Cover Document
Cover Document - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 22, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2019 | |
Entity File Number | 1-11083 | |
Entity Registrant Name | BOSTON SCIENTIFIC CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-2695240 | |
Entity Address, Address Line One | 300 Boston Scientific Way | |
Entity Address, City or Town | Marlborough | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01752-1234 | |
City Area Code | 508 | |
Local Phone Number | 683-4000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | BSX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Listing, Par Value Per Share | $ 0.01 | |
Entity Common Stock, Shares Outstanding | 1,393,823,592 | |
Entity Central Index Key | 0000885725 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net sales | $ 2,707 | $ 2,393 | $ 7,831 | $ 7,262 |
Cost of products sold | 777 | 672 | 2,265 | 2,084 |
Gross profit | 1,930 | 1,720 | 5,566 | 5,179 |
Operating expenses: | ||||
Selling, general and administrative expenses | 1,012 | 870 | 2,849 | 2,616 |
Research and development expenses | 306 | 289 | 866 | 825 |
Royalty expense | 15 | 17 | 48 | 52 |
Amortization expense | 178 | 148 | 498 | 437 |
Intangible asset impairment charges | 0 | 0 | 105 | 35 |
Contingent consideration expense (benefit) | 8 | (13) | (9) | (12) |
Restructuring charges (credits) | 3 | 3 | 10 | 20 |
Litigation-related net charges (credits) | 25 | 18 | (108) | 18 |
Operating expenses | 1,547 | 1,333 | 4,258 | 3,992 |
Operating income (loss) | 383 | 388 | 1,308 | 1,187 |
Other income (expense): | ||||
Interest expense | (95) | (58) | (294) | (177) |
Other, net | (197) | 126 | (322) | 116 |
Income (loss) before income taxes | 91 | 456 | 693 | 1,126 |
Income tax expense (benefit) | (35) | 24 | (11) | (159) |
Net income (loss) | $ 126 | $ 432 | $ 704 | $ 1,285 |
Net income (loss) per common share — basic | $ 0.09 | $ 0.31 | $ 0.51 | $ 0.93 |
Net income (loss) per common share — assuming dilution | $ 0.09 | $ 0.31 | $ 0.50 | $ 0.92 |
Weighted-average shares outstanding | ||||
Basic | 1,393.1 | 1,382.8 | 1,390.6 | 1,380 |
Assuming dilution | 1,412.2 | 1,403.9 | 1,409.7 | 1,399.8 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net income (loss) | $ 126 | $ 432 | $ 704 | $ 1,285 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | (2) | (6) | 4 | (42) |
Net change in derivative financial instruments | 62 | 47 | 102 | 125 |
Net change in defined benefit pensions and other items | 0 | 0 | (1) | 0 |
Total other comprehensive income (loss) | 60 | 40 | 105 | 82 |
Total comprehensive income (loss) | $ 186 | $ 472 | $ 809 | $ 1,367 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 277 | $ 146 |
Trade accounts receivable, net | 1,796 | 1,608 |
Inventories | 1,566 | 1,166 |
Prepaid income taxes | 189 | 161 |
Other current assets | 1,020 | 921 |
Total current assets | 4,847 | 4,003 |
Property, plant and equipment, net | 1,942 | 1,782 |
Goodwill | 10,015 | 7,911 |
Other intangible assets, net | 8,074 | 6,372 |
Other long-term assets | 1,879 | 932 |
TOTAL ASSETS | 26,756 | 20,999 |
Current liabilities: | ||
Current debt obligations | 1,297 | 2,253 |
Accounts payable | 512 | 349 |
Accrued expenses | 1,932 | 2,246 |
Other current liabilities | 513 | 412 |
Total current liabilities | 4,254 | 5,260 |
Long-term debt | 9,590 | 4,803 |
Deferred income taxes | 807 | 328 |
Other long-term liabilities | 2,406 | 1,882 |
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 1,641,342,509 shares as of September 30, 2019 and 1,632,148,030 shares as of December 31, 2018 | 16 | 16 |
Treasury stock, at cost - 247,566,270 shares as of September 30, 2019 and December 31, 2018 | (1,717) | (1,717) |
Additional paid-in capital | 17,510 | 17,346 |
Accumulated deficit | (6,249) | (6,953) |
Accumulated other comprehensive income (loss), net of tax | 138 | 33 |
Total stockholders’ equity | 9,699 | 8,726 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 26,756 | $ 20,999 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheet (Parenthetical) [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 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 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, Shares, Issued | 1,641,342,509 | 1,632,148,030 |
Common Stock, Shares, Outstanding | 1,393,776,239 | 1,384,581,760 |
Treasury Stock, Shares | 247,566,270 | 247,566,270 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | Adjustments for New Accounting Pronouncement [Member] | $ (233) | |||||
Beginning Balance at Dec. 31, 2017 | $ 16 | $ (1,717) | $ 17,161 | (8,390) | $ (59) | |
Beginning Balance (Shares) at Dec. 31, 2017 | 1,621,062,898 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 298 | |||||
Total other comprehensive income (loss) | (69) | |||||
Impact of stock-based compensation plans, net of tax (Shares) | 6,125,111 | |||||
Impact of stock-based compensation plans, net of tax | 23 | |||||
Ending Balance at Mar. 31, 2018 | $ 16 | (1,717) | 17,184 | (8,326) | (128) | |
Ending Balance (Shares) at Mar. 31, 2018 | 1,627,188,009 | |||||
Beginning Balance at Dec. 31, 2017 | $ 16 | (1,717) | 17,161 | (8,390) | (59) | |
Beginning Balance (Shares) at Dec. 31, 2017 | 1,621,062,898 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ 1,285 | |||||
Total other comprehensive income (loss) | 82 | |||||
Ending Balance at Sep. 30, 2018 | $ 16 | (1,717) | 17,304 | (7,339) | 25 | |
Ending Balance (Shares) at Sep. 30, 2018 | 1,631,271,283 | |||||
Beginning Balance at Mar. 31, 2018 | $ 16 | (1,717) | 17,184 | (8,326) | (128) | |
Beginning Balance (Shares) at Mar. 31, 2018 | 1,627,188,009 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 555 | |||||
Total other comprehensive income (loss) | 112 | |||||
Impact of stock-based compensation plans, net of tax (Shares) | 1,688,243 | |||||
Impact of stock-based compensation plans, net of tax | 47 | |||||
Ending Balance at Jun. 30, 2018 | $ 16 | (1,717) | 17,231 | (7,770) | (16) | |
Ending Balance (Shares) at Jun. 30, 2018 | 1,628,876,252 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 432 | 432 | ||||
Total other comprehensive income (loss) | 40 | 40 | ||||
Impact of stock-based compensation plans, net of tax (Shares) | 2,395,031 | |||||
Impact of stock-based compensation plans, net of tax | 73 | |||||
Ending Balance at Sep. 30, 2018 | $ 16 | (1,717) | 17,304 | (7,339) | 25 | |
Ending Balance (Shares) at Sep. 30, 2018 | 1,631,271,283 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 386 | |||||
Total other comprehensive income (loss) | 8 | |||||
Impact of stock-based compensation plans, net of tax (Shares) | 876,747 | |||||
Impact of stock-based compensation plans, net of tax | 42 | |||||
Ending Balance at Dec. 31, 2018 | $ 8,726 | $ 16 | (1,717) | 17,346 | (6,953) | 33 |
Ending Balance (Shares) at Dec. 31, 2018 | 1,632,148,030 | 1,632,148,030 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 424 | |||||
Total other comprehensive income (loss) | 54 | |||||
Impact of stock-based compensation plans, net of tax (Shares) | 6,001,343 | |||||
Impact of stock-based compensation plans, net of tax | 28 | |||||
Ending Balance at Mar. 31, 2019 | $ 16 | (1,717) | 17,374 | (6,528) | 87 | |
Ending Balance (Shares) at Mar. 31, 2019 | 1,638,149,373 | |||||
Beginning Balance at Dec. 31, 2018 | $ 8,726 | $ 16 | (1,717) | 17,346 | (6,953) | 33 |
Beginning Balance (Shares) at Dec. 31, 2018 | 1,632,148,030 | 1,632,148,030 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ 704 | |||||
Total other comprehensive income (loss) | 105 | |||||
Ending Balance at Sep. 30, 2019 | $ 9,699 | $ 16 | (1,717) | 17,510 | (6,249) | 138 |
Ending Balance (Shares) at Sep. 30, 2019 | 1,641,342,509 | |||||
Beginning Balance at Mar. 31, 2019 | $ 16 | (1,717) | 17,374 | (6,528) | 87 | |
Beginning Balance (Shares) at Mar. 31, 2019 | 1,638,149,373 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 154 | |||||
Total other comprehensive income (loss) | (9) | |||||
Impact of stock-based compensation plans, net of tax (Shares) | 949,557 | |||||
Impact of stock-based compensation plans, net of tax | 48 | |||||
Ending Balance at Jun. 30, 2019 | $ 16 | (1,717) | 17,422 | (6,375) | 78 | |
Ending Balance (Shares) at Jun. 30, 2019 | 1,639,098,930 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ 126 | 126 | ||||
Total other comprehensive income (loss) | 60 | 60 | ||||
Impact of stock-based compensation plans, net of tax (Shares) | 2,243,579 | |||||
Impact of stock-based compensation plans, net of tax | 89 | |||||
Ending Balance at Sep. 30, 2019 | $ 9,699 | $ 16 | $ (1,717) | $ 17,510 | $ (6,249) | $ 138 |
Ending Balance (Shares) at Sep. 30, 2019 | 1,641,342,509 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash provided by (used for) operating activities | ||
Cash provided by (used for) operating activities | $ 1,144 | $ 291 |
Investing activities: | ||
Purchases of property, plant and equipment | (275) | (210) |
Proceeds from sale of property, plant and equipment | 5 | 0 |
Payments for acquisitions of businesses, net of cash acquired | (4,382) | (968) |
Payments for investments and acquisitions of certain technologies | (137) | (148) |
Proceeds from divestiture of certain businesses | 90 | 0 |
Payments for settlements of hedge contracts | (294) | 0 |
Cash provided by (used for) investing activities | (4,992) | (1,326) |
Financing activities: | ||
Payment of contingent consideration amounts and royalty rights previously established in purchase accounting | (135) | (16) |
Payments on short-term borrowings | (1,000) | 0 |
Proceeds from short-term borrowings, net of debt issuance costs | 0 | 999 |
Net increase (decrease) in commercial paper | 13 | (403) |
Payments on borrowings from credit facilities | 0 | (569) |
Proceeds from borrowings on credit facilities | 0 | 569 |
Payments on long-term borrowings and debt extinguishment costs | (1,472) | (602) |
Proceeds from long-term borrowings, net of debt issuance costs | 6,243 | 989 |
Cash used to net share settle employee equity awards | (64) | (54) |
Proceeds from issuances of shares of common stock | 113 | 94 |
Cash provided by (used for) financing activities | 3,697 | 1,007 |
Effect of foreign exchange rates on cash | (2) | (9) |
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | (153) | (37) |
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 829 | 1,017 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 676 | 980 |
Supplemental Information | ||
Stock-based compensation expense | 116 | 104 |
Fair value of contingent consideration recorded in purchase accounting | $ 127 | $ 190 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statement of Cash Flows (Supplemental Disclosure) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Cash and cash equivalents | $ 277 | $ 146 | $ 168 | |
Restricted cash and restricted cash equivalents included in Other current assets | 357 | 655 | 781 | |
Restricted cash equivalents included in Other long-term assets | 43 | 27 | 31 | |
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | $ 676 | $ 829 | $ 980 | $ 1,017 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE A – BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Boston Scientific Corporation have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. When used in this report, the terms, "we," "us," "our," and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . For further information, refer to the consolidated financial statements and footnotes thereto included in Item 8 of our most recent Annual Report on Form 10-K. Amounts reported in millions within this report are computed based on the amounts in thousands. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in dollars. On August 19, 2019 , we announced the closing of our acquisition of BTG plc ( BTG Acquisition or BTG ) . Refer to Note B – Acquisitions and Strategic Investments for more information. Subsequent Events We evaluate events occurring after the date of our most recent accompanying unaudited condensed consolidated balance sheet for potential recognition or disclosure in our financial statements. Those items requiring disclosure (nonrecognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note E – Borrowings and Credit Arrangements and Note I – Commitments and Contingencies for more information. Accounting Standards Implemented Since December 31, 2018 ASC Update No. 2016-02 In February 2016, the Financial Accounting Standards Board (FASB) issued ASC Update No. 2016-02, Leases ( FASB ASC Topic 842, Leases ). We adopted the standard as of January 1, 2019, using the modified retrospective approach and the transition method provided by ASC Update No. 2018-11, Leases (Topic 842): Targeted Improvements . Under this method, we applied the new leasing rules on the date of adoption and recognized the cumulative effect of initially applying the standard as an adjustment to our opening balance sheet, rather than at the earliest comparative period presented in the financial statements. Prior periods presented are in accordance with the previous lease guidance under FASB ASC Topic 840, Leases . In addition, we applied the package of practical expedients permitted under FASB ASC Topic 842 transition guidance to our entire lease portfolio at January 1, 2019. As a result, we were not required to reassess (i) whether any expired or existing contracts are or contain leases, (ii) the classification of any expired or existing leases and (iii) the treatment of initial direct costs for any existing leases. Furthermore, we elected not to separate lease and non-lease components for the majority of our leases. Instead, for all applicable classes of underlying assets, we accounted for each separate lease component and the non-lease components associated with that lease component, as a single lease component. As a result of adopting FASB ASC Topic 842 on January 1, 2019, we recognized right-of-use assets of $271 million and corresponding liabilities of $278 million for our existing operating lease portfolio on our unaudited condensed consolidated balance sheet . Operating lease right-of-use assets are presented within Other long-term assets and corresponding liabilities are presented within Other current liabilities and Other long-term liabilities on our unaudited condensed consolidated balance sheets . Finance leases are immaterial to our unaudited condensed consolidated financial statements . Refer to Note E – Borrowings and Credit Arrangements for additional information. There was no material impact to our unaudited condensed consolidated statements of operations or unaudited condensed consolidated statements of cash flows . Please refer to Note G – Leases for information regarding our lease portfolio as of September 30, 2019 as accounted for under FASB ASC Topic 842 . To meet the reporting and disclosure requirements of FASB ASC Topic 842 , we implemented a new lease administration and lease accounting system in 2018 that tracks all of our material leasing arrangements. In addition, we designed and implemented new processes and internal controls during the first quarter of 2019 to ensure the completeness and accuracy of the transition adjustment and subsequent financial reporting under FASB ASC Topic 842 |
Acquisitions and Strategic Inve
Acquisitions and Strategic Investments | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND STRATEGIC INVESTMENTS | NOTE B – ACQUISITIONS AND STRATEGIC INVESTMENTS Our unaudited condensed consolidated financial statements include the operating results for acquired entities from the respective date of acquisition. With the exception of the acquisition of BTG , which was completed on August 19, 2019 , we have not presented supplemental pro forma financial information for acquisitions given their results are not material to our unaudited condensed consolidated financial statements . Transaction costs for all acquisitions in 2019 and 2018 were immaterial to our unaudited condensed consolidated financial statements and were expensed as incurred. 2019 Acquisitions We recorded immaterial purchase price adjustments to the preliminary purchase price allocations of previous acquisitions during the measurement period in the first nine months of 2019 . BTG plc On August 19, 2019 , we announced the closing of our acquisition of BTG , a public company organized under the laws of England and Wales. BTG has three key portfolios, the largest of which is its interventional medicine portfolio (Interventional Medicine) that encompasses interventional oncology therapeutic technologies for patients with liver and kidney cancers, as well as a vascular portfolio for treatment of deep vein thrombosis, pulmonary embolism, deep venous obstruction and superficial venous disease. In addition to the Interventional Medicine product lines, the BTG portfolio also includes a specialty pharmaceutical business ( Specialty Pharmaceuticals ) comprised of acute care antidotes to treat overexposure to certain medications and toxins and a licensing portfolio (Licensing) that generates net royalties related to BTG intellectual property and product license agreements. The transaction price consisted of upfront cash in the aggregate amount of £3.312 billion for the entire issued ordinary share capital of BTG (or $4.023 billion based on the exchange rate of U.S. $1.21 : £1.00 at closing on August 19, 2019 ) , whereby BTG shareholders received 840 pence in cash for each BTG share. The transaction price of $4.023 billion included $404 million of cash and cash equivalents acquired. We implemented the BTG Acquisition by way of a court-sanctioned scheme of arrangement under Part 26 of the United Kingdom Companies Act 2006, as amended. After closing the BTG Acquisition , we terminated the £150 million BTG revolving credit facility, which contained an option to increase the facility by £150 million and was scheduled to expire in November 2020. The termination was effective on August 27, 2019, and there were no amounts outstanding at the time of close of the BTG Acquisition . Purchase Price Allocation We accounted for the BTG Acquisition as a business combination, and in accordance with FASB ASC Topic 805 , Business Combinations ( FASB ASC Topic 805 ), we recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The preliminary BTG Acquisition purchase price was comprised of the amounts presented below, which represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the BTG Acquisition . The final determination of the fair value of certain assets and liabilities will be completed within the measurement period as required by FASB ASC Topic 805 . As of September 30, 2019, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary, including the projection of the underlying cash flows used to determine the fair value of the identified tangible, intangible and financial assets and liabilities. Given the size and breadth of the BTG Acquisition , we anticipate that the purchase price allocation will take longer than prior acquisitions and potentially up to the one year allowed under FASB ASC Topic 805 to adequately analyze all the factors used in establishing the fair value of assets acquired and liabilities assumed as of the acquisition date, including, but not limited to, intangible assets, inventories, financial assets, real and personal property, leases, certain assumed liabilities, including reserves and deferred revenues, tax-related items, and the related tax and foreign currency effects of any changes made. Any potential adjustments made could be material in relation to the preliminary values presented below: (in millions) Payment for acquisition, net of cash acquired $ 3,619 The following summarizes the BTG Acquisition preliminary purchase price allocation as of September 30, 2019 : (in millions) Goodwill $ 1,549 Trade accounts receivable, net 107 Inventories 205 Other current assets 259 Other intangible assets, net 1,869 Other long-term assets 604 Accrued expenses and other current liabilities (305 ) Other long-term liabilities (289 ) Deferred tax liability (380 ) $ 3,619 As a result of the BTG Acquisition , we recognized goodwill of $1.549 billion , which is attributable to the synergies expected to arise from the BTG Acquisition and revenue and cash flow projections associated with future technologies. The goodwill is not deductible for tax purposes. As of September 30, 2019, given the preliminary nature of the purchase price allocation, we have not yet allocated goodwill to the relevant reporting units. We acquired certain intellectual property and related licensing arrangements, principally relating to Zytiga™, as part of the BTG Acquisition that provides the contractual right to receive future royalty payments. The licensing arrangements were accounted for as financial assets as part of acquisition accounting and were recognized at fair value based upon a discounted cash flow approach considering the probability-weighted expected future cash flows to be generated by the royalty stream. Additionally, as part of the intellectual property related to the licensing arrangements that we acquired we also have the contractual obligation to remit a portion of the cash flows received to the inventors associated with the intellectual property. As such, as part of acquisition accounting we have recorded a financial liability related to the future cash flows we are required to remit to the inventors when we collect the royalty payments. The amount recognized for the financial asset was $633 million in aggregate, comprised of $200 million included in Other current assets and $432 million included in Other long-term assets . The amount recognized for the financial liability was $395 million , comprised of $153 million included in Accrued expenses and other current liabilities and $241 million included in Other long-term liabilities . We allocated a portion of the BTG Acquisition preliminary purchase price to specific intangible asset categories as follows: Amount Assigned (in millions) Amortization Period (in years) Risk-Adjusted Discount Rates used in Purchase Price Allocation Amortizable intangible assets: Technology-related $ 1,794 10 - 17 10 % - 12% Other intangible assets 75 2 - 11 11% $ 1,869 As a result of the BTG Acquisition , we assumed a benefit obligation related to a defined benefit pension plan sponsored by BTG for eligible United Kingdom (U.K.) employees (U.K. Plan). The U.K. Plan was closed to new entrants as of June 1, 2004. Prior to the acquisition close date of August 19, 2019 , the Trustees of the U.K. Plan executed buy-in arrangements (Buy-in Contracts), under which the benefit obligation of the pension plan is not transferred to the insurers, and we remain responsible for paying pension benefits. Effectively, the Buy-in Contracts are intended to provide payments designed to equal all future designated contractual benefit payments to covered participants. We do not anticipate any additional material contributions or payments to the U.K. Plan or the insurer. The following assumptions were used to measure the fair value of the benefit obligation and associated plan assets: Discount Rate Expected Return on Plan Assets Rate of Compensation Increase U.K. Plan 0.4% 0.4% 3.4% As of the measurement date of August 19, 2019 , the funded status recognized in our unaudited condensed consolidated balance sheets was as follows: (in millions) Fair value of plan assets $ 213 Benefit obligation (216 ) Funded status $ (3 ) BTG Pro Forma Financial Information (unaudited) BTG contributed $71 million to our Net sales and immaterial amounts to our Net income (loss) for the period from August 19, 2019 through September 30, 2019 . The unaudited estimated pro forma results presented below include the effects of the BTG Acquisition as if it was consummated on January 1, 2018. In the third quarter and first nine months of 2019 , we incurred nonrecurring charges that we attributed to the BTG Acquisition , which are presented in our unaudited condensed consolidated statements of operations for these periods. These nonrecurring charges that are attributable to the BTG Acquisition include immaterial amounts of acquisition-related costs, stock-based compensation expenses as a result of the change in control and retention bonuses and severance payments, adjusted for the related tax effects. We have reflected these nonrecurring charges as adjustments to the pro forma earnings presented below for the third quarter and first nine months of 2019 and 2018 . Additionally, these pro forma amounts have been calculated after applying our accounting policies and adjusting the results of BTG to reflect the additional costs associated with fair value adjustments relating to inventories, property, plant, and equipment, and intangible assets as if the BTG Acquisition had occurred on January 1, 2018, with the consequential tax effects. Additionally, the pro forma amounts have been adjusted to reflect the amortization of deferred financing costs and interest expense associated with additional financing entered into as part of the BTG Acquisition . The pro forma results exclude BTG ’s historical licensing revenue and related cost of sales, as these arrangements are accounted for as part of the BTG Acquisition as a financial asset and liability and are not accounted for within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers . The supplemental pro forma information presented below is for informational purposes only and should be read in conjunction with our historical financial statements. The pro forma results do not include any anticipated synergies or other expected benefits of the BTG Acquisition . Accordingly, the unaudited estimated pro forma financial information below is not necessarily indicative of what the actual results of operations of the combined companies would have been had the BTG Acquisition occurred as of January 1, 2018, nor are they indicative of future results of operations. We believe that the pro forma assumptions and adjustments are reasonable and appropriate under the circumstances and are factually supported based on information currently available. Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share data) 2019 2018 2019 2018 Net sales $ 2,795 $ 2,561 $ 8,237 $ 7,740 Net income (loss) 152 332 599 950 Net income (loss) per common share — basic $ 0.11 $ 0.24 $ 0.43 $ 0.69 Net income (loss) per common share — assuming dilution $ 0.11 $ 0.24 $ 0.42 $ 0.68 Transaction with Varian Medical Systems, Inc. On August 21, 2019, we completed the sale of our drug-eluting and bland embolic microsphere portfolio to Varian Medical Systems, Inc. (Varian) in connection with the BTG Acquisition . The transaction price consisted of an upfront cash payment of $90 million , a portion of which is allocated to the fair value of the services to be rendered under the Transition Services Agreement and Transition Manufacturing Agreement entered into with Varian as part of this transaction. Additionally, we transferred certain contingent consideration arrangements arising from our initial acquisition of the portfolio to Varian and agreed to indemnify Varian for any payments ultimately arising under the terms of the contingent consideration arrangement. Accordingly, as part of the disposal, we recorded a liability of $16 million to recognize the fair value of this guarantee based on our potential obligation resulting from the indemnifications. The maximum amount payable under this guarantee is $200 million in accordance with FASB ASC Topic 460, Guarantees , which is consistent with the contingent consideration arrangement executed with our initial acquisition of the portfolio in accordance with FASB ASC Topic 805 . Vertiflex, Inc. On June 11, 2019, we announced the closing of our acquisition of Vertiflex, Inc. (Vertiflex), a privately-held company which has developed and commercialized the Superion™ Indirect Decompression System, a minimally-invasive device used to improve physical function and reduce pain in patients with lumbar spinal stenosis (LSS). The transaction price consisted of an upfront cash payment of $465 million and contingent payments that are based on a percentage of Vertiflex sales growth in the first three years following the acquisition close. We estimate the sales-based contingent payments to be in a range of zero to $100 million ; however, the payments are uncapped over the three year term. Vertiflex is part of our Neuromodulation business. Millipede, Inc. On January 29, 2019, we announced the closing of our acquisition of Millipede, Inc. (Millipede), a privately-held company that has developed the IRIS Transcatheter Annuloplasty Ring System for the treatment of severe mitral regurgitation. We have been an investor in Millipede since the first quarter of 2018 as part of an investment and acquisition option agreement, whereby we purchased a portion of the outstanding shares of Millipede, along with newly issued shares of the company, for an upfront cash payment of $90 million . We held an interest of approximately 20 percent immediately prior to the acquisition date. In the fourth quarter of 2018, upon the recent successful completion of a first-in-human clinical study, we exercised our option to acquire the remaining shares of Millipede. We remeasured the fair value of our previously-held investment based on the implied enterprise value and allocation of purchase price consideration according to priority of equity interests. The transaction price for the remaining stake consisted of an upfront cash payment of $325 million and up to an additional $125 million payment upon achievement of a commercial milestone. Millipede is part of our Interventional Cardiology business. Purchase Price Allocation We accounted for our 2019 acquisitions of Vertiflex and Millipede as business combinations, and in accordance with FASB ASC Topic 805 , we recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition dates. The preliminary purchase prices of our acquisitions of Vertiflex and Millipede, presented in aggregate, were comprised of the following components: (in millions) Payments for acquisitions, net of cash acquired $ 763 Fair value of contingent consideration 127 Fair value of prior interests 102 $ 992 The preliminary purchase price allocations of our acquisitions of Vertiflex and Millipede, presented in aggregate, were comprised of the following components as of September 30, 2019 : (in millions) Goodwill $ 575 Amortizable intangible assets 220 Indefinite-lived intangible assets 240 Other assets acquired 24 Liabilities assumed (12 ) Net deferred tax liabilities (56 ) $ 992 We allocated a portion of the preliminary purchase prices of our acquisitions of Vertiflex and Millipede, presented in aggregate, to the specific intangible asset categories as follows: Amount Assigned (in millions) Amortization Period (in years) Risk-Adjusted Discount Rates used in Purchase Price Allocation Amortizable intangible assets: Technology-related $ 210 12 15% Other intangible assets 10 12 15% Indefinite-lived intangible assets: In-process research and development (IPR&D) 240 N/A 19% $ 461 2018 Acquisitions We recorded immaterial purchase price adjustments to the preliminary purchase price allocations of previous acquisitions during the measurement period in the first nine months of 2019 . Claret Medical, Inc. On August 2, 2018, we announced the closing of our acquisition of Claret Medical, Inc. (Claret), a privately-held company that has developed and commercialized the Sentinel™ Cerebral Embolic Protection System. The device is used to protect the brain during certain interventional procedures, predominately in patients undergoing transcatheter aortic valve replacement (TAVR). The transaction price consisted of an upfront cash payment of $220 million and an additional $50 million payment for reaching a reimbursement-based milestone that was achieved in the third quarter of 2018. Claret is part of our Interventional Cardiology business. Cryterion Medical, Inc. On July 5, 2018, we announced the closing of our acquisition of Cryterion Medical, Inc. (Cryterion), a privately-held company developing a single-shot cryoablation platform for the treatment of atrial fibrillation. We have been an investor in Cryterion since 2016 and held an interest of approximately 35 percent immediately prior to the acquisition date. The transaction price to acquire the remaining stake consisted of an upfront cash payment of $202 million . Cryterion is part of our Electrophysiology business. NxThera, Inc. On April 30, 2018, we announced the closing of our acquisition of NxThera, Inc. (NxThera), a privately-held company that developed the Rezūm™ System, a minimally invasive therapy in a growing category of treatment options for patients with benign prostatic hyperplasia (BPH). We held a minority interest immediately prior to the acquisition date. The transaction price to acquire the remaining stake consisted of an upfront cash payment of approximately $240 million and up to approximately $85 million in payments contingent upon commercial milestones over the four years following the date of acquisition. NxThera is part of our Urology and Pelvic Health business. nVision Medical Corporation On April 16, 2018, we announced the closing of our acquisition of nVision Medical Corporation (nVision), a privately-held company focused on women’s health. nVision developed the first and only device cleared by the U.S. Food and Drug Administration (FDA) to collect cells from the fallopian tubes, offering a potential platform for earlier diagnosis of ovarian cancer. The transaction price consisted of an upfront cash payment of $150 million and up to an additional $125 million in payments contingent upon clinical and commercial milestones over the four years following the date of acquisition. nVision is part of our Urology and Pelvic Health business. In addition, we completed other individually immaterial acquisitions in the first nine months of 2018 for total consideration of $158 million in cash at closing plus aggregate contingent consideration of up to $62 million . We recorded gains of $142 million in the third quarter of 2018 and $182 million in the first nine months of 2018 within Other, net on our unaudited condensed consolidated statements of operations based on the difference between the book values and the fair values of our previously-held investments immediately prior to the acquisition dates. The aggregate fair value of our previously-held investments immediately prior to the acquisition dates was $251 million . We remeasured the fair value of each previously-held investment based on the implied enterprise value and allocation of purchase price consideration according to priority of equity interests. Purchase Price Allocation We accounted for our 2018 acquisitions as business combinations, and in accordance with FASB ASC Topic 805 , we 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 for our 2018 acquisitions as of September 30, 2019 : (in millions) Payments for acquisitions, net of cash acquired $ 969 Fair value of contingent consideration 190 Fair value of prior interests 251 $ 1,410 The following summarizes the aggregate purchase price allocations for our 2018 acquisitions as of September 30, 2019 : (in millions) Goodwill $ 618 Amortizable intangible assets 707 Indefinite-lived intangible assets 213 Other assets acquired 19 Liabilities assumed (14 ) Net deferred tax liabilities (134 ) $ 1,410 We allocated a portion of the aggregate purchase prices to specific intangible asset categories as follows for our 2018 acquisitions as of September 30, 2019 : Amount Assigned (in millions) Amortization Period (in years) Risk-Adjusted Discount Rates used in Purchase Price Allocation Amortizable intangible assets: Technology-related $ 697 10 - 14 17 % - 23% Other intangible assets 10 6 - 13 13 % - 15% Indefinite-lived intangible assets: IPR&D 213 N/A 15% $ 920 Our technology-related intangible assets consist of technical processes, intellectual property and institutional understanding with respect to products and processes that we intend to leverage in future products or processes and will carry forward from one product generation to the next. We used the multi-period excess earnings method, a form of the income 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. Goodwill was primarily established due 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. Based on preliminary estimates updated for applicable regulatory changes, the goodwill recorded relating to our 2019 and 2018 acquisitions is not deductible for tax purposes. Contingent Consideration Changes in the fair value of our contingent consideration liability were as follows: (in millions) Balance as of December 31, 2018 $ 347 Amount recorded related to current year acquisitions 127 Contingent consideration arrangements transferred to Varian (16 ) Contingent consideration expense (benefit) (9 ) Contingent consideration payments (68 ) Balance as of September 30, 2019 $ 380 As of September 30, 2019 , the maximum amount of future contingent consideration (undiscounted) that we could be required to pay was $747 million , which includes our estimate of maximum contingent payments of $100 million associated with the Vertiflex acquisition described above. The maximum decreased $126 million compared to the amount as of December 31, 2018 primarily due to the contingent consideration arrangement which is now accounted for as a guarantee in connection with our transaction with Varian as discussed in the BTG section above. The recurring Level 3 fair value measurements of our contingent consideration liability include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of September 30, 2019 Valuation Technique Unobservable Input Range Weighted Average (1) R&D, Regulatory and Commercialization-based Milestones $220 million Discounted Cash Flow Discount Rate 2 % - 3% 3% Probability of Payment 50 % - 90% 84% Projected Year of Payment 2019 - 2027 2020 Revenue-based Payments $160 million Discounted Cash Flow Discount Rate 11 % - 15% 13% Probability of Payment 60 % - 100% 99% Projected Year of Payment 2019 - 2026 2021 (1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average. Projected contingent payment amounts related to some of our research and development (R&D), commercialization-based and revenue-based milestones are discounted back to the current period using a discounted cash flow model. Significant increases or decreases in projected revenues, probabilities of payment, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement as of September 30, 2019 . Strategic Investments The aggregate carrying amount of our strategic investments was comprised of the following: As of (in millions) September 30, 2019 December 31, 2018 Equity method investments $ 270 $ 303 Measurement alternative investments (1) 173 94 Notes receivable 23 26 $ 468 $ 424 (1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured 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. These investments are classified as Other long-term assets within our accompanying unaudited condensed consolidated balance sheets , in accordance with U.S. GAAP and our accounting policies. As of September 30, 2019 , the cost of our aggregated equity method investments exceeded our share of the underlying equity in net assets by $308 million , which represents amortizable intangible assets, IPR&D, goodwill and deferred tax liabilities. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE C – 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 are as follows: As of September 30, 2019 As of December 31, 2018 (in millions) Gross Carrying Amount Accumulated Amortization/ Write-offs Gross Carrying Amount Accumulated Amortization/ Write-offs Amortizable intangible assets Technology-related $ 12,018 $ (5,545 ) $ 10,197 $ (5,266 ) Patents 524 (404 ) 520 (393 ) Other intangible assets 1,748 (1,047 ) 1,666 (958 ) $ 14,290 $ (6,996 ) $ 12,383 $ (6,617 ) Indefinite-lived intangible assets Goodwill $ 19,915 $ (9,900 ) $ 17,811 $ (9,900 ) IPR&D 661 — 486 — Technology-related 120 — 120 — $ 20,695 $ (9,900 ) $ 18,417 $ (9,900 ) The following represents our goodwill balance allocated to our global reportable segments and unallocated amounts: (in millions) MedSurg Rhythm and Neuro Cardiovascular BTG Acquisition (1) Total As of December 31, 2018 $ 2,063 $ 1,924 $ 3,925 $ — $ 7,911 Impact of foreign currency fluctuations and other changes in carrying amount (3 ) — 2 1 (1 ) Goodwill acquired — 268 307 1,549 2,124 Goodwill divested — — (19 ) — (19 ) As of September 30, 2019 $ 2,060 $ 2,191 $ 4,214 $ 1,550 $ 10,015 (1) As a result of the BTG Acquisition , we recognized goodwill attributable to the synergies expected to arise from the BTG Acquisition and revenue and cash flow projections associated with future technologies. The goodwill is not deductible for tax purposes. As of September 30, 2019, given the preliminary nature of the BTG Acquisition purchase price allocation, we have not yet allocated goodwill to the relevant reporting units and/or reportable segments. Goodwill and Indefinite-Lived Intangible Asset Impairment Testing We did not have any goodwill impairments in the third quarter and first nine months of 2019 or 2018. We test our goodwill balances in the second quarter of each year for impairment, or more frequently if impairment indicators are present or changes in circumstances suggest an impairment may exist. In the second quarter of 2019 , we performed our annual goodwill impairment test for all of our reporting units and concluded that the fair value of each reporting unit exceeded its carrying value. In performing the goodwill impairment assessment, we utilized both the optional qualitative assessment and the quantitative approach prescribed under FASB ASC Topic 350, Intangibles - Goodwill and Other . In 2019, we performed a qualitative assessment for our Urology and Pelvic Health, Neuromodulation and Endoscopy reporting units since their fair values have exceeded carrying value by greater than 100 percent. The remaining reporting units were quantitatively tested for impairment. For the reporting units subject to a qualitative assessment, if it is determined that it is more likely than not that the fair value of the reporting unit is less than its carrying value, the quantitative approach of the goodwill impairment test is necessary. In 2019, for all reporting units tested using the qualitative assessment, we concluded that it was unnecessary to perform the quantitative impairment test. For all reporting units tested using the quantitative approach, we concluded that the fair value of each reporting unit exceeded its carrying value. We did not have any Intangible asset impairment charges in the third quarter of 2019 or 2018. We recorded immaterial Intangible asset impairment charges in the first nine months of 2019 and 2018. 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. If we determine it is more likely than not that the asset is impaired based on our qualitative assessment of impairment indicators, we test the intangible asset for recoverability. If the carrying value of the intangible asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset or asset group, we will write the carrying value down to fair value in the period impairment is identified. In the third quarter of 2019 , we performed our annual impairment test of all IPR&D projects and our indefinite-lived core technology assets using the optional qualitative assessment approach and determined that the assets were not impaired. We also verified that the classification of IPR&D projects and our indefinite-lived core technology assets we continue to recognize on our unaudited condensed consolidated balance sheets as indefinite-lived assets continues to be appropriate. Refer to Critical Accounting Policies and Estimates within Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our most recent Annual Report on Form 10-K for further discussion of our annual goodwill and intangible asset impairment testing. |
Hedging Activities and Fair Val
Hedging Activities and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE D – HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS Derivative Instruments and Hedging Activities We address market risk from changes in foreign currency exchange rates and interest rates through risk management programs which include the use of derivative financial instruments. We operate these programs pursuant to documented corporate risk management policies and do not enter into derivative transactions for speculative purposes. Our derivative instruments do not subject our earnings to material risk, as the gains or losses on these derivatives generally offset losses or gains recognized on the hedged item. We manage concentration of counterparty credit risk by limiting acceptable counterparties to major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to individual counterparties and by actively monitoring counterparty credit ratings and the amount of individual credit exposure. We also employ master netting arrangements that limit the risk of counterparty non-payment on a particular settlement date to the net gain that would have otherwise been received from the counterparty. Although not completely eliminated, we do not consider the risk of counterparty default to be significant as a result of these protections. Further, none of our derivative instruments are subject to collateral or other security arrangements, nor do they contain provisions that are dependent on our credit ratings from any credit rating agency. Currency Derivative Instruments Risk Management Strategy Our risk from changes in currency exchange rates consists primarily of monetary assets and liabilities, forecast intercompany and third-party transactions, net investments in certain subsidiaries and the purchase price of any acquisition that is denominated in a currency other than the U.S. dollar. We manage currency exchange rate risk at a consolidated level to reduce the cost of hedging by taking advantage of offsetting transactions. We employ derivative instruments, primarily forward currency contracts, to reduce the risk to our earnings and cash flows associated with changes in currency exchange rates. The success of our currency risk management program depends, in part, on forecast transactions denominated primarily in Euro, Japanese yen, Chinese renminbi and British pound sterling. We may experience unanticipated currency exchange gains or losses to the extent the actual activity is different than forecast. In addition, changes in currency exchange rates related to any unhedged transactions may impact our earnings and cash flows. Derivative Designations and Hedging Relationships Certain of our currency derivative instruments are designated as cash flow hedges under FASB ASC Topic 815 , Derivatives and Hedging ( FASB ASC Topic 815 ), and are intended to protect the U.S. dollar value of forecasted transactions. The gain or loss on a derivative instrument designated as a cash flow hedge is recorded in the Net change in derivative financial instruments component of Other comprehensive income (loss), net of tax (OCI) on our unaudited condensed consolidated statements of comprehensive income (loss) until the underlying third-party transaction occurs. When the underlying third-party transaction occurs, we recognize the gain or loss in earnings within the Cost of products sold caption of our unaudited condensed consolidated statements of operations . In the event the hedging relationship is no longer effective, or if the occurrence of the hedged forecast transaction becomes no longer probable, we reclassify the gains or losses within Accumulated other comprehensive income (loss), net of tax (AOCI) to earnings at that time. We also designate certain forward currency contracts as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in the Euro, Swiss franc, Japanese yen, British pound sterling, South Korean won and Taiwan dollar. We elected to use the spot method to assess effectiveness for our derivatives that are designated as net investment hedges. Under the spot method, the change in fair value attributable to changes in the spot rate is recorded in the Foreign currency translation adjustment (CTA) component of OCI . We have elected to exclude the spot-forward difference from the assessment of hedge effectiveness and are amortizing this amount separately, as calculated at the date of designation, on a straight-line basis over the term of the currency forward contracts. Amortization of the spot-forward difference is then reclassified from AOCI to current period earnings as a reduction to Interest expense on our unaudited condensed consolidated statements of operations . We also use forward currency contracts that are not part of designated hedging relationships under FASB ASC Topic 815 as a part of our strategy to manage our exposure to currency exchange rate risk related to monetary assets and liabilities and related forecast transactions. These non-designated currency forward contracts have an original time to maturity consistent with the hedged currency transaction exposures, generally less than one year, and are marked-to-market with changes in fair value recorded to earnings within the Other, net caption of our unaudited condensed consolidated statements of operations . Certain of our non-designated forward currency contracts were entered into for the purpose of managing our exposure to currency exchange rate risk related to the purchase price of the BTG Acquisition . As of September 30, 2019 , we settled all outstanding contracts , resulting in a cumulative loss on the contracts of $294 million that was recognized over time in earnings as we adjusted for changes in fair value until the final fair value was determined at maturity. We received £3.312 billion of cash to fund the BTG Acquisition , which translated into $4.303 billion based on hedged currency exchange rates. We recognized a $207 million loss in the third quarter of 2019 and a $323 million loss in the first nine months of 2019 in Other, net due to changes in fair value of the contracts. Interest Rate Derivative Instruments Risk Management Strategy Our interest rate risk relates primarily to U.S. dollar borrowings partially offset by U.S. dollar cash investments. We use interest rate derivative instruments to manage our earnings and cash flow exposure to changes in interest rates. Under these agreements we and the counterparty, at specified intervals, exchange the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. We designate these derivative instruments either as fair value or cash flow hedges in accordance with FASB ASC Topic 815 . Derivative Designations and Hedging Relationships We had no interest rate derivative instruments designated as cash flow hedges outstanding as of September 30, 2019 and $1.000 billion outstanding as of December 31, 2018 , which were intended to manage our earnings and cash flow exposure to changes in the benchmark interest rate in connection with the forecasted issuance of fixed-rate debt. For outstanding designated cash flow hedges, we record the changes in the fair value of the derivatives within OCI until the underlying hedged transaction occurs, at which time we recognize the gain or loss within Interest expense over the same period that the hedged items affect earnings, so long as the hedge relationship remains effective. If we determine the hedging relationship is no longer effective, or if the occurrence of the hedged forecast transaction becomes no longer probable, we reclassify the amount of gains or losses from AOCI to earnings at that time. During the fourth quarter of 2018, we entered into interest rate derivative contracts designated as cash flow hedges having a notional amount of $1.000 billion to hedge interest rate risk. In the first quarter of 2019, we terminated these instruments in connection with our senior notes issuance in the same period as discussed in Note E – Borrowings and Credit Arrangements . We recognized an immaterial loss within OCI in the first nine months of 2019 and are reclassifying the amortization of the loss from AOCI into earnings as a component of Interest expense over the same period that the hedged item affects earnings, so long as the hedge relationship remains effective. We are also continuing to reclassify in a similar manner the amortization of the gains or losses of our other previously terminated interest rate derivative instruments that were designated as cash flow hedges. The balance of the deferred loss on our terminated cash flow hedges within AOCI was immaterial as of September 30, 2019 and December 31, 2018 . We recognized immaterial gains and losses in Interest expense relating to the amortization of our terminated cash flow hedges in the current and prior periods. We had no interest rate derivative instruments designated as fair value hedges outstanding as of September 30, 2019 and December 31, 2018 . Prior to 2018, we terminated interest rate derivative instruments that were designated as fair value hedges and are continuing to recognize the amortization of the gains or losses originally recorded within the Long-term debt caption on our unaudited condensed consolidated balance sheets into earnings as a component of Interest expense over the same period that the discount or premium associated with the hedged items affects earnings. In the event that we designate outstanding interest rate derivative instruments as fair value hedges, we record the changes in the fair values of interest rate derivatives designated as fair value hedges and of the underlying hedged debt instruments in Interest expense , which generally offset. The balance of the deferred gains on our terminated fair value hedges within Long-term debt was immaterial as of September 30, 2019 and December 31, 2018 . We recognized immaterial gains in Interest expense relating to the amortization of the terminated fair value hedges in the current and prior periods. The following table presents the contractual amounts of our derivative instruments outstanding: (in millions) FASB ASC Topic 815 Designation As of September 30, 2019 December 31, 2018 Forward currency contracts Cash flow hedge $ 4,030 $ 3,962 Forward currency contracts Net investment hedge 1,935 1,483 Forward currency contracts Non-designated 3,522 5,880 Interest rate derivative contracts Cash flow hedge — 1,000 Total Notional Outstanding $ 9,487 $ 12,326 The remaining time to maturity as of September 30, 2019 is within 60 months for all designated forward currency contracts and generally less than one year for all non-designated forward currency contracts. The following presents the effect of our derivative instruments designated as cash flow and net investment hedges under FASB ASC Topic 815 on our accompanying unaudited condensed consolidated statements of operations . Refer to Note M – Changes in Other Comprehensive Income for the total amounts relating to derivative instruments presented within the unaudited condensed consolidated statements of comprehensive income (loss) . Effect of Hedging Relationships on Accumulated Other Comprehensive Income Amount Recognized in OCI on Derivative Unaudited Condensed Consolidated Statements of Operations (1) Amount Reclassified from AOCI into Earnings (in millions) Pre-Tax Gain (Loss) Tax Benefit (Expense) Gain (Loss) Net of Tax Location of Amount Reclassified Total Amount of Line Item Presented Pre-Tax (Gain) Loss Tax (Benefit) Expense (Gain) Loss Net of Tax Three Months Ended September 30, 2019 Forward currency contracts Cash flow hedges $ 101 $ (23 ) $ 78 Cost of products sold $ 777 $ (22 ) $ 5 $ (17 ) Net investment hedges (2) 64 (14 ) 50 Interest expense 95 (12 ) 3 (9 ) Interest rate derivative contracts Cash flow hedges — — — Interest expense 95 1 — 1 Three Months Ended September 30, 2018 Forward currency contracts Cash flow hedges $ 58 $ (13 ) $ 45 Cost of products sold $ 672 $ 2 $ — $ 2 Net investment hedges (2) 4 (1 ) 3 Interest expense 58 (10 ) 2 (8 ) Nine Months Ended September 30, 2019 Forward currency contracts Cash flow hedges $ 176 $ (40 ) $ 136 Cost of products sold $ 2,265 $ (47 ) $ 10 $ (36 ) Net investment hedges (2) 92 (21 ) 71 Interest expense 294 (33 ) 7 (25 ) Interest rate derivative contracts Cash flow hedges — — — Interest expense 294 3 (1 ) 2 Nine Months Ended September 30, 2018 Forward currency contracts Cash flow hedges $ 135 $ (30 ) $ 105 Cost of products sold $ 2,084 $ 27 $ (6 ) $ 21 Net investment hedges (2) 25 (6 ) 19 Interest expense 177 (17 ) 4 (13 ) Interest rate derivative contracts Cash flow hedges — — — Interest expense 177 (1 ) — (1 ) (1) In all periods presented in the table above, the pre-tax (gain) loss amounts reclassified from AOCI to earnings represent the effect of the hedging relationships on earnings. All other amounts included in earnings related to hedging relationships were immaterial. (2) For our outstanding net investment hedges, the net gain or loss reclassified from AOCI to earnings as a reduction of Interest expense represents the straight-line amortization of the excluded component as calculated at the date of designation. This initial value of the excluded component has been excluded from the assessment of effectiveness in accordance with FASB ASC Topic 815 . In the current period, we did not recognize any gains or losses on the components included in the assessment of hedge effectiveness in AOCI or earnings. As of September 30, 2019 , pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below (in millions): Designated Derivative Instrument FASB ASC Topic 815 Designation Location on Unaudited Condensed Consolidated Statements of Operations Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings Forward currency contracts Cash flow hedge Cost of products sold $ 104 Forward currency contracts Net investment hedge Interest expense 48 Interest rate derivative contracts Cash flow hedge Interest expense (5 ) Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below: Location on Unaudited Condensed Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2019 2018 2019 2018 Net gain (loss) on currency hedge contracts Other, net $ (202 ) $ 16 $ (334 ) $ 25 Net gain (loss) on currency transaction exposures Other, net (4 ) (23 ) — (40 ) Net currency exchange gain (loss) $ (207 ) $ (6 ) $ (334 ) $ (15 ) Certain of our non-designated forward currency contracts were entered into for the purpose of managing our exposure to currency exchange rate risk related to the purchase price of the BTG Acquisition . As of September 30, 2019 , we settled all outstanding contracts . We recognized a $207 million loss in the third quarter of 2019 and a $323 million loss in the first nine months of 2019 in Net gain (loss) on currency hedge contracts due to changes in fair value of the contracts. Fair Value Measurements 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, Fair Value Measurements and Disclosures ( FASB ASC Topic 820 ) and considering the estimated amount we would receive or pay to transfer these instruments at the reporting date given the applicable current currency exchange rates, interest rates, the creditworthiness of the counterparty for unrealized gain positions and our own creditworthiness for unrealized loss positions. In certain instances, we may utilize financial models to measure fair value of our derivative instruments. 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. The following are the balances of our derivative assets and liabilities: Location on Unaudited Condensed Consolidated Balance Sheets (1) As of (in millions) September 30, 2019 December 31, 2018 Derivative Assets: Designated Derivative Instruments Forward currency contracts Other current assets $ 98 $ 55 Forward currency contracts Other long-term assets 358 183 456 237 Non-Designated Derivative Instruments Forward currency contracts Other current assets 48 67 Total Derivative Assets $ 504 $ 304 Derivative Liabilities: Designated Derivative Instruments Forward currency contracts Other current liabilities $ 3 $ 2 Forward currency contracts Other long-term liabilities 5 3 Interest rate contracts Other current liabilities — 44 8 49 Non-Designated Derivative Instruments Forward currency contracts Other current liabilities 40 31 Total Derivative Liabilities $ 48 $ 80 (1) We classify derivative assets and liabilities as current when the settlement date of the derivative contract is one year or less. 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 quoted market prices or other observable inputs are not available, we apply valuation techniques to estimate fair value. FASB ASC Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The category of a financial asset or a financial liability 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 September 30, 2019 December 31, 2018 (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Money market and government funds $ 26 $ — $ — $ 26 $ 13 $ — $ — $ 13 Derivative instruments — 504 — 504 — 304 — 304 Licensing arrangements — — 633 633 — — — — $ 26 $ 504 $ 633 $ 1,163 $ 14 $ 304 $ — $ 318 Liabilities Derivative instruments $ — $ 48 $ — $ 48 $ — $ 80 $ — $ 80 Contingent consideration — — 380 380 — — 347 347 Licensing arrangements — — 341 341 — — — — $ — $ 48 $ 720 $ 768 $ — $ 80 $ 347 $ 427 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 unaudited condensed consolidated balance sheets , in accordance with U.S. GAAP and our accounting policies. In addition to $26 million invested in money market and government funds as of September 30, 2019 , we had $249 million in interest bearing and non-interest-bearing bank accounts. In addition to $13 million invested in money market and government funds as of December 31, 2018 , we had $133 million in interest bearing and non-interest-bearing bank accounts. Our recurring fair value measurements using Level 3 inputs relates 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. In addition, our recurring fair value measurements using Level 3 inputs relate to our licensing arrangements. In the third quarter of 2019 , we acquired intellectual property and related licensing arrangements as of the result of the BTG Acquisition that provides the contractual right to receive future royalty payments. As part of the licensing arrangements we acquired, we also have the contractual obligation to remit a portion of the cash flows received to the inventors associated with the intellectual property. We have elected the fair value option to account for the licensing arrangements financial asset and financial liability in accordance with FASB ASC Topic 825, Financial Instruments . As of September 30, 2019, we have recorded the preliminary fair values of the financial asset and financial liability using a discounted cash flow approach considering the probability-weighted expected future cash flows to be generated by the royalty stream. The preliminary fair value of the financial liability also considers the related contractual provisions that govern our payment obligations. As discussed in Note B – Acquisitions and Strategic Investments , given the size and breadth of the BTG Acquisition , we anticipate that the purchase price allocation will take longer than prior acquisitions and potentially up to the one year allowed under FASB ASC Topic 805 to adequately analyze all the factors used in establishing the fair value of assets acquired and liabilities assumed as of the acquisition date, including the licensing arrangements financial asset and liability and the related tax and foreign currency effects of any changes made. The recurring Level 3 fair value measurements of our licensing arrangements include the following significant unobservable inputs: Licensing Arrangements Fair Value as of September 30, 2019 Valuation Technique Unobservable Input Range Weighted Average (1) Financial Asset $633 million Discounted Cash Flow Discount Rate 9% 9% Projected Year of Payment 2019 - 2027 2023 Financial Liability $341 million Discounted Cash Flow Discount Rate 9% 9% Projected Year of Payment 2019 - 2027 2023 (1) Unobservable inputs relate to a single financial asset and liability. As such, unobservable inputs were not weighted by the relative fair value of the instruments. For projected year of payment, the amount represents the median of the inputs and is not a weighted average. Significant increases or decreases in projected cash flows of the royalty stream and the related contractual provisions that govern our payment obligations, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement of the licensing arrangements financial assets and liability as of September 30, 2019 . Non-Recurring Fair Value Measurements We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods after initial recognition. The fair value of a measurement alternative 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. Refer to Note C – Goodwill and Other Intangible Assets for a discussion of the fair values. The fair value of our outstanding debt obligations was $11.990 billion as of September 30, 2019 and $7.239 billion as of December 31, 2018 . We determined fair value by using quoted market prices for our publicly registered senior notes, classified as Level 1 within the fair value hierarchy, amortized cost for commercial paper and face value for term loans and credit facility borrowings outstanding. Refer to Note E – Borrowings and Credit Arrangements for a discussion of our debt obligations. |
Borrowings and Credit Arrangeme
Borrowings and Credit Arrangements | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
BORROWINGS AND CREDIT ARRANGEMENTS | NOTE E – BORROWINGS AND CREDIT ARRANGEMENTS We had total debt of $10.888 billion as of September 30, 2019 and $7.056 billion as of December 31, 2018 . The debt maturity schedule for our long-term debt obligations is presented below: (in millions, except interest rates) Issuance Date Maturity Date As of Semi-annual Coupon Rate September 30, December 31, January 2020 Notes December 2009 January 2020 $ — $ 850 6.000% May 2020 Notes May 2015 May 2020 — 600 2.850% August 2021 Term Loan August 2019 August 2021 1,000 — May 2022 Notes May 2015 May 2022 500 500 3.375% August 2022 Term Loan August 2019 August 2022 1,000 — October 2023 Notes August 2013 October 2023 450 450 4.125% March 2024 Notes February 2019 March 2024 850 — 3.450% May 2025 Notes May 2015 May 2025 750 750 3.850% March 2026 Notes February 2019 March 2026 850 — 3.750% March 2028 Notes February 2018 March 2028 1,000 1,000 4.000% March 2029 Notes February 2019 March 2029 850 — 4.000% November 2035 Notes November 2005 November 2035 350 350 7.000% March 2039 Notes February 2019 March 2039 750 — 4.550% January 2040 Notes December 2009 January 2040 300 300 7.375% March 2049 Notes February 2019 March 2049 1,000 — 4.700% Unamortized Debt Issuance Discount 2020 - 2049 (79 ) (29 ) Unamortized Gain on Fair Value Hedges 2020 - 2023 14 26 Finance Lease Obligation (1) Various 6 6 Long-term debt $ 9,590 $ 4,803 Note: The table above does not include unamortized amounts related to interest rate contracts designated as cash flow hedges. (1) Effective January 1, 2019, we adopted FASB ASC Topic 842 , which requires that we recognize finance lease obligations in our unaudited condensed consolidated balance sheet . As of December 31, 2018, these leases were referred to as capital lease obligations in accordance with FASB ASC Topic 840 . Please refer to Note A – Basis of Presentation for additional information. Revolving Credit Facility As of September 30, 2019 and December 31, 2018 , we maintained a $2.750 billion revolving credit facility (2018 Facility) with a global syndicate of commercial banks that matures on December 19, 2023 with one-year extension options subject to certain conditions. This facility provides backing for the commercial paper program. The 2018 Credit Agreement for the 2018 Facility requires that we comply with certain covenants, including financial covenants as described within Debt Covenants below. There were no amounts outstanding under our revolving credit facility as of September 30, 2019 and December 31, 2018 . Term Loans On February 25, 2019, upon the closing of our senior notes offering in aggregate principal amount of $4.300 billion described below, we terminated the $1.000 billion Term Loan Credit Agreement, entered into on August 20, 2018 and amended on December 19, 2018 ( August 2019 Term Loan ). The August 2019 Term Loan was scheduled to mature on August 19, 2019. As of December 31, 2018 , we had $1.000 billion outstanding under our August 2019 Term Loan , which was presented within Current debt obligations on our accompanying unaudited condensed consolidated balance sheets . On December 19, 2018, we entered into a $2.000 billion senior unsecured delayed-draw term loan facility consisting of a $1.000 billion two-year delayed draw term loan credit facility maturing in two years from the date of the closing of the BTG Acquisition (Two-Year Delayed Draw Term Loan) and a $1.000 billion three-year delayed draw term loan credit facility maturing in three years from the date of the closing of the BTG Acquisition (Three-Year Delayed Draw Term Loan). Borrowings are available in U.S. dollars and bear interest at LIBOR or a base rate, in each case plus an applicable margin based on our public debt ratings. We are required to pay customary ticking fees on the average daily unused commitments based on our public debt ratings. The facilities contain customary representations and covenants, as described within Debt Covenants below. The facilities contain customary events of default, which may result in the acceleration of any outstanding commitments, and also contain customary U.K. certain funds provisions. Any proceeds from the facilities will be available to finance the BTG Acquisition and pay related transaction costs, as defined by the facilities. On August 19, 2019 , for the purpose of funding the BTG Acquisition , we borrowed $1.000 billion under the Two-Year Delayed Draw Term Loan and $1.000 billion under the Three-Year Delayed Draw Term Loan . As of September 30, 2019 , our average interest rates on the borrowings were 3.37 percent for the Two-Year Delayed Draw Term Loan and 3.47 percent for the Three-Year Delayed Draw Term Loan. Debt Covenants As of and through September 30, 2019 , we were in compliance with all the required covenants related to our debt obligations. For additional information regarding the terms of our debt agreements, refer to Note E – Borrowings and Credit Arrangements to our consolidated financial statements in our most recent Annual Report on Form 10-K. All existing credit arrangements described above require that we maintain certain financial covenants, as follows: Covenant Requirement Actual as of September 30, 2019 as of September 30, 2019 Maximum leverage ratio (1) 4.75 times 4.27 times (1) Ratio of total debt to consolidated EBITDA, as defined by the credit agreements, for the preceding four consecutive fiscal quarters. Our covenants require that we maintain a maximum leverage ratio of 3.75 times , provided, however, that for the two consecutive fiscal quarters ended immediately following the consummation of a Qualified Acquisition, as defined by each agreement, the maximum leverage ratio shall be 4.75 times , and then subject to a step-down for each succeeding fiscal quarter end to 4.50 times , 4.25 times , 4.00 times and then back to 3.75 times for each fiscal quarter end thereafter. On August 19, 2019 , we announced the closing of our acquisition of BTG , a Qualified Acquisition, and our maximum leverage ratio was 4.75 times as of September 30, 2019 . Refer to Note B – Acquisitions and Strategic Investments for more information. Our covenants provide for an exclusion from the calculation of consolidated EBITDA, as defined by the agreements, through maturity, of any non-cash charges and up to $500 million in restructuring charges and restructuring-related expenses related to our current or future restructuring plans. As of September 30, 2019 , we had $314 million of the restructuring charge exclusion remaining. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the agreements, are excluded from the calculation of consolidated EBITDA, as defined by the agreements, provided that the sum of any excluded net cash litigation payments do not exceed $2.624 billion in the aggregate. As of September 30, 2019 , we had $1.262 billion of the litigation exclusion remaining. 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 on terms acceptable to us. In this case, all credit facility commitments would terminate, and any amounts borrowed under the facility would become immediately due and payable. Furthermore, any termination of our credit facility may negatively impact the credit ratings assigned to our commercial paper program which may impact our ability to refinance any then outstanding commercial paper as it becomes due and payable . Commercial Paper As of (in millions, except maturity and yield) September 30, 2019 December 31, 2018 Commercial paper outstanding (at par) $ 1,293 $ 1,248 Maximum borrowing capacity 2,750 2,750 Borrowing capacity available 1,457 1,502 Weighted average maturity 40 days 27 days Weighted average yield 2.43 % 3.04 % Senior Notes We had senior notes outstanding of $7.650 billion as of September 30, 2019 and $4.800 billion as of December 31, 2018 . In February 2019, we completed an offering of $4.300 billion in aggregate principal amount of senior notes comprised of $850 million of 3.450% senior notes due March 2024 , $850 million of 3.750% senior notes due March 2026 , $850 million of 4.000% senior notes due March 2029 , $750 million of 4.550% senior notes due March 2039 and $1.000 billion of 4.700% senior notes due March 2049 . We used a portion of the net proceeds from the offering to repay the $850 million plus accrued interest and premium of our 6.000% senior notes due in January 2020 , the $600 million plus accrued interest and premium of our 2.850% senior notes due in May 2020 and the $1.000 billion plus accrued interest of our August 2019 Term Loan . In the third quarter of 2019 , the remaining proceeds were used to finance a portion of the BTG Acquisition . Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to liabilities of our subsidiaries (see Other Arrangements below). On October 22, 2019, we announced the commencement of a cash tender offer (Tender Offer) for up to $1.000 billion combined aggregate principal amount (Aggregate Maximum Principal Amount) of our outstanding 4.125% senior notes due October 2023 , 4.000% senior notes due March 2028 , 3.850% senior notes due May 2025 and 3.375% senior notes due May 2022 (collectively, Tender Offer Notes). The Tender Offer is being made exclusively pursuant to an offer to purchase dated October 22, 2019, which sets forth the terms and conditions of the Tender Offer. Consummation of the Tender Offer is subject to satisfaction or waiver of the conditions described in the offer to purchase, including the financing condition that we shall have closed one or more debt financings resulting in net proceeds in an amount, together with cash on hand, not less than the amount required, upon the terms and subject to the conditions of the Tender Offer, to purchase all the securities validly tendered and accepted for purchase in the Tender Offer and to pay accrued interest thereon and fees and expenses associated therewith. The Tender Offer will expire at midnight, Eastern Standard Time, on November 19, 2019, unless extended or terminated by us. However, because the aggregate principal amount of Tender Offer Notes validly tendered and not validly withdrawn as of the early tender date at 5:00 p.m. Eastern Standard Time, on November 4, 2019, would cause the Aggregate Maximum Principal Amount to be exceeded and we do not expect to increase the Aggregate Maximum Principal Amount, we do not expect to accept any further tenders of Tender Offer Notes. Bridge Facility On February 25, 2019, upon the closing of our senior notes offering in aggregate principal amount of $4.300 billion described above, we terminated the Bridge Facility entered into on November 20, 2018. The termination was pursuant to the terms of the Bridge Facility, which required full termination upon the refinancing of the January 2020 Notes and May 2020 Notes discussed above. There were no amounts borrowed under the Bridge Facility as of December 31, 2018. Other Arrangements We have accounts receivable factoring programs in certain European countries and with commercial banks in Japan which include promissory notes discounting programs. We account for our factoring programs as sales under FASB ASC Topic 860, Transfers and Servicing . We have no retained interest in the transferred receivables, other than collection and administration, and once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. Amounts de-recognized for accounts and notes receivable, which are excluded from Trade accounts receivable, net in the accompanying unaudited condensed consolidated balance sheets , are aggregated by contract denominated currency below (in millions): Factoring Arrangements As of September 30, 2019 As of December 31, 2018 Amount De-recognized Average Interest Rate Amount De-recognized Average Interest Rate Euro denominated $ 146 1.7 % $ 165 2.7 % Yen denominated 210 0.6 % 195 0.9 % Refer to Note E – Borrowing and Credit Arrangements to our audited financial statements contained in Item 8 of our most recent Annual Report on Form 10-K for additional information on our borrowings and credit agreements. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Balance Sheet Information [Abstract] | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | NOTE F – SUPPLEMENTAL BALANCE SHEET INFORMATION Components of selected captions in our accompanying unaudited condensed consolidated balance sheets are as follows: Cash, cash equivalents, restricted cash and restricted cash equivalents As of (in millions) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 277 $ 146 Restricted cash and restricted cash equivalents included in Other current assets 357 655 Restricted cash equivalents in Other long-term assets 43 27 $ 676 $ 829 Trade accounts receivable, net As of (in millions) September 30, 2019 December 31, 2018 Accounts receivable $ 1,871 $ 1,676 Allowance for doubtful accounts (75 ) (68 ) $ 1,796 $ 1,608 The following is a rollforward of our allowance for doubtful accounts: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2019 2018 2019 2018 Beginning balance $ 73 $ 63 $ 68 $ 68 Net charges to expenses 8 6 19 15 Utilization of allowances (5 ) (4 ) (11 ) (17 ) Ending balance $ 75 $ 66 $ 75 $ 66 Inventories As of (in millions) September 30, 2019 December 31, 2018 Finished goods $ 940 $ 760 Work-in-process 206 100 Raw materials 420 306 $ 1,566 $ 1,166 Property, plant and equipment, net As of (in millions) September 30, 2019 December 31, 2018 Land $ 112 $ 97 Buildings and improvements 1,160 1,100 Equipment, furniture and fixtures 3,368 3,224 Capital in progress 357 319 4,996 4,740 Less: accumulated depreciation 3,055 2,958 $ 1,942 $ 1,782 Depreciation expense was $79 million for the third quarter of 2019 , $74 million for the third quarter of 2018 , $220 million for the first nine months of 2019 and $212 million for the first nine months of 2018 . Accrued expenses As of (in millions) September 30, 2019 December 31, 2018 Legal reserves $ 328 $ 712 Payroll and related liabilities 693 630 Rebates 280 229 Contingent consideration 112 138 Other 518 538 $ 1,932 $ 2,246 Other long-term liabilities As of (in millions) September 30, 2019 December 31, 2018 Income taxes $ 671 $ 739 Legal reserves 240 217 Contingent consideration 268 209 Other 1,227 717 $ 2,406 $ 1,882 |
Leases Leases
Leases Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | NOTE G – LEASES We have operating and finance leases for real estate including corporate offices, land, warehouse space, and vehicles and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). We recognize lease expense on a straight-line basis over the lease term for short-term leases that we do not record on our balance sheet. If there is a change in our assessment of the lease term, and as a result, the remaining lease term extends more than 12 months from the end of the previously determined lease term, or we subsequently become reasonably certain that we will exercise an option to purchase the underlying asset, the lease no longer meets the definition of a short-term lease and is accounted for as either an operating or finance lease and recognized on the balance sheet. For leases executed in 2019 and later, we account for the lease components and the non-lease components as a single lease component, with the exception of our warehouse leases. Our leases have remaining lease terms of less than 1 year to approximately 60 years , some of which may include options to extend the leases for up to 10 years . If we are reasonably certain we will exercise an option to extend the lease, the time period covered by the extension option is included in the lease term. We determine whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we utilize the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The following table presents supplemental balance sheet information related to our operating leases: (in millions) As of September 30, 2019 Assets Operating lease right-of-use assets in Other long-term assets $ 306 Liabilities Operating lease liabilities in Other current liabilities 62 Operating lease liabilities in Other long-term liabilities 251 The following table presents the weighted average remaining lease term and discount rate information related to our operating leases: As of September 30, 2019 Weighted average remaining lease term 5.6 years Weighted average discount rate 3.7% Our operating lease cost was $21 million in the third quarter of 2019 and $57 million for the first nine months of 2019 . The following table presents supplemental cash flow information related to our operating leases: (in millions) Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 55 Right-of-use assets obtained in exchange for operating lease obligations totaled $84 million for the first nine months of 2019 . The following table presents the maturities of our operating lease liabilities as of September 30, 2019 : Fiscal year Operating Leases (in millions) 2019 (excluding the first nine months of 2019) $ 22 2020 76 2021 65 2022 52 2023 41 Thereafter 95 Total future minimum operating lease payments 350 Less: imputed interest 37 Present value of operating lease liabilities $ 314 As of September 30, 2019 , we have additional leases for office space and R&D space, that have not yet commenced, of $68 million . These leases will commence during the fourth quarter of 2019 and 2020 , with lease terms of 1 month to 15 years . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE H – INCOME TAXES Our effective tax rate from continuing operations is presented below: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Effective tax rate from continuing operations (38.7 )% 5.3 % (1.6 )% (14.1 )% The change in our reported tax rates for the third quarter and first nine months of 2019 , as compared to the same periods in 2018 , relates primarily to the impact of certain receipts and charges that are taxed at different rates than our effective tax rate. These receipts and charges include intangible asset impairment charges, acquisition-related items, restructuring items, litigation-related items as well as certain discrete tax items primarily related to share-based payments and the 2018 settlement of our transfer pricing dispute with the Internal Revenue Service (IRS) for the 2001 through 2010 tax years. As of September 30, 2019 , we had $405 million of gross unrecognized tax benefits, of which a net $320 million , if recognized, would affect our effective tax rate. As of December 31, 2018 , we had $427 million of gross unrecognized tax benefits, of which a net $332 million , if recognized, would affect our effective tax rate. It is reasonably possible that within the next 12 months we will resolve multiple issues with foreign, federal and state taxing authorities, resulting in a reduction in our balance of unrecognized tax benefits of up to $99 million . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE I – 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 dynamics 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 U.S. 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 $568 million as of September 30, 2019 and $929 million as of December 31, 2018 and includes certain estimated costs of settlement, damages and defense. The decrease in our legal accrual was mainly due to settlement payments associated with product liability cases or claims related to transvaginal surgical mesh products. A portion of our legal accrual is already funded through our qualified settlement fund (QSF), which is included in other restricted cash and restricted cash equivalents balance of $357 million as of September 30, 2019 and $655 million as of December 31, 2018 . Refer to Note F – Supplemental Balance Sheet Information for additional information. We recorded litigation-related net charges of $25 million in the third quarter of 2019 and litigation-related net credits of $108 million in the first nine months of 2019 . In the first quarter of 2019 , we recorded $148 million of the total $180 million one-time settlement payment received from Edwards Lifesciences Corporation in January 2019 to Litigation-related net charges (credits) on our unaudited condensed consolidated financial statements . 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 net charges (credits) in our unaudited condensed consolidated financial statements . All other legal and product liability charges, credits and costs are recorded within Selling, general and administrative expenses . As such, a portion of the related gain from this settlement was recorded in Selling, general and administrative expenses on our unaudited condensed consolidated statements of operations . 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 disclosed in our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019 and 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 November 20, 2017, The Board of Regents, University of Texas System (UT) and TissueGen.Inc., served a lawsuit against us in the Western District of Texas. The complaint against us alleges patent infringement of two U.S. patents owned by UT, relating to “Drug Releasing Biodegradable Fiber Implant” and “Drug Releasing Biodegradable Fiber for Delivery of Therapeutics,” and affects the manufacture, use and sale of our Synergy™ Stent System. On March 12, 2018, the District Court for the Western District of Texas dismissed the action and transferred it to the United States District Court for the District of Delaware. On September 5, 2019, the Court of Appeals for the Federal Circuit affirmed the dismissal of the District Court for the Western District of Texas. Product Liability Litigation As of October 16, 2019 , approximately 53,000 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. As of October 16, 2019 , 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 52,000 cases and claims. These 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 52,000 cases and claims, approximately 43,500 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 April 16, 2019, the U.S. Food and Drug Administration (FDA) ordered that all manufacturers of surgical mesh products indicated for the transvaginal repair of pelvic organ prolapse stop selling and distributing their products in the United States immediately, stemming from the FDA’s 2016 reclassification of these devices to class III (high risk) devices, and as a result, the Company ceased global sales and distribution of surgical mesh products indicated for transvaginal pelvic organ prolapse. The pending cases are in various federal and state courts in the U.S. and include eight putative class actions. 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. There were also fewer than 25 cases in Canada, inclusive of one certified and three putative class actions and fewer than 25 claims in the United Kingdom. We have reached a tentative agreement to settle the Canadian class actions. 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. Other Proceedings On November 1, 2017 we entered into a definitive agreement with Channel Medsystems, Inc. (Channel) pursuant to which we could have been obligated to pay $145 million in cash up-front and a maximum of $130 million in contingent payments to acquire Channel. The agreement contained a provision allowing Channel to sell the remaining equity interests of the company to us upon achievement of a regulatory milestone and an option allowing us to acquire the remaining equity interests. We sent a notice of termination of that agreement to Channel in the second quarter of 2018. On September 12, 2018, Channel filed a complaint in Delaware Chancery Court against us for alleged breach of the agreement. Channel alleges that we breached the agreement by terminating it. We have answered the complaint, denied the claims by Channel and have counterclaimed to recover part of our investment in Channel, alleging fraud in the inducement. On April 2, 2019, Channel announced its receipt of FDA approval of the Cerene™ Cryotherapy Device. Trial testimony was taken in April 2019, and the post-trial briefing and hearing have been completed. During the third quarter of 2019, Channel notified us that they were exercising their option to sell the remaining equity interests in Channel to us. We responded to the notification that we did not intend to purchase Channel since the previous agreement had been terminated. On September 6, 2019, Boston Scientific Corporation, Boston Scientific Scimed, Inc., and Fortis Advisors, LLC, as a Securityholder Representative for the former Securityholders of nVision Medical Corp. filed a declaratory judgment action against BioCardia, Inc. in the United States District Court for the Northern District of California to address threats and allegations by BioCardia challenging inventorship and ownership of various patents that Boston Scientific Corporation acquired through an April 13, 2018 merger with nVision as well as related threats and allegations by BioCardia of trade secret misappropriation and unjust enrichment. On April 18, 2019, Blue Cross & Blue Shield of Louisiana and HMO Louisiana, Inc. filed a class action complaint against Janssen Biotech, Inc, Janssen Oncology, Inc, Janssen Research & Development, LLC and BTG International Limited in the United States District Court for the Eastern District of Virginia. The complaint alleges that the defendants violated the Sherman Act and the antitrust and consumer protections laws of several states by pursuing patent litigation relating to ZYTIGA™ in order to delay generic entry. On June 21, 2019, the case was transferred to the United States District Court for the District of New Jersey and has been consolidated with similar complaints. On December 21, 2017, Janssen Biotech, Inc., Janssen Oncology, Inc, Janssen Research & Development, LLC, and Johnson & Johnson (collectively, Janssen) were served with a qui tam complaint filed on behalf of the United States, 28 states, and the District of Columbia. The complaint, which was filed in the United States District Court for the Northern District of California, alleges that Janssen violated the federal False Claims Act and state law when providing pricing information for ZYTIGA to the government in connection with direct government sales and government-funded drug reimbursement programs. The case has been transferred to United States District Court for the District of New Jersey. On June 20, 2019, the complaint was amended to include BTG International Limited as a defendant. Matters Concluded Since December 31, 2018 On January 15, 2019, we announced that we reached an agreement with Edwards Lifesciences Corporation (Edwards) to settle all outstanding patent disputes between us and Edwards in all venues around the world. All pending cases or appeals in courts and patent offices between the two companies have been or will be dismissed, and the parties will not litigate patent disputes related to current portfolios of transcatheter aortic valves, certain mitral valve repair devices, and left atrial appendage closure devices. Any injunctions currently in place will be lifted. Under the terms of the agreement, Edwards made a one-time payment to us of $180 million . No further royalties will be owed by either party under the agreement. All other terms remain confidential. The previously disclosed matters that have been resolved as a result of this settlement include: • 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 March 9, 2017, the court found that Edwards infringed both patents and Edwards appealed. • On November 9, 2015, Edwards Lifesciences, LLC filed an invalidity claim against one of our subsidiaries, Sadra Medical, Inc. (Sadra), 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 March 3, 2017, the court found one of our patents valid and infringed and some claims of the second patent invalid and the remaining claims not infringed. Both parties have filed an appeal. On March 28, 2018, the Court of Appeals affirmed the decision of the High Court. • 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 '672) owned by Edwards is infringed by our Lotus™ Valve System. The trial began on February 7, 2017. On March 9, 2017, the court found that we did not infringe the Spenser '672 patent. Edwards filed an appeal. • 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 Valve System. The trial began on February 7, 2017. On March 28, 2017, the European Patent Office revoked the Bourang patent and on April 3, 2017, the court suspended the infringement action pending Edwards' appeal of the revocation of the patent at the European Patent Office. • On April 19, 2016, a subsidiary of Boston Scientific filed suit against Edwards Lifesciences Corporation (Edwards) in the U.S. 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 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 (USPTO), Patent Trial and Appeal Board. On March 29, 2017, the USPTO granted the inter partes review request. On April 18, 2017, Edwards filed a second petition for inter partes review of our patent with the USPTO. On March 23, 2018, the USPTO found our patent invalid. The Company filed an appeal before the United States Court of Appeals for the Federal Circuit on May 24, 2018. • On April 19, 2016, a subsidiary of Boston Scientific filed suit against Edwards Lifesciences Corporation in the U.S. 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 USPTO, Patent Trial and Appeal Board. On April 21, 2017, the USPTO denied the petition. On April 19 and 20, 2017, Edwards filed multiple inter partes review petitions against the patents in suit. On September 8, 2017, the court granted a stay of the action pending an inter partes review of the patents in suit. • 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 '550) owned by Edwards is infringed by our Lotus™ Transcatheter Heart Valve System. The trial began on February 7, 2017. On March 9, 2017, the court found that we infringed the Spenser '550 patent. The Company filed an appeal. On April 13, 2018, the ‘550 patent was revoked by the European Patent Office. • 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 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 Valve System. On April 13, 2018, the ‘550 patent was revoked by the European Patent Office. • On August 1, 2018, the Company filed a patent infringement action on the merits in Dusseldorf, Germany against Edwards Lifesciences Corporation and Edwards Lifesciences GmbH (collectively Edwards) alleging that the Sapien 3™ Device and Sapien 3 Ultra Device infringed a patent owned by the Company. • On August 3, 2018, the Company filed a preliminary injunction request in Dusseldorf, Germany against Edwards Lifesciences Corporation and Edwards Lifesciences GmbH (collectively Edwards) alleging that the Sapien 3 Ultra Device infringed a patent owned by the Company. On October 23, 2018, the court found that the Sapien 3 Ultra Device infringed the patent. Edwards had the right to appeal. • On August 22, 2018, Edwards Lifesciences LLC filed a patent infringement action against Boston Scientific Corporation, in the U. S. District Court of Delaware, alleging that two U.S. patents (Schweich) owned by them are infringed by our Watchman™ Left Atrial Appendage Closure Device, Watchman Delivery System and Watchman Access System. On December 14, 2016, we learned that the Associacao Brasileira de Medicina de Grupo d/b/a ABRAMGE filed a complaint against us, Arthrex and Zimmer Biomet Holdings, in the U.S. District Court for the District of Delaware. This complaint, which ABRAMGE never served against us, 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 us and the other defendants. The amended complaint does not contain any material changes in the allegations against us. Subsequently, on March 2, 2017, ABRAMGE filed a motion to consolidate this lawsuit with two other similar suits that it had brought against Stryker and Abbott Laboratories, in a multidistrict litigation proceeding. On April 13, 2017, we filed a motion to dismiss the amended complaint, as well as a separate opposition to the multidistrict litigation motion and on May 31, 2017, the Joint Panel on Multi-District Litigation denied ABRAMGE’s motion for the multidistrict litigation. On September 1, 2017, ABRAMGE filed a motion for leave to file a Second Amended Complaint, while our motion to dismiss the Amended Complaint remained pending. On September 15, 2017, we filed an opposition to the motion seeking leave to amend. On November 8, 2018, the Court granted ABRAMGE’s motion for leave to file a Second Amended Complaint, while also granting us leave to renew our motion to dismiss. We filed our motion to dismiss the Second Amended Complaint on January 18, 2019. On February 28, 2019, ABRAMGE dismissed its Second Amended Complaint, concluding the lawsuit. 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 U.S. 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 were in contact with the U.S. Attorney’s Office for the Southern District of West Virginia and responded voluntarily to their requests in connection with that office’s review of the allegations concerning the use of mesh resin in the complaint. We reached a settlement on this matter and this case was dismissed on May 13, 2019. On February 27, 2017, Carolyn Turner filed a complaint against us and five 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 U.S. District Court for the Middle District of Florida, Orlando Division and alleges violations of the RICO, negligence, strict liability, breach of an express or implied warranty, intentional and negligent misrepresentation, fraud and unjust enrichment. Ms. Turner served this complaint against us on April 7, 2017. As of April 27, 2017, this case was stayed, pending resolution of the transfer petition to the mesh multidistrict litigation. We reached a settlement on this matter and this case was dismissed on February 25, 2019. On April 24, 2019, a class action complaint was filed in the U.S. District Court for the Southern District of New York against Boston Scientific Corporation, Michael F. Mahoney, our Chief Executive Officer, and Daniel J. Brennan, our Chief Financial Officer. The complaint alleges violations of federal securities laws based on false and/or misleading statements and failure to disclose facts related to the Company’s transvaginal surgical mesh products. On September 20, 2019, the case was dismissed with prejudice. |
Weighted Average Shares Outstan
Weighted Average Shares Outstanding | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Weighted Average Number Of Shares Outstanding [Text Block] | NOTE J – WEIGHTED AVERAGE SHARES OUTSTANDING Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2019 2018 2019 2018 Weighted average shares outstanding - basic 1,393.1 1,382.8 1,390.6 1,380.0 Net effect of common stock equivalents 19.0 21.0 19.1 19.9 Weighted average shares outstanding - assuming dilution 1,412.2 1,403.9 1,409.7 1,399.8 The impact of stock options outstanding with exercise prices greater than the average fair market value of our common stock was immaterial for all periods presented. We issued approximately two million shares of our common stock in the third quarter of 2019 , approximately two million shares of our common stock in the third quarter of 2018 , approximately nine million shares of our common stock in the first nine months of 2019 and approximately 10 million shares of our common stock in the first nine months of 2018 , following the exercise of stock options, vesting of deferred stock units or purchases under our employee stock purchase plan. We did not repurchase any shares of our common stock in the first nine months of 2019 or 2018 . |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE K – SEGMENT REPORTING We have three reportable segments comprised of MedSurg, Rhythm and Neuro, and Cardiovascular, 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 reportable segment net sales, operating income of reportable segments, excluding intersegment profits, and reportable segment operating income as a percentage of reportable segment net sales. Reportable segment operating income as a percentage of reportable segment net sales is defined as operating income of reportable segments divided by reportable segment net sales. Our presentation of reportable segment net sales and operating income of reportable segments includes the impact of foreign currency fluctuations, since our chief operating decision maker (CODM) reviews operating results both including and excluding the impact of foreign currency fluctuations, and the following presentation more closely aligns to our unaudited condensed consolidated financial statements . We exclude from operating income of reportable segments certain corporate-related expenses and certain transactions or adjustments that our CODM considers to be non-operational, such as amounts related to amortization expense, intangible asset impairment charges, acquisition-related items, restructuring and restructuring-related items, litigation-related items and medical device regulation charges. Although we exclude these amounts from operating income of reportable segments, they are included in Income (loss) before income taxes on the unaudited condensed consolidated statements of operations 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 unaudited condensed consolidated statements of operations is as follows (in millions, except percentages): Three Months Ended September 30, Nine Months Ended September 30, Net sales 2019 2018 2019 2018 MedSurg $ 845 $ 746 $ 2,429 $ 2,207 Rhythm and Neuro 780 740 2,323 2,252 Cardiovascular 1,011 908 3,009 2,806 Reportable segment net sales 2,636 2,393 7,760 7,262 BTG Acquisition (1) 71 n/a 71 n/a Net sales $ 2,707 $ 2,393 $ 7,831 $ 7,262 Three Months Ended September 30, Nine Months Ended September 30, Income (loss) before income taxes 2019 2018 2019 2018 MedSurg $ 319 $ 274 $ 870 $ 807 Rhythm and Neuro 166 168 488 481 Cardiovascular 281 268 857 858 Operating income of reportable segments 766 710 2,216 2,146 BTG Acquisition (1) 16 n/a 16 n/a Corporate expenses, including hedging activities (75 ) (97 ) (215 ) (297 ) Intangible asset impairment charges, acquisition/divestiture-related, restructuring- and restructuring-related, litigation-related net (charges) credits and medical device regulation charges (146 ) (77 ) (210 ) (225 ) Amortization expense (178 ) (148 ) (498 ) (437 ) Operating income (loss) 383 388 1,308 1,187 Other expense, net (292 ) 68 (615 ) (61 ) Income (loss) before income taxes $ 91 $ 456 $ 693 $ 1,126 Reportable segment operating income as a percentage of reportable segment net sales Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 MedSurg 37.8 % 36.8 % 35.8 % 36.6 % Rhythm and Neuro 21.3 % 22.7 % 21.0 % 21.4 % Cardiovascular 27.8 % 29.5 % 28.5 % 30.6 % (1) For the first nine months of 2019 , there have been no changes to our internal reporting structure, and accordingly, we have not revised our segment reporting or geographic presentation. We will continue to integrate the BTG Acquisition into our operations in the fourth quarter and will reassess our operating and reportable segments as well as geographic presentation for any changes related to our internal reporting structure as well as to the information regularly reviewed by the CODM . To the extent any changes in our operating and reportable segments are identified, these will be reflected in our segment reporting information in the period in which the change occurs. Our results of operations include the results of BTG following the acquisition date of August 19, 2019. The BTG Acquisition reconciling item above excludes certain adjustments that our CODM considers to be non-operational, such as acquisition-related items. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | NOTE L – REVENUE We generate revenue primarily from the sale of single-use medical devices and present revenue net of sales taxes in our unaudited condensed consolidated statements of operations . The following tables disaggregate our revenue from contracts with customers by business and geographic region (in millions): Three Months Ended September 30, Nine Months Ended September 30, Businesses 2019 2018 2019 2018 Endoscopy U.S. $ 277 $ 247 $ 800 $ 724 International 209 196 596 580 Worldwide 486 443 1,396 1,304 Urology and Pelvic Health U.S. 257 214 737 623 International 102 89 297 280 Worldwide 359 303 1,033 904 Cardiac Rhythm Management U.S. 284 289 860 869 International 194 186 607 594 Worldwide 478 475 1,467 1,462 Electrophysiology U.S. 38 37 113 111 International 43 39 132 119 Worldwide 81 76 245 230 Neuromodulation U.S. 183 155 487 446 International 39 34 125 113 Worldwide 222 189 612 559 Interventional Cardiology U.S. 327 283 942 859 International 373 332 1,126 1,062 Worldwide 700 615 2,067 1,922 Peripheral Interventions U.S. 155 152 466 449 International 156 142 475 436 Worldwide 311 293 942 885 BTG Acquisition (1) Interventional Medicine 48 n/a 48 n/a Specialty Pharmaceuticals 23 n/a 23 n/a Worldwide 71 n/a 71 n/a Net Sales $ 2,707 $ 2,393 $ 7,831 $ 7,262 (1) For the first nine months of 2019 , there have been no changes to our internal reporting structure, and accordingly, we have not revised our segment reporting or geographic presentation. We will continue to integrate the BTG Acquisition into our operations in the fourth quarter and will reassess our operating and reportable segments as well as geographic presentation for any changes related to our internal reporting structure as well as to the information regularly reviewed by the CODM . To the extent any changes in our operating and reportable segments are identified, these will be reflected in our segment reporting information in the period in which the change occurs. Our results of operations include the results of BTG following the acquisition date of August 19, 2019. BTG net sales are substantially U.S. based. Three Months Ended September 30, Nine Months Ended September 30, Geographic Regions (Excluding BTG Acquisition) 2019 2018 2019 2018 U.S. $ 1,521 $ 1,375 $ 4,402 $ 4,078 EMEA (Europe, Middle East and Africa) 530 498 1,662 1,619 APAC (Asia-Pacific) 484 425 1,402 1,282 Latin America and Canada 101 94 293 282 BTG Acquisition (1) (Worldwide) 71 n/a 71 n/a Net Sales $ 2,707 $ 2,393 $ 7,831 $ 7,262 Emerging Markets (2) (Excluding BTG Acquisition) $ 310 $ 267 $ 925 $ 812 (1) Our results of operations include the results of BTG following the acquisition date of August 19, 2019. BTG net sales are substantially U.S. based. (2) We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities. Periodically, we assess our list of Emerging Markets; effective January 1, 2019, we updated our list of Emerging Market countries. Our current list is comprised of the following countries: Argentina, Brazil, Chile, China, Colombia, Czech Republic, India, Indonesia, Malaysia, Mexico, Philippines, Poland, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Thailand, Turkey and Vietnam. We have revised prior year amounts to the current year’s presentation. The revision had an immaterial impact on prior year Emerging Markets sales. Deferred Revenue Contract liabilities are classified within Other current liabilities and Other long-term liabilities on our accompanying unaudited condensed consolidated balance sheets . Our deferred revenue balance was $398 million as of September 30, 2019 and $373 million as of December 31, 2018 . Our contractual liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System. Revenue is recognized over the average service period which is based on device and patient longevity. We recognized revenue of $35 million in the third quarter of 2019 and $107 million in the first nine months of 2019 that was included in the above December 31, 2018 contract liability balance. We have elected not to disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less. In addition, we have not identified material unfulfilled performance obligations for which revenue is not currently deferred. Variable Consideration We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit and record the amount for estimated sales returns 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. If we are unable to reasonably estimate the expected rebates, 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. |
Changes in Other Comprehensive
Changes in Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2019 | |
Other Comprehensive Income (Loss) Net of Tax, Period Change [Abstract] | |
Comprehensive Income (Loss) Note [Text Block] | NOTE M – CHANGES IN OTHER COMPREHENSIVE INCOME The following tables provide the reclassifications out of Other comprehensive income (loss), net of tax : (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of June 30, 2019 $ (46 ) $ 150 $ — $ (26 ) $ 78 Other comprehensive income (loss) before reclassifications 7 78 — — 86 (Income) loss amounts reclassified from accumulated other comprehensive income (9 ) (16 ) — — (26 ) Total other comprehensive income (loss) (2 ) 62 — — 60 Balance as of September 30, 2019 $ (48 ) $ 213 $ — $ (26 ) $ 138 (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of June 30, 2018 $ (68 ) $ 79 $ — $ (27 ) $ (16 ) Other comprehensive income (loss) before reclassifications 2 45 — — 47 (Income) loss amounts reclassified from accumulated other comprehensive income (8 ) 1 — — (7 ) Total other comprehensive income (loss) (6 ) 47 — — 40 Balance as of September 30, 2018 $ (74 ) $ 126 $ — $ (27 ) $ 25 (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of December 31, 2018 $ (53 ) $ 111 $ — $ (25 ) $ 33 Other comprehensive income (loss) before reclassifications 30 136 — (1 ) 165 (Income) loss amounts reclassified from accumulated other comprehensive income (25 ) (34 ) — — (59 ) Total other comprehensive income (loss) 4 102 — (1 ) 105 Balance as of September 30, 2019 $ (48 ) $ 213 $ — $ (26 ) $ 138 (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of December 31, 2017 $ (32 ) $ 1 $ (1 ) $ (27 ) $ (59 ) Other comprehensive income (loss) before reclassifications (29 ) 105 — — 76 (Income) loss amounts reclassified from accumulated other comprehensive income (13 ) 20 1 — 8 Total other comprehensive income (loss) (42 ) 125 — — 82 Balance as of September 30, 2018 $ (74 ) $ 126 $ — $ (27 ) $ 25 Refer to Note D – Hedging Activities and Fair Value Measurements for further detail on our net investment hedges recorded in Foreign currency translation adjustments and our cash flow hedges recorded in Net change in derivative financial instruments . As a result of adopting ASC Update No. 2016-01 in the first quarter of 2018, we recorded a cumulative effect adjustment to retained earnings to reclassify unrealized gains and losses from our equity investments previously recorded to Accumulated other comprehensive income (loss), net of tax . These equity investments were classified as available-for-sale securities under the former accounting guidance, and we now refer to these investments as publicly-held equity securities. Please refer to Note A – Significant Accounting Policies included in Item 8 of our most recent Annual Report on Form 10-K for more information. The Net change in defined benefit pensions and other items before reclassifications and reclassified from Accumulated other comprehensive income (loss), net of tax were reduced by immaterial income tax impacts in the third quarter and first nine months of 2019 and 2018 . |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | NOTE N – NEW ACCOUNTING PRONOUNCEMENTS Periodically, 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 unaudited condensed consolidated financial statements . Standards to be Implemented 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 (Update No. 2016-13). 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. Update No. 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018. We plan to adopt Update No. 2016-13 in the first quarter of 2020, and 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. 2018-15 In August 2018, the FASB issued ASC Update No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) : Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ( Update No. 2018-15). The purpose of Update No. 2018-15 is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Update No. 2018-15 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period. We plan to adopt Update No. 2018-15 in the first quarter of 2020, and we are in the process of determining the effect that the adoption will have on our financial position and results of operations. No other new accounting pronouncements issued or effective in the period had or are expected to have a material impact on our unaudited condensed consolidated financial statements . |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Lessee, Leases [Policy Text Block] | Operating lease right-of-use assets are presented within Other long-term assets and corresponding liabilities are presented within Other current liabilities and Other long-term liabilities on our unaudited condensed consolidated balance sheets . Finance leases are immaterial to our unaudited condensed consolidated financial statements . Refer to Note E – Borrowings and Credit Arrangements for additional information. There was no material impact to our unaudited condensed consolidated statements of operations or unaudited condensed consolidated statements of cash flows . Please refer to Note G – Leases for information regarding our lease portfolio as of September 30, 2019 as accounted for under FASB ASC Topic 842 . |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events We evaluate events occurring after the date of our most recent accompanying unaudited condensed consolidated balance sheet for potential recognition or disclosure in our financial statements. Those items requiring disclosure (nonrecognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note E – Borrowings and Credit Arrangements and Note I – Commitments and Contingencies for more information. |
Fair Value Measurements Hedging
Fair Value Measurements Hedging Activities and Fair Value Measurements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement, Policy [Policy Text Block] | 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, Fair Value Measurements and Disclosures |
Derivatives, Policy [Policy Text Block] | Our derivative instruments do not subject our earnings to material risk, as the gains or losses on these derivatives generally offset losses or gains recognized on the hedged item. We manage concentration of counterparty credit risk by limiting acceptable counterparties to major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to individual counterparties and by actively monitoring counterparty credit ratings and the amount of individual credit exposure. We also employ master netting arrangements that limit the risk of counterparty non-payment on a particular settlement date to the net gain that would have otherwise been received from the counterparty. Although not completely eliminated, we do not consider the risk of counterparty default to be significant as a result of these protections. Further, none of our derivative instruments are subject to collateral or other security arrangements, nor do they contain provisions that are dependent on our credit ratings from any credit rating agency. |
Leases Leases (Policies)
Leases Leases (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Short-term Leases [Policy Text Block] | Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). |
Separation of Lease and Nonlease Components [Policy Text Block] | For leases executed in 2019 and later, we account for the lease components and the non-lease components as a single lease component, with the exception of our warehouse leases. |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Costs, Policy [Policy Text Block] | 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. |
Changes in Other Comprehensiv_2
Changes in Other Comprehensive Income Changes in Other Comprehensive Income (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
ASC Update No. 2016-01, Financial Instruments [Policy Text Block] | As a result of adopting ASC Update No. 2016-01 in the first quarter of 2018, we recorded a cumulative effect adjustment to retained earnings to reclassify unrealized gains and losses from our equity investments previously recorded to Accumulated other comprehensive income (loss), net of tax . These equity investments were classified as available-for-sale securities under the former accounting guidance, and we now refer to these investments as publicly-held equity securities. Please refer to Note A – Significant Accounting Policies included in Item 8 of our most recent Annual Report on Form 10-K for more information. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
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 (Update No. 2016-13). 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. Update No. 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018. We plan to adopt Update No. 2016-13 in the first quarter of 2020, and 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. 2018-15, Internal-Use Software [Policy Text Block] | ASC Update No. 2018-15 In August 2018, the FASB issued ASC Update No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) : Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ( Update No. 2018-15). The purpose of Update No. 2018-15 is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Update No. 2018-15 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period. We plan to adopt Update No. 2018-15 in the first quarter of 2020, and we are in the process of determining the effect that the adoption will have on our financial position and results of operations. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
2019 Acquisitions [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | (in millions) Payments for acquisitions, net of cash acquired $ 763 Fair value of contingent consideration 127 Fair value of prior interests 102 $ 992 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | (in millions) Goodwill $ 575 Amortizable intangible assets 220 Indefinite-lived intangible assets 240 Other assets acquired 24 Liabilities assumed (12 ) Net deferred tax liabilities (56 ) $ 992 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Amount Assigned (in millions) Amortization Period (in years) Risk-Adjusted Discount Rates used in Purchase Price Allocation Amortizable intangible assets: Technology-related $ 210 12 15% Other intangible assets 10 12 15% Indefinite-lived intangible assets: In-process research and development (IPR&D) 240 N/A 19% $ 461 |
2018 Acquisitions [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The components of the aggregate purchase prices are as follows for our 2018 acquisitions as of September 30, 2019 : (in millions) Payments for acquisitions, net of cash acquired $ 969 Fair value of contingent consideration 190 Fair value of prior interests 251 $ 1,410 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | (in millions) Goodwill $ 618 Amortizable intangible assets 707 Indefinite-lived intangible assets 213 Other assets acquired 19 Liabilities assumed (14 ) Net deferred tax liabilities (134 ) $ 1,410 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Amount Assigned (in millions) Amortization Period (in years) Risk-Adjusted Discount Rates used in Purchase Price Allocation Amortizable intangible assets: Technology-related $ 697 10 - 14 17 % - 23% Other intangible assets 10 6 - 13 13 % - 15% Indefinite-lived intangible assets: IPR&D 213 N/A 15% $ 920 |
BTG Acquisition [Member] | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share data) 2019 2018 2019 2018 Net sales $ 2,795 $ 2,561 $ 8,237 $ 7,740 Net income (loss) 152 332 599 950 Net income (loss) per common share — basic $ 0.11 $ 0.24 $ 0.43 $ 0.69 Net income (loss) per common share — assuming dilution $ 0.11 $ 0.24 $ 0.42 $ 0.68 |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The preliminary BTG Acquisition purchase price was comprised of the amounts presented below, which represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the BTG Acquisition . The final determination of the fair value of certain assets and liabilities will be completed within the measurement period as required by FASB ASC Topic 805 . As of September 30, 2019, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary, including the projection of the underlying cash flows used to determine the fair value of the identified tangible, intangible and financial assets and liabilities. Given the size and breadth of the BTG Acquisition , we anticipate that the purchase price allocation will take longer than prior acquisitions and potentially up to the one year allowed under FASB ASC Topic 805 to adequately analyze all the factors used in establishing the fair value of assets acquired and liabilities assumed as of the acquisition date, including, but not limited to, intangible assets, inventories, financial assets, real and personal property, leases, certain assumed liabilities, including reserves and deferred revenues, tax-related items, and the related tax and foreign currency effects of any changes made. Any potential adjustments made could be material in relation to the preliminary values presented below: (in millions) Payment for acquisition, net of cash acquired $ 3,619 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following summarizes the BTG Acquisition preliminary purchase price allocation as of September 30, 2019 : (in millions) Goodwill $ 1,549 Trade accounts receivable, net 107 Inventories 205 Other current assets 259 Other intangible assets, net 1,869 Other long-term assets 604 Accrued expenses and other current liabilities (305 ) Other long-term liabilities (289 ) Deferred tax liability (380 ) $ 3,619 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | We allocated a portion of the BTG Acquisition preliminary purchase price to specific intangible asset categories as follows: Amount Assigned (in millions) Amortization Period (in years) Risk-Adjusted Discount Rates used in Purchase Price Allocation Amortizable intangible assets: Technology-related $ 1,794 10 - 17 10 % - 12% Other intangible assets 75 2 - 11 11% $ 1,869 |
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | The following assumptions were used to measure the fair value of the benefit obligation and associated plan assets: Discount Rate Expected Return on Plan Assets Rate of Compensation Increase U.K. Plan 0.4% 0.4% 3.4% |
Schedule of Net Funded Status [Table Text Block] | As of the measurement date of August 19, 2019 , the funded status recognized in our unaudited condensed consolidated balance sheets was as follows: (in millions) Fair value of plan assets $ 213 Benefit obligation (216 ) Funded status $ (3 ) |
Contingent Consideration (Table
Contingent Consideration (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Changes in the fair value of our contingent consideration liability were as follows: (in millions) Balance as of December 31, 2018 $ 347 Amount recorded related to current year acquisitions 127 Contingent consideration arrangements transferred to Varian (16 ) Contingent consideration expense (benefit) (9 ) Contingent consideration payments (68 ) Balance as of September 30, 2019 $ 380 |
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | The recurring Level 3 fair value measurements of our contingent consideration liability include the following significant unobservable inputs: Contingent Consideration Liability Fair Value as of September 30, 2019 Valuation Technique Unobservable Input Range Weighted Average (1) R&D, Regulatory and Commercialization-based Milestones $220 million Discounted Cash Flow Discount Rate 2 % - 3% 3% Probability of Payment 50 % - 90% 84% Projected Year of Payment 2019 - 2027 2020 Revenue-based Payments $160 million Discounted Cash Flow Discount Rate 11 % - 15% 13% Probability of Payment 60 % - 100% 99% Projected Year of Payment 2019 - 2026 2021 (1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average. |
Strategic Investments (Tables)
Strategic Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments [Abstract] | |
Investment [Table Text Block] | The aggregate carrying amount of our strategic investments was comprised of the following: As of (in millions) September 30, 2019 December 31, 2018 Equity method investments $ 270 $ 303 Measurement alternative investments (1) 173 94 Notes receivable 23 26 $ 468 $ 424 (1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured 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. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | 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 are as follows: As of September 30, 2019 As of December 31, 2018 (in millions) Gross Carrying Amount Accumulated Amortization/ Write-offs Gross Carrying Amount Accumulated Amortization/ Write-offs Amortizable intangible assets Technology-related $ 12,018 $ (5,545 ) $ 10,197 $ (5,266 ) Patents 524 (404 ) 520 (393 ) Other intangible assets 1,748 (1,047 ) 1,666 (958 ) $ 14,290 $ (6,996 ) $ 12,383 $ (6,617 ) Indefinite-lived intangible assets Goodwill $ 19,915 $ (9,900 ) $ 17,811 $ (9,900 ) IPR&D 661 — 486 — Technology-related 120 — 120 — $ 20,695 $ (9,900 ) $ 18,417 $ (9,900 ) |
Schedule of Goodwill [Table Text Block] | The following represents our goodwill balance allocated to our global reportable segments and unallocated amounts: (in millions) MedSurg Rhythm and Neuro Cardiovascular BTG Acquisition (1) Total As of December 31, 2018 $ 2,063 $ 1,924 $ 3,925 $ — $ 7,911 Impact of foreign currency fluctuations and other changes in carrying amount (3 ) — 2 1 (1 ) Goodwill acquired — 268 307 1,549 2,124 Goodwill divested — — (19 ) — (19 ) As of September 30, 2019 $ 2,060 $ 2,191 $ 4,214 $ 1,550 $ 10,015 (1) As a result of the BTG Acquisition , we recognized goodwill attributable to the synergies expected to arise from the BTG Acquisition and revenue and cash flow projections associated with future technologies. The goodwill is not deductible for tax purposes. As of September 30, 2019, given the preliminary nature of the BTG Acquisition purchase price allocation, we have not yet allocated goodwill to the relevant reporting units and/or reportable segments. |
Hedging Activities and Fair V_2
Hedging Activities and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative [Line Items] | |
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | The following table presents the contractual amounts of our derivative instruments outstanding: (in millions) FASB ASC Topic 815 Designation As of September 30, 2019 December 31, 2018 Forward currency contracts Cash flow hedge $ 4,030 $ 3,962 Forward currency contracts Net investment hedge 1,935 1,483 Forward currency contracts Non-designated 3,522 5,880 Interest rate derivative contracts Cash flow hedge — 1,000 Total Notional Outstanding $ 9,487 $ 12,326 |
Derivative Instruments, Gain (Loss) [Table Text Block] | Effect of Hedging Relationships on Accumulated Other Comprehensive Income Amount Recognized in OCI on Derivative Unaudited Condensed Consolidated Statements of Operations (1) Amount Reclassified from AOCI into Earnings (in millions) Pre-Tax Gain (Loss) Tax Benefit (Expense) Gain (Loss) Net of Tax Location of Amount Reclassified Total Amount of Line Item Presented Pre-Tax (Gain) Loss Tax (Benefit) Expense (Gain) Loss Net of Tax Three Months Ended September 30, 2019 Forward currency contracts Cash flow hedges $ 101 $ (23 ) $ 78 Cost of products sold $ 777 $ (22 ) $ 5 $ (17 ) Net investment hedges (2) 64 (14 ) 50 Interest expense 95 (12 ) 3 (9 ) Interest rate derivative contracts Cash flow hedges — — — Interest expense 95 1 — 1 Three Months Ended September 30, 2018 Forward currency contracts Cash flow hedges $ 58 $ (13 ) $ 45 Cost of products sold $ 672 $ 2 $ — $ 2 Net investment hedges (2) 4 (1 ) 3 Interest expense 58 (10 ) 2 (8 ) Nine Months Ended September 30, 2019 Forward currency contracts Cash flow hedges $ 176 $ (40 ) $ 136 Cost of products sold $ 2,265 $ (47 ) $ 10 $ (36 ) Net investment hedges (2) 92 (21 ) 71 Interest expense 294 (33 ) 7 (25 ) Interest rate derivative contracts Cash flow hedges — — — Interest expense 294 3 (1 ) 2 Nine Months Ended September 30, 2018 Forward currency contracts Cash flow hedges $ 135 $ (30 ) $ 105 Cost of products sold $ 2,084 $ 27 $ (6 ) $ 21 Net investment hedges (2) 25 (6 ) 19 Interest expense 177 (17 ) 4 (13 ) Interest rate derivative contracts Cash flow hedges — — — Interest expense 177 (1 ) — (1 ) |
Derivative Instruments, Gain (Loss) that may be Reclassified from AOCI to Earnings within Twelve Months [Table Text Block] | As of September 30, 2019 , pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below (in millions): Designated Derivative Instrument FASB ASC Topic 815 Designation Location on Unaudited Condensed Consolidated Statements of Operations Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings Forward currency contracts Cash flow hedge Cost of products sold $ 104 Forward currency contracts Net investment hedge Interest expense 48 Interest rate derivative contracts Cash flow hedge Interest expense (5 ) |
Derivatives Not Designated as Hedging Instruments [Table Text Block] | Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below: Location on Unaudited Condensed Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2019 2018 2019 2018 Net gain (loss) on currency hedge contracts Other, net $ (202 ) $ 16 $ (334 ) $ 25 Net gain (loss) on currency transaction exposures Other, net (4 ) (23 ) — (40 ) Net currency exchange gain (loss) $ (207 ) $ (6 ) $ (334 ) $ (15 ) Certain of our non-designated forward currency contracts were entered into for the purpose of managing our exposure to currency exchange rate risk related to the purchase price of the BTG Acquisition . As of September 30, 2019 , we settled all outstanding contracts . We recognized a $207 million loss in the third quarter of 2019 and a $323 million loss in the first nine months of 2019 in Net gain (loss) on currency hedge contracts due to changes in fair value of the contracts. |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following are the balances of our derivative assets and liabilities: Location on Unaudited Condensed Consolidated Balance Sheets (1) As of (in millions) September 30, 2019 December 31, 2018 Derivative Assets: Designated Derivative Instruments Forward currency contracts Other current assets $ 98 $ 55 Forward currency contracts Other long-term assets 358 183 456 237 Non-Designated Derivative Instruments Forward currency contracts Other current assets 48 67 Total Derivative Assets $ 504 $ 304 Derivative Liabilities: Designated Derivative Instruments Forward currency contracts Other current liabilities $ 3 $ 2 Forward currency contracts Other long-term liabilities 5 3 Interest rate contracts Other current liabilities — 44 8 49 Non-Designated Derivative Instruments Forward currency contracts Other current liabilities 40 31 Total Derivative Liabilities $ 48 $ 80 (1) We classify derivative assets and liabilities as current when the settlement date of the derivative contract is one year or less. |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Assets and liabilities measured at fair value on a recurring basis consist of the following: As of September 30, 2019 December 31, 2018 (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Money market and government funds $ 26 $ — $ — $ 26 $ 13 $ — $ — $ 13 Derivative instruments — 504 — 504 — 304 — 304 Licensing arrangements — — 633 633 — — — — $ 26 $ 504 $ 633 $ 1,163 $ 14 $ 304 $ — $ 318 Liabilities Derivative instruments $ — $ 48 $ — $ 48 $ — $ 80 $ — $ 80 Contingent consideration — — 380 380 — — 347 347 Licensing arrangements — — 341 341 — — — — $ — $ 48 $ 720 $ 768 $ — $ 80 $ 347 $ 427 The recurring Level 3 fair value measurements of our licensing arrangements include the following significant unobservable inputs: Licensing Arrangements Fair Value as of September 30, 2019 Valuation Technique Unobservable Input Range Weighted Average (1) Financial Asset $633 million Discounted Cash Flow Discount Rate 9% 9% Projected Year of Payment 2019 - 2027 2023 Financial Liability $341 million Discounted Cash Flow Discount Rate 9% 9% Projected Year of Payment 2019 - 2027 2023 (1) Unobservable inputs relate to a single financial asset and liability. As such, unobservable inputs were not weighted by the relative fair value of the instruments. For projected year of payment, the amount represents the median of the inputs and is not a weighted average. |
Borrowings and Credit Arrange_2
Borrowings and Credit Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Short-term Debt [Line Items] | |
Schedule of Long-term Debt Instruments [Table Text Block] | (in millions, except interest rates) Issuance Date Maturity Date As of Semi-annual Coupon Rate September 30, December 31, January 2020 Notes December 2009 January 2020 $ — $ 850 6.000% May 2020 Notes May 2015 May 2020 — 600 2.850% August 2021 Term Loan August 2019 August 2021 1,000 — May 2022 Notes May 2015 May 2022 500 500 3.375% August 2022 Term Loan August 2019 August 2022 1,000 — October 2023 Notes August 2013 October 2023 450 450 4.125% March 2024 Notes February 2019 March 2024 850 — 3.450% May 2025 Notes May 2015 May 2025 750 750 3.850% March 2026 Notes February 2019 March 2026 850 — 3.750% March 2028 Notes February 2018 March 2028 1,000 1,000 4.000% March 2029 Notes February 2019 March 2029 850 — 4.000% November 2035 Notes November 2005 November 2035 350 350 7.000% March 2039 Notes February 2019 March 2039 750 — 4.550% January 2040 Notes December 2009 January 2040 300 300 7.375% March 2049 Notes February 2019 March 2049 1,000 — 4.700% Unamortized Debt Issuance Discount 2020 - 2049 (79 ) (29 ) Unamortized Gain on Fair Value Hedges 2020 - 2023 14 26 Finance Lease Obligation (1) Various 6 6 Long-term debt $ 9,590 $ 4,803 Note: The table above does not include unamortized amounts related to interest rate contracts designated as cash flow hedges. (1) Effective January 1, 2019, we adopted FASB ASC Topic 842 , which requires that we recognize finance lease obligations in our unaudited condensed consolidated balance sheet . As of December 31, 2018, these leases were referred to as capital lease obligations in accordance with FASB ASC Topic 840 . Please refer to Note A – Basis of Presentation for additional information. |
Summary Of Term Loan And Revolving Credit Facility Agreement Compliance With Debt Covenants [Table Text Block] | Covenant Requirement Actual as of September 30, 2019 as of September 30, 2019 Maximum leverage ratio (1) 4.75 times 4.27 times (1) Ratio of total debt to consolidated EBITDA, as defined by the credit agreements, for the preceding four consecutive fiscal quarters. |
Transfer of Financial Assets Accounted for as Sales [Table Text Block] | Factoring Arrangements As of September 30, 2019 As of December 31, 2018 Amount De-recognized Average Interest Rate Amount De-recognized Average Interest Rate Euro denominated $ 146 1.7 % $ 165 2.7 % Yen denominated 210 0.6 % 195 0.9 % |
Commercial Paper [Member] | |
Short-term Debt [Line Items] | |
Schedule of Short-term Debt [Table Text Block] | Commercial Paper As of (in millions, except maturity and yield) September 30, 2019 December 31, 2018 Commercial paper outstanding (at par) $ 1,293 $ 1,248 Maximum borrowing capacity 2,750 2,750 Borrowing capacity available 1,457 1,502 Weighted average maturity 40 days 27 days Weighted average yield 2.43 % 3.04 % |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Balance Sheet Information [Abstract] | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Table Text Block] | As of (in millions) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 277 $ 146 Restricted cash and restricted cash equivalents included in Other current assets 357 655 Restricted cash equivalents in Other long-term assets 43 27 $ 676 $ 829 |
Trade accounts receivable, net [Table Text Block] | As of (in millions) September 30, 2019 December 31, 2018 Accounts receivable $ 1,871 $ 1,676 Allowance for doubtful accounts (75 ) (68 ) $ 1,796 $ 1,608 Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2019 2018 2019 2018 Beginning balance $ 73 $ 63 $ 68 $ 68 Net charges to expenses 8 6 19 15 Utilization of allowances (5 ) (4 ) (11 ) (17 ) Ending balance $ 75 $ 66 $ 75 $ 66 |
Inventory Disclosure [Table Text Block] | As of (in millions) September 30, 2019 December 31, 2018 Finished goods $ 940 $ 760 Work-in-process 206 100 Raw materials 420 306 $ 1,566 $ 1,166 |
Property, plant and equipment, net [Table Text Block] | As of (in millions) September 30, 2019 December 31, 2018 Land $ 112 $ 97 Buildings and improvements 1,160 1,100 Equipment, furniture and fixtures 3,368 3,224 Capital in progress 357 319 4,996 4,740 Less: accumulated depreciation 3,055 2,958 $ 1,942 $ 1,782 |
Schedule of Accrued Liabilities [Table Text Block] | As of (in millions) September 30, 2019 December 31, 2018 Legal reserves $ 328 $ 712 Payroll and related liabilities 693 630 Rebates 280 229 Contingent consideration 112 138 Other 518 538 $ 1,932 $ 2,246 |
Other long-term liabilities [Table Text Block] | As of (in millions) September 30, 2019 December 31, 2018 Income taxes $ 671 $ 739 Legal reserves 240 217 Contingent consideration 268 209 Other 1,227 717 $ 2,406 $ 1,882 |
Leases Leases (Tables)
Leases Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Lessee Disclosure [Abstract] | |
Lessee Supplemental Balance Sheet Information [Table Text Block] | The following table presents supplemental balance sheet information related to our operating leases: (in millions) As of September 30, 2019 Assets Operating lease right-of-use assets in Other long-term assets $ 306 Liabilities Operating lease liabilities in Other current liabilities 62 Operating lease liabilities in Other long-term liabilities 251 |
Weighted average remaining lease term and discount rate [Table Text Block] | The following table presents the weighted average remaining lease term and discount rate information related to our operating leases: As of September 30, 2019 Weighted average remaining lease term 5.6 years Weighted average discount rate 3.7% |
Supplemental Cash Flow Information Related to Leases [Table Text Block] | The following table presents supplemental cash flow information related to our operating leases: (in millions) Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 55 |
Maturities of Lease Liabilities [Table Text Block] | The following table presents the maturities of our operating lease liabilities as of September 30, 2019 : Fiscal year Operating Leases (in millions) 2019 (excluding the first nine months of 2019) $ 22 2020 76 2021 65 2022 52 2023 41 Thereafter 95 Total future minimum operating lease payments 350 Less: imputed interest 37 Present value of operating lease liabilities $ 314 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule of Income Tax Rate Reconciliation [Line Items] | |
Schedule of Effective Income Tax Rate from Continuing Operations [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Effective tax rate from continuing operations (38.7 )% 5.3 % (1.6 )% (14.1 )% |
Weighted Average Shares Outst_2
Weighted Average Shares Outstanding (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2019 2018 2019 2018 Weighted average shares outstanding - basic 1,393.1 1,382.8 1,390.6 1,380.0 Net effect of common stock equivalents 19.0 21.0 19.1 19.9 Weighted average shares outstanding - assuming dilution 1,412.2 1,403.9 1,409.7 1,399.8 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating Profit (Loss) 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 unaudited condensed consolidated statements of operations is as follows (in millions, except percentages): Three Months Ended September 30, Nine Months Ended September 30, Net sales 2019 2018 2019 2018 MedSurg $ 845 $ 746 $ 2,429 $ 2,207 Rhythm and Neuro 780 740 2,323 2,252 Cardiovascular 1,011 908 3,009 2,806 Reportable segment net sales 2,636 2,393 7,760 7,262 BTG Acquisition (1) 71 n/a 71 n/a Net sales $ 2,707 $ 2,393 $ 7,831 $ 7,262 Three Months Ended September 30, Nine Months Ended September 30, Income (loss) before income taxes 2019 2018 2019 2018 MedSurg $ 319 $ 274 $ 870 $ 807 Rhythm and Neuro 166 168 488 481 Cardiovascular 281 268 857 858 Operating income of reportable segments 766 710 2,216 2,146 BTG Acquisition (1) 16 n/a 16 n/a Corporate expenses, including hedging activities (75 ) (97 ) (215 ) (297 ) Intangible asset impairment charges, acquisition/divestiture-related, restructuring- and restructuring-related, litigation-related net (charges) credits and medical device regulation charges (146 ) (77 ) (210 ) (225 ) Amortization expense (178 ) (148 ) (498 ) (437 ) Operating income (loss) 383 388 1,308 1,187 Other expense, net (292 ) 68 (615 ) (61 ) Income (loss) before income taxes $ 91 $ 456 $ 693 $ 1,126 Reportable segment operating income as a percentage of reportable segment net sales Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 MedSurg 37.8 % 36.8 % 35.8 % 36.6 % Rhythm and Neuro 21.3 % 22.7 % 21.0 % 21.4 % Cardiovascular 27.8 % 29.5 % 28.5 % 30.6 % |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following tables disaggregate our revenue from contracts with customers by business and geographic region (in millions): Three Months Ended September 30, Nine Months Ended September 30, Businesses 2019 2018 2019 2018 Endoscopy U.S. $ 277 $ 247 $ 800 $ 724 International 209 196 596 580 Worldwide 486 443 1,396 1,304 Urology and Pelvic Health U.S. 257 214 737 623 International 102 89 297 280 Worldwide 359 303 1,033 904 Cardiac Rhythm Management U.S. 284 289 860 869 International 194 186 607 594 Worldwide 478 475 1,467 1,462 Electrophysiology U.S. 38 37 113 111 International 43 39 132 119 Worldwide 81 76 245 230 Neuromodulation U.S. 183 155 487 446 International 39 34 125 113 Worldwide 222 189 612 559 Interventional Cardiology U.S. 327 283 942 859 International 373 332 1,126 1,062 Worldwide 700 615 2,067 1,922 Peripheral Interventions U.S. 155 152 466 449 International 156 142 475 436 Worldwide 311 293 942 885 BTG Acquisition (1) Interventional Medicine 48 n/a 48 n/a Specialty Pharmaceuticals 23 n/a 23 n/a Worldwide 71 n/a 71 n/a Net Sales $ 2,707 $ 2,393 $ 7,831 $ 7,262 (1) For the first nine months of 2019 , there have been no changes to our internal reporting structure, and accordingly, we have not revised our segment reporting or geographic presentation. We will continue to integrate the BTG Acquisition into our operations in the fourth quarter and will reassess our operating and reportable segments as well as geographic presentation for any changes related to our internal reporting structure as well as to the information regularly reviewed by the CODM . To the extent any changes in our operating and reportable segments are identified, these will be reflected in our segment reporting information in the period in which the change occurs. Our results of operations include the results of BTG following the acquisition date of August 19, 2019. BTG net sales are substantially U.S. based. Three Months Ended September 30, Nine Months Ended September 30, Geographic Regions (Excluding BTG Acquisition) 2019 2018 2019 2018 U.S. $ 1,521 $ 1,375 $ 4,402 $ 4,078 EMEA (Europe, Middle East and Africa) 530 498 1,662 1,619 APAC (Asia-Pacific) 484 425 1,402 1,282 Latin America and Canada 101 94 293 282 BTG Acquisition (1) (Worldwide) 71 n/a 71 n/a Net Sales $ 2,707 $ 2,393 $ 7,831 $ 7,262 Emerging Markets (2) (Excluding BTG Acquisition) $ 310 $ 267 $ 925 $ 812 (1) Our results of operations include the results of BTG following the acquisition date of August 19, 2019. BTG net sales are substantially U.S. based. (2) We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities. Periodically, we assess our list of Emerging Markets; effective January 1, 2019, we updated our list of Emerging Market countries. Our current list is comprised of the following countries: Argentina, Brazil, Chile, China, Colombia, Czech Republic, India, Indonesia, Malaysia, Mexico, Philippines, Poland, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Thailand, Turkey and Vietnam. We have revised prior year amounts to the current year’s presentation. The revision had an immaterial impact on prior year Emerging Markets sales. |
Changes in Other Comprehensiv_3
Changes in Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Comprehensive Income (Loss) Net of Tax, Period Change [Abstract] | |
Changes in Other Comprehensive Income [Table Text Block] | The following tables provide the reclassifications out of Other comprehensive income (loss), net of tax : (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of June 30, 2019 $ (46 ) $ 150 $ — $ (26 ) $ 78 Other comprehensive income (loss) before reclassifications 7 78 — — 86 (Income) loss amounts reclassified from accumulated other comprehensive income (9 ) (16 ) — — (26 ) Total other comprehensive income (loss) (2 ) 62 — — 60 Balance as of September 30, 2019 $ (48 ) $ 213 $ — $ (26 ) $ 138 (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of June 30, 2018 $ (68 ) $ 79 $ — $ (27 ) $ (16 ) Other comprehensive income (loss) before reclassifications 2 45 — — 47 (Income) loss amounts reclassified from accumulated other comprehensive income (8 ) 1 — — (7 ) Total other comprehensive income (loss) (6 ) 47 — — 40 Balance as of September 30, 2018 $ (74 ) $ 126 $ — $ (27 ) $ 25 (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of December 31, 2018 $ (53 ) $ 111 $ — $ (25 ) $ 33 Other comprehensive income (loss) before reclassifications 30 136 — (1 ) 165 (Income) loss amounts reclassified from accumulated other comprehensive income (25 ) (34 ) — — (59 ) Total other comprehensive income (loss) 4 102 — (1 ) 105 Balance as of September 30, 2019 $ (48 ) $ 213 $ — $ (26 ) $ 138 (in millions) Foreign Currency Translation Adjustments Net Change in Derivative Financial Instruments Net Change in Available-for-Sale Securities Net Change in Defined Benefit Pensions and Other Items Total Balance as of December 31, 2017 $ (32 ) $ 1 $ (1 ) $ (27 ) $ (59 ) Other comprehensive income (loss) before reclassifications (29 ) 105 — — 76 (Income) loss amounts reclassified from accumulated other comprehensive income (13 ) 20 1 — 8 Total other comprehensive income (loss) (42 ) 125 — — 82 Balance as of September 30, 2018 $ (74 ) $ 126 $ — $ (27 ) $ 25 |
Basis of Presentation ASUs Impl
Basis of Presentation ASUs Implemented (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Sep. 30, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease, Practical Expedients, Package [true false] | true | |
Operating lease, right-of-use assets, other long-term assets [Member] | Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 271 | |
Operating lease, liability, other long-term liabilities [Member] | Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 278 |
Acquisitions (Details)
Acquisitions (Details) £ / shares in Units, $ / shares in Units, £ in Millions | Aug. 21, 2019USD ($) | Aug. 19, 2019GBP (£) | Jun. 11, 2019USD ($) | Jan. 29, 2019USD ($) | Aug. 02, 2018USD ($) | Jul. 05, 2018USD ($) | Apr. 30, 2018USD ($) | Apr. 16, 2018USD ($) | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2019GBP (£) | Sep. 30, 2019USD ($) | Aug. 19, 2019USD ($) | Aug. 19, 2019£ / shares | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,707,000,000 | $ 2,393,000,000 | $ 7,831,000,000 | $ 7,262,000,000 | |||||||||||||
Proceeds from Divestiture of Businesses | $ 90,000,000 | 90,000,000 | 0 | ||||||||||||||
Business Acquisition, Pro Forma Revenue | 2,795,000,000 | 2,561,000,000 | 8,237,000,000 | 7,740,000,000 | |||||||||||||
Assets for Plan Benefits, Defined Benefit Plan | $ 213,000,000 | ||||||||||||||||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 0.40% | 0.40% | |||||||||||||||
Operating Lease, Payments | 55,000,000 | ||||||||||||||||
Interest Expense | 95,000,000 | 58,000,000 | 294,000,000 | 177,000,000 | |||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 4,382,000,000 | 968,000,000 | |||||||||||||||
Accounts, Notes, Loans and Financing Receivable, Net, Current | $ 1,796,000,000 | $ 1,608,000,000 | |||||||||||||||
Inventory, Net | 1,566,000,000 | 1,166,000,000 | |||||||||||||||
Other Assets, Current | 1,020,000,000 | 921,000,000 | |||||||||||||||
Other Intangible Assets, Net | 8,074,000,000 | 6,372,000,000 | |||||||||||||||
Other Assets, Noncurrent | 1,879,000,000 | 932,000,000 | |||||||||||||||
Accrued Liabilities, Current | (1,932,000,000) | (2,246,000,000) | |||||||||||||||
Other Liabilities, Noncurrent | 2,406,000,000 | 1,882,000,000 | |||||||||||||||
Deferred Tax Liabilities, Net, Noncurrent | (807,000,000) | (328,000,000) | |||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 747,000,000 | ||||||||||||||||
Other Nonoperating Income (Expense) | 142,000,000 | 182,000,000 | |||||||||||||||
Business Combination, Contingent Consideration, Liability | 380,000,000 | 347,000,000 | |||||||||||||||
Goodwill | $ 10,015,000,000 | $ 7,911,000,000 | |||||||||||||||
Goodwill, Acquired During Period | $ 2,124,000,000 | ||||||||||||||||
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | 0.40% | ||||||||||||||||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Rate of Compensation Increase | 3.40% | 3.40% | |||||||||||||||
Defined Benefit Plan, Benefit Obligation | $ (216,000,000) | ||||||||||||||||
Defined Benefit Plan, Funded (Unfunded) Status of Plan | (3,000,000) | ||||||||||||||||
Business Acquisition, Pro Forma Net Income (Loss) | $ 152,000,000 | $ 332,000,000 | $ 599,000,000 | $ 950,000,000 | |||||||||||||
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ / shares | $ 0.11 | $ 0.24 | $ 0.43 | $ 0.69 | |||||||||||||
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ / shares | $ 0.11 | $ 0.24 | $ 0.42 | $ 0.68 | |||||||||||||
BTG intellectual property [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Other Assets, Current | 200,000,000 | ||||||||||||||||
Other Assets, Noncurrent | 432,000,000 | ||||||||||||||||
Other Liabilities, Noncurrent | 241,000,000 | ||||||||||||||||
Other Assets | 633,000,000 | ||||||||||||||||
Other Liabilities | 395,000,000 | ||||||||||||||||
Accrued Liabilities and Other Liabilities | 153,000,000 | ||||||||||||||||
BTG Acquisition [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 71,000,000 | $ 71,000,000 | |||||||||||||||
Business Acquisition, Share Price | £ / shares | £ 8.40 | ||||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | £ 3,312 | 4,023,000,000 | 3,619,000,000 | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable, Net, Current | 107,000,000 | ||||||||||||||||
Inventory, Net | 205,000,000 | ||||||||||||||||
Other Assets, Current | 259,000,000 | ||||||||||||||||
Other Intangible Assets, Net | 1,869,000,000 | ||||||||||||||||
Other Assets, Noncurrent | 604,000,000 | ||||||||||||||||
Accrued Liabilities, Current | (305,000,000) | ||||||||||||||||
Other Liabilities, Noncurrent | (289,000,000) | ||||||||||||||||
Deferred Tax Liabilities, Net, Noncurrent | (380,000,000) | ||||||||||||||||
Cash Acquired from Acquisition | $ 404,000,000 | ||||||||||||||||
Termination Loans | £ | £ 150 | ||||||||||||||||
Goodwill | $ 1,549,000,000 | ||||||||||||||||
Exchange Rate, USD | $ 1.21 | ||||||||||||||||
Intangible Assets Acquired, Finite and Indefinite-lived | 1,869,000,000 | ||||||||||||||||
BTG Acquisition [Member] | Technology-Based Intangible Assets [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived Intangible Assets Acquired | $ 1,794,000,000 | ||||||||||||||||
BTG Acquisition [Member] | Technology-Based Intangible Assets [Member] | Minimum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 10.00% | 10.00% | |||||||||||||||
BTG Acquisition [Member] | Technology-Based Intangible Assets [Member] | Maximum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 17 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 12.00% | 12.00% | |||||||||||||||
BTG Acquisition [Member] | Other Intangible Assets [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived Intangible Assets Acquired | $ 75,000,000 | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 11.00% | 11.00% | |||||||||||||||
BTG Acquisition [Member] | Other Intangible Assets [Member] | Minimum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years | ||||||||||||||||
BTG Acquisition [Member] | Other Intangible Assets [Member] | Maximum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 years | ||||||||||||||||
Vertiflex, Inc. [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payments to Acquire Businesses, Gross | $ 465,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | 0 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 100,000,000 | ||||||||||||||||
Millipede, Inc. [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Business Combination, Consideration Transferred | $ 90,000,000 | ||||||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage | 20.00% | ||||||||||||||||
Payments to Acquire Businesses, Gross | $ 325,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 125,000,000 | ||||||||||||||||
2018 Acquisitions [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 969,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration, Liability | $ 190,000,000 | ||||||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 251,000,000 | ||||||||||||||||
Goodwill | 618,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 707,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | 213,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 19,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (14,000,000) | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | $ (134,000,000) | ||||||||||||||||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination | 1,410,000,000 | ||||||||||||||||
Intangible Assets Acquired, Finite and Indefinite-lived | 920,000,000 | ||||||||||||||||
2018 Acquisitions [Member] | Purchased research and development [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Indefinite-lived Intangible Assets Acquired | 213,000,000 | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 15.00% | 15.00% | |||||||||||||||
2018 Acquisitions [Member] | Technology-Based Intangible Assets [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived Intangible Assets Acquired | $ 697,000,000 | ||||||||||||||||
2018 Acquisitions [Member] | Technology-Based Intangible Assets [Member] | Minimum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 17.00% | 17.00% | |||||||||||||||
2018 Acquisitions [Member] | Technology-Based Intangible Assets [Member] | Maximum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 14 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 23.00% | 23.00% | |||||||||||||||
2018 Acquisitions [Member] | Other Intangible Assets [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived Intangible Assets Acquired | $ 10,000,000 | ||||||||||||||||
2018 Acquisitions [Member] | Other Intangible Assets [Member] | Minimum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 13.00% | 13.00% | |||||||||||||||
2018 Acquisitions [Member] | Other Intangible Assets [Member] | Maximum [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 15.00% | 15.00% | |||||||||||||||
Claret [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payments to Acquire Businesses, Gross | $ 220,000,000 | $ 50,000,000 | |||||||||||||||
Cryterion [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage | 35.00% | ||||||||||||||||
Payments to Acquire Businesses, Gross | $ 202,000,000 | ||||||||||||||||
NxThera [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payments to Acquire Businesses, Gross | $ 240,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 85,000,000 | ||||||||||||||||
nVision [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payments to Acquire Businesses, Gross | $ 150,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 125,000,000 | ||||||||||||||||
Other 2018 Acquisitions [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payments to Acquire Businesses, Gross | $ 158,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 62,000,000 | $ 62,000,000 | |||||||||||||||
2019 Acquisitions [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 763,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration, Liability | $ 127,000,000 | ||||||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 102,000,000 | ||||||||||||||||
Goodwill | 575,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 220,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | 240,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 24,000,000 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (12,000,000) | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | $ (56,000,000) | ||||||||||||||||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination | 992,000,000 | ||||||||||||||||
Intangible Assets Acquired, Finite and Indefinite-lived | 461,000,000 | ||||||||||||||||
2019 Acquisitions [Member] | Purchased research and development [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Indefinite-lived Intangible Assets Acquired | 240,000,000 | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 19.00% | 19.00% | |||||||||||||||
2019 Acquisitions [Member] | Technology-Based Intangible Assets [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived Intangible Assets Acquired | $ 210,000,000 | ||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 15.00% | 15.00% | |||||||||||||||
2019 Acquisitions [Member] | Other Intangible Assets [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived Intangible Assets Acquired | $ 10,000,000 | ||||||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years | ||||||||||||||||
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation | 15.00% | 15.00% | |||||||||||||||
divested business due to BTG acquisition [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 200,000,000 | ||||||||||||||||
Business Combination, Contingent Consideration, Liability | $ 16,000,000 |
Contingent Consideration (Detai
Contingent Consideration (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Jun. 11, 2019 | |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||||||
Business Combination, Contingent Consideration, Liability Beginning Balance | $ 347 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases | 127 | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | (16) | |||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 8 | $ (13) | (9) | $ (12) | ||
Payment of contingent consideration | (68) | |||||
Business Combination, Contingent Consideration, Liability Ending Balance | 380 | 380 | ||||
Business Combination, Contingent Consideration Arrangements [Abstract] | ||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 747 | |||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
Business Combination, Contingent Consideration, Liability | 380 | 347 | 380 | |||
Vertiflex, Inc. [Member] | ||||||
Business Combination, Contingent Consideration Arrangements [Abstract] | ||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 100 | |||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | $ 0 | |||||
Valuation Technique, Discounted Cash Flow [Member] | R&D, Regulatory and Commercialization-based Milestone [Member] | ||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||||||
Business Combination, Contingent Consideration, Liability Ending Balance | 220 | 220 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
Business Combination, Contingent Consideration, Liability | 220 | 220 | 220 | |||
Valuation Technique, Discounted Cash Flow [Member] | revenue-based payments [Member] | ||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||||||
Business Combination, Contingent Consideration, Liability Ending Balance | 160 | 160 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
Business Combination, Contingent Consideration, Liability | $ 160 | $ 160 | $ 160 | |||
Minimum [Member] | Valuation Technique, Discounted Cash Flow [Member] | R&D, Regulatory and Commercialization-based Milestone [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
contingent consideration liability, probability of payment | 50.00% | |||||
Discount Rate, Fair Value Input | 2.00% | |||||
Minimum [Member] | Valuation Technique, Discounted Cash Flow [Member] | revenue-based payments [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
contingent consideration liability, probability of payment | 60.00% | |||||
Discount Rate, Fair Value Input | 11.00% | |||||
Maximum [Member] | ||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ (126) | |||||
Maximum [Member] | Valuation Technique, Discounted Cash Flow [Member] | R&D, Regulatory and Commercialization-based Milestone [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
contingent consideration liability, probability of payment | 90.00% | |||||
Discount Rate, Fair Value Input | 3.00% | |||||
Maximum [Member] | Valuation Technique, Discounted Cash Flow [Member] | revenue-based payments [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
contingent consideration liability, probability of payment | 100.00% | |||||
Discount Rate, Fair Value Input | 15.00% | |||||
Weighted Average [Member] | Valuation Technique, Discounted Cash Flow [Member] | R&D, Regulatory and Commercialization-based Milestone [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
contingent consideration liability, probability of payment | 84.00% | |||||
Discount Rate, Fair Value Input | 3.00% | |||||
Weighted Average [Member] | Valuation Technique, Discounted Cash Flow [Member] | revenue-based payments [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||||
contingent consideration liability, probability of payment | 99.00% | |||||
Discount Rate, Fair Value Input | 13.00% |
Strategic Investments (Details)
Strategic Investments (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of Investments [Line Items] | ||
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | $ 308 | |
Equity method investments | 270 | $ 303 |
Measurement alternative investments (1) | 173 | 94 |
Notes receivable | 23 | 26 |
Investments | $ 468 | $ 424 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Intangible Assets and Goodwill [Line Items] | |||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 105 | $ 35 | |
Finite-Lived Intangible Assets, Gross | 14,290 | 14,290 | $ 12,383 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (6,996) | (6,996) | (6,617) | ||
Indefinite-lived intangible assets, including goodwill | 20,695 | 20,695 | 18,417 | ||
Indefinite-lived intangible assets and goodwill, accumulated write-offs | 9,900 | 9,900 | 9,900 | ||
Goodwill [Roll Forward] | |||||
Goodwill Beginning Balance | 7,911 | ||||
Goodwill, Translation and Purchase Accounting Adjustments | (1) | ||||
Goodwill, Acquired During Period | 2,124 | ||||
Goodwill Ending Balance | 10,015 | 10,015 | |||
Goodwill, Written off Related to Sale of Business Unit | (19) | ||||
MedSurg [Member] | |||||
Goodwill [Roll Forward] | |||||
Goodwill Beginning Balance | 2,063 | ||||
Goodwill, Translation and Purchase Accounting Adjustments | (3) | ||||
Goodwill, Acquired During Period | 0 | ||||
Goodwill Ending Balance | 2,060 | 2,060 | |||
Rhythm and Neuro [Member] | |||||
Goodwill [Roll Forward] | |||||
Goodwill Beginning Balance | 1,924 | ||||
Goodwill, Translation and Purchase Accounting Adjustments | 0 | ||||
Goodwill, Acquired During Period | 268 | ||||
Goodwill Ending Balance | 2,191 | 2,191 | |||
Cardiovascular [Member] | |||||
Goodwill [Roll Forward] | |||||
Goodwill Beginning Balance | 3,925 | ||||
Goodwill, Translation and Purchase Accounting Adjustments | 2 | ||||
Goodwill, Acquired During Period | 307 | ||||
Goodwill Ending Balance | 4,214 | 4,214 | |||
Goodwill, Written off Related to Sale of Business Unit | (19) | ||||
BTG Acquisition [Member] | |||||
Goodwill [Roll Forward] | |||||
Goodwill Beginning Balance | 0 | ||||
Goodwill, Translation and Purchase Accounting Adjustments | 1 | ||||
Goodwill, Acquired During Period | 1,549 | ||||
Goodwill Ending Balance | 1,550 | 1,550 | |||
Goodwill [Member] | |||||
Intangible Assets and Goodwill [Line Items] | |||||
Goodwill, Gross | 19,915 | 19,915 | 17,811 | ||
Goodwill, Impaired, Accumulated Impairment Loss | (9,900) | (9,900) | (9,900) | ||
In Process Research and Development [Member] | |||||
Intangible Assets and Goodwill [Line Items] | |||||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 661 | 661 | 486 | ||
Technology-Based Intangible Assets [Member] | |||||
Intangible Assets and Goodwill [Line Items] | |||||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 120 | 120 | 120 | ||
Technology-Based Intangible Assets [Member] | |||||
Intangible Assets and Goodwill [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 12,018 | 12,018 | 10,197 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (5,545) | (5,545) | (5,266) | ||
Patents [Member] | |||||
Intangible Assets and Goodwill [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 524 | 524 | 520 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (404) | (404) | (393) | ||
Other Intangible Assets [Member] | |||||
Intangible Assets and Goodwill [Line Items] | |||||
Finite-Lived Intangible Assets, Gross | 1,748 | 1,748 | 1,666 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ (1,047) | $ (1,047) | $ (958) |
Hedging Activities and Fair V_3
Hedging Activities and Fair Value Measurements (Details) £ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Rate | Sep. 30, 2018USD ($) | Sep. 30, 2019GBP (£)units | Sep. 30, 2019USD ($)units | Dec. 31, 2018USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Payments for Hedge, Investing Activities | $ 294 | $ 0 | |||||
Derivative, Notional Amount | $ 9,487 | $ 12,326 | |||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | $ 78 | $ 45 | 136 | 105 | |||
Cost of Goods and Services Sold | 777 | 672 | 2,265 | 2,084 | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | 16 | (1) | 34 | (20) | |||
Interest Expense | 95 | 58 | 294 | 177 | |||
Gain (Loss) on Derivative Used in Net Investment Hedge, after Tax | (9) | (8) | $ (25) | (13) | |||
Derivative Asset, Fair Value, Gross Asset | 504 | 304 | |||||
Cash | 249 | 133 | |||||
Derivative Liability, Fair Value, Gross Liability | 48 | 80 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Debt Instrument, Fair Value Disclosure | 11,990 | 7,239 | |||||
Business Combination, Contingent Consideration, Liability | 380 | 347 | |||||
Fair Value, Inputs, Level 3 [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Discount Rate, Fair Value Input | 9.00% | ||||||
Fair Value, Measurements, Recurring [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Money Market Funds, at Carrying Value | 26 | 13 | |||||
Derivative Asset | 504 | 304 | |||||
Licensing arrangements, asset | 633 | 0 | |||||
Derivative Liability | 48 | 80 | |||||
Business Combination, Contingent Consideration, Liability | 380 | 347 | |||||
Licensing arrangements, liability | 341 | 0 | |||||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 768 | 427 | |||||
Assets, Fair Value Disclosure | 1,163 | 318 | |||||
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 | 26 | 13 | |||||
Derivative Asset | 0 | 0 | |||||
Licensing arrangements, asset | 0 | 0 | |||||
Derivative Liability | 0 | 0 | |||||
Business Combination, Contingent Consideration, Liability | 0 | 0 | |||||
Licensing arrangements, liability | 0 | 0 | |||||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | 0 | |||||
Assets, Fair Value Disclosure | 26 | 14 | |||||
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 | 0 | |||||
Derivative Asset | 504 | 304 | |||||
Licensing arrangements, asset | 0 | 0 | |||||
Derivative Liability | 48 | 80 | |||||
Business Combination, Contingent Consideration, Liability | 0 | 0 | |||||
Licensing arrangements, liability | 0 | 0 | |||||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 48 | 80 | |||||
Assets, Fair Value Disclosure | 504 | 304 | |||||
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 | |||||
Derivative Asset | 0 | 0 | |||||
Licensing arrangements, asset | 633 | 0 | |||||
Derivative Liability | 0 | 0 | |||||
Business Combination, Contingent Consideration, Liability | 380 | 347 | |||||
Licensing arrangements, liability | 341 | 0 | |||||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 720 | 347 | |||||
Assets, Fair Value Disclosure | 633 | 0 | |||||
Designated as Hedging Instrument [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments in Hedges, Assets, at Fair Value | 456 | 237 | |||||
Derivative Instruments in Hedges, Liabilities, at Fair Value | $ 8 | 49 | |||||
Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Forward Currency Contracts, Time to Maturity | units | 60 | 60 | |||||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative, Notional Amount | $ 3,522 | 5,880 | |||||
Not Designated as Hedging Instrument [Member] | BTG Acquisition [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Cash | £ 3,312 | 4,303 | |||||
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative, Notional Amount | 4,030 | 3,962 | |||||
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative, Notional Amount | 0 | 1,000 | |||||
Net Investment Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative, Notional Amount | 1,935 | 1,483 | |||||
Weighted Average [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Discount Rate, Fair Value Input | 9.00% | ||||||
Cost of Sales [Member] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months | 104 | ||||||
Cost of Sales [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | 101 | 58 | $ 176 | 135 | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax | (23) | (13) | (40) | (30) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | 78 | 45 | 136 | 105 | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | (22) | 2 | (47) | 27 | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax | 5 | 0 | 10 | (6) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | (17) | 2 | (36) | 21 | |||
Interest Expense [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | (5) | ||||||
Interest Expense [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | 0 | 0 | 0 | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax | 0 | 0 | 0 | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | 0 | 0 | 0 | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 1 | (3) | (1) | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax | 0 | (1) | 0 | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | 1 | 2 | (1) | ||||
Interest Expense [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Used in Net Investment Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | 48 | ||||||
Interest Expense [Member] | Net Investment Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Other Comprehensive Income (Loss), Net Investment Hedge, Gain (Loss), before Reclassification and Tax | 64 | 4 | 92 | 25 | |||
Other Comprehensive Income (Loss), Derivative, Excluded Component, Increase (Decrease), before Adjustments, Tax | (14) | (1) | (21) | (6) | |||
Other Comprehensive Income (Loss), Derivative, Excluded Component, Increase (Decrease), before Adjustments, after Tax | 50 | 3 | 71 | 19 | |||
Other Comprehensive Income (Loss), Net Investment Hedge, Gain (Loss), Reclassification, before Tax | (12) | (10) | (33) | (17) | |||
Other Comprehensive Income (Loss), Net Investment Hedge, Gain (Loss), after Reclassification, Tax | 3 | 2 | 7 | 4 | |||
Gain (Loss) on Derivative Used in Net Investment Hedge, after Tax | 9 | 8 | (25) | 13 | |||
Other Nonoperating Income (Expense) [Member] | Not Designated as Hedging Instrument [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | (202) | 16 | (334) | 25 | |||
Foreign Currency Transaction Gain (Loss), before Tax | (4) | (23) | 0 | (40) | |||
Net currency exchange gain (loss) | (207) | $ (6) | (334) | $ (15) | |||
Other Nonoperating Income (Expense) [Member] | Not Designated as Hedging Instrument [Member] | BTG Acquisition [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ (207) | $ (323) | |||||
R&D, Regulatory and Commercialization-based Milestone [Member] | Valuation Technique, Discounted Cash Flow [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Business Combination, Contingent Consideration, Liability | 220 | ||||||
R&D, Regulatory and Commercialization-based Milestone [Member] | Weighted Average [Member] | Valuation Technique, Discounted Cash Flow [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Discount Rate, Fair Value Input | 3.00% | ||||||
R&D, Regulatory and Commercialization-based Milestone [Member] | Minimum [Member] | Valuation Technique, Discounted Cash Flow [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Discount Rate, Fair Value Input | 2.00% | ||||||
R&D, Regulatory and Commercialization-based Milestone [Member] | Maximum [Member] | Valuation Technique, Discounted Cash Flow [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Discount Rate, Fair Value Input | Rate | 3.00% | ||||||
Prepaid Expenses and Other Current Assets [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments in Hedges, Assets, at Fair Value | 98 | 55 | |||||
Prepaid Expenses and Other Current Assets [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 48 | 67 | |||||
Other Noncurrent Assets [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments in Hedges, Assets, at Fair Value | 358 | 183 | |||||
Other Current Liabilities [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments in Hedges, Liabilities, at Fair Value | 3 | 2 | |||||
Other Current Liabilities [Member] | Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments in Hedges, Liabilities, at Fair Value | 0 | 44 | |||||
Other Current Liabilities [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 40 | 31 | |||||
Other Noncurrent Liabilities [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Derivative Instruments in Hedges, Liabilities, at Fair Value | $ 5 | $ 3 |
Borrowings and Credit Arrange_3
Borrowings and Credit Arrangements (Details) - USD ($) $ in Millions | Feb. 25, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Oct. 22, 2019 | Aug. 19, 2019 | Dec. 19, 2018 | Sep. 30, 2018 |
Debt Instrument [Line Items] | |||||||
Total debt | $ 10,888 | $ 7,056 | |||||
Restricted Cash and Cash Equivalents in Other current assets | 357 | 655 | $ 781 | ||||
Long-term Debt and Capital Lease Obligations | 9,590 | 4,803 | |||||
Debt, Current | 1,297 | 2,253 | |||||
Exclusion from EBITDA for Restructuring Charges | 500 | ||||||
Restructuring charges remaining to be excluded from calculation of consolidated EBITDA | 314 | ||||||
Litigation and Debt Exclusion from EBITDA | 2,624 | ||||||
Legal payments remaining to be excluded from calculation of consolidated EBITDA | 1,262 | ||||||
Commercial Paper [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Commercial Paper | 1,293 | 1,248 | |||||
Maximum Commercial Paper Outstanding with 2017 Facility | 2,750 | 2,750 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,457 | $ 1,502 | |||||
Weighted Average Maturity, Days | 40 days | 27 days | |||||
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 2.43% | 3.04% | |||||
August 2019 Term Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Extinguishment of Debt, Amount | $ 1,000 | ||||||
Short-term Debt | $ 1,000 | ||||||
Current Requirement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 4.75 | ||||||
Current Requirement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 3.75 | ||||||
Requirement, first two quarters following qualified acquisition [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 4.75 | ||||||
Actual, Covenant [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 4.27 | ||||||
Requirement, third quarter following qualified acquisition [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 4.50 | ||||||
Requirement, fourth quarter following qualified acquisition [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 4.25 | ||||||
Requirement, fifth quarter following qualified acquisition [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 4 | ||||||
Requirement, sixth quarter and thereafter following qualified acquisition [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum Leverage Ratio | 3.75 | ||||||
the 2018 Facility [Member] | Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,750 | 2,750 | |||||
February2019AggregateOffering [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 4,300 | ||||||
January 2020 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 0 | $ 850 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | |||||
Extinguishment of Debt, Amount | 850 | ||||||
May 2020 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 0 | $ 600 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.85% | 2.85% | |||||
Extinguishment of Debt, Amount | $ 600 | ||||||
August 2021 Term Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 1,000 | $ 0 | |||||
May 2022 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 500 | $ 500 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.375% | 3.375% | |||||
August 2022 Term Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 1,000 | $ 0 | |||||
October 2023 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 450 | $ 450 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.125% | 4.125% | |||||
March 2024 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 850 | $ 0 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.45% | ||||||
May 2025 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 750 | $ 750 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | 3.85% | |||||
March 2026 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 850 | $ 0 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | ||||||
March 2028 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 1,000 | $ 1,000 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | |||||
March 2029 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 850 | $ 0 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ||||||
November 2035 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 350 | $ 350 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | |||||
March 2039 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 750 | $ 0 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.55% | ||||||
January 2040 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 300 | $ 300 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.375% | 7.375% | |||||
March 2049 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 1,000 | $ 0 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.70% | ||||||
Unamortized Gain on Fair Value Hedges | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 14 | 26 | |||||
Finance Lease Obligation (1) | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | 6 | 6 | |||||
Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | 7,650 | 4,800 | |||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ (79) | (29) | |||||
Three-Year Delayed Draw Term Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate During Period | 3.47% | ||||||
Three-Year Delayed Draw Term Loan [Member] | Debt Instrument, Redemption, Period Three [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Line of Credit | $ 1,000 | $ 1,000 | |||||
Two-Year Delayed Draw Term Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate During Period | 3.37% | ||||||
Two-Year Delayed Draw Term Loan [Member] | Debt Instrument, Redemption, Period Two [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Line of Credit | $ 1,000 | 1,000 | |||||
Aggregate Senior Unsecured Delayed Draw Term Loan [Member] | Unsecured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Line of Credit | $ 2,000 | ||||||
Yen Denominated Factoring Arrangements [Member] | |||||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||||||
Transfer of Financial Assets Accounted for as Sales, Amount Derecognized | $ 210 | $ 195 | |||||
Average interest rate of de-recognized receivables | 0.60% | 0.90% | |||||
Euro Denominated Factoring Arrangements [Member] | |||||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||||||
Transfer of Financial Assets Accounted for as Sales, Amount Derecognized | $ 146 | $ 165 | |||||
Average interest rate of de-recognized receivables | 1.70% | 2.70% | |||||
Subsequent Event [Member] | Tender Offer [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | $ 1,000 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Line Items] | ||||||
Cash and Cash Equivalents | $ 277 | $ 168 | $ 277 | $ 168 | $ 146 | |
Restricted Cash and Cash Equivalents in Other current assets | 357 | 781 | 357 | 781 | 655 | |
Restricted Cash Equivalents in Other long-term assets | 43 | 31 | 43 | 31 | 27 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 676 | 980 | 676 | 980 | 829 | $ 1,017 |
Trade accounts receivable, net | ||||||
Accounts receivable | 1,871 | 1,871 | 1,676 | |||
Less: allowance for doubtful accounts | (75) | (75) | (68) | |||
Trade accounts receivable, net | 1,796 | 1,796 | 1,608 | |||
Allowance for doubtful accounts | ||||||
Beginning balance | 73 | 63 | 68 | 68 | ||
Charges to expenses | 8 | 6 | 19 | 15 | ||
Utilization of allowances | (5) | (4) | (11) | (17) | ||
Ending balance | 75 | 66 | 75 | 66 | ||
Inventories | ||||||
Inventory, Finished Goods, Net of Reserves | 940 | 940 | 760 | |||
Inventory, Work in Process, Net of Reserves | 206 | 206 | 100 | |||
Inventory, Raw Materials, Net of Reserves | 420 | 420 | 306 | |||
Inventories | 1,566 | 1,566 | 1,166 | |||
Property, plant and equipment, net | ||||||
Land | 112 | 112 | 97 | |||
Buildings and improvements | 1,160 | 1,160 | 1,100 | |||
Equipment, furniture and fixtures | 3,368 | 3,368 | 3,224 | |||
Capital in progress | 357 | 357 | 319 | |||
Property, plant and equipment | 4,996 | 4,996 | 4,740 | |||
Less: accumulated depreciation | 3,055 | 3,055 | 2,958 | |||
Property, plant and equipment, net | 1,942 | 1,942 | 1,782 | |||
Supplemental Balance Sheet Information | ||||||
Depreciation expense | 79 | $ 74 | 220 | $ 212 | ||
Accrued expenses | ||||||
Legal reserves, current | 328 | 328 | 712 | |||
Payroll and related liabilities | 693 | 693 | 630 | |||
Accrued Rebates, Current | 280 | 280 | 229 | |||
Business Combination, Contingent Consideration, Liability, Current | 112 | 112 | 138 | |||
Other | 518 | 518 | 538 | |||
Accrued expenses | 1,932 | 1,932 | 2,246 | |||
Other long-term liabilities | ||||||
Accrued income taxes | 671 | 671 | 739 | |||
Legal reserves, noncurrent | 240 | 240 | 217 | |||
Business Combination, Contingent Consideration, Liability, Noncurrent | 268 | 268 | 209 | |||
Other Accrued Liabilities, Noncurrent | 1,227 | 1,227 | 717 | |||
Other long-term liabilities | 2,406 | 2,406 | $ 1,882 | |||
Non Acquisition Related [Member] | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Line Items] | ||||||
Restricted Cash and Cash Equivalents in Other current assets | $ 357 | $ 357 |
Leases Leases (Details)
Leases Leases (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($)Rate | Sep. 30, 2019USD ($)Rate | |
Assets and Liabilities, Lessee [Abstract] | ||
Operating Lease, Right-of-Use Asset | $ 306 | $ 306 |
Operating Lease, Liability, Current | 62 | 62 |
Operating Lease, Liability, Noncurrent | 251 | 251 |
Lessee, Lease, Description [Line Items] | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 84 | |
Lessee, leases not yet commenced, amount | 68 | 68 |
Operating Lease, Payments | 55 | |
Operating Lease, Cost | $ 21 | $ 57 |
Operating Lease, Weighted Average Remaining Lease Term | 5 years 7 months 6 days | 5 years 7 months 6 days |
Finance Lease, Weighted Average Discount Rate, Percent | Rate | 3.70% | 3.70% |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 22 | $ 22 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 76 | 76 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 65 | 65 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 52 | 52 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 41 | 41 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 95 | 95 |
Lessee, Operating Lease, Liability, Payments, Due | 350 | 350 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 37 | 37 |
Operating Lease, Liability | $ 314 | $ 314 |
Minimum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 1 month | 1 month |
Lessee, Operating Lease, Term of Contract | 1 year | 1 year |
Maximum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 15 years | 15 years |
Lessee, Operating Lease, Term of Contract | 60 years | 60 years |
Lessee, Operating and Finance Leases, Option to Extend | 10 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||||
Unrecognized Tax Benefits | $ 405 | $ 405 | $ 427 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 320 | $ 320 | $ 332 | ||
Effective tax rate from continuing operations | (38.70%) | 5.30% | (1.60%) | (14.10%) | |
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 99 | $ 99 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Oct. 16, 2019claims | Dec. 31, 2018USD ($) | Sep. 12, 2018USD ($) | |
Loss Contingencies [Line Items] | ||||||||
Accrual for legal matters that are probable and estimable | $ | $ 568 | $ 568 | $ 929 | |||||
Restricted Cash and Cash Equivalents in Other current assets | $ | 357 | $ 781 | 357 | $ 781 | $ 655 | |||
Litigation-related net charges (credits) | $ | (25) | $ (148) | $ (18) | 108 | $ (18) | |||
Litigation Settlement Received, Gain | $ | $ 180 | |||||||
Subsequent Event [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Product liability cases or claims related to mesh product | 53,000 | |||||||
Putative class actions in the U.S., Mesh | 8 | |||||||
Product liability cases or claims related to mesh product - Canada | 25 | |||||||
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 | 25 | |||||||
Assigned to one judge in MA [Member] | Subsequent Event [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Product liability cases or claims related to mesh product | 3,100 | |||||||
Settled Litigation [Member] | Subsequent Event [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Product liability cases or claims related to mesh product | 52,000 | |||||||
Total Product liability cases and claims settled related to Mesh product | 43,500 | |||||||
Non Acquisition Related [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Restricted Cash and Cash Equivalents in Other current assets | $ | $ 357 | $ 357 | ||||||
Upfront Cash [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Alleged Breach of Purchase Agreement, Amount | $ | $ 145 | |||||||
Maximum Contingent Payment [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Alleged Breach of Purchase Agreement, Amount | $ | $ 130 |
Weighted Average Shares Outst_3
Weighted Average Shares Outstanding (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted Average Number of Shares Outstanding, Basic | 1,393.1 | 1,382.8 | 1,390.6 | 1,380 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 19 | 21 | 19.1 | 19.9 |
Weighted Average Number of Shares Outstanding, Diluted | 1,412.2 | 1,403.9 | 1,409.7 | 1,399.8 |
Stock Issued During Period, Shares, New Issues | 2,000,000 | 2,000,000 | 9,000,000 | 10 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)reportablesegments | Sep. 30, 2018USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | reportablesegments | 3 | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,707 | $ 2,393 | $ 7,831 | $ 7,262 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Operating Income Allocated to Reportable Segments | 766 | 710 | 2,216 | 2,146 |
Amortization expense | (178) | (148) | (498) | (437) |
Operating income (loss) | 383 | 388 | 1,308 | 1,187 |
Other expense, net | (292) | 68 | (615) | (61) |
Income (loss) before income taxes | 91 | 456 | 693 | 1,126 |
MedSurg [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 845 | 746 | 2,429 | 2,207 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Operating Income Allocated to Reportable Segments | $ 319 | $ 274 | $ 870 | $ 807 |
Segment Operating Income as a Percentage of Net Sales | 37.80% | 36.80% | 35.80% | 36.60% |
Rhythm and Neuro [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 780 | $ 740 | $ 2,323 | $ 2,252 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Operating Income Allocated to Reportable Segments | $ 166 | $ 168 | $ 488 | $ 481 |
Segment Operating Income as a Percentage of Net Sales | 21.30% | 22.70% | 21.00% | 21.40% |
Cardiovascular [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 1,011 | $ 908 | $ 3,009 | $ 2,806 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Operating Income Allocated to Reportable Segments | $ 281 | $ 268 | $ 857 | $ 858 |
Segment Operating Income as a Percentage of Net Sales | 27.80% | 29.50% | 28.50% | 30.60% |
Excludes BTG Acquisition [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,636 | $ 7,760 | ||
BTG Acquisition [Member] | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | (16) | (16) | ||
Corporate expenses and currency exchange [Member] | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | (75) | $ (97) | (215) | $ (297) |
Special Charges [Member] | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | (146) | $ (77) | (210) | $ (225) |
BTG Acquisition [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 71 | $ 71 |
Revenue (Details)
Revenue (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)units | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)units | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||||
Emerging Markets total countries | units | 20 | 20 | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,707 | $ 2,393 | $ 7,831 | $ 7,262 | |
Contract with Customer, Liability [Abstract] | |||||
Contract with Customer, Liability | 398 | 398 | $ 373 | ||
Change in Contract with Customer, Liability [Abstract] | |||||
Contract with Customer, Liability, Revenue Recognized | 35 | 107 | |||
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,521 | 1,375 | 4,402 | 4,078 | |
EMEA [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 530 | 498 | 1,662 | 1,619 | |
APAC [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 484 | 425 | 1,402 | 1,282 | |
Latin America and Canada [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 101 | 94 | 293 | 282 | |
Emerging Markets [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 310 | 267 | 925 | 812 | |
Global Endoscopy (Endo) Reporting Unit [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 486 | 443 | 1,396 | 1,304 | |
Global Endoscopy (Endo) Reporting Unit [Member] | United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 277 | 247 | 800 | 724 | |
Global Endoscopy (Endo) Reporting Unit [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 209 | 196 | 596 | 580 | |
Global Urology (Uro) Reporting Unit [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 359 | 303 | 1,033 | 904 | |
Global Urology (Uro) Reporting Unit [Member] | United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 257 | 214 | 737 | 623 | |
Global Urology (Uro) Reporting Unit [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 102 | 89 | 297 | 280 | |
Global CRM Reporting Unit [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 478 | 475 | 1,467 | 1,462 | |
Global CRM Reporting Unit [Member] | United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 284 | 289 | 860 | 869 | |
Global CRM Reporting Unit [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 194 | 186 | 607 | 594 | |
Global Electrophysiology (EP) Reporting Unit [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 81 | 76 | 245 | 230 | |
Global Electrophysiology (EP) Reporting Unit [Member] | United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 38 | 37 | 113 | 111 | |
Global Electrophysiology (EP) Reporting Unit [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 43 | 39 | 132 | 119 | |
Global Neuromodulation (NM) Reporting Unit [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 222 | 189 | 612 | 559 | |
Global Neuromodulation (NM) Reporting Unit [Member] | United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 183 | 155 | 487 | 446 | |
Global Neuromodulation (NM) Reporting Unit [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 39 | 34 | 125 | 113 | |
Global Interventional Cardiology (IC) Reporting Unit [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 700 | 615 | 2,067 | 1,922 | |
Global Interventional Cardiology (IC) Reporting Unit [Member] | United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 327 | 283 | 942 | 859 | |
Global Interventional Cardiology (IC) Reporting Unit [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 373 | 332 | 1,126 | 1,062 | |
Global Peripheral Interventions (PI) Reporting Unit [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 311 | 293 | 942 | 885 | |
Global Peripheral Interventions (PI) Reporting Unit [Member] | United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 155 | 152 | 466 | 449 | |
Global Peripheral Interventions (PI) Reporting Unit [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 156 | $ 142 | 475 | $ 436 | |
BTG Spec Pharma [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 23 | 23 | |||
BTG Interventional Medicine [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 48 | 48 | |||
BTG Acquisition [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 71 | $ 71 |
Changes in Other Comprehensiv_4
Changes in Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Other Comprehensive Income (Loss) Net of Tax, Period Change [Abstract] | ||||||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | $ 86 | $ 47 | $ 165 | $ 76 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (26) | (7) | (59) | 8 | ||||
Total other comprehensive income (loss) | 60 | 40 | 105 | 82 | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 138 | 25 | 138 | 25 | $ 78 | $ 33 | $ (16) | $ (59) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | 7 | 2 | 30 | (29) | ||||
Gain (Loss) on Derivative Used in Net Investment Hedge, after Tax | (9) | (8) | (25) | (13) | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (2) | (6) | 4 | (42) | ||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (48) | (74) | (48) | (74) | (46) | (53) | (68) | (32) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | 78 | 45 | 136 | 105 | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | (16) | 1 | (34) | 20 | ||||
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI for Write-down of Securities, Net of Tax | 0 | 0 | 0 | 1 | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | 62 | 47 | 102 | 125 | ||||
Other Comprehensive Income (Loss), Securities, Available-for-sale, Adjustment, before Reclassification Adjustments and Tax | 0 | 0 | 0 | 0 | ||||
AOCI, Cash Flow Hedge, Cumulative Gain (Loss), after Tax | 213 | 126 | 213 | 126 | 150 | 111 | 79 | 1 |
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, after Tax | 0 | 0 | 0 | 0 | ||||
Accumulated Other Comprehensive Income (Loss), Securities, Available-for-sale, Adjustment, after Tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, before Reclassification Adjustment, after Tax | 0 | 0 | 1 | 0 | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, after Tax | 0 | 0 | 0 | 0 | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 0 | 1 | 0 | ||||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | $ (26) | $ (27) | $ (26) | $ (27) | $ (26) | $ (25) | $ (27) | $ (27) |