Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jan. 31, 2014 | Jun. 28, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'Edwards Lifesciences Corp | ' | ' |
Entity Central Index Key | '0001099800 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $7,477,512,403 |
Entity Common Stock, Shares Outstanding | ' | 107,240,547 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $420.40 | $310.90 |
Short-term investments (Note 2) | 516.5 | 210.5 |
Accounts receivable, net (Note 4) | 302.5 | 321.1 |
Other receivables | 25.5 | 26.4 |
Inventories (Note 4) | 308.9 | 281 |
Deferred income taxes | 33.4 | 43.4 |
Prepaid expenses | 46.8 | 41.6 |
Other current assets | 71.8 | 57 |
Total current assets | 1,725.80 | 1,291.90 |
Long-term accounts receivable, net (Note 4) | 7.3 | 9.9 |
Property, plant and equipment, net (Note 4) | 421.6 | 373.3 |
Goodwill (Note 6) | 385.4 | 384.7 |
Other intangible assets, net (Note 6) | 57.2 | 67 |
Investments in unconsolidated affiliates (Note 7) | 21.9 | 21.1 |
Deferred income taxes | 70.1 | 47.3 |
Other assets | 35.4 | 26.3 |
Total assets | 2,724.70 | 2,221.50 |
Current liabilities | ' | ' |
Accounts payable | 48.4 | 74.7 |
Accrued and other liabilities (Note 4) | 297.2 | 272.7 |
Total current liabilities | 345.6 | 347.4 |
Long-term debt (Note 8) | 593.1 | 189.3 |
Uncertain tax positions | 126.4 | 110.7 |
Other long-term liabilities | 100.4 | 94.8 |
Commitments and contingencies (Notes 8 and 16) | ' | ' |
Stockholders' equity (Note 12) | ' | ' |
Preferred stock, $.01 par value, authorized 50.0 shares, no shares outstanding | ' | ' |
Common stock, $1.00 par value, 350.0 shares authorized, 126.0 and 124.2 shares issued, and 109.3 and 114.3 shares outstanding, respectively | 126 | 124.2 |
Additional paid-in capital | 671.2 | 489 |
Retained earnings | 2,045.60 | 1,653.90 |
Accumulated other comprehensive loss | -27.6 | -37.9 |
Treasury stock, at cost, 16.7 and 9.9 shares, respectively | -1,256 | -749.9 |
Total stockholders' equity | 1,559.20 | 1,479.30 |
Total liabilities and stockholders' equity | $2,724.70 | $2,221.50 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Per Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, authorized shares | 50 | 50 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized | 350 | 350 |
Common stock, shares issued | 126 | 124.2 |
Common stock, shares outstanding | 109.3 | 114.3 |
Treasury stock, shares | 16.7 | 9.9 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' |
Net sales | $2,045.50 | $1,899.60 | $1,678.60 |
Cost of goods sold | 522.4 | 494.6 | 489.8 |
Gross profit | 1,523.10 | 1,405 | 1,188.80 |
Selling, general and administrative expenses | 745.6 | 705.3 | 642.4 |
Research and development expenses | 323 | 291.3 | 246.3 |
Special (gains) charges (Note 3) | -67.3 | 16 | 21.6 |
Interest expense | 9.8 | 4.4 | 3.1 |
Interest income | -4.6 | -4.8 | -3.4 |
Other expense (income), net (Note 14) | 1.3 | 1.7 | -4.8 |
Income before provision for income taxes | 515.3 | 391.1 | 283.6 |
Provision for income taxes (Note 15) | 123.6 | 97.9 | 46.9 |
Net income | $391.70 | $293.20 | $236.70 |
Earnings per share: | ' | ' | ' |
Basic (in dollars per share) | $3.51 | $2.55 | $2.07 |
Diluted (in dollars per share) | $3.44 | $2.48 | $1.98 |
Weighted-average number of common shares outstanding: | ' | ' | ' |
Basic (in shares) | 111.7 | 114.9 | 114.6 |
Diluted (in shares) | 113.8 | 118.3 | 119.4 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' |
Net income | $391.70 | $293.20 | $236.70 |
Other comprehensive income (loss), net of tax (Note 13): | ' | ' | ' |
Foreign currency translation adjustments | 5.6 | 4.2 | -5.2 |
Unrealized (loss) gain on cash flow hedges | -3.5 | 1.1 | 16.8 |
Unrealized loss on available-for-sale investments for the period | -1.1 | ' | -0.1 |
Reclassification of net realized investment loss (gain) to earnings | ' | 0.3 | -1 |
Defined benefit pension plans - net actuarial gain (loss) and other | 9.3 | -6 | -5.9 |
Other comprehensive income (loss), net of tax | 10.3 | -0.4 | 4.6 |
Comprehensive income | $402 | $292.80 | $241.30 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | ' | ' | ' |
Net income | $391.70 | $293.20 | $236.70 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 68.7 | 57.3 | 58 |
Stock-based compensation (Notes 2 and 12) | 47.4 | 42.1 | 35 |
Excess tax benefit from stock plans (Notes 2 and 12) | -73.5 | -56.5 | -6 |
Deferred income taxes | 0.1 | 8.1 | -0.6 |
Special charges (Note 3) | 14.6 | 14.9 | 21.2 |
(Gain) loss on trading securities | -1 | -0.7 | 1 |
Other | 3.2 | 3.9 | -1.1 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts and other receivables, net | 8.5 | -26.5 | -53.7 |
Inventories | -44.4 | -21.7 | -57 |
Accounts payable and accrued liabilities | 50.3 | 30.2 | 55.4 |
Prepaid expenses and other current assets | 4.6 | 12.8 | 20.6 |
Other | 2.5 | 5 | -1.3 |
Net cash provided by operating activities | 472.7 | 362.1 | 308.2 |
Cash flows from investing activities | ' | ' | ' |
Capital expenditures | -109 | -109 | -76.6 |
Proceeds from short-term investments (Note 2) | 526.4 | 662.3 | 349.9 |
Purchases of short-term investments (Note 2) | -823.2 | -592.6 | -643.3 |
Acquisitions (Note 5) | ' | -36.6 | -42.6 |
Investments in intangible assets | -1.1 | -7 | -7.7 |
Proceeds from sale of assets | 2.3 | 3 | 3.9 |
Proceeds from unconsolidated affiliates | 0.3 | 2.8 | 9.1 |
Investments in unconsolidated affiliates | -3 | -2 | -2.3 |
(Investments in) proceeds from trading securities, net | -1.4 | -0.6 | 3.1 |
Other | -4 | 0.9 | ' |
Net cash used in investing activities | -412.7 | -78.8 | -406.5 |
Cash flows from financing activities | ' | ' | ' |
Proceeds from issuance of debt | 1,305 | 407 | 526.1 |
Payments on debt | -895.4 | -367.5 | -421.7 |
Repurchase of common stock | -496.9 | -344.1 | -303.4 |
Equity forward contract related to accelerated share repurchase agreement (Note 12) | ' | -9.1 | ' |
Proceeds from stock plans | 45.5 | 100.1 | 59.5 |
Excess tax benefit from stock plans (Notes 2 and 12) | 73.5 | 56.5 | 6 |
Other | 3.2 | 1.5 | -1.7 |
Net cash provided by (used in) financing activities | 34.9 | -155.6 | -135.2 |
Effect of currency exchange rate changes on cash and cash equivalents | 14.6 | 12 | 8.6 |
Net increase (decrease) in cash and cash equivalents | 109.5 | 139.7 | -224.9 |
Cash and cash equivalents at beginning of year | 310.9 | 171.2 | 396.1 |
Cash and cash equivalents at end of year | 420.4 | 310.9 | 171.2 |
Cash paid during the year for: | ' | ' | ' |
Interest | 4.3 | 4.4 | 3.2 |
Income taxes | 54 | 38 | 15.4 |
Non-cash investing and financing transactions: | ' | ' | ' |
Capital expenditures accruals | 8.4 | 20.9 | 11 |
Capital additions transferred from inventory | $7.80 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
In Millions, except Share data, unless otherwise specified | ||||||
BALANCE AT beginning of year at Dec. 31, 2010 | $1,308.20 | $117 | ($102) | $211.30 | $1,124 | ($42.10) |
BALANCE AT beginning of year (in shares) at Dec. 31, 2010 | ' | 117,000,000 | 2,000,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income | 236.7 | ' | ' | ' | 236.7 | ' |
Other comprehensive (loss) income, net of tax | 4.6 | ' | ' | ' | ' | 4.6 |
Common stock issued under equity plans, including tax benefits | 57.2 | 3 | ' | 54.2 | ' | ' |
Common stock issued under equity plans, including tax benefits (in shares) | ' | 3,000,000 | ' | ' | ' | ' |
Stock-based compensation expense | 35 | ' | ' | 35 | ' | ' |
Repurchase of common stock | -303.8 | ' | -303.8 | ' | ' | ' |
Repurchase of common stock (in shares) | 3,900,000 | ' | 3,900,000 | ' | ' | ' |
BALANCE AT end of year at Dec. 31, 2011 | 1,337.90 | 120 | -405.8 | 300.5 | 1,360.70 | -37.5 |
BALANCE AT end of year (in shares) at Dec. 31, 2011 | ' | 120,000,000 | 5,900,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income | 293.2 | ' | ' | ' | 293.2 | ' |
Other comprehensive (loss) income, net of tax | -0.4 | ' | ' | ' | ' | -0.4 |
Common stock issued under equity plans, including tax benefits | 159.7 | 4.2 | ' | 155.5 | ' | ' |
Common stock issued under equity plans, including tax benefits (in shares) | ' | 4,200,000 | ' | ' | ' | ' |
Stock-based compensation expense | 42.1 | ' | ' | 42.1 | ' | ' |
Repurchase of common stock | -353.2 | ' | -344.1 | -9.1 | ' | ' |
Repurchase of common stock (in shares) | 4,000,000 | ' | 4,000,000 | ' | ' | ' |
BALANCE AT end of year at Dec. 31, 2012 | 1,479.30 | 124.2 | -749.9 | 489 | 1,653.90 | -37.9 |
BALANCE AT end of year (in shares) at Dec. 31, 2012 | ' | 124,200,000 | 9,900,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income | 391.7 | ' | ' | ' | 391.7 | ' |
Other comprehensive (loss) income, net of tax | 10.3 | ' | ' | ' | ' | 10.3 |
Common stock issued under equity plans, including tax benefits | 127.5 | 1.8 | ' | 125.7 | ' | ' |
Common stock issued under equity plans, including tax benefits (in shares) | ' | 1,800,000 | ' | ' | ' | ' |
Stock-based compensation expense | 47.4 | ' | ' | 47.4 | ' | ' |
Repurchase of common stock | -497 | ' | -506.1 | 9.1 | ' | ' |
Repurchase of common stock (in shares) | 6,800,000 | ' | 6,800,000 | ' | ' | ' |
BALANCE AT end of year at Dec. 31, 2013 | $1,559.20 | $126 | ($1,256) | $671.20 | $2,045.60 | ($27.60) |
BALANCE AT end of year (in shares) at Dec. 31, 2013 | ' | 126,000,000 | 16,700,000 | ' | ' | ' |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2013 | |
DESCRIPTION OF BUSINESS | ' |
DESCRIPTION OF BUSINESS | ' |
1. DESCRIPTION OF BUSINESS | |
Edwards Lifesciences Corporation ("Edwards Lifesciences" or the "Company") conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan and Rest of World. Edwards Lifesciences is focused on technologies that treat structural heart disease and critically ill patients. A pioneer in the development and commercialization of heart valve products, Edwards Lifesciences is the world's leading manufacturer of heart valves and repair products used to replace or repair a patient's diseased or defective heart valve. The Company is also a global leader in hemodynamic monitoring systems used to measure a patient's cardiovascular function in the hospital setting. | |
The products and technologies provided by Edwards Lifesciences to treat advanced cardiovascular disease or critically ill patients are categorized into the following main areas: Surgical Heart Valve Therapy, Transcatheter Heart Valves, and Critical Care. The Company's Surgical Heart Valve Therapy portfolio includes tissue heart valves and heart valve repair products for the surgical replacement or repair of a patient's heart valve. The portfolio also includes a diverse line of cardiac surgery systems used during minimally invasive surgical procedures, and cannulae, embolic protection devices and other products used during cardiopulmonary bypass. The Company's Transcatheter Heart Valves portfolio includes technologies designed to treat heart valve disease using catheter-based approaches as opposed to open surgical techniques. In the Critical Care portfolio, Edwards Lifesciences' products include pulmonary artery catheters, disposable pressure transducers and advanced monitoring systems. The portfolio also includes a line of balloon catheter-based vascular products, surgical clips and inserts. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Principles of Consolidation | |||||||||||
The accompanying consolidated financial statements include the accounts of Edwards Lifesciences and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Cash Flow Statement Revision | |||||||||||
In preparing the consolidated financial statements for the year ended December 31, 2013, the Company determined that it had misclassified certain accrued capital expenditures in the consolidated statements of cash flows for the years ended December 31, 2012 and 2011. The Company has evaluated and concluded that this did not result in a material misstatement of the Company's previously issued consolidated financial statements. However, the Company has elected to revise its consolidated statements of cash flows for the years ended December 31, 2012 and 2011 to correct the presentation of accrued capital expenditures, resulting in a decrease to net cash used in investing activities (with a corresponding decrease to net cash provided by operating activities) of $11.7 million and $6.3 million, respectively. | |||||||||||
Use of Estimates | |||||||||||
The consolidated financial statements of Edwards Lifesciences have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP") which have been applied consistently in all material respects. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. | |||||||||||
Foreign Currency Translation | |||||||||||
When the local currency of the Company's foreign entities is the functional currency, all assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted-average exchange rate prevailing during the period. The effects of foreign currency translation adjustments for these entities are deferred and reported in stockholders' equity as a component of "Accumulated Other Comprehensive Loss." The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in "Other Expense (Income), net." | |||||||||||
Revenue Recognition | |||||||||||
The Company recognizes revenue when it is realized or realizable and earned. Revenue is considered realized or realizable and earned upon delivery of the product, provided that an agreement of sale exists, the sales price is fixed or determinable, and collection is reasonably assured. In the case of certain products where the Company maintains consigned inventory at customer locations, revenue is recognized at the time the Company is notified that the customer has used the inventory. | |||||||||||
The Company's principal sales terms provide for title and risk of loss transferring upon delivery to the customer, limited right of return and no unusual provisions or conditions. When the Company recognizes revenue from the sale of its products, an estimate of various sales returns and allowances is recorded which reduces product sales and accounts receivable. These adjustments include estimates for rebates, returns and other sales allowances. These provisions are estimated and recorded at the time of sale based upon historical payment experience, historical relationship to revenues, estimated customer inventory levels, and current contract sales terms with direct and indirect customers. Other than in limited circumstances, product returns are not significant because returns are generally not allowed unless the product is damaged at time of receipt. In addition, the Company may allow customers to return previously purchased products for next-generation product offerings. For these transactions, the Company defers recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. | |||||||||||
The Company's primary sales adjustment relates to distributor rebates which are given to the Company's United States distributors and represents the difference between the Company's sales price to the distributor (at the Company's distributor "list price") and the negotiated price to be paid by the end-customer. This distributor rebate is recorded by the Company as a reduction to sales and a reduction to the distributor's accounts receivable at the time of sale to a distributor. The Company validates the distributor rebate accrual quarterly through either a review of the inventory reports obtained from its distributors or an estimate of its distributor's inventory. This distributor inventory information is used to verify the estimated liability for future distributor rebate claims based on historical rebates and contract rates. The Company periodically monitors current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated. | |||||||||||
The Company also offers volume rebates to certain group purchasing organizations ("GPOs") and customers based upon target sales levels. For volume rebates offered to GPOs, the rebates are recorded as a reduction to sales and an obligation to the GPO, as the Company expects to pay in cash. For volume rebates offered to customers, the rebates are recorded as a reduction to sales and accounts receivable, as the Company expects a net payment from the customer. The provision for volume rebates is estimated based on customers' contracted rebate programs and historical experience of rebates paid. The Company periodically monitors its customer rebate programs to ensure that the allowance and liability for accrued rebates is fairly stated. | |||||||||||
Shipping and Handling Costs | |||||||||||
Shipping costs, which are costs incurred to physically move product from the Company's premises to the customer's premises, are included in "Selling, General and Administrative Expenses." Handling costs, which are costs incurred to store, move and prepare products for shipment, are included in "Cost of Goods Sold." For the years ended December 31, 2013, 2012 and 2011, shipping costs of $56.6 million, $54.9 million and $51.0 million, respectively, were included in "Selling, General and Administrative Expenses." | |||||||||||
Cash Equivalents | |||||||||||
The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. These investments are valued at cost, which approximates fair value. | |||||||||||
Short-term Investments | |||||||||||
Short-term investments include bank time deposits with original maturities between three months and one year. Bank time deposits with original maturities of three months or less are classified as cash equivalents. Investments in bank time deposits are classified as held-to-maturity, as management has both the intent and ability to hold these investments to maturity, and are reported at cost, which approximates fair value. Income relating to these bank time deposits is reported as "Interest Income." | |||||||||||
Allowance for Doubtful Accounts | |||||||||||
The Company records allowances for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. When evaluating its allowances for doubtful accounts related to receivables from customers in certain European countries that have historically paid beyond the stated terms, the Company's analysis considers a number of factors including evidence of the customer's ability to comply with credit terms, economic conditions and procedures implemented by the Company to collect the historical receivables. Additional allowances for doubtful accounts may be required if there is deterioration in past due balances, if economic conditions are less favorable than the Company has anticipated, or for customer-specific circumstances, such as financial difficulty. The allowance for doubtful accounts was $12.2 million and $12.0 million at December 31, 2013 and 2012, respectively. | |||||||||||
Inventories | |||||||||||
Inventories are stated at the lower of cost (first-in, first-out method) or market value. Market value for raw materials is based on replacement costs, and for other inventory classifications is based on net realizable value. | |||||||||||
A write-down for excess or inactive inventory is recorded for inventory which is obsolete, nearing its expiration date (generally triggered at six months prior to expiration), is damaged or slow moving (generally defined as quantities in excess of a two year supply). The allowance for excess and obsolete inventory was $29.6 million and $16.3 million at December 31, 2013 and 2012, respectively. | |||||||||||
The Company allocates to inventory general and administrative costs that are related to the production process. These costs include insurance, manufacturing accounting personnel, human resources personnel and information technology. During the years ended December 31, 2013, 2012 and 2011, the Company allocated $24.7 million, $26.2 million and $25.3 million, respectively, of general and administrative costs to inventory. General and administrative costs included in inventory at December 31, 2013 and 2012 were $14.3 million and $15.1 million, respectively. | |||||||||||
Property, Plant and Equipment | |||||||||||
Property, plant and equipment are recorded at cost. Depreciation is principally calculated for financial reporting purposes on the straight-line method over the estimated useful lives of the related assets, which range from 10 to 40 years for buildings and improvements, from 3 to 15 years for machinery and equipment, and from 3 to 10 years for software. Leasehold improvements are amortized over the life of the related facility leases or the asset, whichever is shorter. Straight-line and accelerated methods of depreciation are used for income tax purposes. | |||||||||||
Depreciation expense for property, plant and equipment was $53.1 million, $44.0 million and $44.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. Repairs and maintenance expense was $21.7 million, $20.6 million and $18.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||
Impairment of Goodwill and Long-lived Assets | |||||||||||
Goodwill is reviewed for impairment annually in the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. The Company identifies its reporting units and determines the carrying value of each reporting unit by assigning the assets and liabilities, including existing goodwill, to those reporting units. The fair value of the reporting unit is estimated based on the Company's market capitalization and a market revenue multiple. If the carrying value of the reporting unit exceeds its estimated fair value, then the Company measures the amount of the impairment loss by comparing the implied fair value of goodwill to its carrying value. In 2013, 2012 and 2011, the Company did not record any impairment loss as the fair value of each reporting unit significantly exceeded its respective carrying value. | |||||||||||
Indefinite-lived intangible assets relate to in-process research and development ("IPR&D") acquired in business combinations. The estimated fair values of IPR&D projects acquired in a business combination which have not reached technological feasibility are capitalized and accounted for as indefinite-lived intangible assets subject to impairment testing until completion or abandonment of the projects. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If the project is abandoned, all remaining capitalized amounts are written off immediately. Indefinite-lived intangible assets are reviewed for impairment annually, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss is recognized when the asset's carrying value exceeds its fair value. IPR&D projects acquired in an asset acquisition are expensed unless the project has an alternative future use. | |||||||||||
Management reviews the carrying amounts of other finite-lived intangible assets and long-lived tangible assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit, and adverse legal or regulatory developments. If it is determined that such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair market value. Estimated fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. | |||||||||||
Patent Costs | |||||||||||
The Company expenses legal costs incurred for patent preparation and applications. The Company capitalizes certain legal costs related to the defense and enforcement of issued patents for which success is deemed probable. These capitalized legal costs are amortized over the life of the related patent. Such legal costs are periodically reviewed for impairment and recoverability. | |||||||||||
Investments in Unconsolidated Affiliates | |||||||||||
Investments in unconsolidated affiliates are long-term equity investments in companies that are in various stages of development. Certain of these investments are designated as available-for-sale. These investments are carried at fair market value, with unrealized gains and losses reported in stockholders' equity as a component of "Accumulated Other Comprehensive Loss." Gains or losses on investments sold are based on the specific identification method. Other investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company's investment and adjusted each period for the Company's share of the investee's income or loss and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment's fair value. | |||||||||||
When the fair value of an available-for-sale investment declines below cost, management uses the following criteria to determine if such a decline should be considered other-than-temporary and result in a recognized loss: | |||||||||||
• | |||||||||||
the duration and extent to which the market value has been less than cost; | |||||||||||
• | |||||||||||
the financial condition and near term prospects of the investee; | |||||||||||
• | |||||||||||
the reasons for the decline in market value; | |||||||||||
• | |||||||||||
the investee's performance against product development milestones; and | |||||||||||
• | |||||||||||
the Company's ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. | |||||||||||
Income Taxes | |||||||||||
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and adjusting the amount, if necessary. The factors used to assess the likelihood of realization are both historical experience and the Company's forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company's effective tax rate on future earnings. | |||||||||||
When assessing whether a windfall tax benefit relating to stock-based compensation has been realized, the Company follows the with and without approach, under which the windfall benefit is recognized only if an incremental benefit is provided after considering all other tax attributes presently available to the Company. Consideration is given only to the direct impacts of stock awards when calculating the amount of windfalls and shortfalls. | |||||||||||
The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company recognizes the financial statement benefit of a tax position only after determining that a position would more likely than not be sustained based upon its technical merit if challenged by the relevant taxing authority and taken by management to the court of last resort. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company recognizes interest and penalties related to income tax matters in income tax expense. | |||||||||||
Research and Development Costs | |||||||||||
Research and development costs are charged to expense when incurred. | |||||||||||
Earnings per Share | |||||||||||
Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during a period. Employee equity share options, nonvested shares and similar equity instruments granted by the Company are treated as potential common shares in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of restricted stock units, market-based restricted stock units and in-the-money options. The dilutive impact of the restricted stock units, market-based restricted stock units and in-the-money options is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of compensation expense for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in "Additional Paid-in Capital" when the award becomes deductible are assumed to be used to repurchase shares. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. | |||||||||||
The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information): | |||||||||||
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Basic: | |||||||||||
Net income | $ | 391.7 | $ | 293.2 | $ | 236.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted-average shares outstanding | 111.7 | 114.9 | 114.6 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic earnings per share | $ | 3.51 | $ | 2.55 | $ | 2.07 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Diluted: | |||||||||||
Net income | $ | 391.7 | $ | 293.2 | $ | 236.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted-average shares outstanding | 111.7 | 114.9 | 114.6 | ||||||||
Dilutive effect of stock plans | 2.1 | 3.4 | 4.8 | ||||||||
| | | | | | | | | | | |
Dilutive weighted-average shares outstanding | 113.8 | 118.3 | 119.4 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Diluted earnings per share | $ | 3.44 | $ | 2.48 | $ | 1.98 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Stock options, restricted stock units and market-based restricted stock units to purchase approximately 3.3 million, 1.7 million and 1.0 million shares for the years ended December 31, 2013, 2012 and 2011, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. | |||||||||||
Stock-based Compensation | |||||||||||
The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values. Stock-based awards consist of stock options, restricted stock units, market-based restricted stock units, and employee stock purchase subscriptions. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period (vesting period) on a straight-line basis. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Upon exercise of stock options or vesting of restricted stock units and market-based restricted stock units, the Company issues common stock. | |||||||||||
Total stock-based compensation expense for the years ended December 31, 2013, 2012 and 2011 was as follows (in millions): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cost of goods sold | $ | 5.9 | $ | 5 | $ | 4 | |||||
Selling, general and administrative expenses | 34.7 | 31.2 | 25.4 | ||||||||
Research and development expenses | 6.8 | 5.9 | 5.6 | ||||||||
| | | | | | | | | | | |
Total stock-based compensation expense | $ | 47.4 | $ | 42.1 | $ | 35 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Upon retirement, all unvested stock options are immediately forfeited. In addition, upon retirement, a participant will immediately vest in 25% of restricted stock units for each full year of employment with the Company measured from the grant date. All remaining unvested restricted stock units are immediately forfeited. For market-based restricted stock units, upon retirement and in certain other specified cases, a participant will receive a pro-rated portion of the shares that would ultimately be issued based on attainment of the performance goals as determined on the vesting date. The pro-rated portion is based on the participant's whole months of service with the Company during the performance period prior to the date of termination. | |||||||||||
Derivatives | |||||||||||
The Company uses derivative financial instruments to manage interest rate and foreign currency risks. It is the Company's policy not to enter into derivative financial instruments for speculative purposes. The Company uses interest rate swaps to convert a portion of its fixed-rate debt into variable-rate debt. These interest rate swaps are designated as fair value hedges and meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swaps are considered to exactly offset changes in the fair value of the underlying long-term debt. The Company uses foreign currency forward exchange contracts to offset the changes due to currency rate movements in the amount of future cash flows associated with intercompany transactions and certain third-party expenses expected to occur within the next 13 months. These foreign currency forward exchange contracts are designated as cash flow hedges. Certain of the Company's locations have assets and liabilities denominated in currencies other than their functional currencies resulting from intercompany and third-party transactions. The Company uses foreign currency forward exchange contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with certain of these assets and liabilities. All foreign currency forward exchange contracts are denominated in currencies of major industrial countries, principally the Euro and the Japanese yen. | |||||||||||
All derivative financial instruments are recognized at fair value in the consolidated balance sheets. For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets the loss or gain on the underlying hedged item. The gain or loss on fair value hedges is classified in net interest expense, as they hedge the interest rate risk associated with the Company's fixed-rate debt. The Company reports in "Accumulated Other Comprehensive Loss" the effective portion of the gain or loss on derivative financial instruments that are designated, and that qualify, as cash flow hedges. The Company reclassifies these gains and losses into earnings in the same period in which the underlying hedged transactions affect earnings. Any hedge ineffectiveness (which represents the amount by which the changes in fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current period earnings. During 2013, 2012 and 2011, the Company did not record any gains or losses due to hedge ineffectiveness. The gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from derivative financial instruments are reported as operating activities in the consolidated statements of cash flows. | |||||||||||
Derivative financial instruments involve credit risk in the event the counterparty should default. It is the Company's policy to execute such instruments with global financial institutions that the Company believes to be creditworthy. The Company diversifies its derivative financial instruments among counterparties to minimize exposure to any one of these entities. The Company also uses International Swap Dealers Association master-netting agreements. Under the master-netting agreements, the Company's counterparty settlement risk is the net amount of any receipts or payments due between the Company and the counterparty financial institution. | |||||||||||
Recently Adopted Accounting Standards | |||||||||||
In December 2011, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance on disclosures about offsetting assets and liabilities. The guidance requires an entity to disclose both gross and net information about financial instruments and derivative instruments that are eligible for offset in the consolidated balance sheet or subject to an enforceable master-netting arrangement or similar agreement. In January 2013, the FASB clarified that this guidance applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the accounting guidance or subject to a master-netting arrangement or similar agreement. The guidance was effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company has provided the information required by this guidance in Note 10. | |||||||||||
In July 2012, the FASB issued an amendment to the accounting guidance on intangible assets to permit an entity to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived asset is impaired as a basis for determining whether it is necessary to calculate the fair value of the indefinite-lived asset and perform the quantitative impairment test by comparing the fair value with the carrying amount. The guidance was effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. | |||||||||||
In February 2013, the FASB issued an amendment to the accounting guidance on reporting amounts reclassified out of accumulated other comprehensive income. The guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassed is required to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. The guidance was effective prospectively for reporting periods beginning after December 15, 2012, and interim periods within those annual periods. The Company has provided the information required by this guidance in Note 13. | |||||||||||
New Accounting Standards Not Yet Adopted | |||||||||||
In July 2013, the FASB issued an amendment to the accounting guidance on income taxes impacting the presentation of unrecognized tax benefits. The guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for all same jurisdiction net operating loss or similar tax loss carryforwards, or tax credit carryforwards. The guidance is effective for annual reporting periods beginning after December 15, 2013 and interim periods therein. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. | |||||||||||
SPECIAL_GAINS_CHARGES
SPECIAL (GAINS) CHARGES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SPECIAL (GAINS) CHARGES | ' | ||||||||||
SPECIAL (GAINS) CHARGES | ' | ||||||||||
3. SPECIAL (GAINS) CHARGES | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in millions) | |||||||||||
Settlements and litigation | $ | (83.6 | ) | $ | — | $ | 3.3 | ||||
Realignment expenses | 10.4 | 9 | 5.5 | ||||||||
IPR&D impairment | 5.9 | — | — | ||||||||
Licensing of intellectual property | — | 7 | — | ||||||||
European receivables reserve | — | — | 12.8 | ||||||||
| | | | | | | | | | | |
Total special (gains) charges | $ | (67.3 | ) | $ | 16 | $ | 21.6 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Settlements and Litigation | |||||||||||
In February 2013, the Company received $83.6 million from Medtronic, Inc. in satisfaction of the April 2010 jury award of damages for infringement of the U.S. Andersen transcatheter heart valve patent, including accrued interest. For further information, see Note 16. | |||||||||||
In December 2011, the Company recorded a $3.3 million charge related to a litigation settlement. | |||||||||||
Realignment Expenses | |||||||||||
In December 2013, the Company recorded a $10.4 million charge related primarily to severance expenses associated with a global workforce realignment impacting 118 employees. As of December 31, 2013, the Company's remaining severance obligations of $9.2 million are expected to be substantially paid by the end of 2014. | |||||||||||
In December 2012, the Company recorded a $9.0 million charge related primarily to severance expenses associated with a global workforce realignment impacting 92 employees. As of December 31, 2013, payments related to the realignment were substantially complete. | |||||||||||
In December 2011, the Company recorded a $5.5 million charge related primarily to severance expenses associated with a global workforce realignment impacting 49 employees. As of December 31, 2013, payments related to the realignment were complete. | |||||||||||
IPR&D Impairment | |||||||||||
In December 2013, the Company recorded a $5.9 million write-off of IPR&D assets acquired from Embrella Cardiovascular, Inc. ("Embrella"). For further information, see Note 5. | |||||||||||
Licensing of Intellectual Property | |||||||||||
In April 2012, the Company obtained an exclusive license to a suturing device for minimally invasive surgery applications. The intellectual property is under development and there is uncertainty as to whether the product will ultimately be approved. The Company recorded a charge of $2.0 million related to the upfront licensing and royalty fees. | |||||||||||
In June 2012, the Company obtained a co-exclusive sublicense to intellectual property related to processing tissue and implanting cardiovascular valves. The intellectual property is under development and there is uncertainty as to whether the product will ultimately be approved. The Company recorded a charge of $5.0 million related to the upfront licensing fee. | |||||||||||
European Receivables Reserve | |||||||||||
During 2011, the Company recorded a $12.8 million charge to reflect the increased risk associated with its southern European receivables, primarily Greece. | |||||||||||
COMPOSITION_OF_CERTAIN_FINANCI
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ' | |||||||
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ' | |||||||
4. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ||||||||
Components of selected captions in the consolidated balance sheets at December 31 are as follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Accounts receivable, net(a) | ||||||||
Trade accounts receivable | $ | 307.9 | $ | 326.7 | ||||
Allowance for doubtful accounts | (5.4 | ) | (5.6 | ) | ||||
| | | | | | | | |
$ | 302.5 | $ | 321.1 | |||||
| | | | | | | | |
| | | | | | | | |
Inventories | ||||||||
Raw materials | $ | 57.8 | $ | 49.5 | ||||
Work in process | 82.2 | 58.8 | ||||||
Finished products | 168.9 | 172.7 | ||||||
| | | | | | | | |
$ | 308.9 | $ | 281 | |||||
| | | | | | | | |
| | | | | | | | |
Property, plant and equipment, net | ||||||||
Land | $ | 21.6 | $ | 21.5 | ||||
Buildings and leasehold improvements | 268.2 | 183.7 | ||||||
Machinery and equipment | 307.6 | 278.9 | ||||||
Equipment with customers | 40.2 | 40.2 | ||||||
Software | 99.2 | 102.1 | ||||||
Construction in progress | 27.9 | 68.1 | ||||||
| | | | | | | | |
764.7 | 694.5 | |||||||
Accumulated depreciation | (343.1 | ) | (321.2 | ) | ||||
| | | | | | | | |
$ | 421.6 | $ | 373.3 | |||||
| | | | | | | | |
| | | | | | | | |
Long-term accounts receivable, net(a) | ||||||||
Long-term trade accounts receivable | $ | 14.1 | $ | 16.3 | ||||
Allowance for doubtful accounts | (6.8 | ) | (6.4 | ) | ||||
| | | | | | | | |
$ | 7.3 | $ | 9.9 | |||||
| | | | | | | | |
| | | | | | | | |
Accrued and other liabilities | ||||||||
Employee compensation and withholdings | $ | 101.1 | $ | 102.7 | ||||
Clinical trial accruals | 37.2 | 23.1 | ||||||
Property, payroll and other taxes | 31.6 | 31 | ||||||
Fair value of derivatives | 17.2 | — | ||||||
Accrued rebates | 15 | 14.2 | ||||||
Realignment reserves | 9.5 | 8.7 | ||||||
Deferred income taxes | 7.2 | 8.7 | ||||||
Taxes payable | 7.1 | 9.5 | ||||||
Litigation reserves (Note 16) | 1.7 | 3.1 | ||||||
Other accrued liabilities | 69.6 | 71.7 | ||||||
| | | | | | | | |
$ | 297.2 | $ | 272.7 | |||||
| | | | | | | | |
| | | | | | | | |
(a) | ||||||||
As of December 31, 2013 and 2012, the Company's accounts receivables, net of the allowance for doubtful accounts, from customers in certain European countries were $104.7 million and $104.7 million, respectively. Balances from customers located in these countries that are expected to be collected beyond one year have been discounted to present value based on the estimated collection date. | ||||||||
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
ACQUISITIONS | ' | ||||
ACQUISITIONS | ' | ||||
5. ACQUISITIONS | |||||
BMEYE, B.V. | |||||
On October 9, 2012, the Company acquired all the outstanding shares of BMEYE, B.V. ("BMEYE") for an aggregate cash purchase price of €28.4 million ($36.9 million). In addition, the Company paid €3.9 million ($5.1 million) to BMEYE as an intercompany loan for payment of certain liabilities that were assumed as part of the acquisition. In connection with the acquisition, the Company placed €4.3 million ($5.5 million) of the purchase price into escrow to satisfy any claims for indemnification made in accordance with the merger agreement. Any funds remaining 18 months after the acquisition date will be disbursed to BMEYE's former shareholders. Acquisition-related costs of $0.5 million were recorded in "Selling, General and Administrative Expenses" during the year ended December 31, 2012. | |||||
BMEYE was a medical device company that specialized in the development of non-invasive technology for advanced hemodynamic monitoring. The acquisition provides the Company with full rights to develop BMEYE's existing technology platform to create a new, integrated hemodynamic monitoring system that has a disposable sensor unit worn by the patient. The acquisition was accounted for as a business combination. Tangible and intangible assets acquired were recorded based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was recorded to goodwill. The following table summarizes the fair values of the assets acquired and liabilities assumed (in millions): | |||||
Cash | $ | 0.3 | |||
Other current assets | 0.9 | ||||
Property and equipment, net | 1.3 | ||||
Goodwill | 34.9 | ||||
IPR&D | 5.2 | ||||
Developed technology | 1.2 | ||||
Current liabilities assumed | (4.5 | ) | |||
Long-term liabilities assumed | (2.4 | ) | |||
| | | | | |
Total purchase price | 36.9 | ||||
Less: cash acquired | (0.3 | ) | |||
| | | | | |
Total purchase price, net of cash acquired | $ | 36.6 | |||
| | | | | |
| | | | | |
Goodwill includes expected synergies and other benefits the Company believes will result from the acquisition. Goodwill was assigned to the Company's Europe segment and is not deductible for tax purposes. IPR&D has been capitalized at fair value as an intangible asset with an indefinite life and will be assessed for impairment in subsequent periods. The fair value of the IPR&D was determined using the income approach. This approach determines fair value based on cash flow projections which are discounted to present value using a risk-adjusted rate of return. Completion of successful design developments, bench testing, pre-clinical studies and human clinical studies are required prior to selling any product. The risks and uncertainties associated with completing development within a reasonable period of time include those related to the design, development and manufacturability of the product, the success of pre-clinical and clinical studies, and the timing of regulatory approvals. The valuation assumed approximately $8.4 million of additional research and development expenditures would be incurred prior to the date of product introduction. In the valuation, net cash inflows were forecasted to commence in 2014. During the fourth quarter of 2013, the Company transferred $0.8 million of the IPR&D to developed technology because the Company received CE mark for the product in Europe. The Company is currently projecting that approximately $0.6 million of research and development expenditures will be incurred prior to the date of product introduction in the United States and Japan, and that net cash inflows will commence in 2014. Upon completion of development, the underlying research and development intangible asset will be amortized over its estimated useful life. Developed technology assets are being amortized over a weighted-average useful life of 6 years. | |||||
The results of operations for BMEYE have been included in the accompanying consolidated financial statements from the date of acquisition. Pro forma results have not been presented as the results of BMEYE are not material in relation to the consolidated financial statements of the Company. | |||||
Embrella Cardiovascular, Inc. | |||||
On March 11, 2011, the Company acquired all the outstanding shares of Embrella, including shares already owned by the Company, for an aggregate cash purchase price of $42.6 million. IPR&D acquired as part of the acquisition was capitalized at fair value, which was determined using the income approach. This approach determines fair value based on cash flow projections which are discounted to present value using a risk-adjusted rate of return. Completion of successful design developments, bench testing, pre-clinical studies and human clinical studies are required prior to selling any product. The risks and uncertainties associated with completing development within a reasonable period of time include those related to the design, development and manufacturability of the product, the success of pre-clinical and clinical studies, and the timing of regulatory approvals. At the time of the valuation, it was assumed that approximately $4.4 million of additional research and development expenditures would be incurred prior to the date of product introduction and that net cash inflows would commence in late 2013. In the fourth quarter of 2013, the Company recorded a $5.9 million impairment charge because the carrying amount of the IPR&D was determined to be in excess of its estimated fair value due to a significant decrease in estimated future unit sales. The impaired IPR&D was reported in the Company's Europe segment. The decrease in estimated future unit sales was due to recent medical findings that diminished concern surrounding in embolic protection devices with transcatheter aortic valve replacement procedures. | |||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||||||||||||||
6. GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||||||||||
The changes in the carrying amount of goodwill, by segment, during the years ended December 31, 2013 and 2012 were as follows: | ||||||||||||||||||||
United | Europe | Total | ||||||||||||||||||
States | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Goodwill at December 31, 2011 | $ | 308.3 | $ | 41.5 | $ | 349.8 | ||||||||||||||
Goodwill acquired during the year | — | 34.9 | 34.9 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Goodwill at December 31, 2012 | 308.3 | 76.4 | 384.7 | |||||||||||||||||
Currency translation adjustment | — | 0.7 | 0.7 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Goodwill at December 31, 2013 | $ | 308.3 | $ | 77.1 | $ | 385.4 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Other intangible assets consist of the following (in millions): | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||
Amortization | Carrying | Amortization | Carrying | |||||||||||||||||
Value | Value | |||||||||||||||||||
Amortizable intangible assets | ||||||||||||||||||||
Patents | $ | 221.7 | $ | (179.9 | ) | $ | 41.8 | $ | 211.2 | $ | (167.3 | ) | $ | 43.9 | ||||||
Developed technology | 43.3 | (35.1 | ) | 8.2 | 41.3 | (33.0 | ) | 8.3 | ||||||||||||
Other | 10.7 | (8.1 | ) | 2.6 | 10.6 | (6.8 | ) | 3.8 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
275.7 | (223.1 | ) | 52.6 | 263.1 | (207.1 | ) | 56 | |||||||||||||
Unamortizable intangible assets | ||||||||||||||||||||
IPR&D | 4.6 | — | 4.6 | 11 | — | 11 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
$ | 280.3 | $ | (223.1 | ) | $ | 57.2 | $ | 274.1 | $ | (207.1 | ) | $ | 67 | |||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Goodwill and IPR&D resulting from purchase business combinations are not subject to amortization. Other acquired intangible assets with definite lives are amortized on a straight-line basis over their expected useful lives. The Company expenses costs incurred to renew or extend the term of acquired intangible assets. | ||||||||||||||||||||
In December 2013, the Company recorded a $5.9 million write-off of IPR&D assets acquired from Embrella. For further information, see Note 5. | ||||||||||||||||||||
The net carrying value of patents includes $23.4 million and $19.2 million of capitalized legal costs related to the defense and enforcement of issued patents for which success is deemed probable as of December 31, 2013 and 2012, respectively (see Note 2). | ||||||||||||||||||||
Amortization expense related to other intangible assets for the years ended December 31, 2013, 2012 and 2011 was $15.7 million, $13.3 million and $14.1 million, respectively. Estimated amortization expense for each of the years ending December 31 is as follows (in millions): | ||||||||||||||||||||
2014 | $ | 15.1 | ||||||||||||||||||
2015 | 13.8 | |||||||||||||||||||
2016 | 13.4 | |||||||||||||||||||
2017 | 6.6 | |||||||||||||||||||
2018 | 1.3 |
INVESTMENTS_IN_UNCONSOLIDATED_
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ' | |||||||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ' | |||||||
7. INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ||||||||
The Company has a number of equity investments in privately and publicly held companies. Investments in these unconsolidated affiliates are as follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Available-for-sale investments | ||||||||
Cost | $ | 0.4 | $ | 0.4 | ||||
Unrealized gains | 0.4 | 1.6 | ||||||
| | | | | | | | |
Fair value of available-for-sale investments | 0.8 | 2 | ||||||
| | | | | | | | |
Equity method investments | ||||||||
Cost | 14.1 | 13.3 | ||||||
Equity in losses | (2.7 | ) | (1.8 | ) | ||||
| | | | | | | | |
Carrying value of equity method investments | 11.4 | 11.5 | ||||||
| | | | | | | | |
Cost method investments | ||||||||
Carrying value of cost method investments | 9.7 | 7.6 | ||||||
| | | | | | | | |
Total investments in unconsolidated affiliates | $ | 21.9 | $ | 21.1 | ||||
| | | | | | | | |
| | | | | | | | |
There were no sales of available-for-sale investments during the year ended December 31, 2013. Proceeds from sales of available-for-sale investments for the years ended December 31, 2012 and 2011 were $2.1 million and $3.6 million, respectively, and the Company realized pre-tax gains of $0.4 million and $1.4 million, respectively. | ||||||||
DEBT_CREDIT_FACILITIES_AND_LEA
DEBT, CREDIT FACILITIES AND LEASE OBLIGATIONS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
DEBT, CREDIT FACILITIES AND LEASE OBLIGATIONS | ' | |||||||
DEBT, CREDIT FACILITIES AND LEASE OBLIGATIONS | ' | |||||||
8. DEBT, CREDIT FACILITIES AND LEASE OBLIGATIONS | ||||||||
In October 2013, the Company issued $600.0 million of 2.875% fixed-rate unsecured senior notes due October 15, 2018 (the "Notes"). The proceeds from the Notes of $597.0 million, which is net of an issuance discount of $3.0 million, was used to repay all amounts then outstanding under the Company's Four-Year Credit Agreement ("the Credit Facility") and the remainder will be used for general corporate purposes. Interest is payable semi-annually in arrears, with the first payment due in April 2014. The effective interest rate is 2.983%. Issuance costs of $5.4 million, as well as the discount on the Notes, are being amortized to interest expense over the term of the Notes. The Company may redeem the Notes, in whole or in part, at any time and from time to time at specified redemption prices. In addition, upon the occurrence of certain change of control triggering events, the Company may be required to repurchase all or a portion of the Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest. The Notes also include covenants that limit the Company's ability to incur secured indebtedness, enter into sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of its assets. As of December 31, 2013, the carrying value of the Notes was $593.1 million, which is net of the unamortized discount of $2.9 million and a $4.0 million adjustment related to changes in the fair value of the portion of the Notes in a fair value hedging relationship (see further information in Note 10). As of December 31, 2013, the fair value of the Notes, based on Level 2 inputs, approximated the face value of the Notes. | ||||||||
The Company's Credit Facility matures on July 29, 2015. On June 13, 2013, the Company amended the Credit Facility to increase the aggregate borrowings provided under the Credit Facility to $750.0 million. Borrowings generally bear interest at the London interbank offered rate ("LIBOR") plus a spread ranging from 0.875% to 1.600%, depending on the leverage ratio as defined in the Credit Facility. The Company also pays a facility fee ranging from 0.125% to 0.275%, depending on the leverage ratio, on the entire facility whether or not drawn. During 2013, the spread over LIBOR was 0.875% and the facility fee ranged from 0.125% to 0.150%. Issuance costs of $2.4 million are being amortized to interest expense over 4 years. As of December 31, 2013, there were no borrowings outstanding under the Credit Facility. The Credit Facility is unsecured and contains various financial and other covenants, including a maximum leverage ratio and a minimum interest coverage ratio, as defined in the Credit Facility. The Company was in compliance with all covenants at December 31, 2013. | ||||||||
As of December 31, 2012, included in the Credit Facility were unsecured notes denominated in Japanese yen of ¥1.2 billion (US$14.3 million). | ||||||||
The weighted-average interest rate under all debt obligations was 2.7% and 1.7% at December 31, 2013 and 2012, respectively. | ||||||||
Certain facilities and equipment are leased under operating leases expiring at various dates. Most of the operating leases contain renewal options. Total expense for all operating leases was $25.9 million, $23.9 million and $21.5 million for the years 2013, 2012 and 2011, respectively. | ||||||||
Future minimum lease payments (including interest) under non-cancelable operating leases and aggregate debt maturities at December 31, 2013 were as follows (in millions): | ||||||||
Operating | Aggregate | |||||||
Leases | Debt | |||||||
Maturities | ||||||||
2014 | $ | 23.5 | $ | — | ||||
2015 | 17.4 | — | ||||||
2016 | 12.6 | — | ||||||
2017 | 8.2 | — | ||||||
2018 | 7.2 | 600 | ||||||
Thereafter | 34.7 | — | ||||||
| | | | | | | | |
Total obligations and commitments | $ | 103.6 | $ | 600 | ||||
| | | | | | | | |
| | | | | | | | |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
9. FAIR VALUE MEASUREMENTS | ||||||||||||||
The consolidated financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. Financial instruments of the Company consist of cash deposits, bank time deposits, accounts and other receivables, investments in unconsolidated affiliates, accounts payable, certain accrued liabilities and borrowings under the Credit Facility. The carrying value of these financial instruments generally approximates fair value due to their short-term nature. Financial instruments also include notes payable. See Note 8 for further information on the fair value of the Notes. | ||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company prioritizes the inputs used to determine fair values in one of the following three categories: | ||||||||||||||
Level 1—Quoted market prices in active markets for identical assets or liabilities. | ||||||||||||||
Level 2—Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. | ||||||||||||||
Level 3—Unobservable inputs that are not corroborated by market data. | ||||||||||||||
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. | ||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||||||||||
The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis as of December 31, 2013 and 2012 (in millions): | ||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets | ||||||||||||||
Investments held for executive deferred compensation plan | $ | 15.1 | $ | — | $ | — | $ | 15.1 | ||||||
Investments in unconsolidated affiliates | 0.8 | — | — | 0.8 | ||||||||||
Derivatives | — | 13.8 | — | 13.8 | ||||||||||
| | | | | | | | | | | | | | |
$ | 15.9 | $ | 13.8 | $ | — | $ | 29.7 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Derivatives | $ | — | $ | 17.2 | $ | — | $ | 17.2 | ||||||
Executive deferred compensation plan | 15.5 | — | — | 15.5 | ||||||||||
| | | | | | | | | | | | | | |
$ | 15.5 | $ | 17.2 | $ | — | $ | 32.7 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
Assets | ||||||||||||||
Investments held for executive deferred compensation plan | $ | 12.7 | $ | — | $ | — | $ | 12.7 | ||||||
Investments in unconsolidated affiliates | 2 | — | — | 2 | ||||||||||
Derivatives | — | 5.7 | — | 5.7 | ||||||||||
| | | | | | | | | | | | | | |
$ | 14.7 | $ | 5.7 | $ | — | $ | 20.4 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Executive deferred compensation plan | $ | 12.4 | $ | — | $ | — | $ | 12.4 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Executive Deferred Compensation Plan | ||||||||||||||
The Company holds investments in trading securities related to its executive deferred compensation plan. The investments are in a variety of stock and bond mutual funds. The fair values of these investments and the corresponding liabilities are based on quoted market prices and are categorized as Level 1. | ||||||||||||||
Investments in Unconsolidated Affiliates | ||||||||||||||
Investments in unconsolidated affiliates are long-term equity investments in companies that are in various stages of development. Certain of the Company's investments in unconsolidated affiliates are designated as available-for-sale. These investments are carried at fair market value based on quoted market prices and are categorized as Level 1. | ||||||||||||||
Derivative Instruments | ||||||||||||||
The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts to manage foreign currency exposures and interest rate swap agreements to manage its interest rate exposures. All derivatives contracts are recognized on the balance sheet at their fair value. The fair value of foreign currency derivative financial instruments was estimated by discounting expected cash flows using quoted market interest rates and foreign exchange rates as of December 31, 2013 and 2012. The fair value of the interest rate swap agreements was determined based on a discounted cash flow analysis reflecting the contractual terms of the agreements and the 6 month LIBOR forward interest rate curve. Judgment was employed in interpreting market data to develop estimates of fair value; accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions or valuation methodologies could have a material effect on the estimated fair value amounts. The derivative instruments are categorized as Level 2. | ||||||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||||||||
10. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||||||||||||
The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. The Company does not enter into these arrangements for trading or speculation purposes. | ||||||||||||||||||||
Notional Amount | ||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Foreign currency forward exchange contracts | $ | 805.5 | $ | 779 | ||||||||||||||||
Interest rate swap agreements | $ | 300 | $ | — | ||||||||||||||||
The following table presents the location and fair value amounts of derivative instruments reported in the consolidated balance sheets (in millions): | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Balance Sheet Location | December 31, | December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 13.8 | $ | 5.7 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Foreign currency contracts | Accrued and other liabilities | $ | 13.2 | $ | — | |||||||||||||||
Interest rate swap agreements | Other long-term liabilities | $ | 4 | $ | — | |||||||||||||||
The following table presents the effect of master-netting agreements and rights of offset on the consolidated balance sheets (in millions): | ||||||||||||||||||||
Gross Amounts | ||||||||||||||||||||
Not Offset in the | ||||||||||||||||||||
Gross | Consolidated | |||||||||||||||||||
Amounts | Balance Sheet | |||||||||||||||||||
Offset in the | ||||||||||||||||||||
Consolidated | Net Amounts | |||||||||||||||||||
Balance Sheet | Presented in the | |||||||||||||||||||
Consolidated | ||||||||||||||||||||
December 31, 2013 | Gross | Balance Sheet | Financial | Cash | Net | |||||||||||||||
Amounts(a) | Instruments | Collateral | Amount | |||||||||||||||||
Received | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 13.8 | $ | — | $ | 13.8 | $ | (9.5 | ) | $ | — | $ | 4.3 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 13.2 | $ | — | $ | 13.2 | $ | (9.5 | ) | $ | — | $ | 3.7 | |||||||
Interest rate swap agreements | $ | 4 | $ | — | $ | 4 | $ | — | $ | — | $ | 4 | ||||||||
December 31, 2012 | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 10.9 | $ | (5.2 | ) | $ | 5.7 | $ | — | $ | — | $ | 5.7 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 5.2 | $ | (5.2 | ) | $ | — | $ | — | $ | — | $ | — | |||||||
(a) | ||||||||||||||||||||
The gross amounts presented as of December 31, 2012 do not include derivative assets of $3.8 million, and derivative liabilities of $3.8 million, as these derivatives were not subject to a master-netting arrangement and did not have rights of offset. | ||||||||||||||||||||
The following tables present the effect of derivative instruments on the consolidated statements of operations and consolidated statements of comprehensive income (in millions): | ||||||||||||||||||||
Amount of | Amount of | |||||||||||||||||||
Gain or (Loss) | Gain or (Loss) | |||||||||||||||||||
Recognized in | Reclassified | |||||||||||||||||||
OCI on | from | |||||||||||||||||||
Derivative | Accumulated | |||||||||||||||||||
(Effective | OCI into | |||||||||||||||||||
Portion) | Location of Gain or | Income | ||||||||||||||||||
(Loss) Reclassified | ||||||||||||||||||||
from Accumulated | ||||||||||||||||||||
2013 | 2012 | OCI into Income | 2013 | 2012 | ||||||||||||||||
Derivatives in cash flow hedging relationships | ||||||||||||||||||||
Foreign currency contracts | $ | 16.3 | $ | 13.7 | Cost of goods sold | $ | 21.5 | $ | 12.2 | |||||||||||
Amount of Gain or | ||||||||||||||||||||
(Loss) Recognized | ||||||||||||||||||||
in Income on | ||||||||||||||||||||
Location of Gain or (Loss) | Derivative | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | 2013 | 2012 | 2011 | |||||||||||||||||
Derivatives in fair value hedging relationships | ||||||||||||||||||||
Interest rate swap agreements | Interest expense | $ | (4.0 | ) | $ | — | $ | — | ||||||||||||
The losses on the interest rate swap agreements are fully offset by the changes in the fair value of the fixed rate debt being hedged. | ||||||||||||||||||||
Amount of Gain or | ||||||||||||||||||||
(Loss) Recognized | ||||||||||||||||||||
in Income on | ||||||||||||||||||||
Location of Gain or (Loss) | Derivative | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | 2013 | 2012 | 2011 | |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Foreign currency contracts | Other expense (income), net | $ | 18.4 | $ | 4.4 | $ | (6.0 | ) | ||||||||||||
The Company expects that during 2014 it will reclassify to earnings a $5.1 million gain currently recorded in "Accumulated Other Comprehensive Loss." | ||||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011, the Company did not record any gains or losses due to hedge ineffectiveness. | ||||||||||||||||||||
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | |||||||||||||
EMPLOYEE BENEFIT PLANS | ' | |||||||||||||
11. EMPLOYEE BENEFIT PLANS | ||||||||||||||
Defined Benefit Plans | ||||||||||||||
Edwards Lifesciences maintains defined benefit pension plans in Japan and certain European countries. Information regarding the Company's defined benefit pension plans is as follows (in millions): | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Change in projected benefit obligation: | ||||||||||||||
Beginning of year | $ | 108 | $ | 95.6 | ||||||||||
Service cost | 7.6 | 7.2 | ||||||||||||
Interest cost | 2 | 2.3 | ||||||||||||
Participant contributions | 1.9 | 2 | ||||||||||||
Actuarial (gain) loss | (5.6 | ) | 10.2 | |||||||||||
Benefits paid | — | (6.5 | ) | |||||||||||
Curtailment gain | — | (2.0 | ) | |||||||||||
Currency exchange rate changes and other | (2.7 | ) | (0.8 | ) | ||||||||||
| | | | | | | | |||||||
End of year | $ | 111.2 | $ | 108 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Change in fair value of plan assets: | ||||||||||||||
Beginning of year | $ | 57.2 | $ | 53.8 | ||||||||||
Actual return on plan assets | 4.4 | 1.7 | ||||||||||||
Employer contributions | 6.7 | 6.5 | ||||||||||||
Participant contributions | 1.9 | 2 | ||||||||||||
Benefits paid | — | (6.3 | ) | |||||||||||
Currency exchange rate changes and other | (1.7 | ) | (0.5 | ) | ||||||||||
| | | | | | | | |||||||
End of year | $ | 68.5 | $ | 57.2 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Funded Status | ||||||||||||||
Projected benefit obligation | $ | (111.2 | ) | $ | (108.0 | ) | ||||||||
Plan assets at fair value | 68.5 | 57.2 | ||||||||||||
| | | | | | | | |||||||
Underfunded status | $ | (42.7 | ) | $ | (50.8 | ) | ||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Net amounts recognized on the consolidated balance sheet: | ||||||||||||||
Other long-term liabilities | $ | 42.7 | $ | 50.8 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Accumulated other comprehensive loss, net of tax: | ||||||||||||||
Net actuarial loss | $ | (16.7 | ) | $ | (27.9 | ) | ||||||||
Net prior service credit | 2.1 | 2.4 | ||||||||||||
Deferred income tax benefit | 3.4 | 5 | ||||||||||||
| | | | | | | | |||||||
Total | $ | (11.2 | ) | $ | (20.5 | ) | ||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
The accumulated benefit obligation ("ABO") for all defined benefit pension plans was $99.3 million and $93.3 million as of December 31, 2013 and 2012, respectively. The projected benefit obligation and ABO were in excess of plan assets for all pension plans as of December 31, 2013 and 2012. | ||||||||||||||
The components of net periodic benefit cost are as follows (in millions): | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Service cost, net | $ | 7.6 | $ | 7.2 | $ | 6.6 | ||||||||
Interest cost | 2 | 2.3 | 2.2 | |||||||||||
Expected return on plan assets | (1.2 | ) | (1.4 | ) | (1.4 | ) | ||||||||
Curtailment gain | — | (0.2 | ) | — | ||||||||||
Amortization of actuarial loss | 1.3 | 0.8 | 0.6 | |||||||||||
Amortization of prior service credit | (0.3 | ) | (0.3 | ) | (0.4 | ) | ||||||||
Amortization of transition obligation | — | 0.1 | 0.1 | |||||||||||
| | | | | | | | | | | ||||
Net periodic pension benefits cost | $ | 9.4 | $ | 8.5 | $ | 7.7 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
The net actuarial loss and prior service credit that will be amortized from "Accumulated Other Comprehensive Loss" into net periodic benefits cost in 2014 are expected to be $0.6 million and $(0.3) million, respectively. | ||||||||||||||
Expected long-term returns for each of the plans' strategic asset classes were developed through consultation with investment advisors. Several factors were considered, including survey of investment managers' expectations, current market data, minimum guaranteed returns in certain insurance contracts, and historical market returns over long periods. Using policy target allocation percentages and the asset class expected returns, a weighted-average expected return was calculated. | ||||||||||||||
To select the discount rates for the defined benefit pension plans, the Company uses a modeling process that involves matching the expected duration of its benefit plans to a yield curve constructed from a portfolio of AA-rated fixed-income debt instruments, or their equivalent. For each country, the Company uses the implied yield of this hypothetical portfolio at the appropriate duration as a discount rate benchmark. | ||||||||||||||
The weighted-average assumptions used to determine the benefit obligations are as follows: | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Discount rate | 2.2 | % | 1.9 | % | ||||||||||
Rate of compensation increase | 3.1 | % | 3.1 | % | ||||||||||
Social securities increase | 1.8 | % | 1.8 | % | ||||||||||
Pension increase | 2 | % | 2 | % | ||||||||||
The weighted-average assumptions used to determine the net periodic benefit cost are as follows: | ||||||||||||||
Years ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Discount rate | 1.9 | % | 2.5 | % | 2.4 | % | ||||||||
Expected return on plan assets | 2.1 | % | 2.6 | % | 2.7 | % | ||||||||
Rate of compensation increase | 3.1 | % | 3.1 | % | 2.9 | % | ||||||||
Social securities increase | 1.8 | % | 1.8 | % | 1.8 | % | ||||||||
Pension increase | 2 | % | 2 | % | 2 | % | ||||||||
Plan Assets | ||||||||||||||
The Company's investment strategy for plan assets is to seek a competitive rate of return relative to an appropriate level of risk and to earn performance rates of return in accordance with the benchmarks adopted for each asset class. Risk management practices include diversification across asset classes and investment styles, and periodic rebalancing toward asset allocation targets. | ||||||||||||||
The Administrative and Investment Committee decides on the defined benefit plan provider in each location and that provider decides the target allocation for the Company's defined benefit plan at that location. The target asset allocation selected reflects a risk/return profile the Company feels is appropriate relative to the plans' liability structure and return goals. In certain plans, asset allocations may be governed by local requirements. Target weighted-average asset allocations at December 31, 2013, by asset category, are as follows: | ||||||||||||||
Insurance contracts | 81.1 | % | ||||||||||||
Equity securities | 10.4 | % | ||||||||||||
Debt securities | 8.5 | % | ||||||||||||
| | | | | ||||||||||
Total | 100 | % | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
The fair values of the Company's defined benefit plan assets at December 31, 2013 and 2012, by asset category, are as follows (in millions): | ||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Asset Category | ||||||||||||||
Cash | $ | 0.8 | $ | — | $ | — | $ | 0.8 | ||||||
Equity securities: | ||||||||||||||
United States equities | 2.1 | — | — | 2.1 | ||||||||||
International equities | 5.9 | — | — | 5.9 | ||||||||||
Debt securities: | ||||||||||||||
United States government bonds | 0.6 | — | — | 0.6 | ||||||||||
International government bonds | 4.5 | — | — | 4.5 | ||||||||||
Insurance contracts | — | — | 54.6 | 54.6 | ||||||||||
| | | | | | | | | | | | | | |
$ | 13.9 | $ | — | $ | 54.6 | $ | 68.5 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
Asset Category | ||||||||||||||
Cash | $ | 0.8 | $ | — | $ | — | $ | 0.8 | ||||||
Equity securities: | ||||||||||||||
United States equities | 1.6 | — | — | 1.6 | ||||||||||
International equities | 4.5 | — | — | 4.5 | ||||||||||
Debt securities: | ||||||||||||||
United States government bonds | 0.6 | — | — | 0.6 | ||||||||||
International government bonds | 4 | — | — | 4 | ||||||||||
Insurance contracts | — | — | 45.7 | 45.7 | ||||||||||
| | | | | | | | | | | | | | |
$ | 11.5 | $ | — | $ | 45.7 | $ | 57.2 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The following table summarizes the changes in fair value of the Company's defined benefit plan assets that have been classified as Level 3 for the years ended December 31, 2013 and 2012 (in millions): | ||||||||||||||
Insurance | ||||||||||||||
Contracts | ||||||||||||||
Balance at December 31, 2011 | $ | 43.5 | ||||||||||||
Actual return on plan assets: | ||||||||||||||
Relating to assets still held at December 31, 2012 | 1.2 | |||||||||||||
Relating to assets sold during 2012 | 0.1 | |||||||||||||
Purchases, sales and settlements | 0.4 | |||||||||||||
Currency exchange rate impact | 0.5 | |||||||||||||
| | | | | ||||||||||
Balance at December 31, 2012 | 45.7 | |||||||||||||
Actual return on plan assets: | ||||||||||||||
Relating to assets still held at December 31, 2013 | 0.9 | |||||||||||||
Relating to assets sold during 2013 | 0.1 | |||||||||||||
Purchases, sales and settlements | 6.9 | |||||||||||||
Currency exchange rate impact | 1 | |||||||||||||
| | | | | ||||||||||
Balance at December 31, 2013 | $ | 54.6 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Equity and debt securities are valued at fair value based on quoted market prices reported on the active markets on which the individual securities are traded. The insurance contracts are valued at the cash surrender value of the contracts, which is deemed to approximate its fair value. | ||||||||||||||
The following benefit payments, which reflect expected future service, as appropriate, at December 31, 2013, are expected to be paid (in millions): | ||||||||||||||
2014 | $ | 4.2 | ||||||||||||
2015 | 4.4 | |||||||||||||
2016 | 5.3 | |||||||||||||
2017 | 5.1 | |||||||||||||
2018 | 5.3 | |||||||||||||
2019-2023 | 34.1 | |||||||||||||
As of December 31, 2013, expected employer contributions for 2014 are $6.3 million. | ||||||||||||||
Defined Contribution Plans | ||||||||||||||
The Company's employees in the United States and Puerto Rico are eligible to participate in a qualified 401(k) and 1165(e) plan, respectively. In the United States, participants may contribute up to 25% of their eligible compensation (subject to tax code limitation) to the plan. Edwards Lifesciences matches the first 3% of the participant's annual eligible compensation contributed to the plan on a dollar-for-dollar basis. Edwards Lifesciences matches the next 2% of the participant's annual eligible compensation to the plan on a 50% basis. In Puerto Rico, participants may contribute up to 25% of their annual compensation (subject to tax code limitation) to the plan. Edwards Lifesciences matches the first 4% of participant's annual eligible compensation contributed to the plan on a 50% basis. The Company also provides a 2% profit sharing contribution calculated on eligible earnings for each employee. Matching contributions relating to Edwards Lifesciences employees were $12.0 million, $10.8 million and $9.9 million in 2013, 2012 and 2011, respectively. | ||||||||||||||
The Company has a nonqualified deferred compensation plan for a select group of employees that provides the opportunity to defer a specified percentage of their eligible cash compensation. Participants may elect to defer up to 25% of total eligible compensation. The Company's obligations under this plan are unfunded. The amount accrued under this plan was $10.4 million and $8.2 million at December 31, 2013 and 2012, respectively. | ||||||||||||||
During 2001, the Company adopted a nonqualified option plan ("Executive Option Plan") for the benefit of the executive officers and other key employees. The Executive Option Plan permitted participants to receive options to purchase shares of mutual funds or common stock of the Company in lieu of all or a portion of their compensation (base salary and bonus) earned prior to January 1, 2005. The Company discontinued option grants under the Executive Option Plan and has adopted the Executive Deferred Compensation Plan to provide officers and other key employees the opportunity to defer compensation earned after December 31, 2004 to future dates specified by the participant with a return based on investment alternatives selected by the participant. The amount accrued under this plan was $15.5 million and $12.4 million at December 31, 2013 and 2012, respectively. | ||||||||||||||
COMMON_STOCK
COMMON STOCK | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
COMMON STOCK | ' | |||||||||||||||||||||
COMMON STOCK | ' | |||||||||||||||||||||
12. COMMON STOCK | ||||||||||||||||||||||
Treasury Stock | ||||||||||||||||||||||
In September 2011, the Board of Directors approved a stock repurchase program authorizing the Company to purchase on the open market, including under a Rule 10b5-1 plan, and in privately negotiated transactions up to $500.0 million of the Company's common stock. In May 2013, the Board of Directors approved a new stock repurchase program authorizing the Company to purchase on the open market, including pursuant to a Rule 10b5-1 plan, and in privately negotiated transactions up to an additional $750.0 million of the Company's common stock from time to time until December 31, 2016. Stock repurchased under these programs will be used to offset obligations under the Company's employee stock option programs and reduce the total shares outstanding. | ||||||||||||||||||||||
During 2013, 2012 and 2011, the Company repurchased 6.8 million, 4.0 million and 3.9 million shares, respectively, at an aggregate cost of $497.0 million, $353.2 million and $303.4 million, respectively, including shares purchased under the accelerated share repurchase ("ASR") agreements described below and shares acquired to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees. The timing and size of any future stock repurchases are subject to a variety of factors, including market conditions, stock prices and other cash requirements. | ||||||||||||||||||||||
Accelerated Share Repurchase | ||||||||||||||||||||||
During 2013 and 2012, the Company entered into ASR agreements providing for the repurchase of the Company's common stock based on the volume-weighted average price ("VWAP") of the Company's common stock during the terms of the agreements, less a discount. The ASR agreements were subject to collar provisions that established minimum and maximum number of shares to be repurchased. The following table summarizes the terms of the ASR agreements (dollars and shares in millions, except per-share data): | ||||||||||||||||||||||
Initial Delivery | ||||||||||||||||||||||
Final Settlement | ||||||||||||||||||||||
Value of | ||||||||||||||||||||||
Shares as % | ||||||||||||||||||||||
of Contract | ||||||||||||||||||||||
Agreement Date | Amount | Shares | Price per | Value | Settlement | Total Shares | Average Price | |||||||||||||||
Paid | Received | Share | Date | Received | per Share | |||||||||||||||||
Feb-12 | $ | 54 | 0.6 | $ | 72.4 | 80 | % | May-12 | 0.7 | $ | 75.12 | |||||||||||
May-12 | $ | 50 | 0.5 | $ | 84.81 | 80 | % | Aug-12 | 0.5 | $ | 97.5 | |||||||||||
Nov-12 | $ | 100 | 1.1 | $ | 85.73 | 90 | % | Feb-13 | 1.2 | $ | 88.93 | |||||||||||
Aug-13 | $ | 250 | 3.1 | $ | 72.39 | 90 | % | Oct-13 | 3.5 | $ | 71.24 | |||||||||||
The ASR agreements were accounted for as two separate transactions: (a) the value of the initial delivery of shares was recorded as shares of common stock acquired in a treasury stock transaction on the acquisition date and (b) the remaining amount of the purchase price paid was recorded as a forward contract indexed to the Company's own common stock and was recorded in "Additional Paid-in Capital" on the consolidated balance sheets. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. The Company determined that the forward contract indexed to the Company's common stock met all the applicable criteria for equity classification and, therefore, was not accounted for as a derivative instrument. | ||||||||||||||||||||||
Employee and Director Stock Plans | ||||||||||||||||||||||
The Edwards Lifesciences Corporation Long-term Stock Incentive Compensation Program (the "Program") provides for the grant of incentive and non-qualified stock options, restricted stock and restricted stock units for eligible employees and contractors of the Company. Under the Program, these grants are awarded at a price equal to the fair market value at the date of grant based upon the closing price on that date. Options to purchase shares of the Company's common stock granted under the Program generally vest over predetermined periods of between three to four years and expire seven years after the date of grant. Restricted stock units of the Company's common stock granted under the Program generally vest over predetermined periods ranging from three to five years after the date of grant. Market-based restricted stock units of the Company's common stock granted under the Program vest based on a combination of certain service and market conditions. The actual number of shares issued will be determined based on the Company's total shareholder return relative to a selected industry peer group over a three-year performance period, and may range from 0 percent to 175 percent of the targeted number of shares granted. On May 14, 2013, an amendment and restatement of the Program was approved by the Company's stockholders. Under the amended Program, the number of shares of common stock available for issuance under the Program was 48.9 million shares. No more than 3.6 million shares reserved for issuance may be granted in the form of restricted stock or restricted stock units. | ||||||||||||||||||||||
The Company also maintains the Nonemployee Directors Stock Incentive Compensation Program (the "Nonemployee Directors Program"). Under the Nonemployee Directors Program, each nonemployee director may receive annually up to 10,000 stock options or 4,000 restricted stock units of the Company's common stock, or a combination thereof, provided that in no event may the total value of the combined annual award exceed $0.2 million. Additionally, each nonemployee director may elect to receive all or a portion of the annual cash retainer to which the director is otherwise entitled through the issuance of stock options or restricted stock units. Each option and restricted stock unit award granted in 2011 or prior generally vests in three equal annual installments. Each option and restricted stock unit award granted after 2011 generally vests after one year. Upon a director's initial election to the Board, the director receives an initial grant of restricted stock units equal to a fair market value on grant date of $0.2 million, not to exceed 10,000 shares. These grants vest over three years from the date of grant. Under the Nonemployee Directors Program, an aggregate of 1.4 million shares of the Company's common stock has been authorized for issuance. | ||||||||||||||||||||||
The Company has an employee stock purchase plan for United States employees and a plan for international employees (collectively "ESPP"). Under the ESPP, eligible employees may purchase shares of the Company's common stock at 85% of the lower of the fair market value of Edwards Lifesciences common stock on the effective date of subscription or the date of purchase. Under the ESPP, employees can authorize the Company to withhold up to 12% of their compensation for common stock purchases, subject to certain limitations. The ESPP is available to all active employees of the Company paid from the United States payroll and to eligible employees of the Company outside the United States to the extent permitted by local law. The ESPP for United States employees is qualified under Section 423 of the Internal Revenue Code. The number of shares of common stock authorized for issuance under the ESPP was 6.6 million shares. | ||||||||||||||||||||||
The fair value of each option award and employee stock purchase subscription is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following tables. The risk-free interest rate is estimated using the U.S. Treasury yield curve and is based on the expected term of the award. Expected volatility is estimated based on a blend of the weighted-average of the historical volatility of Edwards' stock and the implied volatility from traded options on Edwards' stock. The expected term of awards granted is estimated from the vesting period of the award, as well as historical exercise behavior, and represents the period of time that awards granted are expected to be outstanding. The Company uses historical data to estimate forfeitures and has estimated an annual forfeiture rate of 5.1%. | ||||||||||||||||||||||
The Black-Scholes option pricing model was used with the following weighted-average assumptions for options granted during the following periods: | ||||||||||||||||||||||
Option Awards | ||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Average risk-free interest rate | 0.8 | % | 0.7 | % | 1.7 | % | ||||||||||||||||
Expected dividend yield | None | None | None | |||||||||||||||||||
Expected volatility | 31 | % | 31 | % | 27 | % | ||||||||||||||||
Expected life (years) | 4.6 | 4.6 | 4.5 | |||||||||||||||||||
Fair value, per share | $ | 19.47 | $ | 23.93 | $ | 22.78 | ||||||||||||||||
The Black-Scholes option pricing model was used with the following weighted-average assumptions for ESPP subscriptions granted during the following periods: | ||||||||||||||||||||||
ESPP | ||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Average risk-free interest rate | 0.1 | % | 0.1 | % | 0.2 | % | ||||||||||||||||
Expected dividend yield | None | None | None | |||||||||||||||||||
Expected volatility | 33 | % | 33 | % | 28 | % | ||||||||||||||||
Expected life (years) | 0.6 | 0.6 | 0.6 | |||||||||||||||||||
Fair value, per share | $ | 19.87 | $ | 21.3 | $ | 20.02 | ||||||||||||||||
The fair value of market-based restricted stock units was determined using a Monte Carlo simulation model, which uses multiple input variables to determine the probability of satisfying the market condition requirements. The weighted-average assumptions used to determine the fair value of the market-based restricted stock units during the years ended December 31, 2013 and 2012 included a risk-free interest rate of 0.4 percent and 0.3 percent, respectively, and an expected volatility rate of 33.4 percent and 30.4 percent, respectively. | ||||||||||||||||||||||
Stock option activity during the year ended December 31, 2013 under the Program and the Nonemployee Directors Program was as follows (in millions, except years and per-share amounts): | ||||||||||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | |||||||||||||||||||
Average | Average | Intrinsic Value | ||||||||||||||||||||
Exercise | Remaining | |||||||||||||||||||||
Price | Contractual | |||||||||||||||||||||
Term | ||||||||||||||||||||||
Outstanding as of December 31, 2012 | 7.5 | $ | 49.92 | |||||||||||||||||||
Options granted | 1.4 | 71.48 | ||||||||||||||||||||
Options exercised | (1.0 | ) | 25.82 | |||||||||||||||||||
Options forfeited | (0.2 | ) | 77.46 | |||||||||||||||||||
| | | | | | | | | | | | | ||||||||||
Outstanding as of December 31, 2013 | 7.7 | 56.37 | 3.7 years | $ | 126.4 | |||||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
Exercisable as of December 31, 2013 | 5.2 | 46.9 | 2.8 years | 122.8 | ||||||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
Vested and expected to vest as of December 31, 2013 | 7.5 | 55.68 | 3.6 years | 126 | ||||||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
The following table summarizes nonvested restricted stock unit activity during the year ended December 31, 2013 under the Program and the Nonemployee Directors Program (in millions, except per-share amounts): | ||||||||||||||||||||||
Shares | Weighted- | |||||||||||||||||||||
Average | ||||||||||||||||||||||
Grant-Date | ||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||
Nonvested as of December 31, 2012 | 0.8 | $ | 67.92 | |||||||||||||||||||
Granted(a) | 0.3 | 66.52 | ||||||||||||||||||||
Vested | (0.3 | ) | 44.31 | |||||||||||||||||||
Forfeited | — | — | ||||||||||||||||||||
| | | | | | | | |||||||||||||||
Nonvested as of December 31, 2013 | 0.8 | 75.87 | ||||||||||||||||||||
| | | | | | | | |||||||||||||||
| | | | | | | | |||||||||||||||
(a) | ||||||||||||||||||||||
Includes 0.1 million shares of market-based restricted stock units granted during 2013, which represents the targeted number of shares to be issued. As described above, the actual number of shares ultimately issued will be determined based on the Company's total shareholder return relative to a selected industry peer group. | ||||||||||||||||||||||
The intrinsic value of stock options exercised and restricted stock units vested during the years ended December 31, 2013, 2012 and 2011 were $73.9 million, $252.8 million and $180.7 million, respectively. The intrinsic value of stock options is calculated as the amount by which the market price of the Company's common stock exceeds the exercise price of the option. During the years ended December 31, 2013, 2012 and 2011, the Company received cash from exercises of stock options of $26.3 million, $80.5 million and $42.4 million, respectively, and realized tax benefits from exercises of stock options and vesting of restricted stock units of $24.7 million, $82.6 million and $60.7 million, respectively. The total grant-date fair value of stock options vested during the years ended December 31, 2013, 2012 and 2011 were $21.8 million, $19.5 million and $16.9 million, respectively. | ||||||||||||||||||||||
As of December 31, 2013, the total remaining unrecognized compensation expense related to nonvested stock options, restricted stock units, market-based restricted stock units and employee stock purchase subscriptions amounted to $76.0 million, which will be amortized over the weighted-average remaining requisite service period of 29 months. | ||||||||||||||||||||||
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||||||||||||||
13. ACCUMULATED OTHER COMPREHENSIVE LOSS | |||||||||||||||||
Presented below is a summary of activity for each component of "Accumulated Other Comprehensive Loss" for the years ended December 31, 2013, 2012 and 2011. Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-United States subsidiaries. | |||||||||||||||||
Foreign | Unrealized Gain | Unrealized Gain | Unrealized | Total | |||||||||||||
Currency | (Loss) on Cash | (Loss) on | Pension | Accumulated | |||||||||||||
Translation | Flow Hedges | Available-for-Sale | Costs(a) | Other | |||||||||||||
Adjustments | Investments | Comprehensive | |||||||||||||||
Loss | |||||||||||||||||
(in millions) | |||||||||||||||||
December 31, 2010 | $ | (24.8 | ) | $ | (10.9 | ) | $ | 2.2 | $ | (8.6 | ) | $ | (42.1 | ) | |||
Other comprehensive loss before reclassifications | (5.2 | ) | (1.6 | ) | (0.7 | ) | (6.9 | ) | (14.4 | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss | — | 29 | (1.6 | ) | 0.3 | 27.7 | |||||||||||
Deferred income tax (expense) benefit | — | (10.6 | ) | 1.2 | 0.7 | (8.7 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
December 31, 2011 | (30.0 | ) | 5.9 | 1.1 | (14.5 | ) | (37.5 | ) | |||||||||
Other comprehensive income (loss) before reclassifications | 4.2 | 13.7 | 0.1 | (7.8 | ) | 10.2 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (12.2 | ) | 0.3 | 0.6 | (11.3 | ) | ||||||||||
Deferred income tax (expense) benefit | — | (0.4 | ) | (0.1 | ) | 1.2 | 0.7 | ||||||||||
| | | | | | | | | | | | | | | | | |
December 31, 2012 | (25.8 | ) | 7 | 1.4 | (20.5 | ) | (37.9 | ) | |||||||||
Other comprehensive income (loss) before reclassifications | 5.6 | 16.3 | (1.2 | ) | 9.9 | 30.6 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | (21.5 | ) | 1 | (20.5 | ) | ||||||||||||
Deferred income tax benefit (expense) | — | 1.7 | 0.1 | (1.6 | ) | 0.2 | |||||||||||
| | | | | | | | | | | | | | | | | |
December 31, 2013 | $ | (20.2 | ) | $ | 3.5 | $ | 0.3 | $ | (11.2 | ) | $ | (27.6 | ) | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | |||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011, the change in unrealized pension costs consisted of the following (in millions): | |||||||||||||||||
Pre-Tax | Tax Benefit | Net of Tax | |||||||||||||||
Amount | (Expense) | Amount | |||||||||||||||
2013 | |||||||||||||||||
Prior service cost arising during period | $ | — | $ | — | $ | — | |||||||||||
Amortization of prior service credit | (0.3 | ) | — | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.3 | ) | — | (0.3 | ) | ||||||||||||
Net transition obligation amortized during period | — | — | — | ||||||||||||||
Net actuarial gain arising during period | 11.2 | (1.6 | ) | 9.6 | |||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | 10.9 | $ | (1.6 | ) | $ | 9.3 | ||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
2012 | |||||||||||||||||
Prior service cost arising during period | $ | (0.2 | ) | $ | — | $ | (0.2 | ) | |||||||||
Amortization of prior service credit | (0.3 | ) | — | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.5 | ) | — | (0.5 | ) | ||||||||||||
Net transition obligation amortized during period | 0.1 | — | 0.1 | ||||||||||||||
Net actuarial loss arising during period | (6.8 | ) | 1.2 | (5.6 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | (7.2 | ) | $ | 1.2 | $ | (6.0 | ) | |||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
2011 | |||||||||||||||||
Prior service credit arising during period | $ | 0.1 | $ | — | $ | 0.1 | |||||||||||
Amortization of prior service credit | (0.4 | ) | 0.1 | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.3 | ) | 0.1 | (0.2 | ) | ||||||||||||
Net transition obligation amortized during period | 0.1 | — | 0.1 | ||||||||||||||
Net actuarial loss arising during period | (6.4 | ) | 0.6 | (5.8 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | (6.6 | ) | $ | 0.7 | $ | (5.9 | ) | |||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
The following table provides information about amounts reclassified from "Accumulated Other Comprehensive Loss" (in millions): | |||||||||||||||||
Details about Accumulated Other Comprehensive Loss | Year Ended | Affected Line on Consolidated | |||||||||||||||
Components | December 31, | Statements of Operations | |||||||||||||||
2013 | |||||||||||||||||
Gain on cash flow hedges | $ | 21.5 | Cost of goods sold | ||||||||||||||
(8.4 | ) | Provision for income taxes | |||||||||||||||
| | | | | | ||||||||||||
$ | 13.1 | Net of tax | |||||||||||||||
| | | | | | ||||||||||||
Amortization of pension adjustments | $ | (1.0 | ) | (a) | |||||||||||||
0.2 | Provision for income taxes | ||||||||||||||||
| | | | | | ||||||||||||
$ | (0.8 | ) | Net of tax | ||||||||||||||
| | | | | | ||||||||||||
| | | | | | ||||||||||||
(a) | |||||||||||||||||
This item is included in the components of net periodic benefit costs. See Note 11 for additional information. | |||||||||||||||||
OTHER_EXPENSE_INCOME_NET
OTHER EXPENSE (INCOME), NET | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
OTHER EXPENSE (INCOME), NET | ' | ||||||||||
OTHER EXPENSE (INCOME), NET | ' | ||||||||||
14. OTHER EXPENSE (INCOME), NET | |||||||||||
Years Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in millions) | |||||||||||
Foreign exchange losses, net | $ | 1.5 | $ | 1.2 | $ | 1.9 | |||||
Loss (gain) on investments in unconsolidated affiliates | 0.4 | 0.7 | (5.4 | ) | |||||||
Earn-out payments | — | — | (1.0 | ) | |||||||
Other | (0.6 | ) | (0.2 | ) | (0.3 | ) | |||||
| | | | | | | | | | | |
Total other expense (income), net | $ | 1.3 | $ | 1.7 | $ | (4.8 | ) | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
15. INCOME TAXES | |||||||||||||||||
The Company's income before provision for income taxes was generated from United States and international operations as follows (in millions): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
United States | $ | 219.6 | $ | 143.7 | $ | 23.6 | |||||||||||
International, including Puerto Rico | 295.7 | 247.4 | 260 | ||||||||||||||
| | | | | | | | | | | |||||||
$ | 515.3 | $ | 391.1 | $ | 283.6 | ||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
The provision for income taxes consists of the following (in millions): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Current | |||||||||||||||||
United States: | |||||||||||||||||
Federal | $ | 42.5 | $ | 87.2 | $ | 29.1 | |||||||||||
State and local | 5.7 | 5.9 | 3 | ||||||||||||||
International, including Puerto Rico | 27.9 | 31.6 | 25 | ||||||||||||||
| | | | | | | | | | | |||||||
Current income tax expense | 76.1 | 124.7 | 57.1 | ||||||||||||||
| | | | | | | | | | | |||||||
Deferred | |||||||||||||||||
United States: | |||||||||||||||||
Federal | 41.2 | (23.8 | ) | (6.4 | ) | ||||||||||||
State and local | 0.9 | (2.0 | ) | 1.2 | |||||||||||||
International, including Puerto Rico | 5.4 | (1.0 | ) | (5.0 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Deferred income tax expense (benefit) | 47.5 | (26.8 | ) | (10.2 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Total income tax provision | $ | 123.6 | $ | 97.9 | $ | 46.9 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
The components of deferred tax assets and liabilities are as follows (in millions): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax assets | |||||||||||||||||
Compensation and benefits | $ | 58.2 | $ | 53.5 | |||||||||||||
Net operating loss carryforwards | 33.6 | 27.6 | |||||||||||||||
Benefits from uncertain tax positions | 32.6 | 28.1 | |||||||||||||||
Net tax credit carryforwards | 25.1 | 20.8 | |||||||||||||||
Accrued liabilities | 23 | 13 | |||||||||||||||
Inventories | 8.7 | 0.4 | |||||||||||||||
Cash flow hedges | 3.2 | — | |||||||||||||||
Investments in unconsolidated affiliates | 2.1 | 2.8 | |||||||||||||||
Other | 3.2 | 0.5 | |||||||||||||||
| | | | | | | | ||||||||||
Total deferred tax assets | 189.7 | 146.7 | |||||||||||||||
| | | | | | | | ||||||||||
Deferred tax liabilities | |||||||||||||||||
Property, plant and equipment | (23.6 | ) | (20.8 | ) | |||||||||||||
Deferred tax on foreign earnings | (15.6 | ) | (0.4 | ) | |||||||||||||
Other intangible assets | (10.1 | ) | (1.8 | ) | |||||||||||||
Cash flow hedges | — | (2.0 | ) | ||||||||||||||
Other | (1.6 | ) | (2.9 | ) | |||||||||||||
| | | | | | | | ||||||||||
Total deferred tax liabilities | (50.9 | ) | (27.9 | ) | |||||||||||||
| | | | | | | | ||||||||||
Valuation allowance | (46.4 | ) | (38.6 | ) | |||||||||||||
| | | | | | | | ||||||||||
Net deferred tax assets | $ | 92.4 | $ | 80.2 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
During 2013, net deferred tax assets increased $12.2 million, including items that were recorded to stockholders' equity and which did not impact the Company's income tax provision. | |||||||||||||||||
The valuation allowance of $46.4 million as of December 31, 2013 reduces certain deferred tax assets to amounts that are more likely than not to be realized. This allowance primarily relates to the net operating loss carryforwards of certain United States and non-United States subsidiaries and to the deferred tax assets established for impairment losses on certain investments and for certain non-United States credit carryforwards. | |||||||||||||||||
A valuation allowance of $2.8 million has been provided for other-than-temporary impairments and unrealized losses related to certain investments in unconsolidated affiliates that may not be recognized due to the uncertainty of the ready marketability of certain impaired investments. | |||||||||||||||||
Net operating loss carryforwards and the related carryforward periods at December 31, 2013 are summarized as follows (in millions): | |||||||||||||||||
Carryforward | Tax Benefit | Valuation | Net Tax | Carryforward | |||||||||||||
Amount | Amount | Allowance | Benefit | Period Ends | |||||||||||||
United States state net operating losses | $ | 46.9 | $ | 2.7 | $ | (1.5 | ) | $ | 1.2 | 2014-2032 | |||||||
Non-United States net operating losses | 55.4 | 13.9 | (12.9 | ) | 1 | 2014-2022 | |||||||||||
Non-United States net operating losses | 53.7 | 18.2 | (17.1 | ) | 1.1 | Indefinite | |||||||||||
| | | | | | | | | | | | | | | | | |
Total | $ | 156 | $ | 34.8 | $ | (31.5 | ) | $ | 3.3 | ||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Tax credit carryforwards and the related carryforward periods at December 31, 2013 are summarized as follows (in millions): | |||||||||||||||||
Carryforward | Valuation | Net Tax | Carryforward | ||||||||||||||
Amount | Allowance | Benefit | Period Ends | ||||||||||||||
United States federal tax credits | $ | 9 | $ | — | $ | 9 | 2021-2033 | ||||||||||
California research expenditure tax credits | 46.6 | — | 46.6 | Indefinite | |||||||||||||
Puerto Rico purchases credit | 12.1 | (12.1 | ) | — | Indefinite | ||||||||||||
Other non-United States tax credits | 0.2 | — | 0.2 | 2015-2016 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 67.9 | $ | (12.1 | ) | $ | 55.8 | ||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
The Company has $46.6 million of California research expenditure tax credits it expects to use in future periods. The credits may be carried forward indefinitely. Based upon anticipated future taxable income, the Company expects that it is more likely than not that all California research expenditure tax credits will be utilized, although the utilization of the full benefit is expected to occur over a number of years and into the far distant future. Accordingly, no valuation allowance has been provided. | |||||||||||||||||
The United States state net operating loss carryforwards include $46.9 million of losses attributable to windfall stock option deductions. A net benefit of $1.2 million will be recorded to "Additional Paid-in Capital" when realized as a reduction to income taxes payable. | |||||||||||||||||
Approximately $17.3 million of the total $55.6 million United States federal and state tax credit carryforwards are attributable to windfall stock option deductions and will be recorded as a benefit to "Additional Paid-in Capital" when realized as a reduction to income taxes payable. | |||||||||||||||||
Deferred income taxes have not been provided on the undistributed earnings of certain of the Company's foreign subsidiaries of approximately $1,368.7 million as of December 31, 2013 since these amounts are intended to be indefinitely reinvested in foreign operations. It is not practicable to calculate the deferred taxes associated with these earnings because of the variability of multiple factors that would need to be assessed at the time of any assumed repatriation; however, foreign tax credits would likely be available to reduce federal income taxes in the event of distribution. In making this assertion, the Company evaluates, among other factors, the profitability of its United States and foreign operations and the need for cash within and outside the United States, including cash requirements for capital improvement, acquisitions, market expansion and stock repurchase programs. The Company does not expect any earnings for certain of its European subsidiaries to be indefinitely reinvested and records the tax impact in net income currently. In addition, a portion of the 2013 earnings of another European subsidiary was determined not to be indefinitely reinvested and the tax impact was recorded in net income currently. | |||||||||||||||||
The Company has received tax incentives in Puerto Rico, the Dominican Republic, Singapore and Switzerland. The tax reductions as compared to the local statutory rates favorably impacted earnings per diluted share for the years ended December 31, 2013, 2012 and 2011 by $0.44, $0.39 and $0.40, respectively. The Puerto Rico, Dominican Republic, Singapore and Switzerland grants provide the Company's manufacturing operations partial or full exemption from local taxes until the years 2028, 2030 (subject to review beginning in 2015), 2024 and 2015, respectively. | |||||||||||||||||
A reconciliation of the United States federal statutory income tax rate to the Company's effective income tax rate is as follows (in millions): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Income tax expense at U.S. federal statutory rate | $ | 180.3 | $ | 136.9 | $ | 99.2 | |||||||||||
Foreign income taxed at different rates | (60.6 | ) | (41.5 | ) | (55.3 | ) | |||||||||||
Tax credits, federal and state | (19.8 | ) | (4.9 | ) | (10.4 | ) | |||||||||||
U.S. tax on foreign earnings, net of credits | 18.9 | 0.7 | 9.7 | ||||||||||||||
State and local taxes, net of federal tax benefit | 5.9 | 3.9 | 4.6 | ||||||||||||||
Nondeductible stock-based compensation | 2.6 | 1.9 | 1.9 | ||||||||||||||
Release of reserve for uncertain tax positions for prior years | (3.9 | ) | (0.8 | ) | (4.1 | ) | |||||||||||
Other | 0.2 | 1.7 | 1.3 | ||||||||||||||
| | | | | | | | | | | |||||||
Income tax provision | $ | 123.6 | $ | 97.9 | $ | 46.9 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Certain previously reported amounts in the above table have been reclassified to conform to our current year presentation. | |||||||||||||||||
The federal research credit expired on December 31, 2011 and was not reinstated until January 2, 2013. As a result, the effective income tax rate for the year ended December 31, 2012 was calculated without a benefit for the federal research credit. The effective income tax rate for the year ended December 31, 2013 included (1) an $8.4 million benefit for the full year 2012 federal research credit and (2) $31.3 million of tax expense associated with the $83.6 million litigation award received from Medtronic, Inc. in February 2013 (see Note 3). | |||||||||||||||||
Reserve for Uncertain Tax Positions | |||||||||||||||||
As of December 31, 2013 and 2012, the liability for income taxes associated with uncertain tax positions was $127.7 million and $113.6 million, respectively. The Company estimates that these liabilities would be reduced by $30.9 million and $26.1 million, respectively, from offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, state income taxes and timing adjustments. The net amounts of $96.8 million and $87.5 million, respectively, if not required, would favorably affect the Company's effective tax rate. | |||||||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, penalties and foreign exchange, is as follows (in millions): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Unrecognized tax benefits, January 1 | $ | 113.6 | $ | 78 | $ | 55.1 | |||||||||||
Current year tax positions | 17.8 | 41.7 | 26 | ||||||||||||||
Increase prior year tax positions | 5.7 | 2.6 | 5.9 | ||||||||||||||
Decrease prior year tax positions | (9.0 | ) | (4.3 | ) | (5.5 | ) | |||||||||||
Settlements | (0.1 | ) | (4.3 | ) | (0.1 | ) | |||||||||||
Lapse of statute of limitations | (0.3 | ) | (0.1 | ) | (3.4 | ) | |||||||||||
| | | | | | | | | | | |||||||
Unrecognized tax benefits, December 31 | $ | 127.7 | $ | 113.6 | $ | 78 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
The Company recognizes interest and penalties, if any, related to uncertain tax positions in the provision for income taxes. As of December 31, 2013, the Company had accrued $4.5 million (net of $3.3 million tax benefit) of interest related to uncertain tax positions, and as of December 31, 2012, the Company had accrued $3.1 million (net of $2.1 million tax benefit) of interest related to uncertain tax positions. During 2013, 2012 and 2011, the Company recognized interest expense, net of tax benefit, of $1.4 million, $1.0 million and $0.4 million, respectively, in "Provision for Income Taxes" on the consolidated statements of operations. | |||||||||||||||||
The Company strives to resolve open matters with each tax authority at the examination level and could reach agreement with a tax authority at any time. While the Company has accrued for matters it believes are more likely than not to require settlement, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the consolidated financial statements. Furthermore, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal. The uncertain tax positions are reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations between tax authorities, identification of new issues and issuance of new legislation, regulations or case law. | |||||||||||||||||
At December 31, 2013, all material state, local and foreign income tax matters have been concluded for years through 2006. During the third quarter of 2013, the Internal Revenue Service ("IRS") completed its fieldwork for the 2009 and 2010 tax years. The case is currently in suspense pending finalization of an Advance Pricing Agreement ("APA") and Joint Committee of Taxation approval. The IRS began its examination of the 2011 and 2012 tax years during the fourth quarter of 2013. The Company has also entered into an APA process between the Switzerland and the United States governments for the years 2009 through 2013 covering transfer pricing matters. These transfer pricing matters are significant to the Company's consolidated financial statements, and the final outcome of the negotiations between the two governments is uncertain. Management believes that adequate amounts of tax and related penalty and interest have been provided in income tax expense for any adjustments that may result for the Company's uncertain tax positions. The Company does not anticipate any significant changes in the Company's existing uncertain tax positions in the next 12 months other than immaterial expected settlements which have been classified as current liabilities within the accompanying consolidated balance sheets. | |||||||||||||||||
LEGAL_PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2013 | |
LEGAL PROCEEDINGS | ' |
LEGAL PROCEEDINGS | ' |
16. LEGAL PROCEEDINGS | |
In February 2008, Edwards Lifesciences filed a lawsuit against CoreValve, Inc. in the U.S. District Court for the District of Delaware alleging that its ReValving System infringes three of Edwards' U.S. Andersen patents, later narrowed to one patent ("the '552 patent"). Medtronic, Inc. ("Medtronic") acquired CoreValve, Inc. ("Medtronic CoreValve") in April 2009. In April 2010, a federal jury found the '552 patent to be valid and found that Medtronic CoreValve willfully infringes it. The jury also awarded Edwards $73.9 million in damages. In February 2011, the District Court reaffirmed the jury decision and ruled that Edwards is entitled to recover additional damages due to Medtronic CoreValve's continued infringing sales from the trial through the life of the patent, plus interest. In the same ruling, the court denied Edwards' motions for a permanent injunction, as well as its motion for increased damages relating to Medtronic CoreValve's willful infringement. In November 2012, the U.S. Court of Appeals for the Federal Circuit affirmed the April 2010 federal jury decision that Medtronic CoreValve is willfully infringing the '552 patent and ordered the trial court to reconsider Edwards' request for a permanent injunction that would prohibit the manufacture or sale of the CoreValve System in the United States. The Court of Appeals also affirmed the validity of the '552 patent and the federal jury's verdict awarding an initial payment of $73.9 million in damages to Edwards, which covers infringement through early 2010. In February 2013, the Court of Appeals issued a mandate affirming the judgment of the District Court and directing it to reconsider its prior denial of Edwards' request for a permanent injunction and to assess additional damages for the period after the date of the jury award. In February 2013, Edwards received a payment of $83.6 million from Medtronic in satisfaction of the April 2010 jury award of damages for infringement, including accrued interest, through April 2010 (see Note 3). Proceedings continue before the District Court regarding the permanent injunction and the additional damages. In October 2013, the U.S. Supreme Court denied Medtronic's request for review of the Court of Appeals decision. | |
A second lawsuit is pending in the same District Court against Medtronic CoreValve and Medtronic alleging infringement of three of Edwards' U.S. Andersen patents. In July 2013, the District Court dismissed one of the patents from the lawsuit based on the outcome of reexamination proceedings at the United States Patent and Trademark Office ("USPTO"). | |
In May 2012, the USPTO granted Medtronic's fourth request to reexamine the validity of the '552 patent and in February 2013 confirmed the validity of that patent. | |
In June 2011, Medtronic filed a lawsuit in the U.S. District Court for the District of Minnesota alleging that certain surgical valve holders and a surgical embolic filter device infringe its patents. Edwards counterclaimed against Medtronic, alleging that the Medtronic Contour 3D annuloplasty ring infringes an Edwards ring patent. Edwards subsequently added two more patents to its counterclaim. In February and March 2012, the USPTO granted Edwards' requests to reexamine the validity of three of the four Medtronic patents involved in this lawsuit. | |
In June 2011, Medtronic CoreValve also filed another lawsuit in the U.S. District Court for the Central District of California alleging that the Edwards SAPIEN transcatheter heart valve infringes a Medtronic CoreValve patent. Edwards counterclaimed against Medtronic CoreValve and Medtronic, alleging that the Medtronic CoreValve heart valve infringes Edwards' U.S. Letac-Cribier transcatheter heart valve patent. Edwards' counterclaim was subsequently transferred to the U.S. District Court for the District of Delaware, and in January 2014, a federal jury found Edwards' patent to be valid and found that Medtronic CoreValve willfully infringes it. The jury also awarded Edwards $393.6 million in damages based on Medtronic's worldwide sales of its infringing devices. As to Medtronic CoreValve's original lawsuit in California, in November 2012, the California court ruled that the Medtronic CoreValve patent is invalid and dismissed the lawsuit in favor of Edwards. Medtronic filed an appeal, and in January 2014 the U.S. Court of Appeals for the Federal Circuit confirmed that Medtronic CoreValve's patent is invalid. | |
In March 2012, Medtronic filed another lawsuit in the U.S. District Court for the Central District of California alleging that the methods of implanting the Edwards SAPIEN transcatheter heart valve in the United States infringe two Medtronic patents relating to methods of pacing the heart. The Company is vigorously defending this lawsuit and trial is scheduled for August 2014. | |
In August 2012, Edwards filed a lawsuit against Medtronic in the German District Court of Mannheim alleging that Medtronic's CoreValve and Evolut valves infringe two of Edwards' transcatheter valve patents. These patents were issued by the European Patent Office ("EPO") and were validated as national patents in various European countries, including Germany. In April 2013, Edwards added a third transcatheter valve patent to the lawsuit. An infringement hearing was held in April 2013 for one of the original patents, and the Court ruled that the Medtronic valves did not infringe that patent. Edwards has appealed this decision. In the opposition to the first patent, the EPO determined that patent to be invalid in December 2013. Edwards intends to appeal this decision. The hearing for the second patent was held in May 2013 and the Court subsequently ruled that the Medtronic valves infringe that patent. The Court granted an injunction prohibiting the sale of CoreValve and Evolut systems in Germany, a recall of these products, and an accounting for past damages. Enforcement of this decision was later stayed pending validity proceedings at the EPO. In the opposition to the second patent, the EPO issued a non-binding preliminary opinion in October 2013 outlining concerns about the validity of that patent. An EPO hearing for the opposition to the second patent is scheduled for March 2014. A hearing date for the third patent is pending determination by the EPO in ongoing related oppositions on the validity of the patent. | |
In September 2013 and October 2013, persons purporting to represent a class of persons who purchased the common stock of Edwards between April 25, 2012 and April 23, 2013 filed lawsuits against Edwards and certain of its officers in the United States District Court for the Central District of California. The lawsuits allege that certain of Edwards' public statements concerning the projected sales and prospects of the SAPIEN transcatheter aortic heart valve were false and misleading and assert claims under Sections 10(b) and 20 of the Securities Exchange Act of 1934. On February 21, 2014, these suits were voluntarily dismissed without prejudice. | |
In addition, Edwards Lifesciences is or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits related primarily to products and services currently or formerly manufactured or performed, as applicable, by Edwards Lifesciences. Such cases and claims raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. Upon resolution of any such legal matter or other claim, Edwards Lifesciences may incur charges in excess of established reserves. The Company is not able to estimate the amount or range of any loss for legal contingencies for which there is no reserve or additional loss for matters already reserved. While any such charge could have a material adverse impact on Edwards Lifesciences' net income or cash flows in the period in which it is recorded or paid, management does not believe that any such charge relating to any currently pending lawsuit would have a material adverse effect on Edwards Lifesciences' financial position, results of operations or liquidity. | |
Edwards Lifesciences is subject to various environmental laws and regulations both within and outside of the United States. The operations of Edwards Lifesciences, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. While it is difficult to quantify the potential impact of continuing compliance with environmental protection laws, management believes that such compliance will not have a material impact on Edwards Lifesciences' financial position, results of operations or liquidity. | |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SEGMENT INFORMATION | ' | ||||||||||
SEGMENT INFORMATION | ' | ||||||||||
17. SEGMENT INFORMATION | |||||||||||
Edwards Lifesciences conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan and Rest of World. All regions sell products that are used to treat advanced cardiovascular disease. | |||||||||||
The Company's geographic segments are reported based on the financial information provided to the Chief Operating Decision Maker (the Chief Executive Officer). The Company evaluates the performance of its geographic segments based on net sales and income before provision for income taxes ("pre-tax income"). The accounting policies of the segments are substantially the same as those described in Note 2. Segment net sales and segment pre-tax income are based on internally derived standard foreign exchange rates, which may differ from year to year, and do not include inter-segment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographical distribution that would occur if the segments were not interdependent. Net sales by geographic area are based on the location of the customer. | |||||||||||
Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include net interest expense, global marketing expenses, corporate research and development expenses, manufacturing variances, corporate headquarters costs, special gains and charges, stock-based compensation, foreign currency hedging activities, certain litigation costs and most of the Company's amortization expense. Although most of the Company's depreciation expense is included in segment pre-tax income, due to the Company's methodology for cost build-up, it is impractical to determine the amount of depreciation expense included in each segment, and, therefore, a portion is maintained at the corporate level. The Company neither discretely allocates assets to its operating segments, nor evaluates the operating segments using discrete asset information. | |||||||||||
The table below presents information about Edwards Lifesciences' reportable segments (in millions): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Segment Net Sales | |||||||||||
United States | $ | 939.6 | $ | 812.1 | $ | 605.6 | |||||
Europe | 622.2 | 577 | 549.4 | ||||||||
Japan | 293.7 | 293.4 | 226.8 | ||||||||
Rest of World | 252.8 | 236 | 200.8 | ||||||||
| | | | | | | | | | | |
Total segment net sales | $ | 2,108.30 | $ | 1,918.50 | $ | 1,582.60 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Segment Pre-tax Income | |||||||||||
United States | $ | 550.5 | $ | 465 | $ | 314.9 | |||||
Europe | 287.7 | 250.9 | 237.9 | ||||||||
Japan | 145.6 | 153.1 | 107.6 | ||||||||
Rest of World | 68.3 | 68.8 | 60.3 | ||||||||
| | | | | | | | | | | |
Total segment pre-tax income | $ | 1,052.10 | $ | 937.8 | $ | 720.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The table below presents reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income (in millions): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net Sales Reconciliation | |||||||||||
Segment net sales | $ | 2,108.30 | $ | 1,918.50 | $ | 1,582.60 | |||||
Foreign currency | (62.8 | ) | (18.9 | ) | 96 | ||||||
| | | | | | | | | | | |
Consolidated net sales | $ | 2,045.50 | $ | 1,899.60 | $ | 1,678.60 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Pre-tax Income Reconciliation | |||||||||||
Segment pre-tax income | $ | 1,052.10 | $ | 937.8 | $ | 720.7 | |||||
Unallocated amounts: | |||||||||||
Corporate items | (586.5 | ) | (536.2 | ) | (436.3 | ) | |||||
Special gains (charges) | 67.3 | (16.0 | ) | (21.6 | ) | ||||||
Interest (expense) income, net | (5.2 | ) | 0.4 | 0.3 | |||||||
Foreign currency | (12.4 | ) | 5.1 | 20.5 | |||||||
| | | | | | | | | | | |
Consolidated pre-tax income | $ | 515.3 | $ | 391.1 | $ | 283.6 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Enterprise-Wide Information | |||||||||||
Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated financial statements. | |||||||||||
As of or for the Years Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in millions) | |||||||||||
Net Sales by Geographic Area | |||||||||||
United States | $ | 939.6 | $ | 812.1 | $ | 605.6 | |||||
Europe | 616.5 | 559.7 | 574 | ||||||||
Japan | 243.6 | 294.1 | 283.7 | ||||||||
Rest of World | 245.8 | 233.7 | 215.3 | ||||||||
| | | | | | | | | | | |
$ | 2,045.50 | $ | 1,899.60 | $ | 1,678.60 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Net Sales by Major Product Area | |||||||||||
Surgical Heart Valve Therapy | $ | 801.2 | $ | 787.5 | $ | 784.4 | |||||
Transcatheter Heart Valves | 707.7 | 552.1 | 333.8 | ||||||||
Critical Care | 536.6 | 560 | 560.4 | ||||||||
| | | | | | | | | | | |
$ | 2,045.50 | $ | 1,899.60 | $ | 1,678.60 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-lived Tangible Assets by Geographic Area | |||||||||||
United States | $ | 308.2 | $ | 263.4 | $ | 223 | |||||
Europe | 40.9 | 38.8 | 36.3 | ||||||||
Japan | 10.8 | 13.2 | 11.9 | ||||||||
Rest of World | 97.1 | 84.2 | 57.7 | ||||||||
| | | | | | | | | | | |
$ | 457 | $ | 399.6 | $ | 328.9 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
QUARTERLY_FINANCIAL_RESULTS_AN
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) | ' | ||||||||||||||||
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) | ' | ||||||||||||||||
18. QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) | |||||||||||||||||
Years Ended December 31, | First | Second | Third | Fourth | Total | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
(in millions, except per share data) | |||||||||||||||||
2013 | |||||||||||||||||
Net sales | $ | 496.7 | $ | 517.2 | $ | 495.6 | $ | 536 | $ | 2,045.50 | |||||||
Gross profit | 374.5 | 392.2 | 365.9 | 390.5 | 1,523.10 | ||||||||||||
Net income(a) | 144.9 | 94.1 | 76.9 | 75.8 | 391.7 | ||||||||||||
Earnings per common share(a): | |||||||||||||||||
Basic | 1.27 | 0.84 | 0.69 | 0.69 | 3.51 | ||||||||||||
Diluted | 1.24 | 0.82 | 0.68 | 0.68 | 3.44 | ||||||||||||
Market price: | |||||||||||||||||
High | $ | 94.98 | $ | 86.11 | $ | 73.73 | $ | 78.89 | $ | 94.98 | |||||||
Low | 78.1 | 62.34 | 65.03 | 60.62 | 60.62 | ||||||||||||
2012 | |||||||||||||||||
Net sales | $ | 459.2 | $ | 482 | $ | 447.9 | $ | 510.5 | $ | 1,899.60 | |||||||
Gross profit | 331.9 | 352.2 | 336.2 | 384.7 | 1,405.00 | ||||||||||||
Net income(b) | 65.1 | 67.8 | 69.2 | 91.1 | 293.2 | ||||||||||||
Earnings per common share(b): | |||||||||||||||||
Basic | 0.57 | 0.59 | 0.6 | 0.79 | 2.55 | ||||||||||||
Diluted | 0.55 | 0.57 | 0.58 | 0.77 | 2.48 | ||||||||||||
Market price: | |||||||||||||||||
High | $ | 83.96 | $ | 104.25 | $ | 109.88 | $ | 110.79 | $ | 110.79 | |||||||
Low | 67.95 | 67.86 | 96.36 | 81.29 | 67.86 | ||||||||||||
(a) | |||||||||||||||||
The first quarter of 2013 includes $83.6 million received in satisfaction of a jury award of damages for infringement of the Company's U.S. Andersen transcatheter heart valve patent, including interest. | |||||||||||||||||
The fourth quarter of 2013 includes a $15.2 million charge to record a sales returns reserve and related costs for estimated Transcatheter Heart Valve product returns expected upon introduction of next-generation Transcatheter Heart Valve products; a $10.4 million charge related primarily to severance associated with a global workforce realignment; and a $5.9 million charge to write off certain acquired IPR&D assets. | |||||||||||||||||
(b) | |||||||||||||||||
The second quarter of 2012 includes an $8.1 million charge due to the voluntary recalls of certain of the Company's heart valves and Critical Care catheters and a $7.0 million charge for the licensing of intellectual property. | |||||||||||||||||
The fourth quarter of 2012 includes a $9.0 million charge related primarily to severance associated with a global workforce realignment. | |||||||||||||||||
VALUATION_AND_QUALIFYING_ACCOU
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||
19. VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||
Additions | |||||||||||||||||
Balance at | Charged to | Charged to | Deductions | Balance at | |||||||||||||
Beginning | Costs and | Other | From | End of | |||||||||||||
of Period | Expenses | Accounts | Reserves | Period | |||||||||||||
(in millions) | |||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Allowance for doubtful accounts(a) | $ | 12 | $ | 2.4 | $ | — | $ | (2.2 | ) | $ | 12.2 | ||||||
Inventory reserves(b) | 16.3 | 27.5 | — | (14.2 | ) | 29.6 | |||||||||||
Tax valuation allowance(c) | 38.6 | 8.2 | — | (0.4 | ) | 46.4 | |||||||||||
Year ended December 31, 2012 | |||||||||||||||||
Allowance for doubtful accounts(a) | $ | 19 | $ | 3 | $ | 0.4 | $ | (10.4 | ) | $ | 12 | ||||||
Inventory reserves(b) | 12.9 | 21.8 | — | (18.4 | ) | 16.3 | |||||||||||
Tax valuation allowance(c) | 32.4 | 3.1 | 5.2 | (2.1 | ) | 38.6 | |||||||||||
Year ended December 31, 2011 | |||||||||||||||||
Allowance for doubtful accounts(a) | $ | 11.6 | $ | 9 | $ | 0.3 | $ | (1.9 | ) | $ | 19 | ||||||
Inventory reserves(b) | 11.2 | 15.3 | — | (13.6 | ) | 12.9 | |||||||||||
Tax valuation allowance(c) | 30.3 | 3.1 | 0.4 | (1.4 | ) | 32.4 | |||||||||||
(a) | |||||||||||||||||
The deductions related to allowances for doubtful accounts represent accounts receivable which are written off and product which is returned from customers. | |||||||||||||||||
(b) | |||||||||||||||||
Inventory reserves result from inventory which is obsolete, nearing its expiration date, damaged or slow moving. The deductions related to inventory reserves represent inventory that has been disposed. | |||||||||||||||||
(c) | |||||||||||||||||
The tax valuation allowances are provided for other-than-temporary impairments and unrealized losses related to certain unconsolidated affiliates that may not be recognized due to the uncertainty of the ready marketability of certain impaired investments, and net operating loss and credit carryforwards that may not be recognized due to insufficient taxable income. | |||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
Principles of Consolidation | ' | ||||||||||
Principles of Consolidation | |||||||||||
The accompanying consolidated financial statements include the accounts of Edwards Lifesciences and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Cash Flow Statement Revision | ' | ||||||||||
Cash Flow Statement Revision | |||||||||||
In preparing the consolidated financial statements for the year ended December 31, 2013, the Company determined that it had misclassified certain accrued capital expenditures in the consolidated statements of cash flows for the years ended December 31, 2012 and 2011. The Company has evaluated and concluded that this did not result in a material misstatement of the Company's previously issued consolidated financial statements. However, the Company has elected to revise its consolidated statements of cash flows for the years ended December 31, 2012 and 2011 to correct the presentation of accrued capital expenditures, resulting in a decrease to net cash used in investing activities (with a corresponding decrease to net cash provided by operating activities) of $11.7 million and $6.3 million, respectively. | |||||||||||
Use of Estimates | ' | ||||||||||
Use of Estimates | |||||||||||
The consolidated financial statements of Edwards Lifesciences have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP") which have been applied consistently in all material respects. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. | |||||||||||
Foreign Currency Translation | ' | ||||||||||
Foreign Currency Translation | |||||||||||
When the local currency of the Company's foreign entities is the functional currency, all assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted-average exchange rate prevailing during the period. The effects of foreign currency translation adjustments for these entities are deferred and reported in stockholders' equity as a component of "Accumulated Other Comprehensive Loss." The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in "Other Expense (Income), net." | |||||||||||
Revenue Recognition | ' | ||||||||||
Revenue Recognition | |||||||||||
The Company recognizes revenue when it is realized or realizable and earned. Revenue is considered realized or realizable and earned upon delivery of the product, provided that an agreement of sale exists, the sales price is fixed or determinable, and collection is reasonably assured. In the case of certain products where the Company maintains consigned inventory at customer locations, revenue is recognized at the time the Company is notified that the customer has used the inventory. | |||||||||||
The Company's principal sales terms provide for title and risk of loss transferring upon delivery to the customer, limited right of return and no unusual provisions or conditions. When the Company recognizes revenue from the sale of its products, an estimate of various sales returns and allowances is recorded which reduces product sales and accounts receivable. These adjustments include estimates for rebates, returns and other sales allowances. These provisions are estimated and recorded at the time of sale based upon historical payment experience, historical relationship to revenues, estimated customer inventory levels, and current contract sales terms with direct and indirect customers. Other than in limited circumstances, product returns are not significant because returns are generally not allowed unless the product is damaged at time of receipt. In addition, the Company may allow customers to return previously purchased products for next-generation product offerings. For these transactions, the Company defers recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. | |||||||||||
The Company's primary sales adjustment relates to distributor rebates which are given to the Company's United States distributors and represents the difference between the Company's sales price to the distributor (at the Company's distributor "list price") and the negotiated price to be paid by the end-customer. This distributor rebate is recorded by the Company as a reduction to sales and a reduction to the distributor's accounts receivable at the time of sale to a distributor. The Company validates the distributor rebate accrual quarterly through either a review of the inventory reports obtained from its distributors or an estimate of its distributor's inventory. This distributor inventory information is used to verify the estimated liability for future distributor rebate claims based on historical rebates and contract rates. The Company periodically monitors current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated. | |||||||||||
The Company also offers volume rebates to certain group purchasing organizations ("GPOs") and customers based upon target sales levels. For volume rebates offered to GPOs, the rebates are recorded as a reduction to sales and an obligation to the GPO, as the Company expects to pay in cash. For volume rebates offered to customers, the rebates are recorded as a reduction to sales and accounts receivable, as the Company expects a net payment from the customer. The provision for volume rebates is estimated based on customers' contracted rebate programs and historical experience of rebates paid. The Company periodically monitors its customer rebate programs to ensure that the allowance and liability for accrued rebates is fairly stated. | |||||||||||
Shipping and Handling Costs | ' | ||||||||||
Shipping and Handling Costs | |||||||||||
Shipping costs, which are costs incurred to physically move product from the Company's premises to the customer's premises, are included in "Selling, General and Administrative Expenses." Handling costs, which are costs incurred to store, move and prepare products for shipment, are included in "Cost of Goods Sold." For the years ended December 31, 2013, 2012 and 2011, shipping costs of $56.6 million, $54.9 million and $51.0 million, respectively, were included in "Selling, General and Administrative Expenses." | |||||||||||
Cash Equivalents and Short-term Investments | ' | ||||||||||
Cash Equivalents | |||||||||||
The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. These investments are valued at cost, which approximates fair value. | |||||||||||
Short-term Investments | |||||||||||
Short-term investments include bank time deposits with original maturities between three months and one year. Bank time deposits with original maturities of three months or less are classified as cash equivalents. Investments in bank time deposits are classified as held-to-maturity, as management has both the intent and ability to hold these investments to maturity, and are reported at cost, which approximates fair value. Income relating to these bank time deposits is reported as "Interest Income." | |||||||||||
Allowance for Doubtful Accounts | ' | ||||||||||
Allowance for Doubtful Accounts | |||||||||||
The Company records allowances for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. When evaluating its allowances for doubtful accounts related to receivables from customers in certain European countries that have historically paid beyond the stated terms, the Company's analysis considers a number of factors including evidence of the customer's ability to comply with credit terms, economic conditions and procedures implemented by the Company to collect the historical receivables. Additional allowances for doubtful accounts may be required if there is deterioration in past due balances, if economic conditions are less favorable than the Company has anticipated, or for customer-specific circumstances, such as financial difficulty. The allowance for doubtful accounts was $12.2 million and $12.0 million at December 31, 2013 and 2012, respectively. | |||||||||||
Inventories | ' | ||||||||||
Inventories | |||||||||||
Inventories are stated at the lower of cost (first-in, first-out method) or market value. Market value for raw materials is based on replacement costs, and for other inventory classifications is based on net realizable value. | |||||||||||
A write-down for excess or inactive inventory is recorded for inventory which is obsolete, nearing its expiration date (generally triggered at six months prior to expiration), is damaged or slow moving (generally defined as quantities in excess of a two year supply). The allowance for excess and obsolete inventory was $29.6 million and $16.3 million at December 31, 2013 and 2012, respectively. | |||||||||||
The Company allocates to inventory general and administrative costs that are related to the production process. These costs include insurance, manufacturing accounting personnel, human resources personnel and information technology. During the years ended December 31, 2013, 2012 and 2011, the Company allocated $24.7 million, $26.2 million and $25.3 million, respectively, of general and administrative costs to inventory. General and administrative costs included in inventory at December 31, 2013 and 2012 were $14.3 million and $15.1 million, respectively. | |||||||||||
Property, Plant and Equipment | ' | ||||||||||
Property, Plant and Equipment | |||||||||||
Property, plant and equipment are recorded at cost. Depreciation is principally calculated for financial reporting purposes on the straight-line method over the estimated useful lives of the related assets, which range from 10 to 40 years for buildings and improvements, from 3 to 15 years for machinery and equipment, and from 3 to 10 years for software. Leasehold improvements are amortized over the life of the related facility leases or the asset, whichever is shorter. Straight-line and accelerated methods of depreciation are used for income tax purposes. | |||||||||||
Depreciation expense for property, plant and equipment was $53.1 million, $44.0 million and $44.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. Repairs and maintenance expense was $21.7 million, $20.6 million and $18.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||
Impairment of Goodwill and Long-lived Assets | ' | ||||||||||
Impairment of Goodwill and Long-lived Assets | |||||||||||
Goodwill is reviewed for impairment annually in the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. The Company identifies its reporting units and determines the carrying value of each reporting unit by assigning the assets and liabilities, including existing goodwill, to those reporting units. The fair value of the reporting unit is estimated based on the Company's market capitalization and a market revenue multiple. If the carrying value of the reporting unit exceeds its estimated fair value, then the Company measures the amount of the impairment loss by comparing the implied fair value of goodwill to its carrying value. In 2013, 2012 and 2011, the Company did not record any impairment loss as the fair value of each reporting unit significantly exceeded its respective carrying value. | |||||||||||
Indefinite-lived intangible assets relate to in-process research and development ("IPR&D") acquired in business combinations. The estimated fair values of IPR&D projects acquired in a business combination which have not reached technological feasibility are capitalized and accounted for as indefinite-lived intangible assets subject to impairment testing until completion or abandonment of the projects. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If the project is abandoned, all remaining capitalized amounts are written off immediately. Indefinite-lived intangible assets are reviewed for impairment annually, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss is recognized when the asset's carrying value exceeds its fair value. IPR&D projects acquired in an asset acquisition are expensed unless the project has an alternative future use. | |||||||||||
Management reviews the carrying amounts of other finite-lived intangible assets and long-lived tangible assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit, and adverse legal or regulatory developments. If it is determined that such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair market value. Estimated fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. | |||||||||||
Patent Costs | ' | ||||||||||
Patent Costs | |||||||||||
The Company expenses legal costs incurred for patent preparation and applications. The Company capitalizes certain legal costs related to the defense and enforcement of issued patents for which success is deemed probable. These capitalized legal costs are amortized over the life of the related patent. Such legal costs are periodically reviewed for impairment and recoverability. | |||||||||||
Investments in Unconsolidated Affiliates | ' | ||||||||||
Investments in Unconsolidated Affiliates | |||||||||||
Investments in unconsolidated affiliates are long-term equity investments in companies that are in various stages of development. Certain of these investments are designated as available-for-sale. These investments are carried at fair market value, with unrealized gains and losses reported in stockholders' equity as a component of "Accumulated Other Comprehensive Loss." Gains or losses on investments sold are based on the specific identification method. Other investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company's investment and adjusted each period for the Company's share of the investee's income or loss and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment's fair value. | |||||||||||
When the fair value of an available-for-sale investment declines below cost, management uses the following criteria to determine if such a decline should be considered other-than-temporary and result in a recognized loss: | |||||||||||
• | |||||||||||
the duration and extent to which the market value has been less than cost; | |||||||||||
• | |||||||||||
the financial condition and near term prospects of the investee; | |||||||||||
• | |||||||||||
the reasons for the decline in market value; | |||||||||||
• | |||||||||||
the investee's performance against product development milestones; and | |||||||||||
• | |||||||||||
the Company's ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | |||||||||||
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and adjusting the amount, if necessary. The factors used to assess the likelihood of realization are both historical experience and the Company's forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company's effective tax rate on future earnings. | |||||||||||
When assessing whether a windfall tax benefit relating to stock-based compensation has been realized, the Company follows the with and without approach, under which the windfall benefit is recognized only if an incremental benefit is provided after considering all other tax attributes presently available to the Company. Consideration is given only to the direct impacts of stock awards when calculating the amount of windfalls and shortfalls. | |||||||||||
The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company recognizes the financial statement benefit of a tax position only after determining that a position would more likely than not be sustained based upon its technical merit if challenged by the relevant taxing authority and taken by management to the court of last resort. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon settlement with the relevant tax authority. The Company recognizes interest and penalties related to income tax matters in income tax expense. | |||||||||||
Research and Development Costs | ' | ||||||||||
Research and Development Costs | |||||||||||
Research and development costs are charged to expense when incurred. | |||||||||||
Earnings per Share | ' | ||||||||||
Earnings per Share | |||||||||||
Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during a period. Employee equity share options, nonvested shares and similar equity instruments granted by the Company are treated as potential common shares in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of restricted stock units, market-based restricted stock units and in-the-money options. The dilutive impact of the restricted stock units, market-based restricted stock units and in-the-money options is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of compensation expense for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in "Additional Paid-in Capital" when the award becomes deductible are assumed to be used to repurchase shares. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. | |||||||||||
The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information): | |||||||||||
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Basic: | |||||||||||
Net income | $ | 391.7 | $ | 293.2 | $ | 236.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted-average shares outstanding | 111.7 | 114.9 | 114.6 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic earnings per share | $ | 3.51 | $ | 2.55 | $ | 2.07 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Diluted: | |||||||||||
Net income | $ | 391.7 | $ | 293.2 | $ | 236.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted-average shares outstanding | 111.7 | 114.9 | 114.6 | ||||||||
Dilutive effect of stock plans | 2.1 | 3.4 | 4.8 | ||||||||
| | | | | | | | | | | |
Dilutive weighted-average shares outstanding | 113.8 | 118.3 | 119.4 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Diluted earnings per share | $ | 3.44 | $ | 2.48 | $ | 1.98 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Stock options, restricted stock units and market-based restricted stock units to purchase approximately 3.3 million, 1.7 million and 1.0 million shares for the years ended December 31, 2013, 2012 and 2011, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. | |||||||||||
Stock-based Compensation | ' | ||||||||||
Stock-based Compensation | |||||||||||
The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values. Stock-based awards consist of stock options, restricted stock units, market-based restricted stock units, and employee stock purchase subscriptions. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period (vesting period) on a straight-line basis. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Upon exercise of stock options or vesting of restricted stock units and market-based restricted stock units, the Company issues common stock. | |||||||||||
Total stock-based compensation expense for the years ended December 31, 2013, 2012 and 2011 was as follows (in millions): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cost of goods sold | $ | 5.9 | $ | 5 | $ | 4 | |||||
Selling, general and administrative expenses | 34.7 | 31.2 | 25.4 | ||||||||
Research and development expenses | 6.8 | 5.9 | 5.6 | ||||||||
| | | | | | | | | | | |
Total stock-based compensation expense | $ | 47.4 | $ | 42.1 | $ | 35 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Upon retirement, all unvested stock options are immediately forfeited. In addition, upon retirement, a participant will immediately vest in 25% of restricted stock units for each full year of employment with the Company measured from the grant date. All remaining unvested restricted stock units are immediately forfeited. For market-based restricted stock units, upon retirement and in certain other specified cases, a participant will receive a pro-rated portion of the shares that would ultimately be issued based on attainment of the performance goals as determined on the vesting date. The pro-rated portion is based on the participant's whole months of service with the Company during the performance period prior to the date of termination. | |||||||||||
Derivatives | ' | ||||||||||
Derivatives | |||||||||||
The Company uses derivative financial instruments to manage interest rate and foreign currency risks. It is the Company's policy not to enter into derivative financial instruments for speculative purposes. The Company uses interest rate swaps to convert a portion of its fixed-rate debt into variable-rate debt. These interest rate swaps are designated as fair value hedges and meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swaps are considered to exactly offset changes in the fair value of the underlying long-term debt. The Company uses foreign currency forward exchange contracts to offset the changes due to currency rate movements in the amount of future cash flows associated with intercompany transactions and certain third-party expenses expected to occur within the next 13 months. These foreign currency forward exchange contracts are designated as cash flow hedges. Certain of the Company's locations have assets and liabilities denominated in currencies other than their functional currencies resulting from intercompany and third-party transactions. The Company uses foreign currency forward exchange contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with certain of these assets and liabilities. All foreign currency forward exchange contracts are denominated in currencies of major industrial countries, principally the Euro and the Japanese yen. | |||||||||||
All derivative financial instruments are recognized at fair value in the consolidated balance sheets. For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets the loss or gain on the underlying hedged item. The gain or loss on fair value hedges is classified in net interest expense, as they hedge the interest rate risk associated with the Company's fixed-rate debt. The Company reports in "Accumulated Other Comprehensive Loss" the effective portion of the gain or loss on derivative financial instruments that are designated, and that qualify, as cash flow hedges. The Company reclassifies these gains and losses into earnings in the same period in which the underlying hedged transactions affect earnings. Any hedge ineffectiveness (which represents the amount by which the changes in fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current period earnings. During 2013, 2012 and 2011, the Company did not record any gains or losses due to hedge ineffectiveness. The gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from derivative financial instruments are reported as operating activities in the consolidated statements of cash flows. | |||||||||||
Derivative financial instruments involve credit risk in the event the counterparty should default. It is the Company's policy to execute such instruments with global financial institutions that the Company believes to be creditworthy. The Company diversifies its derivative financial instruments among counterparties to minimize exposure to any one of these entities. The Company also uses International Swap Dealers Association master-netting agreements. Under the master-netting agreements, the Company's counterparty settlement risk is the net amount of any receipts or payments due between the Company and the counterparty financial institution. | |||||||||||
Recently Adopted Accounting Standards and New Accounting Standards Not Yet Adopted | ' | ||||||||||
Recently Adopted Accounting Standards | |||||||||||
In December 2011, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance on disclosures about offsetting assets and liabilities. The guidance requires an entity to disclose both gross and net information about financial instruments and derivative instruments that are eligible for offset in the consolidated balance sheet or subject to an enforceable master-netting arrangement or similar agreement. In January 2013, the FASB clarified that this guidance applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the accounting guidance or subject to a master-netting arrangement or similar agreement. The guidance was effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company has provided the information required by this guidance in Note 10. | |||||||||||
In July 2012, the FASB issued an amendment to the accounting guidance on intangible assets to permit an entity to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived asset is impaired as a basis for determining whether it is necessary to calculate the fair value of the indefinite-lived asset and perform the quantitative impairment test by comparing the fair value with the carrying amount. The guidance was effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. | |||||||||||
In February 2013, the FASB issued an amendment to the accounting guidance on reporting amounts reclassified out of accumulated other comprehensive income. The guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassed is required to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. The guidance was effective prospectively for reporting periods beginning after December 15, 2012, and interim periods within those annual periods. The Company has provided the information required by this guidance in Note 13. | |||||||||||
New Accounting Standards Not Yet Adopted | |||||||||||
In July 2013, the FASB issued an amendment to the accounting guidance on income taxes impacting the presentation of unrecognized tax benefits. The guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for all same jurisdiction net operating loss or similar tax loss carryforwards, or tax credit carryforwards. The guidance is effective for annual reporting periods beginning after December 15, 2013 and interim periods therein. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
Summary of computation of basic and diluted earnings per share | ' | ||||||||||
The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information): | |||||||||||
Years ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Basic: | |||||||||||
Net income | $ | 391.7 | $ | 293.2 | $ | 236.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted-average shares outstanding | 111.7 | 114.9 | 114.6 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic earnings per share | $ | 3.51 | $ | 2.55 | $ | 2.07 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Diluted: | |||||||||||
Net income | $ | 391.7 | $ | 293.2 | $ | 236.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted-average shares outstanding | 111.7 | 114.9 | 114.6 | ||||||||
Dilutive effect of stock plans | 2.1 | 3.4 | 4.8 | ||||||||
| | | | | | | | | | | |
Dilutive weighted-average shares outstanding | 113.8 | 118.3 | 119.4 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Diluted earnings per share | $ | 3.44 | $ | 2.48 | $ | 1.98 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Stock-based compensation expense | ' | ||||||||||
Total stock-based compensation expense for the years ended December 31, 2013, 2012 and 2011 was as follows (in millions): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cost of goods sold | $ | 5.9 | $ | 5 | $ | 4 | |||||
Selling, general and administrative expenses | 34.7 | 31.2 | 25.4 | ||||||||
Research and development expenses | 6.8 | 5.9 | 5.6 | ||||||||
| | | | | | | | | | | |
Total stock-based compensation expense | $ | 47.4 | $ | 42.1 | $ | 35 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
SPECIAL_GAINS_CHARGES_Tables
SPECIAL (GAINS) CHARGES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SPECIAL (GAINS) CHARGES | ' | ||||||||||
Schedule of special (gains) charges | ' | ||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in millions) | |||||||||||
Settlements and litigation | $ | (83.6 | ) | $ | — | $ | 3.3 | ||||
Realignment expenses | 10.4 | 9 | 5.5 | ||||||||
IPR&D impairment | 5.9 | — | — | ||||||||
Licensing of intellectual property | — | 7 | — | ||||||||
European receivables reserve | — | — | 12.8 | ||||||||
| | | | | | | | | | | |
Total special (gains) charges | $ | (67.3 | ) | $ | 16 | $ | 21.6 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
COMPOSITION_OF_CERTAIN_FINANCI1
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ' | |||||||
Schedule of selected captions in the consolidated balance sheets | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Accounts receivable, net(a) | ||||||||
Trade accounts receivable | $ | 307.9 | $ | 326.7 | ||||
Allowance for doubtful accounts | (5.4 | ) | (5.6 | ) | ||||
| | | | | | | | |
$ | 302.5 | $ | 321.1 | |||||
| | | | | | | | |
| | | | | | | | |
Inventories | ||||||||
Raw materials | $ | 57.8 | $ | 49.5 | ||||
Work in process | 82.2 | 58.8 | ||||||
Finished products | 168.9 | 172.7 | ||||||
| | | | | | | | |
$ | 308.9 | $ | 281 | |||||
| | | | | | | | |
| | | | | | | | |
Property, plant and equipment, net | ||||||||
Land | $ | 21.6 | $ | 21.5 | ||||
Buildings and leasehold improvements | 268.2 | 183.7 | ||||||
Machinery and equipment | 307.6 | 278.9 | ||||||
Equipment with customers | 40.2 | 40.2 | ||||||
Software | 99.2 | 102.1 | ||||||
Construction in progress | 27.9 | 68.1 | ||||||
| | | | | | | | |
764.7 | 694.5 | |||||||
Accumulated depreciation | (343.1 | ) | (321.2 | ) | ||||
| | | | | | | | |
$ | 421.6 | $ | 373.3 | |||||
| | | | | | | | |
| | | | | | | | |
Long-term accounts receivable, net(a) | ||||||||
Long-term trade accounts receivable | $ | 14.1 | $ | 16.3 | ||||
Allowance for doubtful accounts | (6.8 | ) | (6.4 | ) | ||||
| | | | | | | | |
$ | 7.3 | $ | 9.9 | |||||
| | | | | | | | |
| | | | | | | | |
Accrued and other liabilities | ||||||||
Employee compensation and withholdings | $ | 101.1 | $ | 102.7 | ||||
Clinical trial accruals | 37.2 | 23.1 | ||||||
Property, payroll and other taxes | 31.6 | 31 | ||||||
Fair value of derivatives | 17.2 | — | ||||||
Accrued rebates | 15 | 14.2 | ||||||
Realignment reserves | 9.5 | 8.7 | ||||||
Deferred income taxes | 7.2 | 8.7 | ||||||
Taxes payable | 7.1 | 9.5 | ||||||
Litigation reserves (Note 16) | 1.7 | 3.1 | ||||||
Other accrued liabilities | 69.6 | 71.7 | ||||||
| | | | | | | | |
$ | 297.2 | $ | 272.7 | |||||
| | | | | | | | |
| | | | | | | | |
(a) | ||||||||
As of December 31, 2013 and 2012, the Company's accounts receivables, net of the allowance for doubtful accounts, from customers in certain European countries were $104.7 million and $104.7 million, respectively. Balances from customers located in these countries that are expected to be collected beyond one year have been discounted to present value based on the estimated collection date. | ||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
ACQUISITIONS | ' | ||||
Summary of fair values of the assets acquired and liabilities assumed | ' | ||||
The following table summarizes the fair values of the assets acquired and liabilities assumed (in millions): | |||||
Cash | $ | 0.3 | |||
Other current assets | 0.9 | ||||
Property and equipment, net | 1.3 | ||||
Goodwill | 34.9 | ||||
IPR&D | 5.2 | ||||
Developed technology | 1.2 | ||||
Current liabilities assumed | (4.5 | ) | |||
Long-term liabilities assumed | (2.4 | ) | |||
| | | | | |
Total purchase price | 36.9 | ||||
Less: cash acquired | (0.3 | ) | |||
| | | | | |
Total purchase price, net of cash acquired | $ | 36.6 | |||
| | | | | |
| | | | | |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||||||||||||||
Changes in the carrying amount of goodwill | ' | |||||||||||||||||||
United | Europe | Total | ||||||||||||||||||
States | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Goodwill at December 31, 2011 | $ | 308.3 | $ | 41.5 | $ | 349.8 | ||||||||||||||
Goodwill acquired during the year | — | 34.9 | 34.9 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Goodwill at December 31, 2012 | 308.3 | 76.4 | 384.7 | |||||||||||||||||
Currency translation adjustment | — | 0.7 | 0.7 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Goodwill at December 31, 2013 | $ | 308.3 | $ | 77.1 | $ | 385.4 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Schedule of other intangible assets | ' | |||||||||||||||||||
Other intangible assets consist of the following (in millions): | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||
Amortization | Carrying | Amortization | Carrying | |||||||||||||||||
Value | Value | |||||||||||||||||||
Amortizable intangible assets | ||||||||||||||||||||
Patents | $ | 221.7 | $ | (179.9 | ) | $ | 41.8 | $ | 211.2 | $ | (167.3 | ) | $ | 43.9 | ||||||
Developed technology | 43.3 | (35.1 | ) | 8.2 | 41.3 | (33.0 | ) | 8.3 | ||||||||||||
Other | 10.7 | (8.1 | ) | 2.6 | 10.6 | (6.8 | ) | 3.8 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
275.7 | (223.1 | ) | 52.6 | 263.1 | (207.1 | ) | 56 | |||||||||||||
Unamortizable intangible assets | ||||||||||||||||||||
IPR&D | 4.6 | — | 4.6 | 11 | — | 11 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
$ | 280.3 | $ | (223.1 | ) | $ | 57.2 | $ | 274.1 | $ | (207.1 | ) | $ | 67 | |||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of estimated future amortization expense | ' | |||||||||||||||||||
Estimated amortization expense for each of the years ending December 31 is as follows (in millions): | ||||||||||||||||||||
2014 | $ | 15.1 | ||||||||||||||||||
2015 | 13.8 | |||||||||||||||||||
2016 | 13.4 | |||||||||||||||||||
2017 | 6.6 | |||||||||||||||||||
2018 | 1.3 |
INVESTMENTS_IN_UNCONSOLIDATED_1
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ' | |||||||
Schedule of investments in unconsolidated affiliates | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Available-for-sale investments | ||||||||
Cost | $ | 0.4 | $ | 0.4 | ||||
Unrealized gains | 0.4 | 1.6 | ||||||
| | | | | | | | |
Fair value of available-for-sale investments | 0.8 | 2 | ||||||
| | | | | | | | |
Equity method investments | ||||||||
Cost | 14.1 | 13.3 | ||||||
Equity in losses | (2.7 | ) | (1.8 | ) | ||||
| | | | | | | | |
Carrying value of equity method investments | 11.4 | 11.5 | ||||||
| | | | | | | | |
Cost method investments | ||||||||
Carrying value of cost method investments | 9.7 | 7.6 | ||||||
| | | | | | | | |
Total investments in unconsolidated affiliates | $ | 21.9 | $ | 21.1 | ||||
| | | | | | | | |
| | | | | | | | |
DEBT_CREDIT_FACILITIES_AND_LEA1
DEBT, CREDIT FACILITIES AND LEASE OBLIGATIONS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
DEBT, CREDIT FACILITIES AND LEASE OBLIGATIONS | ' | |||||||
Future minimum lease payments (including interest) under non-cancelable operating leases and aggregate debt maturities | ' | |||||||
Future minimum lease payments (including interest) under non-cancelable operating leases and aggregate debt maturities at December 31, 2013 were as follows (in millions): | ||||||||
Operating | Aggregate | |||||||
Leases | Debt | |||||||
Maturities | ||||||||
2014 | $ | 23.5 | $ | — | ||||
2015 | 17.4 | — | ||||||
2016 | 12.6 | — | ||||||
2017 | 8.2 | — | ||||||
2018 | 7.2 | 600 | ||||||
Thereafter | 34.7 | — | ||||||
| | | | | | | | |
Total obligations and commitments | $ | 103.6 | $ | 600 | ||||
| | | | | | | | |
| | | | | | | | |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
Summary of financial instruments measured at fair value on a recurring basis | ' | |||||||||||||
The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis as of December 31, 2013 and 2012 (in millions): | ||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets | ||||||||||||||
Investments held for executive deferred compensation plan | $ | 15.1 | $ | — | $ | — | $ | 15.1 | ||||||
Investments in unconsolidated affiliates | 0.8 | — | — | 0.8 | ||||||||||
Derivatives | — | 13.8 | — | 13.8 | ||||||||||
| | | | | | | | | | | | | | |
$ | 15.9 | $ | 13.8 | $ | — | $ | 29.7 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Derivatives | $ | — | $ | 17.2 | $ | — | $ | 17.2 | ||||||
Executive deferred compensation plan | 15.5 | — | — | 15.5 | ||||||||||
| | | | | | | | | | | | | | |
$ | 15.5 | $ | 17.2 | $ | — | $ | 32.7 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
Assets | ||||||||||||||
Investments held for executive deferred compensation plan | $ | 12.7 | $ | — | $ | — | $ | 12.7 | ||||||
Investments in unconsolidated affiliates | 2 | — | — | 2 | ||||||||||
Derivatives | — | 5.7 | — | 5.7 | ||||||||||
| | | | | | | | | | | | | | |
$ | 14.7 | $ | 5.7 | $ | — | $ | 20.4 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Executive deferred compensation plan | $ | 12.4 | $ | — | $ | — | $ | 12.4 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||||||||
Summary of derivative financial instruments used to manage currency exchange rate risk and interest rate risk | ' | |||||||||||||||||||
Notional Amount | ||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Foreign currency forward exchange contracts | $ | 805.5 | $ | 779 | ||||||||||||||||
Interest rate swap agreements | $ | 300 | $ | — | ||||||||||||||||
Schedule of location and fair value amounts of derivative instruments reported in the consolidated balance sheets | ' | |||||||||||||||||||
The following table presents the location and fair value amounts of derivative instruments reported in the consolidated balance sheets (in millions): | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Balance Sheet Location | December 31, | December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 13.8 | $ | 5.7 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Foreign currency contracts | Accrued and other liabilities | $ | 13.2 | $ | — | |||||||||||||||
Interest rate swap agreements | Other long-term liabilities | $ | 4 | $ | — | |||||||||||||||
Schedule of effect of master-netting agreements and rights of offset on the consolidated balance sheets | ' | |||||||||||||||||||
The following table presents the effect of master-netting agreements and rights of offset on the consolidated balance sheets (in millions): | ||||||||||||||||||||
Gross Amounts | ||||||||||||||||||||
Not Offset in the | ||||||||||||||||||||
Gross | Consolidated | |||||||||||||||||||
Amounts | Balance Sheet | |||||||||||||||||||
Offset in the | ||||||||||||||||||||
Consolidated | Net Amounts | |||||||||||||||||||
Balance Sheet | Presented in the | |||||||||||||||||||
Consolidated | ||||||||||||||||||||
December 31, 2013 | Gross | Balance Sheet | Financial | Cash | Net | |||||||||||||||
Amounts(a) | Instruments | Collateral | Amount | |||||||||||||||||
Received | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 13.8 | $ | — | $ | 13.8 | $ | (9.5 | ) | $ | — | $ | 4.3 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 13.2 | $ | — | $ | 13.2 | $ | (9.5 | ) | $ | — | $ | 3.7 | |||||||
Interest rate swap agreements | $ | 4 | $ | — | $ | 4 | $ | — | $ | — | $ | 4 | ||||||||
December 31, 2012 | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 10.9 | $ | (5.2 | ) | $ | 5.7 | $ | — | $ | — | $ | 5.7 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 5.2 | $ | (5.2 | ) | $ | — | $ | — | $ | — | $ | — | |||||||
(a) | ||||||||||||||||||||
The gross amounts presented as of December 31, 2012 do not include derivative assets of $3.8 million, and derivative liabilities of $3.8 million, as these derivatives were not subject to a master-netting arrangement and did not have rights of offset. | ||||||||||||||||||||
Schedule of effect of derivative instruments on the consolidated statements of operations and consolidated statements of comprehensive income | ' | |||||||||||||||||||
The following tables present the effect of derivative instruments on the consolidated statements of operations and consolidated statements of comprehensive income (in millions): | ||||||||||||||||||||
Amount of | Amount of | |||||||||||||||||||
Gain or (Loss) | Gain or (Loss) | |||||||||||||||||||
Recognized in | Reclassified | |||||||||||||||||||
OCI on | from | |||||||||||||||||||
Derivative | Accumulated | |||||||||||||||||||
(Effective | OCI into | |||||||||||||||||||
Portion) | Location of Gain or | Income | ||||||||||||||||||
(Loss) Reclassified | ||||||||||||||||||||
from Accumulated | ||||||||||||||||||||
2013 | 2012 | OCI into Income | 2013 | 2012 | ||||||||||||||||
Derivatives in cash flow hedging relationships | ||||||||||||||||||||
Foreign currency contracts | $ | 16.3 | $ | 13.7 | Cost of goods sold | $ | 21.5 | $ | 12.2 | |||||||||||
Amount of Gain or | ||||||||||||||||||||
(Loss) Recognized | ||||||||||||||||||||
in Income on | ||||||||||||||||||||
Location of Gain or (Loss) | Derivative | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | 2013 | 2012 | 2011 | |||||||||||||||||
Derivatives in fair value hedging relationships | ||||||||||||||||||||
Interest rate swap agreements | Interest expense | $ | (4.0 | ) | $ | — | $ | — | ||||||||||||
Amount of Gain or | ||||||||||||||||||||
(Loss) Recognized | ||||||||||||||||||||
in Income on | ||||||||||||||||||||
Location of Gain or (Loss) | Derivative | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | 2013 | 2012 | 2011 | |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Foreign currency contracts | Other expense (income), net | $ | 18.4 | $ | 4.4 | $ | (6.0 | ) |
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | |||||||||||||
Information regarding defined benefit pension plans | ' | |||||||||||||
Information regarding the Company's defined benefit pension plans is as follows (in millions): | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Change in projected benefit obligation: | ||||||||||||||
Beginning of year | $ | 108 | $ | 95.6 | ||||||||||
Service cost | 7.6 | 7.2 | ||||||||||||
Interest cost | 2 | 2.3 | ||||||||||||
Participant contributions | 1.9 | 2 | ||||||||||||
Actuarial (gain) loss | (5.6 | ) | 10.2 | |||||||||||
Benefits paid | — | (6.5 | ) | |||||||||||
Curtailment gain | — | (2.0 | ) | |||||||||||
Currency exchange rate changes and other | (2.7 | ) | (0.8 | ) | ||||||||||
| | | | | | | | |||||||
End of year | $ | 111.2 | $ | 108 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Change in fair value of plan assets: | ||||||||||||||
Beginning of year | $ | 57.2 | $ | 53.8 | ||||||||||
Actual return on plan assets | 4.4 | 1.7 | ||||||||||||
Employer contributions | 6.7 | 6.5 | ||||||||||||
Participant contributions | 1.9 | 2 | ||||||||||||
Benefits paid | — | (6.3 | ) | |||||||||||
Currency exchange rate changes and other | (1.7 | ) | (0.5 | ) | ||||||||||
| | | | | | | | |||||||
End of year | $ | 68.5 | $ | 57.2 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Funded Status | ||||||||||||||
Projected benefit obligation | $ | (111.2 | ) | $ | (108.0 | ) | ||||||||
Plan assets at fair value | 68.5 | 57.2 | ||||||||||||
| | | | | | | | |||||||
Underfunded status | $ | (42.7 | ) | $ | (50.8 | ) | ||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Net amounts recognized on the consolidated balance sheet: | ||||||||||||||
Other long-term liabilities | $ | 42.7 | $ | 50.8 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Accumulated other comprehensive loss, net of tax: | ||||||||||||||
Net actuarial loss | $ | (16.7 | ) | $ | (27.9 | ) | ||||||||
Net prior service credit | 2.1 | 2.4 | ||||||||||||
Deferred income tax benefit | 3.4 | 5 | ||||||||||||
| | | | | | | | |||||||
Total | $ | (11.2 | ) | $ | (20.5 | ) | ||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Components of net periodic benefit cost | ' | |||||||||||||
The components of net periodic benefit cost are as follows (in millions): | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Service cost, net | $ | 7.6 | $ | 7.2 | $ | 6.6 | ||||||||
Interest cost | 2 | 2.3 | 2.2 | |||||||||||
Expected return on plan assets | (1.2 | ) | (1.4 | ) | (1.4 | ) | ||||||||
Curtailment gain | — | (0.2 | ) | — | ||||||||||
Amortization of actuarial loss | 1.3 | 0.8 | 0.6 | |||||||||||
Amortization of prior service credit | (0.3 | ) | (0.3 | ) | (0.4 | ) | ||||||||
Amortization of transition obligation | — | 0.1 | 0.1 | |||||||||||
| | | | | | | | | | | ||||
Net periodic pension benefits cost | $ | 9.4 | $ | 8.5 | $ | 7.7 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Schedule of weighted-average assumptions used to determine the benefit obligations and net periodic benefit cost | ' | |||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Discount rate | 2.2 | % | 1.9 | % | ||||||||||
Rate of compensation increase | 3.1 | % | 3.1 | % | ||||||||||
Social securities increase | 1.8 | % | 1.8 | % | ||||||||||
Pension increase | 2 | % | 2 | % | ||||||||||
Years ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Discount rate | 1.9 | % | 2.5 | % | 2.4 | % | ||||||||
Expected return on plan assets | 2.1 | % | 2.6 | % | 2.7 | % | ||||||||
Rate of compensation increase | 3.1 | % | 3.1 | % | 2.9 | % | ||||||||
Social securities increase | 1.8 | % | 1.8 | % | 1.8 | % | ||||||||
Pension increase | 2 | % | 2 | % | 2 | % | ||||||||
Schedule of target weighted-average asset allocations and fair values of defined benefit pension plan assets | ' | |||||||||||||
Insurance contracts | 81.1 | % | ||||||||||||
Equity securities | 10.4 | % | ||||||||||||
Debt securities | 8.5 | % | ||||||||||||
| | | | | ||||||||||
Total | 100 | % | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
The fair values of the Company's defined benefit plan assets at December 31, 2013 and 2012, by asset category, are as follows (in millions): | ||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Asset Category | ||||||||||||||
Cash | $ | 0.8 | $ | — | $ | — | $ | 0.8 | ||||||
Equity securities: | ||||||||||||||
United States equities | 2.1 | — | — | 2.1 | ||||||||||
International equities | 5.9 | — | — | 5.9 | ||||||||||
Debt securities: | ||||||||||||||
United States government bonds | 0.6 | — | — | 0.6 | ||||||||||
International government bonds | 4.5 | — | — | 4.5 | ||||||||||
Insurance contracts | — | — | 54.6 | 54.6 | ||||||||||
| | | | | | | | | | | | | | |
$ | 13.9 | $ | — | $ | 54.6 | $ | 68.5 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
December 31, 2012 | ||||||||||||||
Asset Category | ||||||||||||||
Cash | $ | 0.8 | $ | — | $ | — | $ | 0.8 | ||||||
Equity securities: | ||||||||||||||
United States equities | 1.6 | — | — | 1.6 | ||||||||||
International equities | 4.5 | — | — | 4.5 | ||||||||||
Debt securities: | ||||||||||||||
United States government bonds | 0.6 | — | — | 0.6 | ||||||||||
International government bonds | 4 | — | — | 4 | ||||||||||
Insurance contracts | — | — | 45.7 | 45.7 | ||||||||||
| | | | | | | | | | | | | | |
$ | 11.5 | $ | — | $ | 45.7 | $ | 57.2 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Summary of changes in fair value of defined benefit plan assets classified as Level 3 | ' | |||||||||||||
The following table summarizes the changes in fair value of the Company's defined benefit plan assets that have been classified as Level 3 for the years ended December 31, 2013 and 2012 (in millions): | ||||||||||||||
Insurance | ||||||||||||||
Contracts | ||||||||||||||
Balance at December 31, 2011 | $ | 43.5 | ||||||||||||
Actual return on plan assets: | ||||||||||||||
Relating to assets still held at December 31, 2012 | 1.2 | |||||||||||||
Relating to assets sold during 2012 | 0.1 | |||||||||||||
Purchases, sales and settlements | 0.4 | |||||||||||||
Currency exchange rate impact | 0.5 | |||||||||||||
| | | | | ||||||||||
Balance at December 31, 2012 | 45.7 | |||||||||||||
Actual return on plan assets: | ||||||||||||||
Relating to assets still held at December 31, 2013 | 0.9 | |||||||||||||
Relating to assets sold during 2013 | 0.1 | |||||||||||||
Purchases, sales and settlements | 6.9 | |||||||||||||
Currency exchange rate impact | 1 | |||||||||||||
| | | | | ||||||||||
Balance at December 31, 2013 | $ | 54.6 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Benefit payments reflecting expected future service | ' | |||||||||||||
The following benefit payments, which reflect expected future service, as appropriate, at December 31, 2013, are expected to be paid (in millions): | ||||||||||||||
2014 | $ | 4.2 | ||||||||||||
2015 | 4.4 | |||||||||||||
2016 | 5.3 | |||||||||||||
2017 | 5.1 | |||||||||||||
2018 | 5.3 | |||||||||||||
2019-2023 | 34.1 |
COMMON_STOCK_Tables
COMMON STOCK (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||
COMMON STOCK | ' | |||||||||||||||||||||
Table summarizes the terms of the ASR agreements | ' | |||||||||||||||||||||
The following table summarizes the terms of the ASR agreements (dollars and shares in millions, except per-share data): | ||||||||||||||||||||||
Initial Delivery | ||||||||||||||||||||||
Final Settlement | ||||||||||||||||||||||
Value of | ||||||||||||||||||||||
Shares as % | ||||||||||||||||||||||
of Contract | ||||||||||||||||||||||
Agreement Date | Amount | Shares | Price per | Value | Settlement | Total Shares | Average Price | |||||||||||||||
Paid | Received | Share | Date | Received | per Share | |||||||||||||||||
Feb-12 | $ | 54 | 0.6 | $ | 72.4 | 80 | % | May-12 | 0.7 | $ | 75.12 | |||||||||||
May-12 | $ | 50 | 0.5 | $ | 84.81 | 80 | % | Aug-12 | 0.5 | $ | 97.5 | |||||||||||
Nov-12 | $ | 100 | 1.1 | $ | 85.73 | 90 | % | Feb-13 | 1.2 | $ | 88.93 | |||||||||||
Aug-13 | $ | 250 | 3.1 | $ | 72.39 | 90 | % | Oct-13 | 3.5 | $ | 71.24 | |||||||||||
Schedule of weighted-average assumptions for options granted during the period | ' | |||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Average risk-free interest rate | 0.8 | % | 0.7 | % | 1.7 | % | ||||||||||||||||
Expected dividend yield | None | None | None | |||||||||||||||||||
Expected volatility | 31 | % | 31 | % | 27 | % | ||||||||||||||||
Expected life (years) | 4.6 | 4.6 | 4.5 | |||||||||||||||||||
Fair value, per share | $ | 19.47 | $ | 23.93 | $ | 22.78 | ||||||||||||||||
Schedule of weighted-average assumptions for ESPP subscriptions granted during the period | ' | |||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||
Average risk-free interest rate | 0.1 | % | 0.1 | % | 0.2 | % | ||||||||||||||||
Expected dividend yield | None | None | None | |||||||||||||||||||
Expected volatility | 33 | % | 33 | % | 28 | % | ||||||||||||||||
Expected life (years) | 0.6 | 0.6 | 0.6 | |||||||||||||||||||
Fair value, per share | $ | 19.87 | $ | 21.3 | $ | 20.02 | ||||||||||||||||
Schedule of stock option activity | ' | |||||||||||||||||||||
Stock option activity during the year ended December 31, 2013 under the Program and the Nonemployee Directors Program was as follows (in millions, except years and per-share amounts): | ||||||||||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | |||||||||||||||||||
Average | Average | Intrinsic Value | ||||||||||||||||||||
Exercise | Remaining | |||||||||||||||||||||
Price | Contractual | |||||||||||||||||||||
Term | ||||||||||||||||||||||
Outstanding as of December 31, 2012 | 7.5 | $ | 49.92 | |||||||||||||||||||
Options granted | 1.4 | 71.48 | ||||||||||||||||||||
Options exercised | (1.0 | ) | 25.82 | |||||||||||||||||||
Options forfeited | (0.2 | ) | 77.46 | |||||||||||||||||||
| | | | | | | | | | | | | ||||||||||
Outstanding as of December 31, 2013 | 7.7 | 56.37 | 3.7 years | $ | 126.4 | |||||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
Exercisable as of December 31, 2013 | 5.2 | 46.9 | 2.8 years | 122.8 | ||||||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
Vested and expected to vest as of December 31, 2013 | 7.5 | 55.68 | 3.6 years | 126 | ||||||||||||||||||
| | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | ||||||||||
Summary of nonvested restricted stock unit activity | ' | |||||||||||||||||||||
The following table summarizes nonvested restricted stock unit activity during the year ended December 31, 2013 under the Program and the Nonemployee Directors Program (in millions, except per-share amounts): | ||||||||||||||||||||||
Shares | Weighted- | |||||||||||||||||||||
Average | ||||||||||||||||||||||
Grant-Date | ||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||
Nonvested as of December 31, 2012 | 0.8 | $ | 67.92 | |||||||||||||||||||
Granted(a) | 0.3 | 66.52 | ||||||||||||||||||||
Vested | (0.3 | ) | 44.31 | |||||||||||||||||||
Forfeited | — | — | ||||||||||||||||||||
| | | | | | | | |||||||||||||||
Nonvested as of December 31, 2013 | 0.8 | 75.87 | ||||||||||||||||||||
| | | | | | | | |||||||||||||||
| | | | | | | | |||||||||||||||
(a) | ||||||||||||||||||||||
Includes 0.1 million shares of market-based restricted stock units granted during 2013, which represents the targeted number of shares to be issued. As described above, the actual number of shares ultimately issued will be determined based on the Company's total shareholder return relative to a selected industry peer group. | ||||||||||||||||||||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||||||||||||||
Summary of activity for each component of Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
Foreign | Unrealized Gain | Unrealized Gain | Unrealized | Total | |||||||||||||
Currency | (Loss) on Cash | (Loss) on | Pension | Accumulated | |||||||||||||
Translation | Flow Hedges | Available-for-Sale | Costs(a) | Other | |||||||||||||
Adjustments | Investments | Comprehensive | |||||||||||||||
Loss | |||||||||||||||||
(in millions) | |||||||||||||||||
December 31, 2010 | $ | (24.8 | ) | $ | (10.9 | ) | $ | 2.2 | $ | (8.6 | ) | $ | (42.1 | ) | |||
Other comprehensive loss before reclassifications | (5.2 | ) | (1.6 | ) | (0.7 | ) | (6.9 | ) | (14.4 | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss | — | 29 | (1.6 | ) | 0.3 | 27.7 | |||||||||||
Deferred income tax (expense) benefit | — | (10.6 | ) | 1.2 | 0.7 | (8.7 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
December 31, 2011 | (30.0 | ) | 5.9 | 1.1 | (14.5 | ) | (37.5 | ) | |||||||||
Other comprehensive income (loss) before reclassifications | 4.2 | 13.7 | 0.1 | (7.8 | ) | 10.2 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (12.2 | ) | 0.3 | 0.6 | (11.3 | ) | ||||||||||
Deferred income tax (expense) benefit | — | (0.4 | ) | (0.1 | ) | 1.2 | 0.7 | ||||||||||
| | | | | | | | | | | | | | | | | |
December 31, 2012 | (25.8 | ) | 7 | 1.4 | (20.5 | ) | (37.9 | ) | |||||||||
Other comprehensive income (loss) before reclassifications | 5.6 | 16.3 | (1.2 | ) | 9.9 | 30.6 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | (21.5 | ) | 1 | (20.5 | ) | ||||||||||||
Deferred income tax benefit (expense) | — | 1.7 | 0.1 | (1.6 | ) | 0.2 | |||||||||||
| | | | | | | | | | | | | | | | | |
December 31, 2013 | $ | (20.2 | ) | $ | 3.5 | $ | 0.3 | $ | (11.2 | ) | $ | (27.6 | ) | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | |||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011, the change in unrealized pension costs consisted of the following (in millions): | |||||||||||||||||
Pre-Tax | Tax Benefit | Net of Tax | |||||||||||||||
Amount | (Expense) | Amount | |||||||||||||||
2013 | |||||||||||||||||
Prior service cost arising during period | $ | — | $ | — | $ | — | |||||||||||
Amortization of prior service credit | (0.3 | ) | — | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.3 | ) | — | (0.3 | ) | ||||||||||||
Net transition obligation amortized during period | — | — | — | ||||||||||||||
Net actuarial gain arising during period | 11.2 | (1.6 | ) | 9.6 | |||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | 10.9 | $ | (1.6 | ) | $ | 9.3 | ||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
2012 | |||||||||||||||||
Prior service cost arising during period | $ | (0.2 | ) | $ | — | $ | (0.2 | ) | |||||||||
Amortization of prior service credit | (0.3 | ) | — | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.5 | ) | — | (0.5 | ) | ||||||||||||
Net transition obligation amortized during period | 0.1 | — | 0.1 | ||||||||||||||
Net actuarial loss arising during period | (6.8 | ) | 1.2 | (5.6 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | (7.2 | ) | $ | 1.2 | $ | (6.0 | ) | |||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
2011 | |||||||||||||||||
Prior service credit arising during period | $ | 0.1 | $ | — | $ | 0.1 | |||||||||||
Amortization of prior service credit | (0.4 | ) | 0.1 | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.3 | ) | 0.1 | (0.2 | ) | ||||||||||||
Net transition obligation amortized during period | 0.1 | — | 0.1 | ||||||||||||||
Net actuarial loss arising during period | (6.4 | ) | 0.6 | (5.8 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | (6.6 | ) | $ | 0.7 | $ | (5.9 | ) | |||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Change in unrealized pension costs | ' | ||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011, the change in unrealized pension costs consisted of the following (in millions): | |||||||||||||||||
Pre-Tax | Tax Benefit | Net of Tax | |||||||||||||||
Amount | (Expense) | Amount | |||||||||||||||
2013 | |||||||||||||||||
Prior service cost arising during period | $ | — | $ | — | $ | — | |||||||||||
Amortization of prior service credit | (0.3 | ) | — | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.3 | ) | — | (0.3 | ) | ||||||||||||
Net transition obligation amortized during period | — | — | — | ||||||||||||||
Net actuarial gain arising during period | 11.2 | (1.6 | ) | 9.6 | |||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | 10.9 | $ | (1.6 | ) | $ | 9.3 | ||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
2012 | |||||||||||||||||
Prior service cost arising during period | $ | (0.2 | ) | $ | — | $ | (0.2 | ) | |||||||||
Amortization of prior service credit | (0.3 | ) | — | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.5 | ) | — | (0.5 | ) | ||||||||||||
Net transition obligation amortized during period | 0.1 | — | 0.1 | ||||||||||||||
Net actuarial loss arising during period | (6.8 | ) | 1.2 | (5.6 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | (7.2 | ) | $ | 1.2 | $ | (6.0 | ) | |||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
2011 | |||||||||||||||||
Prior service credit arising during period | $ | 0.1 | $ | — | $ | 0.1 | |||||||||||
Amortization of prior service credit | (0.4 | ) | 0.1 | (0.3 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Net prior service cost arising during period | (0.3 | ) | 0.1 | (0.2 | ) | ||||||||||||
Net transition obligation amortized during period | 0.1 | — | 0.1 | ||||||||||||||
Net actuarial loss arising during period | (6.4 | ) | 0.6 | (5.8 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Unrealized pension costs, net | $ | (6.6 | ) | $ | 0.7 | $ | (5.9 | ) | |||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Schedule of amounts reclassified from Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
The following table provides information about amounts reclassified from "Accumulated Other Comprehensive Loss" (in millions): | |||||||||||||||||
Details about Accumulated Other Comprehensive Loss | Year Ended | Affected Line on Consolidated | |||||||||||||||
Components | December 31, | Statements of Operations | |||||||||||||||
2013 | |||||||||||||||||
Gain on cash flow hedges | $ | 21.5 | Cost of goods sold | ||||||||||||||
(8.4 | ) | Provision for income taxes | |||||||||||||||
| | | | | | ||||||||||||
$ | 13.1 | Net of tax | |||||||||||||||
| | | | | | ||||||||||||
Amortization of pension adjustments | $ | (1.0 | ) | (a) | |||||||||||||
0.2 | Provision for income taxes | ||||||||||||||||
| | | | | | ||||||||||||
$ | (0.8 | ) | Net of tax | ||||||||||||||
| | | | | | ||||||||||||
| | | | | | ||||||||||||
(a) | |||||||||||||||||
This item is included in the components of net periodic benefit costs. See Note 11 for additional information. | |||||||||||||||||
OTHER_EXPENSE_INCOME_NET_Table
OTHER EXPENSE (INCOME), NET (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
OTHER EXPENSE (INCOME), NET | ' | ||||||||||
Schedule of OTHER EXPENSE (INCOME), NET | ' | ||||||||||
Years Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in millions) | |||||||||||
Foreign exchange losses, net | $ | 1.5 | $ | 1.2 | $ | 1.9 | |||||
Loss (gain) on investments in unconsolidated affiliates | 0.4 | 0.7 | (5.4 | ) | |||||||
Earn-out payments | — | — | (1.0 | ) | |||||||
Other | (0.6 | ) | (0.2 | ) | (0.3 | ) | |||||
| | | | | | | | | | | |
Total other expense (income), net | $ | 1.3 | $ | 1.7 | $ | (4.8 | ) | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
Income before provision for income taxes generated from United States and international operations | ' | ||||||||||||||||
The Company's income before provision for income taxes was generated from United States and international operations as follows (in millions): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
United States | $ | 219.6 | $ | 143.7 | $ | 23.6 | |||||||||||
International, including Puerto Rico | 295.7 | 247.4 | 260 | ||||||||||||||
| | | | | | | | | | | |||||||
$ | 515.3 | $ | 391.1 | $ | 283.6 | ||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Provision for income taxes | ' | ||||||||||||||||
The provision for income taxes consists of the following (in millions): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Current | |||||||||||||||||
United States: | |||||||||||||||||
Federal | $ | 42.5 | $ | 87.2 | $ | 29.1 | |||||||||||
State and local | 5.7 | 5.9 | 3 | ||||||||||||||
International, including Puerto Rico | 27.9 | 31.6 | 25 | ||||||||||||||
| | | | | | | | | | | |||||||
Current income tax expense | 76.1 | 124.7 | 57.1 | ||||||||||||||
| | | | | | | | | | | |||||||
Deferred | |||||||||||||||||
United States: | |||||||||||||||||
Federal | 41.2 | (23.8 | ) | (6.4 | ) | ||||||||||||
State and local | 0.9 | (2.0 | ) | 1.2 | |||||||||||||
International, including Puerto Rico | 5.4 | (1.0 | ) | (5.0 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Deferred income tax expense (benefit) | 47.5 | (26.8 | ) | (10.2 | ) | ||||||||||||
| | | | | | | | | | | |||||||
Total income tax provision | $ | 123.6 | $ | 97.9 | $ | 46.9 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Components of deferred tax assets and liabilities | ' | ||||||||||||||||
The components of deferred tax assets and liabilities are as follows (in millions): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax assets | |||||||||||||||||
Compensation and benefits | $ | 58.2 | $ | 53.5 | |||||||||||||
Net operating loss carryforwards | 33.6 | 27.6 | |||||||||||||||
Benefits from uncertain tax positions | 32.6 | 28.1 | |||||||||||||||
Net tax credit carryforwards | 25.1 | 20.8 | |||||||||||||||
Accrued liabilities | 23 | 13 | |||||||||||||||
Inventories | 8.7 | 0.4 | |||||||||||||||
Cash flow hedges | 3.2 | — | |||||||||||||||
Investments in unconsolidated affiliates | 2.1 | 2.8 | |||||||||||||||
Other | 3.2 | 0.5 | |||||||||||||||
| | | | | | | | ||||||||||
Total deferred tax assets | 189.7 | 146.7 | |||||||||||||||
| | | | | | | | ||||||||||
Deferred tax liabilities | |||||||||||||||||
Property, plant and equipment | (23.6 | ) | (20.8 | ) | |||||||||||||
Deferred tax on foreign earnings | (15.6 | ) | (0.4 | ) | |||||||||||||
Other intangible assets | (10.1 | ) | (1.8 | ) | |||||||||||||
Cash flow hedges | — | (2.0 | ) | ||||||||||||||
Other | (1.6 | ) | (2.9 | ) | |||||||||||||
| | | | | | | | ||||||||||
Total deferred tax liabilities | (50.9 | ) | (27.9 | ) | |||||||||||||
| | | | | | | | ||||||||||
Valuation allowance | (46.4 | ) | (38.6 | ) | |||||||||||||
| | | | | | | | ||||||||||
Net deferred tax assets | $ | 92.4 | $ | 80.2 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Summary of net operating loss carryforwards and the related carryforward periods | ' | ||||||||||||||||
Net operating loss carryforwards and the related carryforward periods at December 31, 2013 are summarized as follows (in millions): | |||||||||||||||||
Carryforward | Tax Benefit | Valuation | Net Tax | Carryforward | |||||||||||||
Amount | Amount | Allowance | Benefit | Period Ends | |||||||||||||
United States state net operating losses | $ | 46.9 | $ | 2.7 | $ | (1.5 | ) | $ | 1.2 | 2014-2032 | |||||||
Non-United States net operating losses | 55.4 | 13.9 | (12.9 | ) | 1 | 2014-2022 | |||||||||||
Non-United States net operating losses | 53.7 | 18.2 | (17.1 | ) | 1.1 | Indefinite | |||||||||||
| | | | | | | | | | | | | | | | | |
Total | $ | 156 | $ | 34.8 | $ | (31.5 | ) | $ | 3.3 | ||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Summary of tax credit carryforwards and the related carryforward periods | ' | ||||||||||||||||
Tax credit carryforwards and the related carryforward periods at December 31, 2013 are summarized as follows (in millions): | |||||||||||||||||
Carryforward | Valuation | Net Tax | Carryforward | ||||||||||||||
Amount | Allowance | Benefit | Period Ends | ||||||||||||||
United States federal tax credits | $ | 9 | $ | — | $ | 9 | 2021-2033 | ||||||||||
California research expenditure tax credits | 46.6 | — | 46.6 | Indefinite | |||||||||||||
Puerto Rico purchases credit | 12.1 | (12.1 | ) | — | Indefinite | ||||||||||||
Other non-United States tax credits | 0.2 | — | 0.2 | 2015-2016 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 67.9 | $ | (12.1 | ) | $ | 55.8 | ||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Reconciliation of the United States federal statutory income tax rate to the Company's effective income tax rate | ' | ||||||||||||||||
A reconciliation of the United States federal statutory income tax rate to the Company's effective income tax rate is as follows (in millions): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Income tax expense at U.S. federal statutory rate | $ | 180.3 | $ | 136.9 | $ | 99.2 | |||||||||||
Foreign income taxed at different rates | (60.6 | ) | (41.5 | ) | (55.3 | ) | |||||||||||
Tax credits, federal and state | (19.8 | ) | (4.9 | ) | (10.4 | ) | |||||||||||
U.S. tax on foreign earnings, net of credits | 18.9 | 0.7 | 9.7 | ||||||||||||||
State and local taxes, net of federal tax benefit | 5.9 | 3.9 | 4.6 | ||||||||||||||
Nondeductible stock-based compensation | 2.6 | 1.9 | 1.9 | ||||||||||||||
Release of reserve for uncertain tax positions for prior years | (3.9 | ) | (0.8 | ) | (4.1 | ) | |||||||||||
Other | 0.2 | 1.7 | 1.3 | ||||||||||||||
| | | | | | | | | | | |||||||
Income tax provision | $ | 123.6 | $ | 97.9 | $ | 46.9 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, penalties and foreign exchange | ' | ||||||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, penalties and foreign exchange, is as follows (in millions): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Unrecognized tax benefits, January 1 | $ | 113.6 | $ | 78 | $ | 55.1 | |||||||||||
Current year tax positions | 17.8 | 41.7 | 26 | ||||||||||||||
Increase prior year tax positions | 5.7 | 2.6 | 5.9 | ||||||||||||||
Decrease prior year tax positions | (9.0 | ) | (4.3 | ) | (5.5 | ) | |||||||||||
Settlements | (0.1 | ) | (4.3 | ) | (0.1 | ) | |||||||||||
Lapse of statute of limitations | (0.3 | ) | (0.1 | ) | (3.4 | ) | |||||||||||
| | | | | | | | | | | |||||||
Unrecognized tax benefits, December 31 | $ | 127.7 | $ | 113.6 | $ | 78 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
SEGMENT INFORMATION | ' | ||||||||||
Information about reportable segments | ' | ||||||||||
The table below presents information about Edwards Lifesciences' reportable segments (in millions): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Segment Net Sales | |||||||||||
United States | $ | 939.6 | $ | 812.1 | $ | 605.6 | |||||
Europe | 622.2 | 577 | 549.4 | ||||||||
Japan | 293.7 | 293.4 | 226.8 | ||||||||
Rest of World | 252.8 | 236 | 200.8 | ||||||||
| | | | | | | | | | | |
Total segment net sales | $ | 2,108.30 | $ | 1,918.50 | $ | 1,582.60 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Segment Pre-tax Income | |||||||||||
United States | $ | 550.5 | $ | 465 | $ | 314.9 | |||||
Europe | 287.7 | 250.9 | 237.9 | ||||||||
Japan | 145.6 | 153.1 | 107.6 | ||||||||
Rest of World | 68.3 | 68.8 | 60.3 | ||||||||
| | | | | | | | | | | |
Total segment pre-tax income | $ | 1,052.10 | $ | 937.8 | $ | 720.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ||||||||||
The table below presents reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income (in millions): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net Sales Reconciliation | |||||||||||
Segment net sales | $ | 2,108.30 | $ | 1,918.50 | $ | 1,582.60 | |||||
Foreign currency | (62.8 | ) | (18.9 | ) | 96 | ||||||
| | | | | | | | | | | |
Consolidated net sales | $ | 2,045.50 | $ | 1,899.60 | $ | 1,678.60 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Pre-tax Income Reconciliation | |||||||||||
Segment pre-tax income | $ | 1,052.10 | $ | 937.8 | $ | 720.7 | |||||
Unallocated amounts: | |||||||||||
Corporate items | (586.5 | ) | (536.2 | ) | (436.3 | ) | |||||
Special gains (charges) | 67.3 | (16.0 | ) | (21.6 | ) | ||||||
Interest (expense) income, net | (5.2 | ) | 0.4 | 0.3 | |||||||
Foreign currency | (12.4 | ) | 5.1 | 20.5 | |||||||
| | | | | | | | | | | |
Consolidated pre-tax income | $ | 515.3 | $ | 391.1 | $ | 283.6 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Enterprise-wide information | ' | ||||||||||
Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated financial statements. | |||||||||||
As of or for the Years Ended | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(in millions) | |||||||||||
Net Sales by Geographic Area | |||||||||||
United States | $ | 939.6 | $ | 812.1 | $ | 605.6 | |||||
Europe | 616.5 | 559.7 | 574 | ||||||||
Japan | 243.6 | 294.1 | 283.7 | ||||||||
Rest of World | 245.8 | 233.7 | 215.3 | ||||||||
| | | | | | | | | | | |
$ | 2,045.50 | $ | 1,899.60 | $ | 1,678.60 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Net Sales by Major Product Area | |||||||||||
Surgical Heart Valve Therapy | $ | 801.2 | $ | 787.5 | $ | 784.4 | |||||
Transcatheter Heart Valves | 707.7 | 552.1 | 333.8 | ||||||||
Critical Care | 536.6 | 560 | 560.4 | ||||||||
| | | | | | | | | | | |
$ | 2,045.50 | $ | 1,899.60 | $ | 1,678.60 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-lived Tangible Assets by Geographic Area | |||||||||||
United States | $ | 308.2 | $ | 263.4 | $ | 223 | |||||
Europe | 40.9 | 38.8 | 36.3 | ||||||||
Japan | 10.8 | 13.2 | 11.9 | ||||||||
Rest of World | 97.1 | 84.2 | 57.7 | ||||||||
| | | | | | | | | | | |
$ | 457 | $ | 399.6 | $ | 328.9 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
QUARTERLY_FINANCIAL_RESULTS_AN1
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) | ' | ||||||||||||||||
Schedule of Quarterly Financial Results | ' | ||||||||||||||||
Years Ended December 31, | First | Second | Third | Fourth | Total | ||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | |||||||||||||
(in millions, except per share data) | |||||||||||||||||
2013 | |||||||||||||||||
Net sales | $ | 496.7 | $ | 517.2 | $ | 495.6 | $ | 536 | $ | 2,045.50 | |||||||
Gross profit | 374.5 | 392.2 | 365.9 | 390.5 | 1,523.10 | ||||||||||||
Net income(a) | 144.9 | 94.1 | 76.9 | 75.8 | 391.7 | ||||||||||||
Earnings per common share(a): | |||||||||||||||||
Basic | 1.27 | 0.84 | 0.69 | 0.69 | 3.51 | ||||||||||||
Diluted | 1.24 | 0.82 | 0.68 | 0.68 | 3.44 | ||||||||||||
Market price: | |||||||||||||||||
High | $ | 94.98 | $ | 86.11 | $ | 73.73 | $ | 78.89 | $ | 94.98 | |||||||
Low | 78.1 | 62.34 | 65.03 | 60.62 | 60.62 | ||||||||||||
2012 | |||||||||||||||||
Net sales | $ | 459.2 | $ | 482 | $ | 447.9 | $ | 510.5 | $ | 1,899.60 | |||||||
Gross profit | 331.9 | 352.2 | 336.2 | 384.7 | 1,405.00 | ||||||||||||
Net income(b) | 65.1 | 67.8 | 69.2 | 91.1 | 293.2 | ||||||||||||
Earnings per common share(b): | |||||||||||||||||
Basic | 0.57 | 0.59 | 0.6 | 0.79 | 2.55 | ||||||||||||
Diluted | 0.55 | 0.57 | 0.58 | 0.77 | 2.48 | ||||||||||||
Market price: | |||||||||||||||||
High | $ | 83.96 | $ | 104.25 | $ | 109.88 | $ | 110.79 | $ | 110.79 | |||||||
Low | 67.95 | 67.86 | 96.36 | 81.29 | 67.86 | ||||||||||||
(a) | |||||||||||||||||
The first quarter of 2013 includes $83.6 million received in satisfaction of a jury award of damages for infringement of the Company's U.S. Andersen transcatheter heart valve patent, including interest. | |||||||||||||||||
The fourth quarter of 2013 includes a $15.2 million charge to record a sales returns reserve and related costs for estimated Transcatheter Heart Valve product returns expected upon introduction of next-generation Transcatheter Heart Valve products; a $10.4 million charge related primarily to severance associated with a global workforce realignment; and a $5.9 million charge to write off certain acquired IPR&D assets. | |||||||||||||||||
(b) | |||||||||||||||||
The second quarter of 2012 includes an $8.1 million charge due to the voluntary recalls of certain of the Company's heart valves and Critical Care catheters and a $7.0 million charge for the licensing of intellectual property. | |||||||||||||||||
The fourth quarter of 2012 includes a $9.0 million charge related primarily to severance associated with a global workforce realignment. | |||||||||||||||||
VALUATION_AND_QUALIFYING_ACCOU1
VALUATION AND QUALIFYING ACCOUNTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||
Schedule of allowance for doubtful accounts, inventory reserves and tax valuation allowances | ' | ||||||||||||||||
Additions | |||||||||||||||||
Balance at | Charged to | Charged to | Deductions | Balance at | |||||||||||||
Beginning | Costs and | Other | From | End of | |||||||||||||
of Period | Expenses | Accounts | Reserves | Period | |||||||||||||
(in millions) | |||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Allowance for doubtful accounts(a) | $ | 12 | $ | 2.4 | $ | — | $ | (2.2 | ) | $ | 12.2 | ||||||
Inventory reserves(b) | 16.3 | 27.5 | — | (14.2 | ) | 29.6 | |||||||||||
Tax valuation allowance(c) | 38.6 | 8.2 | — | (0.4 | ) | 46.4 | |||||||||||
Year ended December 31, 2012 | |||||||||||||||||
Allowance for doubtful accounts(a) | $ | 19 | $ | 3 | $ | 0.4 | $ | (10.4 | ) | $ | 12 | ||||||
Inventory reserves(b) | 12.9 | 21.8 | — | (18.4 | ) | 16.3 | |||||||||||
Tax valuation allowance(c) | 32.4 | 3.1 | 5.2 | (2.1 | ) | 38.6 | |||||||||||
Year ended December 31, 2011 | |||||||||||||||||
Allowance for doubtful accounts(a) | $ | 11.6 | $ | 9 | $ | 0.3 | $ | (1.9 | ) | $ | 19 | ||||||
Inventory reserves(b) | 11.2 | 15.3 | — | (13.6 | ) | 12.9 | |||||||||||
Tax valuation allowance(c) | 30.3 | 3.1 | 0.4 | (1.4 | ) | 32.4 | |||||||||||
(a) | |||||||||||||||||
The deductions related to allowances for doubtful accounts represent accounts receivable which are written off and product which is returned from customers. | |||||||||||||||||
(b) | |||||||||||||||||
Inventory reserves result from inventory which is obsolete, nearing its expiration date, damaged or slow moving. The deductions related to inventory reserves represent inventory that has been disposed. | |||||||||||||||||
(c) | |||||||||||||||||
The tax valuation allowances are provided for other-than-temporary impairments and unrealized losses related to certain unconsolidated affiliates that may not be recognized due to the uncertainty of the ready marketability of certain impaired investments, and net operating loss and credit carryforwards that may not be recognized due to insufficient taxable income. | |||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Decrease in net cash provided by operating activities | ($412.70) | ($78.80) | ($406.50) |
Restatement adjustment | ' | ' | ' |
Decrease in net cash provided by operating activities | ' | ($11.70) | ($6.30) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' |
Shipping and handling costs | $56.60 | $54.90 | $51 |
Allowance for Doubtful Accounts | 12.2 | 12 | ' |
Time period prior to expiration date which triggers write-down of inventory | '6 months | ' | ' |
Time period used to evaluate slow-moving inventory levels | '2 years | ' | ' |
Allowance for excess and obsolete inventory | 29.6 | 16.3 | ' |
General and administrative costs allocated to inventory | 24.7 | 26.2 | 25.3 |
General and administrative costs included in inventory | $14.30 | $15.10 | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment | ' | ' | ' |
Depreciation expense for property, plant and equipment | $53.10 | $44 | $44 |
Repairs and maintenance expense | $21.70 | $20.60 | $18.10 |
Buildings and improvements | Minimum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life | '10 years | ' | ' |
Buildings and improvements | Maximum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life | '40 years | ' | ' |
Machinery and equipment | Minimum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life | '3 years | ' | ' |
Machinery and equipment | Maximum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life | '15 years | ' | ' |
Software | Minimum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life | '3 years | ' | ' |
Software | Maximum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life | '10 years | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (Limited partnerships or limited liability corporations, Minimum) | Dec. 31, 2013 |
Limited partnerships or limited liability corporations | Minimum | ' |
Investment in unconsolidated affiliates | ' |
Equity method investment ownership percentage | 5.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Basic: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $75.80 | $76.90 | $94.10 | $144.90 | $91.10 | $69.20 | $67.80 | $65.10 | $391.70 | $293.20 | $236.70 |
Weighted-average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 111.7 | 114.9 | 114.6 |
Basic earnings per share (in dollars per share) | $0.69 | $0.69 | $0.84 | $1.27 | $0.79 | $0.60 | $0.59 | $0.57 | $3.51 | $2.55 | $2.07 |
Diluted: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $75.80 | $76.90 | $94.10 | $144.90 | $91.10 | $69.20 | $67.80 | $65.10 | $391.70 | $293.20 | $236.70 |
Weighted-average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 111.7 | 114.9 | 114.6 |
Dilutive effect of stock plans (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 2.1 | 3.4 | 4.8 |
Dilutive weighted-average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 113.8 | 118.3 | 119.4 |
Diluted earnings per share (in dollars per share) | $0.68 | $0.68 | $0.82 | $1.24 | $0.77 | $0.58 | $0.57 | $0.55 | $3.44 | $2.48 | $1.98 |
Stock compensation plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computation of earnings per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 3.3 | 1.7 | 1 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allocation of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense | $47.40 | $42.10 | $35 |
Percentage of restricted stock units that vest upon retirement for each full year of employment subsequent to the grant date | 25.00% | ' | ' |
Derivative disclosures | ' | ' | ' |
Maximum period of time currency rate movements in future cash flows associated with intercompany transactions and certain third-party expenses are hedged | '13 months | ' | ' |
Cost of goods sold | ' | ' | ' |
Allocation of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense | 5.9 | 5 | 4 |
Selling, general and administrative expenses | ' | ' | ' |
Allocation of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense | 34.7 | 31.2 | 25.4 |
Research and development expenses | ' | ' | ' |
Allocation of stock-based compensation expense | ' | ' | ' |
Stock-based compensation expense | $6.80 | $5.90 | $5.60 |
SPECIAL_GAINS_CHARGES_Details
SPECIAL (GAINS) CHARGES (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2013 | Mar. 31, 2013 |
CoreValve, Inc. | CoreValve, Inc. | |||||
SPECIAL (GAINS) CHARGES | ' | ' | ' | ' | ' | ' |
Settlements and litigation | ' | ($83.60) | ' | $3.30 | ($83.60) | ($83.60) |
Realignment expenses | ' | 10.4 | 9 | 5.5 | ' | ' |
IPR&D impairment | 5.9 | 5.9 | ' | ' | ' | ' |
Licensing of intellectual property | ' | ' | 7 | ' | ' | ' |
European receivables reserve | ' | ' | ' | 12.8 | ' | ' |
Total special (gains) charges | ' | -67.3 | 16 | 21.6 | ' | ' |
Litigation Award | ' | ' | ' | ' | ' | ' |
Amount of payment received from Medtronic in satisfaction of the April 2010 jury award of damages for infringement, including accrued interest | ' | ' | ' | ' | $83.60 | ' |
SPECIAL_GAINS_CHARGES_Details_
SPECIAL (GAINS) CHARGES (Details 2) (USD $) | 12 Months Ended | 1 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
2013 global workforce realignment | 2012 global workforce realignment | 2011 global workforce realignment | ||||
Employee severance | Employee severance | Employee severance | ||||
item | item | item | ||||
Realignment Expenses | ' | ' | ' | ' | ' | ' |
Realignment expenses | $10.40 | $9 | $5.50 | $10.40 | $9 | $5.50 |
Number of employees impacted by realignment activity | ' | ' | ' | 118 | 92 | 49 |
Remaining liability for global workforce realignment | $9.50 | $8.70 | ' | $9.20 | ' | ' |
SPECIAL_GAINS_CHARGES_Details_1
SPECIAL (GAINS) CHARGES (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
IPR&D | IPR&D | |||
Embrella | Embrella | |||
IPR&D impairment | ' | ' | ' | ' |
IPR&D impairment | $5.90 | $5.90 | $5.90 | $5.90 |
SPECIAL_GAINS_CHARGES_Details_2
SPECIAL (GAINS) CHARGES (Details 4) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 30, 2012 | Jun. 30, 2012 |
Exclusive license of intellectual property | Co-exclusive sublicense to intellectual property | |||
Licensing of Intellectual Property | ' | ' | ' | ' |
Upfront licensing and royalty fees | $7 | ' | $2 | $5 |
European receivables reserve | ' | $12.80 | ' | ' |
COMPOSITION_OF_CERTAIN_FINANCI2
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accounts receivable, net | ' | ' |
Trade accounts receivable | $307.90 | $326.70 |
Allowance for doubtful accounts | -5.4 | -5.6 |
Total accounts receivable, net | 302.5 | 321.1 |
Inventories | ' | ' |
Raw materials | 57.8 | 49.5 |
Work in process | 82.2 | 58.8 |
Finished products | 168.9 | 172.7 |
Total inventories | 308.9 | 281 |
Property, plant and equipment, net | ' | ' |
Land | 21.6 | 21.5 |
Buildings and leasehold improvements | 268.2 | 183.7 |
Machinery and equipment | 307.6 | 278.9 |
Equipment with customers | 40.2 | 40.2 |
Software | 99.2 | 102.1 |
Construction in progress | 27.9 | 68.1 |
Total property, plant and equipment, gross | 764.7 | 694.5 |
Accumulated depreciation | -343.1 | -321.2 |
Total property, plant and equipment, net | 421.6 | 373.3 |
Long-term accounts receivable, net | ' | ' |
Long-term trade accounts receivable | 14.1 | 16.3 |
Allowance for doubtful accounts | -6.8 | -6.4 |
Total long-term accounts receivable, net | 7.3 | 9.9 |
Accrued and other liabilities | ' | ' |
Employee compensation and withholdings | 101.1 | 102.7 |
Clinical trial accruals | 37.2 | 23.1 |
Property, payroll and other taxes | 31.6 | 31 |
Fair value of derivatives | 17.2 | ' |
Accrued rebates | 15 | 14.2 |
Realignment reserves | 9.5 | 8.7 |
Deferred income taxes | 7.2 | 8.7 |
Taxes payable | 7.1 | 9.5 |
Litigation reserves (Note 16) | 1.7 | 3.1 |
Other accrued liabilities | 69.6 | 71.7 |
Accrued and other liabilities | 297.2 | 272.7 |
European receivables | ' | ' |
Accounts receivable, net | ' | ' |
Accounts receivables, net of allowance for doubtful accounts | $104.70 | $104.70 |
ACQUISITIONS_Details
ACQUISITIONS (Details) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 09, 2012 | Oct. 09, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Oct. 09, 2012 | Dec. 31, 2013 | Oct. 09, 2012 | Dec. 31, 2013 | Mar. 11, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 11, 2011 |
USD ($) | USD ($) | USD ($) | USD ($) | BMEYE | BMEYE | BMEYE | BMEYE | BMEYE | BMEYE | BMEYE | BMEYE | Embrella | Embrella | Embrella | Embrella | |
USD ($) | EUR (€) | USD ($) | Developed technology | Developed technology | IPR&D | IPR&D | IPR&D | USD ($) | IPR&D | IPR&D | IPR&D | |||||
USD ($) | USD ($) | USD ($) | Developed technology | USD ($) | USD ($) | USD ($) | ||||||||||
USD ($) | ||||||||||||||||
Business acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate cash purchase price | ' | ' | ' | ' | $36.90 | € 28.40 | ' | ' | ' | ' | ' | ' | $42.60 | ' | ' | ' |
Amount paid as an intercompany loan for payment of certain liabilities | ' | ' | ' | ' | 5.1 | 3.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Escrow | ' | ' | ' | ' | 5.5 | 4.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Time period, subsequent to the acquisition date, remaining funds in escrow will be disbursed | ' | ' | ' | ' | '18 months | '18 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition-related costs | ' | ' | ' | ' | ' | ' | 0.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash | ' | ' | ' | ' | 0.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other current assets | ' | ' | ' | ' | 0.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | ' | ' | ' | ' | 1.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 385.4 | 385.4 | 384.7 | 349.8 | 34.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Indefinite-lived intangible asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.2 | ' | ' | ' | ' | ' |
Finite-lived intangible asset | ' | ' | ' | ' | ' | ' | ' | ' | 1.2 | ' | ' | ' | ' | ' | ' | ' |
Current liabilities assumed | ' | ' | ' | ' | -4.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term liabilities assumed | ' | ' | ' | ' | -2.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total purchase price | ' | ' | ' | ' | 36.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less: cash acquired | ' | ' | ' | ' | -0.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total purchase price, net of cash acquired | ' | ' | 36.6 | 42.6 | 36.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional research and development expenditures projected at valuation date to be incurred prior to product introduction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.4 | ' | ' | ' | ' | 4.4 |
Amount of IPR&D transferred to developed technology | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.8 | ' | ' | ' | ' |
Current projection of additional research and development expenditures that will be incurred prior to the date of product introduction in the United States and Japan | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.6 | ' | ' | ' | ' | ' | ' |
Weighted-average useful life | ' | ' | ' | ' | ' | ' | ' | '6 years | ' | ' | ' | ' | ' | ' | ' | ' |
IPR&D impairment | $5.90 | $5.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5.90 | $5.90 | ' |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 |
United States | United States | United States | Europe | Europe | |||
Goodwill | ' | ' | ' | ' | ' | ' | ' |
Goodwill, beginning of period | $384.70 | $349.80 | $308.30 | $308.30 | $308.30 | $76.40 | $41.50 |
Goodwill acquired during the year | ' | 34.9 | ' | ' | ' | ' | 34.9 |
Currency translation adjustment | 0.7 | ' | ' | ' | ' | 0.7 | ' |
Goodwill, end of period | $385.40 | $384.70 | $308.30 | $308.30 | $308.30 | $77.10 | $76.40 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
IPR&D | IPR&D | IPR&D | IPR&D | Patents | Patents | Developed technology | Developed technology | Other | Other | |||||
Embrella | Embrella | |||||||||||||
Amortizable intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost | $275.70 | $275.70 | $263.10 | ' | ' | ' | ' | ' | $221.70 | $211.20 | $43.30 | $41.30 | $10.70 | $10.60 |
Accumulated Amortization | -223.1 | -223.1 | -207.1 | ' | ' | ' | ' | ' | -179.9 | -167.3 | -35.1 | -33 | -8.1 | -6.8 |
Net Carrying Value | 52.6 | 52.6 | 56 | ' | ' | ' | ' | ' | 41.8 | 43.9 | 8.2 | 8.3 | 2.6 | 3.8 |
Unamortizable intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Carrying Value | ' | ' | ' | ' | 4.6 | 11 | ' | ' | ' | ' | ' | ' | ' | ' |
Gross intangible Assets | 280.3 | 280.3 | 274.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Net Carrying Amount of Intangible Assets | 57.2 | 57.2 | 67 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized legal costs related to the defense and enforcement of issued patents | ' | ' | ' | ' | ' | ' | ' | ' | 23.4 | 19.2 | ' | ' | ' | ' |
IPR&D impairment | 5.9 | 5.9 | ' | ' | ' | ' | 5.9 | 5.9 | ' | ' | ' | ' | ' | ' |
Amortization expense related to other intangible assets | ' | 15.7 | 13.3 | 14.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 15.1 | 15.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 13.8 | 13.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 13.4 | 13.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 6.6 | 6.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | $1.30 | $1.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVESTMENTS_IN_UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Available-for-sale investments | ' | ' | ' |
Cost | $0.40 | $0.40 | ' |
Unrealized gains | 0.4 | 1.6 | ' |
Fair value of available-for-sale investments | 0.8 | 2 | ' |
Equity method investments | ' | ' | ' |
Cost | 14.1 | 13.3 | ' |
Equity in losses | -2.7 | -1.8 | ' |
Carrying value of equity method investments | 11.4 | 11.5 | ' |
Cost method investments | ' | ' | ' |
Carrying value of cost method investments | 9.7 | 7.6 | ' |
Total investments in unconsolidated affiliates | 21.9 | 21.1 | ' |
Available-for-sale investments | ' | ' | ' |
Proceeds from sales of available-for-sale investments | 0 | 2.1 | 3.6 |
Realized pre-tax gains on sales of available-for-sale investments | ' | $0.40 | $1.40 |
DEBT_CREDIT_FACILITIES_AND_LEA2
DEBT, CREDIT FACILITIES AND LEASE OBLIGATIONS (Details) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Jun. 13, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Oct. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2013 |
USD ($) | USD ($) | USD ($) | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Senior Notes due 2018 | Senior Notes due 2018 | Senior Notes due 2018 | Senior Notes due 2018 | |
USD ($) | USD ($) | Minimum | Maximum | Debt agreement terms | Debt agreement terms | Denominated in Japanese yen | Denominated in Japanese yen | USD ($) | USD ($) | Carrying value | Change of control triggering events | ||||
Minimum | Maximum | USD ($) | JPY (¥) | USD ($) | |||||||||||
Debt and credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $600 | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.88% | ' | ' | ' |
Proceeds from the Notes | 1,305 | 407 | 526.1 | ' | ' | ' | ' | ' | ' | ' | ' | 597 | ' | ' | ' |
Issuance discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | 2.9 | ' | ' |
Term of Credit Facility | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.98% | ' | ' | ' |
Issuance costs | ' | ' | ' | 2.4 | ' | ' | ' | ' | ' | ' | ' | 5.4 | ' | ' | ' |
Price at which Notes may be required to be repurchased as a percentage of principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% |
Value of the Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 593.1 | ' |
Adjustment related to changes in the fair value of the portion of the Notes in a fair value hedging relationship | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' |
Aggregate borrowings provided by Credit Facility | ' | ' | ' | ' | 750 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reference interest rate of the credit facility | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percent spread added to reference rate of unsecured credit facility | ' | ' | ' | 0.88% | ' | ' | ' | 0.88% | 1.60% | ' | ' | ' | ' | ' | ' |
Facility fee (as a percent) | ' | ' | ' | ' | ' | 0.13% | 0.15% | 0.13% | 0.28% | ' | ' | ' | ' | ' | ' |
Issuance costs amortization period | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowings outstanding under the facility | ' | ' | ' | 0 | ' | ' | ' | ' | ' | 14.3 | 1,200 | ' | ' | ' | ' |
Weighted-average interest rate (as a percent) | 2.70% | 1.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense for all operating leases | 25.9 | 23.9 | 21.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future minimum lease payments (including interest) under non-cancelable operating leases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 23.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 17.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 12.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 8.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 7.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | 34.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total future minimum lease payments | 103.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate Debt Maturities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total aggregate debt maturities | $600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Assets | ' | ' |
Investments in unconsolidated affiliates | $0.80 | $2 |
Fair Value on a Recurring Basis | Level 1 | ' | ' |
Assets | ' | ' |
Investments held for executive deferred compensation plan | 15.1 | 12.7 |
Investments in unconsolidated affiliates | 0.8 | 2 |
Total assets | 15.9 | 14.7 |
Liabilities | ' | ' |
Executive deferred compensation plan | 15.5 | 12.4 |
Total liabilities | 15.5 | ' |
Fair Value on a Recurring Basis | Level 2 | ' | ' |
Assets | ' | ' |
Derivatives | 13.8 | 5.7 |
Total assets | 13.8 | 5.7 |
Liabilities | ' | ' |
Derivatives | 17.2 | ' |
Total liabilities | 17.2 | ' |
Fair Value on a Recurring Basis | Total | ' | ' |
Assets | ' | ' |
Investments held for executive deferred compensation plan | 15.1 | 12.7 |
Investments in unconsolidated affiliates | 0.8 | 2 |
Derivatives | 13.8 | 5.7 |
Total assets | 29.7 | 20.4 |
Liabilities | ' | ' |
Derivatives | 17.2 | ' |
Executive deferred compensation plan | 15.5 | 12.4 |
Total liabilities | $32.70 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Foreign currency forward exchange contracts | ' | ' |
Derivative Financial Instruments | ' | ' |
Notional Amount | $805.50 | $779 |
Interest rate swap agreements | ' | ' |
Derivative Financial Instruments | ' | ' |
Notional Amount | $300 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) (Designated as hedging instruments, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Foreign currency contracts | Other current assets | ' | ' |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative assets | $13.80 | $5.70 |
Foreign currency contracts | Accrued and other liabilities | ' | ' |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative liabilities | 13.2 | ' |
Interest rate swap agreements | Other long-term liabilities | ' | ' |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative liabilities | $4 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Foreign currency contracts | ' | ' |
Derivative Asset | ' | ' |
Gross Amounts | $13.80 | $10.90 |
Gross Amounts Offset in the Consolidated Balance Sheet | ' | -5.2 |
Net Amounts Presented in the Consolidated Balance Sheet | 13.8 | 5.7 |
Derivative Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet | ' | ' |
Financial Instruments | -9.5 | ' |
Net amount | 4.3 | 5.7 |
Derivative asset, not subject to master netting arrangement | ' | 3.8 |
Derivative Liabilities | ' | ' |
Gross Amounts | 13.2 | 5.2 |
Gross Amounts Offset in the Consolidated Balance Sheet | ' | -5.2 |
Net Amounts Presented in the Consolidated Balance Sheet | 13.2 | ' |
Derivative Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet | ' | ' |
Financial Instruments | -9.5 | ' |
Net amount | 3.7 | ' |
Derivative liability, not subject to master netting arrangement | ' | 3.8 |
Interest rate swap agreements | ' | ' |
Derivative Liabilities | ' | ' |
Gross Amounts | 4 | ' |
Net Amounts Presented in the Consolidated Balance Sheet | 4 | ' |
Derivative Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet | ' | ' |
Net amount | $4 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 4) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Gains or losses due to cash flow hedge ineffectiveness | $0 | ' | ' |
Expected reclassification of gain recorded in accumulated other comprehensive loss into earnings during next twelve months | 5.1 | ' | ' |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other expense (income), net | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Amount of Gain or (Loss) Recognized in Income on Derivative | 18.4 | 4.4 | -6 |
Derivatives in cash flow hedging relationships | Foreign currency contracts | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 16.3 | 13.7 | ' |
Derivatives in cash flow hedging relationships | Foreign currency contracts | Cost of goods sold | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | 21.5 | 12.2 | ' |
Derivatives in fair value hedging relationship | Interest rate swap agreements | Interest expense | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Amount of Gain or (Loss) Recognized in Income on Derivative | ($4) | ' | ' |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Change in fair value of plan assets: | ' | ' | ' |
Fair value of plan assets, ending balance | $68.50 | $57.20 | ' |
Funded Status | ' | ' | ' |
Plan assets at fair value | 68.5 | 57.2 | ' |
Defined benefit pension plans | ' | ' | ' |
Change in projected benefit obligation: | ' | ' | ' |
Projected benefit obligation, opening balance | 108 | 95.6 | ' |
Service cost | 7.6 | 7.2 | 6.6 |
Interest cost | 2 | 2.3 | 2.2 |
Participant contributions | 1.9 | 2 | ' |
Actuarial (gain) loss | -5.6 | 10.2 | ' |
Benefits paid | ' | -6.5 | ' |
Curtailment gain | ' | -2 | ' |
Currency exchange rate changes and other | -2.7 | -0.8 | ' |
Projected benefit obligation, ending balance | 111.2 | 108 | 95.6 |
Change in fair value of plan assets: | ' | ' | ' |
Fair value of plan assets, opening balance | 57.2 | 53.8 | ' |
Actual return on plan assets | 4.4 | 1.7 | ' |
Employer contributions | 6.7 | 6.5 | ' |
Participant contributions | 1.9 | 2 | ' |
Benefits paid | ' | -6.3 | ' |
Currency exchange rate changes and other | -1.7 | -0.5 | ' |
Fair value of plan assets, ending balance | 68.5 | 57.2 | 53.8 |
Funded Status | ' | ' | ' |
Projected benefit obligation | -111.2 | -108 | -95.6 |
Plan assets at fair value | 68.5 | 57.2 | 53.8 |
Underfunded status | -42.7 | -50.8 | ' |
Net amounts recognized on the consolidated balance sheet: | ' | ' | ' |
Other long-term liabilities | 42.7 | 50.8 | ' |
Accumulated other comprehensive loss, net of tax: | ' | ' | ' |
Net actuarial loss | -16.7 | -27.9 | ' |
Net prior service credit | 2.1 | 2.4 | ' |
Deferred income tax benefit | 3.4 | 5 | ' |
Total | -11.2 | -20.5 | ' |
Accumulated benefit obligation for defined benefit pension plans | $99.30 | $93.30 | ' |
EMPLOYEE_BENEFIT_PLANS_Details1
EMPLOYEE BENEFIT PLANS (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Target weighted-average asset allocations | ' | ' | ' |
Target asset allocations (as a percent) | 100.00% | ' | ' |
Insurance contracts | ' | ' | ' |
Target weighted-average asset allocations | ' | ' | ' |
Target asset allocations (as a percent) | 81.10% | ' | ' |
Equity securities: | ' | ' | ' |
Target weighted-average asset allocations | ' | ' | ' |
Target asset allocations (as a percent) | 10.40% | ' | ' |
Debt securities: | ' | ' | ' |
Target weighted-average asset allocations | ' | ' | ' |
Target asset allocations (as a percent) | 8.50% | ' | ' |
Defined benefit pension plans | ' | ' | ' |
Components of net periodic benefit cost | ' | ' | ' |
Service cost | $7.60 | $7.20 | $6.60 |
Interest cost | 2 | 2.3 | 2.2 |
Expected return on plan assets | -1.2 | -1.4 | -1.4 |
Curtailment gain | ' | -0.2 | ' |
Amortization of actuarial loss | 1.3 | 0.8 | 0.6 |
Amortization of prior service credit | -0.3 | -0.3 | -0.4 |
Amortization of transition obligation | ' | 0.1 | 0.1 |
Net periodic pension benefits cost | 9.4 | 8.5 | 7.7 |
Defined Benefit Plan, Amounts that will Be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year | ' | ' | ' |
Net actuarial loss amortized from accumulated other comprehensive loss into net periodic benefits cost | 0.6 | ' | ' |
Prior service credit amortized from accumulated other comprehensive loss into net periodic benefits cost | ($0.30) | ' | ' |
Weighted-average assumption to determine the benefit obligations | ' | ' | ' |
Discount rate (as a percent) | 2.20% | 1.90% | ' |
Rate of compensation increase (as a percent) | 3.10% | 3.10% | ' |
Social securities increase (as a percent) | 1.80% | 1.80% | ' |
Pension increase (as a percent) | 2.00% | 2.00% | ' |
Weighted-average assumptions to determine the net periodic benefit cost | ' | ' | ' |
Discount rate (as a percent) | 1.90% | 2.50% | 2.40% |
Expected return on plan assets (as a percent) | 2.10% | 2.60% | 2.70% |
Rate of compensation increase (as a percent) | 3.10% | 3.10% | 2.90% |
Social securities increase (as a percent) | 1.80% | 1.80% | 1.80% |
Pension increase (as a percent) | 2.00% | 2.00% | 2.00% |
EMPLOYEE_BENEFIT_PLANS_Details2
EMPLOYEE BENEFIT PLANS (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | $68.50 | $57.20 | ' |
Cash | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 0.8 | 0.8 | ' |
United States equities | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 2.1 | 1.6 | ' |
International equities | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 5.9 | 4.5 | ' |
United States government bonds | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 0.6 | 0.6 | ' |
International government bonds | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 4.5 | 4 | ' |
Insurance contracts | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 54.6 | 45.7 | ' |
Level 1 | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 13.9 | 11.5 | ' |
Level 1 | Cash | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 0.8 | 0.8 | ' |
Level 1 | United States equities | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 2.1 | 1.6 | ' |
Level 1 | International equities | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 5.9 | 4.5 | ' |
Level 1 | United States government bonds | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 0.6 | 0.6 | ' |
Level 1 | International government bonds | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 4.5 | 4 | ' |
Level 3 | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | 54.6 | 45.7 | ' |
Level 3 | Insurance contracts | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Fair value of defined benefit plan assets | $54.60 | $45.70 | $43.50 |
EMPLOYEE_BENEFIT_PLANS_Details3
EMPLOYEE BENEFIT PLANS (Details 4) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Fair value of plan assets | ' | ' |
Fair value of plan assets, ending balance | $68.50 | $57.20 |
Insurance contracts | ' | ' |
Fair value of plan assets | ' | ' |
Fair value of plan assets, ending balance | 54.6 | 45.7 |
Level 3 | ' | ' |
Fair value of plan assets | ' | ' |
Fair value of plan assets, ending balance | 54.6 | 45.7 |
Level 3 | Insurance contracts | ' | ' |
Fair value of plan assets | ' | ' |
Fair value of plan assets, opening balance | 45.7 | 43.5 |
Relating to assets still held at the end of the period | 0.9 | 1.2 |
Relating to assets sold during the period | 0.1 | 0.1 |
Purchases, sales and settlements | 6.9 | 0.4 |
Currency exchange rate impact | 1 | 0.5 |
Fair value of plan assets, ending balance | $54.60 | $45.70 |
EMPLOYEE_BENEFIT_PLANS_Details4
EMPLOYEE BENEFIT PLANS (Details 5) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Future expected benefit payments of defined benefit plans | ' | ' | ' |
2014 | $4.20 | ' | ' |
2015 | 4.4 | ' | ' |
2016 | 5.3 | ' | ' |
2017 | 5.1 | ' | ' |
2018 | 5.3 | ' | ' |
2019-2023 | 34.1 | ' | ' |
Expected employer contributions to defined benefit plans for 2014 | 6.3 | ' | ' |
Defined Contribution Plans | ' | ' | ' |
Matching contributions relating to entity's employees | $12 | $10.80 | $9.90 |
United States defined contribution plan | ' | ' | ' |
Defined Contribution Plans | ' | ' | ' |
Maximum percentage of a participant's eligible compensation that a participant may contribute to the plan | 25.00% | ' | ' |
Percent of participants compensation that the employer will match, first level | 3.00% | ' | ' |
Percent of participants compensation that the employer will match, second level | 2.00% | ' | ' |
Company match, second level (as a percent) | 50.00% | ' | ' |
Puerto Rico defined contribution plan | ' | ' | ' |
Defined Contribution Plans | ' | ' | ' |
Maximum percentage of a participant's eligible compensation that a participant may contribute to the plan | 25.00% | ' | ' |
Percent of participants compensation that the employer will match, first level | 4.00% | ' | ' |
Company match, first level (as a percent) | 50.00% | ' | ' |
Percent of a participant's eligible compensation that the employer will contribute to the profit sharing plan | 2.00% | ' | ' |
EMPLOYEE_BENEFIT_PLANS_Details5
EMPLOYEE BENEFIT PLANS (Details 6) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Nonqualified deferred compensation plan | ' | ' |
Deferred Compensation Arrangement with Individual, Postretirement Benefits | ' | ' |
Percentage of eligible cash compensation which can be deferred by participants | 25.00% | ' |
Amount accrued under the plan | $10.40 | $8.20 |
Executive Deferred Compensation Plan | ' | ' |
Deferred Compensation Arrangement with Individual, Postretirement Benefits | ' | ' |
Amount accrued under the plan | $15.50 | $12.40 |
COMMON_STOCK_Details
COMMON STOCK (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | 31-May-13 |
Stock repurchase programs, ASRs and shares acquired for tax withholding | Stock repurchase programs, ASRs and shares acquired for tax withholding | Stock repurchase programs, ASRs and shares acquired for tax withholding | September 2011 share repurchase program | May 2013 share repurchase program | ||||
Treasury Stock | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum amount authorized by the Board of Directors for stock repurchase | ' | ' | ' | ' | ' | ' | $500 | $750 |
Shares repurchased | 6.8 | 4 | 3.9 | ' | ' | ' | ' | ' |
Aggregate cost of stock repurchases | $497 | $353.20 | $303.80 | $49.70 | $353.20 | $303.40 | ' | ' |
COMMON_STOCK_Details_2
COMMON STOCK (Details 2) (USD $) | 12 Months Ended | 1 Months Ended | 4 Months Ended | 1 Months Ended | 4 Months Ended | 1 Months Ended | 4 Months Ended | 1 Months Ended | 3 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 29, 2012 | 31-May-12 | 31-May-12 | Aug. 31, 2012 | Nov. 30, 2012 | Feb. 28, 2013 | Aug. 31, 2013 | Oct. 31, 2013 |
ASR agreement date, February 2012 | ASR agreement date, February 2012 | ASR agreement date, May 2012 | ASR agreement date, May 2012 | ASR agreement date, November 2012 | ASR agreement date, November 2012 | ASR agreement date, August 2013 | ASR agreement date, August 2013 | ||||
Accelerated Share Repurchase | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount Paid | $496.90 | $344.10 | $303.40 | $54 | ' | $50 | ' | $100 | ' | $250 | ' |
Shares Received | 6.8 | 4 | 3.9 | 0.6 | 0.7 | 0.5 | 0.5 | 1.1 | 1.2 | 3.1 | 3.5 |
Price per Share | ' | ' | ' | $72.40 | ' | $84.81 | ' | $85.73 | ' | $72.39 | ' |
Value of Shares as % of Contract Value | ' | ' | ' | 80.00% | ' | 80.00% | ' | 90.00% | ' | 90.00% | ' |
Average Price per Share | ' | ' | ' | ' | $75.12 | ' | $97.50 | ' | $88.93 | ' | $71.24 |
COMMON_STOCK_Details_3
COMMON STOCK (Details 3) (USD $) | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 |
Employee and Director Stock Plans | ' |
Estimated annual forfeiture rate (as a percent) | 5.10% |
Publicly traded options on common stock | ' |
Employee and Director Stock Plans | ' |
Minimum term of publically traded options of its common stock used to calculate expected volatility | '1 year |
ESPP | ' |
Employee and Director Stock Plans | ' |
Percentage of the lower of the fair market value of common stock on the effective date of subscription or the date of purchase | 85.00% |
Maximum percentage of compensation employees can authorize to be withheld for common stock purchases | 12.00% |
Common stock available for issuance under the Program, as amended (in shares) | 6,600,000 |
MRSUs | Total shareholder return relative to selected industry peer group | ' |
Employee and Director Stock Plans | ' |
Vesting period | '3 years |
MRSUs | Total shareholder return relative to selected industry peer group | Minimum | ' |
Employee and Director Stock Plans | ' |
Percentage of targeted number of shares granted | 0.00% |
MRSUs | Total shareholder return relative to selected industry peer group | Maximum | ' |
Employee and Director Stock Plans | ' |
Percentage of targeted number of shares granted | 175.00% |
Long-term Stock Incentive Compensation Program | ' |
Employee and Director Stock Plans | ' |
Common stock available for issuance under the Program, as amended (in shares) | 48,900,000 |
Long-term Stock Incentive Compensation Program | Option Awards | ' |
Employee and Director Stock Plans | ' |
Expiration date | '7 years |
Long-term Stock Incentive Compensation Program | Option Awards | Minimum | ' |
Employee and Director Stock Plans | ' |
Vesting period | '3 years |
Long-term Stock Incentive Compensation Program | Option Awards | Maximum | ' |
Employee and Director Stock Plans | ' |
Vesting period | '4 years |
Long-term Stock Incentive Compensation Program | Restricted stock or restricted stock units | ' |
Employee and Director Stock Plans | ' |
Common stock available for issuance under the Program, as amended (in shares) | 3,600,000 |
Long-term Stock Incentive Compensation Program | Restricted stock units | Minimum | ' |
Employee and Director Stock Plans | ' |
Vesting period | '3 years |
Long-term Stock Incentive Compensation Program | Restricted stock units | Maximum | ' |
Employee and Director Stock Plans | ' |
Vesting period | '5 years |
Nonemployee Directors Program | ' |
Employee and Director Stock Plans | ' |
Common stock available for issuance under the Program, as amended (in shares) | 1,400,000 |
Nonemployee Directors Program | Annual award to nonemployee director | ' |
Employee and Director Stock Plans | ' |
Limit on total value of the award | 0.2 |
Nonemployee Directors Program | Option Awards | Annual award to nonemployee director | ' |
Employee and Director Stock Plans | ' |
Common stock available for issuance under the Program, as amended (in shares) | 10,000 |
Nonemployee Directors Program | Option Awards | Awards granted in 2011 and prior | ' |
Employee and Director Stock Plans | ' |
Vesting period | '3 years |
Nonemployee Directors Program | Option Awards | Awards granted in 2012 and later | ' |
Employee and Director Stock Plans | ' |
Vesting period | '1 year |
Nonemployee Directors Program | Restricted stock units | Annual award to nonemployee director | ' |
Employee and Director Stock Plans | ' |
Common stock available for issuance under the Program, as amended (in shares) | 4,000 |
Nonemployee Directors Program | Restricted stock units | Awards granted in 2011 and prior | ' |
Employee and Director Stock Plans | ' |
Vesting period | '3 years |
Nonemployee Directors Program | Restricted stock units | Awards granted in 2012 and later | ' |
Employee and Director Stock Plans | ' |
Vesting period | '1 year |
Nonemployee Directors Program | Restricted stock units | Award upon director's initial election to Board | ' |
Employee and Director Stock Plans | ' |
Vesting period | '3 years |
Limit on total value of the award | 0.2 |
COMMON_STOCK_Details_4
COMMON STOCK (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Option Awards | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' |
Average risk-free interest rate (as a percent) | 0.80% | 0.70% | 1.70% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected volatility (as a percent) | 31.00% | 31.00% | 27.00% |
Expected life | '4 years 7 months 6 days | '4 years 7 months 6 days | '4 years 6 months |
Fair value, per share | $19.47 | $23.93 | $22.78 |
ESPP | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' |
Average risk-free interest rate (as a percent) | 0.10% | 0.10% | 0.20% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected volatility (as a percent) | 33.00% | 33.00% | 28.00% |
Expected life | '7 months 6 days | '7 months 6 days | '7 months 6 days |
Fair value, per share | $19.87 | $21.30 | $20.02 |
MRSUs | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' |
Average risk-free interest rate (as a percent) | 0.40% | 0.30% | ' |
Expected volatility (as a percent) | 33.40% | 30.40% | ' |
COMMON_STOCK_Details_5
COMMON STOCK (Details 5) (USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Stock option activity | ' |
Outstanding as of December 31, 2012 (in shares) | 7.5 |
Options granted (in shares) | 1.4 |
Options exercised (in shares) | -1 |
Options forfeited (in shares) | -0.2 |
Outstanding as of December 31, 2013 (in shares) | 7.7 |
Exercisable as of December 31, 2013 (in shares) | 5.2 |
Vested and expected to vest as of December 31, 2013 (in shares) | 7.5 |
Weighted- Average Exercise Price | ' |
Outstanding as of December 31, 2012 (in dollars per share) | $49.92 |
Options granted (in dollars per share) | $71.48 |
Options exercised (in dollars per share) | $25.82 |
Options forfeited (in dollars per share) | $77.46 |
Outstanding as of December 31, 2013 (in dollars per share) | $56.37 |
Exercisable as of December 31, 2013 (in dollars per share) | $46.90 |
Vested and expected to vest as of December 31, 2013 (in dollars per share) | $55.68 |
Weighted- Average Remaining Contractual Term | ' |
Outstanding as of December 31, 2013 | '3 years 8 months 12 days |
Exercisable as of December 31, 2013 (in shares) | '2 years 9 months 18 days |
Vested and expected to vest as of December 31, 2013 | '3 years 7 months 6 days |
Aggregate Intrinsic Value | ' |
Outstanding as of December 31, 2013 | $126.40 |
Exercisable as of December 31, 2013 | 122.8 |
Vested and expected to vest as of December 31, 2013 | $126 |
Nonvested restricted stock unit activity | ' |
Nonvested as of December 31, 2012 (in shares) | 0.8 |
Granted (in shares) | 0.3 |
Vested (in shares) | -0.3 |
Nonvested as of December 31, 2013 (in shares) | 0.8 |
Weighted- Average Grant-Date Fair Value | ' |
Nonvested as of December 31, 2012 (in dollars per share) | $67.92 |
Granted (in dollars per share) | $66.52 |
Vested (in dollars per share) | $44.31 |
Nonvested as of December 31, 2013 (in dollars per share) | $75.87 |
MRSUs | ' |
Nonvested restricted stock unit activity | ' |
Granted (in shares) | 0.1 |
COMMON_STOCK_Details_6
COMMON STOCK (Details 6) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
COMMON STOCK | ' | ' | ' |
Intrinsic value of stock options exercised and vested restricted stock units | $73.90 | $252.80 | $180.70 |
Cash received from exercises of stock options | 26.3 | 80.5 | 42.4 |
Realized tax benefits from exercises of stock options and vesting of restricted stock units | 24.7 | 82.6 | 60.7 |
Total grant-date fair value of stock options vested | 21.8 | 19.5 | 16.9 |
Unrecognized compensation expense related to nonvested stock options, restricted stock units, market-based restricted stock units and employee stock purchase subscriptions | $76 | ' | ' |
Period over which unrecognized compensation expense is expected to be recognized | '29 months | ' | ' |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Changes in accumulated other comprehensive loss components | ' | ' | ' |
Balance at the beginning of the period | ($37.90) | ($37.50) | ($42.10) |
Other comprehensive income (loss) before reclassifications | 30.6 | 10.2 | -14.4 |
Amounts reclassified from accumulated other comprehensive loss | -20.5 | -11.3 | 27.7 |
Deferred income tax benefit (expense) | 0.2 | 0.7 | -8.7 |
Balance at the end of the period | -27.6 | -37.9 | -37.5 |
Foreign Currency Translation Adjustments | ' | ' | ' |
Changes in accumulated other comprehensive loss components | ' | ' | ' |
Balance at the beginning of the period | -25.8 | -30 | -24.8 |
Other comprehensive income (loss) before reclassifications | 5.6 | 4.2 | -5.2 |
Balance at the end of the period | -20.2 | -25.8 | -30 |
Unrealized Gain (Loss) on Cash Flow Hedges | ' | ' | ' |
Changes in accumulated other comprehensive loss components | ' | ' | ' |
Balance at the beginning of the period | 7 | 5.9 | -10.9 |
Other comprehensive income (loss) before reclassifications | 16.3 | 13.7 | -1.6 |
Amounts reclassified from accumulated other comprehensive loss | -21.5 | -12.2 | 29 |
Deferred income tax benefit (expense) | 1.7 | -0.4 | -10.6 |
Balance at the end of the period | 3.5 | 7 | 5.9 |
Unrealized Gain (Loss) on Available-for-Sale Investments | ' | ' | ' |
Changes in accumulated other comprehensive loss components | ' | ' | ' |
Balance at the beginning of the period | 1.4 | 1.1 | 2.2 |
Other comprehensive income (loss) before reclassifications | -1.2 | 0.1 | -0.7 |
Amounts reclassified from accumulated other comprehensive loss | ' | 0.3 | -1.6 |
Deferred income tax benefit (expense) | 0.1 | -0.1 | 1.2 |
Balance at the end of the period | 0.3 | 1.4 | 1.1 |
Unrealized Pension Costs | ' | ' | ' |
Changes in accumulated other comprehensive loss components | ' | ' | ' |
Balance at the beginning of the period | -20.5 | -14.5 | -8.6 |
Other comprehensive income (loss) before reclassifications | 9.9 | -7.8 | -6.9 |
Amounts reclassified from accumulated other comprehensive loss | 1 | 0.6 | 0.3 |
Deferred income tax benefit (expense) | -1.6 | 1.2 | 0.7 |
Balance at the end of the period | ($11.20) | ($20.50) | ($14.50) |
ACCUMULATED_OTHER_COMPREHENSIV3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Unrealized pension costs, net, Pre-Tax Amount | ' | ' | ' |
Prior service cost arising during period, Pre-Tax Amount | ' | ($0.20) | $0.10 |
Amortization of prior service credit, Pre-Tax Amount | -0.3 | -0.3 | -0.4 |
Net prior service cost arising during period, Pre-Tax Amount | -0.3 | -0.5 | -0.3 |
Net transition obligation amortized during period, Pre-Tax Amount | ' | 0.1 | 0.1 |
Net actuarial gain (loss) arising during period, Pre-Tax Amount | 11.2 | -6.8 | -6.4 |
Unrealized pension costs, net, Pre-Tax Amount | 10.9 | -7.2 | -6.6 |
Unrealized pension costs, net, Tax Benefit (Expense) | ' | ' | ' |
Amortization of prior service credit, Tax Benefit (Expense) | ' | ' | 0.1 |
Net prior service cost arising during period, Tax Benefit (Expense) | ' | ' | 0.1 |
Net actuarial gain (loss) arising during period, Tax Benefit (Expense) | -1.6 | 1.2 | 0.6 |
Unrealized pension costs, net, Tax Benefit (Expense) | -1.6 | 1.2 | 0.7 |
Unrealized pension costs, net, Net of Tax Amount | ' | ' | ' |
Prior service cost arising during period, Net of Tax Amount | ' | -0.2 | 0.1 |
Amortization of prior service credit, Net of Tax Amount | -0.3 | -0.3 | -0.3 |
Net prior service cost arising during period, Net of Tax Amount | -0.3 | -0.5 | -0.2 |
Net transition obligation amortized during period, Net of Tax Amount | ' | 0.1 | 0.1 |
Net actuarial gain (loss) arising during period, Net of Tax Amount | 9.6 | -5.6 | -5.8 |
Unrealized pension costs, net, Net of Tax Amount | $9.30 | ($6) | ($5.90) |
ACCUMULATED_OTHER_COMPREHENSIV4
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of goods sold | ' | ' | ' | ' | ' | ' | ' | ' | ($522.40) | ($494.60) | ($489.80) |
Provision for income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -123.6 | -97.9 | -46.9 |
Net income | 75.8 | 76.9 | 94.1 | 144.9 | 91.1 | 69.2 | 67.8 | 65.1 | 391.7 | 293.2 | 236.7 |
Gain on cash flow hedges | Amount Reclassified from Accumulated Other Comprehensive Loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of goods sold | ' | ' | ' | ' | ' | ' | ' | ' | 21.5 | ' | ' |
Provision for income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -8.4 | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 13.1 | ' | ' |
Amortization of pension adjustments | Amount Reclassified from Accumulated Other Comprehensive Loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net periodic benefit costs | ' | ' | ' | ' | ' | ' | ' | ' | -1 | ' | ' |
Provision for income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 0.2 | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | ($0.80) | ' | ' |
OTHER_EXPENSE_INCOME_NET_Detai
OTHER EXPENSE (INCOME), NET (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
OTHER EXPENSE (INCOME), NET | ' | ' | ' |
Foreign exchange losses, net | $1.50 | $1.20 | $1.90 |
Loss (gain) on investments in unconsolidated affiliates | 0.4 | 0.7 | -5.4 |
Earn-out payments | ' | ' | -1 |
Other | -0.6 | -0.2 | -0.3 |
Total other expense (income), net | $1.30 | $1.70 | ($4.80) |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
INCOME TAXES | ' | ' | ' |
United States | $219.60 | $143.70 | $23.60 |
International, including Puerto Rico | 295.7 | 247.4 | 260 |
Income before provision for income taxes | 515.3 | 391.1 | 283.6 |
Current: | ' | ' | ' |
Federal | 42.5 | 87.2 | 29.1 |
State and local | 5.7 | 5.9 | 3 |
International, including Puerto Rico | 27.9 | 31.6 | 25 |
Current income tax expense | 76.1 | 124.7 | 57.1 |
Deferred: | ' | ' | ' |
Federal | 41.2 | -23.8 | -6.4 |
State and local | 0.9 | -2 | 1.2 |
International, including Puerto Rico | 5.4 | -1 | -5 |
Deferred income tax expense (benefit) | 47.5 | -26.8 | -10.2 |
Total income tax provision | $123.60 | $97.90 | $46.90 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred tax assets | ' | ' |
Compensation and benefits | $58.20 | $53.50 |
Net operating loss carryforwards | 33.6 | 27.6 |
Benefits from uncertain tax positions | 32.6 | 28.1 |
Net tax credit carryforwards | 25.1 | 20.8 |
Accrued liabilities | 23 | 13 |
Inventories | 8.7 | 0.4 |
Cash flow hedges | 3.2 | ' |
Investments in unconsolidated affiliates | 2.1 | 2.8 |
Other | 3.2 | 0.5 |
Total deferred tax assets | 189.7 | 146.7 |
Deferred tax liabilities | ' | ' |
Property, plant and equipment | -23.6 | -20.8 |
Deferred tax on foreign earnings | -15.6 | -0.4 |
Other intangible assets | -10.1 | -1.8 |
Cash flow hedges | ' | -2 |
Other | -1.6 | -2.9 |
Total deferred tax liabilities | -50.9 | -27.9 |
Valuation allowance | -46.4 | -38.6 |
Net deferred tax assets | 92.4 | 80.2 |
Increase in net deferred tax assets, including items recorded in stockholders' equity | $12.20 | ' |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Net operating loss carryforwards | ' |
Carryforward Amount | $156 |
Tax Benefit Amount | 34.8 |
Valuation Allowance | -31.5 |
Net Tax Benefit | 3.3 |
State | Carryforward Period Ends 2014-2032 | ' |
Net operating loss carryforwards | ' |
Carryforward Amount | 46.9 |
Tax Benefit Amount | 2.7 |
Valuation Allowance | -1.5 |
Net Tax Benefit | 1.2 |
United States net operating loss carryforwards attributable to windfall stock option deductions | 46.9 |
Net tax benefit that will be recorded to Additional Paid-In Capital when realized as a reduction to income taxes payable | 1.2 |
Non-United States | Carryforward Period Ends 2014-2022 | ' |
Net operating loss carryforwards | ' |
Carryforward Amount | 55.4 |
Tax Benefit Amount | 13.9 |
Valuation Allowance | -12.9 |
Net Tax Benefit | 1 |
Non-United States | Carryforward Period Indefinite | ' |
Net operating loss carryforwards | ' |
Carryforward Amount | 53.7 |
Tax Benefit Amount | 18.2 |
Valuation Allowance | -17.1 |
Net Tax Benefit | $1.10 |
INCOME_TAXES_Details_4
INCOME TAXES (Details 4) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Tax credit carryforwards | ' |
Carryforward Amount | $67.90 |
Valuation Allowance | -12.1 |
Net Tax Benefit | 55.8 |
Valuation allowance provided for other-than-temporary impairments and unrealized losses on investments | 2.8 |
United States federal and state | ' |
Tax credit carryforwards | ' |
Carryforward Amount | 55.6 |
Tax credit carryforwards attributable to windfall stock option deductions | 17.3 |
United States | Carryforward Period Ends 2021-2033 | ' |
Tax credit carryforwards | ' |
Carryforward Amount | 9 |
Net Tax Benefit | 9 |
Non-United States | Carryforward Period Ends 2015-2016 | ' |
Tax credit carryforwards | ' |
Carryforward Amount | 0.2 |
Net Tax Benefit | 0.2 |
Non-United States | Puerto Rico purchases credit | Carryforward Period Indefinite | ' |
Tax credit carryforwards | ' |
Carryforward Amount | 12.1 |
Valuation Allowance | -12.1 |
State | California research expenditure tax credits | Carryforward Period Indefinite | ' |
Tax credit carryforwards | ' |
Carryforward Amount | 46.6 |
Net Tax Benefit | 46.6 |
Tax Benefit Amount | $46.60 |
INCOME_TAXES_Details_5
INCOME TAXES (Details 5) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2013 | Mar. 31, 2013 |
CoreValve, Inc. | CoreValve, Inc. | ||||
INCOME TAXES | ' | ' | ' | ' | ' |
Undistributed earnings of foreign subsidiaries | $1,368.70 | ' | ' | ' | ' |
Favorable impact on earnings per diluted share due to tax incentives received in Puerto Rico, Dominican Republic, Singapore and Switzerland (in dollars per share) | $0.44 | $0.39 | $0.40 | ' | ' |
Reconciliation of United States federal statutory income tax rate to effective income tax rate | ' | ' | ' | ' | ' |
Income tax expense at U.S. federal statutory rate | 180.3 | 136.9 | 99.2 | ' | ' |
Foreign income taxed at different rates | -60.6 | -41.5 | -55.3 | ' | ' |
Tax credits, federal and state | -19.8 | -4.9 | -10.4 | ' | ' |
U.S. tax on foreign earnings, net of credits | 18.9 | 0.7 | 9.7 | ' | ' |
State and local taxes, net of federal tax benefit | 5.9 | 3.9 | 4.6 | ' | ' |
Nondeductible stock-based compensation | 2.6 | 1.9 | 1.9 | ' | ' |
Release of reserve for uncertain tax positions for prior years | -3.9 | -0.8 | -4.1 | ' | ' |
Other | 0.2 | 1.7 | 1.3 | ' | ' |
Total income tax provision | 123.6 | 97.9 | 46.9 | 31.3 | ' |
Tax benefit related to federal research credit | 8.4 | ' | ' | ' | ' |
LEGAL PROCEEDINGS | ' | ' | ' | ' | ' |
Tax expense | 123.6 | 97.9 | 46.9 | 31.3 | ' |
Amount of litigation award from Medtronic | $83.60 | ' | ($3.30) | $83.60 | $83.60 |
INCOME_TAXES_Details_6
INCOME TAXES (Details 6) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
INCOME TAXES | ' | ' | ' |
Liability for income taxes associated with uncertain tax positions | $127.70 | $113.60 | $78 |
Offsetting tax benefits associated with correlative effects of potential transfer pricing adjustments, state income taxes and timing adjustments | 30.9 | 26.1 | ' |
Net liability for income taxes associated with uncertain tax positions | 96.8 | 87.5 | ' |
Unrecognized tax benefits | ' | ' | ' |
Unrecognized tax benefits, January 1 | 113.6 | 78 | 55.1 |
Current year tax positions | 17.8 | 41.7 | 26 |
Increase prior year tax positions | 5.7 | 2.6 | 5.9 |
Decrease prior year tax positions | -9 | -4.3 | -5.5 |
Settlements | -0.1 | -4.3 | -0.1 |
Lapse of statute of limitations | -0.3 | -0.1 | -3.4 |
Unrecognized tax benefits, December 31 | 127.7 | 113.6 | 78 |
Interest and penalties related to uncertain tax positions, net of tax benefits | 4.5 | 3.1 | ' |
Interest and penalties related to uncertain tax positions, tax benefit | 3.3 | 2.1 | ' |
Interest expense, net of tax benefit | $1.40 | $1 | $0.40 |
LEGAL_PROCEEDINGS_Details
LEGAL PROCEEDINGS (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 | Feb. 28, 2013 | Mar. 31, 2013 | Apr. 30, 2010 | Jan. 31, 2014 |
CoreValve, Inc. | CoreValve, Inc. | CoreValve, Inc. | Favorable ruling | |||
Heart valve patent infringement counterclaim against Medtronic CoreValve and Medtronic | ||||||
LEGAL PROCEEDINGS | ' | ' | ' | ' | ' | ' |
Amount awarded in damages | ' | ' | ' | ' | $73.90 | ' |
Amount of payment received from Medtronic in satisfaction of the April 2010 jury award of damages for infringement, including accrued interest | ' | ' | 83.6 | ' | ' | ' |
Damage award | $83.60 | ($3.30) | $83.60 | $83.60 | ' | $393.60 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $536 | $495.60 | $517.20 | $496.70 | $510.50 | $447.90 | $482 | $459.20 | $2,045.50 | $1,899.60 | $1,678.60 |
Pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | 515.3 | 391.1 | 283.6 |
Unallocated amounts: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Special gains (charges) | ' | ' | ' | ' | ' | ' | ' | ' | 67.3 | -16 | -21.6 |
Interest (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | -5.2 | 0.4 | 0.3 |
Total segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 2,108.30 | 1,918.50 | 1,582.60 |
Pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | 1,052.10 | 937.8 | 720.7 |
Total segment | United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 939.6 | 812.1 | 605.6 |
Pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | 550.5 | 465 | 314.9 |
Total segment | Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 622.2 | 577 | 549.4 |
Pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | 287.7 | 250.9 | 237.9 |
Total segment | Japan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 293.7 | 293.4 | 226.8 |
Pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | 145.6 | 153.1 | 107.6 |
Total segment | Rest of World | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 252.8 | 236 | 200.8 |
Pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | 68.3 | 68.8 | 60.3 |
Reconciling items (Unallocated amounts), foreign currency | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | -62.8 | -18.9 | 96 |
Pre-tax income | ' | ' | ' | ' | ' | ' | ' | ' | -12.4 | 5.1 | 20.5 |
Corporate, non-segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unallocated amounts: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Corporate items | ' | ' | ' | ' | ' | ' | ' | ' | ($586.50) | ($536.20) | ($436.30) |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $536 | $495.60 | $517.20 | $496.70 | $510.50 | $447.90 | $482 | $459.20 | $2,045.50 | $1,899.60 | $1,678.60 |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-lived tangible assets | 457 | ' | ' | ' | 399.6 | ' | ' | ' | 457 | 399.6 | 328.9 |
Surgical Heart Valve Therapy | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 801.2 | 787.5 | 784.4 |
Transcatheter Heart Valves | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 707.7 | 552.1 | 333.8 |
Critical Care | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 536.6 | 560 | 560.4 |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 939.6 | 812.1 | 605.6 |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-lived tangible assets | 308.2 | ' | ' | ' | 263.4 | ' | ' | ' | 308.2 | 263.4 | 223 |
Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 616.5 | 559.7 | 574 |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-lived tangible assets | 40.9 | ' | ' | ' | 38.8 | ' | ' | ' | 40.9 | 38.8 | 36.3 |
Japan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 243.6 | 294.1 | 283.7 |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-lived tangible assets | 10.8 | ' | ' | ' | 13.2 | ' | ' | ' | 10.8 | 13.2 | 11.9 |
Rest of World | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 245.8 | 233.7 | 215.3 |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-lived tangible assets | $97.10 | ' | ' | ' | $84.20 | ' | ' | ' | $97.10 | $84.20 | $57.70 |
QUARTERLY_FINANCIAL_RESULTS_AN2
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2012 | Feb. 28, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Licensing of intellectual property | CoreValve, Inc. | CoreValve, Inc. | 2013 global workforce realignment | 2012 global workforce realignment | High | High | High | High | High | High | High | High | High | High | Low | Low | Low | Low | Low | Low | Low | Low | Low | Low | ||||||||||||
Net sales | $536 | $495.60 | $517.20 | $496.70 | $510.50 | $447.90 | $482 | $459.20 | $2,045.50 | $1,899.60 | $1,678.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | 390.5 | 365.9 | 392.2 | 374.5 | 384.7 | 336.2 | 352.2 | 331.9 | 1,523.10 | 1,405 | 1,188.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 75.8 | 76.9 | 94.1 | 144.9 | 91.1 | 69.2 | 67.8 | 65.1 | 391.7 | 293.2 | 236.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings per common share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | $0.69 | $0.69 | $0.84 | $1.27 | $0.79 | $0.60 | $0.59 | $0.57 | $3.51 | $2.55 | $2.07 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Diluted (in dollars per share) | $0.68 | $0.68 | $0.82 | $1.24 | $0.77 | $0.58 | $0.57 | $0.55 | $3.44 | $2.48 | $1.98 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Market Price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $78.89 | $73.73 | $86.11 | $94.98 | $110.79 | $109.88 | $104.25 | $83.96 | $94.98 | $110.79 | $60.62 | $65.03 | $62.34 | $78.10 | $81.29 | $96.36 | $67.86 | $67.95 | $60.62 | $67.86 |
Jury award of damages for infringement, including accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | 83.6 | ' | -3.3 | ' | 83.6 | 83.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Voluntary recalls of certain heart valves and Critical Care catheters | ' | ' | ' | ' | ' | ' | 8.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales returns reserve and related costs | 15.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
IPR&D impairment | 5.9 | ' | ' | ' | ' | ' | ' | ' | 5.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront licensing charge | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | 7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Realignment charge | ' | ' | ' | ' | ' | ' | ' | ' | $10.40 | $9 | $5.50 | ' | ' | ' | $10.40 | $9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
VALUATION_AND_QUALIFYING_ACCOU2
VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for doubtful accounts | ' | ' | ' |
Movement in Valuation Allowances and Reserves | ' | ' | ' |
Balance at Beginning of Period | $12 | $19 | $11.60 |
Additions - Charged to Costs and Expenses | 2.4 | 3 | 9 |
Additions - Charged to Other Accounts | ' | 0.4 | 0.3 |
Deductions From Reserves | -2.2 | -10.4 | -1.9 |
Balance at End of Period | 12.2 | 12 | 19 |
Inventory reserves | ' | ' | ' |
Movement in Valuation Allowances and Reserves | ' | ' | ' |
Balance at Beginning of Period | 16.3 | 12.9 | 11.2 |
Additions - Charged to Costs and Expenses | 27.5 | 21.8 | 15.3 |
Deductions From Reserves | -14.2 | -18.4 | -13.6 |
Balance at End of Period | 29.6 | 16.3 | 12.9 |
Tax valuation allowance | ' | ' | ' |
Movement in Valuation Allowances and Reserves | ' | ' | ' |
Balance at Beginning of Period | 38.6 | 32.4 | 30.3 |
Additions - Charged to Costs and Expenses | 8.2 | 3.1 | 3.1 |
Additions - Charged to Other Accounts | ' | 5.2 | 0.4 |
Deductions From Reserves | -0.4 | -2.1 | -1.4 |
Balance at End of Period | $46.40 | $38.60 | $32.40 |