COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 23, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-15525 | |
Entity Registrant Name | EDWARDS LIFESCIENCES CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4316614 | |
Entity Address, Address Line One | One Edwards Way | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Zip Code | 92614 | |
City Area Code | 949 | |
Local Phone Number | 250-2500 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | EW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 621,636,777 | |
Entity Central Index Key | 0001099800 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 1,174.2 | $ 1,183.2 |
Short-term investments (Note 3) | 156.4 | 219.4 |
Accounts receivable, net of allowances of $8.5 and $9.6, respectively | 586.6 | 514.6 |
Other receivables | 77.7 | 88.2 |
Inventories (Note 2) | 767.9 | 802.3 |
Prepaid expenses | 77.3 | 75.1 |
Other current assets | 229.1 | 208.2 |
Total current assets | 3,069.2 | 3,091 |
Long-term investments (Note 3) | 802.2 | 801.6 |
Property, plant, and equipment, net | 1,417.9 | 1,395.2 |
Operating lease right-of-use assets | 88.5 | 94.2 |
Goodwill | 1,170.8 | 1,173.2 |
Other intangible assets, net | 330.3 | 331.4 |
Deferred income taxes | 209.3 | 230.9 |
Other assets | 125.5 | 119.6 |
Total assets | 7,213.7 | 7,237.1 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 2) | 772.5 | 866.7 |
Operating lease liabilities | 26.5 | 27.2 |
Total current liabilities | 799 | 893.9 |
Long-term debt | 595.2 | 595 |
Contingent consideration liabilities (Note 4) | 181.6 | 186.1 |
Taxes payable | 215.3 | 215.3 |
Operating lease liabilities | 67.1 | 72.7 |
Uncertain tax positions | 224.2 | 214.4 |
Litigation settlement accrual | 222.1 | 233 |
Other liabilities | 250.8 | 252.4 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value, authorized 50.0 shares, no shares outstanding | 0 | 0 |
Common stock, $1.00 par value, 1,050.0 shares authorized, 637.5 and 636.4 shares issued, and 621.8 and 624.3 shares outstanding, respectively | 637.5 | 636.4 |
Additional paid-in capital | 1,496.8 | 1,438.1 |
Retained earnings | 4,903.2 | 4,565 |
Accumulated other comprehensive loss (Note 9) | (172.4) | (161.1) |
Treasury stock, at cost, 15.7 and 12.1 shares, respectively | (2,206.7) | (1,904.1) |
Total stockholders' equity | 4,658.4 | 4,574.3 |
Total liabilities and stockholders' equity | $ 7,213.7 | $ 7,237.1 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 8.5 | $ 9.6 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 1,050,000,000 | 1,050,000,000 |
Common stock, shares issued (in shares) | 637,500,000 | 636,400,000 |
Common stock, shares outstanding (in shares) | 621,800,000 | 624,300,000 |
Treasury stock (in shares) | 15,700,000 | 12,100,000 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 1,216.6 | $ 1,128.7 |
Cost of sales | 293.4 | 265.1 |
Gross profit | 923.2 | 863.6 |
Selling, general, and administrative expenses | 330.8 | 307.8 |
Research and development expenses | 207 | 187.4 |
Intellectual property litigation expenses | 6.4 | 12.5 |
Change in fair value of contingent consideration liabilities (Note 4) | (4.5) | (2.2) |
Operating income | 383.5 | 358.1 |
Interest income, net | (0.3) | (4.5) |
Other income, net | (5.5) | (1.9) |
Income before provision for income taxes | 389.3 | 364.5 |
Provision for income taxes | 51.1 | 53.9 |
Net income | $ 338.2 | $ 310.6 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.54 | $ 0.50 |
Diluted (in dollars per share) | $ 0.54 | $ 0.49 |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 623.2 | 624.6 |
Diluted (in shares) | 631.3 | 635.1 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 338.2 | $ 310.6 |
Other comprehensive (loss) income, net of tax (Note 9): | ||
Foreign currency translation adjustments | (32.2) | 2.3 |
Unrealized gain on hedges | 24.5 | 6.6 |
Defined benefit pension plans | 0.3 | (0.2) |
Unrealized loss on available-for-sale investments | (4.8) | (4.6) |
Reclassification of net realized investment loss (gain) to earnings | 0.9 | (0.1) |
Other comprehensive (loss) income | (11.3) | 4 |
Comprehensive income | $ 326.9 | $ 314.6 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net income | $ 338.2 | $ 310.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 32.4 | 24.5 |
Non-cash operating lease cost | 7.3 | 6.7 |
Stock-based compensation (Note 6) | 28.2 | 23.9 |
Change in fair value of contingent consideration liabilities (Note 4) | (4.5) | (2.2) |
Deferred income taxes | 10.8 | 3.6 |
Other | (2.7) | 14.7 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables, net | (89.5) | (4.2) |
Inventories | 2.5 | (35.2) |
Accounts payable and accrued liabilities | (9.3) | (144.4) |
Income taxes | 14.1 | 32.2 |
Prepaid expenses and other current assets | (5.4) | (5.5) |
Litigation settlement accrual | 1.6 | 0 |
Other | (23.2) | (17.6) |
Net cash provided by operating activities | 300.5 | 207.1 |
Cash flows from investing activities | ||
Capital expenditures | (106) | (82.2) |
Purchases of held-to-maturity investments (Note 3) | 0 | (112) |
Proceeds from held-to-maturity investments (Note 3) | 50 | 100.2 |
Purchases of available-for-sale investments (Note 3) | (77.4) | (150.9) |
Proceeds from available-for-sale investments (Note 3) | 86.8 | 127.8 |
Issuances of notes receivable | (3.6) | (16.6) |
Other | 0.5 | (1) |
Net cash used in investing activities | (49.7) | (134.7) |
Cash flows from financing activities | ||
Proceeds from issuance of debt | 4.5 | 7.9 |
Payments on debt and finance lease obligations | (4.9) | (8.2) |
Purchases of treasury stock | (302.6) | (614.8) |
Proceeds from stock plans | 31.6 | 29.1 |
Other | (2.9) | (0.4) |
Net cash used in financing activities | (274.3) | (586.4) |
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash | 14.2 | (2.1) |
Net decrease in cash, cash equivalents, and restricted cash | (9.3) | (516.1) |
Cash, cash equivalents, and restricted cash at beginning of period | 1,200.2 | 1,184.4 |
Cash, cash equivalents, and restricted cash at end of period | $ 1,190.9 | $ 668.3 |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2019 | 218.1 | 9 | ||||
Beginning balance at Dec. 31, 2019 | $ 4,148.3 | $ 218.1 | $ (1,278.7) | $ 1,623.3 | $ 3,741.6 | $ (156) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 310.6 | 310.6 | ||||
Other comprehensive income, net of tax | 4 | 4 | ||||
Common stock issued under stock plans (in shares) | 0.4 | |||||
Common stock issued under stock plans | 29.1 | $ 0.4 | 28.7 | |||
Stock-based compensation expense | 23.9 | 23.9 | ||||
Purchases of treasury stock (in shares) | 3 | |||||
Purchases of treasury stock | (614.8) | $ (614.8) | ||||
Ending balance (in shares) at Mar. 31, 2020 | 218.5 | 12 | ||||
Ending balance at Mar. 31, 2020 | 3,901.1 | $ 218.5 | $ (1,893.5) | 1,675.9 | 4,052.2 | (152) |
Beginning balance (in shares) at Dec. 31, 2020 | 636.4 | 12.1 | ||||
Beginning balance at Dec. 31, 2020 | 4,574.3 | $ 636.4 | $ (1,904.1) | 1,438.1 | 4,565 | (161.1) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 338.2 | 338.2 | ||||
Other comprehensive income, net of tax | (11.3) | (11.3) | ||||
Common stock issued under stock plans (in shares) | 1.1 | |||||
Common stock issued under stock plans | 31.6 | $ 1.1 | 30.5 | |||
Stock-based compensation expense | 28.2 | 28.2 | ||||
Purchases of treasury stock (in shares) | 3.6 | |||||
Purchases of treasury stock | (302.6) | $ (302.6) | ||||
Ending balance (in shares) at Mar. 31, 2021 | 637.5 | 15.7 | ||||
Ending balance at Mar. 31, 2021 | $ 4,658.4 | $ 637.5 | $ (2,206.7) | $ 1,496.8 | $ 4,903.2 | $ (172.4) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying interim consolidated condensed financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in Edwards Lifesciences' Annual Report on Form 10-K for the year ended December 31, 2020. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted. 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. In particular, the COVID-19 pandemic has adversely impacted, and may further adversely impact, nearly all aspects of our business and markets, including our workforce and the operations of our customers, suppliers, and business partners. The full extent to which the pandemic will directly or indirectly impact the Company's business, results of operations and financial condition, including sales, expenses, manufacturing, clinical trials, research and development costs, reserves and allowances, fair value measurements, asset impairment charges, contingent consideration obligations, and the effectiveness of the Company's hedging instruments, will depend on future developments that are highly uncertain and difficult to predict. These developments include, but are not limited to, the duration and spread of the outbreak (including new variants of COVID-19), its severity, the actions to contain the virus or address its impact, the timing, distribution, public acceptance and efficacy of vaccines and other treatments, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. Certain reclassifications have been made to the prior year's consolidated condensed financial statements to conform to the current year presentation. Stock Split On May 7, 2020, the Company’s Board of Directors declared a three-for-one stock split of the Company's outstanding shares of common stock effected in the form of a stock dividend, distributed on May 29, 2020 to stockholders of record on May 18, 2020. The Company distributed two newly issued shares of common stock to holders of record of each share of common stock to effect the stock split. All applicable share and per-share amounts in the consolidated condensed financial statements and the notes to consolidated condensed financial statements have been retroactively adjusted to reflect this stock split. The consolidated condensed statement of stockholders’ equity for the three months ended March 31, 2020 has not been retroactively adjusted to reflect the stock split. |
OTHER CONSOLIDATED FINANCIAL ST
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS | OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS Composition of Certain Financial Statement Captions Components of selected captions in the consolidated condensed balance sheets consisted of the following (in millions): March 31, 2021 December 31, 2020 Inventories Raw materials $ 132.2 $ 136.7 Work in process 152.8 140.0 Finished products 482.9 525.6 $ 767.9 $ 802.3 At March 31, 2021 and December 31, 2020, $123.0 million and $130.0 million, respectively, of the Company's finished products inventories were held on consignment. March 31, 2021 December 31, 2020 (in millions) Accounts payable and accrued liabilities Accounts payable $ 150.4 $ 196.5 Employee compensation and withholdings 197.5 236.7 Taxes payable (Note 11) 10.7 18.6 Property, payroll, and other taxes 61.0 49.7 Research and development accruals 55.8 52.3 Accrued rebates 60.3 67.2 Fair value of derivatives 16.1 39.3 Accrued marketing expenses 15.9 14.3 Litigation settlement 50.0 37.5 Litigation and insurance 24.9 23.3 Accrued relocation costs 21.4 21.0 Accrued professional services 6.7 7.6 Accrued realignment reserves 14.8 14.5 Other accrued liabilities 87.0 88.2 $ 772.5 $ 866.7 Supplemental Cash Flow Information (in millions) Three Months Ended 2021 2020 Cash paid during the year for: Amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7.7 $ 7.1 Non-cash investing and financing transactions: Right-of-use assets obtained in exchange for new lease liabilities $ 3.5 $ 4.5 Capital expenditures accruals $ 36.4 $ 33.9 Cash, Cash Equivalents, and Restricted Cash (in millions) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 1,174.2 $ 1,183.2 Restricted cash included in other current assets 16.4 16.6 Restricted cash included in other assets 0.3 0.4 Total cash, cash equivalents, and restricted cash $ 1,190.9 $ 1,200.2 Amounts included in restricted cash primarily represent funds placed in escrow related to litigation and real estate purchases, and funds restricted for construction. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Debt Securities Investments in debt securities at the end of each period were as follows (in millions): March 31, 2021 December 31, 2020 Held-to-maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ — $ — $ — $ — $ 50.0 $ — $ — $ 50.0 Available-for-sale Bank time deposits $ 14.1 $ — $ — $ 14.1 $ 24.1 $ — $ — $ 24.1 U.S. government and agency securities 136.4 1.8 (0.1) 138.1 147.0 2.2 — 149.2 Foreign government bonds — — — — — — — — Asset-backed securities 161.1 1.3 (0.2) 162.2 149.6 1.9 — 151.5 Corporate debt securities 600.3 5.0 (1.5) 603.8 600.8 7.5 — 608.3 Municipal securities 2.8 — — 2.8 2.8 — — 2.8 Total $ 914.7 $ 8.1 $ (1.8) $ 921.0 $ 924.3 $ 11.6 $ — $ 935.9 The cost and fair value of investments in debt securities, by contractual maturity, as of March 31, 2021, were as follows: Available-for-Sale Amortized Cost Fair Value (in millions) Due in 1 year or less $ 155.5 $ 156.4 Due after 1 year through 5 years 569.7 573.3 Instruments not due at a single maturity date 189.5 191.3 $ 914.7 $ 921.0 Actual maturities may differ from the contractual maturities due to call or prepayment rights. The following table presents gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): March 31, 2021 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. government and agency securities $ 23.1 $ (0.1) $ — $ — $ 23.1 $ (0.1) Asset-backed securities 58.6 (0.2) — — 58.6 (0.2) Corporate debt securities 214.4 (1.5) — — 214.4 (1.5) $ 296.1 $ (1.8) $ — $ — $ 296.1 $ (1.8) There were no investments that were in an unrealized loss position as of December 31, 2020. Investments in Unconsolidated Affiliates The Company has a number of equity investments in privately and publicly held companies. Investments in these unconsolidated affiliates are recorded in " Long-term Investments " on the consolidated condensed balance sheets, and are as follows: March 31, December 31, (in millions) Equity method investments Carrying value of equity method investments $ 7.1 $ 5.7 Equity securities Carrying value of non-marketable equity securities 30.5 29.4 Total investments in unconsolidated affiliates $ 37.6 $ 35.1 Non-marketable equity securities consist of investments in privately held companies without readily determinable fair values, and are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company recorded an upward adjustment of $1.0 million during the three months ended March 31, 2021 based on observable price changes. As of March 31, 2021, the Company had recorded accumulated upward adjustments of $4.8 million based on observable price changes, and accumulated downward adjustments of $2.6 million due to impairments and observable price changes. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The consolidated condensed 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, accounts and other receivables, investments, accounts payable, certain accrued liabilities, and borrowings under a revolving credit agreement. These financial instruments are held at cost, which generally approximates fair value due to their short-term nature. Financial instruments also include notes payable. As of March 31, 2021, the fair value of the notes payable, based on Level 2 inputs, was $676.6 million. 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 (in millions): March 31, 2021 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 10.9 $ 15.0 $ — $ 25.9 Available-for-sale investments: Bank time deposits — 14.1 — 14.1 Corporate debt securities — 603.8 — 603.8 Asset-backed securities — 162.2 — 162.2 U.S. government and agency securities 55.8 82.3 — 138.1 Municipal securities — 2.8 — 2.8 Investments held for deferred compensation plans 113.4 — — 113.4 Derivatives — 28.8 — 28.8 $ 180.1 $ 909.0 $ — $ 1,089.1 Liabilities Derivatives $ — $ 16.1 $ — $ 16.1 Deferred compensation plans 113.0 — — 113.0 Contingent consideration liabilities — — 181.6 181.6 $ 113.0 $ 16.1 $ 181.6 $ 310.7 December 31, 2020 Assets Cash equivalents $ 16.2 $ — $ — $ 16.2 Available-for-sale investments: Bank time deposits — 24.1 — 24.1 Corporate debt securities — 608.3 — 608.3 Asset-backed securities — 151.5 — 151.5 U.S. government and agency securities 56.9 92.2 — 149.1 Municipal securities — 2.8 — 2.8 Investments held for deferred compensation plans 111.2 — — 111.2 Derivatives — 8.1 — 8.1 $ 184.3 $ 887.0 $ — $ 1,071.3 Liabilities Derivatives $ — $ 39.3 $ — $ 39.3 Deferred compensation plans 111.6 — — 111.6 Contingent consideration liabilities — — 186.1 186.1 $ 111.6 $ 39.3 $ 186.1 $ 337.0 The following table summarizes the changes in fair value of the contingent consideration liabilities (in millions): Three Months Ended 2021 2020 Balance at December 31 $ 186.1 $ 172.5 Changes in fair value (4.5) (2.2) Balance at March 31 $ 181.6 $ 170.3 Cash Equivalents and Available-for-sale Investments The Company estimates the fair values of its money market funds based on quoted prices in active markets for identical assets. The Company estimates the fair values of its time deposits, commercial paper, U.S. and foreign government and agency securities, municipal securities, asset-backed securities, and corporate debt securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades and broker-dealer quotes on the same or similar securities, benchmark yields, credit spreads, prepayment and default projections based on historical data, and other observable inputs. The Company independently reviews and validates the pricing received from the third-party pricing service by comparing the prices to prices reported by a secondary pricing source. The Company’s validation procedures have not resulted in an adjustment to the pricing received from the pricing service. Deferred Compensation Plans The Company holds investments in trading securities related to its deferred compensation plans. 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. Derivative Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and cross currency swap contracts to manage foreign currency exposures. All derivatives contracts are recognized on the balance sheet at their fair value. The fair value of the derivative financial instruments was estimated based on quoted market foreign exchange rates and market discount rates. 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. Contingent Consideration Liabilities Certain of the Company's acquisitions involve contingent consideration arrangements. Payment of additional consideration is contingent upon the acquired company reaching certain performance milestones, such as attaining specified revenue levels or obtaining regulatory approvals. These contingent consideration liabilities are measured at estimated fair value using either a probability weighted discounted cash flow analysis or a Monte Carlo simulation model, both of which consider significant unobservable inputs. These inputs include (1) the discount rate used to present value the projected cash flows (ranging from 0.0% to 9.2%; weighted average of 3.7%), (2) the probability of milestone achievement (ranging from 0.3% to 99.7%; weighted average of 70.9%), (3) the projected payment dates (ranging from 2023 to 2027; weighted average of 2026), and (4) the volatility of future revenue (ranging from 37.0% to 40.0%; weighted average of 38.8%). The weighted average of each of the above inputs was determined based on the relative fair value of each obligation. The use of different assumptions could have a material effect on the estimated fair value amounts. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 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 March 31, 2021 December 31, 2020 (in millions) Foreign currency forward exchange contracts $ 1,509.7 $ 1,525.5 Cross currency swap contracts 300.0 300.0 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. The master-netting agreements provide for the net settlement of all contracts through a single payment in a single currency in the event of default, as defined by the agreements. The Company uses foreign currency forward exchange contracts and cross currency swap contracts to manage its exposure to changes in currency exchange rates from (a) future cash flows associated with intercompany transactions and certain local currency expenses expected to occur within the next 13 months (designated as cash flow hedges), (b) its net investment in certain foreign subsidiaries (designated as net investment hedges) and (c) foreign currency denominated assets or liabilities (designated as fair value hedges). The Company also uses foreign currency forward exchange contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with certain assets and liabilities denominated in currencies other than their functional currencies (resulting principally from intercompany and local currency transactions). All derivative financial instruments are recognized at fair value in the consolidated condensed balance sheets. For each derivative instrument that is designated as a fair value hedge, the gain or loss on the derivative included in the assessment of hedge effectiveness is recognized immediately to earnings, and offsets the loss or gain on the underlying hedged item. The Company reports in " Accumulated Other Comprehensive Loss " 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 line item and in the same period in which the underlying hedged transactions affect earnings. Changes in the fair value of net investment hedges are reported in " Accumulated Other Comprehensive Loss " as a part of the cumulative translation adjustment and would be reclassified into earnings if the underlying net investment is sold or substantially liquidated. The portion of the change in fair value related to components excluded from the hedge effectiveness assessment are amortized into earnings over the life of the derivative. 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 net investment hedges are reported as investing activities in the consolidated statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities. The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions): Fair Value Derivatives designated as hedging instruments Balance Sheet March 31, 2021 December 31, 2020 Assets Foreign currency contracts Other current assets $ 26.2 $ 7.3 Cross currency swap contracts Other assets $ 2.6 $ 0.8 Liabilities Foreign currency contracts Accounts payable and accrued liabilities $ 16.1 $ 39.3 The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): Gross Amounts Gross Amounts Net Amounts March 31, 2021 Gross Financial Cash Net Derivative assets Foreign currency contracts $ 26.2 $ — $ 26.2 $ (9.5) $ — $ 16.7 Cross currency swap contracts $ 2.6 $ — $ 2.6 $ — $ — $ 2.6 Derivative liabilities Foreign currency contracts $ 16.1 $ — $ 16.1 $ (9.5) $ — $ 6.6 December 31, 2020 Derivative assets Foreign currency contracts $ 7.3 $ — $ 7.3 $ (6.1) $ — $ 1.2 Cross currency swap contracts $ 0.8 $ — $ 0.8 $ — $ — $ 0.8 Derivative liabilities Foreign currency contracts $ 39.3 $ — $ 39.3 $ (6.1) $ — $ 33.2 The following tables present the effect of derivative and non-derivative hedging instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income (loss) (in millions): Amount of Gain or (Loss) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2021 2020 2021 2020 Cash flow hedges Foreign currency contracts $ 28.2 $ 17.5 Cost of sales $ (5.5) $ 6.1 Selling, general, and administrative expenses $ 0.1 $ 0.8 Amount of Gain or (Loss) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2021 2020 2021 2020 Net investment hedges Cross currency swap contracts $ 1.8 $ 31.3 Interest income, net $ 1.6 $ 1.7 The cross currency swaps have an expiration date of June 15, 2028. At maturity of the cross currency swap contracts, the Company will deliver the notional amount of €257.2 million and will receive $300.0 million from the counterparties. The Company will receive semi-annual interest payments from the counterparties based on a fixed interest rate until maturity of the agreements. Amount of Gain or (Loss) Three Months Ended Location of Gain or (Loss) 2021 2020 Fair value hedges Foreign currency contracts Other income, net $ 6.3 $ 1.7 Amount of Gain or (Loss) Three Months Ended Location of Gain or (Loss) 2021 2020 Derivatives not designated as hedging instruments Foreign currency contracts Other income, net $ 15.2 $ 8.6 The following tables present the effect of fair value and cash flow hedge accounting on the consolidated condensed statements of operations (in millions): Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other Income, net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (293.4) $ (330.8) $ 5.5 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships: Foreign currency contracts: Hedged items $ — $ — $ (5.5) Derivatives designated as hedging instruments $ — $ — $ 5.5 Amount excluded from effectiveness testing recognized in earnings based on an amortization approach $ — $ — $ 0.8 Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ (5.5) $ 0.1 $ — Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other Expense (Income), net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (265.1) $ (307.8) $ 1.9 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships: Foreign currency contracts: Hedged items $ — $ — $ (0.7) Derivatives designated as hedging instruments $ — $ — $ 0.7 Amount excluded from effectiveness testing recognized in earnings based on an amortization approach $ — $ — $ 1.0 Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ 6.1 $ 0.8 $ — The Company expects that during the next twelve months it will reclassify to earnings a $9.0 million loss currently recorded in " Accumulated Other Comprehensive Loss ." |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three months ended March 31, 2021 and 2020 was as follows (in millions): Three Months Ended 2021 2020 Cost of sales $ 5.5 $ 4.6 Selling, general, and administrative expenses 16.5 14.4 Research and development expenses 6.2 4.9 Total stock-based compensation expense 28.2 23.9 Income tax benefit (3.9) (3.5) Total stock-based compensation expense, net of tax $ 24.3 $ 20.4 At March 31, 2021, the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units, and employee stock purchase plan ("ESPP") subscription awards amounted to $135.0 million, which will be amortized on a straight-line basis over the weighted-average remaining requisite service period of 27 months. Fair Value Disclosures The following table includes the weighted-average grant-date fair values of stock options granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: Option Awards Three Months Ended 2021 2020 Average risk-free interest rate 0.6 % 1.4 % Expected dividend yield None None Expected volatility 33.4 % 29.7 % Expected term (years) 5.2 5.2 Fair value, per option $ 26.28 $ 22.79 The following table includes the weighted-average grant-date fair values for ESPP subscriptions granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: ESPP Three Months Ended 2021 2020 Average risk-free interest rate 0.1 % 1.6 % Expected dividend yield None None Expected volatility 37.5 % 31.9 % Expected term (years) 0.6 0.6 Fair value, per share $ 22.14 $ 15.71 |
ACCELERATED SHARE REPURCHASE
ACCELERATED SHARE REPURCHASE | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
ACCELERATED SHARE REPURCHASE | ACCELERATED SHARE REPURCHASE During 2021, the Company entered into an accelerated share repurchase ("ASR") agreement 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 term of the agreement, less a discount. The following table summarizes the terms of the ASR agreement (dollars and shares in millions, except per share data): Initial Delivery Final Settlement Agreement Date Amount Shares Price per Value of Settlement Total Shares Average Price February 2021 $ 250.0 2.4 $ 83.86 80 % March 2021 3.0 $ 84.51 The ASR agreement was accounted for as two separate transactions: (1) 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 (2) 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESThe Company is or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits including those related to products and services currently or formerly manufactured or performed, as applicable, by the Company, workplace and employment matters, matters involving real estate, Company operations or health care regulations, or governmental investigations (the "Lawsuits"). The Lawsuits 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. Management does not believe that any loss relating to the Lawsuits would have a material adverse effect on the Company's overall financial condition, results of operations or cash flows. However, the resolution of one or more of the Lawsuits in any reporting period, could have a material adverse impact on the Company's financial results for that period. The Company is not able to estimate the amount or range of any loss for legal contingencies related to the Lawsuits for which there is no reserve or additional loss for matters already reserved. The Company is subject to various environmental laws and regulations both within and outside of the United States. The Company's operations, 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 the Company's financial results. The Company's threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary exposure is involved is $1 million. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables summarize the activity for each component of " Accumulated Other Comprehensive Loss " (in millions): Foreign Unrealized Loss on Hedges Unrealized Gain on Available-for-sale Investments Unrealized Total December 31, 2020 $ (122.4) $ (27.7) $ 8.6 $ (19.6) $ (161.1) Other comprehensive (loss) gain before reclassifications (30.2) 34.8 (6.1) 0.3 (1.2) Amounts reclassified from accumulated other comprehensive loss (1.6) (0.9) 0.9 — (1.6) Deferred income tax (expense) benefit (0.4) (9.4) 1.3 — (8.5) March 31, 2021 $ (154.6) $ (3.2) $ 4.7 $ (19.3) $ (172.4) Foreign Unrealized Gain on Hedges Unrealized Gain (Loss) on Available-for-sale Investments Unrealized Total December 31, 2019 $ (154.8) $ 12.5 $ 1.7 $ (15.4) $ (156.0) Other comprehensive gain (loss) before reclassifications 11.6 19.0 (6.3) (0.2) 24.1 Amounts reclassified from accumulated other comprehensive loss (1.7) (8.6) (0.1) — (10.4) Deferred income tax (expense) benefit (7.6) (3.8) 1.7 — (9.7) March 31, 2020 $ (152.5) $ 19.1 $ (3.0) $ (15.6) $ (152.0) The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Three Months Ended Affected Line on Consolidated Condensed Details about Accumulated Other Comprehensive Loss Components 2021 2020 Foreign currency translation adjustments $ 1.6 $ 1.7 Other income, net (0.4) (0.4) Provision for income taxes $ 1.2 $ 1.3 Net of tax Gain (loss) on hedges $ (5.5) $ 6.1 Cost of sales 0.1 0.8 Selling, general, and administrative expenses 6.3 1.7 Other income, net 0.9 8.6 Total before tax 0.7 (1.9) Provision for income taxes $ 1.6 $ 6.7 Net of tax Gain (loss) on available-for-sale investments $ (0.9) $ 0.1 Other income, net 0.2 (0.2) Provision for income taxes $ (0.7) $ (0.1) Net of tax |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
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. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Dilutive potential common shares include employee equity share options, nonvested shares, and similar equity instruments granted by the Company. 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): Three Months Ended 2021 2020 Basic: Net income $ 338.2 $ 310.6 Weighted-average shares outstanding 623.2 624.6 Basic earnings per share $ 0.54 $ 0.50 Diluted: Net income $ 338.2 $ 310.6 Weighted-average shares outstanding 623.2 624.6 Dilutive effect of stock plans 8.1 10.5 Dilutive weighted-average shares outstanding 631.3 635.1 Diluted earnings per share $ 0.54 $ 0.49 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective income tax rates were 13.1% and 14.8% for the three months ended March 31, 2021 and 2020, respectively. The effective rates for the three months ended March 31, 2021 and 2020 were lower than the federal statutory rate of 21% primarily due to (1) the tax benefit from employee share-based compensation, (2) foreign earnings taxed at lower rates, and (3) Federal and California research and development credits. The effective rates include a tax benefit from employee share- based compensation of $11.5 million and $10.3 million for the three months ended March 31, 2021 and 2020, respectively. The Company is under continuous tax audits by the Internal Revenue Service (“IRS”) and other taxing authorities. During these audits the Company may receive proposed audit adjustments that could be material. Therefore, there is a possibility that an adverse outcome in these audits could have a material effect on the Company's results of operations and financial condition. 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 eventual outcome with a tax authority may result in a tax liability that is more or less than that reflected in the consolidated condensed 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. As of March 31, 2021 and December 31, 2020, the gross liability for income taxes associated with uncertain tax positions was $300.5 million and $281.8 million, respectively. The Company estimates that these liabilities would be reduced by $104.7 million and $95.1 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 $195.8 million and $186.7 million, respectively, if not required, would favorably affect the Company's effective tax rate. The Company previously executed an Advance Pricing Agreement ("APA") in 2018 between the United States and Switzerland governments for tax years 2009 through 2020 covering various, but not all, transfer pricing matters. The unagreed transfer pricing matters, namely Surgical Structural Heart and Transcatheter Aortic Valve Replacement (collectively “Surgical/TAVR”) intercompany royalty transactions, then reverted to IRS Examination for further consideration as part of the respective years' regular tax audit. In addition, the Company executed other bilateral APAs as follows: during 2017, an APA between the United States and Japan covering tax years 2015 through 2019; and during 2018, APAs between Japan and Singapore and between Switzerland and Japan covering tax years 2015 through 2019. The Company has filed to renew these APAs related to Japan for the years 2020 and forward. The execution of some or all of these APA renewals depends on many variables outside of the Company's control. As of March 31, 2021, all material state, local, and foreign income tax matters have been concluded for years through 2015. While not material, the Company continues to address matters in Wisconsin and India for years from 2010. The Company’s U.S. federal income tax returns have all been audited through 2014. The IRS began its examination of the 2015 and 2016 tax years during the fourth quarter of 2018 and later added the 2017 tax year to this audit cycle during the first quarter of 2019. The IRS audit field work for the 2015-2017 tax years was substantially completed during the fourth quarter of 2020, except for transfer pricing matters. During the first quarter of 2021, the Company received a draft Notice of Proposed Adjustment (“Draft NOPA”) from the IRS for the 2015-2017 tax years relating to transfer pricing involving certain Surgical/TAVR intercompany royalty transactions between the Company's U.S. and Switzerland affiliated companies. The Draft NOPA proposes an increase to the Company's U.S. taxable income which could result in additional tax expense for this period of approximately $200 million. The Company's analysis of the Draft NOPA is ongoing, and it continues to work with the IRS on how the facts are described and analyzed in the Draft NOPA. The Draft NOPA also represents a significant change to previously agreed upon transfer pricing methodologies for these transactions. The Company plans to continue its dialogue with the IRS on this matter and, as a result, the final NOPA and any adjustments asserted by the IRS may differ materially. The Company anticipates receiving the final NOPA and Revenue Agent’s Report prior to the end of the third quarter of 2021. Should the Company not come to an agreement with the IRS at the examination level, the Company will evaluate all possible remedies available to it, which could likely take several years to resolve. No payment of any amount related to the Draft NOPA is required to be made, if at all, until all applicable proceedings have been completed. However, the Company has the option to deposit all or a portion of any proposed assessment at any time. The Company believes the amounts previously accrued related to this uncertain tax position are sufficient and, accordingly, has not recorded any additional amount based on the Draft NOPA received. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 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 operating income. The accounting policies of the segments are substantially the same as those described in Note 2 of the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020. Segment net sales and segment operating 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 income, 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, changes in the fair value of contingent consideration liabilities, and most of the Company's amortization expense. Although most of the Company's depreciation expense is included in segment operating 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): Three Months Ended 2021 2020 Segment Net Sales United States $ 674.7 $ 667.4 Europe 255.4 247.5 Japan 127.7 109.8 Rest of World 124.5 104.4 Total segment net sales $ 1,182.3 $ 1,129.1 Segment Operating Income United States $ 466.1 $ 464.8 Europe 133.3 128.0 Japan 87.6 71.7 Rest of World 47.3 34.9 Total segment operating income $ 734.3 $ 699.4 The table below presents reconciliations of segment net sales to consolidated net sales and segment operating income to consolidated pre-tax income (in millions): Three Months Ended 2021 2020 Net Sales Reconciliation Segment net sales $ 1,182.3 $ 1,129.1 Foreign currency 34.3 (0.4) Consolidated net sales $ 1,216.6 $ 1,128.7 Pre-tax Income Reconciliation Segment operating income $ 734.3 $ 699.4 Unallocated amounts: Corporate items (357.7) (340.7) Intellectual property litigation expenses (6.4) (12.5) Change in fair value of contingent consideration liabilities 4.5 2.2 Foreign currency 8.8 9.7 Consolidated operating income 383.5 358.1 Non-operating income 5.8 6.4 Consolidated pre-tax income $ 389.3 $ 364.5 Enterprise-wide Information The following enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements. Three Months Ended 2021 2020 (in millions) Net Sales by Geographic Area United States $ 674.7 $ 667.4 Europe 280.0 249.3 Japan 132.3 110.0 Rest of World 129.6 102.0 $ 1,216.6 $ 1,128.7 Net Sales by Major Product Area Transcatheter Aortic Valve Replacement $ 791.7 $ 742.2 Transcatheter Mitral and Tricuspid Therapies 16.3 10.5 Surgical Structural Heart 213.0 193.4 Critical Care 195.6 182.6 $ 1,216.6 $ 1,128.7 March 31, 2021 December 31, 2020 (in millions) Long-lived Tangible Assets by Geographic Area United States $ 1,101.0 $ 1,084.3 Europe 201.4 192.7 Japan 18.0 20.4 Rest of World 310.3 311.0 $ 1,630.7 $ 1,608.4 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying interim consolidated condensed financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in Edwards Lifesciences' Annual Report on Form 10-K for the year ended December 31, 2020. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted. 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. In particular, the COVID-19 pandemic has adversely impacted, and may further adversely impact, nearly all aspects of our business and markets, including our workforce and the operations of our customers, suppliers, and business partners. The full extent to which the pandemic will directly or indirectly impact the Company's business, results of operations and financial condition, including sales, expenses, manufacturing, clinical trials, research and development costs, reserves and allowances, fair value measurements, asset impairment charges, contingent consideration obligations, and the effectiveness of the Company's hedging instruments, will depend on future developments that are highly uncertain and difficult to predict. These developments include, but are not limited to, the duration and spread of the outbreak (including new variants of COVID-19), its severity, the actions to contain the virus or address its impact, the timing, distribution, public acceptance and efficacy of vaccines and other treatments, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. |
Reclassification | Certain reclassifications have been made to the prior year's consolidated condensed financial statements to conform to the current year presentation. |
OTHER CONSOLIDATED FINANCIAL _2
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Components of selected captions in the consolidated condensed balance sheets consisted of the following (in millions): March 31, 2021 December 31, 2020 Inventories Raw materials $ 132.2 $ 136.7 Work in process 152.8 140.0 Finished products 482.9 525.6 $ 767.9 $ 802.3 |
Schedule of Accounts Payable and Accrued Liabilities | March 31, 2021 December 31, 2020 (in millions) Accounts payable and accrued liabilities Accounts payable $ 150.4 $ 196.5 Employee compensation and withholdings 197.5 236.7 Taxes payable (Note 11) 10.7 18.6 Property, payroll, and other taxes 61.0 49.7 Research and development accruals 55.8 52.3 Accrued rebates 60.3 67.2 Fair value of derivatives 16.1 39.3 Accrued marketing expenses 15.9 14.3 Litigation settlement 50.0 37.5 Litigation and insurance 24.9 23.3 Accrued relocation costs 21.4 21.0 Accrued professional services 6.7 7.6 Accrued realignment reserves 14.8 14.5 Other accrued liabilities 87.0 88.2 $ 772.5 $ 866.7 |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental Cash Flow Information (in millions) Three Months Ended 2021 2020 Cash paid during the year for: Amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7.7 $ 7.1 Non-cash investing and financing transactions: Right-of-use assets obtained in exchange for new lease liabilities $ 3.5 $ 4.5 Capital expenditures accruals $ 36.4 $ 33.9 |
Schedule of Cash and Cash Equivalents | Cash, Cash Equivalents, and Restricted Cash (in millions) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 1,174.2 $ 1,183.2 Restricted cash included in other current assets 16.4 16.6 Restricted cash included in other assets 0.3 0.4 Total cash, cash equivalents, and restricted cash $ 1,190.9 $ 1,200.2 |
Schedule of Restricted Cash | Cash, Cash Equivalents, and Restricted Cash (in millions) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 1,174.2 $ 1,183.2 Restricted cash included in other current assets 16.4 16.6 Restricted cash included in other assets 0.3 0.4 Total cash, cash equivalents, and restricted cash $ 1,190.9 $ 1,200.2 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments in Debt Securities | Investments in debt securities at the end of each period were as follows (in millions): March 31, 2021 December 31, 2020 Held-to-maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ — $ — $ — $ — $ 50.0 $ — $ — $ 50.0 Available-for-sale Bank time deposits $ 14.1 $ — $ — $ 14.1 $ 24.1 $ — $ — $ 24.1 U.S. government and agency securities 136.4 1.8 (0.1) 138.1 147.0 2.2 — 149.2 Foreign government bonds — — — — — — — — Asset-backed securities 161.1 1.3 (0.2) 162.2 149.6 1.9 — 151.5 Corporate debt securities 600.3 5.0 (1.5) 603.8 600.8 7.5 — 608.3 Municipal securities 2.8 — — 2.8 2.8 — — 2.8 Total $ 914.7 $ 8.1 $ (1.8) $ 921.0 $ 924.3 $ 11.6 $ — $ 935.9 |
Schedule of Cost and Fair Value of Investments in Debt Securities, By Contractual Maturity | The cost and fair value of investments in debt securities, by contractual maturity, as of March 31, 2021, were as follows: Available-for-Sale Amortized Cost Fair Value (in millions) Due in 1 year or less $ 155.5 $ 156.4 Due after 1 year through 5 years 569.7 573.3 Instruments not due at a single maturity date 189.5 191.3 $ 914.7 $ 921.0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following table presents gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): March 31, 2021 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. government and agency securities $ 23.1 $ (0.1) $ — $ — $ 23.1 $ (0.1) Asset-backed securities 58.6 (0.2) — — 58.6 (0.2) Corporate debt securities 214.4 (1.5) — — 214.4 (1.5) $ 296.1 $ (1.8) $ — $ — $ 296.1 $ (1.8) |
Schedule of Investments in Unconsolidated Affiliates | Investments in these unconsolidated affiliates are recorded in " Long-term Investments " on the consolidated condensed balance sheets, and are as follows: March 31, December 31, (in millions) Equity method investments Carrying value of equity method investments $ 7.1 $ 5.7 Equity securities Carrying value of non-marketable equity securities 30.5 29.4 Total investments in unconsolidated affiliates $ 37.6 $ 35.1 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
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 (in millions): March 31, 2021 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 10.9 $ 15.0 $ — $ 25.9 Available-for-sale investments: Bank time deposits — 14.1 — 14.1 Corporate debt securities — 603.8 — 603.8 Asset-backed securities — 162.2 — 162.2 U.S. government and agency securities 55.8 82.3 — 138.1 Municipal securities — 2.8 — 2.8 Investments held for deferred compensation plans 113.4 — — 113.4 Derivatives — 28.8 — 28.8 $ 180.1 $ 909.0 $ — $ 1,089.1 Liabilities Derivatives $ — $ 16.1 $ — $ 16.1 Deferred compensation plans 113.0 — — 113.0 Contingent consideration liabilities — — 181.6 181.6 $ 113.0 $ 16.1 $ 181.6 $ 310.7 December 31, 2020 Assets Cash equivalents $ 16.2 $ — $ — $ 16.2 Available-for-sale investments: Bank time deposits — 24.1 — 24.1 Corporate debt securities — 608.3 — 608.3 Asset-backed securities — 151.5 — 151.5 U.S. government and agency securities 56.9 92.2 — 149.1 Municipal securities — 2.8 — 2.8 Investments held for deferred compensation plans 111.2 — — 111.2 Derivatives — 8.1 — 8.1 $ 184.3 $ 887.0 $ — $ 1,071.3 Liabilities Derivatives $ — $ 39.3 $ — $ 39.3 Deferred compensation plans 111.6 — — 111.6 Contingent consideration liabilities — — 186.1 186.1 $ 111.6 $ 39.3 $ 186.1 $ 337.0 |
Summary of Changes in Fair Value of Contingent Consideration Obligation | The following table summarizes the changes in fair value of the contingent consideration liabilities (in millions): Three Months Ended 2021 2020 Balance at December 31 $ 186.1 $ 172.5 Changes in fair value (4.5) (2.2) Balance at March 31 $ 181.6 $ 170.3 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Derivative Financial Instruments Used to Manage Currency Exchange Rate Risk and Interest Rate Risk | Notional Amount March 31, 2021 December 31, 2020 (in millions) Foreign currency forward exchange contracts $ 1,509.7 $ 1,525.5 Cross currency swap contracts 300.0 300.0 |
Schedule of Location and Fair Value Amounts of Derivative Instruments Reported in Consolidated Condensed Balance Sheets | The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions): Fair Value Derivatives designated as hedging instruments Balance Sheet March 31, 2021 December 31, 2020 Assets Foreign currency contracts Other current assets $ 26.2 $ 7.3 Cross currency swap contracts Other assets $ 2.6 $ 0.8 Liabilities Foreign currency contracts Accounts payable and accrued liabilities $ 16.1 $ 39.3 |
Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Assets | The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): Gross Amounts Gross Amounts Net Amounts March 31, 2021 Gross Financial Cash Net Derivative assets Foreign currency contracts $ 26.2 $ — $ 26.2 $ (9.5) $ — $ 16.7 Cross currency swap contracts $ 2.6 $ — $ 2.6 $ — $ — $ 2.6 Derivative liabilities Foreign currency contracts $ 16.1 $ — $ 16.1 $ (9.5) $ — $ 6.6 December 31, 2020 Derivative assets Foreign currency contracts $ 7.3 $ — $ 7.3 $ (6.1) $ — $ 1.2 Cross currency swap contracts $ 0.8 $ — $ 0.8 $ — $ — $ 0.8 Derivative liabilities Foreign currency contracts $ 39.3 $ — $ 39.3 $ (6.1) $ — $ 33.2 |
Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Liabilities | The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): Gross Amounts Gross Amounts Net Amounts March 31, 2021 Gross Financial Cash Net Derivative assets Foreign currency contracts $ 26.2 $ — $ 26.2 $ (9.5) $ — $ 16.7 Cross currency swap contracts $ 2.6 $ — $ 2.6 $ — $ — $ 2.6 Derivative liabilities Foreign currency contracts $ 16.1 $ — $ 16.1 $ (9.5) $ — $ 6.6 December 31, 2020 Derivative assets Foreign currency contracts $ 7.3 $ — $ 7.3 $ (6.1) $ — $ 1.2 Cross currency swap contracts $ 0.8 $ — $ 0.8 $ — $ — $ 0.8 Derivative liabilities Foreign currency contracts $ 39.3 $ — $ 39.3 $ (6.1) $ — $ 33.2 |
Schedule of Effect of Derivative Instruments on Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income | The following tables present the effect of derivative and non-derivative hedging instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income (loss) (in millions): Amount of Gain or (Loss) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2021 2020 2021 2020 Cash flow hedges Foreign currency contracts $ 28.2 $ 17.5 Cost of sales $ (5.5) $ 6.1 Selling, general, and administrative expenses $ 0.1 $ 0.8 Amount of Gain or (Loss) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2021 2020 2021 2020 Net investment hedges Cross currency swap contracts $ 1.8 $ 31.3 Interest income, net $ 1.6 $ 1.7 Amount of Gain or (Loss) Three Months Ended Location of Gain or (Loss) 2021 2020 Fair value hedges Foreign currency contracts Other income, net $ 6.3 $ 1.7 Amount of Gain or (Loss) Three Months Ended Location of Gain or (Loss) 2021 2020 Derivatives not designated as hedging instruments Foreign currency contracts Other income, net $ 15.2 $ 8.6 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following tables present the effect of fair value and cash flow hedge accounting on the consolidated condensed statements of operations (in millions): Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other Income, net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (293.4) $ (330.8) $ 5.5 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships: Foreign currency contracts: Hedged items $ — $ — $ (5.5) Derivatives designated as hedging instruments $ — $ — $ 5.5 Amount excluded from effectiveness testing recognized in earnings based on an amortization approach $ — $ — $ 0.8 Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ (5.5) $ 0.1 $ — Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other Expense (Income), net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (265.1) $ (307.8) $ 1.9 The effects of fair value and cash flow hedging: Gain (loss) on fair value hedging relationships: Foreign currency contracts: Hedged items $ — $ — $ (0.7) Derivatives designated as hedging instruments $ — $ — $ 0.7 Amount excluded from effectiveness testing recognized in earnings based on an amortization approach $ — $ — $ 1.0 Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ 6.1 $ 0.8 $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three months ended March 31, 2021 and 2020 was as follows (in millions): Three Months Ended 2021 2020 Cost of sales $ 5.5 $ 4.6 Selling, general, and administrative expenses 16.5 14.4 Research and development expenses 6.2 4.9 Total stock-based compensation expense 28.2 23.9 Income tax benefit (3.9) (3.5) Total stock-based compensation expense, net of tax $ 24.3 $ 20.4 |
Schedule of Weighted-Average Assumptions for Options Granted | The following table includes the weighted-average grant-date fair values of stock options granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: Option Awards Three Months Ended 2021 2020 Average risk-free interest rate 0.6 % 1.4 % Expected dividend yield None None Expected volatility 33.4 % 29.7 % Expected term (years) 5.2 5.2 Fair value, per option $ 26.28 $ 22.79 |
Schedule of Weighted-Average Assumptions for ESPP Subscriptions Granted | The following table includes the weighted-average grant-date fair values for ESPP subscriptions granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: ESPP Three Months Ended 2021 2020 Average risk-free interest rate 0.1 % 1.6 % Expected dividend yield None None Expected volatility 37.5 % 31.9 % Expected term (years) 0.6 0.6 Fair value, per share $ 22.14 $ 15.71 |
ACCELERATED SHARE REPURCHASE (T
ACCELERATED SHARE REPURCHASE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Accelerated Share Repurchases | The following table summarizes the terms of the ASR agreement (dollars and shares in millions, except per share data): Initial Delivery Final Settlement Agreement Date Amount Shares Price per Value of Settlement Total Shares Average Price February 2021 $ 250.0 2.4 $ 83.86 80 % March 2021 3.0 $ 84.51 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Summary of Activity for Each Component of Accumulated Other Comprehensive Loss | The following tables summarize the activity for each component of " Accumulated Other Comprehensive Loss " (in millions): Foreign Unrealized Loss on Hedges Unrealized Gain on Available-for-sale Investments Unrealized Total December 31, 2020 $ (122.4) $ (27.7) $ 8.6 $ (19.6) $ (161.1) Other comprehensive (loss) gain before reclassifications (30.2) 34.8 (6.1) 0.3 (1.2) Amounts reclassified from accumulated other comprehensive loss (1.6) (0.9) 0.9 — (1.6) Deferred income tax (expense) benefit (0.4) (9.4) 1.3 — (8.5) March 31, 2021 $ (154.6) $ (3.2) $ 4.7 $ (19.3) $ (172.4) Foreign Unrealized Gain on Hedges Unrealized Gain (Loss) on Available-for-sale Investments Unrealized Total December 31, 2019 $ (154.8) $ 12.5 $ 1.7 $ (15.4) $ (156.0) Other comprehensive gain (loss) before reclassifications 11.6 19.0 (6.3) (0.2) 24.1 Amounts reclassified from accumulated other comprehensive loss (1.7) (8.6) (0.1) — (10.4) Deferred income tax (expense) benefit (7.6) (3.8) 1.7 — (9.7) March 31, 2020 $ (152.5) $ 19.1 $ (3.0) $ (15.6) $ (152.0) |
Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss | The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Three Months Ended Affected Line on Consolidated Condensed Details about Accumulated Other Comprehensive Loss Components 2021 2020 Foreign currency translation adjustments $ 1.6 $ 1.7 Other income, net (0.4) (0.4) Provision for income taxes $ 1.2 $ 1.3 Net of tax Gain (loss) on hedges $ (5.5) $ 6.1 Cost of sales 0.1 0.8 Selling, general, and administrative expenses 6.3 1.7 Other income, net 0.9 8.6 Total before tax 0.7 (1.9) Provision for income taxes $ 1.6 $ 6.7 Net of tax Gain (loss) on available-for-sale investments $ (0.9) $ 0.1 Other income, net 0.2 (0.2) Provision for income taxes $ (0.7) $ (0.1) Net of tax |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule 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): Three Months Ended 2021 2020 Basic: Net income $ 338.2 $ 310.6 Weighted-average shares outstanding 623.2 624.6 Basic earnings per share $ 0.54 $ 0.50 Diluted: Net income $ 338.2 $ 310.6 Weighted-average shares outstanding 623.2 624.6 Dilutive effect of stock plans 8.1 10.5 Dilutive weighted-average shares outstanding 631.3 635.1 Diluted earnings per share $ 0.54 $ 0.49 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Information About Reportable Segments and Reconciliation of Segment Net Sales to Consolidated Net Sales and Segment Pre-Tax Income to Consolidated Pre-Tax Income | The table below presents information about Edwards Lifesciences' reportable segments (in millions): Three Months Ended 2021 2020 Segment Net Sales United States $ 674.7 $ 667.4 Europe 255.4 247.5 Japan 127.7 109.8 Rest of World 124.5 104.4 Total segment net sales $ 1,182.3 $ 1,129.1 Segment Operating Income United States $ 466.1 $ 464.8 Europe 133.3 128.0 Japan 87.6 71.7 Rest of World 47.3 34.9 Total segment operating income $ 734.3 $ 699.4 The table below presents reconciliations of segment net sales to consolidated net sales and segment operating income to consolidated pre-tax income (in millions): Three Months Ended 2021 2020 Net Sales Reconciliation Segment net sales $ 1,182.3 $ 1,129.1 Foreign currency 34.3 (0.4) Consolidated net sales $ 1,216.6 $ 1,128.7 Pre-tax Income Reconciliation Segment operating income $ 734.3 $ 699.4 Unallocated amounts: Corporate items (357.7) (340.7) Intellectual property litigation expenses (6.4) (12.5) Change in fair value of contingent consideration liabilities 4.5 2.2 Foreign currency 8.8 9.7 Consolidated operating income 383.5 358.1 Non-operating income 5.8 6.4 Consolidated pre-tax income $ 389.3 $ 364.5 |
Enterprise-Wide Information | The following enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements. Three Months Ended 2021 2020 (in millions) Net Sales by Geographic Area United States $ 674.7 $ 667.4 Europe 280.0 249.3 Japan 132.3 110.0 Rest of World 129.6 102.0 $ 1,216.6 $ 1,128.7 Net Sales by Major Product Area Transcatheter Aortic Valve Replacement $ 791.7 $ 742.2 Transcatheter Mitral and Tricuspid Therapies 16.3 10.5 Surgical Structural Heart 213.0 193.4 Critical Care 195.6 182.6 $ 1,216.6 $ 1,128.7 March 31, 2021 December 31, 2020 (in millions) Long-lived Tangible Assets by Geographic Area United States $ 1,101.0 $ 1,084.3 Europe 201.4 192.7 Japan 18.0 20.4 Rest of World 310.3 311.0 $ 1,630.7 $ 1,608.4 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) | May 07, 2020Rate |
Accounting Policies [Abstract] | |
Stock split ratio | 300.00% |
OTHER CONSOLIDATED FINANCIAL _3
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Schedule of Inventory (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventories | ||
Raw materials | $ 132.2 | $ 136.7 |
Work in process | 152.8 | 140 |
Finished products | 482.9 | 525.6 |
Total inventories | 767.9 | 802.3 |
Finished products inventories held on consignment | $ 123 | $ 130 |
OTHER CONSOLIDATED FINANCIAL _4
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Schedule of Accounts Payable and Accrued Liabilities and Long Term Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Accounts payable and accrued liabilities | ||
Accounts payable | $ 150.4 | $ 196.5 |
Employee compensation and withholdings | 197.5 | 236.7 |
Taxes payable (Note 11) | 10.7 | 18.6 |
Property, payroll, and other taxes | 61 | 49.7 |
Research and development accruals | 55.8 | 52.3 |
Accrued rebates | 60.3 | 67.2 |
Fair value of derivatives | 16.1 | 39.3 |
Accrued marketing expenses | 15.9 | 14.3 |
Litigation settlement | 50 | 37.5 |
Litigation and insurance | 24.9 | 23.3 |
Accrued relocation costs | 21.4 | 21 |
Accrued professional services | 6.7 | 7.6 |
Accrued realignment reserves | 14.8 | 14.5 |
Other accrued liabilities | 87 | 88.2 |
Total accounts payable and accrued liabilities | $ 772.5 | $ 866.7 |
OTHER CONSOLIDATED FINANCIAL _5
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash paid during the year for: | ||
Operating cash flows from operating leases | $ 7.7 | $ 7.1 |
Non-cash investing and financing transactions: | ||
Right-of-use assets obtained in exchange for new lease liabilities | 3.5 | 4.5 |
Capital expenditures accruals | $ 36.4 | $ 33.9 |
OTHER CONSOLIDATED FINANCIAL _6
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||||
Cash and cash equivalents | $ 1,174.2 | $ 1,183.2 | ||
Restricted cash included in other current assets | 16.4 | 16.6 | ||
Restricted cash included in other assets | 0.3 | 0.4 | ||
Total cash, cash equivalents, and restricted cash | $ 1,190.9 | $ 1,200.2 | $ 668.3 | $ 1,184.4 |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments in Debt Securities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Available-for-sale | ||
Amortized Cost | $ 914.7 | $ 924.3 |
Gross Unrealized Gains | 8.1 | 11.6 |
Gross Unrealized Losses | (1.8) | 0 |
Fair Value | 921 | 935.9 |
Bank time deposits | ||
Held-to-maturity | ||
Amortized Cost | 0 | 50 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 0 | 50 |
Available-for-sale | ||
Amortized Cost | 14.1 | 24.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 14.1 | 24.1 |
U.S. government and agency securities | ||
Available-for-sale | ||
Amortized Cost | 136.4 | 147 |
Gross Unrealized Gains | 1.8 | 2.2 |
Gross Unrealized Losses | (0.1) | 0 |
Fair Value | 138.1 | 149.2 |
Foreign government bonds | ||
Available-for-sale | ||
Amortized Cost | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 0 | 0 |
Asset-backed securities | ||
Available-for-sale | ||
Amortized Cost | 161.1 | 149.6 |
Gross Unrealized Gains | 1.3 | 1.9 |
Gross Unrealized Losses | (0.2) | 0 |
Fair Value | 162.2 | 151.5 |
Corporate debt securities | ||
Available-for-sale | ||
Amortized Cost | 600.3 | 600.8 |
Gross Unrealized Gains | 5 | 7.5 |
Gross Unrealized Losses | (1.5) | 0 |
Fair Value | 603.8 | 608.3 |
Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 2.8 | 2.8 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 2.8 | $ 2.8 |
INVESTMENTS - Schedule of Cost
INVESTMENTS - Schedule of Cost and Fair Value of Investments in Debt Securities, By Contractual Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due in 1 year or less | $ 155.5 | |
Due after 1 year through 5 years | 569.7 | |
Instruments not due at a single maturity date | 189.5 | |
Amortized Cost | 914.7 | $ 924.3 |
Fair Value | ||
Due in 1 year or less | 156.4 | |
Due after 1 year through 5 years | 573.3 | |
Instruments not due at a single maturity date | 191.3 | |
Fair Value | $ 921 | $ 935.9 |
INVESTMENTS - Schedule of Inv_2
INVESTMENTS - Schedule of Investments in Continuous Loss Position (Details) $ in Millions | Mar. 31, 2021USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
Fair value, less than twelve months | $ 296.1 |
Gross unrealized losses, less than twelve months | (1.8) |
Fair value, twelve months or greater | 0 |
Gross unrealized losses, twelve months or greater | 0 |
Fair value, total | 296.1 |
Gross unrealized losses, total | (1.8) |
U.S. government and agency securities | |
Debt Securities, Available-for-sale [Line Items] | |
Fair value, less than twelve months | 23.1 |
Gross unrealized losses, less than twelve months | (0.1) |
Fair value, twelve months or greater | 0 |
Gross unrealized losses, twelve months or greater | 0 |
Fair value, total | 23.1 |
Gross unrealized losses, total | (0.1) |
Asset-backed securities | |
Debt Securities, Available-for-sale [Line Items] | |
Fair value, less than twelve months | 58.6 |
Gross unrealized losses, less than twelve months | (0.2) |
Fair value, twelve months or greater | 0 |
Gross unrealized losses, twelve months or greater | 0 |
Fair value, total | 58.6 |
Gross unrealized losses, total | (0.2) |
Corporate debt securities | |
Debt Securities, Available-for-sale [Line Items] | |
Fair value, less than twelve months | 214.4 |
Gross unrealized losses, less than twelve months | (1.5) |
Fair value, twelve months or greater | 0 |
Gross unrealized losses, twelve months or greater | 0 |
Fair value, total | 214.4 |
Gross unrealized losses, total | $ (1.5) |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($) | Dec. 31, 2020investment | |
Debt and Equity Securities, FV-NI [Line Items] | ||
Number of investments | investment | 0 | |
Upward price adjustments | $ 1 | |
Other income, net | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Increase in non-marketable equity securities due to observable price changes | 4.8 | |
Decrease in non-marketable equity securities due to observable price changes | $ 2.6 |
INVESTMENTS - Schedule of Inv_3
INVESTMENTS - Schedule of Investments in Unconsolidated Affiliates (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Equity method investments | ||
Carrying value of equity method investments | $ 7.1 | $ 5.7 |
Equity securities | ||
Carrying value of non-marketable equity securities | 30.5 | 29.4 |
Total investments in unconsolidated affiliates | $ 37.6 | $ 35.1 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Millions | Mar. 31, 2021USD ($) |
Level 2 | |
Financial instruments | |
Notes payable fair value disclosure | $ 676.6 |
Discount Rate | Level 3 | Obligations | Minimum | |
Financial instruments | |
Contingent consideration liability measurement input | 0 |
Discount Rate | Level 3 | Obligations | Maximum | |
Financial instruments | |
Contingent consideration liability measurement input | 0.092 |
Discount Rate | Level 3 | Obligations | Weighted Average | |
Financial instruments | |
Contingent consideration liability measurement input | 0.037 |
Probability of Milestone Achievement | Level 3 | Obligations | Minimum | |
Financial instruments | |
Contingent consideration liability measurement input | 0.003 |
Probability of Milestone Achievement | Level 3 | Obligations | Maximum | |
Financial instruments | |
Contingent consideration liability measurement input | 0.997 |
Probability of Milestone Achievement | Level 3 | Obligations | Weighted Average | |
Financial instruments | |
Contingent consideration liability measurement input | 0.709 |
Volatility of Future Revenue | Level 3 | Obligations | Minimum | |
Financial instruments | |
Contingent consideration liability measurement input | 0.370 |
Volatility of Future Revenue | Level 3 | Obligations | Maximum | |
Financial instruments | |
Contingent consideration liability measurement input | 0.400 |
Volatility of Future Revenue | Level 3 | Obligations | Weighted Average | |
Financial instruments | |
Contingent consideration liability measurement input | 0.388 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Available-for-sale investments | $ 921 | $ 935.9 |
Bank time deposits | ||
Assets | ||
Available-for-sale investments | 14.1 | 24.1 |
Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 603.8 | 608.3 |
Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 162.2 | 151.5 |
U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 138.1 | 149.2 |
Municipal securities | ||
Assets | ||
Available-for-sale investments | 2.8 | 2.8 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | ||
Assets | ||
Cash equivalents | 25.9 | 16.2 |
Investments held for deferred compensation plans | 113.4 | 111.2 |
Derivatives | 28.8 | 8.1 |
Assets | 1,089.1 | 1,071.3 |
Liabilities | ||
Derivatives | 16.1 | 39.3 |
Deferred compensation plans | 113 | 111.6 |
Contingent consideration liabilities | 181.6 | 186.1 |
Liabilities | 310.7 | 337 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Bank time deposits | ||
Assets | ||
Available-for-sale investments | 14.1 | 24.1 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 603.8 | 608.3 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 162.2 | 151.5 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 138.1 | 149.1 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Municipal securities | ||
Assets | ||
Available-for-sale investments | 2.8 | 2.8 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | ||
Assets | ||
Cash equivalents | 10.9 | 16.2 |
Investments held for deferred compensation plans | 113.4 | 111.2 |
Derivatives | 0 | 0 |
Assets | 180.1 | 184.3 |
Liabilities | ||
Derivatives | 0 | 0 |
Deferred compensation plans | 113 | 111.6 |
Contingent consideration liabilities | 0 | 0 |
Liabilities | 113 | 111.6 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | Bank time deposits | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 55.8 | 56.9 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | Municipal securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | ||
Assets | ||
Cash equivalents | 15 | 0 |
Investments held for deferred compensation plans | 0 | 0 |
Derivatives | 28.8 | 8.1 |
Assets | 909 | 887 |
Liabilities | ||
Derivatives | 16.1 | 39.3 |
Deferred compensation plans | 0 | 0 |
Contingent consideration liabilities | 0 | 0 |
Liabilities | 16.1 | 39.3 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | Bank time deposits | ||
Assets | ||
Available-for-sale investments | 14.1 | 24.1 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 603.8 | 608.3 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 162.2 | 151.5 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 82.3 | 92.2 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | Municipal securities | ||
Assets | ||
Available-for-sale investments | 2.8 | 2.8 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Investments held for deferred compensation plans | 0 | 0 |
Derivatives | 0 | 0 |
Assets | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Deferred compensation plans | 0 | 0 |
Contingent consideration liabilities | 181.6 | 186.1 |
Liabilities | 181.6 | 186.1 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | Bank time deposits | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | Municipal securities | ||
Assets | ||
Available-for-sale investments | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Sum_2
FAIR VALUE MEASUREMENTS - Summary of Changes in Fair Value of Contingent Consideration Obligation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning balance | $ 186.1 | $ 172.5 |
Changes in fair value | (4.5) | (2.2) |
Ending balance | $ 181.6 | $ 170.3 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Derivative Financial Instruments Used to Manage Currency Exchange Rate Risk and Interest Rate Risk (Details) - Derivatives designated as hedging instruments - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Foreign currency forward exchange contracts | ||
Derivative Financial Instruments | ||
Derivative notional amount | $ 1,509.7 | $ 1,525.5 |
Cross currency swap contracts | ||
Derivative Financial Instruments | ||
Derivative notional amount | $ 300 | $ 300 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($) | Mar. 31, 2021EUR (€) | Dec. 31, 2020USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Changes due to currency rate movements and expenses expected to occur, maximum term | 13 months | ||
Derivative Financial Instruments | |||
Loss expected to be reclassified as earnings | $ 9 | ||
Derivatives designated as hedging instruments | Cross currency swap contracts | |||
Derivative Financial Instruments | |||
Derivative liability, fair value | 300 | $ 300 | |
Net investment hedges | Derivatives designated as hedging instruments | Cross currency swap contracts | |||
Derivative Financial Instruments | |||
Derivative liability, fair value | $ 300 | € 257.2 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Location and Fair Value Amounts of Derivative Instruments Reported in Consolidated Condensed Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Foreign currency contracts | ||
Assets | ||
Fair value of derivative assets | $ 26.2 | $ 7.3 |
Liabilities | ||
Fair value of derivative liabilities | 16.1 | 39.3 |
Cross currency swap contracts | ||
Assets | ||
Fair value of derivative assets | 2.6 | 0.8 |
Derivatives designated as hedging instruments | Foreign currency contracts | Other current assets | ||
Assets | ||
Fair value of derivative assets | 26.2 | 7.3 |
Derivatives designated as hedging instruments | Foreign currency contracts | Accounts payable and accrued liabilities | ||
Liabilities | ||
Fair value of derivative liabilities | 16.1 | 39.3 |
Derivatives designated as hedging instruments | Cross currency swap contracts | Other assets | ||
Assets | ||
Fair value of derivative assets | $ 2.6 | $ 0.8 |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Foreign currency contracts | ||
Derivative assets | ||
Gross Amounts | $ 26.2 | $ 7.3 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 26.2 | 7.3 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | (9.5) | (6.1) |
Cash Collateral Received | 0 | 0 |
Net Amount | 16.7 | 1.2 |
Derivative liabilities | ||
Gross Amounts | 16.1 | 39.3 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 16.1 | 39.3 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Gross Amounts Not Offset in the Consolidated Balance Sheet | (9.5) | (6.1) |
Cash Collateral Received | 0 | 0 |
Net Amount | 6.6 | 33.2 |
Cross currency swap contracts | ||
Derivative assets | ||
Gross Amounts | 2.6 | 0.8 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 2.6 | 0.8 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 2.6 | $ 0.8 |
DERIVATIVE INSTRUMENTS AND HE_7
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Effect of Derivative Instruments on Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Foreign currency contracts | Derivatives not designated as hedging instruments | Other income, net | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ 15.2 | $ 8.6 |
Cash flow hedges | Foreign currency contracts | Derivatives designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative | 28.2 | 17.5 |
Cash flow hedges | Foreign currency contracts | Derivatives designated as hedging instruments | Cost of sales | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | (5.5) | 6.1 |
Cash flow hedges | Foreign currency contracts | Derivatives designated as hedging instruments | Selling, general, and administrative expenses | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | 0.1 | 0.8 |
Net investment hedges | Cross currency swap contracts | Derivatives designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative | 1.8 | 31.3 |
Net investment hedges | Cross currency swap contracts | Derivatives designated as hedging instruments | Interest income, net | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | 1.6 | 1.7 |
Fair value hedges | Foreign currency contracts | Derivatives designated as hedging instruments | Other income, net | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ 6.3 | $ 1.7 |
DERIVATIVE INSTRUMENTS AND HE_8
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Cash Flow Hedge Effects on Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments, Gain (Loss) | ||
Cost of sales | $ (293.4) | $ (265.1) |
Selling, general, and administrative expenses | (330.8) | (307.8) |
Other Income, net | 5.5 | 1.9 |
Foreign currency contracts | Cost of sales | ||
Gain (loss) on fair value hedging relationships: | ||
Hedged items | 0 | 0 |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach | 0 | 0 |
Gain (loss) on cash flow hedging relationships: | ||
Amount of gain (loss) reclassified from accumulated OCI into income | (5.5) | 6.1 |
Foreign currency contracts | Cost of sales | Derivatives designated as hedging instruments | ||
Gain (loss) on fair value hedging relationships: | ||
Derivatives designated as hedging instruments | 0 | 0 |
Foreign currency contracts | Selling, general, and administrative expenses | ||
Gain (loss) on fair value hedging relationships: | ||
Hedged items | 0 | 0 |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach | 0 | 0 |
Gain (loss) on cash flow hedging relationships: | ||
Amount of gain (loss) reclassified from accumulated OCI into income | 0.1 | 0.8 |
Foreign currency contracts | Selling, general, and administrative expenses | Derivatives designated as hedging instruments | ||
Gain (loss) on fair value hedging relationships: | ||
Derivatives designated as hedging instruments | 0 | 0 |
Foreign currency contracts | Other Income, net | ||
Gain (loss) on fair value hedging relationships: | ||
Hedged items | (5.5) | (0.7) |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach | 0.8 | 1 |
Gain (loss) on cash flow hedging relationships: | ||
Amount of gain (loss) reclassified from accumulated OCI into income | 0 | 0 |
Foreign currency contracts | Other Income, net | Derivatives designated as hedging instruments | ||
Gain (loss) on fair value hedging relationships: | ||
Derivatives designated as hedging instruments | $ 5.5 | $ 0.7 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | $ 28.2 | $ 23.9 |
Income tax benefit | (3.9) | (3.5) |
Total stock-based compensation expense, net of tax | 24.3 | 20.4 |
Cost of sales | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | 5.5 | 4.6 |
Selling, general, and administrative expenses | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | 16.5 | 14.4 |
Research and development expenses | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | $ 6.2 | $ 4.9 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Total remaining unrecognized compensation cost | $ 135 |
Unrecognized compensation cost, recognition period | 27 months |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Weighted-Average Assumptions for Options and ESPP Subscriptions Granted Granted (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average risk-free interest rate | 0.60% | 1.40% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility (as a percent) | 33.40% | 29.70% |
Expected term | 5 years 2 months 12 days | 5 years 2 months 12 days |
Fair value, per option (in dollars per share) | $ 26.28 | $ 22.79 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average risk-free interest rate | 0.10% | 1.60% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility (as a percent) | 37.50% | 31.90% |
Expected term | 7 months 6 days | 7 months 6 days |
Fair value, per option (in dollars per share) | $ 22.14 | $ 15.71 |
ACCELERATED SHARE REPURCHASE -
ACCELERATED SHARE REPURCHASE - Schedule of Accelerated Share Repurchases (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | |
Mar. 31, 2021 | Feb. 28, 2021 | |
February 2021 Stock Repurchase Program | ||
Class of Stock [Line Items] | ||
Authorized repurchase amount | $ 250 | |
Initial delivery of treasury stock (in shares) | 2.4 | |
Average cost per share of shares acquired (in dollars per share) | $ 83.86 | |
Value of shares repurchased as percentage of contract | 80.00% | |
March 2021 Stock Repurchase Program | ||
Class of Stock [Line Items] | ||
Initial delivery of treasury stock (in shares) | 3 | |
Final price per share of repurchased shares (in dollars per share) | $ 84.51 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($)lawsuit | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of lawsuits that if settled could have a material adverse impact on net income or cash flows | lawsuit | 1 |
Threshold for disclosing material environmental legal proceedings with governmental authority | $ | $ 1 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Activity for Each Component of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | $ 4,574.3 | $ 4,148.3 |
Ending balance | 4,658.4 | 3,901.1 |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (122.4) | (154.8) |
Other comprehensive gain (loss) before reclassifications | (30.2) | 11.6 |
Amounts reclassified from accumulated other comprehensive loss | (1.6) | (1.7) |
Deferred income tax benefit (expense) | (0.4) | (7.6) |
Ending balance | (154.6) | (152.5) |
Unrealized Loss on Hedges | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (27.7) | 12.5 |
Other comprehensive gain (loss) before reclassifications | 34.8 | 19 |
Amounts reclassified from accumulated other comprehensive loss | (0.9) | (8.6) |
Deferred income tax benefit (expense) | (9.4) | (3.8) |
Ending balance | (3.2) | 19.1 |
Unrealized Gain on Available-for-sale Investments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | 8.6 | 1.7 |
Other comprehensive gain (loss) before reclassifications | (6.1) | (6.3) |
Amounts reclassified from accumulated other comprehensive loss | 0.9 | (0.1) |
Deferred income tax benefit (expense) | 1.3 | 1.7 |
Ending balance | 4.7 | (3) |
Unrealized Pension Costs | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (19.6) | (15.4) |
Other comprehensive gain (loss) before reclassifications | 0.3 | (0.2) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Deferred income tax benefit (expense) | 0 | 0 |
Ending balance | (19.3) | (15.6) |
Total Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (161.1) | (156) |
Other comprehensive gain (loss) before reclassifications | (1.2) | 24.1 |
Amounts reclassified from accumulated other comprehensive loss | (1.6) | (10.4) |
Deferred income tax benefit (expense) | (8.5) | (9.7) |
Ending balance | $ (172.4) | $ (152) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Affected Line on Consolidated Condensed Statements of Operations | ||
Other income, net | $ 5.5 | $ 1.9 |
Provision for income taxes | (51.1) | (53.9) |
Net income | 338.2 | 310.6 |
Cost of sales | (293.4) | (265.1) |
Selling, general, and administrative expenses | (330.8) | (307.8) |
Total before tax | 389.3 | 364.5 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Foreign Currency Translation Adjustments | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Other income, net | 1.6 | 1.7 |
Provision for income taxes | (0.4) | (0.4) |
Net income | 1.2 | 1.3 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Unrealized Loss on Hedges | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Provision for income taxes | 0.7 | (1.9) |
Net income | 1.6 | 6.7 |
Cost of sales | (5.5) | 6.1 |
Selling, general, and administrative expenses | 0.1 | 0.8 |
Other income, net | 6.3 | 1.7 |
Total before tax | 0.9 | 8.6 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Gain (loss) on available-for-sale investments | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Other income, net | (0.9) | 0.1 |
Provision for income taxes | 0.2 | (0.2) |
Net income | $ (0.7) | $ (0.1) |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Basic: | ||
Net income | $ 338.2 | $ 310.6 |
Weighted-average shares outstanding (in shares) | 623.2 | 624.6 |
Basic earnings per share (in dollars per share) | $ 0.54 | $ 0.50 |
Diluted: | ||
Net income | $ 338.2 | $ 310.6 |
Weighted-average shares outstanding (in shares) | 623.2 | 624.6 |
Dilutive effect of stock plans (in shares) | 8.1 | 10.5 |
Dilutive weighted-average shares outstanding (in shares) | 631.3 | 635.1 |
Diluted earnings per share (in dollars per share) | $ 0.54 | $ 0.49 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stock compensation plan | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the computation of earnings per share (in shares) | 1.9 | 2 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 13.10% | 14.80% | |
Tax benefit from employee share-based compensation | $ 11.5 | $ 10.3 | |
Liability for income taxes associated with uncertain tax positions | 300.5 | $ 281.8 | |
Decrease in unrecognized tax benefits is reasonably possible | 104.7 | 95.1 | |
Net amounts that would favorably affect effective tax rate | 195.8 | $ 186.7 | |
Additional federal tax | $ 200 |
SEGMENT INFORMATION - Informati
SEGMENT INFORMATION - Information About Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Net Sales | ||
Net sales | $ 1,216.6 | $ 1,128.7 |
Segment Operating Income | ||
Segment operating income | 389.3 | 364.5 |
Operating segments | ||
Segment Net Sales | ||
Net sales | 1,182.3 | 1,129.1 |
Segment Operating Income | ||
Segment operating income | 734.3 | 699.4 |
United States | Operating segments | ||
Segment Net Sales | ||
Net sales | 674.7 | 667.4 |
Segment Operating Income | ||
Segment operating income | 466.1 | 464.8 |
Europe | Operating segments | ||
Segment Net Sales | ||
Net sales | 255.4 | 247.5 |
Segment Operating Income | ||
Segment operating income | 133.3 | 128 |
Japan | Operating segments | ||
Segment Net Sales | ||
Net sales | 127.7 | 109.8 |
Segment Operating Income | ||
Segment operating income | 87.6 | 71.7 |
Rest of World | Operating segments | ||
Segment Net Sales | ||
Net sales | 124.5 | 104.4 |
Segment Operating Income | ||
Segment operating income | $ 47.3 | $ 34.9 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliations of Segment Net Sales to Consolidated Net Sales and Segment Pre-Tax Income to Consolidated Pre-Tax Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net Sales Reconciliation | ||
Net sales | $ 1,216.6 | $ 1,128.7 |
Pre-tax Income Reconciliation | ||
Consolidated operating income | 383.5 | 358.1 |
Unallocated amounts: | ||
Change in fair value of contingent consideration liabilities | 4.5 | 2.2 |
Income before provision for income taxes | 389.3 | 364.5 |
Operating segments | ||
Net Sales Reconciliation | ||
Net sales | 1,182.3 | 1,129.1 |
Pre-tax Income Reconciliation | ||
Consolidated operating income | 734.3 | 699.4 |
Unallocated amounts: | ||
Income before provision for income taxes | 734.3 | 699.4 |
Corporate items | ||
Unallocated amounts: | ||
Corporate items | (357.7) | (340.7) |
Reconciling items | ||
Net Sales Reconciliation | ||
Net sales | 34.3 | (0.4) |
Unallocated amounts: | ||
Intellectual property litigation expenses | (6.4) | (12.5) |
Foreign currency | 8.8 | 9.7 |
Non-operating income | $ 5.8 | $ 6.4 |
SEGMENT INFORMATION - Enterpris
SEGMENT INFORMATION - Enterprise-Wide Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Enterprise-Wide Information | |||
Net sales | $ 1,216.6 | $ 1,128.7 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 1,630.7 | $ 1,608.4 | |
Transcatheter Aortic Valve Replacement | |||
Enterprise-Wide Information | |||
Net sales | 791.7 | 742.2 | |
Transcatheter Mitral and Tricuspid Therapies | |||
Enterprise-Wide Information | |||
Net sales | 16.3 | 10.5 | |
Surgical Structural Heart | |||
Enterprise-Wide Information | |||
Net sales | 213 | 193.4 | |
Critical Care | |||
Enterprise-Wide Information | |||
Net sales | 195.6 | 182.6 | |
United States | |||
Enterprise-Wide Information | |||
Net sales | 674.7 | 667.4 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 1,101 | 1,084.3 | |
Europe | |||
Enterprise-Wide Information | |||
Net sales | 280 | 249.3 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 201.4 | 192.7 | |
Japan | |||
Enterprise-Wide Information | |||
Net sales | 132.3 | 110 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 18 | 20.4 | |
Rest of World | |||
Enterprise-Wide Information | |||
Net sales | 129.6 | $ 102 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | $ 310.3 | $ 311 |