Document and Entity Information
Document and Entity Information Document - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document Information [Line Items] | |||
Entity Registrant Name | BOSTON SCIENTIFIC CORPORATION | ||
Entity Central Index Key | 885,725 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 1,363,488,640 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 31.6 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net sales | $ 8,386 | $ 7,477 | $ 7,380 |
Cost of products sold | 2,424 | 2,173 | 2,210 |
Gross profit | 5,962 | 5,304 | 5,170 |
Operating expenses: | |||
Selling, general and administrative expenses | 3,099 | 2,873 | 2,902 |
Research and development expenses | 920 | 876 | 817 |
Royalty expense | 79 | 70 | 111 |
Amortization expense | 545 | 495 | 438 |
Intangible asset impairment charges | 11 | 19 | 195 |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 29 | 123 | (85) |
Restructuring charges | 28 | 26 | 69 |
Litigation-related charges | 804 | 1,105 | 1,036 |
Pension termination charges | 0 | 44 | 0 |
Gain on divestiture | 0 | 0 | (12) |
Operating expenses | 5,515 | 5,631 | 5,471 |
Operating income (loss) | 447 | (327) | (301) |
Other income (expense): | |||
Interest expense | (233) | (284) | (216) |
Other, net | (37) | (39) | 8 |
Income (loss) before income taxes | 177 | (650) | (509) |
Income tax (benefit) expense | (170) | (411) | (390) |
Net income (loss) | $ 347 | $ (239) | $ (119) |
Net income (loss) per common share — basic | $ 0.26 | $ (0.18) | $ (0.09) |
Net income (loss) per common share — assuming dilution | $ 0.25 | $ (0.18) | $ (0.09) |
Weighted-average shares outstanding | |||
Basic | 1,357.6 | 1,341.2 | 1,324.3 |
Assuming dilution | 1,377.2 | 1,341.2 | 1,324.3 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) | $ 347 | $ (239) | $ (119) |
Foreign currency translation adjustment | (25) | (16) | (22) |
Net change in unrealized gains and losses on derivative financial instruments, net of tax | (45) | (67) | 78 |
Net change in available-for-sale securities | (6) | 0 | 0 |
Net change in unrealized costs associated with certain retirement plans | (11) | 27 | (18) |
Total other comprehensive income (loss) | (87) | (56) | 38 |
Total comprehensive income (loss) | $ 260 | $ (295) | $ (81) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 196 | $ 319 |
Trade accounts receivable, net | 1,472 | 1,275 |
Inventories | 955 | 1,016 |
Deferred and prepaid income taxes | 75 | 496 |
Other current assets | 541 | 365 |
Total current assets | 3,239 | 3,471 |
Property, plant and equipment, net | 1,630 | 1,490 |
Goodwill | 6,678 | 6,473 |
Other intangible assets, net | 5,883 | 6,194 |
Other long-term assets | 666 | 505 |
TOTAL ASSETS | 18,096 | 18,133 |
Current liabilities: | ||
Current debt obligations | 64 | 3 |
Accounts payable | 447 | 209 |
Accrued expenses | 2,312 | 1,970 |
Other current liabilities | 764 | 248 |
Total current liabilities | 3,587 | 2,430 |
Long-term debt | 5,420 | 5,674 |
Deferred income taxes | 18 | 735 |
Other long-term liabilities | 2,338 | 2,974 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value - authorized 50,000,000 shares, none issued and outstanding | ||
Common stock, $0.01 par value - authorized 2,000,000,000 shares; issued 1,609,670,817 shares as of December 31, 2016 and 1,594,213,786 shares as of December 31, 2015 | 16 | 16 |
Treasury stock, at cost - 247,566,270 shares as of December 31, 2016 and December 31, 2015 | (1,717) | (1,717) |
Additional paid-in capital | 17,014 | 16,860 |
Accumulated deficit | (8,581) | (8,927) |
Accumulated other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment | (79) | (54) |
Unrealized gain on derivative financial instruments | 107 | 152 |
Unrealized loss on available-for-sale securities | (6) | 0 |
Unrealized costs associated with certain retirement plans | (21) | (10) |
Total stockholders’ equity | 6,733 | 6,320 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 18,096 | $ 18,133 |
Consolidated Balance Sheet Para
Consolidated Balance Sheet Paranthetical - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 1,609,670,817 | 1,594,213,786 |
Common stock, shares outstanding | 1,362,104,547 | 1,346,647,516 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury shares | 247,566,270 | 247,566,270 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at Dec. 31, 2013 | $ 16 | $ (1,592) | $ 16,579 | $ (8,570) | $ 106 | |
Balance (Shares) at Dec. 31, 2013 | 1,560,302,634 | |||||
Net income (loss) | $ (119) | (119) | ||||
Other comprehensive income (loss), net of tax | ||||||
Foreign currency translation adjustment | (22) | (22) | ||||
Net change in unrealized gains and losses on derivative financial instruments, net of tax | 78 | 78 | ||||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Reclassification Adjustments and Tax | 0 | |||||
Net change in unrealized costs associated with certain retirement plans | 18 | (18) | ||||
Impact of stock-based compensation plans, net of tax (Shares) | 14,715,602 | |||||
Stock Issued During Period, Value, New Issues | $ 0 | |||||
Impact of stock-based compensation plans, net of tax | 124 | |||||
Acquisition of treasury stock | (125) | |||||
Balance (Shares) at Dec. 31, 2014 | 1,575,018,236 | |||||
Balance at Dec. 31, 2014 | $ 16 | (1,717) | 16,703 | (8,689) | 144 | |
Net income (loss) | (239) | (239) | ||||
Other comprehensive income (loss), net of tax | ||||||
Foreign currency translation adjustment | (16) | (16) | ||||
Net change in unrealized gains and losses on derivative financial instruments, net of tax | (67) | (67) | ||||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Reclassification Adjustments and Tax | 0 | |||||
Net change in unrealized costs associated with certain retirement plans | $ (27) | 27 | ||||
Impact of stock-based compensation plans, net of tax (Shares) | 19,195,550 | |||||
Stock Issued During Period, Value, New Issues | $ 0 | |||||
Impact of stock-based compensation plans, net of tax | 157 | |||||
Balance (Shares) at Dec. 31, 2015 | 1,594,213,786 | 1,594,213,786 | ||||
Balance at Dec. 31, 2015 | $ 6,320 | $ 16 | (1,717) | 16,860 | (8,927) | 88 |
Other comprehensive income (loss), net of tax | ||||||
ProfitLossDueToRounding | 1 | |||||
Net income (loss) | 347 | 347 | ||||
Foreign currency translation adjustment | (25) | (25) | ||||
Net change in unrealized gains and losses on derivative financial instruments, net of tax | (45) | (45) | ||||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Reclassification Adjustments and Tax | (6) | (6) | ||||
Net change in unrealized costs associated with certain retirement plans | $ 11 | (11) | ||||
Impact of stock-based compensation plans, net of tax (Shares) | 15,457,031 | |||||
Stock Issued During Period, Value, New Issues | ||||||
Impact of stock-based compensation plans, net of tax | 153 | |||||
Balance (Shares) at Dec. 31, 2016 | 1,609,670,817 | 1,609,670,817 | ||||
Balance at Dec. 31, 2016 | $ 6,733 | $ 16 | $ (1,717) | 17,014 | (8,581) | $ 1 |
Other comprehensive income (loss), net of tax | ||||||
ProfitLossDueToRounding | $ 1 | $ (1) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) | $ 347 | $ (239) | $ (119) |
Adjustments to reconcile net income (loss) to cash provided by operating activities | |||
Gain on sale of businesses | 0 | 0 | (12) |
Gain on sale of property, plant and equipment | (11) | 0 | 0 |
Depreciation and amortization | 815 | 769 | 725 |
Deferred and prepaid income taxes | (305) | (532) | (397) |
Stock-based compensation expense | 116 | 107 | 103 |
Intangible asset impairment charges | 11 | 19 | 195 |
Net losses (gains) on investments and notes receivable | 21 | 9 | (27) |
Contingent consideration expense (benefit) | 29 | 123 | (85) |
Payment of contingent consideration in excess of amounts established in purchase accounting | (57) | (57) | (103) |
Pension termination charges | 0 | 44 | 0 |
Inventory step-up amortization | 22 | 36 | 9 |
Other, net | (12) | 41 | 18 |
Increase (decrease) in operating assets and liabilities, net of acquisitions: | |||
Trade accounts receivable | (216) | (17) | 53 |
Inventories | 40 | 3 | (81) |
Other assets | (253) | (23) | (33) |
Accounts payable and accrued expenses | 553 | (20) | 620 |
Other liabilities | (128) | 337 | 403 |
Cash provided by operating activities | 972 | 600 | 1,269 |
Investing Activities | |||
Purchases of property, plant and equipment | (376) | (247) | (259) |
Proceeds on disposals of property, plant and equipment | 29 | 0 | 0 |
Payments for acquisitions of businesses, net of cash acquired | (408) | (1,734) | (486) |
Proceeds from business divestitures, net of costs | 0 | 0 | 12 |
Payments for investments and acquisitions of certain technologies | (132) | (266) | (26) |
Proceeds from investments and collections of notes receivable | 0 | 61 | 14 |
Cash used for investing activities | (887) | (2,186) | (745) |
Financing Activities | |||
Payments of contingent consideration amounts previously established in purchase accounting | (65) | (156) | (34) |
Proceeds from long-term borrowings, net of debt issuance costs | 0 | 2,580 | 0 |
Payments on long-term borrowings | (250) | (1,150) | 0 |
Proceeds from borrowings on credit facilities | 630 | 565 | 810 |
Payments on borrowings from credit facilities | (570) | (565) | (810) |
Payments for acquisitions of treasury stock | 0 | 0 | (125) |
Payment to net share settle employee equity awards | (62) | (66) | (51) |
Proceeds from issuances of shares of common stock | 111 | 114 | 60 |
Cash provided by (used for) financing activities | (206) | 1,322 | (150) |
Effect of foreign exchange rates on cash | (2) | (4) | (4) |
Net increase (decrease) in cash and cash equivalents | (123) | (268) | 370 |
Cash and cash equivalents at beginning of period | 319 | 587 | 217 |
Cash and cash equivalents at beginning of period | 196 | 319 | 587 |
Supplemental Information | |||
Cash paid for income taxes, net | 94 | 80 | 74 |
Cash paid for interest | 233 | 283 | 221 |
Fair value of contingent consideration recorded in purchase accounting | $ 50 | $ 63 | $ 3 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | les of Consolidation Our consolidated financial statements include the accounts of Boston Scientific Corporation and our wholly-owned subsidiaries, after the elimination of intercompany transactions. We assess the terms of our investment interests to determine if any of our investees meet the definition of a variable interest entity (VIE) . For any VIEs, we perform an analysis to determine whether our variable interests give us a controlling financial interest in a VIE. The analysis identifies the primary beneficiary of a VIE as the enterprise that has both 1) the power to direct activities of a VIE that most significantly impact the entity’s economic performance and 2) the obligation to absorb losses of the entity or the right to receive benefits from the entity. Based on our assessments under the applicable guidance, we did not have controlling financial or operating interests in any VIEs and therefore did not consolidate any VIEs for 2016 , 2015 , and 2014 . On January 3, 2011, we closed the sale of our Neurovascular business to Stryker Corporation (Stryker). Due to our continuing involvement in the operations of the Neurovascular business following the divestiture, the divestiture did not meet the criteria for presentation as a discontinued operation and, therefore, the results of the Neurovascular business were included in our results of operations for 2014. Refer to Note C – Divestitures for a description of this business divestiture. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and with the instructions to Form 10-K and Regulation S-X. Additionally, certain prior year balances related to debt issuance costs have been restated to reflect our adoption of Accounting Standards Codification Update No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . Amounts reclassified from other long-term assets to long-term debt were not material. Refer to Note Q - New Accounting Pronouncements for additional information on our adoption of the accounting pronouncement. Subsequent Events We evaluate events occurring after the date of our accompanying consolidated balance sheets for potential recognition or disclosure in our financial statements. We did not identify any material subsequent events requiring adjustment to our accompanying consolidated financial statements (recognized subsequent events). Those items requiring disclosure (unrecognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note F – Borrowings and Credit Arrangements and Note K – Commitments and Contingencies for further details. In addition, in February 2017, we initiated a voluntary removal of all Lotus™ Valve devices, including Lotus with Depth Guard™, from global commercial and clinical sites due to reports of premature release of a pin connecting the Lotus Valve to the delivery system. Accounting Estimates To prepare our consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our financial statements and the reported amounts of our revenues and expenses during the reporting period. Our actual results may differ from these estimates. Refer to Critical Accounting Estimates included in Item 7 of this Annual Report for further discussion. Cash and Cash Equivalents We record cash and cash equivalents in our consolidated balance sheets at cost, which approximates fair value. Our policy is to invest excess cash in short-term marketable securities earning a market rate of interest without assuming undue risk to principal, and we limit our direct exposure to securities in any one industry or issuer. We consider all highly liquid investments purchased with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. We record available-for-sale investments at fair value and exclude unrealized gains and temporary losses on available-for-sale securities from earnings, reporting such gains and losses, net of tax, as a separate component of stockholders’ equity, until realized. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. Refer to Investments in Publicly Traded and Privately Held Entities below for additional details. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, derivative financial instrument contracts and accounts and notes receivable. Our investment policy limits exposure to concentrations of credit risk and changes in market conditions. Counterparties to financial instruments expose us to credit-related losses in the event of nonperformance. We transact our financial instruments with a diversified group of major financial institutions with investment grade credit ratings and actively monitor their credit ratings and our outstanding positions to limit our credit exposure. We provide credit, in the normal course of business, to hospitals, healthcare agencies, clinics, doctors' offices and other private and governmental institutions and generally do not require collateral. We record our accounts receivable in our consolidated balance sheets at net realizable value. We perform on-going credit evaluations of our customers and maintain allowances for potential credit losses, based on historical information and management's best estimates. Amounts determined to be uncollectible are written off against this reserve. We recorded write-offs of uncollectible accounts receivable of $11 million in 2016 , $16 million in 2015 , and $15 million in 2014 . We are not dependent on any single institution and no single customer accounted for more than ten percent of our net sales in 2016 , 2015 , and 2014 or accounts receivable at December 31, 2016 or 2015 ; however, large group purchasing organizations, hospital networks and other buying groups have become increasingly important to our business and represent a substantial portion of our U.S. net sales. We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers in Southern Europe, specifically Greece, Italy, Spain and Portugal are subject to an increased number of days outstanding relative to other countries prior to payment. Historically, receivable balances with certain publicly-owned hospitals in these countries accumulate over a period of time and are then subsequently settled as large lump sum payments. While we believe our allowance for doubtful accounts in these countries is adequate as of December 31, 2016 , if significant changes were to occur in the payment practices of these European governments or if government funding becomes unavailable, we may not be able to collect on receivables due to us from these customers and our write-offs of uncollectible amounts may increase. Revenue Recognition We generate revenue primarily from the sale of single-use medical devices, and present revenue net of sales taxes in our consolidated statements of operations. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors. We consider revenue to be realized or realizable and earned when all of the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectability is reasonably assured. Revenue is recognized upon passage of title and risk of loss to customers, unless we are required to provide additional services, and provided we can form an estimate for sales returns. We recognize revenue from consignment arrangements based on product usage, or implant, which indicates that the sale is complete. For revenue arrangements with multiple deliverables, where the sale of a device is combined with a future service obligation, we defer revenue on the undelivered element and recognize this revenue over the related service period. Many of our Cardiac Rhythm Management (CRM) product offerings combine the sale of a device with our LATITUDE™ Patient Management System, which represents a future service obligation. Generally, we do not have vendor specific objective evidence of selling price available related to our future service obligations; therefore, we determine our estimates of selling price using third party evidence when available; otherwise, we use our best estimate of selling price. We allocate arrangement consideration using the relative selling price method. We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit. We base our estimate for sales returns upon historical trends and record the amount as a reduction to revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. We also offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum rebate percentage offered. We have entered certain agreements with group purchasing organizations to sell our products to participating hospitals at negotiated prices. We recognize revenue from these agreements following the same revenue recognition criteria discussed above. Warranty Obligations We offer warranties on certain of our product offerings. The majority of our warranty liability relates to implantable devices offered by our CRM business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant, and a partial warranty for a period of time thereafter. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim, and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We assess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary. Changes in our product warranty accrual during 2016 , 2015 , and 2014 consisted of the following (in millions): Year Ended December 31, 2016 2015 2014 Beginning balance $ 23 $ 25 $ 28 Provision 25 15 9 Settlements/ reversals (26 ) (17 ) (12 ) Ending balance $ 22 $ 23 $ 25 Inventories We state inventories at the lower of first-in, first-out cost or market. We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in the future. Further, the industry in which we participate is characterized by rapid product development and frequent new product introductions. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to excess, expired and obsolete inventory. Approximately 40 percent of our finished goods inventory as of December 31, 2016 and December 31, 2015 was at customer locations pursuant to consignment arrangements or held by sales representatives. Property, Plant and Equipment We state property, plant, equipment, and leasehold improvements at historical cost. We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. We depreciate buildings over a 20 to 40 year life; building improvements over the remaining useful life of the building structure; equipment, furniture and fixtures over a three to ten year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease. Depreciation expense was $270 million in 2016 , $274 million in 2015 and $287 million in 2014 . Valuation of Business Combinations We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the dates of acquisition, including identifiable intangible assets and in-process research and development which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred through selling, general and administrative costs. In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory, revenue or commercialization-based milestones. Indefinite-lived Intangibles, including In-Process Research and Development Our indefinite-lived intangible assets that are not subject to amortization include acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine, and in-process research and development intangible assets acquired in a business combination. Our in-process research and development represents intangible assets acquired in a business combination that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. We classify in-process research and development acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, we will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, we would write-off the remaining carrying amount of the associated in-process research and development intangible asset. We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets; in addition, we review our indefinite-lived assets for classification and impairment more frequently if changes in circumstances or indicators exist. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with Financial Accounting Standards Board ( FASB ) Accounting Standards Codification® ( ASC ) Topic 350, Intangibles - Goodwill and Other ( Topic 350 ) . If the carrying value exceeds the fair value of the indefinite-lived intangible asset, we write the carrying value down to the fair value. We use the income approach to determine the fair values of our in-process research and development. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. We base our revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected levels of market share. In arriving at the value of the in-process projects, we consider, among other factors: the in-process projects’ stage of completion; the complexity of the work completed as of the acquisition date; the costs already incurred; the projected costs to complete; the contribution of other acquired assets; the expected regulatory path and introduction dates by region; and the estimated useful life of the technology. We apply a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition. See Note D - Goodwill and Other Intangible Assets for more information related to indefinite-lived intangibles, including in-process research and development during 2016 , 2015 , and 2014 . For asset purchases outside of business combinations, we expense any purchased research and development assets as of the acquisition date. Amortization and Impairment of Intangible Assets We record intangible assets at historical cost and amortize them over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: patents and licenses, two to 20 years; definite-lived technology-related, five to 25 years; customer relationships, five to 25 years; other intangible assets, various. We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified. We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). See Note D - Goodwill and Other Intangible Assets for more information related to impairments of intangible assets during 2016 , 2015 , and 2014 . For patents developed internally, we capitalize costs incurred to obtain patents, including attorney fees, registration fees, consulting fees, and other expenditures directly related to securing the patent. Goodwill Valuation Based on information regularly reviewed by our chief operating decision maker, we have three global reportable segments comprised of Cardiovascular, Rhythm Management, and MedSurg. We determined our global reporting units by identifying our operating segments and assessing whether any components of these segments constituted a business for which discrete financial information is available and whether segment management regularly reviews the operating results of any components. Through this process, we identified the following global reporting units: Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Pelvic Health, and Neuromodulation. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. In 2016, we identified six operating segments including Interventional Cardiology, Peripheral Interventions, Rhythm Management, Endoscopy, Urology and Pelvic Health, and Neuromodulation. For purposes of identifying our reporting units, we then assessed whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We identified Rhythm Management as having two components: Cardiac Rhythm Management and Electrophysiology. For our 2016, 2015 and 2014 annual impairment assessment we identified seven reporting units, which align to our seven core businesses: Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Pelvic Health and Neuromodulation. As noted above, for our 2016 annual impairment assessment we aggregated the Cardiac Rhythm Management and Electrophysiology reporting units, components of the Rhythm Management operating segment, based on the criteria prescribed in FASB ASC Topic 350 . These reporting units were aggregated due to a reorganization that commenced in 2015 that resulted in integrated leadership, shared resources and consolidation of certain sites in 2016. In performing the goodwill impairment assessment for 2016, we utilized both the optional qualitative assessment and the two-step approach prescribed under FASB ASC Topic 350 . Beginning in 2016, the qualitative assessment was used for testing certain reporting units where fair value has historically exceeded carrying value by greater than 100%. All other reporting units were tested using the two-step approach. The qualitative assessment requires an evaluation of whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount based on an assessment of relevant events including macroeconomic factors, industry and market conditions, cost factors, overall financial performance and other entity-specific factors. After assessing the totality of events, if it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying value, the first and second steps of the goodwill impairment test are unnecessary. If it is determined that impairment is more likely than not, then we perform the first step of the two-step impairment test. In 2016, for all reporting units tested using the optional qualitative assessment, we concluded that it was not necessary to perform the first step of the two-step goodwill impairment test. The first step requires a comparison of the carrying value of the reporting units to the fair value of these units. When allocating goodwill from business combinations to our reporting units, we assign goodwill to the reporting units that we expect to benefit from the respective business combination at the time of acquisition. In addition, for purposes of performing our goodwill impairment tests, assets and liabilities, including corporate assets, which relate to a reporting unit’s operations, and would be considered in determining its fair value, are allocated to the individual reporting units. We allocate assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit. For our 2016 , 2015 , and 2014 annual impairment assessments, for those reporting units for which a quantitative test was performed, we used only the income approach, specifically the Discounted Cash Flow (DCF) method, to derive the fair value of each of our reporting units. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwill assessments because we believe the income approach most appropriately measures our income producing assets. We have considered using the market approach and cost approach but concluded they are not appropriate in valuing our reporting units given the lack of relevant market comparisons available for application of the market approach and the inability to replicate the value of the specific technology-based assets within our reporting units for application of the cost approach. Therefore, we believe that the income approach represents the most appropriate valuation technique for which sufficient data are available to determine the fair value of our reporting units. In applying the income approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within our DCF analysis is based on our most recent operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period in our DCF analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates of market-participant risk-adjusted weighted average cost of capital (WACC) as a basis for determining the discount rates to apply to our reporting units’ future expected cash flows. If the carrying value of a reporting unit exceeds its fair value, we then perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. If the carrying value of a reporting unit is zero or negative, we evaluate whether it is more likely than not that a goodwill impairment exists. If we determine adverse qualitative factors exist that would indicate it is more likely than not an impairment exists, we then perform the second step of the goodwill test. The second step of the goodwill impairment test compares the estimated fair value of a reporting unit’s goodwill to its carrying value. If we were unable to complete the second step of the test prior to the issuance of our financial statements and an impairment loss was probable and could be reasonably estimated, we would recognize our best estimate of the loss in our current period financial statements and disclose that the amount is an estimate. We would then recognize any adjustment to that estimate in subsequent reporting periods, once we have finalized the second step of the impairment test. Refer to Note D - Goodwill and Other Intangible Assets to our consolidated financial statements for additional details related to our annual goodwill impairment test. Investments in Publicly Traded and Privately Held Entities We account for our publicly traded investments as available-for-sale securities based on the quoted market price at the end of the reporting period. Unrealized holding gains or losses during the period, net of tax, are recorded to accumulated other comprehensive income/loss. We compute realized gains and losses on sales of available-for-sale securities at fair value based on the average cost method, adjusted for any other-than-temporary declines in fair value. As of December 31, 2016, we held $20 million of available-for-sale securities. We held no available-for-sale securities during 2015 and 2014 . We account for investments in entities over which we have the ability to exercise significant influence under the equity method if we hold 50 percent or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary in accordance with FASB ASC Topic 323, Investments - Equity Method and Joint Ventures (Topic 323) . We record these investments initially at cost, and adjust the carrying amount to reflect our share of the earnings or losses of the investee, including all adjustments similar to those made in preparing consolidated financial statements. We account for investments in entities in which we have less than a 20 percent ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee in accordance with FASB ASC Topic 325 , Investments - Other . In addition, we have notes receivable from certain companies that we account for in accordance with FASB ASC Topic 320 , Investments - Debt and Equity Securities (Topic 320) . Refer to Note B – Acquisitions and Strategic Investments for additional details on the balances of our equity and cost method investments. Each reporting period, we evaluate our investments to determine if there are any events or circumstances that are likely to have a significant adverse effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a significant deterioration in earnings performance; recent financing rounds at reduced valuations; a significant adverse change in the regulatory, economic or technological environment of an investee; or a significant doubt about an investee’s ability to continue as a going concern. If we identify an impairment indicator, we will estimate the fair value of the investment and compare it to its carrying value. Our estimation of fair value considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and we make a determination as to whether the impairment is other-than-temporary. We deem an impairment to be other-than-temporary unless we have the ability and intent to hold an investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. Impairment losses on our investments are included in other, net in our consolidated statements of operations. Income Taxes We utilize the asset and liability method of accounting for income taxes. Under thi |
Acquisitions and Strategic Inve
Acquisitions and Strategic Investments | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | Our consolidated financial statements include the operating results for each acquired entity from its respective date of acquisition. We do not present pro forma financial information for these acquisitions given their results are not material to our consolidated financial statements. Transaction costs associated with these acquisitions were expensed as incurred and are not material for the years ended December 31, 2016 , 2015 , and 2014 . 2016 Acquisitions Neovasc, Inc.'s Advanced Biological Tissue Business On December 12, 2016, we completed the acquisition of certain manufacturing assets and capabilities of the Neovasc, Inc. (Neovasc) advanced biological tissue business for a total upfront cash payment of $68 million . With this acquisition, we will integrate certain manufacturing assets and biologic tissue capabilities into our structural heart business for use in the manufacturing of the Lotus™ Valve System and future heart valve technologies within our Interventional Cardiology business. We began the process of integrating Neovasc into our Interventional Cardiology business in the fourth quarter of 2016 and expect to be substantially complete by the end of 2018. EndoChoice Holdings, Inc. On November 22, 2016, we completed our acquisition of EndoChoice Holdings, Inc. (EndoChoice) for $8.00 per share or approximately $214 million . In addition, total consideration for the acquisition also included repayment of Endochoice's existing senior term loan facility totaling $43 million , and related acquisition fees and expenses. EndoChoice is an Alpharetta, Georgia based company focused on the development and commercialization of infection control products, pathology services and single-use devices for specialists treating a wide range of gastrointestinal (GI) conditions. We began the process of integrating EndoChoice into our Endoscopy business in the fourth quarter of 2016 and expect to be substantially complete by the end of 2017. Distal Access, LLC's Gynecology and Urology Portfolio On November 15, 2016, we completed the acquisition of the gynecology and urology portfolio of Distal Access, LLC (Distal), a Salt Lake City based company that designs minimally invasive medical devices for an upfront cash payment of $20 million plus a potential $35 million in future consideration based on future sales through 2020 in addition to regulatory and product launch milestones. The portfolio includes the Resectr™ Tissue Resection Device, a single-use solution designed to remove uterine polyps. We began the process of integrating the Resectr device into our Urology and Pelvic Health business during the fourth quarter of 2016 and expect to be substantially complete by the end of 2017. LumenR™ Tissue Retractor System On November 1, 2016, we acquired the LumenR™ Tissue Retractor System from LumenR LLC (LumenR), a privately held Newark, California based company for an upfront cash payment of $30 million plus a potential $70 million in future consideration based on future sales through the third quarter of 2026 in addition to development and technology transfer milestones. The LumenR™ Tissue Retractor System is currently in development for use during endoscopic resection of lesions in the colon, esophagus or stomach. Cosman Medical, Inc. On July 27, 2016, we acquired Cosman Medical, Inc. (Cosman), a privately held manufacturer of radiofrequency ablation systems, expanding our Neuromodulation portfolio and offering physicians treating patients with chronic pain a wider choice of non-opioid therapeutic options. Total consideration was comprised of $71 million in up-front cash plus related fees and expenses, and a potential additional $20 million in consideration based on future sales through June 30, 2019. We are in the process of integrating Cosman into our Neuromodulation business, and expect the integration to be substantially complete by the end of 2017. Purchase Price Allocation We accounted for these acquisitions as a business combination and, in accordance with FASB ASC Topic 805 , Business Combinations (Topic 850) , we recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The components of the aggregate preliminary purchase price are as follows (in millions): Cash, net of cash acquired $ 366 Fair value of contingent consideration 50 Fair value of debt repaid 43 $ 459 The following summarizes the preliminary purchase price allocation for our 2016 acquisitions as of December 31, 2016 , (in millions): Goodwill $ 208 Amortizable intangible assets 228 Inventory 11 Property, plant and equipment 6 Other net liabilities (2 ) Deferred income taxes 8 $ 459 We allocated a portion of the preliminary purchase price to specific intangible asset categories as follows: Amount (in millions) Weighted (in years) Range of Risk- Amortizable intangible assets: Technology-related $ 176 9-13 11% - 20% Customer relationships 51 9-13 11% - 12% Other intangible assets 1 4 11% $ 228 2015 Acquisitions Interventional Radiology Business of CeloNova Biosciences On December 31, 2015, we completed the acquisition of the interventional radiology business of CeloNova Biosciences (CeloNova) , for an upfront payment of $70 million and additional payments contingent on regulatory and sales milestones. The acquisition includes drug-eluting microspheres designed to be loaded with chemotherapy drugs for delivery to cancerous tumors, and spherical embolic products used to treat uterine fibroids and other conditions. We are in the process of integrating CeloNova into our Peripheral Interventions business and expect to be substantially complete by the second half of 2017. AMS Portfolio Acquisition On August 3, 2015, we completed the acquisition of the American Medical Systems male urology portfolio (AMS Portfolio Acquisition), which includes the men's health and prostate health businesses, from Endo International plc. Total consideration was comprised of $1.616 billion in up-front cash plus related fees and expenses, and a potential additional $50 million in consideration based on 2016 sales. The AMS male urology portfolio was integrated with our formerly named Urology and Women's Health business, and the joint businesses became Urology and Pelvic Health. The integration was substantially complete by the end of 2016. In addition, as part of the acquisition agreement, we made a $60 million Series B non-voting preferred stock investment in the women's health business of Endo Health Solutions, a wholly owned subsidiary of Endo International, plc., representing the remaining Women's Health business of the American Medical Systems' Portfolio. This investment was subsequently repaid in the fourth quarter of 2015. Xlumena, Inc. On April 2, 2015, we acquired Xlumena, Inc. (Xlumena), a medical device company that developed minimally invasive devices for Endoscopic Ultrasound (EUS) guided transluminal drainage of targeted areas within the gastrointestinal tract. The purchase agreement called for an upfront payment of $63 million , an additional payment of $13 million upon FDA clearance of the HOT AXIOS™ Product, and further sales-based milestones based on sales achieved through 2018. In 2016, we completed the integration of Xlumena into our Endoscopy business. In addition, we completed other acquisitions during 2015 for total consideration of $6 million in cash at closing plus contingent consideration of up to $1 million . Purchase Price Allocation We accounted for these acquisitions as business combinations and, in accordance with FASB ASC Topic 850 , we have recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition dates. The components of the aggregate purchase prices are as follows (in millions): Cash, net of cash acquired $ 1,735 Fair value of contingent consideration 63 $ 1,798 The following summarizes the aggregate purchase price allocation for the 2015 acquisitions as of December 31, 2015 (in millions): Goodwill $ 573 Amortizable intangible assets 1,074 Indefinite-lived intangible assets 6 Inventory 103 Property, plant and equipment 43 Other net assets 42 Deferred income taxes (43 ) $ 1,798 We allocated a portion of the purchase price to specific intangible asset categories as follows: Amount (in millions) Weighted (in years) Range of Risk- Amortizable intangible assets: Technology-related $ 431 11-13 14% - 23% Customer relationships 625 12-13 14% - 15% Other intangible assets 18 13 14% Indefinite-lived intangible assets: In-process research & development $ 6 N/A 17% $ 1,080 2014 Acquisitions Interventional Business of Bayer AG On August 29, 2014, we completed the acquisition of the Interventional Division of Bayer AG (Bayer), for a total cash consideration of $414 million . We believe that this acquisition enhances our ability to offer physicians and healthcare systems a more complete portfolio of solutions to treat challenging vascular conditions. The transaction includes the AngioJet™ Thrombectomy System and the Fetch® 2 Aspiration Catheter, which are used in endovascular procedures to remove blood clots from blocked arteries and veins, and the JetStream™ Atherectomy System, used to remove plaque and thrombi from diseased arteries. In 2016, we completed the integration of Bayer into our Peripheral Interventions and Interventional Cardiology businesses. IoGyn, Inc. On May 7, 2014, we completed the acquisition of the remaining fully diluted equity of IoGyn, Inc. (IoGyn). Prior to the acquisition, we held a 28 percent minority interest in IoGyn in addition to notes receivable of approximately $8 million . Total consideration was comprised of a net cash payment of $65 million at closing to acquire the remaining 72 percent of IoGyn equity and repay outstanding debt. IoGyn has developed the Symphion™ System, a next generation system for hysteroscopic intrauterine tissue removal including fibroids (myomas) and polyps. In March 2014, IoGyn received U.S. Food & Drug Administration (FDA) approval for the system and in October 2014, we began a limited market release of the system in the United States. We integrated the operations of the IoGyn business into our Urology and Pelvic Health business. In addition, we completed other acquisitions during 2014 for total consideration of $7 million cash at closing plus contingent consideration of up to $4 million . Purchase Price Allocation We accounted for these acquisitions as business combinations and, in accordance with FASB ASC Topic 850 , we have recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The components of the aggregate purchase price for our 2014 acquisitions are as follows (in millions): Cash, net of cash acquired $ 479 Fair value of prior interests 31 $ 510 In addition, prior to the acquisition of IoGyn, we had an equity interest in IoGyn and held $8 million of notes receivables. We re-measured our previously-held investments to their estimated acquisition-date fair value of $31 million and recorded a gain of $19 million in other, net, in the accompanying consolidated statements of operations during the second quarter of 2014. We measured the fair values of the previously-held investments based on the liquidation preferences and priority of the equity interest and debt, including accrued interest. The following summarizes the aggregate purchase price allocation for our 2014 acquisitions as of December 31, 2014: Goodwill $ 210 Amortizable intangible assets 263 Inventory 23 Property, plant and equipment 17 Prepaid Transaction Service Agreement 5 Other net assets (1 ) Deferred income taxes (7 ) $ 510 We allocated a portion of the purchase price to specific intangible asset categories as follows: Amount (in millions) Weighted (in years) Range of Risk- Amortizable intangible assets: Technology-related $ 233 10 - 14 14 - 18 % Customer relationships 29 10 18% Other intangible assets 1 2 14% $ 263 For our 2016, 2015 and 2014 acquisitions, our technology-related intangible assets consist of technical processes, intellectual property, and institutional understanding with respect to products and processes that we will leverage in future products or processes and will carry forward from one product generation to the next. We used the income approach and relief from royalty approach to derive the fair value of the technology-related intangible assets, and are amortizing them on a straight-line basis over their assigned estimated useful lives. In-process research and development represents the estimated fair value of acquired in-process research and development projects that have not yet reached technological feasibility. These indefinite-lived intangible assets are tested for impairment on an annual basis, or more frequently if impairment indicators are present, in accordance with U.S. GAAP and our accounting policies. Upon completion of the associated research and development efforts, we will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products. Customer relationships represent the estimated fair value of non-contractual customer, payor and distributor relationships. Customer relationships are direct relationships with physicians and hospitals performing procedures with the acquired products, payor relationships are contracts and relationships with healthcare payors relating to reimbursement of services and distributor relationships are relationships with third parties used to sell the acquired products, all as of the acquisition date. These relationships were valued separately from goodwill because there is a history and pattern of conducting business with customers and distributors. We used the income approach or the replacement cost and lost profits methodology to derive the fair value of the customer relationships. The customer relationships intangible assets are amortized on a straight-line basis over their assigned estimated useful lives. Other intangible assets primarily include acquired tradenames. These tradenames include brand names that we expect to continue using in our product portfolio and related marketing materials. The tradenames are valued using a relief from royalty methodology and are amortized on a straight-line basis over their assigned estimated useful lives. We believe that the estimated intangible asset values represent the fair value at the date of acquisition and do not exceed the amount a third party would pay for the assets. These fair value measurements are based on significant unobservable inputs, including management estimates and assumptions and, accordingly, are classified as Level 3 within the fair value hierarchy prescribed by FASB ASC Topic 820, Fair Value Measurements and Disclosures . We recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable assets acquired as goodwill. Goodwill was established due primarily to synergies expected to be gained from leveraging our existing operations as well as revenue and cash flow projections associated with future technologies, and has been allocated to our reportable segments based on the relative expected benefit. Of the goodwill recorded, approximately $116 million , based on preliminary estimates, related to our 2016 acquisitions is deductible for tax purposes. Of the goodwill recorded related to our 2015 acquisitions $449 million is deductible for tax purposes and $160 million of the recorded goodwill related to our 2014 acquisitions is deductible for tax purposes. Refer to Note D - Goodwill and Other Intangible Assets for more information related to goodwill allocated to our reportable segments. Contingent Consideration Certain of our acquisitions involve contingent consideration arrangements. Payment of additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified revenue levels, achieving product development targets and/or obtaining regulatory approvals. In accordance with U.S. GAAP, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations. We recorded a net expense related to the changes in fair value of our contingent consideration liabilities of $29 million during 2016 , net expense related to the changes in fair value of our contingent consideration liabilities of $123 million during 2015 , and a net benefit related to the change in fair value of our contingent consideration liabilities of $85 million during 2014 . We made contingent consideration payments of $122 million in 2016 , $213 million in 2015 and $137 million in 2014 . Changes in the fair value of our contingent consideration liabilities were as follows (in millions): Balance as of December 31, 2014 $ 274 Amounts recorded related to new acquisitions 63 Other amounts recorded related to prior acquisitions (1 ) Fair value adjustment 123 Contingent payments related to prior period acquisition (213 ) Balance as of December 31, 2015 $ 246 Amounts recorded related to new acquisitions 50 Other amounts recorded related to prior acquisitions 1 Fair value adjustment 29 Contingent payments related to prior period acquisition (122 ) Balance as of December 31, 2016 $ 204 As of December 31, 2016 , the maximum amount of future contingent consideration (undiscounted) that we could be required to pay was approximately $1.308 billion . Contingent consideration liabilities are remeasured to fair value each reporting period using projected revenues, discount rates, probabilities of payment and projected payment dates. The recurring Level 3 fair value measurements of our contingent consideration liabilities include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of December 31, 2016 Valuation Technique Unobservable Input Range R&D and Commercialization-based Milestone $46 million Discounted Cash Flow Discount Rate 2% - 3% Projected Year of Payment 2017 - 2021 Revenue-based Payments $60 million Discounted Cash Flow Discount Rate 11% - 15% Projected Year of Payment 2017 - 2026 $98 million Monte Carlo Revenue Volatility 25% Risk Free Rate LIBOR Term and Cost of Debt Structure Projected Year of Payment 2017 - 2022 Increases or decreases in the fair value of our contingent consideration can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving R&D, regulatory and commercialization-based, and revenue-based milestones. Projected contingent payment amounts related to some of our R&D, regulatory and commercialization-based and revenue-based milestones are discounted back to the current period using a discounted cash flow (DCF) model. Other revenue-based payments are valued using a Monte Carlo valuation model, which simulates future revenues during the earn out-period using management's best estimates. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans. Increases in projected revenues and probabilities of payment may result in higher fair value measurements. Increases in discount rates and the time to payment may result in lower fair value measurements. Increases or decreases in any of those inputs together, or in isolation, may result in a significantly lower or higher fair value measurement. Strategic Investments On April 30, 2015, we acquired a 27 percent ownership interest in Preventice Solutions, Inc. (Preventice), which includes 18.5 percent of Preventice's common stock. Preventice is a privately-held company headquartered in Minneapolis, MN, and a leading developer of mobile health solutions and services. In addition to the equity agreement, we entered into a commercial agreement with Preventice, under which we have become Preventice’s exclusive, worldwide sales and marketing representative. In October 2016, we notified Preventice of our intent to terminate the commercial agreement and will transition the sales force back to Preventice in 2017 under the terms of the agreement. On April 13, 2015, we acquired 25 percent of the common stock of Frankenman Medical Equipment Company (Frankenman). Frankenman is a privately-held company headquartered in Suzhou, China, and is a local market leader in surgical staplers. Additionally, we entered into co-promotional and co-selling agreements with Frankenman to commercialize selected products jointly in China. We believe this alliance will enable us to reach more clinicians and treat more patients in China by providing access to training on less invasive endoscopic technologies with clinical and economic benefits. We are accounting for our investments in Preventice and Frankenman, as well as certain of our other strategic investments, as equity method investments, in accordance with FASB ASC Topic 323 . The aggregate carrying amount of our strategic investments as of December 31, 2016 and December 31, 2015 , were comprised of the following categories: As of December 31, 2016 December 31, 2015 Equity method investments $ 265 $ 173 Cost method investments 20 45 Available-for-sale securities 20 — Notes receivable 42 30 $ 347 $ 248 As of December 31, 2016 , the book value of our equity method investments exceeded our share of the book value of the investees’ underlying net assets by approximately $200 million , which represents amortizable intangible assets and in-process research and development, corresponding deferred tax liabilities, and goodwill. The net losses from our equity method adjustments, presented within the Other, net caption of our consolidated statement of operations were $17 million in 2016 and were immaterial in 2015 and 2014. |
Divestitures
Divestitures | 12 Months Ended |
Dec. 31, 2016 | |
Divestitures [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | In January 2011, we closed the sale of our Neurovascular business to Stryker Corporation for a purchase price of $1.500 billion in cash. At the time of divestiture, due to our continuing involvement in the operations of the Neurovascular business following the transaction, the divestiture did not meet the criteria for presentation as a discontinued operation. Our sales related to our divested Neurovascular business have declined as the various transition services and supply agreements have terminated. We recorded a gain of $12 million during 2014 associated with the transaction and we recorded revenue related to the Neurovascular business following its divestiture of $4 million in 2014 . |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization and accumulated write-offs of goodwill as of December 31, 2016 and 2015 are as follows: As of December 31, 2016 As of December 31, 2015 Gross Carrying Accumulated Amortization/ Gross Carrying Accumulated Amortization/ (in millions) Amount Write-offs Amount Write-offs Amortizable intangible assets Technology-related $ 9,123 $ (4,468 ) $ 8,948 $ (4,054 ) Patents 529 (374 ) 520 (358 ) Other intangible assets 1,583 (722 ) 1,529 (610 ) $ 11,235 $ (5,564 ) $ 10,997 $ (5,022 ) Unamortizable intangible assets Goodwill $ 16,578 $ (9,900 ) $ 16,373 $ (9,900 ) In-process research and development (IPR&D) 92 — 99 — Technology-related 120 — 120 — $ 16,790 $ (9,900 ) $ 16,592 $ (9,900 ) Our technology-related intangible assets that are not subject to amortization represent technical processes, intellectual property and/or institutional understanding acquired through business combinations that are fundamental to the on-going operations of our business and have no limit to their useful life. Our technology-related intangible assets that are not subject to amortization are comprised primarily of certain acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine. We assess our indefinite-lived intangible assets at least annually for impairment and reassess their classification as indefinite-lived assets. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with FASB ASC Topic 350 . The following represents our goodwill balance by global reportable segment: (in millions) Cardiovascular Rhythm Management MedSurg Total Balance as of December 31, 2014 $ 3,426 $ 290 $ 2,182 $ 5,898 Purchase price adjustments 2 2 (2 ) 2 Goodwill acquired 23 — 550 573 Balance as of December 31, 2015 $ 3,451 $ 292 $ 2,730 $ 6,473 Purchase price adjustments — (2 ) (1 ) (3 ) Goodwill acquired 62 — 146 208 Balance as of December 31, 2016 $ 3,513 $ 290 $ 2,875 $ 6,678 The 2016 and 2015 purchase price adjustments relate primarily to adjustments in taxes payable and deferred income taxes, including changes in the liability for unrecognized tax benefits. Goodwill Impairment Testing We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. In performing the goodwill impairment assessment, we utilize both the optional qualitative assessment and the two-step approach prescribed under FASB ASC Topic 350 . Beginning in 2016, the qualitative assessment was used for testing certain reporting units where fair value has historically exceeded the carrying value by greater than 100%. All other reporting units were tested using the two-step approach. In 2016, for all reporting units tested using the optional qualitative assessment, we concluded that it was not necessary to perform the first step of the two-step goodwill test. For all reporting units tested under the two step approach, we concluded that the fair value of each reporting unit exceeded its carrying value. Because our global Electrophysiology reporting unit was identified as being at higher risk of potential goodwill impairment during our 2015 annual test, it was tested for impairment on a stand-alone basis in the second quarter of 2016, immediately prior to aggregating it with our global Cardiac Rhythm Management reporting unit. The fair value of the stand-alone global Electrophysiology reporting unit exceeded the carrying value by approximately 36 percent . In comparison, the global Electrophysiology reporting unit had excess fair value of approximately 28 percent as of our 2015 annual test. As of the date of our 2016 annual goodwill impairment test, the aggregated global Electrophysiology and Cardiac Rhythm Management operating segment (Rhythm Management) had excess fair value over carrying value of approximately 70 percent and held $292 million of allocated goodwill. As such, it was not deemed at higher risk of future impairment. Changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses could result in future impairments of goodwill within our reporting units . Refer to Note A - Significant Accounting Policies and Critical Accounting Policies and Estimates within Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Item 7 of this Annual Report on Form 10-K for a discussion of key assumptions used in our testing. On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill. The key variables that drive the cash flows of our reporting units and amortizable intangibles are estimated revenue growth rates and levels of profitability. Terminal value growth rate assumptions, as well as the weighted average cost of capital (WACC) rate applied, are additional key variables for reporting unit cash flows. These assumptions are subject to uncertainty, including our ability to grow revenue and improve profitability levels. Relatively small declines in the future performance and cash flows of a reporting unit or asset group or small changes in other key assumptions may result in the recognition of significant goodwill impairment charges. For example, as of the date of our annual goodwill impairment test, keeping all other variables constant, a combined increase of 50 basis points in the WACC along with a simultaneous decrease of 150 basis points in the long term growth rate applied would require that we perform the second step of the goodwill impairment test for our global Electrophysiology reporting unit. The estimates used for our future cash flows and discount rates represent management's best estimates, which we believe to be reasonable, but future declines in business performance may result in impairment of our goodwill. Future events or factors could have a negative impact on the levels of excess fair value over carrying value of our reporting units and negative changes in one or more of these events or factors could result in impairment charges. The following is a rollforward of accumulated goodwill write-offs by global reportable segment: (in millions) Cardiovascular Rhythm Management MedSurg Total Accumulated write-offs as of December 31, 2014 $ (1,479 ) $ (6,960 ) $ (1,461 ) $ (9,900 ) Goodwill written off — — — — Accumulated write-offs as of December 31, 2015 $ (1,479 ) $ (6,960 ) (1,461 ) $ (9,900 ) Goodwill written off — — — — Accumulated write-offs as of December 31, 2016 $ (1,479 ) $ (6,960 ) $ (1,461 ) $ (9,900 ) Intangible Asset Impairment Charges Unamortizable intangible assets are tested for impairment on an annual basis during the third quarter of each year, or more frequently if impairment indicators are present, in accordance with U.S. GAAP and our accounting policies described in Note A – Significant Accounting Policies of this Annual Report on Form 10-K. In addition, on a quarterly basis, we monitor all intangible assets for events or other potential indicators of impairment that would warrant an interim impairment test. The intangible asset category and associated write downs recorded in 2016, 2015 and 2014 were as follows: Year Ended December 31, (in millions) 2016 2015 2014 Amortizable intangible assets $ 4 $ 9 $ 107 In-process research and development 7 10 88 $ 11 19 $ 195 2014 Charges During the fourth quarter of 2014, as a result of revised estimates in conjunction with our annual operating plan, we performed an interim impairment test of in-process research and development projects associated with certain of our acquisitions. Based on our impairment assessment, and lower expected future cash flows associated with our intangible assets, we recorded an impairment charge of $18 million to write-down the balances of these in-process projects to their fair value, which was determined to be zero . During the third quarter of 2014, we performed our annual impairment test of all in-process research and development projects, and our indefinite lived core technology assets. Based on the results of our annual test, we recorded total impairment charges of $4 million to write-down the balances of certain in-process projects to their fair value. In addition, as a result of revised estimates in conjunction with our annual operating plan, we performed an interim impairment test of core technology associated with certain of our acquisitions, and recorded an impairment charge of $8 million , for a total of $12 million of impairment charges in the third quarter of 2014. During the second quarter of 2014, as a result of revised estimates developed in conjunction with our annual strategic planning process and annual goodwill impairment test, we performed an interim impairment test of our in-process research and development projects and core technology assets associated with certain of our acquisitions. Based on our impairment assessment, and lower expected future cash flows associated with our intangible assets, we recorded impairment charges of $110 million . The impairment charges were due to changes in our clinical strategy and lower estimates of the European and global hypertension markets, and the resulting amount of future revenue and cash flows associated with our hypertension technology; as a result, we recorded impairment charges of $67 million related to these technology intangible assets. In addition, in the second quarter of 2014, due to revised expectations and timing as a result of the announcement of a third FDA Circulatory System Devices Panel, we recorded impairment charges of $35 million related to the in-process research and development intangible assets acquired from Atritech, Inc. (Atritech). We also recorded an $8 million intangible asset impairment charge associated with changes in the amount of the expected cash flows related to certain other acquired in-process research and development projects. During the first quarter of 2014, as a result of lower estimates of the resistant hypertension market following the announcement of data from a competitor's clinical trial, we performed an interim impairment test of our hypertension-related in-process research and development projects and core technology assets. The impairment assessments were based upon probability-weighted cash flows of potential future scenarios. Based on our impairment assessment, and lower expected future cash flows associated with our hypertension-related intangible assets, we recorded impairment charges of $55 million in the first quarter of 2014 to write-down the balance of these intangible assets to their fair value. The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs: Intangible Asset Valuation Date Fair Value Valuation Technique Unobservable Input Rate Technology-related (amortizable) September 30, 2015 $8 million Income Approach -Excess Earnings Method Discount Rate 10% In-Process R&D June 30, 2015 $6 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% In-Process R&D September 30, 2014 $16 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% In-Process R&D June 30, 2014 $83 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% Technology-related (amortizable) June 30, 2014 $8 million Income Approach - Excess Earnings Method Discount Rate 15% In-Process R&D March 31, 2014 $6 million Income Approach - Excess Earnings Method Discount Rate 20% Technology-related (amortizable) March 31, 2014 $64 million Income Approach - Excess Earnings Method Discount Rate 15% Estimated amortization expense for each of the five succeeding fiscal years based upon our intangible asset portfolio as of December 31, 2016 is as follows: Estimated Amortization Expense Fiscal Year (in millions) 2017 $ 535 2018 525 2019 523 2020 519 2021 481 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Derivative Instruments and Hedging Activities We address market risk from changes in foreign currency exchange rates and interest rates through a risk management program that includes the use of derivative financial instruments, and we operate the program pursuant to documented corporate risk management policies. Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives generally offset losses and gains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments that are designated as hedging instruments pursuant to FASB ASC Topic 815 . Currency Hedging We are exposed to currency risk consisting primarily of foreign currency denominated monetary assets and liabilities, forecasted foreign currency denominated intercompany transactions and third-party transactions and net investments in certain subsidiaries. We manage our exposure to changes in foreign currency exchange rates on a consolidated basis to take advantage of offsetting transactions. We use derivative instruments, and non-derivative transactions to reduce the risk that our earnings and cash flows associated with these foreign currency denominated balances and transactions will be adversely affected by foreign currency exchange rate changes. Currently or Previously Designated Foreign Currency Hedges All of our designated currency hedge contracts outstanding as of December 31, 2016 and December 31, 2015 were cash flow hedges under Topic 815 intended to protect the U.S. dollar value of our forecasted foreign currency denominated transactions. We record the effective portion of any change in the fair value of foreign currency cash flow hedges in other comprehensive income (OCI) until the related third-party transaction occurs. Once the related third-party transaction occurs, we reclassify the effective portion of any related gain or loss on the foreign currency cash flow hedge to earnings. In the event the hedged forecasted transaction does not occur, or it becomes no longer probable that it will occur, we reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. We had currency derivative instruments designated as cash flow hedges outstanding in the contract amount of $2.271 billion as of December 31, 2016 and $1.458 billion as of December 31, 2015 . We recognized net gains of $133 million during 2016 on our cash flow hedges, as compared to $213 million of net gains during 2015 , and $105 million of net gains during 2014 . All currency cash flow hedges outstanding as of December 31, 2016 mature within 60 months. As of December 31, 2016 , $102 million of net gains, net of tax, were recorded in accumulated other comprehensive income (AOCI) to recognize the effective portion of the fair value of any currency derivative instruments that are, or previously were, designated as foreign currency cash flow hedges, as compared to net gains of $145 million as of December 31, 2015 . As of December 31, 2016 , $63 million of net gains, net of tax, may be reclassified to earnings within the next twelve months. The success of our hedging program depends, in part, on forecasts of transaction activity in various currencies (primarily British pound sterling, Euro and Japanese yen). We may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activity during periods of currency volatility. In addition, changes in foreign currency exchange rates related to any unhedged transactions may impact our earnings and cash flows. Non-designated Foreign Currency Contracts We use currency forward contracts as a part of our strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These currency forward contracts are not designated as cash flow, fair value or net investment hedges under FASB ASC Topic 815 ; are marked-to-market with changes in fair value recorded to earnings; and are entered into for periods consistent with currency transaction exposures, generally less than one year. We had currency derivative instruments not designated as hedges under FASB ASC Topic 815 outstanding in the contract amount of $1.830 billion as of December 31, 2016 and $2.090 billion as of December 31, 2015 . Interest Rate Hedging Our interest rate risk relates primarily to U.S. dollar borrowings, partially offset by U.S. dollar cash investments. We have historically used interest rate derivative instruments to manage our earnings and cash flow exposure to changes in interest rates by converting fixed-rate debt into floating-rate debt or floating-rate debt into fixed-rate debt. We had no interest rate derivative instruments outstanding as of December 31, 2016 and December 31, 2015 . We designate these derivative instruments either as fair value or cash flow hedges under FASB ASC Topic 815 . We record changes in the value of fair value hedges in interest expense, which is generally offset by changes in the fair value of the hedged debt obligation. Interest payments made or received related to our interest rate derivative instruments are included in interest expense. We record the effective portion of any change in the fair value of derivative instruments designated as cash flow hedges as unrealized gains or losses in OCI, net of tax, until the hedged cash flow occurs, at which point the effective portion of any gain or loss is reclassified to earnings. We record the ineffective portion of our cash flow hedges in interest expense. In the event the hedged cash flow does not occur, or it becomes no longer probable that it will occur, we reclassify the amount of any gain or loss on the related cash flow hedge to interest expense at that time. During the first quarter of 2015 , we terminated interest rate derivative contracts designated as fair value hedges having a notional amount of $450 million to convert fixed-rate debt into floating-rate debt and received total proceeds of approximately $35 million , which included approximately $7 million of net accrued interest receivable. We assessed at inception, and re-assessed on an ongoing basis, whether the interest rate derivative contracts were highly effective in offsetting changes in the fair value of the hedged fixed rate debt. We had no fair value hedges outstanding during 2016 and recognized no gains or losses in interest expense during 2016 . During 2015 , we recognized, in interest expense, an $8 million loss on our hedged debt and an $8 million gain on the related interest rate derivatives contracts. This resulted in immaterial net gains recorded in earning due to ineffectiveness in 2015. During the second quarter of 2015 , we entered into forward starting interest rate derivative contracts having a notional amount of $450 million to hedge interest rate risk associated with a planned issuance of fixed-rate senior notes, which we designated as cash flow hedges. These hedges were terminated during the second quarter at the time we issued the fixed-rate senior notes and we received total proceeds of approximately $11 million . We had no amount outstanding under these hedges as of December 31, 2016 and December 31, 2015 . We assessed, at inception, and re-assessed, on an ongoing basis, whether the cash flow derivative contracts were highly effective in offsetting changes in interest rates. The gain on this derivative contract was recorded within accumulated other comprehensive income, and is being amortized into earnings as a reduction to interest expense over the life of the related senior notes. We are amortizing the gains and losses on previously terminated interest rate derivative instruments, including fixed-to-floating interest rate contracts designated as fair value hedges, and forward starting interest rate derivative contracts and treasury locks designated as cash flow hedges into earnings as a component of interest expense over the remaining term of the hedged debt, in accordance with Topic 815. The carrying amount of certain of our senior notes included unamortized gains of $51 million as of December 31, 2016 and $63 million as of December 31, 2015 , and immaterial unamortized losses as of December 31, 2016 and December 31, 2015 . In addition, we had pre-tax net gains within AOCI related to terminated forward starting interest rate derivative contracts and treasury locks of $9 million as of December 31, 2016 , and $10 million as of December 31, 2015 . The net gains that we recognized in earnings related to previously terminated interest rate derivatives were $13 million in 2016 , $13 million in 2015 , and $9 million in 2014 . As of December 31, 2016 , $13 million of net gains may be reclassified to earnings within the next twelve months from amortization of our previously terminated interest rate derivative contracts. Counterparty Credit Risk We do not have significant concentrations of credit risk arising from our derivative financial instruments, whether from an individual counterparty or a related group of counterparties. We manage our concentration of counterparty credit risk on our derivative instruments by limiting acceptable counterparties to a diversified group of major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to each counterparty, and by actively monitoring their credit ratings and outstanding fair values on an on-going basis. Furthermore, none of our derivative transactions are subject to collateral or other security arrangements and none contain provisions that are dependent on our credit ratings from any credit rating agency. We also employ master netting arrangements that reduce our counterparty payment settlement risk on any given maturity date to the net amount of any receipts or payments due between us and the counterparty financial institution. Thus, the maximum loss due to counterparty credit risk is limited to the unrealized gains in such contracts net of any unrealized losses should any of these counterparties fail to perform as contracted. Although these protections do not eliminate concentrations of credit risk, as a result of the above considerations, we do not consider the risk of counterparty default to be significant. Fair Value of Derivative Instruments The following presents the effect of our derivative instruments designated as cash flow hedges under Topic 815 on our accompanying consolidated statements of operations during 2016, 2015 and 2014 (in millions): Amount of Pre-tax Gain (Loss) Recognized in OCI (Effective Portion) Amount of Pre-tax Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion) Location in Statement of Operations Year Ended December 31, 2016 Interest rate contracts $ — $ 1 Interest expense Currency hedge contracts 65 133 Cost of products sold $ 65 $ 134 Year Ended December 31, 2015 Interest rate contracts $ 11 $ 2 Interest expense Currency hedge contracts 98 213 Cost of products sold $ 109 $ 215 Year Ended December 31, 2014 Interest rate contracts $ — $ 1 Interest expense Currency hedge contracts 227 105 Cost of products sold $ 227 $ 106 The amount of gain (loss) recognized in earnings related to the ineffective portion of hedging relationships was immaterial in all periods presented. Net gains and losses on currency hedge contracts not designated as hedging instruments were offset by net losses and gains from foreign currency transaction exposures, as shown in the following table: (in millions) Location in Statement of Operations Year Ended December 31, 2016 2015 2014 Gain (loss) on currency hedge contracts $ (20 ) $ 48 $ 52 Other, net Gain (loss) on foreign currency transaction exposures 7 (69 ) (70 ) Other, net Net foreign currency gain (loss) $ (13 ) $ (21 ) $ (18 ) FASB ASC Topic 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fair value of our derivative instruments using the framework prescribed by FASB ASC Topic 820 , by considering the estimated amount we would receive or pay to transfer these instruments at the reporting date and by taking into account current interest rates, foreign currency exchange rates, the creditworthiness of the counterparty for the assets and our creditworthiness for liabilities. In certain instances, we may utilize financial models to measure fair value. In doing so, we use inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of December 31, 2016 we have classified all of our derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by Topic 820, as discussed below, because these observable inputs are available for substantially the full term of our derivative instruments. The following are the balances of our derivative assets and liabilities as of December 31, 2016 and December 31, 2015 : As of December 31, December 31, (in millions) Location in Balance Sheet (1) 2016 2015 Derivative Assets: Designated Hedging Instruments Currency hedge contracts Other current assets $ 98 $ 138 Currency hedge contracts Other long-term assets 65 66 163 204 Non-Designated Hedging Instruments Currency hedge contracts Other current assets 36 33 Total Derivative Assets $ 199 $ 237 Derivative Liabilities: Designated Hedging Instruments Currency hedge contracts Other current liabilities $ 3 $ 1 Currency hedge contracts Other long-term liabilities 4 — 7 1 Non-Designated Hedging Instruments Currency hedge contracts Other current liabilities 19 22 Total Derivative Liabilities $ 26 $ 23 (1) We classify derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less. Other Fair Value Measurements Recurring Fair Value Measurements On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices, where available. Where quoted market prices or other observable inputs are not available, we apply valuation techniques to estimate fair value. Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows: • Level 1 – Inputs to the valuation methodology are quoted market prices for identical assets or liabilities. • Level 2 – Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs. • Level 3 – Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk. Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2016 and December 31, 2015 : As of December 31, 2016 As of December 31, 2015 (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Money market and government funds $ 42 $ — $ — $ 42 $ 118 $ — $ — $ 118 Available-for-sale-securities 20 — — 20 — — — — Currency hedge contracts — 199 — 199 — 237 — 237 $ 62 $ 199 $ — $ 261 $ 118 $ 237 $ — $ 355 Liabilities Currency hedge contracts $ — $ 26 $ — $ 26 $ — $ 23 $ — $ 23 Accrued contingent consideration — — 204 $ 204 — — 246 246 $ — $ 26 $ 204 $ 230 $ — $ 23 $ 246 $ 269 Our investments in money market and government funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. These investments are classified as cash and cash equivalents within our accompanying consolidated balance sheets, in accordance with U.S. GAAP and our accounting policies. In addition to $42 million invested in money market and government funds as of December 31, 2016 , we had $19 million in short-term time deposits and $135 million in interest bearing and non-interest bearing bank accounts. In addition to $118 million invested in money market and government funds as of December 31, 2015 , we had $31 million in short-term time deposits and $170 million in interest bearing and non-interest bearing bank accounts. On December 1, 2016, we signed a subscription agreement to acquire 11,817,000 shares of Neovasc’s common stock for $0.60 per share or $7 million . The subscription agreement was accounted for as a derivative forward contract, in accordance with FASB ASC Topic 815 , until the settlement date. On December 12, 2016, the contract was settled, and we acquired the shares of Neovasc’s common stock for $7 million . The fair value of the shares purchased on the settlement date was $26 million . Therefore, we recognized a gain of $12 million , net of tax, in earnings on the forward contract during 2016. Subsequently, we are accounting for the investment as an available-for-sale security, in accordance with FASB ASC Topic 320 . Our recurring fair value measurements using significant unobservable inputs (Level 3) relate solely to our contingent consideration liability. Refer to Note B – Acquisitions and Strategic Investments for a discussion of the changes in the fair value of our contingent consideration liability and additional details on our Neovasc strategic investment. Non-Recurring Fair Value Measurements We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods subsequent to initial recognition. The fair value of a cost method investment is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. Refer to Note B - Acquisitions and Strategic Investments for a discussion of our strategic investments. The fair value of our outstanding debt obligations was $5.739 billion as of December 31, 2016 and $5.887 billion as of December 31, 2015 , which was determined by using quoted market prices for our publicly-registered senior notes, classified as Level 1 within the fair value hierarchy. Refer to Note F – Borrowings and Credit Arrangements for a discussion of our debt obligations. |
Borrowings and Credit Arrangeme
Borrowings and Credit Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
BORROWINGS AND CREDIT ARRANGEMENTS | BORROWINGS AND CREDIT ARRANGEMENTS We had total debt of $5.484 billion as of December 31, 2016 and $5.677 billion as of December 31, 2015 . The debt maturity schedule for the significant components of our debt obligations as of December 31, 2016 is as follows: (in millions) 2017 2018 2019 2020 2021 Thereafter Total Senior notes $ 250 $ 600 $ — $ 1,450 $ — $ 2,350 $ 4,650 Term loans — 225 150 375 — — 750 $ 250 $ 825 $ 150 $ 1,825 $ — $ 2,350 $ 5,400 Note: The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes or debt issuance costs. Revolving Credit Facility On April 10, 2015, we entered into a new $2.000 billion revolving credit facility (the 2015 Facility) with a global syndicate of commercial banks and terminated our previous $2.000 billion revolving credit facility. The 2015 Facility matures on April 10, 2020. Eurodollar and multicurrency loans under the 2015 Facility bear interest at LIBOR plus an interest margin of between 0.900 percent and 1.500 percent , based on our corporate credit ratings and consolidated leverage ratio ( 1.300 percent as of December 31, 2016 ). In addition, we are required to pay a facility fee based on our credit ratings, consolidated leverage ratio, and the total amount of revolving credit commitments, regardless of usage, under the agreement ( 0.200 percent as of December 31, 2016 ). The 2015 Facility contains covenants which, among other things, require that we maintain a minimum interest coverage ratio of 3.0 times consolidated EBITDA and a maximum leverage ratio of 4.5 times consolidated EBITDA for the first four fiscal quarter-ends following the closing of the AMS Portfolio Acquisition on August 3, 2015, and decreasing to 4.25 times , 4.00 times , and 3.75 times consolidated EBITDA for the next three fiscal quarter-ends after such four fiscal quarter-ends, respectively, and then to 3.50 times for each fiscal quarter-end thereafter. There were no amounts borrowed under our current and prior revolving credit facilities as of December 31, 2016 or December 31, 2015 . Our revolving credit facility agreement in place as of December 31, 2016 requires that we maintain certain financial covenants, as follows: Covenant Requirement as of December 31, 2016 Actual as of December 31, 2016 Maximum leverage ratio (1) 4.0 times 2.4 times Minimum interest coverage ratio (2) 3.0 times 9.8 times (1) Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters. (2) Ratio of consolidated EBITDA, as defined by the credit agreement, to interest expense for the preceding four consecutive fiscal quarters. The credit agreement for the 2015 Facility provides for an exclusion from the calculation of consolidated EBITDA, as defined by the credit agreement, through the credit agreement maturity, of any non-cash charges and up to $620 million in restructuring charges and restructuring-related expenses related to our current or future restructuring plans. As of December 31, 2016, we had $485 million of the restructuring charge exclusion remaining. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the agreement, are excluded from the calculation of consolidated EBITDA and any new debt issued to fund any tax deficiency payments is excluded from consolidated total debt, as defined in the agreement, provided that the sum of any excluded net cash litigation payments and any new debt issued to fund any tax deficiency payments not exceed $2.000 billion in the aggregate. As of December 31, 2016 , we had approximately $885 million of the combined legal and debt exclusion remaining. As of and through December 31, 2016 , we were in compliance with the required covenants. Any inability to maintain compliance with these covenants could require us to seek to renegotiate the terms of our credit facility or seek waivers from compliance with these covenants, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers. Term Loans As of December 31, 2016 , we had an aggregate $750 million outstanding under our unsecured term loan facilities and $1.000 billion outstanding under these facilities as of December 31, 2015 . These facilities include an unsecured term loan facility entered into in August 2013 (2013 Term Loan) which had $150 million outstanding as of December 31, 2016 and $250 million outstanding as of December 31, 2015 , along with an unsecured term loan credit facility entered into in April 2015 (2015 Term Loan) which had $600 million outstanding as of December 31, 2016 and $750 million outstanding as of December 31, 2015 . Borrowings under the 2013 Term Loan bear interest at LIBOR plus an interest margin of between 1.0 percent and 1.75 percent (currently 1.5 percent ), based on our corporate credit ratings and consolidated leverage ratio. We repaid $150 million of our 2013 Term Loan facility in the fourth quarter of 2015 and repaid an additional $100 million during the second quarter of 2016. As a result and in accordance with the credit agreement, the outstanding balance of $150 million is the remaining principal amount due at the final maturity date in August 2018.The 2013 Term Loan borrowings are repayable at any time without premium or penalty. Our term loan facility requires that we comply with certain covenants, including financial covenants with respect to maximum leverage and minimum interest coverage, consistent with the 2015 Term Loan Facility. The maximum leverage ratio requirement is 4.0 times , our actual leverage ratio as of December 31, 2016 is 2.4 times , and the minimum interest coverage ratio requirement is 3.0 times , our actual interest coverage ratio as of December 31, 2016 is 9.8 times . On April 10, 2015, we entered into a new $750 million unsecured term loan credit facility which matures on August 3, 2020. The 2015 Term Loan was funded on August 3, 2015 and was used to partially fund the AMS Portfolio Acquisition, including the payment of fees and expenses. Term loan borrowings under this facility bear interest at LIBOR plus an interest margin of between 1.00 percent and 1.75 percent (currently 1.50 percent ), based on our corporate credit ratings and consolidated leverage ratio. We repaid $150 million of our 2015 Term Loan during the second quarter of 2016. The remaining 2015 Term Loan requires quarterly principal payments of $38 million commencing in the third quarter of 2018, and the remaining principal amount is due at the final maturity date of August 3, 2020. The 2015 Term Loan agreement requires that we comply with certain covenants, including financial covenants with respect to maximum leverage and minimum interest coverage, consistent with our revolving credit facility. The maximum leverage ratio requirement is 4.0 times , our actual leverage ratio as of December 31, 2016 is 2.4 times , and the minimum interest coverage ratio requirement is 3.0 times , our actual interest coverage ratio as of December 31, 2016 is 9.8 times . Senior Notes We had senior notes outstanding of $4.650 billion as of December 31, 2016 and December 31, 2015 . In May 2015, we completed the offering of $1.850 billion in aggregate principal amount of senior notes consisting of $600 million in aggregate principal amount of 2.850% notes due 2020, $500 million in aggregate principal amount of 3.375% notes due 2022 and $750 million in aggregate principal amount of 3.850% notes due 2025. The net proceeds from the offering of the notes, after deducting underwriting discounts and estimated offering expenses, were approximately $1.830 billion . We used a portion of the net proceeds from the senior notes offering to redeem $400 million aggregate principal amount of our 5.500% notes due November 2015 and $600 million aggregate principal amount of our 6.400% notes due June 2016. The remaining senior notes offering proceeds, together with the 2015 Term Loan, were used to fund the AMS Portfolio Acquisition. We recorded a charge of $45 million in interest expense, during the second quarter of 2015, for premiums, accelerated amortization of debt issuance costs, and investor discount costs net of interest rate hedge gains related to the early debt extinguishment. Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to any sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to borrowings under our credit and security facility, to the extent if borrowed by our subsidiaries, and to liabilities of our subsidiaries (see Other Arrangements below). On January 12, 2017, we used our existing credit facilities to repay the $250 million plus interest of our senior notes due in January 2017. Our senior notes consist of the following as of December 31, 2016 : Amount (in millions) Issuance Date Maturity Date Semi-annual Coupon Rate January 2017 Notes $ 250 November 2004 January 2017 5.125% October 2018 Notes 600 August 2013 October 2018 2.650% January 2020 Notes 850 December 2009 January 2020 6.000% May 2020 Notes 600 May 2015 May 2020 2.850% May 2022 Notes 500 May 2015 May 2022 3.375% May 2025 Notes 750 May 2015 May 2025 3.850% October 2023 Notes 450 August 2013 October 2023 4.125% November 2035 Notes 350 November 2005 November 2035 6.250% January 2040 Notes 300 December 2009 January 2040 7.375% $ 4,650 Our $4.050 billion of senior notes issued in 2009, 2013 and 2015 contain a change-in-control provision, which provides that each holder of the senior notes may require us to repurchase all or a portion of the notes at a price equal to 101 percent of the aggregate repurchased principal, plus accrued and unpaid interest, if a rating event, as defined in the indenture, occurs as a result of a change-in-control, as defined in the indenture. Any other credit rating changes may impact our borrowing cost, but do not require us to repay any borrowings. The interest rate payable on our November 2035 Notes is currently 7.00 percent . Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2035 Notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher. Other Arrangements We maintained a $300 million credit and security facility secured by our U.S. trade receivables maturing on June 9, 2017. The credit and security facility required that we maintain a maximum leverage covenant consistent with our revolving credit facility. The maximum leverage ratio requirement was 4.0 times and our actual leverage ratio as of December 31, 2016 was 2.4 times . We had borrowings of $60 million outstanding under this facility as of December 31, 2016 and no borrowings outstanding as of December 31, 2015 . On February 7, 2017, we amended the terms of this credit and security facility, including increasing the facility size to $400 million . This amendment retained a similar maximum leverage ratio requirement and extended the facility maturity to February 2019. We have accounts receivable factoring programs in certain European countries that we account for as sales under FASB ASC Topic 860, Transfers and Servicing . These agreements provide for the sale of accounts receivable to third parties, without recourse, of up to approximately $391 million as of December 31, 2016 . We have no retained interests in the transferred receivables, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. We de-recognized $152 million of receivables as of December 31, 2016 at an average interest rate of 1.8 percent , and $151 million as of December 31, 2015 at an average interest rate of 2.4 percent . In addition, we have uncommitted credit facilities with a commercial Japanese bank that provide for borrowings, promissory notes discounting and receivables factoring of up to 21.0 billion Japanese yen (approximately $180 million as of December 31, 2016 ). We de-recognized $149 million of notes receivable as of December 31, 2016 at an average interest rate of 1.6 percent and $132 million of notes receivable as of December 31, 2015 at an average interest rate of 1.6 percent . De-recognized accounts and notes receivable are excluded from trade accounts receivable, net in the accompanying consolidated balance sheets. As of December 31, 2016 and December 31, 2015 , we had outstanding letters of credit of $44 million which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of December 31, 2016 and 2015 , none of the beneficiaries had drawn upon the letters of credit or guarantees; accordingly, we have not recognized a related liability for our outstanding letters of credit in our consolidated balance sheets as of December 31, 2016 or 2015 . |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | LEASES AND OTHER PURCHASE OBLIGATIONS Rent expense amounted to $80 million in 2016 , $76 million in 2015 and $76 million in 2014 . Future minimum rental commitments as of December 31, 2016 under all noncancellable lease agreements, including capital leases, were as follows (in millions): 2017 $ 66 2018 60 2019 42 2020 34 2021 25 Thereafter 64 $ 291 Future minimum purchase obligations as of December 31, 2016 , were as follows (in millions): 2017 $ 321 2018 52 2019 39 2020 19 2021 12 Thereafter 15 $ 458 |
Restructuring Related Activitie
Restructuring Related Activities | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | RESTRUCTURING-RELATED ACTIVITIES We monitor the dynamics of the economy, the healthcare industry, and the markets in which we compete and assess opportunities for improved operational effectiveness and efficiency, and better alignment of expenses with revenues, while preserving our ability to make the investments in research and development projects, capital, our people that we believe are essential to our long-term success. As a result of these assessments, we have undertaken various restructuring initiatives in order to enhance our growth potential and position us for long-term success. These initiatives are described below. 2016 Restructuring Plan On June 6, 2016, our Board of Directors approved, and we committed to, a restructuring initiative (the 2016 Restructuring Plan). The 2016 Restructuring Plan is intended to develop global commercialization, technology and manufacturing capabilities in key growth markets, build on our Plant Network Optimization (PNO) strategy which is intended to simplify our manufacturing plant structure by transferring certain production lines among facilities, and expand operational efficiencies in support of our operating income margin goals. Key activities under the 2016 Restructuring Plan include strengthening global infrastructure through evolving global real estate and workplaces, developing global commercial and technical competencies, enhancing manufacturing and distribution expertise in certain regions, and continuing implementation of our PNO strategy. These activities initiated in the second quarter of 2016 and are expected to be substantially completed by the end of 2018. The implementation of the 2016 Restructuring Plan is expected to result in total pre-tax charges of approximately $175 million to $225 million , and approximately $160 million to $210 million of these charges are estimated to result in cash outlays, of which we have made payments of $27 million in 2016. We have recorded related costs of $47 million in 2016, and recorded a portion of these expenses as restructuring charges and the remaining portion through other lines within our consolidated statements of operations. The following table provides a summary of our estimates of costs associated with the 2016 Restructuring Plan through the end of 2018 by major type of cost: Type of cost Total estimated amount expected to be incurred Restructuring charges: Termination benefits $65 million to $80 million Other (1) $15 million to $25 million Restructuring-related expenses: Other (2) $95 million to $120 million $175 million to $225 million (1) Consists primarily of consulting fees and costs associated with contract cancellations. (2) Comprised of other costs directly related to the 2016 Restructuring Plan, including program management, accelerated depreciation, and costs to transfer product lines among facilities. 2014 Restructuring Plan On October 22, 2013, our Board of Directors approved, and we committed to, a restructuring initiative (the 2014 Restructuring Plan). The 2014 Restructuring Plan built on the progress we made to address financial pressures in a changing global marketplace, further strengthened our operational effectiveness and efficiency and supported new growth investments. Key activities under the plan included continued implementation of our PNO strategy, continued focus on driving operational effectiveness and efficiencies and business and commercial model changes. The PNO strategy simplified our manufacturing plant structure by transferring certain production lines among facilities. Other activities involved rationalizing organizational reporting structures to streamline various functions, eliminate bureaucracy, increase productivity and better align resources to business strategies and marketplace dynamics. These activities were initiated in the fourth quarter of 2013 and were substantially completed by the end of 2015, except for certain actions associated with our PNO strategy, which were completed by the end of 2016. The implementation of the 2014 Restructuring Plan resulted in total pre-tax charges of $261 million and $244 million of cash outlays. We recorded a portion of these expenses as restructuring charges and the remaining portion through other lines within our consolidated statements of operations. The following table provides a summary of our total costs associated with the 2014 Restructuring plan through December 31, 2016 by major type of cost: Type of cost Total amount incurred Restructuring charges: Termination benefits $91 million Other (1) $34 million Restructuring-related expenses: Other (2) $136 million $261 million (1) Consists primarily of consulting fees and costs associated with contractual cancellations. (2) Comprised of other costs directly related to the 2014 Restructuring plan, including program management, accelerated depreciation, and costs to transfer product lines among facilities. We recorded restructuring charges pursuant to our restructuring plans of $28 million during 2016 , $26 million during 2015 , and $69 million during 2014 . In addition, we recorded expenses within other lines of our accompanying consolidated statements of operations related to our restructuring initiatives of $50 million during 2016 , $57 million during 2015 , and $48 million during 2014 . The following presents these costs (credits) by major type and line item within our accompanying consolidated statements of operations, as well as by program: Year Ended December 31, 2016 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Fixed Asset Write-Offs Other Total Restructuring charges $ 19 $ — $ — $ 2 $ 7 $ 28 Restructuring-related expenses: Cost of products sold — — 34 — — 34 Selling, general and administrative expenses — 5 — — 11 16 — 5 34 — 11 50 $ 19 $ 5 $ 34 $ 2 $ 18 $ 78 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Fixed Asset Write-Offs Other Total 2016 Restructuring plan $ 24 $ 1 $ 15 $ — $ 7 $ 47 2014 Restructuring plan $ (5 ) $ 4 19 $ 2 $ 11 $ 31 $ 19 $ 5 $ 34 $ 2 $ 18 $ 78 Year Ended December 31, 2015 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Other Total Restructuring charges $ 23 $ — $ — $ 3 $ 26 Restructuring-related expenses: Cost of products sold — — 31 — 31 Selling, general and administrative expenses — 3 — 23 26 — 3 31 23 57 $ 23 $ 3 $ 31 $ 26 $ 83 (in millions) Termination Accelerated Transfer Other Total 2014 Restructuring plan $ 27 $ 3 $ 31 $ 26 $ 87 Substantially complete restructuring plan (4 ) — — — (4 ) $ 23 $ 3 $ 31 $ 26 $ 83 Year Ended December 31, 2014 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Other Total Restructuring charges $ 42 $ — $ — $ 27 $ 69 Restructuring-related expenses: Cost of products sold — — 24 — 24 Selling, general and administrative expenses — 5 — 19 24 — 5 24 19 48 $ 42 $ 5 $ 24 $ 46 $ 117 (in millions) Termination Accelerated Transfer Costs Other Total 2014 Restructuring plan $ 41 $ 5 $ 24 $ 43 $ 113 Substantially complete restructuring plan 1 — — 3 4 $ 42 $ 5 $ 24 $ 46 $ 117 Termination benefits represent amounts incurred pursuant to our benefit arrangements and amounts for “one-time” involuntary termination benefits, and have been recorded in accordance with FASB ASC Topic 712 and FASB ASC Topic 420 . Other restructuring costs, which represent primarily consulting fees and costs related to contract cancellations, are being recorded as incurred in accordance with FASB ASC Topic 420 . Accelerated depreciation is being recorded over the adjusted remaining useful life of the related assets and production line transfer costs are being recorded as incurred. As of December 31, 2016 , we have incurred cumulative restructuring charges related to our 2016 Restructuring Plan and our 2014 Restructuring Plan of $153 million and restructuring-related costs of $155 million since we committed to the plans. The following presents these costs by major type and by plan: (in millions) 2016 Restructuring Plan 2014 Restructuring Plan Total Termination benefits 24 $ 91 $ 115 Fixed asset write-offs — 2 2 Other 4 32 36 Total restructuring charges 28 125 153 Accelerated depreciation 1 12 13 Transfer costs 15 75 90 Other 3 49 52 Restructuring-related expenses 19 136 155 $ 47 $ 261 $ 308 We made cash payments of $82 million in 2016 associated with restructuring initiatives, and as of December 31, 2016 we had made total cash payments of $271 million related to our 2016 Restructuring Plan and 2014 Restructuring Plan since committing to the plans. These payments were made using cash generated from operations, and are comprised of the following: (in millions) 2016 Restructuring Plan 2014 Restructuring Plan Total Year Ended December 31, 2016 Termination benefits 8 $ 24 $ 32 Transfer costs 15 19 34 Other 4 12 16 $ 27 $ 55 $ 82 Program to Date Termination benefits 8 93 $ 101 Transfer costs 15 74 89 Other 4 77 81 $ 27 $ 244 $ 271 Our restructuring liability is primarily comprised of accruals for termination benefits. The following is a rollforward of the termination benefit liability associated with our 2016 Restructuring Plan, our 2014 Restructuring Plan and our substantially complete restructuring plan, which is reported as a component of accrued expenses included in our accompanying consolidated balance sheets: Restructuring Plan Termination Benefits (in millions) 2016 Restructuring Plan 2014 Restructuring Plan Substantially complete restructuring plan Total Accrued as of December 31, 2014 — 39 4 43 Charges — 27 (4 ) 23 Cash payments — (37 ) — (37 ) Accrued as of December 31, 2015 — 29 — 29 Charges 24 (5 ) — 19 Cash payments (8 ) (24 ) — (32 ) Accrued as of December 31, 2016 $ 16 $ — $ — $ 16 In addition to our accrual for termination benefits, we had a $6 million liability as of December 31, 2016 and a $3 million liability as of December 31, 2015 for other restructuring-related items. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Balance Sheet Information [Abstract] | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | SUPPLEMENTAL BALANCE SHEET INFORMATION Components of selected captions in our accompanying consolidated balance sheets are as follows: Trade accounts receivable, net As of (in millions) December 31, 2016 December 31, 2015 Accounts receivable $ 1,591 $ 1,394 Less: allowance for doubtful accounts (73 ) (75 ) Less: allowance for sales returns (46 ) (44 ) $ 1,472 $ 1,275 The following is a rollforward of our allowance for doubtful accounts for 2016, 2015 and 2014 : Year Ended December 31, (in millions) 2016 2015 2014 Beginning balance $ 75 $ 76 $ 81 Net charges to expenses 9 15 10 Utilization of allowances (11 ) (16 ) (15 ) Ending balance $ 73 $ 75 $ 76 Inventories As of (in millions) December 31, 2016 December 31, 2015 Finished goods $ 625 $ 706 Work-in-process 94 102 Raw materials 236 208 $ 955 $ 1,016 Prepaids and other current assets As of (in millions) December 31, 2016 December 31, 2015 Prepaid expenses $ 58 $ 57 Restricted cash 243 54 Other 240 254 $ 541 $ 365 Property, plant and equipment, net As of (in millions) December 31, 2016 December 31, 2015 Land $ 91 $ 86 Buildings and improvements 981 981 Equipment, furniture and fixtures 2,955 2,793 Capital in progress 338 202 4,365 4,062 Less: accumulated depreciation 2,735 2,572 $ 1,630 $ 1,490 Accrued expenses As of (in millions) December 31, 2016 December 31, 2015 Legal reserves $ 1,062 $ 773 Payroll and related liabilities 572 504 Accrued contingent consideration 63 119 Other 615 574 $ 2,312 $ 1,970 Other long-term liabilities As of (in millions) December 31, 2016 December 31, 2015 Accrued income taxes $ 781 $ 1,253 Legal reserves 961 1,163 Accrued contingent consideration 141 127 Other long-term liabilities 455 431 $ 2,338 $ 2,974 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our income (loss) before income taxes consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Domestic $ (1,019 ) $ (1,623 ) $ (1,263 ) Foreign 1,196 973 754 $ 177 $ (650 ) $ (509 ) The related benefit for income taxes consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Current Federal $ 31 $ 59 $ (2 ) State 6 3 (5 ) Foreign 136 132 111 173 194 104 Deferred Federal (337 ) (545 ) (458 ) State (14 ) (41 ) (23 ) Foreign 8 (19 ) (13 ) (343 ) (605 ) (494 ) $ (170 ) $ (411 ) $ (390 ) The reconciliation of income taxes at the federal statutory rate to the actual benefit for income taxes is as follows: Year Ended December 31, 2016 2015 2014 U.S. federal statutory income tax rate 35.0 % (35.0 )% (35.0 )% State income taxes, net of federal benefit (1.7 )% (4.8 )% (6.5 )% Effect of foreign taxes (99.1 )% (34.4 )% (29.1 )% Acquisition-related 9.4 % 6.0 % (7.5 )% Research credit (15.0 )% (4.4 )% (7.0 )% Valuation allowance (42.2 )% 2.3 % 4.0 % Compensation-related 6.4 % 1.6 % 0.7 % Non-deductible expenses 9.3 % 2.4 % 1.9 % Uncertain domestic tax positions 5.5 % 2.7 % 2.0 % Other, net (3.5 )% 0.4 % (0.2 )% (95.9 )% (63.2 )% (76.7 )% We had net deferred tax assets of $62 million as of December 31, 2016 and net deferred tax liabilities of $264 million as of December 31, 2015 . Gross deferred tax liabilities of $1.760 billion as of December 31, 2016 and $1.875 billion as of December 31, 2015 relate primarily to goodwill and intangible assets acquired in connection with our prior acquisitions. Gross deferred tax assets of $1.822 billion as of December 31, 2016 and $1.611 billion as of December 31, 2015 relate primarily to the establishment of inventory and product-related reserves; litigation, product liability and other reserves and accruals; compensation related accruals; net operating loss carryforwards and tax credit carryforwards; and the federal benefit of uncertain tax positions. Significant components of our deferred tax assets and liabilities are as follows: As of December 31, (in millions) 2016 2015 Deferred Tax Assets: Inventory costs and related reserves $ 37 $ 49 Tax benefit of net operating loss and credits 798 742 Reserves and accruals 228 232 Restructuring-related charges 14 17 Litigation and product liability reserves 752 689 Investment write-down 17 7 Compensation related 142 138 Federal benefit of uncertain tax positions 238 197 Other 42 39 2,268 2,110 Less valuation allowance (446 ) (499 ) 1,822 1,611 Deferred Tax Liabilities: Property, plant and equipment 42 44 Unrealized gains and losses on derivative financial instruments 67 82 Intangible assets 1,651 1,749 1,760 1,875 Net Deferred Tax Assets / (Liabilities) 62 (264 ) Prepaid on intercompany profit 75 63 Net Deferred Tax Assets / (Liabilities) and Prepaid on Intercompany Profit $ 137 $ (201 ) Our deferred tax assets, deferred tax liabilities and prepaid on intercompany profit, are included in the following locations within our accompanying consolidated balance sheets (in millions): Location in As of December 31, Component Balance Sheet 2016 2015 Current deferred tax asset and prepaid on intercompany profit Deferred income taxes $ 75 $ 496 Non-current deferred tax asset Other long-term assets 80 40 Deferred Tax Assets and Prepaid on Intercompany Profit 155 536 Current deferred tax liability Other current liabilities — 2 Non-current deferred tax liability Deferred income taxes 18 735 Deferred Tax Liabilities 18 737 Net Deferred Tax Assets / (Liabilities) and Prepaid on Intercompany Profit $ 137 $ (201 ) As of December 31, 2016 , we had U.S. federal and state tax net operating loss carryforwards and tax credits, the tax effect of which was $724 million . As of December 31, 2015 , we had U.S. federal and state tax net operating loss carryforwards and tax credits, the tax effect of which was $500 million . In addition, we had foreign tax net operating loss carryforwards and tax credits, the tax effect of which was $172 million as of December 31, 2016 , as compared to $273 million as of December 31, 2015 . These tax attributes will expire periodically beginning in 2017. The tax effect of both U.S. federal and state tax net operating loss carryforwards and tax credits and foreign tax net operating loss carryforwards and tax credits as of December 31, 2015 was previously disclosed in the amounts of $624 million and $288 million , respectively. We are updating these amounts to reflect unrecognized tax benefits that reduce the amounts. The current accounting standard for stock-based compensation prohibits the recognition of windfall tax benefits from stock-based compensation deducted for tax return purposes until realized through a reduction of income taxes payable. We have $76 million and $32 million of U.S. tax net operating loss and credits as of December 31, 2016 and December 31, 2015 , respectively. These amounts were not included in the gross deferred tax balances as of December 31, 2016 and December 31, 2015 . After consideration of all positive and negative evidence, we believe that it is more likely than not that a portion of the deferred tax assets will not be realized. As a result, we established a valuation allowance of $446 million as of December 31, 2016 and $499 million as of December 31, 2015 , representing a decrease of $53 million . The decrease in the valuation allowance as of December 31, 2016 , as compared to December 31, 2015 , is primarily attributable to the release of valuation allowance related to certain foreign tax net operating losses which expired in 2016. The release was offset by an increase to the valuation allowance related to federal and state tax credits and state tax net operating loss carryforwards. The income tax impact of the unrealized gain or loss component of other comprehensive income and stockholders' equity was a charge of $9 million in 2016 , a charge of $25 million in 2015 , and a charge of $21 million in 2014 . We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2016 because we intend to permanently reinvest such earnings outside the U.S. As of December 31, 2016 , the cumulative amount of excess financial reporting basis over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested is approximately $9.8 billion . Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries. We obtain tax incentives through Free Trade Zone Regime offered in Costa Rica which allows 100% exemption from income tax in the first eight years of operations and 50% exemption in the following four years. This tax incentive resulted in income tax savings of $123 million for 2016 , $7 million for 2015 , and $7 million for 2014 . The tax incentive for 100% exemption from income tax is expected to expire in 2023. The impact of per share earnings is $0.09 for 2016 and immaterial for 2015 and 2014 . As of December 31, 2016 , we had $1.095 billion of gross unrecognized tax benefits, of which a net $1.006 billion , if recognized, would affect our effective tax rate. As of December 31, 2015 , we had $1.056 billion of gross unrecognized tax benefits, of which a net $900 million , if recognized, would affect our effective tax rate. As of December 31, 2014 , we had $1.047 billion of gross unrecognized tax benefits, of which a net $903 million , if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions): Year Ended December 31, 2016 2015 2014 Beginning Balance $ 1,056 $ 1,047 $ 1,102 Additions based on positions related to the current year 47 32 44 Additions based on positions related to prior years 14 38 3 Reductions for tax positions of prior years (17 ) (36 ) (87 ) Settlements with taxing authorities (3 ) (18 ) (5 ) Statute of limitation expirations (2 ) (7 ) (10 ) Ending Balance $ 1,095 $ 1,056 $ 1,047 We are subject to U.S. Federal income tax as well as income tax of multiple state and foreign jurisdictions. We have concluded all U.S. federal income tax matters through 2000, all foreign income tax matters through 2002 and substantially all material state and local income tax matters through 2005. We have received Notices of Deficiency from the Internal Revenue Service (IRS) reflecting proposed audit adjustments for Guidant Corporation for its 2001 through 2006 tax years and Boston Scientific Corporation for its 2006 and 2007 tax years. The total incremental tax liability asserted by the IRS for the applicable periods is $1.162 billion plus interest. The primary issue in dispute for all years is the transfer pricing associated with the technology license agreements between domestic and foreign subsidiaries of Guidant. In addition, the IRS has proposed adjustments in connection with the financial terms of our Transaction Agreement with Abbott Laboratories pertaining to the sale of Guidant's vascular intervention business to Abbott in April 2006. During 2014, we received a Revenue Agent Report from the IRS reflecting significant proposed audit adjustments to our 2008, 2009, and 2010 tax years based upon the same transfer pricing methodologies that the IRS applied to our 2001 through 2007 tax years. We do not agree with the transfer pricing methodologies applied by the IRS or its resulting assessment. We have filed petitions with the U.S. Tax Court (Tax Court) contesting the Notices of Deficiency for the 2001 through 2007 tax years in challenge and submitted a letter to the IRS Office of Appeals (IRS Appeals) protesting the Revenue Agent Report for the 2008 through 2010 tax years and requesting an administrative appeal hearing. The issues in dispute were scheduled to be heard in Tax Court in late July 2016. On July 19, 2016, we entered into a Stipulation of Settled Issues with the IRS intended to resolve all of the aforementioned transfer pricing issues, as well as the issues related to our transaction with Abbott. The Stipulation of Settled Issues is contingent upon IRS Appeals applying the same basis of settlement to all transfer pricing issues for the Company’s 2008, 2009, and 2010 tax years, and if applicable, review by the U.S. Congress Joint Committee on Taxation. In October 2016, we reached an agreement in principle with IRS Appeals as to the resolution of the transfer pricing issues in 2008, 2009, and 2010 tax years, subject to additional calculations of tax as well as documentation to memorialize our agreement. In the event that the conditions in the Stipulation of Settled Items are satisfied, we expect to make net tax payments to the IRS of approximately $275 million , plus interest through the date of payment. If finalized, payments related to the resolution are expected in the next nine to 18 months. We believe that our income tax reserves associated with these matters are adequate as of December 31, 2016 and we do not expect to recognize any additional charges related to resolution of this controversy. However, the final resolution of these issues is contingent and if the Stipulation of Settled Issues is not finalized, it could have a material impact on our financial condition, results of operations, or cash flows. We recognize interest and penalties related to income taxes as a component of income tax expense. We had $572 million accrued for gross interest and penalties as of December 31, 2016 and $500 million as of December 31, 2015 . The increase in gross interest and penalties of $72 million was recognized in our consolidated statements of operations. We recognized net tax expense related to interest and penalties of $46 million in 2016 , $37 million in 2015 and $26 million in 2014 . It is reasonably possible that within the next 12 months we will resolve multiple issues including transfer pricing and transactional- related issues with foreign, federal and state taxing authorities, in which case we could record a reduction in our balance of unrecognized tax benefits of up to approximately $758 million . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The medical device market in which we primarily participate is largely technology driven. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. Over the years, there has been litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These forces frequently drive settlement not only for individual cases, but also for a series of pending and potentially related and unrelated cases. Although monetary and injunctive relief is typically sought, remedies and restitution are generally not determined until the conclusion of the trial court proceedings and can be modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other geographies. During recent years, we successfully negotiated closure of several long-standing legal matters and have received favorable rulings in several other matters; however, there continues to be outstanding intellectual property litigation. Adverse outcomes in one or more of these matters could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity. In the normal course of business, product liability, securities and commercial claims are asserted against us. Similar claims may be asserted against us in the future related to events not known to management at the present time. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, securities and commercial litigation, and other legal proceedings in the future, regardless of their outcome, could have a material adverse effect on our financial position, results of operations and/or liquidity. In addition, like other companies in the medical device industry, we are subject to extensive regulation by national, state and local government agencies in the United States and other countries in which we operate. From time to time we are the subject of qui tam actions and governmental investigations often involving regulatory, marketing and other business practices. These qui tam actions and governmental investigations could result in the commencement of civil and criminal proceedings, substantial fines, penalties and administrative remedies and have a material adverse effect on our financial position, results of operations and/or liquidity. In accordance with FASB ASC Topic 450, Contingencies , we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. Our accrual for legal matters that are probable and estimable was $2.023 billion as of December 31, 2016 and $1.936 billion as of December 31, 2015 , and includes certain estimated costs of settlement, damages and defense. The increase in our legal accrual was primarily due to litigation-related charges recorded during the year. During 2016, 2015 and 2014 , we recorded litigation-related net charges in the amount of $804 million , $1.105 billion , and $1.036 billion , respectively. We continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact our operating results, cash flows and/or our ability to comply with our debt covenants. In management's opinion, we are not currently involved in any legal proceedings other than those specifically identified below, which, individually or in the aggregate, could have a material adverse effect on our financial condition, operations and/or cash flows. Unless included in our legal accrual or otherwise indicated below, a range of loss associated with any individual material legal proceeding cannot be estimated. Patent Litigation On May 19, 2005, G. David Jang, M.D. filed suit against us alleging breach of contract relating to certain patent rights covering stent technology. The suit was filed in the U.S. District Court for the Central District of California seeking monetary damages and rescission of contract. After a Markman ruling relating to the Jang patent rights, Dr. Jang stipulated to the dismissal of certain claims alleged in the complaint with a right to appeal and the parties subsequently agreed to settle the other claims. In May 2007, Dr. Jang filed an appeal with respect to the remaining patent claims and in July 2008, the Court of Appeals vacated the District Court's consent judgment and remanded the case back to the District Court for further clarification. In August 2011, the District Court entered a stipulated judgment that we did not infringe the Jang patent. Dr. Jang filed an appeal on September 21, 2011 and on August 22, 2012, the Court of Appeals vacated the District Court's judgment and remanded the case to the District Court for further proceedings. On July 8, 2015, a jury found that our Express Stent family did not literally infringe a Jang patent, but that the stents infringed under the doctrine of equivalents. The court reserved judgment until the conclusion of further proceedings related to the doctrine of equivalents finding. On September 29, 2015, the court ruled that our Express Stent family did not infringe under the doctrine of equivalents and, on October 30, 2015, the court entered judgment in our favor. On November 25, 2015, Dr. Jang filed a motion for judgment as a matter of law on literal infringement and/or for a new trial. On February 3, 2016, the court denied Dr. Jang’s motion for a new trial and judgment as a matter of law. Dr. Jang filed a notice of appeal. On September 27, 2010, Boston Scientific Scimed, Inc., Boston Scientific Ltd., Endovascular Technologies, Inc. and we filed suit against Taewoong Medical, Co., Ltd., Standard Sci-Tech, Inc., EndoChoice, Inc. and Sewoon Medical Co., Ltd for infringement of three patents on stents for use in the GI system (the Pulnev and Hankh patents) and against Cook Medical Inc. (and related entities) for infringement of the same three patents and an additional patent (the Thompson patent). The suit was filed in the U.S. District Court for the District of Massachusetts seeking monetary damages and injunctive relief. In December 2010, we amended our complaint to add infringement of six additional Pulnev patents. In January 2011, the defendants filed a counterclaim of invalidity and unenforceability. In September 2011, we amended the complaint to add Chek-Med Systems d/b/a GI Supply as a defendant. On December 22, 2016 the following defendants were dismissed: Taewoong Medical Co., Ltd., GI Supply, Inc., Standard Sci-Tech, Inc., Endochoice, Inc. and Sewoon Medical Co. Trial against the remaining parties is scheduled to begin September 11, 2017. On October 30, 2015, a subsidiary of Boston Scientific filed suit against Edwards Lifesciences Corporation and Edwards Lifesciences Services GmbH in Düsseldorf District Court in Germany for patent infringement. We allege that Edwards’ SAPIEN™ 3 heart valve infringes our patent related to adaptive sealing technology. On February 25, 2016, we extended the action to allege infringement of a second patent related to adaptive sealing technology. The trial began on February 7, 2017. On November 9, 2015, Edwards Lifesciences, LLC filed an invalidity claim against one of our subsidiaries, Sadra Medical, Inc., in the High Court of Justice, Chancery Division Patents Court in the United Kingdom, alleging that a European patent owned by Sadra relating to a repositionable heart valve is invalid. On January 15, 2016, we filed our defense and counterclaim for a declaration that our European patent is valid and infringed by Edwards. On February 25, 2016, we amended our counterclaim to allege infringement of a second patent related to adaptive sealing technology. A trial was held from January 18 to January 27, 2017. On November 23, 2015, Edwards Lifesciences PVT, Inc. filed a patent infringement action against us and one of our subsidiaries, Boston Scientific Medizintechnik GmbH, in the District Court of Düsseldorf, Germany alleging a European patent (Spenser) owned by Edwards is infringed by our Lotus™ Transcatheter Heart Valve System. The trial began on February 7, 2017. On November 23, 2015, Edwards Lifesciences Corporation filed a patent infringement action against us and Boston Scientific Medizintechnik GmbH in the District Court of Düsseldorf, Germany alleging an European patent (Bourang) owned by Edwards is infringed by our Lotus Transcatheter Heart Valve System. The trial began on February 7, 2017. On April 19, 2016, a subsidiary of Boston Scientific filed suit against Edwards Lifesciences Corporation in the United States District Court for the District of Delaware for patent infringement. We allege that Edwards’ SAPIEN™ 3 valve infringes a patent related to adaptive sealing technology. On June 9, 2016, Edwards filed a counterclaim alleging that our Lotus Transcatheter Heart Valve System infringes three patents owned by Edwards. On October 12, 2016, Edwards filed a petition for inter partes review of our patent with the U.S. Patent and Trademark Office, Patent Trial and Appeal Board. The trial has been set to begin on July 30, 2018. On April 19, 2016, a subsidiary of Boston Scientific filed suit against Edwards Lifesciences Corporation in the United States District Court for the Central District of California for patent infringement. We allege that Edwards’ aortic valve delivery systems infringe eight of our catheter related patents. On October 13, 2016, Edwards filed a petition for inter partes review of one asserted patent with the U.S. Patent & Trademark Office, Patent Trial and Appeal Board. The trial has been set to begin on May 29, 2018. On April 26, 2016, Edwards Lifesciences PVT, Inc. filed a patent infringement action against us and one of our subsidiaries, Boston Scientific Medizintechnik GmbH, in the District Court of Düsseldorf, Germany alleging a European patent (Spenser) owned by Edwards is infringed by our Lotus Transcatheter Heart Valve System. The trial began on February 7, 2017. On October 27, 2016, Edwards Lifesciences PVT, Inc. filed a patent infringement action against us and one of our subsidiaries, Boston Scientific, LTD, in the Federal Court of Canada alleging that three Canadian patents (Spenser) owned by Edwards are infringed by our Lotus Transcatheter Heart Valve System. On October 28, 2016, the Regents of the University of California filed a patent infringement action against us in the United States District Court for the Northern District of California alleging that two U.S. patents (Lesh) owned by the Regents of the University of California are infringed by certain of our catheters and other devices used to treat atrial fibrillation. On November 29, 2016 Nevro Corp. filed a patent infringement action against us and one of our subsidiaries, Boston Scientific Neuromodulation Corporation, in the United States District Court for the Northern District of California alleging that six U.S. patents (Alataris) owned by Nevro Corp. are infringed by our spinal cord stimulation systems. On December 9, 2016, the Company and Boston Scientific Neuromodulation Corporation, filed a patent infringement action against Nevro Corp. in United States District Court for the District of Delaware alleging that ten U.S. patents owned by Boston Scientific Neuromodulation Corporation are infringed by Nevro’s Senza™ Spinal Cord Stimulation System. On December 22, 2016, Edwards Lifesciences PVT, Inc. and Edwards Lifesciences SA (AG) filed a plenary summons against Boston Scientific Limited and Boston Scientific Group Public Company in the High Court of Ireland alleging that a European patent (Spenser) owned by Edwards is infringed by our Lotus Transcatheter Heart Valve System. Product Liability Litigation No individual lawsuits remain pending in state court jurisdictions against Guidant alleging personal injuries associated with defibrillators or pacemakers involved in certain 2005 and 2006 product communications. Further, we are aware of approximately 8 Guidant product liability lawsuits pending in international jurisdictions associated with defibrillators or pacemakers, including devices involved in the 2005 and 2006 product communications. Four of these suits are pending in Canada involving certain models of Guidant pacemakers, three of which are stayed pending the outcome of one lead class action. On May 8, 2009, the Justice of Ontario Court certified a class of persons in whom pacemakers were implanted in Canada and a class of family members with derivative claims. In each case, these matters generally seek monetary damages from us. This class action has been inactive since 2011. On March 24, 2014, the Ontario Superior Court approved a $3 million settlement of a class action involving certain models of Guidant defibrillators. We believe Guidant has satisfied its obligations pursuant to the settlement agreement. As of February 21, 2017 , approximately 43,000 product liability cases or claims related to transvaginal surgical mesh products designed to treat stress urinary incontinence and pelvic organ prolapse have been asserted against us. The pending cases are in various federal and state courts in the United States and include eight putative class actions. There were also fewer than 20 cases in Canada, inclusive of one certified and three putative class actions, and fewer than 20 claims in the United Kingdom. Generally, the plaintiffs allege personal injury associated with use of our transvaginal surgical mesh products. The plaintiffs assert design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims. Over 3,100 of the cases have been specially assigned to one judge in state court in Massachusetts. On February 7, 2012, the Judicial Panel on Multi-District Litigation (MDL) established MDL-2326 in the U.S. District Court for the Southern District of West Virginia and transferred the federal court transvaginal surgical mesh cases to MDL-2326 for coordinated pretrial proceedings. During the fourth quarter of 2013, we received written discovery requests from certain state attorneys general offices regarding our transvaginal surgical mesh products. We have responded to those requests. As of February 21, 2017 , we have entered into master settlement agreements in principle or are in the final stages of entering one with certain plaintiffs' counsel to resolve an aggregate of approximately 31,000 cases and claims. The master settlement agreements provide that the settlement and distribution of settlement funds to participating claimants are conditional upon, among other things, achieving minimum required claimant participation thresholds. Of the approximately 31,000 cases and claims approximately 12,000 have met the conditions of the settlement and are final. All settlement agreements were entered into solely by way of compromise and without any admission or concession by us of any liability or wrongdoing. On or about January 12, 2016, Teresa L. Stevens filed a claim against us and three other defendants asserting for herself, and on behalf of a putative class of similarly-situated women, that she was harmed by a vaginal mesh implant that she alleges contained a counterfeit or adulterated resin product that we imported from China. The complaint was filed in the United States District Court for the Southern District of West Virginia, before the same Court that is hearing the mesh MDL. The complaint, which alleges Racketeer Influenced and Corrupt Organizations Act (RICO) violations, fraud, misrepresentation, deceptive trade practices and unjust enrichment, seeks both equitable relief and damages under state and federal law. On January 26, 2016, the Court issued an order staying the case and directing the plaintiff to submit information to allow the FDA to issue a determination with respect to her allegations. In addition, we are in contact with the U.S. Attorney’s Office for the Southern District of West Virginia, and are responding voluntarily to their requests in connection with that office’s review of the allegations concerning the use of mesh resin in the complaint. We deny the plaintiff’s allegations and intend to defend ourselves vigorously. We have established a product liability accrual for known and estimated future cases and claims asserted against us as well as with respect to the actions that have resulted in verdicts against us and the costs of defense thereof associated with our transvaginal surgical mesh products. While we believe that our accrual associated with this matter is adequate, changes to this accrual may be required in the future as additional information becomes available. While we continue to engage in discussions with plaintiffs’ counsel regarding potential resolution of pending cases and claims and intend to vigorously contest the cases and claims asserted against us; that do not settle, the final resolution of the cases and claims is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity. Initial trials involving our transvaginal surgical mesh products have resulted in both favorable and unfavorable judgments for us. We do not believe that the judgment in any one trial is representative of potential outcomes of all cases or claims related to our transvaginal surgical mesh products. Governmental Investigations and Qui Tam Matters On August 3, 2012, we were served with a qui tam complaint that had previously been filed under seal against Boston Scientific Neuromodulation Corp. in the U.S. District Court for the District of New Jersey on March 2, 2011. On August 8, 2012, we learned that the federal government had previously declined to intervene in this matter. The relators’ complaint, now unsealed, alleges that Boston Scientific Neuromodulation Corp. violated the federal and various states' false claims acts through submission of fraudulent bills for implanted devices, under-reporting of certain adverse events, and promotion of off-label uses. On September 10, 2012, the relators filed an amended complaint revising and restating certain of the claims in the original complaint. Our motion to dismiss, filed subsequently, was denied on May 31, 2013, and on June 28, 2013, we answered the amended complaint and brought certain counterclaims arising from relators’ unauthorized removal of documents from the business during their employments, which the relators moved to dismiss on July 22, 2013. The Court denied relators’ motion to dismiss the counterclaims on September 4, 2014. On May 5, 2014, we were served with a subpoena from the U.S. Department of Health and Human Services, Office of the Inspector General. The subpoena seeks information relating to the launch of the Cognis and Teligen line of devices in 2008, the performance of those devices from 2007 to 2009, and the operation of the Physician Guided Learning Program. We are cooperating with this request. On May 6, 2016, a qui tam lawsuit in this matter was unsealed in the U.S. District Court for the District of Minnesota. At the same time, we learned that the U.S. Government and the State of California had earlier declined to intervene in that lawsuit on April 15, 2016. The complaint was served on us on July 21, 2016. On October 7, 2016, the plaintiff/relator served an Amended Complaint that dropped the allegations relating to the Physician Guided Learning Program. On February 23, 2015, a judge for the Court of Modena (Italy) ordered a trial for Boston Scientific SpA and three of its employees, as well as numerous other defendants charged in criminal proceedings. The charges arise from allegations that the defendants made improper donations to certain health care providers and other employees of the Hospital of Modena in order to induce them to conduct unauthorized clinical trials, as well as related government fraud in relation to the financing of such clinical trials. A trial began on February 24, 2016 and is ongoing. We deny these allegations and intend to defend ourselves vigorously. On December 1, 2015, the Brazilian governmental entity known as CADE (the Administrative Council of Economic Defense), served a search warrant on the offices of our Brazilian subsidiary, as well as on the Brazilian offices of several other major medical device makers who do business in Brazil, in furtherance of an investigation into alleged anti-competitive activity with respect to certain tender offers for government contracts. We are cooperating fully with CADE’s inquiry. On December 14, 2016, we learned that the Associacao Brasileira de Medicina de Grupo d/b/a ABRAMGE filed a Complaint against the Company, Arthrex and Zimmer Biomet Holdings, in the U.S. District Court for the District of Delaware. This Complaint, which ABRAMGE never served against the Company, alleges that the defendants or their agents paid kickbacks to health care providers in order to increase sales and prices, and are liable under a variety of common law theories. On February 6, 2017, ABRAMGE filed and served an Amended Complaint on the Company and the other defendants. The Amended Complaint does not contain any material changes in the allegations against the Company. We deny these allegations and intend to defend ourselves vigorously if ABRAMGE serves the Complaint. Other Proceedings In June of 2016, Guidant asserted three arbitrations claims, which are pending, related to three insurance policies for indemnity arising out of previously incurred and satisfied liabilities tied to allegedly defective cardiac rhythm management devices, which Guidant had manufactured. Guidant has claimed indemnities against such liabilities under insurance policies which it purchased for the 2004 policy year. The three insurance policies were issued respectively by Markel (Bermuda), Zurich (now Swiss Re International SE, UK Branch) and Swiss Re. On November 2, 2015, Acacia Research Corporation (ARC) filed an arbitration demand with the American Arbitration Association alleging that the Company breached an agreement relating to the sale of patents from the Company to ARC. The hearing began on February 20, 2017. Refer to Note J - Income Taxes for information regarding our tax litigation. Matters Concluded Since December 31, 2015 On September 22, 2014, The Board of Trustees for the University of Alabama filed a complaint in the United States District Court for the Northern District of Alabama alleging that the sale of our cardiac resynchronization therapy devices infringe a patent owned by the University of Alabama. On August 21, 2015, the court ordered a stay pending our requests for inter partes review of all claims related to the patent before the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office (USPTO). Our requests were rejected on September 24, 2015 and October 19, 2015. On March 7, 2016, the USPTO granted our reconsideration motion and initiated an inter partes review and, on March 29, 2016, the District Court stayed the case pending a decision in the inter partes review. On October 6, 2016 the parties reached a settlement agreement. On October 19, 2016, the case was dismissed with prejudice. On March 12, 2010, we received a Civil Investigative Demand (CID) from the Civil Division of the U.S. Department of Justice (DOJ) requesting documents and information relating to reimbursement advice offered by us relating to certain CRM devices. On February 9, 2016, the DOJ informed us that we are no longer required to retain documents and information relating to the CID. On July 11, 2014, we were served with a subpoena from the U.S. Attorney for the District of New Jersey. The subpoena seeks information relating to BridgePoint Medical, Inc., which we acquired in October 2012, including information relating to its sale of CrossBoss™ and Stingray™ products, educational and training activities that relate to those sales and our acquisition of BridgePoint Medical. On August 20, 2015, the court unsealed a qui tam lawsuit brought by a former employee named Robin Levy against the company as well as a decision by the U.S. Attorney for New Jersey declining to intervene in the lawsuit. The lawsuit alleges that the company violated the federal and various state false claims acts through seeking to upcode Chronic Total Occlusion (“CTO”) procedures and requiring in-patient treatment and purchases of coronary stents in order for physicians to receive training on the CTO procedure. On January 26, 2016, the Court dismissed the qui tam lawsuit. On March 18, 2015, Denise Fretter and Maria Korsgaard, claiming to represent a class of current and former female field sales employees at Boston Scientific Neuromodulation Corporation (BSNC), filed a lawsuit against BSNC in the U.S. District Court for the Central District of California. The plaintiffs allege gender discrimination in pay, promotions and differential treatment against them and the putative class. On February 6, 2016, the parties entered into a confidential settlement agreement, and the case has been dismissed. On April 24, 2014, Dr. Qingsheng Zhu and Dr. Julio Spinelli, acting jointly on behalf of the stockholder representative committee of Action Medical, Inc. (Action Medical), filed a lawsuit against us and our subsidiary, Cardiac Pacemakers, Inc. (CPI), in the U.S. District Court for the District of Delaware. The stockholder representatives alleged that we and CPI breached a contractual duty to pursue development and commercialization of certain patented heart pacing methods and devices and to return certain patents. On March 15, 2016, the Court granted summary judgment in our favor as to all of plaintiffs’ claims for damages. The parties subsequently reached a resolution on the remaining claim and counterclaim concerning specific performance, and the case was dismissed on June 29, 2016. On February 18, 2014, Atlas IP, LLC filed a complaint in the United States District Court for the Southern District of Florida alleging that the sale of our LATITUDE™ Patient Management System and implantable devices that communicate with the LATITUDE™ Device infringe a patent owned by Atlas. On July 9, 2014, the District Court granted our motion to transfer venue to the United States District Court for the District of Minnesota. On January 12, 2015, Atlas dismissed its complaint. On September 22, 2015, Atlas IP LLC filed a complaint in Federal Court in Ottawa, Ontario, Canada alleging that the sale of our LATITUDE™ Patient Management System and implantable devices that communicate with the LATITUDE™ Device infringe certain claims of a Canadian patent owned by Atlas. On October 25, 2016, the claim against us in Canada was dismissed. On September 28, 2011, we served a complaint against Mirowski Family Ventures LLC in the U.S. District Court for the Southern District of Indiana for a declaratory judgment that we have paid all royalties owed and did not breach any contractual or fiduciary obligations arising out of a license agreement. Mirowski answered and filed counterclaims requesting damages. On May 13, 2013, Mirowski Family Ventures served us with a complaint alleging breach of contract in Montgomery County Circuit Court, Maryland, and they amended this complaint on August 1, 2013. On July 29, 2013, the Indiana case was dismissed. On September 10, 2013, we removed the case to the United States District Court for the District of Maryland. On June 5, 2014, the District Court granted Mirowski’s motion to remand the case to the Montgomery County Circuit Court. On September 24, 2014, following a jury verdict against us, the Montgomery County Circuit Court entered a judgment that we breached our license agreement with Mirowski and awarded damages of $308 million . On October 28, 2014, the Montgomery County Circuit Court denied our post-trial motions seeking to overturn the judgment. On November 19, 2014, we filed an appeal with the Maryland Court of Special Appeals. On January 29, 2016, the Maryland Court of Special Appeals affirmed the decision of the Montgomery County Circuit Court. On February 2, 2016, we filed a motion for reconsideration, which was denied. On July 12, 2016, the Maryland Court of Appeals denied our petition for certiorari. On July 26, 2016, we paid $366 million in satisfaction of the judgment and interest, subject to a right of rescission should the judgment be reversed. On October 7, 2016 we filed a Petition for Writ of Certiorari with the United States Supreme Court. On February 21, 2017, the Court denied our petition. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | STOCKHOLDERS' EQUITY Preferred Stock We are authorized to issue 50 million shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by our stockholders. As of December 31, 2016 and 2015 , we had no shares of preferred stock issued or outstanding. Common Stock We are authorized to issue 2.0 billion shares of common stock, $0.01 par value per share. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors, and to share ratably in our assets legally available for distribution to our stockholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption, or conversion rights. The holders of common stock do not have cumulative voting rights. The holders of a majority of the shares of common stock can elect all of the directors and can control our management and affairs. On January 25, 2013, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $1.0 billion of our common stock. We did not repurchase any shares of our common stock during 2016 or 2015. During 2014 , we repurchased approximately 10 million shares of our common stock for $125 million . Repurchased shares are available for reissuance under our equity incentive plans and for general corporate purposes, including acquisitions. As of December 31, 2016 , we had remaining $535 million authorized under our 2013 share repurchase program. There were approximately 248 million shares in treasury as of December 31, 2016 and December 31, 2015 . |
Stock Ownership Plans
Stock Ownership Plans | 12 Months Ended |
Dec. 31, 2016 | |
Stock Ownership Plans [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | STOCK OWNERSHIP PLANS Employee and Director Stock Incentive Plans In March and May 2011, our Board of Directors and stockholders, respectively, approved our 2011 Long-Term Incentive Plan (the 2011 LTIP), authorizing up to 146 million shares of our common stock. The 2011 LTIP covers officers, directors, employees and consultants, and provides for the grant of restricted or unrestricted common stock, deferred stock units (DSU), options to acquire our common stock, stock appreciation rights, performance awards (market-based and performance-based DSUs) and other stock and non-stock awards. Shares reserved under our current and former stock incentive plans totaled approximately 150 million as of December 31, 2016 . The Executive Compensation and Human Resources Committee of the Board of Directors, consisting of independent, non-employee directors, may authorize the issuance of common stock and authorize cash awards under the 2011 LTIP in recognition of the achievement of long-term performance objectives established by the Committee. Nonqualified options issued to employees are generally granted with an exercise price equal to the market price of our stock on the grant date, vest over a four -year service period, and have a ten -year contractual life. In the case of qualified options, if the recipient owns more than ten percent of the voting power of all classes of stock, the option granted will be at an exercise price of 110 percent of the fair market value of our common stock on the date of grant and will expire over a period not to exceed five years. Non-vested stock awards, including restricted stock awards and deferred stock units, issued to employees are generally granted with an exercise price of zero and typically vest in five equal annual installments. These awards represent our commitment to issue shares to recipients after the vesting period. Upon each vesting date, such awards are no longer subject to risk of forfeiture and we issue shares of our common stock to the recipient. The following presents the impact of stock-based compensation on our consolidated statements of operations for the years ended December 31, 2016 , 2015 and 2014 : Year Ended December 31, (in millions, except per share data) 2016 2015 2014 Cost of products sold $ 6 $ 7 $ 6 Selling, general and administrative expenses 90 81 79 Research and development expenses 20 19 18 116 107 103 Income tax benefit (29 ) (28 ) (28 ) $ 87 $ 79 $ 75 Net impact per common share - basic $ 0.06 $ 0.06 $ 0.06 Net impact per common share - assuming dilution $ 0.06 $ 0.06 $ 0.06 Stock Options We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock options granted to employees under our stock incentive plans. We calculated the fair value for options granted during 2016, 2015 and 2014 using the following estimated weighted-average assumptions: Year Ended December 31, 2016 2015 2014 Options granted (in thousands) 4,186 4,441 4,943 Weighted-average exercise price $ 17.46 $ 16.49 $ 13.02 Weighted-average grant-date fair value $ 5.60 $ 5.54 $ 5.07 Black-Scholes Assumptions Expected volatility 30 % 31 % 37 % Expected term (in years, weighted) 6.0 6.0 6.0 Risk-free interest rate 1.14% - 2.08% 1.49% - 1.92% 1.69% - 2.09% Expected Volatility We use our historical volatility and implied volatility as a basis to estimate expected volatility in our valuation of stock options. Expected Term We estimate the expected term of options using historical exercise and forfeiture data. We believe that this historical data provides the best estimate of the expected term of new option grants. Risk-Free Interest Rate We use yield rates on U.S. Treasury securities for a period approximating the expected term of the award to estimate the risk-free interest rate in our grant-date fair value assessment. Expected Dividend Yield We have not historically paid cash dividends to our stockholders and currently do not intend to pay cash dividends. Therefore, we have assumed an expected dividend yield of zero in our grant-date fair value assessment. Information related to stock options for 2016, 2015 and 2014 under stock incentive plans is as follows: Stock Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in millions) Outstanding as of December 31, 2013 44,892 $ 12 Granted 4,943 13 Exercised (4,418 ) 8 Cancelled/forfeited (5,909 ) 17 Outstanding as of December 31, 2014 39,508 $ 11 Granted 4,441 16 Exercised (9,040 ) 9 Cancelled/forfeited (3,820 ) 25 Outstanding as of December 31, 2015 31,089 $ 11 Granted 4,186 17 Exercised (6,612 ) 12 Cancelled/forfeited (2,019 ) 21 Outstanding as of December 31, 2016 26,644 $ 11 5.8 $ 281 Exercisable as of December 31, 2016 17,293 $ 9 4.4 $ 226 Expected to vest as of December 31, 2016 8,664 16 8.3 51 Total vested and expected to vest as of December 31, 2016 25,957 $ 11 5.7 $ 277 The total intrinsic value of stock options exercised was $64 million in 2016 , $69 million in 2015 and $24 million in 2014 . Non-Vested Stock We value restricted stock awards and DSUs based on the closing trading value of our shares on the date of grant. Information related to non-vested stock awards during 2016, 2015 and 2014 is as follows: Non-Vested Stock Award Units (in thousands) Weighted Average Grant- Date Fair Value Balance as of December 31, 2013 37,339 $ 7 Granted 7,072 13 Vested (1) (11,205 ) 7 Forfeited (2,671 ) 8 Balance as of December 31, 2014 30,535 $ 9 Granted 6,606 16 Vested (1) (11,607 ) 8 Forfeited (1,770 ) 10 Balance as of December 31, 2015 23,764 $ 11 Granted 6,132 17 Vested (1) (10,045 ) 10 Forfeited (1,054 ) 13 Balance as of December 31, 2016 18,797 $ 14 (1) The number of restricted stock units vested includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements. The total vesting date fair value of stock award units that vested was approximately $179 million in 2016 , $186 million in 2015 and $146 million in 2014 . Market-based DSU Awards During 2016, 2015 and 2014 , we granted market-based DSU awards to certain members of our senior management team. The number of shares ultimately issued to the recipient is based on the total shareholder return (TSR) of our common stock as compared to the TSR of the common stock of the other companies in the S&P 500 Health Care Index over a three-year performance period. In addition, award recipients must remain employed by us throughout the three-year performance period to attain the full amount of the market-based DSUs that satisfied the market performance criteria. We determined the fair value of the market-based DSU awards to be approximately $6 million for 2016 , $7 million for 2015 and $6 million for 2014 . We determined these fair values based on Monte Carlo simulations as of the date of grant, utilizing the following assumptions: 2016 2015 2014 Awards Awards Awards Stock price on date of grant $ 17.26 $ 16.31 $ 13.08 Measurement period (in years) 2.9 3.0 3.0 Risk-free rate 0.90 % 0.98 % 0.66 % We recognize the expense on these awards in our consolidated statements of operations on a straight-line basis over the three-year measurement period. Free Cash Flow Performance-based DSU Awards During 2016 , 2015 and 2014 , we granted free cash flow performance-based DSU awards to certain members of our senior management team. The attainment of these performance-based DSUs is based on our adjusted free cash flow (FCF) measured against our internal annual financial plan performance for FCF. FCF is measured over a one-year performance period beginning January 1st of each year and ending December 31st. The number of performance-based DSUs as to which the performance criteria under this program shall be determined to have been satisfied will be in a range of 0% to 150% of the target number of performance-based DSUs awarded to the participant. In addition, award recipients must remain employed by us throughout a three-year service period (inclusive of the one-year performance period) to attain the full amount of the performance-based DSUs that satisfied the performance criteria. We determined the fair value of the 2016 FCF awards to be approximately $8 million , based on the closing stock price at December 31, 2016 and an achievement of approximately 114% of the target payout. The per unit fair value is $21.63 , which is the closing stock price on December 31, 2016 . We determined the fair value of the 2015 FCF awards to be approximately $6 million and the per unit fair value was $18.44 , and we determined the fair value of the 2014 FCF awards to be approximately $5 million and the per unit fair value was $13.25 . We recognize the expense on these awards in our consolidated statements of operations over the vesting period which is three years after the date of grant. Expense Attribution We recognize compensation expense for our stock using a straight-line method over the substantive vesting period. Most of our stock awards provide for immediate vesting upon death or disability of the participant. In addition, our stock grants to employees provide for accelerated vesting of our stock-based awards, other than performance-based and market-based awards, upon retirement. In accordance with the terms of our stock grants, for employees who will become retirement eligible prior to the vest date we expense stock-based awards, other than performance-based and market-based awards, over the greater of one year or the period between grant date and retirement-eligibility. The performance-based and market-based awards discussed above do not contain provisions that would accelerate the full vesting of the awards upon retirement-eligibility. We recognize stock-based compensation expense for the value of the portion of awards that are ultimately expected to vest. FASB ASC Topic 718, Compensation – Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock-based award. We have applied, based on an analysis of our historical forfeitures, a weighted-average annual forfeiture rate of approximately eight percent to all unvested stock-based awards as of December 31, 2016 , which represents the portion that we expect will be forfeited each year over the vesting period. We re-evaluate this analysis annually, or more frequently if there are significant changes in circumstances, and adjust the forfeiture rate as necessary. Ultimately, we will only recognize expense for those shares that vest. Unrecognized Compensation Cost We expect to recognize the following future expense for awards outstanding as of December 31, 2016 : Unrecognized Compensation Cost (in millions)(1) Weighted Average Remaining Vesting Period (in years) Stock options $ 27 Non-vested stock awards 136 $ 163 1.3 (1) Amounts presented represent compensation cost, net of estimated forfeitures. Employee Stock Purchase Plans Our global employee stock purchase plan provides for the granting of options to purchase up to 50 million shares of our common stock to all eligible employees. Under the global employee stock purchase plan, we grant each eligible employee, at the beginning of each six-month offering period, an option to purchase shares of our common stock equal to not more than ten percent of the employee’s eligible compensation or the statutory limit under the U.S. Internal Revenue Code. Such options may be exercised only to the extent of accumulated payroll deductions at the end of the offering period, at a purchase price equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. As of December 31, 2016 , there were approximately 15 million shares available for future issuance under the employee stock purchase plan. Information related to shares issued or to be issued in connection with the employee stock purchase plan based on employee contributions and the range of purchase prices is as follows: (shares in thousands) 2016 2015 2014 Shares issued or to be issued 2,337 2,529 2,618 Range of purchase prices $15.29 - $18.39 $11.24 - $15.13 $10.12 - $11.04 We use the Black-Scholes option-pricing model to calculate the grant-date fair value of shares issued under the employee stock purchase plan. We recognize expense related to shares purchased through the employee stock purchase plan ratably over the offering period. We recognized $11 million in expense associated with our employee stock purchase plan in 2016 , $9 million in 2015 and $8 million in 2014 . |
Weighted Average Shares Outstan
Weighted Average Shares Outstanding | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | WEIGHTED AVERAGE SHARES OUTSTANDING Year Ended December 31, (in millions) 2016 2015 2014 Weighted average shares outstanding - basic 1,357.6 1,341.2 1,324.3 Net effect of common stock equivalents 19.6 — — Weighted average shares outstanding - assuming dilution 1,377.2 1,341.2 1,324.3 Our weighted-average shares outstanding for earnings per share calculations excluded common stock equivalents of 22 million in 2015 and 24 million in 2014 due to our net loss positions. Weighted-average shares outstanding, assuming dilution, excludes the impact of less than 1 million stock options for 2016 , 2 million stock options for 2015 and 12 million stock options for 2014 , due to the exercise prices of these stock options being greater than the average fair market value of our common stock during the year. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING We have three reportable segments comprised of: Cardiovascular, Rhythm Management, and MedSurg, which represent an aggregation of our operating segments. Each of our reportable segments generates revenues from the sale of medical devices. We measure and evaluate our reportable segments based on segment net sales and operating income, excluding the impact of changes in foreign currency and sales from divested businesses. Sales generated from reportable segments and divested businesses, as well as operating results of reportable segments and corporate expenses, are based on internally-derived standard currency exchange rates, which may differ from year to year, and do not include intersegment profits. As needed, we restate segment information for the prior period based on our internally-derived standard currency exchange rates used for the current period in order to remove the impact of foreign currency exchange fluctuation. We exclude from segment operating income certain corporate-related expenses and certain transactions or adjustments that our chief operating decision maker considers to be non-operational, such as amounts related to intangible asset impairment charges; acquisition-, divestiture-, litigation-, restructuring- and restructuring-related net charges and credits; pension termination charges; and amortization expense. Although we exclude these amounts from segment operating income, they are included in reported consolidated operating income (loss) and are included in the reconciliation below. A reconciliation of the totals reported for the reportable segments to the applicable line items in our accompanying consolidated statements of operations is as follows: Year Ended December 31, (in millions) 2016 2015 2014 Net sales Interventional Cardiology $ 2,524 $ 2,242 $ 2,092 Peripheral Interventions 1,093 975 861 Cardiovascular 3,617 3,217 2,953 Cardiac Rhythm Management 1,994 1,934 1,922 Electrophysiology 261 248 228 Rhythm Management 2,255 2,182 2,150 Endoscopy 1,565 1,422 1,343 Urology and Pelvic Health 1,065 735 542 Neuromodulation 574 512 474 MedSurg 3,204 2,669 2,359 Net sales allocated to reportable segments 9,076 8,068 7,462 Sales generated from business divestitures — — 4 Impact of foreign currency fluctuations (690 ) (591 ) (86 ) $ 8,386 $ 7,477 $ 7,380 Year Ended December 31, (in millions) 2016 2015 2014 Depreciation expense Cardiovascular $ 122 $ 116 $ 120 Rhythm Management 83 94 92 MedSurg 74 73 75 Depreciation expense allocated to reportable segments 279 283 287 Impact of foreign currency fluctuations (9 ) (9 ) — $ 270 $ 274 $ 287 Year Ended December 31, (in millions) 2016 2015 2014 Income (loss) before income taxes Cardiovascular $ 1,137 $ 972 $ 767 Rhythm Management 404 328 289 MedSurg 1,045 856 746 Operating income allocated to reportable segments 2,586 2,156 1,802 Corporate expenses and currency exchange (565 ) (486 ) (308 ) Intangible asset impairment charges; pension termination charges; and acquisition- and divestiture-related net charges, litigation-related net charges, and restructuring- and restructuring-related net charges (1,029 ) (1,502 ) (1,357 ) Amortization expense (545 ) (495 ) (438 ) Operating income (loss) 447 (327 ) (301 ) Other expense, net (270 ) (323 ) (208 ) $ 177 $ (650 ) $ (509 ) As of December 31, (in millions) 2016 2015 Total assets Cardiovascular $ 1,748 $ 1,583 Rhythm Management 1,250 1,279 MedSurg 1,499 1,141 Total assets allocated to reportable segments 4,497 4,003 Goodwill 6,678 6,473 Other intangible assets, net 5,883 6,194 All other corporate assets 1,038 1,463 $ 18,096 $ 18,133 Enterprise-Wide Information (based on actual currency exchange rates) Year Ended December 31, (in millions) 2016 2015 2014 Net sales Interventional Cardiology $ 2,281 $ 2,033 $ 2,057 Cardiac Rhythm Management 1,850 1,807 1,912 Endoscopy 1,440 1,306 1,323 Peripheral Interventions 1,011 904 850 Urology and Pelvic Health 1,005 693 535 Neuromodulation 556 501 472 Electrophysiology 243 233 227 8,386 7,477 7,376 Sales generated from divested businesses — — 4 $ 8,386 $ 7,477 $ 7,380 United States $ 4,759 $ 4,229 $ 3,885 Japan 750 602 678 Other countries 2,877 2,646 2,813 8,386 7,477 7,376 Sales generated from divested businesses — — 4 $ 8,386 $ 7,477 $ 7,380 As of December 31, (in millions) 2016 2015 2014 Long-lived assets United States $ 1,082 $ 1,018 $ 1,002 Ireland 181 170 197 Other foreign countries 367 302 308 Property, plant and equipment, net 1,630 1,490 1,507 Goodwill 6,678 6,473 5,898 Other intangible assets, net 5,883 6,194 5,606 $ 14,191 $ 14,157 $ 13,011 |
Changes in Other Comprehensive
Changes in Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Changes in Other Comprehensive Income [Abstract] | |
Comprehensive Income (Loss) Note [Text Block] | CHANGES IN OTHER COMPREHENSIVE INCOME The following table provides the reclassifications out of other comprehensive income for the years ended December 31, 2016 and December 31, 2015 . Amounts in the chart below are presented net of tax. Year Ended December 31, 2016 (in millions) Foreign Currency Translation Adjustments Unrealized Gains/Losses on Derivative Financial Instruments Unrealized Gains/Losses on Available-for-Sale Securities Defined Benefit Pension Items / Other Total Beginning Balance $(54) $152 $— $(10) $88 Other comprehensive income/(loss) before reclassifications (25) 40 (6) (17) (8) (Gain)/Loss reclassified from accumulated other comprehensive income — (85) — 6 (79) Net current-period other comprehensive income (25) (45) (6) (11) (87) Ending Balance $(79) $107 $(6) $(21) $1 Year Ended December 31, 2015 (in millions) Foreign Currency Translation Adjustments Unrealized Gains/Losses on Derivative Financial Instruments Defined Benefit Pension Items / Other Total Beginning Balance $(38) $219 $(37) $144 Other comprehensive income/(loss) before reclassifications (16) 70 (3) 51 (Gain)/Loss reclassified from accumulated other comprehensive income — (137) 30 (107) Net current-period other comprehensive income (16) (67) 27 (56) Ending Balance $(54) $152 $(10) $88 The income tax impact of the amounts in other comprehensive income for unrealized gains/losses on derivative financial instruments before reclassifications was an expense of $23 million in 2016 and an expense of $39 million in 2015 . The gains and losses on derivative financial instruments reclassified from accumulated other comprehensive income were reduced by income tax impacts of $48 million in 2016 and $78 million in 2015 . Refer to Note E – Fair Value Measurements for further detail on the reclassifications related to derivatives. The income tax impact of the amounts in other comprehensive income for defined benefit and pension items before reclassifications was a benefit of $9 million in 2016 and a benefit of $2 million in 2015 . The gains and losses on defined benefit and pension items reclassified from accumulated other comprehensive income were reduced by income tax impacts of $2 million in 2016 and $17 million in 2015 . The gains and losses on available-for-sale securities were reduced by immaterial income tax impacts in 2016 . Refer to Note E – Fair Value Measurements for further detail on the gains and losses on available-for-sale securities. |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption on our consolidated financial statements. Standards Implemented Since December 31, 2015 ASC Update No. 2015-05 In April 2015, the FASB issued ASC Update No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Update No. 2015-05 provides accounting guidance on how customers should treat cloud computing arrangements. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. Update No. 2015-05 is effective for annual reporting periods beginning after December 15, 2015 and interim periods within those reporting periods. We elected to adopt the amendments prospectively to all arrangements entered into or materially modified after the effective date. The adoption of Update No. 2015-05 did not have a material impact on our financial position or results of operations. ASC Update No. 2015-12 In July 2015, the FASB issued ASC Update No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965). Update No. 2015-12 has three parts. Part I designates contract value as the only required measure for fully benefit-responsive investment contracts. Part II simplifies the investment disclosure requirements under Topics 820, 960, 962, and 965 for employee benefits plans and Part III provides an alternative measurement date for fiscal periods that do not coincide with a month-end date. Update No. 2015-12 is effective for fiscal years beginning after December 15, 2015. The adoption of Update No. 2015-12 did not have a material impact on our financial position or results of operations. ASC Update No. 2015-16 In September 2015, the FASB issued ASC Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement - Period Adjustments . Update No. 2015-16 eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination. Update No. 2015-16 requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the income statement or disclosed in the notes. Update No. 2015-16 is effective for fiscal years beginning after December 15, 2015. The adoption of Update No. 2015-16 did not impact our financial position or results of operations. ASC Update No. 2015-17 In November 2015, the FASB issued ASC Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Update No. 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. It is effective for fiscal years beginning after December 15, 2016; however, earlier application is permitted. We elected to early adopt Update No. 2015-17 on a prospective basis during the first quarter of 2016; as such, prior periods were not retrospectively adjusted. The adoption of Update No. 2015-17 did not have a material impact on our financial position or results of operations. ASC Update No. 2016-07 In March 2016, the FASB issued ASC Update No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323) . When a previously held investment qualifies for equity method accounting due to an increase in ownership interest or influence, Update No. 2016-07 eliminates the requirement for investors to adjust results retroactively as if the equity method had been in effect during prior periods the investment was held. Instead, it requires investors to adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. We elected to early adopt Update No. 2016-07 on a prospective basis. The adoption of Update No. 2016-07 did not impact our financial position or results of operations. Standards to be Implemented ASC Update No. 2014-09 In May 2014, the FASB issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Update No. 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies using International Financial Reporting Standards and U.S. GAAP. The core principle requires entities to recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration an entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB voted to approve a one year deferral, making the standard effective for public entities for annual and interim periods beginning after December 15, 2017. In March 2016, the FASB issued ASC Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . The purpose of Update No. 2016-08 is to clarify the guidance on principal versus agent considerations. It includes indicators that help to determine whether an entity controls the specified good or service before it is transferred to the customer and to assist in determining when the entity satisfied the performance obligation and as such, whether to recognize a gross or a net amount of consideration in their consolidated statement of operations. In April 2016, the FASB issued ASC Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. Update No. 2016-10 clarifies that entities are not required to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract. Update No. 2016-10 also addresses how to determine whether promised goods or services are separately identifiable and permits entities to make a policy election to treat shipping and handling costs as fulfillment activities. In addition, it clarifies key provisions in Topic 606 related to licensing. In May 2016, the FASB issued ASC Update No. 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815). Update No. 2016-11 rescinds previous SEC comments that were codified in Topic 605, Topic 932 and Topic 815. Upon adoption of ASC 606, certain SEC comments including guidance on accounting for shipping and handling fees and costs and consideration given by a vendor to a customer should not be relied upon. In May 2016, the FASB also issued ASC Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients . Update No. 2016-12 provides clarity around collectibility, presentation of sales taxes, non-cash consideration, contract modifications at transition and completed contracts at transition. Update No. 2016-12 also includes a technical correction within ASC 606 related to required disclosures if the guidance is applied retrospectively upon adoption. In December 2016, the FASB issued ASC Update No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers . Update No. 2016-20 allows entities not to make quantitative disclosures about remaining performance obligations in certain cases and requires entities that use any of the optional exemptions to expand their qualitative disclosures. Update No. 2016-20 also clarifies other areas of the new revenue standard, including disclosure requirements for prior period performance obligations, impairment guidance for contract costs and the interaction of impairment guidance in ASC 340-40 with other guidance elsewhere in the Codification. We expect to adopt Topic 606, and the aforementioned updates, effective January 1, 2018. We established a cross-functional implementation team consisting of representatives from all of our business divisions and regions. During 2016 we analyzed the impact of the standard on our contract portfolio by reviewing a representative sample of our contracts to identify potential differences that would result from applying the requirements of the new standard. The implementation team has apprised both management and the audit committee of project status on a recurring basis. We have not finalized our assessment of the impact of Topic 606. We continue to analyze performance obligations, variable consideration and disclosures. Additionally, we are monitoring updates issued by the FASB. During the first half of 2017, we expect to substantially complete our impact assessment and initiate efforts to redesign impacted processes, policies and controls. ASC Update No. 2016-01 In January 2016, the FASB issued ASC Update No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. It is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application of certain provisions is permitted. Update 2016-01 requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value with changes recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. It also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. Update 2016-01 also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and liability. The adoption of Update No. 2016-01 is not expected to have a material impact on our financial position or results of operations. ASC Update No. 2016-02 In February 2016, the FASB issued ASC Update No. 2016-02, Leases (Topic 842). It is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. Update No. 2016-02 is intended to increase the transparency and comparability among organizations by recognizing lease asset and lease liabilities on the balance sheet, including those previously classified as operating leases under current U.S. GAAP, and disclosing key information about leasing arrangements. We are in the process of determining the effect that the adoption of this standard will have on our financial position and results of operations. ASC Update No. 2016-09 In March 2016, the FASB issued ASC Update No. 2016-09, Compensation- Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update is effective for annual reporting periods after December 15, 2016, including interim periods within those fiscal periods. Early adoption is permitted. The purpose of the update is to simplify several areas of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Upon adoption in 2017, a cumulative effect adjustment of an amount still being determined will be recorded to retained earnings for windfall tax benefits not previously recognized and all future windfall tax benefits will be recognized through income tax expense. We estimate the benefit to income tax expense to be between $20 million and $30 million in 2017 with the majority of the benefit occurring during the first quarter of 2017 due to vesting of the Company’s annual grants. Beginning in the first quarter of 2017, we will disclose the actual effect that the adoption has on our financial position and results of operations. ASC Update No. 2016-13 In June 2016, the FASB issued ASC Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. The purpose of Update No. 2016-13 is to replace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. ASC Update No. 2016-15 In August 2016, the FASB issued ASC Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The purpose of Update No. 2016-15 is to reduce the diversity in practice in presentation and classification of the following items within the statement of cash flows: debt prepayments, settlement of zero coupon debt instruments, contingent consideration payments, insurance proceeds, securitization transactions and distributions from equity method investees. The update also addresses classification of transactions that have characteristics of more than one class of cash flows. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. ASC Update No. 2016-16 In October 2016, the FASB issued ASU Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The purpose of Update No. 2016-16 is to allow an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, as opposed to waiting until the asset is sold to an outside party. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. ASC Update No. 2016-17 In October 2016, the FASB issued ASU Update No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control . The update is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The purpose of Update No. 2016-17 is to amend the consolidation guidance from ASU Update No. 2015-02 on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The amendment requires that a single decision maker include those indirect interests held through related parties that are under common control with the single decision maker on a proportionate basis consistent with indirect interests held through other related parties. Update No. 2016-17 is not expected to have a material impact on our financial position or results of operations. ASC Update No. 2016-18 In November 2016, the FASB issued ASC Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted. The purpose of Update No. 2016-18 is to clar ify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents . We are in the process of determining the effect that the adoption will have on our financial position and results of operations. ASC Update No. 2016-19 In December 2016, the FASB issued ASC Update No. 2016-19, Technical Corrections and Improvements. The purpose of Update No. 2016-19 is primarily to clarify or correct unintended application of guidance that affects a wide variety of topics in the ASC. The update is effective immediately for most of the amendments. Six amendments in Update No. 2016-19 clarify guidance or correct references in the ASC are effective for fiscal years beginning after December 15, 2016, including interim reporting periods within those fiscal years. Early application is permitted. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. ASC Update No. 2017-01 In January 2017, the FASB issued ASC Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The update is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted, including for interim or annual periods in which the financial statements have not been issued or made available for issuance. The purpose of Update No. 2017-01 is to change the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The adoption of Update No. 2017-01 is not expected to have a material impact on our financial position or results of operations. ASC Update No. 2017-04 In January 2017, the FASB issued ASC Update No. 2017-04, Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The purpose of Update No. 2017-04 is to reduce the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the impaired fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this amendment, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. We anticipate early adopting Update No. 2017-04 in fiscal year 2017 on a prospective basis. No other new accounting pronouncements, issued or effective, during the period had, or is expected to have, a material impact on our consolidated financial statements. |
Schedule II
Schedule II | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Description Balance at Charges to Expenses (a) Deductions to Accounts (b) Charges to Balance at End of Year Year Ended December 31, 2016: Allowances for uncollectible accounts and sales returns and allowances $ 119 9 (11 ) 2 $ 119 Year Ended December 31, 2015: Allowances for uncollectible accounts and sales returns and allowances $ 105 15 (16 ) 15 $ 119 Year Ended December 31, 2014: Allowances for uncollectible accounts and sales returns and allowances $ 112 10 (15 ) (2 ) $ 105 (a) Represents allowances for uncollectible accounts established through selling, general and administrative expenses. (b) Represents actual write-offs of uncollectible accounts. (c) Represents net change in allowances for sales returns, recorded as contra-revenue. |
Significant Accounting Polici26
Significant Accounting Policies Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Principles of Consolidation Our consolidated financial statements include the accounts of Boston Scientific Corporation and our wholly-owned subsidiaries, after the elimination of intercompany transactions. We assess the terms of our investment interests to determine if any of our investees meet the definition of a variable interest entity (VIE) . For any VIEs, we perform an analysis to determine whether our variable interests give us a controlling financial interest in a VIE. The analysis identifies the primary beneficiary of a VIE as the enterprise that has both 1) the power to direct activities of a VIE that most significantly impact the entity’s economic performance and 2) the obligation to absorb losses of the entity or the right to receive benefits from the entity. Based on our assessments under the applicable guidance, we did not have controlling financial or operating interests in any VIEs and therefore did not consolidate any VIEs for 2016 , 2015 , and 2014 . On January 3, 2011, we closed the sale of our Neurovascular business to Stryker Corporation (Stryker). Due to our continuing involvement in the operations of the Neurovascular business following the divestiture, the divestiture did not meet the criteria for presentation as a discontinued operation and, therefore, the results of the Neurovascular business were included in our results of operations for 2014. Refer to Note C – Divestitures for a description of this business divestiture. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and with the instructions to Form 10-K and Regulation S-X. Additionally, certain prior year balances related to debt issuance costs have been restated to reflect our adoption of Accounting Standards Codification Update No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . Amounts reclassified from other long-term assets to long-term debt were not material. Refer to Note Q - New Accounting Pronouncements for additional information on our adoption of the accounting pronouncement. |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events We evaluate events occurring after the date of our accompanying consolidated balance sheets for potential recognition or disclosure in our financial statements. We did not identify any material subsequent events requiring adjustment to our accompanying consolidated financial statements (recognized subsequent events). Those items requiring disclosure (unrecognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note F – Borrowings and Credit Arrangements and Note K – Commitments and Contingencies for further details. |
Use of Estimates, Policy [Policy Text Block] | Accounting Estimates To prepare our consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our financial statements and the reported amounts of our revenues and expenses during the reporting period. Our actual results may differ from these estimates. Refer to Critical Accounting Estimates included in Item 7 of this Annual Report for further discussion. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents We record cash and cash equivalents in our consolidated balance sheets at cost, which approximates fair value. Our policy is to invest excess cash in short-term marketable securities earning a market rate of interest without assuming undue risk to principal, and we limit our direct exposure to securities in any one industry or issuer. We consider all highly liquid investments purchased with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. We record available-for-sale investments at fair value and exclude unrealized gains and temporary losses on available-for-sale securities from earnings, reporting such gains and losses, net of tax, as a separate component of stockholders’ equity, until realized. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. Refer to Investments in Publicly Traded and Privately Held Entities below for additional details. |
Concentration Risk Disclosure [Text Block] | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, derivative financial instrument contracts and accounts and notes receivable. Our investment policy limits exposure to concentrations of credit risk and changes in market conditions. Counterparties to financial instruments expose us to credit-related losses in the event of nonperformance. We transact our financial instruments with a diversified group of major financial institutions with investment grade credit ratings and actively monitor their credit ratings and our outstanding positions to limit our credit exposure. We provide credit, in the normal course of business, to hospitals, healthcare agencies, clinics, doctors' offices and other private and governmental institutions and generally do not require collateral. We record our accounts receivable in our consolidated balance sheets at net realizable value. We perform on-going credit evaluations of our customers and maintain allowances for potential credit losses, based on historical information and management's best estimates. Amounts determined to be uncollectible are written off against this reserve. We recorded write-offs of uncollectible accounts receivable of $11 million in 2016 , $16 million in 2015 , and $15 million in 2014 . We are not dependent on any single institution and no single customer accounted for more than ten percent of our net sales in 2016 , 2015 , and 2014 or accounts receivable at December 31, 2016 or 2015 ; however, large group purchasing organizations, hospital networks and other buying groups have become increasingly important to our business and represent a substantial portion of our U.S. net sales. We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers in Southern Europe, specifically Greece, Italy, Spain and Portugal are subject to an increased number of days outstanding relative to other countries prior to payment. Historically, receivable balances with certain publicly-owned hospitals in these countries accumulate over a period of time and are then subsequently settled as large lump sum payments. While we believe our allowance for doubtful accounts in these countries is adequate as of December 31, 2016 , if significant changes were to occur in the payment practices of these European governments or if government funding becomes unavailable, we may not be able to collect on receivables due to us from these customers and our write-offs of uncollectible amounts may increase. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition We generate revenue primarily from the sale of single-use medical devices, and present revenue net of sales taxes in our consolidated statements of operations. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors. We consider revenue to be realized or realizable and earned when all of the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectability is reasonably assured. Revenue is recognized upon passage of title and risk of loss to customers, unless we are required to provide additional services, and provided we can form an estimate for sales returns. We recognize revenue from consignment arrangements based on product usage, or implant, which indicates that the sale is complete. For revenue arrangements with multiple deliverables, where the sale of a device is combined with a future service obligation, we defer revenue on the undelivered element and recognize this revenue over the related service period. Many of our Cardiac Rhythm Management (CRM) product offerings combine the sale of a device with our LATITUDE™ Patient Management System, which represents a future service obligation. Generally, we do not have vendor specific objective evidence of selling price available related to our future service obligations; therefore, we determine our estimates of selling price using third party evidence when available; otherwise, we use our best estimate of selling price. We allocate arrangement consideration using the relative selling price method. We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit. We base our estimate for sales returns upon historical trends and record the amount as a reduction to revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. We also offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum rebate percentage offered. We have entered certain agreements with group purchasing organizations to sell our products to participating hospitals at negotiated prices. We recognize revenue from these agreements following the same revenue recognition criteria discussed above. |
Product Warranty Disclosure [Text Block] | Warranty Obligations We offer warranties on certain of our product offerings. The majority of our warranty liability relates to implantable devices offered by our CRM business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant, and a partial warranty for a period of time thereafter. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim, and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We assess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary. Changes in our product warranty accrual during 2016 , 2015 , and 2014 consisted of the following (in millions): Year Ended December 31, 2016 2015 2014 Beginning balance $ 23 $ 25 $ 28 Provision 25 15 9 Settlements/ reversals (26 ) (17 ) (12 ) Ending balance $ 22 $ 23 $ 25 |
Inventory, Policy [Policy Text Block] | Inventories We state inventories at the lower of first-in, first-out cost or market. We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in the future. Further, the industry in which we participate is characterized by rapid product development and frequent new product introductions. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to excess, expired and obsolete inventory. Approximately 40 percent of our finished goods inventory as of December 31, 2016 and December 31, 2015 was at customer locations pursuant to consignment arrangements or held by sales representatives. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant and Equipment We state property, plant, equipment, and leasehold improvements at historical cost. We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. We depreciate buildings over a 20 to 40 year life; building improvements over the remaining useful life of the building structure; equipment, furniture and fixtures over a three to ten year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease. Depreciation expense was $270 million in 2016 , $274 million in 2015 and $287 million in 2014 . |
Business Combinations Policy [Policy Text Block] | Valuation of Business Combinations We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the dates of acquisition, including identifiable intangible assets and in-process research and development which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred through selling, general and administrative costs. In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory, revenue or commercialization-based milestones. |
In Process Research and Development, Policy [Policy Text Block] | Indefinite-lived Intangibles, including In-Process Research and Development Our indefinite-lived intangible assets that are not subject to amortization include acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine, and in-process research and development intangible assets acquired in a business combination. Our in-process research and development represents intangible assets acquired in a business combination that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. We classify in-process research and development acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, we will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, we would write-off the remaining carrying amount of the associated in-process research and development intangible asset. We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets; in addition, we review our indefinite-lived assets for classification and impairment more frequently if changes in circumstances or indicators exist. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with Financial Accounting Standards Board ( FASB ) Accounting Standards Codification® ( ASC ) Topic 350, Intangibles - Goodwill and Other ( Topic 350 ) . If the carrying value exceeds the fair value of the indefinite-lived intangible asset, we write the carrying value down to the fair value. We use the income approach to determine the fair values of our in-process research and development. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. We base our revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected levels of market share. In arriving at the value of the in-process projects, we consider, among other factors: the in-process projects’ stage of completion; the complexity of the work completed as of the acquisition date; the costs already incurred; the projected costs to complete; the contribution of other acquired assets; the expected regulatory path and introduction dates by region; and the estimated useful life of the technology. We apply a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition. See Note D - Goodwill and Other Intangible Assets for more information related to indefinite-lived intangibles, including in-process research and development during 2016 , 2015 , and 2014 . For asset purchases outside of business combinations, we expense any purchased research and development assets as of the acquisition date. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Amortization and Impairment of Intangible Assets We record intangible assets at historical cost and amortize them over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: patents and licenses, two to 20 years; definite-lived technology-related, five to 25 years; customer relationships, five to 25 years; other intangible assets, various. We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified. We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). See Note D - Goodwill and Other Intangible Assets for more information related to impairments of intangible assets during 2016 , 2015 , and 2014 . For patents developed internally, we capitalize costs incurred to obtain patents, including attorney fees, registration fees, consulting fees, and other expenditures directly related to securing the patent. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Valuation Based on information regularly reviewed by our chief operating decision maker, we have three global reportable segments comprised of Cardiovascular, Rhythm Management, and MedSurg. We determined our global reporting units by identifying our operating segments and assessing whether any components of these segments constituted a business for which discrete financial information is available and whether segment management regularly reviews the operating results of any components. Through this process, we identified the following global reporting units: Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Pelvic Health, and Neuromodulation. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. In 2016, we identified six operating segments including Interventional Cardiology, Peripheral Interventions, Rhythm Management, Endoscopy, Urology and Pelvic Health, and Neuromodulation. For purposes of identifying our reporting units, we then assessed whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We identified Rhythm Management as having two components: Cardiac Rhythm Management and Electrophysiology. For our 2016, 2015 and 2014 annual impairment assessment we identified seven reporting units, which align to our seven core businesses: Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Pelvic Health and Neuromodulation. As noted above, for our 2016 annual impairment assessment we aggregated the Cardiac Rhythm Management and Electrophysiology reporting units, components of the Rhythm Management operating segment, based on the criteria prescribed in FASB ASC Topic 350 . These reporting units were aggregated due to a reorganization that commenced in 2015 that resulted in integrated leadership, shared resources and consolidation of certain sites in 2016. In performing the goodwill impairment assessment for 2016, we utilized both the optional qualitative assessment and the two-step approach prescribed under FASB ASC Topic 350 . Beginning in 2016, the qualitative assessment was used for testing certain reporting units where fair value has historically exceeded carrying value by greater than 100%. All other reporting units were tested using the two-step approach. The qualitative assessment requires an evaluation of whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount based on an assessment of relevant events including macroeconomic factors, industry and market conditions, cost factors, overall financial performance and other entity-specific factors. After assessing the totality of events, if it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying value, the first and second steps of the goodwill impairment test are unnecessary. If it is determined that impairment is more likely than not, then we perform the first step of the two-step impairment test. In 2016, for all reporting units tested using the optional qualitative assessment, we concluded that it was not necessary to perform the first step of the two-step goodwill impairment test. The first step requires a comparison of the carrying value of the reporting units to the fair value of these units. When allocating goodwill from business combinations to our reporting units, we assign goodwill to the reporting units that we expect to benefit from the respective business combination at the time of acquisition. In addition, for purposes of performing our goodwill impairment tests, assets and liabilities, including corporate assets, which relate to a reporting unit’s operations, and would be considered in determining its fair value, are allocated to the individual reporting units. We allocate assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit. For our 2016 , 2015 , and 2014 annual impairment assessments, for those reporting units for which a quantitative test was performed, we used only the income approach, specifically the Discounted Cash Flow (DCF) method, to derive the fair value of each of our reporting units. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwill assessments because we believe the income approach most appropriately measures our income producing assets. We have considered using the market approach and cost approach but concluded they are not appropriate in valuing our reporting units given the lack of relevant market comparisons available for application of the market approach and the inability to replicate the value of the specific technology-based assets within our reporting units for application of the cost approach. Therefore, we believe that the income approach represents the most appropriate valuation technique for which sufficient data are available to determine the fair value of our reporting units. In applying the income approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within our DCF analysis is based on our most recent operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period in our DCF analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates of market-participant risk-adjusted weighted average cost of capital (WACC) as a basis for determining the discount rates to apply to our reporting units’ future expected cash flows. If the carrying value of a reporting unit exceeds its fair value, we then perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. If the carrying value of a reporting unit is zero or negative, we evaluate whether it is more likely than not that a goodwill impairment exists. If we determine adverse qualitative factors exist that would indicate it is more likely than not an impairment exists, we then perform the second step of the goodwill test. The second step of the goodwill impairment test compares the estimated fair value of a reporting unit’s goodwill to its carrying value. If we were unable to complete the second step of the test prior to the issuance of our financial statements and an impairment loss was probable and could be reasonably estimated, we would recognize our best estimate of the loss in our current period financial statements and disclose that the amount is an estimate. We would then recognize any adjustment to that estimate in subsequent reporting periods, once we have finalized the second step of the impairment test. Refer to Note D - Goodwill and Other Intangible Assets to our consolidated financial statements for additional details related to our annual goodwill impairment test. |
Equity and Cost Method Investments, Policy [Policy Text Block] | Investments in Publicly Traded and Privately Held Entities We account for our publicly traded investments as available-for-sale securities based on the quoted market price at the end of the reporting period. Unrealized holding gains or losses during the period, net of tax, are recorded to accumulated other comprehensive income/loss. We compute realized gains and losses on sales of available-for-sale securities at fair value based on the average cost method, adjusted for any other-than-temporary declines in fair value. As of December 31, 2016, we held $20 million of available-for-sale securities. We held no available-for-sale securities during 2015 and 2014 . We account for investments in entities over which we have the ability to exercise significant influence under the equity method if we hold 50 percent or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary in accordance with FASB ASC Topic 323, Investments - Equity Method and Joint Ventures (Topic 323) . We record these investments initially at cost, and adjust the carrying amount to reflect our share of the earnings or losses of the investee, including all adjustments similar to those made in preparing consolidated financial statements. We account for investments in entities in which we have less than a 20 percent ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee in accordance with FASB ASC Topic 325 , Investments - Other . In addition, we have notes receivable from certain companies that we account for in accordance with FASB ASC Topic 320 , Investments - Debt and Equity Securities (Topic 320) . Refer to Note B – Acquisitions and Strategic Investments for additional details on the balances of our equity and cost method investments. Each reporting period, we evaluate our investments to determine if there are any events or circumstances that are likely to have a significant adverse effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a significant deterioration in earnings performance; recent financing rounds at reduced valuations; a significant adverse change in the regulatory, economic or technological environment of an investee; or a significant doubt about an investee’s ability to continue as a going concern. If we identify an impairment indicator, we will estimate the fair value of the investment and compare it to its carrying value. Our estimation of fair value considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and we make a determination as to whether the impairment is other-than-temporary. We deem an impairment to be other-than-temporary unless we have the ability and intent to hold an investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. Impairment losses on our investments are included in other, net in our consolidated statements of operations. |
Income Tax, Policy [Policy Text Block] | Income Taxes We utilize the asset and liability method of accounting for income taxes. Under this method, we determine deferred tax assets and liabilities based on differences between the financial reporting and tax bases of our assets and liabilities. We measure deferred tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. We consider relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as estimates of the impact of future taxable income and available prudent and feasible tax-planning strategies. We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2016 because we intend to permanently reinvest such earnings outside the U.S. As of December 31, 2016 , the cumulative amount of excess financial reporting basis over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested is approximately $9.8 billion . Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries. We provide for potential amounts due in various tax jurisdictions. In the ordinary course of conducting business in multiple countries and tax jurisdictions, there are many transactions and calculations where the ultimate tax outcome is uncertain. Therefore, judgment is required based on individual facts, circumstances and information available in determining whether or not based on technical merits, the position will be sustained upon examination. In our opinion, we have made adequate provisions for income taxes in determining our worldwide income tax position for all years subject to audit. Although we believe our estimates are reasonable, the final outcome of open tax matters may be different from that which we have reflected in our historical income tax provisions and accruals. Such differences could have a material impact on our income tax provision and operating results. See Note J - Income Taxes for further information and discussion of our income tax provision and balances. |
Legal Costs, Policy [Policy Text Block] | Legal and Product Liability Costs In the normal course of business, we are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities litigation and product liability suits. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures or impact our ability to sell our products. We are also the subject of certain governmental investigations, which could result in substantial fines, penalties, and administrative remedies. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We analyze litigation settlements to identify each element of the arrangement. We allocate arrangement consideration to patent licenses received based on estimates of fair value, and capitalize these amounts as assets if the license will provide an on-going future benefit. We record certain legal and product liability charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as litigation-related charges within our consolidated statements of operations; all other legal and product liability charges, credits and costs are recorded within selling, general and administrative expenses. See Note K – Commitments and Contingencies for discussion of our individual material legal proceedings. In accordance with FASB ASC Topic 450, Contingencies , we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. |
Costs Associated with Exit or Disposal Activities or Restructurings, Policy | Costs Associated with Exit Activities We record employee termination costs in accordance with FASB ASC Topic 712 , Compensation - Nonretirement and Postemployment Benefits ( T opic 712) , if we pay the benefits as part of an on-going benefit arrangement, which includes benefits provided as part of our established severance policies or that we provide in accordance with international statutory requirements. We accrue employee termination costs associated with an on-going benefit arrangement if the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and we can reasonably estimate the liability. We account for employee termination benefits that represent a one-time benefit in accordance with FASB ASC Topic 420 , Exit or Disposal Cost Obligation s (Topic 420) . We record such costs into expense over the employee’s future service period, if any. Other costs associated with exit activities may include contract termination costs, including costs related to leased facilities to be abandoned or subleased, consultant fees and impairments of long-lived assets. The costs are expensed in accordance with FASB ASC Topic 420 and FASB ASC Topic 360 , Property, Plant, and Equipment and are included in restructuring charges in our consolidated statement of operations. Additionally, costs directly related to our active restructuring initiatives, including program management costs, accelerated depreciation, and costs to transfer product lines among facilities are included within costs of products sold and selling, general and administrative expenses in our consolidated statement of operations. See Note H – Restructuring-related Activities for further information and discussion of our restructuring plans. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Translation of Foreign Currency We translate all assets and liabilities of foreign subsidiaries from local currency into U.S. dollars using the year-end exchange rate, and translate revenues and expenses at the average exchange rates in effect during the year. We show the net effect of these translation adjustments in our consolidated financial statements as a component of accumulated other comprehensive income. For any significant foreign subsidiaries located in highly inflationary economies, we would re-measure their financial statements as if the functional currency were the U.S. dollar. We did not record any highly inflationary economy translation adjustments in 2016 , 2015 or 2014 . Foreign currency transaction gains and losses are included in other, net in our consolidated statements of operations, net of losses and gains from any related derivative financial instruments. We recognized net foreign currency transaction losses of $13 million in 2016 , $21 million in 2015 , and $18 million in 2014 . |
Derivatives, Policy [Policy Text Block] | Financial Instruments We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with FASB ASC Topic 815 , Derivatives and Hedging (Topic 815) , and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our financial statements. In accordance with FASB ASC Topic 815 , for those derivative instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. The accounting for changes in the fair value (i.e. gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives generally offset losses and gains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments that are designated as hedging instruments pursuant to FASB ASC Topic 815 . Refer to Note E – Fair Value Measurements for more information on our derivative instruments. Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives generally offset losses and gains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments that are designated as hedging instruments pursuant to FASB ASC Topic 815 . |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Costs We generally do not bill customers for shipping and handling of our products. Shipping and handling costs of $101 million in 2016 , $93 million in 2015 , and $100 million in 2014 are included in selling, general and administrative expenses. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development We expense research and development costs, including new product development programs, regulatory compliance and clinical research as incurred. Refer to Indefinite-lived Intangibles, including In-Process Research and Development for our policy regarding in-process research and development acquired in connection with our business combinations and asset purchases. |
Pension and Other Postretirement Plans, Policy [Policy Text Block] | The plan was partially frozen as of September 25, 1995 and completely frozen as of May 31, 2007, and was terminated effective December 1, 2014. During 2015, we finalized the termination process and settled the plan’s obligations. As a result, we recorded pension termination charges of $44 million for the year ended December 31, 2015 . Employee Retirement Plans Following our 2006 acquisition of Guidant Corporation, we sponsored the Guidant Supplemental Retirement Plan, a frozen, non-qualified defined benefit plan for certain former officers and employees of Guidant. The plan was partially frozen as of September 25, 1995 and completely frozen as of May 31, 2007, and was terminated effective December 1, 2014. During 2015, we finalized the termination process and settled the plan’s obligations. As a result, we recorded pension termination charges of $44 million for the year ended December 31, 2015 . The Guidant Supplemental Retirement Plan was partially funded through a Rabbi Trust that contains segregated company assets used to pay the benefit obligations related to the plan. We also maintain an Executive Retirement Plan, a defined benefit plan covering executive officers and division presidents and certain persons that may have served in these roles. Participants may retire with unreduced benefits once retirement conditions have been satisfied. In addition, we maintain retirement plans covering certain international employees. We use a December 31 measurement date for these plans and record the underfunded portion as a liability, recognizing changes in the funded status through other comprehensive income (OCI). We base our discount rate on the rates of return available on high-quality bonds with maturities approximating the expected period over which benefits will be paid. The rate of compensation increase is based on historical and expected rate increases. We base our rate of expected return on plan assets on historical experience, our investment guidelines and expectations for long-term rates of return. Our international pension plan assets are invested in a variety of securities, primarily equity securities and government bonds. These securities are considered Level 1 fair value investments and are valued at quoted market prices. We also sponsor a voluntary 401(k) Retirement Savings Plan for eligible employees. We match 200 percent of employee elective deferrals for the first two percent of employee eligible compensation, and 50 percent of employee elective deferrals greater than two percent, but not exceeding six percent, of employee eligible compensation. Total expense for our matching contributions to the plan was $72 million in 2016 , $69 million in 2015 , and $63 million in 2014 . |
Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Common Share We base net income (loss) per common share upon the weighted-average number of common shares and common stock equivalents outstanding during each year. Potential common stock equivalents are determined using the treasury stock method. We exclude stock options whose effect would be anti-dilutive from the calculation. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Termination benefits represent amounts incurred pursuant to our benefit arrangements and amounts for “one-time” involuntary termination benefits, and have been recorded in accordance with FASB ASC Topic 712 and FASB ASC Topic 420 . Other restructuring costs, which represent primarily consulting fees and costs related to contract cancellations, are being recorded as incurred in accordance with FASB ASC Topic 420 . Accelerated depreciation is being recorded over the adjusted remaining useful life of the related assets and production line transfer costs are being recorded as incurred. |
Legal Costs, Policy [Policy Text Block] | Legal and Product Liability Costs In the normal course of business, we are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities litigation and product liability suits. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures or impact our ability to sell our products. We are also the subject of certain governmental investigations, which could result in substantial fines, penalties, and administrative remedies. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We analyze litigation settlements to identify each element of the arrangement. We allocate arrangement consideration to patent licenses received based on estimates of fair value, and capitalize these amounts as assets if the license will provide an on-going future benefit. We record certain legal and product liability charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as litigation-related charges within our consolidated statements of operations; all other legal and product liability charges, credits and costs are recorded within selling, general and administrative expenses. See Note K – Commitments and Contingencies for discussion of our individual material legal proceedings. In accordance with FASB ASC Topic 450, Contingencies , we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. |
ASC Topic 820, Fair Value Measurements and Disclosures | We determine the fair value of our derivative instruments using the framework prescribed by FASB ASC Topic 820 , by considering the estimated amount we would receive or pay to transfer these instruments at the reporting date and by taking into account current interest rates, foreign currency exchange rates, the creditworthiness of the counterparty for the assets and our creditworthiness for liabilities. In certain instances, we may utilize financial models to measure fair value. In doing so, we use inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. |
ASC Topic 815, Derivatives and Hedging | Financial Instruments We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with FASB ASC Topic 815 , Derivatives and Hedging (Topic 815) , and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our financial statements. In accordance with FASB ASC Topic 815 , for those derivative instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. The accounting for changes in the fair value (i.e. gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives generally offset losses and gains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments that are designated as hedging instruments pursuant to FASB ASC Topic 815 . Refer to Note E – Fair Value Measurements for more information on our derivative instruments. Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives generally offset losses and gains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments that are designated as hedging instruments pursuant to FASB ASC Topic 815 . |
New Accounting Pronouncements N
New Accounting Pronouncements New Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
ASC Update No. 2015 -05, Intangibles- Goodwill and Other - Internal -Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement [Policy Text Block] | ASC Update No. 2015-05 In April 2015, the FASB issued ASC Update No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Update No. 2015-05 provides accounting guidance on how customers should treat cloud computing arrangements. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. Update No. 2015-05 is effective for annual reporting periods beginning after December 15, 2015 and interim periods within those reporting periods. We elected to adopt the amendments prospectively to all arrangements entered into or materially modified after the effective date. The adoption of Update No. 2015-05 did not have a material impact on our financial position or results of operations. |
ASC Update No. 2015-12, Plan Accounting [Policy Text Block] | ASC Update No. 2015-12 In July 2015, the FASB issued ASC Update No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965). Update No. 2015-12 has three parts. Part I designates contract value as the only required measure for fully benefit-responsive investment contracts. Part II simplifies the investment disclosure requirements under Topics 820, 960, 962, and 965 for employee benefits plans and Part III provides an alternative measurement date for fiscal periods that do not coincide with a month-end date. Update No. 2015-12 is effective for fiscal years beginning after December 15, 2015. The adoption of Update No. 2015-12 did not have a material impact on our financial position or results of operations. |
ASC Update No. 2015-16, Business Combinations [Policy Text Block] | ASC Update No. 2015-16 In September 2015, the FASB issued ASC Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement - Period Adjustments . Update No. 2015-16 eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination. Update No. 2015-16 requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the income statement or disclosed in the notes. Update No. 2015-16 is effective for fiscal years beginning after December 15, 2015. The adoption of Update No. 2015-16 did not impact our financial position or results of operations. |
ASC Update No. 2015-17, Income Taxes (Topic 740) [Policy Text Block] | ASC Update No. 2015-17 In November 2015, the FASB issued ASC Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Update No. 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. It is effective for fiscal years beginning after December 15, 2016; however, earlier application is permitted. We elected to early adopt Update No. 2015-17 on a prospective basis during the first quarter of 2016; as such, prior periods were not retrospectively adjusted. The adoption of Update No. 2015-17 did not have a material impact on our financial position or results of operations. |
ASC Update No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323) [Policy Text Block] | ASC Update No. 2016-07 In March 2016, the FASB issued ASC Update No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323) . When a previously held investment qualifies for equity method accounting due to an increase in ownership interest or influence, Update No. 2016-07 eliminates the requirement for investors to adjust results retroactively as if the equity method had been in effect during prior periods the investment was held. Instead, it requires investors to adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. We elected to early adopt Update No. 2016-07 on a prospective basis. The adoption of Update No. 2016-07 did not impact our financial position or results of operations. |
ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) [Policy Text Block] | ASC Update No. 2014-09 In May 2014, the FASB issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Update No. 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies using International Financial Reporting Standards and U.S. GAAP. The core principle requires entities to recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration an entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB voted to approve a one year deferral, making the standard effective for public entities for annual and interim periods beginning after December 15, 2017. |
ASC Update No. 2016-08, Revenue from Contracts with Customers (Topic 606) [Policy Text Block] | In March 2016, the FASB issued ASC Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . The purpose of Update No. 2016-08 is to clarify the guidance on principal versus agent considerations. It includes indicators that help to determine whether an entity controls the specified good or service before it is transferred to the customer and to assist in determining when the entity satisfied the performance obligation and as such, whether to recognize a gross or a net amount of consideration in their consolidated statement of operations. |
Update No. 2016-10, Revenue from Contracts with Customers (Topic 606) [Policy Text Block] | In April 2016, the FASB issued ASC Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. Update No. 2016-10 clarifies that entities are not required to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract. Update No. 2016-10 also addresses how to determine whether promised goods or services are separately identifiable and permits entities to make a policy election to treat shipping and handling costs as fulfillment activities. In addition, it clarifies key provisions in Topic 606 related to licensing. |
ASC Update No. 2016-11 [Policy Text Block] | In May 2016, the FASB issued ASC Update No. 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815). Update No. 2016-11 rescinds previous SEC comments that were codified in Topic 605, Topic 932 and Topic 815. Upon adoption of ASC 606, certain SEC comments including guidance on accounting for shipping and handling fees and costs and consideration given by a vendor to a customer should not be relied upon. |
ASC Update No. 2016-12 [Policy Text Block] | In May 2016, the FASB also issued ASC Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients . Update No. 2016-12 provides clarity around collectibility, presentation of sales taxes, non-cash consideration, contract modifications at transition and completed contracts at transition. Update No. 2016-12 also includes a technical correction within ASC 606 related to required disclosures if the guidance is applied retrospectively upon adoption. |
ASC Update No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers [Policy Text Block] | In December 2016, the FASB issued ASC Update No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers . Update No. 2016-20 allows entities not to make quantitative disclosures about remaining performance obligations in certain cases and requires entities that use any of the optional exemptions to expand their qualitative disclosures. Update No. 2016-20 also clarifies other areas of the new revenue standard, including disclosure requirements for prior period performance obligations, impairment guidance for contract costs and the interaction of impairment guidance in ASC 340-40 with other guidance elsewhere in the Codification. We expect to adopt Topic 606, and the aforementioned updates, effective January 1, 2018. We established a cross-functional implementation team consisting of representatives from all of our business divisions and regions. During 2016 we analyzed the impact of the standard on our contract portfolio by reviewing a representative sample of our contracts to identify potential differences that would result from applying the requirements of the new standard. The implementation team has apprised both management and the audit committee of project status on a recurring basis. We have not finalized our assessment of the impact of Topic 606. We continue to analyze performance obligations, variable consideration and disclosures. Additionally, we are monitoring updates issued by the FASB. During the first half of 2017, we expect to substantially complete our impact assessment and initiate efforts to redesign impacted processes, policies and controls. |
ASC Update No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities [Policy Text Block] | ASC Update No. 2016-01 In January 2016, the FASB issued ASC Update No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. It is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application of certain provisions is permitted. Update 2016-01 requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value with changes recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. It also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. Update 2016-01 also requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and liability. The adoption of Update No. 2016-01 is not expected to have a material impact on our financial position or results of operations. |
ASC Update No. 2016-02, Leases (Topic 842) [Policy Text Block] | ASC Update No. 2016-02 In February 2016, the FASB issued ASC Update No. 2016-02, Leases (Topic 842). It is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. Update No. 2016-02 is intended to increase the transparency and comparability among organizations by recognizing lease asset and lease liabilities on the balance sheet, including those previously classified as operating leases under current U.S. GAAP, and disclosing key information about leasing arrangements. We are in the process of determining the effect that the adoption of this standard will have on our financial position and results of operations. |
ASC Update No. 2016-09, Compensation- Stock Compensation (Topic 718) [Policy Text Block] | ASC Update No. 2016-09 In March 2016, the FASB issued ASC Update No. 2016-09, Compensation- Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update is effective for annual reporting periods after December 15, 2016, including interim periods within those fiscal periods. Early adoption is permitted. The purpose of the update is to simplify several areas of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Upon adoption in 2017, a cumulative effect adjustment of an amount still being determined will be recorded to retained earnings for windfall tax benefits not previously recognized and all future windfall tax benefits will be recognized through income tax expense. We estimate the benefit to income tax expense to be between $20 million and $30 million in 2017 with the majority of the benefit occurring during the first quarter of 2017 due to vesting of the Company’s annual grants. Beginning in the first quarter of 2017, we will disclose the actual effect that the adoption has on our financial position and results of operations. |
ASC Update No. 2016-13 [Policy Text Block] | ASC Update No. 2016-13 In June 2016, the FASB issued ASC Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. The purpose of Update No. 2016-13 is to replace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. |
ASC Update No. 2016-15, Statement of Cash Flows [Policy Text Block] | ASC Update No. 2016-15 In August 2016, the FASB issued ASC Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The purpose of Update No. 2016-15 is to reduce the diversity in practice in presentation and classification of the following items within the statement of cash flows: debt prepayments, settlement of zero coupon debt instruments, contingent consideration payments, insurance proceeds, securitization transactions and distributions from equity method investees. The update also addresses classification of transactions that have characteristics of more than one class of cash flows. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. |
ASU Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory [Policy Text Block] | ASC Update No. 2016-16 In October 2016, the FASB issued ASU Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The purpose of Update No. 2016-16 is to allow an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, as opposed to waiting until the asset is sold to an outside party. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. |
ASU Update No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control [Policy Text Block] | ASC Update No. 2016-17 In October 2016, the FASB issued ASU Update No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control . The update is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The purpose of Update No. 2016-17 is to amend the consolidation guidance from ASU Update No. 2015-02 on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The amendment requires that a single decision maker include those indirect interests held through related parties that are under common control with the single decision maker on a proportionate basis consistent with indirect interests held through other related parties. Update No. 2016-17 is not expected to have a material impact on our financial position or results of operations. |
ASC Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash [Policy Text Block] | ASC Update No. 2016-18 In November 2016, the FASB issued ASC Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted. The purpose of Update No. 2016-18 is to clar ify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents . We are in the process of determining the effect that the adoption will have on our financial position and results of operations. |
ASC Update No. 2016-19, Technical Corrections and Improvements [Policy Text Block] | ASC Update No. 2016-19 In December 2016, the FASB issued ASC Update No. 2016-19, Technical Corrections and Improvements. The purpose of Update No. 2016-19 is primarily to clarify or correct unintended application of guidance that affects a wide variety of topics in the ASC. The update is effective immediately for most of the amendments. Six amendments in Update No. 2016-19 clarify guidance or correct references in the ASC are effective for fiscal years beginning after December 15, 2016, including interim reporting periods within those fiscal years. Early application is permitted. We are in the process of determining the effect that the adoption will have on our financial position and results of operations. |
ASC Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business [Policy Text Block] | ASC Update No. 2017-01 In January 2017, the FASB issued ASC Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The update is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted, including for interim or annual periods in which the financial statements have not been issued or made available for issuance. The purpose of Update No. 2017-01 is to change the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The adoption of Update No. 2017-01 is not expected to have a material impact on our financial position or results of operations. |
ASC Update No. 2017-04, Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. [Policy Text Block] | ASC Update No. 2017-04 In January 2017, the FASB issued ASC Update No. 2017-04, Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. The update is effective for fiscal years beginning after December 15, 2019, including interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The purpose of Update No. 2017-04 is to reduce the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the impaired fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this amendment, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. We anticipate early adopting Update No. 2017-04 in fiscal year 2017 on a prospective basis. |
Significant Accounting Polici29
Significant Accounting Policies Significant Accounting Policies (Tables) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Significant Accounting Policies [Abstract] | ||
Pension and Other Postretirement Plans, Nonpension Benefits, Policy [Policy Text Block] | A rollforward of the changes in the pension benefit obligation for our funded retirement plans during 2016 and 2015 is as follows: Year Ended December 31, (in millions) 2016 2015 Beginning obligations $ 131 $ 138 Service and interest costs 10 9 Actuarial gain (loss) 10 (5 ) Plan amendments 7 — Benefits paid (5 ) (5 ) Foreign currency exchange (1 ) (6 ) Ending obligation $ 152 $ 131 | |
Schedule of Product Warranty Liability [Table Text Block] | Changes in our product warranty accrual during 2016 , 2015 , and 2014 consisted of the following (in millions): Year Ended December 31, 2016 2015 2014 Beginning balance $ 23 $ 25 $ 28 Provision 25 15 9 Settlements/ reversals (26 ) (17 ) (12 ) Ending balance $ 22 $ 23 $ 25 | |
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets [Table Text Block] | The outstanding obligation as of December 31, 2016 and 2015 is as follows: As of December 31, 2016 ( in millions) Accumulated Benefit Obligation (ABO) Projected Fair value of Plan Assets Underfunded Executive Retirement Plan $ 15 $ 17 $ — $ 17 Guidant Supplemental Retirement Plan (frozen) 32 32 — 32 International Retirement Plans 93 103 54 49 140 $ 152 $ 54 $ 98 | As of December 31, 2015 ( in millions) Accumulated Benefit Obligation (ABO) Projected Fair value of Plan Assets Underfunded Executive Retirement Plan $ 12 $ 14 $ — $ 14 Guidant Supplemental Retirement Plan (frozen) 33 33 — 33 International Retirement Plans 76 84 52 32 $ 121 $ 131 $ 52 $ 79 |
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | The critical assumptions associated with our employee retirement plans as of December 31, 2016 are as follows: Expected Return on Plan Assets Rate of Discount Rate Compensation Increase Executive Retirement Plan 3.50% 3.00% Guidant Supplemental Retirement Plan (frozen) 4.00% International Retirement Plans 0.50% - 2.13% 3.00% - 4.10% 2.50% - 6.78% | |
Schedule of Changes in Fair Value of Plan Assets [Table Text Block] | A rollforward of the changes in the fair value of plan assets for our funded retirement plans during 2016 and 2015 is as follows: Year Ended December 31, (in millions) 2016 2015 Beginning fair value $ 52 $ 191 Actual return on plan assets (1 ) 1 Employer contributions 7 6 Benefits paid (5 ) (145 ) Foreign currency exchange 1 (1 ) Ending fair value $ 54 $ 52 |
Acquisitions and Strategic In30
Acquisitions and Strategic Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Investment [Table Text Block] | The aggregate carrying amount of our strategic investments as of December 31, 2016 and December 31, 2015 , were comprised of the following categories: As of December 31, 2016 December 31, 2015 Equity method investments $ 265 $ 173 Cost method investments 20 45 Available-for-sale securities 20 — Notes receivable 42 30 $ 347 $ 248 |
Business Combination, Components of Purchase Price [Table Text Block] | The components of the aggregate purchase price for our 2014 acquisitions are as follows (in millions): Cash, net of cash acquired $ 479 Fair value of prior interests 31 $ 510 The components of the aggregate preliminary purchase price are as follows (in millions): Cash, net of cash acquired $ 366 Fair value of contingent consideration 50 Fair value of debt repaid 43 $ 459 The components of the aggregate purchase prices are as follows (in millions): Cash, net of cash acquired $ 1,735 Fair value of contingent consideration 63 $ 1,798 |
Business Combination, Purchase Price Allocation Schedule [Table Text Block] | We allocated a portion of the preliminary purchase price to specific intangible asset categories as follows: Amount (in millions) Weighted (in years) Range of Risk- Amortizable intangible assets: Technology-related $ 176 9-13 11% - 20% Customer relationships 51 9-13 11% - 12% Other intangible assets 1 4 11% $ 228 The following summarizes the preliminary purchase price allocation for our 2016 acquisitions as of December 31, 2016 , (in millions): Goodwill $ 208 Amortizable intangible assets 228 Inventory 11 Property, plant and equipment 6 Other net liabilities (2 ) Deferred income taxes 8 $ 459 The following summarizes the aggregate purchase price allocation for the 2015 acquisitions as of December 31, 2015 (in millions): Goodwill $ 573 Amortizable intangible assets 1,074 Indefinite-lived intangible assets 6 Inventory 103 Property, plant and equipment 43 Other net assets 42 Deferred income taxes (43 ) $ 1,798 The following summarizes the aggregate purchase price allocation for our 2014 acquisitions as of December 31, 2014: Goodwill $ 210 Amortizable intangible assets 263 Inventory 23 Property, plant and equipment 17 Prepaid Transaction Service Agreement 5 Other net assets (1 ) Deferred income taxes (7 ) $ 510 |
Description of unobservable inputs used in Level 3 fair value measurements [Table Text Block] | The recurring Level 3 fair value measurements of our contingent consideration liabilities include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of December 31, 2016 Valuation Technique Unobservable Input Range R&D and Commercialization-based Milestone $46 million Discounted Cash Flow Discount Rate 2% - 3% Projected Year of Payment 2017 - 2021 Revenue-based Payments $60 million Discounted Cash Flow Discount Rate 11% - 15% Projected Year of Payment 2017 - 2026 $98 million Monte Carlo Revenue Volatility 25% Risk Free Rate LIBOR Term and Cost of Debt Structure Projected Year of Payment 2017 - 2022 The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs: Intangible Asset Valuation Date Fair Value Valuation Technique Unobservable Input Rate Technology-related (amortizable) September 30, 2015 $8 million Income Approach -Excess Earnings Method Discount Rate 10% In-Process R&D June 30, 2015 $6 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% In-Process R&D September 30, 2014 $16 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% In-Process R&D June 30, 2014 $83 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% Technology-related (amortizable) June 30, 2014 $8 million Income Approach - Excess Earnings Method Discount Rate 15% In-Process R&D March 31, 2014 $6 million Income Approach - Excess Earnings Method Discount Rate 20% Technology-related (amortizable) March 31, 2014 $64 million Income Approach - Excess Earnings Method Discount Rate 15% |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | Changes in the fair value of our contingent consideration liabilities were as follows (in millions): Balance as of December 31, 2014 $ 274 Amounts recorded related to new acquisitions 63 Other amounts recorded related to prior acquisitions (1 ) Fair value adjustment 123 Contingent payments related to prior period acquisition (213 ) Balance as of December 31, 2015 $ 246 Amounts recorded related to new acquisitions 50 Other amounts recorded related to prior acquisitions 1 Fair value adjustment 29 Contingent payments related to prior period acquisition (122 ) Balance as of December 31, 2016 $ 204 |
Business Acquisition, Purchase Price Allocation, Intangible Assets, Description | We allocated a portion of the purchase price to specific intangible asset categories as follows: Amount (in millions) Weighted (in years) Range of Risk- Amortizable intangible assets: Technology-related $ 233 10 - 14 14 - 18 % Customer relationships 29 10 18% Other intangible assets 1 2 14% $ 263 We allocated a portion of the purchase price to specific intangible asset categories as follows: Amount (in millions) Weighted (in years) Range of Risk- Amortizable intangible assets: Technology-related $ 431 11-13 14% - 23% Customer relationships 625 12-13 14% - 15% Other intangible assets 18 13 14% Indefinite-lived intangible assets: In-process research & development $ 6 N/A 17% $ 1,080 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | As of December 31, 2016 As of December 31, 2015 Gross Carrying Accumulated Amortization/ Gross Carrying Accumulated Amortization/ (in millions) Amount Write-offs Amount Write-offs Amortizable intangible assets Technology-related $ 9,123 $ (4,468 ) $ 8,948 $ (4,054 ) Patents 529 (374 ) 520 (358 ) Other intangible assets 1,583 (722 ) 1,529 (610 ) $ 11,235 $ (5,564 ) $ 10,997 $ (5,022 ) Unamortizable intangible assets Goodwill $ 16,578 $ (9,900 ) $ 16,373 $ (9,900 ) In-process research and development (IPR&D) 92 — 99 — Technology-related 120 — 120 — $ 16,790 $ (9,900 ) $ 16,592 $ (9,900 ) |
Schedule of Goodwill [Table Text Block] | The following represents our goodwill balance by global reportable segment: (in millions) Cardiovascular Rhythm Management MedSurg Total Balance as of December 31, 2014 $ 3,426 $ 290 $ 2,182 $ 5,898 Purchase price adjustments 2 2 (2 ) 2 Goodwill acquired 23 — 550 573 Balance as of December 31, 2015 $ 3,451 $ 292 $ 2,730 $ 6,473 Purchase price adjustments — (2 ) (1 ) (3 ) Goodwill acquired 62 — 146 208 Balance as of December 31, 2016 $ 3,513 $ 290 $ 2,875 $ 6,678 |
Asset Impairment Charges [Text Block] | The following is a rollforward of accumulated goodwill write-offs by global reportable segment: (in millions) Cardiovascular Rhythm Management MedSurg Total Accumulated write-offs as of December 31, 2014 $ (1,479 ) $ (6,960 ) $ (1,461 ) $ (9,900 ) Goodwill written off — — — — Accumulated write-offs as of December 31, 2015 $ (1,479 ) $ (6,960 ) (1,461 ) $ (9,900 ) Goodwill written off — — — — Accumulated write-offs as of December 31, 2016 $ (1,479 ) $ (6,960 ) $ (1,461 ) $ (9,900 ) |
Description of unobservable inputs used in Level 3 fair value measurements [Table Text Block] | The recurring Level 3 fair value measurements of our contingent consideration liabilities include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of December 31, 2016 Valuation Technique Unobservable Input Range R&D and Commercialization-based Milestone $46 million Discounted Cash Flow Discount Rate 2% - 3% Projected Year of Payment 2017 - 2021 Revenue-based Payments $60 million Discounted Cash Flow Discount Rate 11% - 15% Projected Year of Payment 2017 - 2026 $98 million Monte Carlo Revenue Volatility 25% Risk Free Rate LIBOR Term and Cost of Debt Structure Projected Year of Payment 2017 - 2022 The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs: Intangible Asset Valuation Date Fair Value Valuation Technique Unobservable Input Rate Technology-related (amortizable) September 30, 2015 $8 million Income Approach -Excess Earnings Method Discount Rate 10% In-Process R&D June 30, 2015 $6 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% In-Process R&D September 30, 2014 $16 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% In-Process R&D June 30, 2014 $83 million Income Approach - Excess Earnings Method Discount Rate 16.5 - 20% Technology-related (amortizable) June 30, 2014 $8 million Income Approach - Excess Earnings Method Discount Rate 15% In-Process R&D March 31, 2014 $6 million Income Approach - Excess Earnings Method Discount Rate 20% Technology-related (amortizable) March 31, 2014 $64 million Income Approach - Excess Earnings Method Discount Rate 15% |
Schedule of Impaired Intangible Assets [Table Text Block] | The intangible asset category and associated write downs recorded in 2016, 2015 and 2014 were as follows: Year Ended December 31, (in millions) 2016 2015 2014 Amortizable intangible assets $ 4 $ 9 $ 107 In-process research and development 7 10 88 $ 11 19 $ 195 |
Schedule of Expected Amortization Expense [Table Text Block] | Estimated Amortization Expense Fiscal Year (in millions) 2017 $ 535 2018 525 2019 523 2020 519 2021 481 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements [Abstract] | |
Gains (losses) recognized in earnings for derivatives designed as hedging instruments | The following presents the effect of our derivative instruments designated as cash flow hedges under Topic 815 on our accompanying consolidated statements of operations during 2016, 2015 and 2014 (in millions): Amount of Pre-tax Gain (Loss) Recognized in OCI (Effective Portion) Amount of Pre-tax Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion) Location in Statement of Operations Year Ended December 31, 2016 Interest rate contracts $ — $ 1 Interest expense Currency hedge contracts 65 133 Cost of products sold $ 65 $ 134 Year Ended December 31, 2015 Interest rate contracts $ 11 $ 2 Interest expense Currency hedge contracts 98 213 Cost of products sold $ 109 $ 215 Year Ended December 31, 2014 Interest rate contracts $ — $ 1 Interest expense Currency hedge contracts 227 105 Cost of products sold $ 227 $ 106 |
Classification of derivative assets and liabilities within level 2 | The following are the balances of our derivative assets and liabilities as of December 31, 2016 and December 31, 2015 : As of December 31, December 31, (in millions) Location in Balance Sheet (1) 2016 2015 Derivative Assets: Designated Hedging Instruments Currency hedge contracts Other current assets $ 98 $ 138 Currency hedge contracts Other long-term assets 65 66 163 204 Non-Designated Hedging Instruments Currency hedge contracts Other current assets 36 33 Total Derivative Assets $ 199 $ 237 Derivative Liabilities: Designated Hedging Instruments Currency hedge contracts Other current liabilities $ 3 $ 1 Currency hedge contracts Other long-term liabilities 4 — 7 1 Non-Designated Hedging Instruments Currency hedge contracts Other current liabilities 19 22 Total Derivative Liabilities $ 26 $ 23 (1) We classify derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less. |
Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2016 and December 31, 2015 : As of December 31, 2016 As of December 31, 2015 (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Money market and government funds $ 42 $ — $ — $ 42 $ 118 $ — $ — $ 118 Available-for-sale-securities 20 — — 20 — — — — Currency hedge contracts — 199 — 199 — 237 — 237 $ 62 $ 199 $ — $ 261 $ 118 $ 237 $ — $ 355 Liabilities Currency hedge contracts $ — $ 26 $ — $ 26 $ — $ 23 $ — $ 23 Accrued contingent consideration — — 204 $ 204 — — 246 246 $ — $ 26 $ 204 $ 230 $ — $ 23 $ 246 $ 269 |
Changes in the fair value of recurring fair value measurements using Level 3 inputs | Our recurring fair value measurements using significant unobservable inputs (Level 3) relate solely to our contingent consideration liability |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
NetGainsand LossesonDerivatives not designated as hedging instruments [Table Text Block] | (in millions) Location in Statement of Operations Year Ended December 31, 2016 2015 2014 Gain (loss) on currency hedge contracts $ (20 ) $ 48 $ 52 Other, net Gain (loss) on foreign currency transaction exposures 7 (69 ) (70 ) Other, net Net foreign currency gain (loss) $ (13 ) $ (21 ) $ (18 ) |
Borrowings and Credit Arrange33
Borrowings and Credit Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Terms of senior notes [Table Text Block] | Our senior notes consist of the following as of December 31, 2016 : Amount (in millions) Issuance Date Maturity Date Semi-annual Coupon Rate January 2017 Notes $ 250 November 2004 January 2017 5.125% October 2018 Notes 600 August 2013 October 2018 2.650% January 2020 Notes 850 December 2009 January 2020 6.000% May 2020 Notes 600 May 2015 May 2020 2.850% May 2022 Notes 500 May 2015 May 2022 3.375% May 2025 Notes 750 May 2015 May 2025 3.850% October 2023 Notes 450 August 2013 October 2023 4.125% November 2035 Notes 350 November 2005 November 2035 6.250% January 2040 Notes 300 December 2009 January 2040 7.375% $ 4,650 |
Schedule of debt maturities | The debt maturity schedule for the significant components of our debt obligations as of December 31, 2016 is as follows: (in millions) 2017 2018 2019 2020 2021 Thereafter Total Senior notes $ 250 $ 600 $ — $ 1,450 $ — $ 2,350 $ 4,650 Term loans — 225 150 375 — — 750 $ 250 $ 825 $ 150 $ 1,825 $ — $ 2,350 $ 5,400 Note: The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes or debt issuance costs. |
Summary of term loan and revolving credit facility agreement compliance with debt covenants | Our revolving credit facility agreement in place as of December 31, 2016 requires that we maintain certain financial covenants, as follows: Covenant Requirement as of December 31, 2016 Actual as of December 31, 2016 Maximum leverage ratio (1) 4.0 times 2.4 times Minimum interest coverage ratio (2) 3.0 times 9.8 times (1) Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters. (2) Ratio of consolidated EBITDA, as defined by the credit agreement, to interest expense for the preceding four consecutive fiscal quarters. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Operating Leases of Lessee Disclosure [Table Text Block] | Future minimum rental commitments as of December 31, 2016 under all noncancellable lease agreements, including capital leases, were as follows (in millions): 2017 $ 66 2018 60 2019 42 2020 34 2021 25 Thereafter 64 $ 291 Future minimum purchase obligations as of December 31, 2016 , were as follows (in millions): 2017 $ 321 2018 52 2019 39 2020 19 2021 12 Thereafter 15 $ 458 |
Restructuring Related Activit35
Restructuring Related Activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Cost [Line Items] | |
Impact of restructuring costs on the accompanying financial statements | The following presents these costs (credits) by major type and line item within our accompanying consolidated statements of operations, as well as by program: Year Ended December 31, 2016 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Fixed Asset Write-Offs Other Total Restructuring charges $ 19 $ — $ — $ 2 $ 7 $ 28 Restructuring-related expenses: Cost of products sold — — 34 — — 34 Selling, general and administrative expenses — 5 — — 11 16 — 5 34 — 11 50 $ 19 $ 5 $ 34 $ 2 $ 18 $ 78 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Fixed Asset Write-Offs Other Total 2016 Restructuring plan $ 24 $ 1 $ 15 $ — $ 7 $ 47 2014 Restructuring plan $ (5 ) $ 4 19 $ 2 $ 11 $ 31 $ 19 $ 5 $ 34 $ 2 $ 18 $ 78 Year Ended December 31, 2015 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Other Total Restructuring charges $ 23 $ — $ — $ 3 $ 26 Restructuring-related expenses: Cost of products sold — — 31 — 31 Selling, general and administrative expenses — 3 — 23 26 — 3 31 23 57 $ 23 $ 3 $ 31 $ 26 $ 83 (in millions) Termination Accelerated Transfer Other Total 2014 Restructuring plan $ 27 $ 3 $ 31 $ 26 $ 87 Substantially complete restructuring plan (4 ) — — — (4 ) $ 23 $ 3 $ 31 $ 26 $ 83 Year Ended December 31, 2014 (in millions) Termination Benefits Accelerated Depreciation Transfer Costs Other Total Restructuring charges $ 42 $ — $ — $ 27 $ 69 Restructuring-related expenses: Cost of products sold — — 24 — 24 Selling, general and administrative expenses — 5 — 19 24 — 5 24 19 48 $ 42 $ 5 $ 24 $ 46 $ 117 (in millions) Termination Accelerated Transfer Costs Other Total 2014 Restructuring plan $ 41 $ 5 $ 24 $ 43 $ 113 Substantially complete restructuring plan 1 — — 3 4 $ 42 $ 5 $ 24 $ 46 $ 117 |
Summary of accrued expenses within accompanying unaudited condensed consolidated balance sheets | The following is a rollforward of the termination benefit liability associated with our 2016 Restructuring Plan, our 2014 Restructuring Plan and our substantially complete restructuring plan, which is reported as a component of accrued expenses included in our accompanying consolidated balance sheets: Restructuring Plan Termination Benefits (in millions) 2016 Restructuring Plan 2014 Restructuring Plan Substantially complete restructuring plan Total Accrued as of December 31, 2014 — 39 4 43 Charges — 27 (4 ) 23 Cash payments — (37 ) — (37 ) Accrued as of December 31, 2015 — 29 — 29 Charges 24 (5 ) — 19 Cash payments (8 ) (24 ) — (32 ) Accrued as of December 31, 2016 $ 16 $ — $ — $ 16 |
Cumulative Restructuring Charges [Text Block] | The following presents these costs by major type and by plan: (in millions) 2016 Restructuring Plan 2014 Restructuring Plan Total Termination benefits 24 $ 91 $ 115 Fixed asset write-offs — 2 2 Other 4 32 36 Total restructuring charges 28 125 153 Accelerated depreciation 1 12 13 Transfer costs 15 75 90 Other 3 49 52 Restructuring-related expenses 19 136 155 $ 47 $ 261 $ 308 |
Amount Of Cash Paid In Period To Fully Or Partially Settle Specified Type Of Restructuring Cost [Text Block] | We made cash payments of $82 million in 2016 associated with restructuring initiatives, and as of December 31, 2016 we had made total cash payments of $271 million related to our 2016 Restructuring Plan and 2014 Restructuring Plan since committing to the plans. These payments were made using cash generated from operations, and are comprised of the following: (in millions) 2016 Restructuring Plan 2014 Restructuring Plan Total Year Ended December 31, 2016 Termination benefits 8 $ 24 $ 32 Transfer costs 15 19 34 Other 4 12 16 $ 27 $ 55 $ 82 Program to Date Termination benefits 8 93 $ 101 Transfer costs 15 74 89 Other 4 77 81 $ 27 $ 244 $ 271 |
2016 Restructuring Plan [Member] | |
Restructuring and Related Cost [Line Items] | |
Impact of restructuring costs on the accompanying financial statements | The following table provides a summary of our estimates of costs associated with the 2016 Restructuring Plan through the end of 2018 by major type of cost: Type of cost Total estimated amount expected to be incurred Restructuring charges: Termination benefits $65 million to $80 million Other (1) $15 million to $25 million Restructuring-related expenses: Other (2) $95 million to $120 million $175 million to $225 million (1) Consists primarily of consulting fees and costs associated with contract cancellations. (2) Comprised of other costs directly related to the 2016 Restructuring Plan, including program management, accelerated depreciation, and costs to transfer product lines among facilities. |
2014 Restructuring plan [Member] | |
Restructuring and Related Cost [Line Items] | |
Impact of restructuring costs on the accompanying financial statements | The following table provides a summary of our total costs associated with the 2014 Restructuring plan through December 31, 2016 by major type of cost: Type of cost Total amount incurred Restructuring charges: Termination benefits $91 million Other (1) $34 million Restructuring-related expenses: Other (2) $136 million $261 million (1) Consists primarily of consulting fees and costs associated with contractual cancellations. (2) Comprised of other costs directly related to the 2014 Restructuring plan, including program management, accelerated depreciation, and costs to transfer product lines among facilities. |
Supplemental Balance Sheet In36
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Balance Sheet Information [Abstract] | |
Trade accounts receivable, net | Trade accounts receivable, net As of (in millions) December 31, 2016 December 31, 2015 Accounts receivable $ 1,591 $ 1,394 Less: allowance for doubtful accounts (73 ) (75 ) Less: allowance for sales returns (46 ) (44 ) $ 1,472 $ 1,275 |
Rollforward of allowances for doubtful accounts | The following is a rollforward of our allowance for doubtful accounts for 2016, 2015 and 2014 : Year Ended December 31, (in millions) 2016 2015 2014 Beginning balance $ 75 $ 76 $ 81 Net charges to expenses 9 15 10 Utilization of allowances (11 ) (16 ) (15 ) Ending balance $ 73 $ 75 $ 76 |
Inventories | Inventories As of (in millions) December 31, 2016 December 31, 2015 Finished goods $ 625 $ 706 Work-in-process 94 102 Raw materials 236 208 $ 955 $ 1,016 |
prepaids and other current assets | Prepaids and other current assets As of (in millions) December 31, 2016 December 31, 2015 Prepaid expenses $ 58 $ 57 Restricted cash 243 54 Other 240 254 $ 541 $ 365 |
Property, plant and equipment, net | Property, plant and equipment, net As of (in millions) December 31, 2016 December 31, 2015 Land $ 91 $ 86 Buildings and improvements 981 981 Equipment, furniture and fixtures 2,955 2,793 Capital in progress 338 202 4,365 4,062 Less: accumulated depreciation 2,735 2,572 $ 1,630 $ 1,490 |
Accrued expenses | Accrued expenses As of (in millions) December 31, 2016 December 31, 2015 Legal reserves $ 1,062 $ 773 Payroll and related liabilities 572 504 Accrued contingent consideration 63 119 Other 615 574 $ 2,312 $ 1,970 |
Other long-term liabilities | Other long-term liabilities As of (in millions) December 31, 2016 December 31, 2015 Accrued income taxes $ 781 $ 1,253 Legal reserves 961 1,163 Accrued contingent consideration 141 127 Other long-term liabilities 455 431 $ 2,338 $ 2,974 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Tax rate | The reconciliation of income taxes at the federal statutory rate to the actual benefit for income taxes is as follows: Year Ended December 31, 2016 2015 2014 U.S. federal statutory income tax rate 35.0 % (35.0 )% (35.0 )% State income taxes, net of federal benefit (1.7 )% (4.8 )% (6.5 )% Effect of foreign taxes (99.1 )% (34.4 )% (29.1 )% Acquisition-related 9.4 % 6.0 % (7.5 )% Research credit (15.0 )% (4.4 )% (7.0 )% Valuation allowance (42.2 )% 2.3 % 4.0 % Compensation-related 6.4 % 1.6 % 0.7 % Non-deductible expenses 9.3 % 2.4 % 1.9 % Uncertain domestic tax positions 5.5 % 2.7 % 2.0 % Other, net (3.5 )% 0.4 % (0.2 )% (95.9 )% (63.2 )% (76.7 )% |
Summary of Income Tax Contingencies [Table Text Block] | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions): Year Ended December 31, 2016 2015 2014 Beginning Balance $ 1,056 $ 1,047 $ 1,102 Additions based on positions related to the current year 47 32 44 Additions based on positions related to prior years 14 38 3 Reductions for tax positions of prior years (17 ) (36 ) (87 ) Settlements with taxing authorities (3 ) (18 ) (5 ) Statute of limitation expirations (2 ) (7 ) (10 ) Ending Balance $ 1,095 $ 1,056 $ 1,047 |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Our income (loss) before income taxes consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Domestic $ (1,019 ) $ (1,623 ) $ (1,263 ) Foreign 1,196 973 754 $ 177 $ (650 ) $ (509 ) |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Significant components of our deferred tax assets and liabilities are as follows: As of December 31, (in millions) 2016 2015 Deferred Tax Assets: Inventory costs and related reserves $ 37 $ 49 Tax benefit of net operating loss and credits 798 742 Reserves and accruals 228 232 Restructuring-related charges 14 17 Litigation and product liability reserves 752 689 Investment write-down 17 7 Compensation related 142 138 Federal benefit of uncertain tax positions 238 197 Other 42 39 2,268 2,110 Less valuation allowance (446 ) (499 ) 1,822 1,611 Deferred Tax Liabilities: Property, plant and equipment 42 44 Unrealized gains and losses on derivative financial instruments 67 82 Intangible assets 1,651 1,749 1,760 1,875 Net Deferred Tax Assets / (Liabilities) 62 (264 ) Prepaid on intercompany profit 75 63 Net Deferred Tax Assets / (Liabilities) and Prepaid on Intercompany Profit $ 137 $ (201 ) Our deferred tax assets, deferred tax liabilities and prepaid on intercompany profit, are included in the following locations within our accompanying consolidated balance sheets (in millions): Location in As of December 31, Component Balance Sheet 2016 2015 Current deferred tax asset and prepaid on intercompany profit Deferred income taxes $ 75 $ 496 Non-current deferred tax asset Other long-term assets 80 40 Deferred Tax Assets and Prepaid on Intercompany Profit 155 536 Current deferred tax liability Other current liabilities — 2 Non-current deferred tax liability Deferred income taxes 18 735 Deferred Tax Liabilities 18 737 Net Deferred Tax Assets / (Liabilities) and Prepaid on Intercompany Profit $ 137 $ (201 ) |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The related benefit for income taxes consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Current Federal $ 31 $ 59 $ (2 ) State 6 3 (5 ) Foreign 136 132 111 173 194 104 Deferred Federal (337 ) (545 ) (458 ) State (14 ) (41 ) (23 ) Foreign 8 (19 ) (13 ) (343 ) (605 ) (494 ) $ (170 ) $ (411 ) $ (390 ) |
Stock Ownership Plans (Tables)
Stock Ownership Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Ownership Plans [Abstract] | |
Schedule of Share-based Compensation, Employee Stock Purchase Plan, Activity [Table Text Block] | Information related to shares issued or to be issued in connection with the employee stock purchase plan based on employee contributions and the range of purchase prices is as follows: (shares in thousands) 2016 2015 2014 Shares issued or to be issued 2,337 2,529 2,618 Range of purchase prices $15.29 - $18.39 $11.24 - $15.13 $10.12 - $11.04 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] | We expect to recognize the following future expense for awards outstanding as of December 31, 2016 : Unrecognized Compensation Cost (in millions)(1) Weighted Average Remaining Vesting Period (in years) Stock options $ 27 Non-vested stock awards 136 $ 163 1.3 (1) Amounts presented represent compensation cost, net of estimated forfeitures. |
Market-based awards, valuation assumptions [Table Text Block] | We determined the fair value of the market-based DSU awards to be approximately $6 million for 2016 , $7 million for 2015 and $6 million for 2014 . We determined these fair values based on Monte Carlo simulations as of the date of grant, utilizing the following assumptions: 2016 2015 2014 Awards Awards Awards Stock price on date of grant $ 17.26 $ 16.31 $ 13.08 Measurement period (in years) 2.9 3.0 3.0 Risk-free rate 0.90 % 0.98 % 0.66 % |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | Information related to non-vested stock awards during 2016, 2015 and 2014 is as follows: Non-Vested Stock Award Units (in thousands) Weighted Average Grant- Date Fair Value Balance as of December 31, 2013 37,339 $ 7 Granted 7,072 13 Vested (1) (11,205 ) 7 Forfeited (2,671 ) 8 Balance as of December 31, 2014 30,535 $ 9 Granted 6,606 16 Vested (1) (11,607 ) 8 Forfeited (1,770 ) 10 Balance as of December 31, 2015 23,764 $ 11 Granted 6,132 17 Vested (1) (10,045 ) 10 Forfeited (1,054 ) 13 Balance as of December 31, 2016 18,797 $ 14 (1) The number of restricted stock units vested includes shares withheld on behalf of employees to satisfy statutory tax withholding |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | The following presents the impact of stock-based compensation on our consolidated statements of operations for the years ended December 31, 2016 , 2015 and 2014 : Year Ended December 31, (in millions, except per share data) 2016 2015 2014 Cost of products sold $ 6 $ 7 $ 6 Selling, general and administrative expenses 90 81 79 Research and development expenses 20 19 18 116 107 103 Income tax benefit (29 ) (28 ) (28 ) $ 87 $ 79 $ 75 Net impact per common share - basic $ 0.06 $ 0.06 $ 0.06 Net impact per common share - assuming dilution $ 0.06 $ 0.06 $ 0.06 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock options granted to employees under our stock incentive plans. We calculated the fair value for options granted during 2016, 2015 and 2014 using the following estimated weighted-average assumptions: Year Ended December 31, 2016 2015 2014 Options granted (in thousands) 4,186 4,441 4,943 Weighted-average exercise price $ 17.46 $ 16.49 $ 13.02 Weighted-average grant-date fair value $ 5.60 $ 5.54 $ 5.07 Black-Scholes Assumptions Expected volatility 30 % 31 % 37 % Expected term (in years, weighted) 6.0 6.0 6.0 Risk-free interest rate 1.14% - 2.08% 1.49% - 1.92% 1.69% - 2.09% |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Information related to stock options for 2016, 2015 and 2014 under stock incentive plans is as follows: Stock Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in millions) Outstanding as of December 31, 2013 44,892 $ 12 Granted 4,943 13 Exercised (4,418 ) 8 Cancelled/forfeited (5,909 ) 17 Outstanding as of December 31, 2014 39,508 $ 11 Granted 4,441 16 Exercised (9,040 ) 9 Cancelled/forfeited (3,820 ) 25 Outstanding as of December 31, 2015 31,089 $ 11 Granted 4,186 17 Exercised (6,612 ) 12 Cancelled/forfeited (2,019 ) 21 Outstanding as of December 31, 2016 26,644 $ 11 5.8 $ 281 Exercisable as of December 31, 2016 17,293 $ 9 4.4 $ 226 Expected to vest as of December 31, 2016 8,664 16 8.3 51 Total vested and expected to vest as of December 31, 2016 25,957 $ 11 5.7 $ 277 |
Weighted Average Shares Outst39
Weighted Average Shares Outstanding (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Weighted average shares outstanding | Year Ended December 31, (in millions) 2016 2015 2014 Weighted average shares outstanding - basic 1,357.6 1,341.2 1,324.3 Net effect of common stock equivalents 19.6 — — Weighted average shares outstanding - assuming dilution 1,377.2 1,341.2 1,324.3 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | A reconciliation of the totals reported for the reportable segments to the applicable line items in our accompanying consolidated statements of operations is as follows: Year Ended December 31, (in millions) 2016 2015 2014 Net sales Interventional Cardiology $ 2,524 $ 2,242 $ 2,092 Peripheral Interventions 1,093 975 861 Cardiovascular 3,617 3,217 2,953 Cardiac Rhythm Management 1,994 1,934 1,922 Electrophysiology 261 248 228 Rhythm Management 2,255 2,182 2,150 Endoscopy 1,565 1,422 1,343 Urology and Pelvic Health 1,065 735 542 Neuromodulation 574 512 474 MedSurg 3,204 2,669 2,359 Net sales allocated to reportable segments 9,076 8,068 7,462 Sales generated from business divestitures — — 4 Impact of foreign currency fluctuations (690 ) (591 ) (86 ) $ 8,386 $ 7,477 $ 7,380 |
Reconciliation of depreciation by reportable segment to total [Table Text Block] | Year Ended December 31, (in millions) 2016 2015 2014 Depreciation expense Cardiovascular $ 122 $ 116 $ 120 Rhythm Management 83 94 92 MedSurg 74 73 75 Depreciation expense allocated to reportable segments 279 283 287 Impact of foreign currency fluctuations (9 ) (9 ) — $ 270 $ 274 $ 287 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | Year Ended December 31, (in millions) 2016 2015 2014 Income (loss) before income taxes Cardiovascular $ 1,137 $ 972 $ 767 Rhythm Management 404 328 289 MedSurg 1,045 856 746 Operating income allocated to reportable segments 2,586 2,156 1,802 Corporate expenses and currency exchange (565 ) (486 ) (308 ) Intangible asset impairment charges; pension termination charges; and acquisition- and divestiture-related net charges, litigation-related net charges, and restructuring- and restructuring-related net charges (1,029 ) (1,502 ) (1,357 ) Amortization expense (545 ) (495 ) (438 ) Operating income (loss) 447 (327 ) (301 ) Other expense, net (270 ) (323 ) (208 ) $ 177 $ (650 ) $ (509 ) |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | As of December 31, (in millions) 2016 2015 Total assets Cardiovascular $ 1,748 $ 1,583 Rhythm Management 1,250 1,279 MedSurg 1,499 1,141 Total assets allocated to reportable segments 4,497 4,003 Goodwill 6,678 6,473 Other intangible assets, net 5,883 6,194 All other corporate assets 1,038 1,463 $ 18,096 $ 18,133 |
Reconciliation of sales by division and region to consolidated [Table Text Block] | Enterprise-Wide Information (based on actual currency exchange rates) Year Ended December 31, (in millions) 2016 2015 2014 Net sales Interventional Cardiology $ 2,281 $ 2,033 $ 2,057 Cardiac Rhythm Management 1,850 1,807 1,912 Endoscopy 1,440 1,306 1,323 Peripheral Interventions 1,011 904 850 Urology and Pelvic Health 1,005 693 535 Neuromodulation 556 501 472 Electrophysiology 243 233 227 8,386 7,477 7,376 Sales generated from divested businesses — — 4 $ 8,386 $ 7,477 $ 7,380 United States $ 4,759 $ 4,229 $ 3,885 Japan 750 602 678 Other countries 2,877 2,646 2,813 8,386 7,477 7,376 Sales generated from divested businesses — — 4 $ 8,386 $ 7,477 $ 7,380 |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | As of December 31, (in millions) 2016 2015 2014 Long-lived assets United States $ 1,082 $ 1,018 $ 1,002 Ireland 181 170 197 Other foreign countries 367 302 308 Property, plant and equipment, net 1,630 1,490 1,507 Goodwill 6,678 6,473 5,898 Other intangible assets, net 5,883 6,194 5,606 $ 14,191 $ 14,157 $ 13,011 |
Changes in Other Comprehensiv41
Changes in Other Comprehensive Income (Tables) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in Other Comprehensive Income [Abstract] | ||
Changes in Other Comprehensive Income [Table Text Block] | The following table provides the reclassifications out of other comprehensive income for the years ended December 31, 2016 and December 31, 2015 . Amounts in the chart below are presented net of tax. Year Ended December 31, 2016 (in millions) Foreign Currency Translation Adjustments Unrealized Gains/Losses on Derivative Financial Instruments Unrealized Gains/Losses on Available-for-Sale Securities Defined Benefit Pension Items / Other Total Beginning Balance $(54) $152 $— $(10) $88 Other comprehensive income/(loss) before reclassifications (25) 40 (6) (17) (8) (Gain)/Loss reclassified from accumulated other comprehensive income — (85) — 6 (79) Net current-period other comprehensive income (25) (45) (6) (11) (87) Ending Balance $(79) $107 $(6) $(21) $1 | Year Ended December 31, 2015 (in millions) Foreign Currency Translation Adjustments Unrealized Gains/Losses on Derivative Financial Instruments Defined Benefit Pension Items / Other Total Beginning Balance $(38) $219 $(37) $144 Other comprehensive income/(loss) before reclassifications (16) 70 (3) 51 (Gain)/Loss reclassified from accumulated other comprehensive income — (137) 30 (107) Net current-period other comprehensive income (16) (67) 27 (56) Ending Balance $(54) $152 $(10) $88 |
Significant Accounting Polici42
Significant Accounting Policies Significant Accounting Policies (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016USD ($)reportablesegments | Dec. 31, 2015USD ($)reportablesegments | Dec. 31, 2014USD ($)reportablesegments | Dec. 31, 2013USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Service Cost | $ 10 | $ 9 | ||
Available-for-sale Securities | 20 | 0 | ||
Defined Benefit Plan, Accumulated Benefit Obligation | 140 | 121 | ||
Pension termination charges | $ 0 | $ 44 | $ 0 | |
Number of Reportable Segments | reportablesegments | 3 | |||
Number of global reporting units | reportablesegments | 7 | 7 | 7 | |
International Retirement Plan - Discount Rate - Low | 0.50% | |||
International Retirement Plan - Expected Return on Plan Assets - Low | 3.00% | |||
International Retirement Plan - Discount Rate - High | 2.13% | |||
Executive Retirement Plan Discount Rate | 3.50% | |||
Rabbi Trust Assets | $ 8 | $ 11 | ||
Expense related to matching contributions | 72 | 69 | $ 63 | |
Defined Benefit Plan, Benefit Obligation | 152 | 131 | 138 | |
Defined Benefit Plan, Fair Value of Plan Assets | 54 | 52 | 191 | |
Defined Benefit Plan, Actual Return on Plan Assets | (1) | 1 | ||
Defined Benefit Plan, Contributions by Employer | 7 | 6 | ||
Defined Benefit Plan, Benefits Paid | 5 | 145 | ||
Defined Benefit Plan, Benefits Paid | (5) | (5) | ||
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Benefit Obligation | 1 | (1) | ||
Defined Benefit Plan, Amounts Recognized in Balance Sheet | 98 | 79 | ||
Shipping, Handling and Transportation Costs | 101 | 93 | 100 | |
Foreign Currency Transaction Gain (Loss), before Tax | $ (13) | $ (21) | (18) | |
Percent of finished goods at consignment | 40.00% | 40.00% | ||
Product Warranty Accrual | $ 22 | $ 23 | 25 | $ 28 |
Product Warranty Expense | 25 | 15 | 9 | |
Product Warranty Accrual, Payments | (26) | (17) | (12) | |
Valuation Allowances and Reserves, Deductions | (11) | (16) | (15) | |
Depreciation | 270 | $ 274 | $ 287 | |
Deferred Tax Liabilities, Undistributed Foreign Earnings | $ 9,800 | |||
Executive Retirement Plan Rate of Compensation Increase | 3.00% | |||
Guidant Supplemental Retirement Plan Discount Rate | 4.00% | |||
International Retirement Plan - Expected Return on Plan Assets - High | 4.10% | |||
Concentration Risk, Customer | 0 | 0 | 0 | |
Defined Benefit Plan, Actuarial Gain (Loss) | $ 10 | $ (5) | ||
Defined Benefit Plan, Plan Amendments | 7 | 0 | ||
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Plan Assets | (1) | (6) | ||
Executive retirement plan [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Accumulated Benefit Obligation | 15 | 12 | ||
Defined Benefit Plan, Benefit Obligation | 17 | 14 | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | ||
Defined Benefit Plan, Amounts Recognized in Balance Sheet | 17 | 14 | ||
Guidant supplement retirement plan [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Accumulated Benefit Obligation | 32 | 33 | ||
Defined Benefit Plan, Benefit Obligation | 32 | 33 | ||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | ||
Defined Benefit Plan, Amounts Recognized in Balance Sheet | 32 | 33 | ||
International retirement plans [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Accumulated Benefit Obligation | 93 | 76 | ||
Defined Benefit Plan, Benefit Obligation | 103 | 84 | ||
Defined Benefit Plan, Fair Value of Plan Assets | 54 | 52 | ||
Defined Benefit Plan, Amounts Recognized in Balance Sheet | $ 49 | $ 32 | ||
Minimum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
International Retirement Plan Rate of Compensation Increase | 2.50% | |||
Minimum [Member] | Building and Building Improvements [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 20 years | |||
Minimum [Member] | Equipment [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Minimum [Member] | Patents [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Assets, Useful Life | 2 years | |||
Minimum [Member] | Technology-related [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Assets, Useful Life | 5 years | |||
Minimum [Member] | Customer Relationships [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Assets, Useful Life | 5 years | |||
Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
International Retirement Plan Rate of Compensation Increase | 6.78% | |||
Maximum [Member] | Building and Building Improvements [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 40 years | |||
Maximum [Member] | Equipment [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Maximum [Member] | Patents [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Assets, Useful Life | 20 years | |||
Maximum [Member] | Technology-related [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Assets, Useful Life | 25 years | |||
Maximum [Member] | Customer Relationships [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Assets, Useful Life | 25 years |
Acquisitions and Strategic In43
Acquisitions and Strategic Investments (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 12, 2016 | Nov. 22, 2016 | Nov. 15, 2016 | Nov. 01, 2016 | Jul. 27, 2016 | Aug. 03, 2015 | Apr. 02, 2015 | Aug. 29, 2014 | May 07, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||||||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 116 | $ 449 | $ 160 | ||||||||||
Equity Method Investments | $ 265 | 173 | |||||||||||
Contingent consideration expense | 29 | 123 | (85) | ||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 408 | 1,734 | 486 | ||||||||||
Business Combination, Contingent Consideration, Asset | 204 | 246 | 274 | ||||||||||
Maximum future contingent consideration for acquisitions completed after January 1, 2009 | 1,308 | ||||||||||||
Contingent consideration recognized in the period | 50 | 63 | |||||||||||
Adjustments to accrued contingent consideration | 1 | (1) | |||||||||||
Contingent payment related to business combination | (122) | (213) | |||||||||||
Goodwill | 6,678 | 6,473 | 5,898 | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 263 | ||||||||||||
Total | 510 | ||||||||||||
Additional Acquisitions (Textuals) [Abstract] | |||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 31 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 29 | 123 | (85) | ||||||||||
Payment of contingent consideration | 122 | 213 | 137 | ||||||||||
Cost Method Investments | 20 | 45 | |||||||||||
Notes receivable from portfolio companies | 42 | 30 | |||||||||||
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | 200 | ||||||||||||
2015 Acquisitions [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 1,735 | ||||||||||||
Goodwill | 573 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 1,074 | ||||||||||||
Indefinite-lived intangible assets | 6 | ||||||||||||
Total | 1,798 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 103 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 43 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 42 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 1,080 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets, Current | (43) | ||||||||||||
Contingent consideration recognized in the period | 63 | ||||||||||||
Neovasc [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 68 | ||||||||||||
Distal [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 20 | ||||||||||||
Potential payments based on acheiving certain milestones | $ 35 | ||||||||||||
LumenR [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 30 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Potential payments based on future sales | $ 70 | ||||||||||||
Cosman [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 71 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Potential payments based on future sales | $ 20 | ||||||||||||
EndoChoice [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 214 | ||||||||||||
Business Acquisition, Share Price | $ 8 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 43 | ||||||||||||
Celenova [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 70 | ||||||||||||
Xlumena [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 63 | ||||||||||||
Potential payments based on acheiving certain milestones | $ 13 | ||||||||||||
Other 2015 Acquisitions [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 6 | ||||||||||||
Business Combination, Contingent Consideration, Asset | 1 | ||||||||||||
AMS urology portfolio [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 1,616 | ||||||||||||
Potential payments based on acheiving certain milestones | 50 | ||||||||||||
Non-voting Preferred Stock Investment Amount | $ 60 | ||||||||||||
Bayer and IoGyn [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 479 | ||||||||||||
Goodwill | 210 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 263 | ||||||||||||
Total | 510 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 23 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 17 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 5 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | (1) | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets, Current | (7) | ||||||||||||
Bayer [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 414 | ||||||||||||
IoGyn [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 65 | ||||||||||||
Remaining equity of IoGyn purchased | 72.00% | ||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain | 19 | ||||||||||||
Additional Acquisitions (Textuals) [Abstract] | |||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 31 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Minority interest owned of IoGyn | 28.00% | ||||||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 8 | ||||||||||||
2014 acquisitions (excluding Bayer and IoGyn) [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 7 | ||||||||||||
Business Combination, Contingent Consideration, Asset | 4 | ||||||||||||
2016 Acquisitions [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 366 | ||||||||||||
Goodwill | 208 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 228 | ||||||||||||
Total | 459 | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Business Acquisition, Purchase Price Allocation, Other Noncurrent Assets | (2) | ||||||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | 43 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 11 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 6 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 228 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets, Current | (8) | ||||||||||||
Contingent consideration recognized in the period | 50 | ||||||||||||
Business Combination, Consideration Transferred | 459 | ||||||||||||
R&D- and commercialization-based milestones [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of contingent consideration | $ (46) | ||||||||||||
R&D- and commercialization-based milestones [Member] | Minimum [Member] | |||||||||||||
Additional Acquisitions (Textuals) [Abstract] | |||||||||||||
Risk-adjusted discount rate for contingent consideration | 2.00% | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
contingent consideration liability, projected year of payment | 2,017 | ||||||||||||
R&D- and commercialization-based milestones [Member] | Maximum [Member] | |||||||||||||
Additional Acquisitions (Textuals) [Abstract] | |||||||||||||
Risk-adjusted discount rate for contingent consideration | 3.00% | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
contingent consideration liability, projected year of payment | 2,021 | ||||||||||||
Technology-Based Intangible Assets [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Finite-lived Intangible Assets Acquired | $ 176 | $ 431 | $ 233 | ||||||||||
Technology-related [Member] | Minimum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life | 9 years | 11 years | 10 years | ||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 11.00% | 14.00% | 14.00% | ||||||||||
Technology-related [Member] | Maximum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life | 13 years | 13 years | 14 years | ||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 20.00% | 23.00% | 18.00% | ||||||||||
Customer Relationships [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Finite-lived Intangible Assets Acquired | $ 51 | $ 625 | $ 29 | ||||||||||
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life | 10 years | ||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 18.00% | ||||||||||||
Customer Relationships [Member] | Minimum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life | 9 years | 12 years | |||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 11.00% | 14.00% | |||||||||||
Customer Relationships [Member] | Maximum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life | 13 years | 13 years | |||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 12.00% | 15.00% | |||||||||||
Other Intangible Assets [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Finite-lived Intangible Assets Acquired | $ 1 | $ 18 | $ 1 | ||||||||||
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life | 2 years | ||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 14.00% | ||||||||||||
Other Intangible Assets [Member] | 2015 Acquisitions [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life | 4 years | 13 years | |||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 14.00% | ||||||||||||
Other Intangible Assets [Member] | 2016 Acquisitions [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 11.00% | ||||||||||||
Purchased research and development [Member] | 2015 Acquisitions [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 17.00% | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
In-Process Research and Development Acquired | $ 6 | ||||||||||||
Discounted cash flow [Member] | R&D- and commercialization-based milestones [Member] | Minimum [Member] | |||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
contingent consideration liability, projected year of payment | 2,017 | ||||||||||||
Discounted cash flow [Member] | revenue-based payments [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of contingent consideration | $ (60) | ||||||||||||
Discounted cash flow [Member] | revenue-based payments [Member] | Minimum [Member] | |||||||||||||
Additional Acquisitions (Textuals) [Abstract] | |||||||||||||
Risk-adjusted discount rate for contingent consideration | 11.00% | ||||||||||||
Discounted cash flow [Member] | revenue-based payments [Member] | Maximum [Member] | |||||||||||||
Additional Acquisitions (Textuals) [Abstract] | |||||||||||||
Risk-adjusted discount rate for contingent consideration | 15.00% | ||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
contingent consideration liability, projected year of payment | 2,026 | ||||||||||||
Monte Carlo [Member] | R&D- and commercialization-based milestones [Member] | Minimum [Member] | |||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
contingent consideration liability, projected year of payment | 2,017 | ||||||||||||
Monte Carlo [Member] | revenue-based payments [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of contingent consideration | $ (98) | ||||||||||||
Monte Carlo [Member] | revenue-based payments [Member] | Minimum [Member] | |||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
Revenue Volatility - Contingent Consideration | 25.00% | ||||||||||||
Monte Carlo [Member] | revenue-based payments [Member] | Maximum [Member] | |||||||||||||
Acquisitions (Textuals) [Abstract] | |||||||||||||
contingent consideration liability, projected year of payment | 2,022 |
Acquisitions and Strategic In44
Acquisitions and Strategic Investments Strategic Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2015 | Apr. 13, 2015 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investments | $ 265 | $ 173 | ||
Cost Method Investments | 20 | 45 | ||
Available-for-sale Securities | 20 | 0 | ||
Notes Receivable From Portfolio Companies | 42 | 30 | ||
Net Losses from Equity Method Adjustments | (17) | |||
Investments | $ 347 | $ 248 | ||
Preventice [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 27.00% | |||
Common Stock Interest Acquired | 18.50% | |||
Frankenman [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 25.00% |
Divestitures (Details)
Divestitures (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2011 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on divestitures | $ 0 | $ 0 | $ 12 | |
Purchase Price for Divestiture of Business | $ 1,500 | |||
Segment Reporting, Sales from Divested Businesses | $ 0 | $ 0 | $ 4 |
Goodwill and Other Intangible46
Goodwill and Other Intangible Assets (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)reportablesegments | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Goodwill [Line Items] | |||||||||||
Goodwill | $ 5,898,000,000 | $ 6,678,000,000 | $ 6,473,000,000 | $ 5,898,000,000 | |||||||
Finite-Lived Intangible Assets, Gross | 11,235,000,000 | 10,997,000,000 | |||||||||
Finite-Lived Intangible Assets, Accumulated Amortization | (5,564,000,000) | (5,022,000,000) | |||||||||
Goodwill, Impaired, Accumulated Impairment Loss | (9,900,000,000) | (9,900,000,000) | (9,900,000,000) | (9,900,000,000) | |||||||
Goodwill (Textuals) [Abstract] | |||||||||||
Goodwill impairment charges | 0 | 0 | |||||||||
Intangible Assets, Net (Excluding Goodwill) | 5,606,000,000 | 5,883,000,000 | 6,194,000,000 | 5,606,000,000 | |||||||
Goodwill, Purchase Accounting Adjustments | (3,000,000) | 2,000,000 | |||||||||
Goodwill, Acquired During Period | 208,000,000 | 573,000,000 | |||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Other intangible asset charges | $ 9,000,000 | 18,000,000 | $ 12,000,000 | 11,000,000 | 19,000,000 | 195,000,000 | |||||
Asset Impairment Charges | $ 110,000,000 | $ 55,000,000 | |||||||||
Goodwill, Gross | 16,578,000,000 | 16,373,000,000 | |||||||||
Indefinite-lived intangible assets, accumulated write-offs | (9,900,000,000) | (9,900,000,000) | |||||||||
Indefinite-lived intangible assets, including goodwill | 16,790,000,000 | 16,592,000,000 | |||||||||
Future Amortization Expense, Year One | 535,000,000 | ||||||||||
Future Amortization Expense, Year Two | 525,000,000 | ||||||||||
Future Amortization Expense, Year Three | 523,000,000 | ||||||||||
Future Amortization Expense, Year Four | 519,000,000 | ||||||||||
Future Amortization Expense, Year Five | $ 481,000,000 | ||||||||||
Number of Reportable Segments | reportablesegments | 3 | ||||||||||
In process research and development | 16,000,000 | 83,000,000 | 6,000,000 | ||||||||
Core technology | 8,000,000 | $ 8,000,000 | $ 64,000,000 | ||||||||
Electrophysiology [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Hypothetical change in WACC | 0.50% | ||||||||||
Hypothetical change in revenue growth rates | 1.50% | ||||||||||
Cardiovascular [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Goodwill | 3,426,000,000 | $ 3,513,000,000 | 3,451,000,000 | 3,426,000,000 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss | (1,479,000,000) | (1,479,000,000) | (1,479,000,000) | (1,479,000,000) | |||||||
Goodwill (Textuals) [Abstract] | |||||||||||
Goodwill impairment charges | 0 | 0 | |||||||||
Goodwill, Purchase Accounting Adjustments | 0 | 2,000,000 | |||||||||
Goodwill, Acquired During Period | 62,000,000 | 23,000,000 | |||||||||
Rhythm Management [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Goodwill | 290,000,000 | 290,000,000 | 292,000,000 | 290,000,000 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss | (6,960,000,000) | (6,960,000,000) | (6,960,000,000) | (6,960,000,000) | |||||||
Goodwill (Textuals) [Abstract] | |||||||||||
Goodwill impairment charges | 0 | 0 | |||||||||
Level Of Excess Fair Value Over Carrying Value For Reporting Unit | 70.00% | ||||||||||
Goodwill, Purchase Accounting Adjustments | (2,000,000) | 2,000,000 | |||||||||
Goodwill, Acquired During Period | 0 | 0 | |||||||||
MedSurg [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Goodwill | 2,182,000,000 | 2,875,000,000 | 2,730,000,000 | 2,182,000,000 | |||||||
Goodwill, Impaired, Accumulated Impairment Loss | $ (1,461,000,000) | (1,461,000,000) | (1,461,000,000) | $ (1,461,000,000) | |||||||
Goodwill (Textuals) [Abstract] | |||||||||||
Goodwill impairment charges | 0 | 0 | |||||||||
Goodwill, Purchase Accounting Adjustments | (1,000,000) | (2,000,000) | |||||||||
Goodwill, Acquired During Period | 146,000,000 | 550,000,000 | |||||||||
Global Electrophysiology (EP) Reporting Unit [Member] | |||||||||||
Goodwill (Textuals) [Abstract] | |||||||||||
Level Of Excess Fair Value Over Carrying Value For Reporting Unit | 36.00% | 28.00% | |||||||||
Allocated Goodwill | $ 292,000,000 | ||||||||||
In Process Research and Development [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Intangible assets reclassified from unamortizable to amortizable | $ 7,000,000 | $ 10,000,000 | 88,000,000 | ||||||||
Technology-related [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Intangible assets reclassified from unamortizable to amortizable | $ 4,000,000 | ||||||||||
Finite-Lived Intangible Assets, Gross | 9,123,000,000 | 8,948,000,000 | |||||||||
Finite-Lived Intangible Assets, Accumulated Amortization | (4,468,000,000) | (4,054,000,000) | |||||||||
Patents [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Finite-Lived Intangible Assets, Gross | 529,000,000 | 520,000,000 | |||||||||
Finite-Lived Intangible Assets, Accumulated Amortization | (374,000,000) | (358,000,000) | |||||||||
Other Intangible Assets [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Finite-Lived Intangible Assets, Gross | 1,583,000,000 | 1,529,000,000 | |||||||||
Finite-Lived Intangible Assets, Accumulated Amortization | (722,000,000) | (610,000,000) | |||||||||
Technology-related [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 120,000,000 | 120,000,000 | |||||||||
Indefinite-lived intangible assets, accumulated write-offs | 0 | 0 | |||||||||
Purchased research and development [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 92,000,000 | 99,000,000 | |||||||||
2011 Acquisitions, excluding Sadra [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Other intangible asset charges | 107,000,000 | ||||||||||
In Process Research and Development 2 [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
In process research and development | $ 6,000,000 | ||||||||||
In Process Research and Development [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Other intangible asset charges | 4,000,000 | ||||||||||
Fair Value Inputs, Discount Rate | 20.00% | ||||||||||
IPR&D that was impaired [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Indefinite-lived Intangible Assets (Excluding Goodwill), Fair Value Disclosure | $ 0 | ||||||||||
Core technology [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Other intangible asset charges | $ 8,000,000 | ||||||||||
Fair Value Inputs, Discount Rate | 10.00% | 15.00% | 15.00% | ||||||||
Minimum [Member] | In Process Research and Development [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Fair Value Inputs, Discount Rate | 16.50% | 16.50% | 16.50% | ||||||||
Maximum [Member] | In Process Research and Development [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Fair Value Inputs, Discount Rate | 20.00% | 20.00% | 20.00% | ||||||||
Vessix Charges [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Asset Impairment Charges | $ 67,000,000 | ||||||||||
Other In-process Research and Development Project Charges [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Asset Impairment Charges | 8,000,000 | ||||||||||
Atritech Charges [Member] | |||||||||||
Other Intangible Assets (Textuals) [Abstract] | |||||||||||
Asset Impairment Charges | $ 35,000,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 01, 2016 | Mar. 31, 2015 | |
Interest Rate Swap [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Gain (Loss) on Interest Rate Fair Value Hedge Ineffectiveness | $ 8 | ||||||||||
ERROR in label resolution. | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Accrued Investment Income Receivable | $ 7 | ||||||||||
Available-for-sale Securities | $ 20 | 0 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | 2,271 | 1,458 | |||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) | 26 | ||||||||||
Derivative, Gain on Derivative | 12 | ||||||||||
Cost Method Investments | 20 | 45 | |||||||||
Time Deposits, at Carrying Value | 19 | 31 | |||||||||
Cash | 135 | 170 | |||||||||
Gain (loss) related to ineffective portion of hedging relationships | 0 | ||||||||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 9 | $ 18 | $ 12 | 11 | 19 | $ 195 | |||||
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | 213 | 105 | |||||||||
Unrealized gain on derivative financial instruments | 102 | 145 | |||||||||
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months | 63 | ||||||||||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net | 1,830 | 2,090 | |||||||||
Notional Amount of Interest Rate Derivatives | $ 450 | 450 | |||||||||
Gain (loss) recognized in earnings for terminated interest rate swaps | $ 11 | ||||||||||
Interest Rate Derivatives, at Fair Value, Net | $ 35 | ||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 1 | 2 | 1 | ||||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 0 | 11 | 0 | ||||||||
Unamortized gains on senior notes | 51 | 63 | |||||||||
Unrealized gain on interest rate cash flow hedges, pretax, AOCI | 9 | 10 | |||||||||
Gain (loss) recognized in earnings for previously terminated interest rate swaps | 13 | 13 | 9 | ||||||||
Gain (loss) on previously terminated interest rate swaps to be reclassified within twelve months | 13 | ||||||||||
Asset Impairment Charges | $ 110 | $ 55 | |||||||||
Debt Instrument, Fair Value Disclosure | 5,739 | 5,887 | |||||||||
Common Stock, Value per share, Subscriptions | $ 0.60 | ||||||||||
Common Stock, Value, Subscriptions | $ 7 | ||||||||||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | ERROR in label resolution. | Cost of products sold [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 133 | 213 | 105 | ||||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 65 | 98 | 227 | ||||||||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 134 | 215 | 106 | ||||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 65 | 109 | 227 | ||||||||
Not Designated as Hedging Instrument [Member] | Other, net [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Net gain (loss) from foreign currency transaction exposures | 7 | (69) | (70) | ||||||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (20) | 48 | 52 | ||||||||
Foreign Currency Transaction Gain (Loss), Realized | (13) | (21) | $ (18) | ||||||||
Fair Value, Inputs, Level 2 [Member] | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||
Money Market Funds, at Carrying Value | 0 | ||||||||||
Available-for-sale Securities | 0 | 0 | |||||||||
Fair Value, Measurements, Recurring [Member] | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||
Money Market Funds, at Carrying Value | 42 | 118 | |||||||||
Foreign Currency Contract, Asset, Fair Value Disclosure | 199 | 237 | |||||||||
Assets, Fair Value Disclosure | 261 | 355 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | 26 | 23 | |||||||||
Accrued Contingent Consideration | 204 | 246 | |||||||||
Liabilities, Fair Value Disclosure | 230 | 269 | |||||||||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||
Money Market Funds, at Carrying Value | 42 | 118 | |||||||||
Foreign Currency Contract, Asset, Fair Value Disclosure | 0 | 0 | |||||||||
Assets, Fair Value Disclosure | 62 | 118 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | 0 | 0 | |||||||||
Accrued Contingent Consideration | 0 | 0 | |||||||||
Liabilities, Fair Value Disclosure | 0 | 0 | |||||||||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||
Money Market Funds, at Carrying Value | 0 | ||||||||||
Foreign Currency Contract, Asset, Fair Value Disclosure | 199 | 237 | |||||||||
Assets, Fair Value Disclosure | 199 | 237 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | 26 | 23 | |||||||||
Accrued Contingent Consideration | 0 | 0 | |||||||||
Liabilities, Fair Value Disclosure | 26 | 23 | |||||||||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||
Money Market Funds, at Carrying Value | 0 | 0 | |||||||||
Available-for-sale Securities | 0 | 0 | |||||||||
Foreign Currency Contract, Asset, Fair Value Disclosure | 0 | 0 | |||||||||
Assets, Fair Value Disclosure | 0 | 0 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | 0 | 0 | |||||||||
Accrued Contingent Consideration | 204 | 246 | |||||||||
Liabilities, Fair Value Disclosure | $ 204 | 246 | |||||||||
(Gain) Loss on hedged debt obligation [Member] | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Interest Expense, Other | $ (8) |
Fair Value Measurements (Deta48
Fair Value Measurements (Details BS Table) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Derivatives Fair Value [Line Items] | ||
Available-for-sale Securities | $ 20 | $ 0 |
Derivative Assets | 199 | 237 |
Derivative Instruments in Hedges, Liabilities, at Fair Value | 7 | 1 |
Derivative Liabilities | 26 | 23 |
Designated as Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Instruments in Hedges, Assets, at Fair Value | 163 | 204 |
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 36 | 33 |
Not Designated as Hedging Instrument [Member] | Other Current Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 19 | 22 |
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Instruments in Hedges, Assets, at Fair Value | 98 | 138 |
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Other Long Term Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Instruments in Hedges, Assets, at Fair Value | 65 | 66 |
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Other Current Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Instruments in Hedges, Liabilities, at Fair Value | 3 | 1 |
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Instruments in Hedges, Liabilities, at Fair Value | 4 | 0 |
Fair Value, Measurements, Recurring [Member] | ||
Derivatives Fair Value [Line Items] | ||
Accrued Contingent Consideration | 204 | 246 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Derivatives Fair Value [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Accrued Contingent Consideration | $ 204 | $ 246 |
Borrowings and Credit Arrange49
Borrowings and Credit Arrangements (Details) ¥ in Billions | 9 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Feb. 07, 2017USD ($) | Dec. 31, 2016JPY (¥) | Jun. 30, 2016USD ($) | Apr. 10, 2015USD ($) | Aug. 06, 2013 | Apr. 18, 2012USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Repurchase Agreement Counterparty, Amount at Risk | $ 1.01 | |||||||||
Senior notes issued | $ 4,050,000,000 | $ 4,050,000,000 | ||||||||
Long-term Debt, Current Maturities | 250,000,000 | |||||||||
Letters of Credit Outstanding, Amount | 44,000,000 | 44,000,000 | 44,000,000 | |||||||
Schedule of debt maturities | ||||||||||
Payments due in year two | 825,000,000 | |||||||||
Payments due in year three | 150,000,000 | |||||||||
Payments due in year four | 1,825,000,000 | |||||||||
Payments due in year five | 0 | |||||||||
Payments due, Thereafter | 2,350,000,000 | |||||||||
Payments due, Total | 5,400,000,000 | |||||||||
Summary of compliance with debt covenants | ||||||||||
Line of Credit Facility, Fair Value of Amount Outstanding | 60,000,000 | |||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Total debt | 5,677,000,000 | 5,484,000,000 | 5,677,000,000 | |||||||
Revolving credit facility | 300,000,000 | $ 2,000,000,000 | $ 2,000,000,000 | |||||||
Senior notes | 4,650,000,000 | |||||||||
Maximum amount of proceeds from sale of finance receivables | 391,000,000 | |||||||||
De-recognized receivables | 151,000,000 | $ 152,000,000 | $ 151,000,000 | |||||||
Average interest rate of de-recognized receivables | 1.80% | 2.40% | ||||||||
Interest Expense | $ 233,000,000 | $ 284,000,000 | $ 216,000,000 | |||||||
Covenant Requirement [Member] | ||||||||||
Summary of compliance with debt covenants | ||||||||||
Maximum Leverage Ratio | 4 | 4 | ||||||||
Minimum interest coverage ratio | 3 | 3 | ||||||||
Actual, Covenant [Member] | ||||||||||
Summary of compliance with debt covenants | ||||||||||
Maximum Leverage Ratio | 2.4 | 2.4 | ||||||||
Minimum interest coverage ratio | 9.8 | 9.8 | ||||||||
2015 Term Loan Facility [Domain] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Long-term Debt, Gross | $ 750,000,000 | $ 600,000,000 | 750,000,000 | $ 750,000,000 | ||||||
the 2015 Facility [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Interest Margin above LIBOR, Minimum | 0.90% | |||||||||
Interest Margin above LIBOR, Maximum | 1.50% | |||||||||
Current interest rate on revolving credit facility | 1.30% | |||||||||
Commitment fee percentage | 0.20% | |||||||||
Amount of exclusions from EBITDA related to existing restructuring plans | $ 620,000,000 | |||||||||
Restructuring charges remaining to be excluded from calculation of consolidated EBITDA | 485,000,000 | |||||||||
Amount of exclusions from EBITDA related to future litigation charges and payments | $ 2,000,000,000 | |||||||||
Legal payments remaining to be excluded from calculation of consolidated EBITDA | $ 885,000,000 | |||||||||
Unsecured Term Loan Facility [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Interest Margin above LIBOR, Minimum | 1.00% | |||||||||
Interest Margin above LIBOR, Maximum | 1.75% | |||||||||
Unsecured Term Loan Facility, Interest Rate During Period | 1.50% | 1.50% | ||||||||
Unsecured Term Loan Repayment | $ 150,000,000 | |||||||||
2015 Term Loan [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Interest Margin above LIBOR, Minimum | 1.00% | |||||||||
Interest Margin above LIBOR, Maximum | 1.75% | |||||||||
Unsecured Term Loan Facility, Interest Rate During Period | 1.50% | 1.50% | ||||||||
Quarterly term-loan principal payments | $ 38,000,000 | |||||||||
2013 Term Loan [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Long-term Debt, Gross | $ 250,000,000 | $ 150,000,000 | 250,000,000 | |||||||
Eighth fiscal quarter-end and thereafter following the closing of the AMS Portfolio Acquisition [Member] | Covenant Requirement [Member] | ||||||||||
Summary of compliance with debt covenants | ||||||||||
Maximum Leverage Ratio | 3.50 | 3.50 | ||||||||
Seventh fiscal quarter-end following the closing of the AMS Portfolio Acquisition [Member] | Covenant Requirement [Member] | ||||||||||
Summary of compliance with debt covenants | ||||||||||
Maximum Leverage Ratio | 3.75 | 3.75 | ||||||||
Fifth fiscal quarter-end following the closing of the AMS Portfolio Acquisition [Member] | Covenant Requirement [Member] | ||||||||||
Summary of compliance with debt covenants | ||||||||||
Maximum Leverage Ratio | 4.25 | 4.25 | ||||||||
Sixth fiscal quarter-end following the closing of the AMS Portfolio Acquisition [Member] | Covenant Requirement [Member] | ||||||||||
Summary of compliance with debt covenants | ||||||||||
Maximum Leverage Ratio | 4 | 4 | ||||||||
First four fiscal quarter-ends following the closing of the AMS Portfolio Acquisition [Member] | Covenant Requirement [Member] | ||||||||||
Summary of compliance with debt covenants | ||||||||||
Maximum Leverage Ratio | 4.5 | 4.5 | ||||||||
$600 million, Senior Note [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.40% | 6.40% | ||||||||
Due in 2018 [Member] | Unsecured Term Loan Facility [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Quarterly term-loan principal payments | $ 100,000,000 | |||||||||
Due Q4 2017 [Member] | Unsecured Term Loan Facility [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Quarterly term-loan principal payments | $ 150,000,000 | |||||||||
November 2015 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | 5.50% | ||||||||
January 2017 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 250,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.125% | 5.125% | ||||||||
October 2018 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 600,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.65% | 2.65% | ||||||||
January 2020 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 850,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | ||||||||
May 2020 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 600,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.85% | 2.85% | ||||||||
May 2022 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 500,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.375% | 3.375% | ||||||||
May 2025 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 750,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | 3.85% | ||||||||
October 2023 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 450,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.125% | 4.125% | ||||||||
November 2035 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 7.00% | 7.00% | ||||||||
Senior notes | $ 350,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.25% | 6.25% | ||||||||
January 2040 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | $ 300,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.375% | 7.375% | ||||||||
$600 million, Snr Note [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Repayments of Debt | $ 1,830,000,000 | |||||||||
Premiums, accelerated amortization of debt issuance costs & investor discount costs [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Interest Expense | 45,000,000 | |||||||||
$600 million, Senior Note [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | 600,000,000 | |||||||||
Aggregate Unsecured Term Loan Facility [Member] [Domain] | ||||||||||
Schedule of debt maturities | ||||||||||
Payments due, Total | 1,000,000,000 | 750,000,000 | 1,000,000,000 | |||||||
Unsecured Term Loan Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term Debt, Current Maturities | 0 | |||||||||
Schedule of debt maturities | ||||||||||
Payments due in year two | 225,000,000 | |||||||||
Payments due in year three | 150,000,000 | |||||||||
Payments due in year four | 375,000,000 | |||||||||
Payments due in year five | 0 | |||||||||
Payments due, Thereafter | 0 | |||||||||
November 2015 Notes [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Senior notes | 400,000,000 | |||||||||
May 2022 Notes [Member] | ||||||||||
Schedule of debt maturities | ||||||||||
Payments due, Total | 500,000,000 | |||||||||
May 2020 Notes [Member] | ||||||||||
Schedule of debt maturities | ||||||||||
Payments due, Total | 600,000,000 | |||||||||
Offering Completed in May 2015 [Member] | ||||||||||
Schedule of debt maturities | ||||||||||
Payments due, Total | 1,850,000,000 | |||||||||
Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term Debt, Current Maturities | 250,000,000 | |||||||||
Schedule of debt maturities | ||||||||||
Payments due in year two | 600,000,000 | |||||||||
Payments due in year three | 0 | |||||||||
Payments due in year four | 1,450,000,000 | |||||||||
Payments due in year five | 0 | |||||||||
Payments due, Thereafter | 2,350,000,000 | |||||||||
Payments due, Total | 4,650,000,000 | 4,650,000,000 | ||||||||
May 2025 Notes [Member] | ||||||||||
Schedule of debt maturities | ||||||||||
Payments due, Total | 750,000,000 | |||||||||
Uncommitted Credit Facilities With Two Commercial Japanese Banks [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Maximum amount of proceeds from sale of finance receivables | 180,000,000 | ¥ 21 | ||||||||
De-recognized receivables | $ 132,000,000 | $ 149,000,000 | $ 132,000,000 | |||||||
Average discounted rates of notes receivables | 1.60% | 1.60% | 1.60% | 1.60% | ||||||
Subsequent Event [Member] | ||||||||||
Borrowings and Credit Arrangements (Textuals) [Abstract] | ||||||||||
Revolving credit facility | $ 400,000,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases [Abstract] | |||
Rent Expense, Net | $ 80 | $ 76 | $ 76 |
Leases, Future Minimum Payments Due, Next Twelve Months | 66 | ||
Leases, Future Minimum Payments, Due in Two Years | 60 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 42 | ||
Leases, Future Minimum Payments, Due in Four Years | 34 | ||
Leases, Future Minimum Payments, Due in Five Years | 25 | ||
Leases, Future Minimum Payments, Due Thereafter | 64 | ||
Leases, Future Minimum Payments Due | 291 | ||
Purchase Obligations, Future Minimum Payments Due, Current | 321 | ||
Purchase Obligations, Future Minimum Payments, Due in Two Years | 52 | ||
Purchase Obligations, Future Minimum Payments, Due in Three Years | 39 | ||
Purchase Obligations, Future Minimum Payments, Due in Four Years | 19 | ||
Purchase Obligations, Future Minimum Payments, Due in Five Years | 12 | ||
Purchase Obligations, Future Minimum Payments, Due Thereafter | 15 | ||
Purchase Obligations, Future Minimum Payments Due | $ 458 |
Restructuring Related Activit51
Restructuring Related Activities (Details in Narrative) - USD ($) $ in Millions | 7 Months Ended | 12 Months Ended | 38 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | $ 78 | $ 83 | $ 117 | ||
Restructuring Charges Incurred to Date | $ 153 | ||||
Restructuring Charges | 28 | 26 | 69 | ||
Payments for Restructuring | 82 | 271 | |||
Restructuring and Related Cost, Cost Incurred to Date | $ 308 | 308 | 308 | ||
Restructuring-related Costs Incurred to Date | 155 | ||||
Restructuring Related Expenses | 50 | 57 | 48 | ||
2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges Incurred to Date | 28 | ||||
Payments for Restructuring | 27 | 27 | |||
Restructuring and Related Cost, Cost Incurred to Date | 47 | 47 | 47 | ||
Restructuring-related Costs Incurred to Date | 19 | ||||
2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 87 | 113 | |||
Restructuring Charges Incurred to Date | 125 | ||||
Payments for Restructuring | 55 | 244 | |||
Restructuring and Related Cost, Cost Incurred to Date | 261 | 261 | 261 | ||
Restructuring and Related Cost, Expected Cost | 261 | 261 | 261 | ||
Restructuring-related Costs Incurred to Date | 136 | ||||
Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 4 | 4 | |||
Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 19 | 23 | 42 | ||
Restructuring Charges Incurred to Date | 115 | ||||
Restructuring Reserve | 16 | 16 | 29 | 43 | 16 |
Restructuring Charges | 19 | 23 | 42 | ||
Payments for Restructuring | 32 | 37 | 101 | ||
Restructuring Related Expenses | 0 | 0 | 0 | ||
Employee Severance [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 24 | ||||
Restructuring Charges Incurred to Date | 24 | ||||
Restructuring Reserve | 16 | 16 | 0 | 16 | |
Restructuring Charges | 24 | ||||
Payments for Restructuring | 8 | 8 | |||
Employee Severance [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | (5) | 27 | 41 | ||
Restructuring Charges Incurred to Date | 91 | ||||
Restructuring Reserve | 0 | 0 | 29 | 39 | 0 |
Restructuring Charges | (5) | 27 | |||
Payments for Restructuring | 24 | 37 | 93 | ||
Employee Severance [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 4 | 1 | |||
Restructuring Reserve | 0 | 0 | 0 | 4 | 0 |
Restructuring Charges | 0 | 4 | |||
Payments for Restructuring | 0 | 0 | |||
Impairment of an asset in value [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 2 | 24 | |||
Restructuring Charges Incurred to Date | 2 | ||||
Restructuring Charges | 2 | 0 | |||
Restructuring Related Expenses | 0 | 24 | |||
Impairment of an asset in value [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 0 | ||||
Restructuring Charges Incurred to Date | 0 | ||||
Impairment of an asset in value [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 2 | 24 | |||
Restructuring Charges Incurred to Date | 2 | ||||
Impairment of an asset in value [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 0 | ||||
Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 18 | 26 | 46 | ||
Restructuring Charges Incurred to Date | 36 | ||||
Restructuring Reserve | 6 | 6 | 3 | 6 | |
Restructuring Charges | 7 | 3 | 27 | ||
Payments for Restructuring | 16 | 81 | |||
Restructuring Related Expenses | 11 | 23 | 19 | ||
Other Restructuring [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 7 | ||||
Restructuring Charges Incurred to Date | 4 | ||||
Payments for Restructuring | 4 | 4 | |||
Restructuring-related Costs Incurred to Date | 3 | ||||
Other Restructuring [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 11 | 26 | 43 | ||
Restructuring Charges Incurred to Date | 32 | ||||
Payments for Restructuring | 12 | 77 | |||
Other Restructuring [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 0 | 3 | |||
Reduced Depreciation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 5 | 3 | 5 | ||
Restructuring Charges | 0 | 0 | 0 | ||
Restructuring-related Costs Incurred to Date | 13 | ||||
Restructuring Related Expenses | 5 | 3 | 5 | ||
Reduced Depreciation [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 1 | ||||
Restructuring-related Costs Incurred to Date | 1 | ||||
Reduced Depreciation [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 4 | 3 | 5 | ||
Restructuring-related Costs Incurred to Date | 12 | ||||
Reduced Depreciation [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 0 | 0 | |||
Transfer costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 34 | 31 | |||
Restructuring Charges | 0 | 0 | |||
Payments for Restructuring | 34 | 89 | |||
Restructuring-related Costs Incurred to Date | 90 | ||||
Restructuring Related Expenses | 34 | 31 | |||
Transfer costs [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 15 | ||||
Payments for Restructuring | 15 | 15 | |||
Restructuring-related Costs Incurred to Date | 15 | ||||
Transfer costs [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 19 | 31 | |||
Payments for Restructuring | 19 | 74 | |||
Restructuring-related Costs Incurred to Date | 75 | ||||
Transfer costs [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 0 | ||||
Restructuring Related To Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring-related Costs Incurred to Date | 52 | ||||
Restructuring Related To Plan [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 47 | ||||
Restructuring Related To Plan [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 31 | ||||
Restructuring-related Costs Incurred to Date | 49 | ||||
Maximum [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring plan estimated future cash outflow | 210 | ||||
Restructuring and Related Cost, Expected Cost | 225 | 225 | 225 | ||
Minimum [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring plan estimated future cash outflow | 160 | ||||
Restructuring and Related Cost, Expected Cost | 175 | 175 | 175 | ||
Restructuring Related To Plan [Member] | Maximum [Member] | Other Restructuring [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 120 | 120 | 120 | ||
Restructuring Related To Plan [Member] | Minimum [Member] | Other Restructuring [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 95 | 95 | 95 | ||
Restructuring Plan [Member] | Maximum [Member] | Employee Severance [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 80 | 80 | 80 | ||
Restructuring Plan [Member] | Maximum [Member] | Other Restructuring [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 25 | 25 | 25 | ||
Restructuring Plan [Member] | Minimum [Member] | Employee Severance [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 65 | 65 | 65 | ||
Restructuring Plan [Member] | Minimum [Member] | Other Restructuring [Member] | 2016 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 15 | 15 | 15 | ||
Cost of Sales [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 34 | ||||
Cost of Sales [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | ||||
Cost of Sales [Member] | Impairment of an asset in value [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | ||||
Cost of Sales [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | ||||
Cost of Sales [Member] | Reduced Depreciation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | ||||
Cost of Sales [Member] | Transfer costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 34 | ||||
Cost of products sold [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 31 | 24 | |||
Cost of products sold [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | 0 | |||
Cost of products sold [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | 0 | |||
Cost of products sold [Member] | Reduced Depreciation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | 0 | |||
Cost of products sold [Member] | Transfer costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 31 | 24 | |||
Selling, General and Administrative Expenses [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 16 | 26 | 24 | ||
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | 0 | 0 | ||
Selling, General and Administrative Expenses [Member] | Impairment of an asset in value [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 0 | 0 | |||
Selling, General and Administrative Expenses [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 11 | 23 | 19 | ||
Selling, General and Administrative Expenses [Member] | Reduced Depreciation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | 5 | 3 | $ 5 | ||
Selling, General and Administrative Expenses [Member] | Transfer costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Related Expenses | $ 0 | $ 0 | |||
Restructuring Related To Plan [Member] | Other Restructuring [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 136 | ||||
Restructuring Plan [Member] | Employee Severance [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | 91 | ||||
Restructuring Plan [Member] | Other Restructuring [Member] | 2014 Restructuring plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Incurred Cost | $ 34 |
Supplemental Balance Sheet In52
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts | |||
Beginning balance | $ 119 | $ 105 | $ 112 |
Net (credits) charges to expenses | 15 | 10 | |
Utilization of allowances | (11) | (16) | (15) |
Ending balance | 119 | 119 | 105 |
Trade accounts receivable, net | |||
Accounts receivable | 1,591 | 1,394 | |
Less: allowance for doubtful accounts | (73) | (75) | |
Less: allowance for sales returns | (46) | (44) | |
Trade accounts receivable, net | 1,472 | 1,275 | |
Property, plant and equipment, net | |||
Land | 91 | 86 | |
Buildings and improvements | 981 | 981 | |
Equipment, furniture and fixtures | 2,955 | 2,793 | |
Capital in progress | 338 | 202 | |
Property, plant and equipment | 4,365 | 4,062 | |
Less: accumulated depreciation | 2,735 | 2,572 | |
Property, plant and equipment, net | 1,630 | 1,490 | 1,507 |
Accrued expenses | |||
Legal reserves | 1,062 | 773 | |
Payroll and related liabilities | 572 | 504 | |
Accrued contingent consideration | 63 | 119 | |
Other | 615 | 574 | |
Accrued expenses | 2,312 | 1,970 | |
Other long-term liabilities | |||
Accrued income taxes | 781 | 1,253 | |
Legal reserves | 961 | 1,163 | |
Accrued contingent consideration | 141 | 127 | |
Other long-term liabilities | 455 | 431 | |
Other long-term liabilities | 2,338 | 2,974 | |
Allowance for Doubtful Accounts [Member] | |||
Allowance for doubtful accounts | |||
Beginning balance | 75 | 76 | 81 |
Net (credits) charges to expenses | 9 | 15 | 10 |
Utilization of allowances | (16) | (15) | |
Ending balance | $ 73 | $ 75 | $ 76 |
Supplemental Balance Sheet In53
Supplemental Balance Sheet Information Inventory (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Finished goods | $ 625 | $ 706 |
Work-in-process | 94 | 102 |
Raw materials | 236 | 208 |
Inventory, Net | $ 955 | $ 1,016 |
Supplemental Balance Sheet In54
Supplemental Balance Sheet Information Prepaids and other current assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid expenses | $ 58 | $ 57 |
Restricted cash | 243 | 54 |
Other | 240 | 254 |
prepaid and other current assets | $ 541 | $ 365 |
Income Taxes (Details - Rate Ta
Income Taxes (Details - Rate Table) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Income Tax Rate Reconciliation [Line Items] | |||
effective income tax reconciliation, compensation-related | 6.40% | 1.60% | 0.70% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate | (35.00%) | (35.00%) | (35.00%) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | (1.70%) | (4.80%) | (6.50%) |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | (99.10%) | (34.40%) | (29.10%) |
Effective Income Tax Rate Reconciliation, Nondeductible Expense | (9.40%) | (6.00%) | (7.50%) |
Effective Income Tax Rate Reconciliation, Tax Credits, Research | (15.00%) | (4.40%) | (7.00%) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance | (42.20%) | 2.30% | 4.00% |
Effective Income Tax Rate Reconciliation, Uncertain Domestic Tax Positions | 5.50% | 2.70% | 2.00% |
Effective Income Tax Rate Reconciliation, Other Adjustments | (3.50%) | 0.40% | (0.20%) |
Reported tax rate | (95.90%) | (63.20%) | (76.70%) |
Other Intangible Assets [Member] | |||
Schedule of Income Tax Rate Reconciliation [Line Items] | |||
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses | 9.30% | 2.40% | 1.90% |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||||
Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||||||
Deferred tax assets, net of valuation allowance | $ 155 | $ 536 | ||||
Incremental tax liability asserted by IRS | 1,162 | |||||
Income Tax Examination, Penalties and Interest Accrued | 572 | 500 | ||||
Unrecognized Tax Benefits | 1,095 | 1,056 | $ 1,047 | $ 1,102 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1,006 | 900 | 903 | |||
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions | 47 | 32 | 44 | |||
Unrecognized Tax Benefits, Increases Resulting from Prior Period Tax Positions | 14 | 38 | 3 | |||
Unrecognized Tax Benefits, Decreases Resulting from Prior Period Tax Positions | (17) | (36) | (87) | |||
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities | (3) | (18) | (5) | |||
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations | (2) | (7) | (10) | |||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 724 | 500 | ||||
Deferred Tax Assets, Net, Current | 75 | 496 | ||||
Deferred Tax Assets, Net, Noncurrent | 80 | 40 | ||||
Deferred Tax Assets, Inventory | 37 | 49 | ||||
Deferred Tax Assets, Operating Loss Carryforwards | 798 | 742 | ||||
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals | 228 | 232 | ||||
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Restructuring Charges | 14 | 17 | ||||
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Contingencies | 752 | 689 | ||||
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Impairment Losses | 17 | 7 | ||||
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost | 142 | 138 | ||||
Federal benefit of uncertain tax positions | 238 | 197 | ||||
Deferred Tax Assets, Other | 42 | 39 | ||||
Deferred Tax Assets, Gross | 2,268 | 2,110 | ||||
Deferred Tax Assets, Valuation Allowance | (446) | (499) | ||||
Change in Deferred Tax Assets, Valuation Allowance | (53) | |||||
Deferred Tax Liabilities, Current | 0 | 2 | ||||
Deferred Tax Liabilities, Noncurrent | 18 | 735 | ||||
Deferred Tax Liabilities, Property, Plant and Equipment | 42 | 44 | ||||
Deferred Tax Liabilities, Derivatives | 67 | 82 | ||||
Deferred Tax Liabilities, Goodwill and Intangible Assets, Intangible Assets | 1,651 | 1,749 | ||||
Deferred Tax Liabilities, Other | 1,760 | 1,875 | ||||
Deferred Tax Assets, Net | 62 | |||||
Deferred Tax Liabilities | 18 | 737 | ||||
Deferred Tax Liabilities | (264) | |||||
Deferred Tax Liabilities, Gross | 1,760 | 1,875 | ||||
Current Federal Tax Expense (Benefit) | 31 | 59 | (2) | |||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | (1,019) | (1,623) | (1,263) | |||
Income (Loss) from Continuing Operations before Income Taxes, Foreign | 1,196 | 973 | 754 | |||
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | 177 | (650) | (509) | |||
Current State and Local Tax Expense (Benefit) | 6 | 3 | (5) | |||
Current Foreign Tax Expense (Benefit) | 136 | 132 | 111 | |||
Current Income Tax Expense (Benefit) | 173 | 194 | 104 | |||
Deferred Federal Income Tax Expense (Benefit) | (337) | (545) | (458) | |||
Deferred State and Local Income Tax Expense (Benefit) | (14) | (41) | (23) | |||
Deferred Foreign Income Tax Expense (Benefit) | 8 | (19) | (13) | |||
Deferred Income Tax Expense (Benefit) | (343) | (605) | (494) | |||
Income tax (benefit) expense | (170) | (411) | (390) | |||
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | 172 | 273 | ||||
Other Comprehensive Income (Loss), Tax | 9 | 25 | 21 | |||
Deferred Tax Liabilities, Undistributed Foreign Earnings | 9,800 | |||||
Free Trade Zone Regime Tax Incentive | $ 123 | 7 | 7 | |||
Free Trade Zone Regime Tax Incentive Per Share | $ 0.09 | |||||
Gross interest and penalties recognized in period | $ 72 | |||||
Income Tax Examination, Penalties and Interest Expense | 46 | 37 | $ 26 | |||
Deferred Tax Assets, Prepaid on Intercompany Profit | 75 | 63 | ||||
Net Deferred Tax Assets, Prepaid on Intercompany Profit | 137 | |||||
Net Deferred Tax Liabilities and Prepaid on Intercompany Profit | 137 | (201) | ||||
Deferred Tax Assets, Net of Valuation Allowance | 1,822 | 1,611 | ||||
operating loss carryforwards, domestic | $ 76 | $ 32 | ||||
Subsequent Event [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Litigation Settlement, Amount | $ 275 | |||||
Potential Reduction In Unrecognized Tax Benefits Over Next Twelve Months As Result Of Concluding Certain Matters | $ 758 |
Income Taxes Tax Credits (Detai
Income Taxes Tax Credits (Details) $ in Millions | Dec. 31, 2015USD ($) |
Income Tax Credit Disclosure [Abstract] | |
Operating Loss Carryforwards | $ 624 |
Tax Credit Carryforward, Amount | $ 288 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jul. 26, 2016USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2016USD ($)patentsclaims | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Feb. 21, 2017claims |
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Damages Awarded, Value | $ | $ 308 | ||||||
Accrual for legal matters that are probable and estimable | $ | $ 2,023 | $ 1,936 | |||||
Litigation-related charges | $ | $ 804 | $ 1,105 | $ 1,036 | ||||
Product liability lawsuits related to defibrillators or pacemakers | 8 | ||||||
Suits Pending Against Guidant in Canada and Filed as Class Actions | 4 | ||||||
Suits Pending Against Guidant in Canada, Pending Outcome of Two Lead Class Actions | 3 | ||||||
Suits Pending Against Guidant in Canada, Number of Lead Class Action | 1 | ||||||
Loss Contingency, Settlement Agreement, Consideration | $ | $ 3 | ||||||
Initial GI stent patents allegedly infringed (Pulnev and Hankh patents) | patents | 3 | ||||||
Additional Pulnev patents added to infringement suit | patents | 6 | ||||||
Loss Contingency, Damages Paid, Value | $ | $ 366 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Putative class actions in the U.S., Mesh | 8 | ||||||
Product liability cases or claims related to mesh product assigned to one judge in state court in Massachusetts | 3,100 | ||||||
Product liability cases or claims related to mesh product | 43,000 | ||||||
Litigation Settlement, Amount | $ | $ 275 | ||||||
Product liability cases or claims in Canada, Mesh | 20 | ||||||
Certified class actions in Canada, Mesh | 1 | ||||||
Putative class actions in Canada, Mesh | 3 | ||||||
Product liability cases or claims related to mesh product - United Kingdom | 20 | ||||||
Settled Litigation [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Product liability cases or claims related to mesh product | 31,000 | ||||||
Total Product liability cases and claims settled related to Mesh product | 12,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 25, 2013 | |
Stockholders' Equity Attributable to Parent [Abstract] | ||||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | ||
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||
Treasury shares | 247,566,270 | 247,566,270 | ||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 535 | |||
Stock Repurchase Program, Authorized Amount | $ 1,000 | |||
Stock Repurchased During Period, Shares | 10,000,000 | |||
Payments for Repurchase of Common Stock | $ 0 | $ 0 | $ 125 |
Stock Ownership Plans (Details)
Stock Ownership Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 22, 2016 | Feb. 23, 2015 | Feb. 24, 2014 | Dec. 31, 2013 | May 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share Price | $ 17.26 | $ 16.31 | $ 13.08 | |||||
Unrecognized Compensation Cost - Stock Options | $ 27 | |||||||
Fair value of the Free Cash Flow (FCF) performance awards | $ 8 | $ 6 | $ 5 | |||||
Closing stock price at year end | $ 21.63 | $ 18.44 | $ 13.25 | |||||
Target payout of Free Cash Flows (FCF) performance awards | 114.00% | |||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 2,337,000 | 2,529,000 | 2,618,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 18,797,000 | 23,764,000 | 30,535,000 | 37,339,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 14 | $ 11 | $ 9 | $ 7 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 6,132,000 | 6,606,000 | 7,072,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 17 | $ 16 | $ 13 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (10,045,000) | (11,607,000) | (11,205,000) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 10 | $ 8 | $ 7 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (1,054,000) | (1,770,000) | (2,671,000) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Grant Date Fair Value | $ 13 | $ 10 | $ 8 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 26,644,000 | 31,089,000 | 39,508,000 | 44,892,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 4,186,000 | 4,441,000 | 4,943,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (6,612,000) | (9,040,000) | (4,418,000) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 12 | $ 9 | $ 8 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (2,019,000) | (3,820,000) | (5,909,000) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ 21 | $ 25 | $ 17 | |||||
Stock-based compensation expense | $ 116 | $ 107 | $ 103 | |||||
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 | ||||||
Common Stock, Capital Shares Reserved for Future Issuance | 150,000,000 | |||||||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ (29) | $ (28) | (28) | |||||
Share-based compensation, net of tax benefit | $ 87 | $ 79 | $ 75 | |||||
compensation expense, per share - basic | $ 0.06 | $ 0.06 | $ 0.06 | |||||
compensation expense, per share - diluted | 0.06 | 0.06 | 0.06 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | 17.46 | 16.49 | 13.02 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 5.60 | $ 5.54 | $ 5.07 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 30.00% | 31.00% | 37.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years | 6 years | 6 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 1.14% | 1.49% | 1.69% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 2.08% | 1.92% | 2.09% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value | $ 64 | $ 69 | $ 24 | |||||
Employee Stock Ownership Plan (ESOP), Compensation Expense | $ 11 | $ 9 | $ 8 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 11 | $ 11 | $ 11 | $ 12 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years 9 months 18 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 281 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 17,293,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 9 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 4 years 4 months 24 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 226 | |||||||
Options expected to vest | 8,664,000 | |||||||
Options expected to vest, weighted average exercise price | $ 16 | |||||||
Options expected to vest, weighted average remaining contractual life | 8 years 3 months 18 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 51 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 25,957,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 11 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 5 years 8 months 12 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 277 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | $ 179 | $ 186 | $ 146 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 50,000,000 | |||||||
Amount of employees total compensation eligible for GESOP purchase | 10.00% | |||||||
Global Employee Stock Purchase Plan - Exercise Amount equivalent to 85% of Fair Market Value of Common Stock at beginning or end of each offering period (whichever is less) | 85.00% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 15,000,000 | |||||||
Unrecognized Compensation Cost - Non-vested stock awards | $ 136 | |||||||
Unrecognized Compensation Cost | $ 163 | |||||||
weighted average remaining vesting period | 1 year 3 months 18 days | |||||||
annualweightedaverageforfeiturerate | 8.00% | |||||||
Nonqualified Options Vesting Period | 4 years | |||||||
Nonqualified Options Contractual Life | 10 years | |||||||
voting power of all classes of stock | 10.00% | |||||||
Exercise price of the fair market value of our common stock on the date of grant | 110.00% | |||||||
Qualified options expire over a period not to exceed | 5 years | |||||||
Qualified options exercise price | $ 0 | |||||||
High end of range [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Range of the target number of performance-based DSUs awarded | 150.00% | |||||||
Employee stock purchase plan, purchase price, range | $ 18.39 | $ 15.13 | $ 11.04 | |||||
Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Range of the target number of performance-based DSUs awarded | 0.00% | |||||||
Employee stock purchase plan, purchase price, range | $ 15.29 | $ 11.24 | $ 10.12 | |||||
2011 LTIP Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common Stock, Shares Authorized | 146,000,000 | |||||||
Cost of products sold [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 6 | $ 7 | $ 6 | |||||
Selling, General and Administrative Expenses [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | 90 | 81 | 79 | |||||
Research and Development Expense [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | 20 | 19 | 18 | |||||
2015 awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Fair value of market based awards | $ 6 | |||||||
Measurement period - market based awards | 2 years 10 months 24 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.90% | |||||||
2014 awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Fair value of market based awards | $ 7 | |||||||
Measurement period - market based awards | 3 years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.98% | |||||||
2013 awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Fair value of market based awards | $ 6 | |||||||
Measurement period - market based awards | 3 years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.66% |
Weighted Average Shares Outst61
Weighted Average Shares Outstanding (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share (Textuals) [Abstract] | |||
Excluded common stock equivalents | 22 | 24 | |
Weighted average shares outstanding | |||
Weighted average shares outstanding - basic | 1,357.6 | 1,341.2 | 1,324.3 |
Net effect of common stock equivalents | 19.6 | 0 | 0 |
Weighted average shares outstanding - assuming dilution | 1,377.2 | 1,341.2 | 1,324.3 |
Employee Stock Option [Member] | |||
Earnings Per Share (Textuals) [Abstract] | |||
Excluded common stock equivalents | 1 | 2 | 12 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)reportablesegments | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | $ 8,386 | $ 7,477 | $ 7,376 |
Property, Plant and Equipment, Net | 1,630 | 1,490 | 1,507 |
Net sales | |||
Net sales allocated to reportable segments | 9,076 | 8,068 | 7,462 |
Impact of foreign currency fluctuations | (690) | (591) | (86) |
Net sales | 8,386 | 7,477 | 7,380 |
Revenue by country at actual foreign currency rates | 8,386 | 7,477 | 7,376 |
Segment Reporting, Sales from Divested Businesses | 0 | 0 | 4 |
Amortization expense | (545) | (495) | (438) |
Operating income allocated to reportable segments | 447 | (327) | (301) |
Other expense, net | (270) | (323) | (208) |
Income (loss) before income taxes | 177 | (650) | (509) |
Depreciation | (270) | (274) | (287) |
Goodwill | 6,678 | 6,473 | 5,898 |
Intangible Assets, Net (Excluding Goodwill) | 5,883 | 6,194 | 5,606 |
TOTAL ASSETS | 18,096 | 18,133 | |
Long-Lived Assets | $ 14,191 | 14,157 | 13,011 |
Segment Reporting (Textuals) [Abstract] | |||
Number of reportable segments | reportablesegments | 3 | ||
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Property, Plant and Equipment, Net | $ 1,082 | 1,018 | 1,002 |
Net sales | |||
Revenue by country at actual foreign currency rates | 4,759 | 4,229 | 3,885 |
Japan [Member] | |||
Net sales | |||
Revenue by country at actual foreign currency rates | 750 | 602 | 678 |
IRELAND | |||
Segment Reporting Information [Line Items] | |||
Property, Plant and Equipment, Net | 181 | 170 | 197 |
Other countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Property, Plant and Equipment, Net | 367 | 302 | 308 |
Net sales | |||
Revenue by country at actual foreign currency rates | 2,877 | 2,646 | 2,813 |
Global Interventional Cardiology (IC) Reporting Unit [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 2,524 | 2,242 | 2,092 |
Corporate expenses and currency exchange [Member] | |||
Net sales | |||
Operating Income Unallocated to Segment | (565) | (486) | (308) |
Depreciation | 9 | (9) | 0 |
Special Charges [Member] | |||
Net sales | |||
Operating Income Unallocated to Segment | (1,029) | (1,502) | (1,357) |
Global Peripheral Interventions (PI) Reporting Unit [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 1,093 | 975 | 861 |
Cardiovascular [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 3,617 | 3,217 | 2,953 |
Operating income allocated to reportable segments | 1,137 | 972 | 767 |
Depreciation | (122) | (116) | (120) |
Goodwill | 3,513 | 3,451 | 3,426 |
TOTAL ASSETS | 1,748 | 1,583 | |
Global CRM Reporting Unit [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 1,994 | 1,934 | 1,922 |
Global Electrophysiology (EP) Reporting Unit [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 261 | 248 | 228 |
Rhythm Management [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 2,255 | 2,182 | 2,150 |
Operating income allocated to reportable segments | 404 | 328 | 289 |
Depreciation | (83) | (94) | (92) |
Goodwill | 290 | 292 | 290 |
TOTAL ASSETS | 1,250 | 1,279 | |
Global Endoscopy (Endo) Reporting Unit [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 1,565 | 1,422 | 1,343 |
Global Urology (Uro) Reporting Unit [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 1,065 | 735 | 542 |
Global Neuromodulation (NM) Reporting Unit [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 574 | 512 | 474 |
MedSurg [Member] | |||
Net sales | |||
Net sales allocated to reportable segments | 3,204 | 2,669 | 2,359 |
Operating income allocated to reportable segments | 1,045 | 856 | 746 |
Depreciation | (74) | (73) | (75) |
Goodwill | 2,875 | 2,730 | 2,182 |
TOTAL ASSETS | 1,499 | 1,141 | |
Total allocated to reportable segments [Member] | |||
Net sales | |||
Operating income allocated to reportable segments | 2,586 | 2,156 | 1,802 |
Depreciation | (279) | (283) | (287) |
TOTAL ASSETS | 4,497 | 4,003 | |
Corporate, Non-Segment [Member] | |||
Net sales | |||
TOTAL ASSETS | 1,038 | 1,463 | |
Interventional Cardiology [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | 2,281 | 2,033 | 2,057 |
Cardiac Rhythm Management [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | 1,850 | 1,807 | 1,912 |
Endoscopy [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | 1,440 | 1,306 | 1,323 |
Peripheral Interventions [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | 1,011 | 904 | 850 |
Urology / Women's Health [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | 1,005 | 693 | 535 |
Neuromodulation [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | 556 | 501 | 472 |
Electrophysiology [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from core businesses | $ 243 | $ 233 | $ 227 |
Changes in Other Comprehensiv63
Changes in Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $ (79) | $ (54) | $ (38) |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges and Treasury Locks, Effect Net of Tax | 107 | 152 | 219 |
Unrealized loss on available-for-sale securities | (6) | 0 | |
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax | (21) | (10) | (37) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 1 | 88 | 144 |
Cumulative Translation Adjustment, Net of Tax, Period Increase (Decrease) | (25) | (16) | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Before Reclassifications, Net of Tax | 40 | 70 | |
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | (6) | ||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Reclassification Adjustments, Net of Tax | (17) | (3) | |
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Recognized in Net Periodic Pension Cost, Net of Tax | 6 | 30 | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax | 11 | (27) | 18 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (8) | 51 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Reclassified from OCI, Net of Tax | (85) | (137) | |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax | 0 | ||
Other Comprehensive Income (Loss), Reclassifications out of OCI, Net of Tax | (79) | (107) | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (25) | (16) | (22) |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (45) | (67) | 78 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Reclassification Adjustments and Tax | (6) | 0 | 0 |
Other comprehensive income for defined benefits and pension items, before reclassification, tax impact | 9 | 2 | |
Other Comprehensive Income (Loss), Net of Tax | (87) | (56) | $ 38 |
Other Comprehensive Income (Loss), Tax | (23) | (39) | |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising Reclassed from OCI, Tax | 48 | 78 | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized (Gain) Loss Arising During Period, Tax | $ 2 | $ 17 |
New Accounting Pronouncements I
New Accounting Pronouncements Impact of ASU Adoption (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Minimum [Member] | |
Estimate Impact of ASU Adoption [Line Items] | |
Estimated Impact of ASU 2016-09 Adoption | $ 20 |
Maximum [Member] | |
Estimate Impact of ASU Adoption [Line Items] | |
Estimated Impact of ASU 2016-09 Adoption | $ 30 |
Schedule II (Details)
Schedule II (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation and Qualifying Accounts [Abstract] | ||||
Valuation Allowances and Reserves, Balance | $ 119 | $ 119 | $ 105 | $ 112 |
Net (credits) charges to expenses | 15 | 10 | ||
Valuation Allowances and Reserves, Deductions | (11) | (16) | (15) | |
Valuation Allowances and Reserves, Charged to Other Accounts | $ (2) | $ (15) | $ (2) |