s patents. Ethicon asserts infringement of the U.S. Patent Nos. 9,585,658, 8,479,969, 9,113,874, 8,998,058, 8,991,677, 9,084,601, and 8,616,431. A claim construction hearing occurred on October 1, 2018, and the court issued a scheduling order on December 28, 2018. On March 20, 2019, the court granted the Company’s Motion to Stay pending an Inter Partes Review to be held at the Patent Trademark and Appeals Board to review patentability of six of the seven patents noted above and vacated the trial date. Based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter. On August 27, 2018, Ethicon filed a second complaint for patent infringement against the Company in the U.S. District Court for the District of Delaware. The complaint alleges that the Company’s SureForm 60 Staplers infringe five of Ethicon’s patents. Ethicon asserts infringement of the U.S. Patent Nos. 9,884,369, 7,490,749, 8,602,288, 8,602,287, and 9,326,770. The Company filed an answer denying all claims. On March 19, 2019, Ethicon filed a Motion for Leave to Amend to File a First Amended Complaint, removing allegations related to U.S. Patent No. 9,326,770 and adding allegations related to U.S. Patent Nos. 9,844,379 and 8,479,969. Ethicon has indicated it may seek preliminary injunctive relief, but it has yet to confirm, or to file such a motion. The case is set for a claim construction hearing on September 23, 2019, and trial is set for October 13, 2020. Based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Stockholders’ Equity The following tables present the changes in stockholders’ equity (in millions): Three Months Ended March 31, 2019 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Intuitive Surgical, Inc. Stockholders’ Equity Noncontrolling Interest in Joint Venture Total Stockholders’ Equity Shares Amount Balances at December 31, 2018 114.5 $ 0.1 $ 5,170.3 $ 1,521.7 $ (13.3 ) $ 6,678.8 $ 8.7 $ 6,687.5 Issuance of common stock through employee stock plans 1.2 88.8 88.8 88.8 Shares withheld related to net share settlement of equity awards (0.3 ) (6.4 ) (132.2 ) (138.6 ) (138.6 ) Share-based compensation expense related to employee stock plans 76.1 76.1 76.1 Net income attributable to Intuitive Surgical, Inc. 306.5 306.5 306.5 Other comprehensive income 12.6 12.6 12.6 Capital contribution from noncontrolling interest — 10.0 10.0 Net loss attributable to noncontrolling interest in joint venture — (2.5 ) (2.5 ) Balances at March 31, 2019 115.4 $ 0.1 $ 5,328.8 $ 1,696.0 $ (0.7 ) $ 7,024.2 $ 16.2 $ 7,040.4 Three Months Ended March 31, 2018 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Intuitive Surgical, Inc. Stockholders’ Equity Noncontrolling Interest in Joint Venture Total Stockholders’ Equity Shares Amount Balances at December 31, 2017 112.3 $ 0.1 $ 4,679.2 $ 115.0 $ (15.5 ) $ 4,778.8 $ 1.6 $ 4,780.4 Adoption of new accounting standards 392.1 (1.3 ) 390.8 390.8 Issuance of common stock through employee stock plans 1.2 86.2 86.2 86.2 Shares withheld related to net share settlement of equity awards (0.2 ) (5.8 ) (96.7 ) (102.5 ) (102.5 ) Share-based compensation expense related to employee stock plans 57.5 57.5 57.5 Net income attributable to Intuitive Surgical, Inc. 287.6 287.6 287.6 Other comprehensive loss (1.3 ) (1.3 ) (1.3 ) Capital contribution from noncontrolling interest — 8.0 8.0 Net loss attributable to noncontrolling interest in joint venture — (0.3 ) (0.3 ) Balances at March 31, 2018 113.3 $ 0.1 $ 4,817.1 $ 698.0 $ (18.1 ) $ 5,497.1 $ 9.3 $ 5,506.4 Stock Repurchase Program The Company’s Board of Directors (the “Board”) has authorized an aggregate of $7.5 billion of funding for the Company’s common stock repurchase program (the “Repurchase Program”) since its establishment in March 2009. The most recent authorization occurred in January 2019 when the Board increased the authorized amount available under Repurchase Program to $2.0 billion . As of March 31, 2019 , the remaining amount of share repurchases authorized by the Board was approximately $2.0 billion . Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2019 , and 2018 , are as follows (in millions): Three Months Ended March 31, 2019 Gains (Losses) on Hedge Instruments Unrealized Gains Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ 0.2 $ (9.8 ) $ (0.3 ) $ (3.4 ) $ (13.3 ) Other comprehensive income (loss) before reclassifications 3.5 11.6 (0.4 ) (0.1 ) 14.6 Amounts reclassified from accumulated other comprehensive income (loss) (2.1 ) — — 0.1 (2.0 ) Net current-period other comprehensive income (loss) 1.4 11.6 (0.4 ) — 12.6 Ending balance $ 1.6 $ 1.8 $ (0.7 ) $ (3.4 ) $ (0.7 ) Three Months Ended March 31, 2018 Gains (Losses) on Hedge Instruments Unrealized Gains (Losses) on Available-for-Sale Securities Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ (2.4 ) $ (11.3 ) $ 2.3 $ (4.1 ) $ (15.5 ) Other comprehensive income (loss) before reclassifications (3.0 ) (7.4 ) 4.5 0.3 (5.6 ) Amounts reclassified from accumulated other comprehensive income (loss) 2.2 1.2 — (0.4 ) 3.0 Net current-period other comprehensive income (loss) (0.8 ) (6.2 ) 4.5 (0.1 ) (2.6 ) Ending balance $ (3.2 ) $ (17.5 ) $ 6.8 $ (4.2 ) $ (18.1 ) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION As of March 31, 2019 , approximately 2.6 million shares of common stock were reserved for future issuance under the Company’s stock plans. A maximum of approximately 1.1 million of these shares can be awarded as restricted stock units (“RSUs”). Stock Option Information A summary of stock option activity under all stock plans for the three months ended March 31, 2019 , is presented as follows (in millions, except per share amounts): Stock Options Outstanding Number Outstanding Weighted Average Exercise Price Per Share Balance at December 31, 2018 6.2 $ 200.79 Granted 0.3 $ 541.37 Exercised (0.4 ) $ 143.80 Forfeited/expired (0.1 ) $ 337.41 Balance at March 31, 2019 6.0 $ 219.34 As of March 31, 2019 , options to purchase an aggregate of 4.8 million shares of common stock were exercisable at a weighted average price of $174.13 per share. Restricted Stock Units Information A summary of RSUs activity for the three months ended March 31, 2019 , is presented as follows (in millions, except per share amounts): Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2018 2.0 $ 295.70 Granted 0.7 $ 545.52 Vested (0.7 ) $ 250.63 Forfeited — $ 353.94 Unvested balance at March 31, 2019 2.0 $ 394.13 During the three months ended March 31, 2019, approximately 23,000 RSUs were forfeited. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan (“ESPP”), employees purchased approximately 0.1 million shares for $30.3 million and approximately 0.1 million shares for $25.3 million during the three months ended March 31, 2019 , and 2018 , respectively. Share-based Compensation Expense The following table summarizes share-based compensation expense for the three months ended March 31, 2019 , and 2018 (in millions): Three Months Ended 2019 2018 Cost of sales - products $ 11.0 $ 8.2 Cost of sales - services 4.5 3.9 Total cost of sales 15.5 12.1 Selling, general and administrative 38.6 29.5 Research and development 22.8 16.3 Share-based compensation expense before income taxes 76.9 57.9 Income tax benefit 16.4 12.3 Share-based compensation expense after income taxes $ 60.5 $ 45.6 The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s stock plans and rights to acquire stock granted under the ESPP. The weighted average estimated fair values of stock options and rights to acquire stock under the ESPP, as well as the weighted average assumptions used in calculating those fair values, were as follows: Three Months Ended 2019 2018 Stock Options Risk-free interest rate 2.5 % 2.6 % Expected term (in years) 4.3 4.3 Expected volatility 31 % 33 % Fair value at grant date $ 157.64 $ 130.51 ESPP Risk-free interest rate 2.5 % 1.9 % Expected term (in years) 1.2 1.2 Expected volatility 31 % 32 % Fair value at grant date $ 154.20 $ 124.61 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense (benefit) for the three months ended March 31, 2019 , was $(24.3) million , or (8.7)% of income before taxes, compared with $2.6 million , or 0.9% of income before taxes, for the three months ended March 31, 2018 . The effective tax rates for the three months ended March 31, 2019 , and 2018, differed from the U.S. federal statutory rate of 21% primarily due to excess tax benefits associated with employee equity plans, the effect of income earned by certain overseas entities being taxed at rates lower than the federal statutory rate, and federal research and development (“R&D”) credit benefit, partially offset by state income taxes (net of federal benefit) and U.S. tax on foreign earnings. The Company intends to repatriate earnings from its Swiss subsidiary as needed and the U.S. and foreign tax implications of such repatriations are not expected to be significant. The Company plans to continue to indefinitely reinvest earnings from the rest of the Company’s foreign subsidiaries, which are not significant. As of March 31, 2019 , the Company had a total of gross unrecognized tax benefits of $82.3 million compared with $78.8 million as of December 31, 2018 . If recognized, the gross unrecognized tax benefits would reduce the effective tax rate in the period of recognition. The Company files federal, state, and foreign income tax returns in many U.S. and OUS jurisdictions. Years before 2015 are closed for the significant jurisdictions. Certain of the Company’s unrecognized tax benefits could change due to activities of various tax authorities, including potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect the Company’s effective tax rate in the period in which they change. Due to the uncertainty related to the timing and potential outcome of audits, the Company cannot estimate the range of reasonably possible change in unrecognized tax benefits that may occur in the next 12 months. The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The following table presents the computation of basic and diluted net income per share attributable to Intuitive Surgical, Inc. for the three months ended March 31, 2019 , and 2018 (in millions, except per share amounts): Three Months Ended 2019 2018 Numerator: Net income attributable to Intuitive Surgical, Inc. $ 306.5 $ 287.6 Denominator: Weighted average shares outstanding used in basic calculation 115.0 112.8 Add: dilutive effect of potential common shares 4.6 5.2 Weighted average shares outstanding used in diluted calculation 119.6 118.0 Net income per share attributable to Intuitive Surgical, Inc.: Basic $ 2.67 $ 2.55 Diluted $ 2.56 $ 2.44 Share-based compensation awards of approximately 0.8 million and 0.2 million shares for the three months ended March 31, 2019 , and 2018 , respectively, were outstanding, but were not included in the computation of diluted net income per share attributable to Intuitive Surgical, Inc. common stockholders because the effect of including such shares would have been anti-dilutive in the periods presented. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) of Intuitive Surgical, Inc. and its wholly- and majority-owned subsidiaries have been prepared on a consistent basis with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2018 , and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and therefore, omit certain information and footnote disclosure necessary to present the Financial Statements in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”). These Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 , which was filed with the SEC on February 4, 2019. The results of operations for the first three months of fiscal year 2019 are not necessarily indicative of the results to be expected for the entire fiscal year or any future periods. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“Topic 842”), which amended prior accounting standards for leases. The Company adopted Topic 842 on January 1, 2019, using the alternative modified transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. There was no cumulative-effect adjustment recorded on January 1, 2019. Please see the description of the Company’s “Leases” accounting policy in the “Significant Accounting Policies” section below. The Company elected the following practical expedients when assessing the transition impact from both the lessee and lessor perspectives: (i) not to reassess whether any expired or existing contracts as of January 1, 2019, are or contain leases; (ii) not to reassess the lease classification for any expired or existing leases as of January 1, 2019; (iii) not to reassess initial direct costs for any existing leases as of January 1, 2019; and (iv) not to reassess whether land easements meet the definition of a lease. The primary impact for the Company was the balance sheet recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases as a lessee. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU No. 2018-15, Intangibles (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard also requires customers to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The Company early adopted this standard, as of January 1, 2019, on a prospective basis for applicable implementation costs. The adoption did not have a material impact on the Company's financial position and the results of operations in the first quarter of 2019. |
Leases | Leases The Company determines if an arrangement contains a lease at inception. For arrangements where the Company is the lessee, operating leases are included in intangible and other assets, net; other accrued liabilities; and other long-term liabilities on the Condensed Consolidated Balance Sheet as of March 31, 2019. The Company currently does not have any finance leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as the Company’s leases generally do not provide an implicit rate. Lease terms may include options to extend or terminate when the Company is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company also has lease arrangements with lease and non-lease components. The Company elected the practical expedient not to separate non-lease components from lease components for the Company’s real estate and automobile leases. Additionally, the Company applied a portfolio approach to effectively account for the operating lease ROU assets and lease liabilities for the Company’s automobile leases. The Company elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for short-term leases. |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Summary of Cash and Available-For-Sale Securities | The following tables summarize the Company’s cash and available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents, short-term, or long-term investments as of March 31, 2019 , and December 31, 2018 (in millions): Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short- term Investments Long- term Investments March 31, 2019 Cash $ 251.5 $ — $ — $ 251.5 $ 251.5 $ — $ — Level 1: Money market funds 609.2 — — 609.2 609.2 — — U.S. treasuries 1,582.2 3.7 (3.0 ) 1,582.9 12.0 794.0 776.9 Subtotal 2,191.4 3.7 (3.0 ) 2,192.1 621.2 794.0 776.9 Level 2: Commercial paper 97.3 — — 97.3 3.0 94.3 — Corporate debt securities 1,786.5 7.3 (1.7 ) 1,792.1 — 679.7 1,112.4 U.S. government agencies 709.1 0.6 (2.1 ) 707.6 — 360.3 347.3 Municipal securities 23.9 0.1 — 24.0 — 4.7 19.3 Subtotal 2,616.8 8.0 (3.8 ) 2,621.0 3.0 1,139.0 1,479.0 Total assets measured at fair value $ 5,059.7 $ 11.7 $ (6.8 ) $ 5,064.6 $ 875.7 $ 1,933.0 $ 2,255.9 Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short- term Investments Long- term Investments December 31, 2018 Cash $ 269.4 $ — $ — $ 269.4 $ 269.4 $ — $ — Level 1: Money market funds 569.1 — — 569.1 569.1 — — U.S. treasuries 1,477.8 1.7 (5.3 ) 1,474.2 10.0 897.8 566.4 Subtotal 2,046.9 1.7 (5.3 ) 2,043.3 579.1 897.8 566.4 Level 2: Commercial paper 110.7 — — 110.7 1.4 109.3 — Corporate debt securities 1,607.8 1.3 (4.8 ) 1,604.3 8.0 724.5 871.8 U.S. government agencies 791.8 0.3 (3.8 ) 788.3 — 468.9 319.4 Municipal securities 18.4 — — 18.4 — 4.7 13.7 Subtotal 2,528.7 1.6 (8.6 ) 2,521.7 9.4 1,307.4 1,204.9 Total assets measured at fair value $ 4,845.0 $ 3.3 $ (13.9 ) $ 4,834.4 $ 857.9 $ 2,205.2 $ 1,771.3 |
Summary of Contractual Maturities of Cash Equivalents and Available-For-Sale Investments | The following table summarizes the contractual maturities of the Company’s cash equivalents and available-for-sale investments (excluding cash and money market funds), as of March 31, 2019 (in millions): Amortized Cost Fair Value Mature in less than one year $ 1,993.5 $ 1,991.4 Mature in one to five years 2,205.5 2,212.5 Total $ 4,199.0 $ 4,203.9 |
Gross Notional Amounts for Derivatives and Aggregate Gross Fair Value Outstanding | The notional amounts for derivative instruments provide one measure of the transaction volume. Total gross notional amounts (in USD) for outstanding derivatives and aggregate gross fair value at the end of each period were as follows (in millions): Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments March 31, December 31, March 31, December 31, Notional amounts: Forward contracts $ 178.8 $ 183.0 $ 156.4 $ 182.7 Gross fair value recorded in: Prepaids and other current assets $ 3.2 $ 3.1 $ 4.5 $ 4.1 Other accrued liabilities $ 0.5 $ 0.9 $ 0.9 $ 1.1 |
BALANCE SHEET DETAILS AND OTH_2
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventory Details | The following tables provide details of selected balance sheet items (in millions): As of Inventory March 31, December 31, Raw materials $ 188.0 $ 164.1 Work-in-process 48.5 40.0 Finished goods 231.8 204.9 Total inventory $ 468.3 $ 409.0 |
Other Accrued Liabilities - Short-term | As of Other accrued liabilities—short-term March 31, December 31, Taxes payable $ 20.0 $ 39.1 Litigation related accruals 12.5 55.0 Other accrued liabilities 153.6 137.7 Total other accrued liabilities—short-term $ 186.1 $ 231.8 |
Other Long-term Liabilities | As of Other long-term liabilities March 31, December 31, Income taxes—long-term $ 272.4 $ 270.2 Deferred revenue—long-term 30.8 33.0 Other long-term liabilities 151.1 35.4 Total other long-term liabilities $ 454.3 $ 338.6 |
Supplemental Cash Flow Information | The following table provides supplemental non-cash investing and financing activities (in millions): Three Months Ended March 31, 2019 2018 Equipment transfers, including operating lease assets, from inventory to property, plant, and equipment $ 41.9 $ 26.5 Deferred payments and contingent consideration related to business combinations $ 64.7 $ — |
REVENUE AND CONTRACT ACQUISIT_2
REVENUE AND CONTRACT ACQUISITION COSTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disaggregated by Types and Geography | The following table presents revenue disaggregated by types and geography (in millions): Three Months Ended March 31, U.S. 2019 2018 Instruments and accessories $ 407.4 $ 337.6 Systems 160.7 124.0 Services 123.5 110.8 Total U.S. revenue $ 691.6 $ 572.4 Outside of U.S. (“OUS”) Instruments and accessories $ 144.9 $ 122.7 Systems 86.8 110.5 Services 50.4 41.9 Total OUS revenue $ 282.1 $ 275.1 Total Instruments and accessories $ 552.3 $ 460.3 Systems 247.5 234.5 Services 173.9 152.7 Total revenue $ 973.7 $ 847.5 |
Summary of Contract Assets and Liabilities | The following information summarizes the Company’s contract assets and liabilities (in millions): As of March 31, 2019 December 31, 2018 Contract assets $ 16.5 $ 12.4 Deferred revenue $ 329.2 $ 327.3 |
Sales-type Lease Revenue | The following table presents revenue from our lease arrangements (in millions): Three Months Ended March 31, 2019 2018 Sales-type lease revenue $ 4.6 $ 12.0 Operating lease revenue $ 20.4 $ 9.5 Sales-type Leases. Lease receivables relating to sales-type lease arrangements are presented on the Condensed Consolidated Balance Sheets as follows (in millions): As of March 31, December 31, Gross lease receivables $ 144.1 $ 150.4 Unearned income (6.0 ) (6.3 ) Allowance for credit loss (1.0 ) (1.0 ) Net investment in sales-type leases $ 137.1 $ 143.1 Reported as: Prepaids and other current assets $ 51.8 $ 51.2 Intangible and other assets, net 85.3 91.9 Total, net $ 137.1 $ 143.1 |
Operating Lease Revenue | The following table presents revenue from our lease arrangements (in millions): Three Months Ended March 31, 2019 2018 Sales-type lease revenue $ 4.6 $ 12.0 Operating lease revenue $ 20.4 $ 9.5 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Receivables | Lease receivables relating to sales-type lease arrangements are presented on the Condensed Consolidated Balance Sheets as follows (in millions): As of March 31, December 31, Gross lease receivables $ 144.1 $ 150.4 Unearned income (6.0 ) (6.3 ) Allowance for credit loss (1.0 ) (1.0 ) Net investment in sales-type leases $ 137.1 $ 143.1 Reported as: Prepaids and other current assets $ 51.8 $ 51.2 Intangible and other assets, net 85.3 91.9 Total, net $ 137.1 $ 143.1 |
Schedule of Contractual Maturities of Gross Lease Receivables | Contractual maturities of gross lease receivables at March 31, 2019 , are as follows (in millions): Fiscal Year Amount 2019 $ 37.4 2020 48.1 2021 31.3 2022 16.6 2023 9.2 2024 and thereafter 1.5 Total $ 144.1 |
Schedule of Operating Lease Payments | The Company’s operating lease terms are generally five years or less with its customers. As of March 31, 2019 , the maturities of lease payments are as follows (in millions): Fiscal Year Amount 2019 $ 73.9 2020 98.2 2021 80.4 2022 63.3 2023 37.7 2024 and thereafter 4.6 Total $ 358.1 |
Supplemental Cash Flow and Balance Sheet Information | Supplemental balance sheet information, as of March 31, 2019, related to operating leases was as follows (in millions, except lease term and discount rate): Reported as: Intangible and other assets, net (Right-of-use assets) $ 74.2 Other accrued liabilities $ 5.3 Other long-term liabilities 71.3 Total lease liabilities $ 76.6 Weighted average remaining lease term 7 years Weighted average discount rate 3.6% Supplemental cash flow information, as of March 31, 2019, related to operating leases was as follows (in millions): Cash paid within operating cash flows $ 3.3 Right-of-use assets recognized in exchange for new lease obligations $ 9.6 |
Schedule of Maturities of Operating Lease Liabilities | As of March 31, 2019 , the maturities of the Company’s operating lease liabilities are as follows (in millions): Fiscal Year Amount 2019 $ 8.9 2020 11.2 2021 16.1 2022 12.1 2023 11.0 2024 and thereafter 29.1 Total lease payments $ 88.4 Less imputed interest (11.8 ) Total operating lease liabilities $ 76.6 |
Contractual Maturities of Gross Lease Receivables | Sales-type Leases. Contractual maturities of gross lease receivables as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 50.8 2020 46.5 2021 29.7 2022 14.9 2023 7.5 2024 and thereafter 1.0 Total $ 150.4 |
Schedule Of Future Minimum Lease Receivables and Commitments Under Operating Leases | Future minimum lease commitments under the Company’s operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 15.1 2020 14.5 2021 12.7 2022 11.2 2023 11.0 2024 and thereafter 30.9 Total $ 95.4 Future minimum lease payments related to non-cancellable portion of operating leases as of December 31, 2018, are as follows (in millions): Fiscal Year Amount 2019 $ 88.0 2020 85.8 2021 68.8 2022 51.3 2023 25.4 2024 and thereafter 1.9 Total $ 321.2 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Stockholders Equity [Table Text Block] | The following tables present the changes in stockholders’ equity (in millions): Three Months Ended March 31, 2019 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Intuitive Surgical, Inc. Stockholders’ Equity Noncontrolling Interest in Joint Venture Total Stockholders’ Equity Shares Amount Balances at December 31, 2018 114.5 $ 0.1 $ 5,170.3 $ 1,521.7 $ (13.3 ) $ 6,678.8 $ 8.7 $ 6,687.5 Issuance of common stock through employee stock plans 1.2 88.8 88.8 88.8 Shares withheld related to net share settlement of equity awards (0.3 ) (6.4 ) (132.2 ) (138.6 ) (138.6 ) Share-based compensation expense related to employee stock plans 76.1 76.1 76.1 Net income attributable to Intuitive Surgical, Inc. 306.5 306.5 306.5 Other comprehensive income 12.6 12.6 12.6 Capital contribution from noncontrolling interest — 10.0 10.0 Net loss attributable to noncontrolling interest in joint venture — (2.5 ) (2.5 ) Balances at March 31, 2019 115.4 $ 0.1 $ 5,328.8 $ 1,696.0 $ (0.7 ) $ 7,024.2 $ 16.2 $ 7,040.4 Three Months Ended March 31, 2018 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Intuitive Surgical, Inc. Stockholders’ Equity Noncontrolling Interest in Joint Venture Total Stockholders’ Equity Shares Amount Balances at December 31, 2017 112.3 $ 0.1 $ 4,679.2 $ 115.0 $ (15.5 ) $ 4,778.8 $ 1.6 $ 4,780.4 Adoption of new accounting standards 392.1 (1.3 ) 390.8 390.8 Issuance of common stock through employee stock plans 1.2 86.2 86.2 86.2 Shares withheld related to net share settlement of equity awards (0.2 ) (5.8 ) (96.7 ) (102.5 ) (102.5 ) Share-based compensation expense related to employee stock plans 57.5 57.5 57.5 Net income attributable to Intuitive Surgical, Inc. 287.6 287.6 287.6 Other comprehensive loss (1.3 ) (1.3 ) (1.3 ) Capital contribution from noncontrolling interest — 8.0 8.0 Net loss attributable to noncontrolling interest in joint venture — (0.3 ) (0.3 ) Balances at March 31, 2018 113.3 $ 0.1 $ 4,817.1 $ 698.0 $ (18.1 ) $ 5,497.1 $ 9.3 $ 5,506.4 |
Components of Accumulated Other Comprehensive Income, Net of Tax | The components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2019 , and 2018 , are as follows (in millions): Three Months Ended March 31, 2019 Gains (Losses) on Hedge Instruments Unrealized Gains Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ 0.2 $ (9.8 ) $ (0.3 ) $ (3.4 ) $ (13.3 ) Other comprehensive income (loss) before reclassifications 3.5 11.6 (0.4 ) (0.1 ) 14.6 Amounts reclassified from accumulated other comprehensive income (loss) (2.1 ) — — 0.1 (2.0 ) Net current-period other comprehensive income (loss) 1.4 11.6 (0.4 ) — 12.6 Ending balance $ 1.6 $ 1.8 $ (0.7 ) $ (3.4 ) $ (0.7 ) Three Months Ended March 31, 2018 Gains (Losses) on Hedge Instruments Unrealized Gains (Losses) on Available-for-Sale Securities Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ (2.4 ) $ (11.3 ) $ 2.3 $ (4.1 ) $ (15.5 ) Other comprehensive income (loss) before reclassifications (3.0 ) (7.4 ) 4.5 0.3 (5.6 ) Amounts reclassified from accumulated other comprehensive income (loss) 2.2 1.2 — (0.4 ) 3.0 Net current-period other comprehensive income (loss) (0.8 ) (6.2 ) 4.5 (0.1 ) (2.6 ) Ending balance $ (3.2 ) $ (17.5 ) $ 6.8 $ (4.2 ) $ (18.1 ) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity Under All Stock Plans | A summary of stock option activity under all stock plans for the three months ended March 31, 2019 , is presented as follows (in millions, except per share amounts): Stock Options Outstanding Number Outstanding Weighted Average Exercise Price Per Share Balance at December 31, 2018 6.2 $ 200.79 Granted 0.3 $ 541.37 Exercised (0.4 ) $ 143.80 Forfeited/expired (0.1 ) $ 337.41 Balance at March 31, 2019 6.0 $ 219.34 |
Summary of RSU Activity | A summary of RSUs activity for the three months ended March 31, 2019 , is presented as follows (in millions, except per share amounts): Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2018 2.0 $ 295.70 Granted 0.7 $ 545.52 Vested (0.7 ) $ 250.63 Forfeited — $ 353.94 Unvested balance at March 31, 2019 2.0 $ 394.13 During the three months ended March 31, 2019, approximately 23,000 RSUs were forfeited. |
Summary of Share-Based Compensation Expense | The following table summarizes share-based compensation expense for the three months ended March 31, 2019 , and 2018 (in millions): Three Months Ended 2019 2018 Cost of sales - products $ 11.0 $ 8.2 Cost of sales - services 4.5 3.9 Total cost of sales 15.5 12.1 Selling, general and administrative 38.6 29.5 Research and development 22.8 16.3 Share-based compensation expense before income taxes 76.9 57.9 Income tax benefit 16.4 12.3 Share-based compensation expense after income taxes $ 60.5 $ 45.6 |
Schedule of Estimated Fair Value of the Option Using Black-Scholes Option Pricing Model, Weighted Average Assumptions | The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s stock plans and rights to acquire stock granted under the ESPP. The weighted average estimated fair values of stock options and rights to acquire stock under the ESPP, as well as the weighted average assumptions used in calculating those fair values, were as follows: Three Months Ended 2019 2018 Stock Options Risk-free interest rate 2.5 % 2.6 % Expected term (in years) 4.3 4.3 Expected volatility 31 % 33 % Fair value at grant date $ 157.64 $ 130.51 ESPP Risk-free interest rate 2.5 % 1.9 % Expected term (in years) 1.2 1.2 Expected volatility 31 % 32 % Fair value at grant date $ 154.20 $ 124.61 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | The following table presents the computation of basic and diluted net income per share attributable to Intuitive Surgical, Inc. for the three months ended March 31, 2019 , and 2018 (in millions, except per share amounts): Three Months Ended 2019 2018 Numerator: Net income attributable to Intuitive Surgical, Inc. $ 306.5 $ 287.6 Denominator: Weighted average shares outstanding used in basic calculation 115.0 112.8 Add: dilutive effect of potential common shares 4.6 5.2 Weighted average shares outstanding used in diluted calculation 119.6 118.0 Net income per share attributable to Intuitive Surgical, Inc.: Basic $ 2.67 $ 2.55 Diluted $ 2.56 $ 2.44 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 1,696 | $ 1,521.7 | |
Price allocated to remaining performance obligations | 1,444 | ||
Revenue recognized | 132.2 | $ 115.8 | |
Costs capitalized as contract acquisition costs | $ 37.1 | $ 34.2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Impact of Adopting New Standard (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total revenue | $ 973.7 | $ 847.5 | |
Total cost of revenue | 304.1 | 253.7 | |
Cost of revenue: | |||
Gross profit | 669.6 | 593.8 | |
Operating expenses: | |||
Selling, general and administrative | 273.4 | 221.6 | |
Research and development | 144 | 95.5 | |
Total operating expenses | 417.4 | 317.1 | |
Income from operations | 252.2 | 276.7 | |
Interest and other income, net | 27.5 | 13.2 | |
Income before taxes | 279.7 | 289.9 | |
Income tax expense (benefit) | (24.3) | 2.6 | |
Net income attributable to Intuitive Surgical, Inc. | $ 306.5 | $ 287.6 | |
Net income per share attributable to Intuitive Surgical, Inc.: | |||
Basic (in dollars per share) | $ 2.67 | $ 2.55 | |
Diluted (in dollars per share) | $ 2.56 | $ 2.44 | |
Total comprehensive income attributable to Intuitive Surgical, Inc. | $ 319.1 | $ 285 | |
ASSETS | |||
Accounts receivable, net | 547.6 | $ 682.3 | |
Prepaids and other current assets | 200.4 | 178.8 | |
Deferred tax assets | 392.4 | 428.6 | |
Intangible and other assets, net | 378.7 | 261 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Deferred revenue | 298.4 | 294.3 | |
Other accrued liabilities | 186.1 | 231.8 | |
Retained earnings | 1,696 | $ 1,521.7 | |
Product | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total revenue | 799.8 | 694.8 | |
Total cost of revenue | 246.4 | 201.5 | |
Service | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total revenue | 173.9 | 152.7 | |
Total cost of revenue | $ 57.7 | $ 52.2 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Disaggregated by Types and Geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 973.7 | $ 847.5 |
U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 691.6 | 572.4 |
Outside of U.S. (“OUS”) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 282.1 | 275.1 |
Instruments and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 552.3 | 460.3 |
Instruments and accessories | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 407.4 | 337.6 |
Instruments and accessories | Outside of U.S. (“OUS”) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 144.9 | 122.7 |
Systems | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 247.5 | 234.5 |
Systems | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 160.7 | 124 |
Systems | Outside of U.S. (“OUS”) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 86.8 | 110.5 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 173.9 | 152.7 |
Services | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 123.5 | 110.8 |
Services | Outside of U.S. (“OUS”) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 50.4 | $ 41.9 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Contract assets | $ 16.5 | $ 12.4 |
Deferred revenue | $ 329.2 | $ 327.3 |
FINANCIAL INSTRUMENTS - Summary
FINANCIAL INSTRUMENTS - Summary of Cash and Available-For-Sale Securities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | $ 875.7 | $ 857.9 |
Total | 4,199 | |
Total assets measured at fair value, Amortized Cost | 5,059.7 | 4,845 |
Gross Unrealized Gains | 11.7 | 3.3 |
Gross Unrealized Losses | (6.8) | (13.9) |
Total assets measured at fair value, Fair Value | 5,064.6 | 4,834.4 |
Short- term Investments | 1,933 | 2,205.2 |
Long- term Investments | 2,255.9 | 1,771.3 |
Cash | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 251.5 | 269.4 |
Fair Value | 251.5 | 269.4 |
Level 1 | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 621.2 | 579.1 |
Total | 2,191.4 | 2,046.9 |
Gross Unrealized Gains | 3.7 | 1.7 |
Gross Unrealized Losses | (3) | (5.3) |
Fair Value | 2,192.1 | 2,043.3 |
Short- term Investments | 794 | 897.8 |
Long- term Investments | 776.9 | 566.4 |
Level 1 | Money market funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 609.2 | 569.1 |
Fair Value | 609.2 | 569.1 |
Short- term Investments | 0 | 0 |
Long- term Investments | 0 | 0 |
Level 1 | U.S. treasuries | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 12 | 10 |
Total | 1,582.2 | 1,477.8 |
Gross Unrealized Gains | 3.7 | 1.7 |
Gross Unrealized Losses | (3) | (5.3) |
Fair Value | 1,582.9 | 1,474.2 |
Short- term Investments | 794 | 897.8 |
Long- term Investments | 776.9 | 566.4 |
Level 2 | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 3 | 9.4 |
Total | 2,616.8 | 2,528.7 |
Gross Unrealized Gains | 8 | 1.6 |
Gross Unrealized Losses | (3.8) | (8.6) |
Fair Value | 2,621 | 2,521.7 |
Short- term Investments | 1,139 | 1,307.4 |
Long- term Investments | 1,479 | 1,204.9 |
Level 2 | Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 3 | 1.4 |
Total | 97.3 | 110.7 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 97.3 | 110.7 |
Short- term Investments | 94.3 | 109.3 |
Long- term Investments | 0 | 0 |
Level 2 | Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 0 | 8 |
Total | 1,786.5 | 1,607.8 |
Gross Unrealized Gains | 7.3 | 1.3 |
Gross Unrealized Losses | (1.7) | (4.8) |
Fair Value | 1,792.1 | 1,604.3 |
Short- term Investments | 679.7 | 724.5 |
Long- term Investments | 1,112.4 | 871.8 |
Level 2 | U.S. government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total | 709.1 | 791.8 |
Gross Unrealized Gains | 0.6 | 0.3 |
Gross Unrealized Losses | (2.1) | (3.8) |
Fair Value | 707.6 | 788.3 |
Short- term Investments | 360.3 | 468.9 |
Long- term Investments | 347.3 | 319.4 |
Level 2 | Municipal securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total | 23.9 | 18.4 |
Gross Unrealized Gains | 0.1 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 24 | 18.4 |
Short- term Investments | 4.7 | 4.7 |
Long- term Investments | $ 19.3 | 13.7 |
Prepaids and other current assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Restricted cash equivalents | $ 36.5 |
FINANCIAL INSTRUMENTS - Summa_2
FINANCIAL INSTRUMENTS - Summary of Contractual Maturities of Cash Equivalents and Available-For-Sale Investments (Details) $ in Millions | Mar. 31, 2019USD ($) |
Investments, All Other Investments [Abstract] | |
Total | $ 4,199 |
Amortized Cost | |
Mature in less than one year | 1,993.5 |
Mature in one to five years | 2,205.5 |
Fair Value | |
Mature in less than one year | 1,991.4 |
Mature in one to five years | 2,212.5 |
Total | $ 4,203.9 |
FINANCIAL INSTRUMENTS - Gross N
FINANCIAL INSTRUMENTS - Gross Notional Amounts for Outstanding Derivatives (Details) - Forward contracts - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Derivatives Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amount, forward contracts | $ 178.8 | $ 183 |
Gross fair value of derivative assets | 3.2 | 3.1 |
Gross fair value of derivative liabilities | 0.5 | 0.9 |
Derivatives Not Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amount, forward contracts | 156.4 | 182.7 |
Gross fair value of derivative assets | 4.5 | 4.1 |
Gross fair value of derivative liabilities | $ 0.9 | $ 1.1 |
BALANCE SHEET DETAILS AND OTH_3
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 188 | $ 164.1 |
Work-in-process | 48.5 | 40 |
Finished goods | 231.8 | 204.9 |
Total inventory | $ 468.3 | $ 409 |
BALANCE SHEET DETAILS AND OTH_4
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION - Other Accrued Liabilities - Short-term (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Taxes payable | $ 20 | $ 39.1 |
Litigation related accruals | 12.5 | 55 |
Other accrued liabilities | 153.6 | 137.7 |
Total other accrued liabilities—short-term | $ 186.1 | $ 231.8 |
BALANCE SHEET DETAILS AND OTH_5
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION - Other Long-term Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Income taxes—long-term | $ 272.4 | $ 270.2 |
Deferred revenue—long-term | 30.8 | 33 |
Other long-term liabilities | 151.1 | 35.4 |
Total other long-term liabilities | $ 454.3 | $ 338.6 |
BALANCE SHEET DETAILS AND OTH_6
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION - Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | Jan. 05, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Deferred payments and contingent consideration related to business combinations | $ 64.7 | $ 0 | ||
Goodwill | $ 247.5 | $ 240.6 | ||
Chindex | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | $ 66 | |||
Deferred payments and contingent consideration related to business combinations | 64.7 | |||
Cash payments | 1.3 | |||
Contingent consideration | 81 | |||
Net tangible assets acquired | 1.7 | |||
Intangible assets acquired | 58.6 | |||
Goodwill | $ 5.7 | |||
Weighted average useful life | 2 years 10 months 24 days | |||
Chindex | Distribution rights | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 48.2 | |||
Chindex | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 10.4 |
BALANCE SHEET DETAILS AND OTH_7
BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental non-cash investing activities: | ||
Equipment transfers, including operating lease assets, from inventory to property, plant, and equipment | $ 41.9 | $ 26.5 |
Deferred payments and contingent consideration related to business combinations | $ 64.7 | $ 0 |
REVENUE AND CONTRACT ACQUISIT_3
REVENUE AND CONTRACT ACQUISITION COSTS - Revenue Disaggregated by Types and Geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 973.7 | $ 847.5 |
Instruments and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 552.3 | 460.3 |
Systems | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 247.5 | 234.5 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 173.9 | 152.7 |
U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 691.6 | 572.4 |
U.S. | Instruments and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 407.4 | 337.6 |
U.S. | Systems | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 160.7 | 124 |
U.S. | Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 123.5 | 110.8 |
Outside of U.S. (“OUS”) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 282.1 | 275.1 |
Outside of U.S. (“OUS”) | Instruments and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 144.9 | 122.7 |
Outside of U.S. (“OUS”) | Systems | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 86.8 | 110.5 |
Outside of U.S. (“OUS”) | Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 50.4 | $ 41.9 |
REVENUE AND CONTRACT ACQUISIT_4
REVENUE AND CONTRACT ACQUISITION COSTS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Timing of performance obligation | Payments are generally due 30 days from date of invoice. Sales-type leases have terms that generally range from 24 to 84 months and are usually collateralized by a security interest in the underlying assets. | ||
Price allocated to remaining performance obligations | $ 1,444 | ||
Revenue recognized | 132.2 | $ 115.8 | |
Costs capitalized as contract acquisition costs | $ 37.1 | $ 34.2 |
REVENUE AND CONTRACT ACQUISIT_5
REVENUE AND CONTRACT ACQUISITION COSTS - Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 16.5 | $ 12.4 |
Deferred revenue | $ 329.2 | $ 327.3 |
REVENUE AND CONTRACT ACQUISIT_6
REVENUE AND CONTRACT ACQUISITION COSTS - Sales-type and Operating Lease Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Sales-type lease revenue | $ 4.6 | $ 12 |
Operating lease revenue | $ 20.4 | $ 9.5 |
LEASES - Lease Receivables (Det
LEASES - Lease Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Capital Leased Assets [Line Items] | ||
Gross lease receivables | $ 144.1 | |
Gross lease receivables | $ 150.4 | |
Unearned income | (6) | |
Unearned income | (6.3) | |
Allowance for credit loss | (1) | |
Allowance for credit loss | (1) | |
Net investment in sales-type leases | 137.1 | |
Net investment in sales-type leases | 143.1 | |
Reported as: | ||
Net investment in sales-type leases | 143.1 | |
Prepaids and other current assets | ||
Capital Leased Assets [Line Items] | ||
Net investment in sales-type leases | 51.8 | |
Reported as: | ||
Prepaids and other current assets | 51.2 | |
Intangible and other assets, net | ||
Capital Leased Assets [Line Items] | ||
Net investment in sales-type leases | $ 85.3 | |
Reported as: | ||
Intangible and other assets, net | $ 91.9 |
LEASES - Schedule of Contractua
LEASES - Schedule of Contractual Maturities of Gross Lease Receivables (Details) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 37.4 |
2020 | 48.1 |
2021 | 31.3 |
2022 | 16.6 |
2023 | 9.2 |
2024 and thereafter | 1.5 |
Total | $ 144.1 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Payments (Details) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 73.9 |
2020 | 98.2 |
2021 | 80.4 |
2022 | 63.3 |
2023 | 37.7 |
2024 and thereafter | 4.6 |
Total | $ 358.1 |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease expense | $ 4.3 |
Intangible and other assets, net (Right-of-use assets) | 74.2 |
Total operating lease liabilities | $ 76.6 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Intangible and other assets, net (Right-of-use assets) | $ 74.2 |
Other accrued liabilities | 5.3 |
Other long-term liabilities | 71.3 |
Total lease liabilities | $ 76.6 |
Weighted average remaining lease term | 7 years |
Weighted average discount rate | 3.60% |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid within operating cash flows | $ 3.3 |
Right-of-use assets recognized in exchange for new lease obligations | $ 9.6 |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 8.9 |
2020 | 11.2 |
2021 | 16.1 |
2022 | 12.1 |
2023 | 11 |
2024 and thereafter | 29.1 |
Total lease payments | 88.4 |
Less imputed interest | (11.8) |
Total operating lease liabilities | $ 76.6 |
LEASES - Contractual Maturities
LEASES - Contractual Maturities of Gross Lease Receivables (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 50.8 |
2020 | 46.5 |
2021 | 29.7 |
2022 | 14.9 |
2023 | 7.5 |
2024 and thereafter | 1 |
Total | $ 150.4 |
LEASES - Schedule Of Future Min
LEASES - Schedule Of Future Minimum Lease Receivables Under Operating Leases (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 88 |
2020 | 85.8 |
2021 | 68.8 |
2022 | 51.3 |
2023 | 25.4 |
2024 and thereafter | 1.9 |
Total | $ 321.2 |
LEASES - Schedule of Future M_2
LEASES - Schedule of Future Minimum Lease Commitments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 15.1 |
2020 | 14.5 |
2021 | 12.7 |
2022 | 11.2 |
2023 | 11 |
2024 and thereafter | 30.9 |
Total | $ 95.4 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2019 | |
Commitments and Contingencies [Line Items] | ||
Recorded pre-tax (recoveries) charges | $ 4.5 | |
Loss contingency liability | $ 10.5 |
STOCKHOLDERS' EQUITY - Stock Re
STOCKHOLDERS' EQUITY - Stock Repurchase Program (Details) - Repurchase Program - USD ($) | Mar. 31, 2019 | Jan. 31, 2019 |
Equity, Class of Treasury Stock [Line Items] | ||
Remaining amount of share repurchases authorized | $ 2,000,000,000 | |
Common Stock | ||
Equity, Class of Treasury Stock [Line Items] | ||
Amount of share repurchases authorized | $ 7,500,000,000 | |
Stock repurchase program, increased to authorized amount | $ 2,000,000,000 |
STOCKHOLDERS' EQUITY - Componen
STOCKHOLDERS' EQUITY - Components of Accumulated Other Comprehensive Income, Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Gains (Losses) on Hedge Instruments | ||
Beginning balance | $ 0.2 | $ (2.4) |
Other comprehensive income (loss) before reclassifications | 3.5 | (3) |
Amounts reclassified from accumulated other comprehensive income (loss) | (2.1) | 2.2 |
Net current-period other comprehensive income (loss) | 1.4 | (0.8) |
Ending balance | 1.6 | (3.2) |
Unrealized Gains (Losses) on Available-for-Sale Securities | ||
Beginning balance | (9.8) | (11.3) |
Other comprehensive income (loss) before reclassifications | 11.6 | (7.4) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 1.2 |
Net current-period other comprehensive income (loss) | 11.6 | (6.2) |
Ending balance | 1.8 | (17.5) |
Foreign Currency Translation Gains (Losses) | ||
Beginning balance | (0.3) | 2.3 |
Other comprehensive income (loss) before reclassifications | (0.4) | 4.5 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Net current-period other comprehensive income (loss) | (0.4) | 4.5 |
Ending balance | (0.7) | 6.8 |
Employee Benefit Plans | ||
Beginning balance | (3.4) | (4.1) |
Other comprehensive income (loss) before reclassifications | (0.1) | 0.3 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0.1 | (0.4) |
Net current-period other comprehensive income (loss) | 0 | (0.1) |
Ending balance | (3.4) | (4.2) |
Total | ||
Beginning balance | (13.3) | (15.5) |
Other comprehensive income (loss) before reclassifications | 14.6 | (5.6) |
Amounts reclassified from accumulated other comprehensive income (loss) | (2) | 3 |
Net current-period other comprehensive income (loss) | 12.6 | (2.6) |
Ending balance | $ (0.7) | $ (18.1) |
STOCKHOLDERS' EQUITY Stockholde
STOCKHOLDERS' EQUITY Stockholders' Equity (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 115.4 | 114.5 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 7,040.4 | $ 5,506.4 | $ 6,687.5 | $ 4,780.4 |
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 88.8 | 86.2 | ||
Adjustments Related to Tax Withholding for Share-based Compensation | (138.6) | (102.5) | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 76.1 | 57.5 | ||
Net income attributable to Intuitive Surgical, Inc. | 306.5 | 287.6 | ||
Other Comprehensive Income (Loss), Including Cumulative Effect of New Accounting Principle in Period of Adoption, Net of Tax | 12.6 | (1.3) | ||
Capital contribution from noncontrolling interest | 10 | 8 | ||
Less: net loss attributable to noncontrolling interest in joint venture | $ (2.5) | (0.3) | ||
Cumulative Effect on Retained Earnings, Net of Tax | $ 390.8 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 115.4 | 113.3 | 114.5 | 112.3 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 1.2 | 1.2 | ||
Shares withheld related to net share settlement of equity awards | (0.3) | (0.2) | ||
Additional Paid-in Capital [Member] | ||||
Class of Stock [Line Items] | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 5,328.8 | $ 4,817.1 | 5,170.3 | 4,679.2 |
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 88.8 | 86.2 | ||
Adjustments Related to Tax Withholding for Share-based Compensation | (6.4) | (5.8) | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 76.1 | 57.5 | ||
Retained Earnings [Member] | ||||
Class of Stock [Line Items] | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,696 | 698 | 1,521.7 | 115 |
Adjustments Related to Tax Withholding for Share-based Compensation | (132.2) | (96.7) | ||
Net income attributable to Intuitive Surgical, Inc. | 306.5 | 287.6 | ||
Cumulative Effect on Retained Earnings, Net of Tax | 392.1 | |||
AOCI Attributable to Parent [Member] | ||||
Class of Stock [Line Items] | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (0.7) | (18.1) | (13.3) | (15.5) |
Other Comprehensive Income (Loss), Including Cumulative Effect of New Accounting Principle in Period of Adoption, Net of Tax | 12.6 | (1.3) | ||
Cumulative Effect on Retained Earnings, Net of Tax | (1.3) | |||
Parent [Member] | ||||
Class of Stock [Line Items] | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 7,024.2 | 5,497.1 | 6,678.8 | 4,778.8 |
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 88.8 | 86.2 | ||
Adjustments Related to Tax Withholding for Share-based Compensation | (138.6) | (102.5) | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 76.1 | 57.5 | ||
Net income attributable to Intuitive Surgical, Inc. | 306.5 | 287.6 | ||
Other Comprehensive Income (Loss), Including Cumulative Effect of New Accounting Principle in Period of Adoption, Net of Tax | 12.6 | (1.3) | ||
Cumulative Effect on Retained Earnings, Net of Tax | 390.8 | |||
Noncontrolling Interest [Member] | ||||
Class of Stock [Line Items] | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 16.2 | 9.3 | $ 8.7 | $ 1.6 |
Capital contribution from noncontrolling interest | 10 | 8 | ||
Less: net loss attributable to noncontrolling interest in joint venture | $ (2.5) | $ (0.3) |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserved for future issuance | 2.6 | |
Options exercisable, number of shares | 4.8 | |
Options exercisable, weighted-average exercise price (usd per share) | $ 174.13 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserved for future issuance | 1.1 | |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Stock Purchase Plan, number of shares purchased by employees | 0.1 | 0.1 |
Employee Stock Purchase Plan, value of shares purchased by employees | $ 30.3 | $ 25.3 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary Of Stock Option Activity Under All Stock Plans (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number Outstanding | |
Beginning balance, Number Outstanding | shares | 6.2 |
Options granted, Number Outstanding | shares | 0.3 |
Options exercised, Number Outstanding | shares | (0.4) |
Options forfeited/expired, Number Outstanding | shares | (0.1) |
Ending balance, Number Outstanding | shares | 6 |
Weighted Average Exercise Price Per Share | |
Beginning balance, Weighted Average Exercise Price Per Share | $ / shares | $ 200.79 |
Options granted, Weighted Average Exercise Price Per Share | $ / shares | 541.37 |
Options exercised, Weighted Average Exercise Price Per Share | $ / shares | 143.80 |
Options forfeited/expired, Weighted Average Exercise Price Per Share | $ / shares | 337.41 |
Ending balance, Weighted Average Exercise Price Per Share | $ / shares | $ 219.34 |
SHARE-BASED COMPENSATION - Su_2
SHARE-BASED COMPENSATION - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Shares | |
Unvested beginning balance (in shares) | shares | 2,000 |
Granted (in shares) | shares | 700 |
Vested (in shares) | shares | (700) |
Forfeited (in shares) | shares | (23) |
Unvested ending balance (in shares) | shares | 2,000 |
Weighted Average Grant Date Fair Value | |
Unvested beginning balance (usd per share) | $ / shares | $ 295.70 |
Granted (usd per share) | $ / shares | 545.52 |
Vested (usd per share) | $ / shares | 250.63 |
Forfeited (usd per share) | $ / shares | 353.94 |
Unvested ending balance (usd per share) | $ / shares | $ 394.13 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense before income taxes | $ 76.9 | $ 57.9 |
Income tax benefit | 16.4 | 12.3 |
Share-based compensation expense after income taxes | 60.5 | 45.6 |
Total cost of sales | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense before income taxes | 15.5 | 12.1 |
Total cost of sales | Cost of sales - products | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense before income taxes | 11 | 8.2 |
Total cost of sales | Cost of sales - services | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense before income taxes | 4.5 | 3.9 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense before income taxes | 38.6 | 29.5 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense before income taxes | $ 22.8 | $ 16.3 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule Of Estimated Fair Value Of Option Using Black-Scholes Option Pricing Model, Weighted Average Assumptions (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.50% | 2.60% |
Expected term (in years) | 4 years 3 months 21 days | 4 years 3 months 18 days |
Expected volatility (percent) | 31.00% | 33.00% |
Weighted average fair value at grant date (usd per share) | $ 157.64 | $ 130.51 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.50% | 1.90% |
Expected term (in years) | 1 year 2 months 29 days | 1 year 2 months 12 days |
Expected volatility (percent) | 31.00% | 32.00% |
Weighted average fair value at grant date (usd per share) | $ 154.20 | $ 124.61 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) | $ (24.3) | $ 2.6 | |
Income tax expense, percentage of pre-tax income | (8.70%) | 0.90% | |
Effective tax rate | 21.00% | ||
Total gross unrecognized tax benefits | $ 82.3 | $ 78.8 |
NET INCOME PER SHARE - Computat
NET INCOME PER SHARE - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income attributable to Intuitive Surgical, Inc. | $ 306.5 | $ 287.6 |
Denominator: | ||
Weighted average shares outstanding used in basic calculation | 115 | 112.8 |
Add: dilutive effect of potential common shares | 4.6 | 5.2 |
Weighted average shares outstanding used in diluted calculation | 119.6 | 118 |
Net income per share attributable to Intuitive Surgical, Inc.: | ||
Basic (in dollars per share) | $ 2.67 | $ 2.55 |
Diluted (in dollars per share) | $ 2.56 | $ 2.44 |
NET INCOME PER SHARE - Addition
NET INCOME PER SHARE - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Employee stock options excluded from computation of diluted net income per share | 0.8 | 0.2 |